MRO Magazine

Baylin Technologies Announces First Quarter 2015 Financial Results


May 14, 2015
By Canada News Wire

TORONTO, May 14, 2015 Baylin Technologies Inc. (TSX: BYL) (the “Company” or “Baylin”), a global provider of innovative antenna solutions for the broadband, mobile and wireless infrastructure markets, today announced its financial results for the three months ended March 31, 2015. All figures are stated in United States dollars unless otherwise noted.

Fiscal Q1 2015 Highlights

  • Revenues were $7.9 million, compared to $11.2 million in Q1 2014.
  • Gross profit was $1.0 million, compared to $2.5 million in Q1 2014. 
  • Adjusted EBITDA was $(2.9) million, compared to $(1.8) in Q1 2014.
  • Total cash and cash equivalents were $17.7 million at March 31, 2015.
  • The Company’s new manufacturing facility in Vietnam passed the Samsung Manufacturing Process Audit.
  • The Company’s infrastructure products were selected to upgrade the DAS at University of Phoenix Stadium, the Gila River Arena and the Westgate Entertainment district, in Phoenix.
  • The Board of Directors announced a management change with the appointment of Randy Dewey to Interim President and Chief Executive Officer.
  • Julia Hogan was appointed to the newly created role of Executive Vice President of Infrastructure – Global.

“Our inclusion on the Samsung S6 platform is a strong testament to our design and technological expertise,” said Randy Dewey, Interim President and Chief Executive Officer. “However, the overall mobile industry continues to face mounting pricing pressure. This is driving down average antenna selling prices, industry-wide, which is reflected in our results for the quarter. Broadband and infrastructure sales were relatively in-line year-over-year. We remain optimistic about the long-term growth prospects of both these verticals, but continue to face near-term delays in industry spending across the infrastructure market.”

Mr. Dewey added: “On account of the challenges we faced in 2014, we are making fundamental changes to the business to better align our strategy and resources with future growth opportunities. We are reducing our overall focus on the mobile market and have shifted our organizational capacity toward the infrastructure market. With our range of leading products that can accommodate heavy data usage at some of the world’s largest venues, we remain confident that the infrastructure market will be a major long-term growth driver. We believe that 2015 will be a year of transition for Baylin, where we are reducing costs and laying the foundation to deliver future growth.”

Selected Financial Information
(In thousands of United States dollars except per share amounts)

Three Months Ended March 31

2015

2014

% Change

Revenue

7,955

11,251

(29%)

Gross profit

1,029

2,525

(59%)

R&D

1,617

1,832

(12%)

Operating expenses

3,801

3,154

20%

Adjusted EBITDA1

(2,898)

(1,767)

64%

Net income (loss)

(5,750)

(3,850)

49%

Net income (loss) per share

Basic

(0.31)

(0.21)

48%

Diluted

(0.31)

(0.21)

48%

Issued and outstanding

Common shares

18,733,919

18,733,919

0%

 

The Company’s complete financial statements and Management’s Discussion & Analysis for the three months ended March 31, 2015 are available at baylintech.com/investor-relations/ and www.sedar.com/.

Financial Summary

Revenues
Revenues for Q1 2015 were $7.9 million, compared to $11.2 million in Q1 2014. The year-over-year decrease was as a result of a substantial reduction in orders from a key mobile customer. This was the main factor in the year-over-year decreases in revenues, gross profit and adjusted EBITDA. The reduction in revenues from this one customer was offset, in part, by strong sales of new antennas in our broadband and infrastructure products.

Gross Profit
Gross profit for Q1 2015 was $1.0 million (12.9% of revenues), compared to $2.5 million (22.4% of revenues) in Q1 2014.

Research and Development
Research and development (“R&D”) costs were $1.6 million in Q1 2015, compared to $1.8 million in Q1 2014. The decrease in R&D costs is the result a reduction in headcount that was initiated over the course of 2014.

Sales and Marketing
Sales and marketing costs were $1.2 million for Q1 2015, compared to $1.1 million in Q1 2014. The increase is due to recruitment costs of new sales and marketing employees, which are aimed at generating increased support for the continued growth in sales momentum and greater brand awareness.

General and Administrative
General and administrative (“G&A”) costs were $2.6 million for Q1 2015, compared to $2.1 million for Q1 2014. G&A expenses increased as a result of severance payments made to former senior executives.

Adjusted EBITDA
Adjusted EBITDA1 for the three months ended March 31, 2015 was $(2.9) million compared to
$(1.8) million for the same period last year.

Net Income (Loss)
Net loss in Q1 2015 was $5.7 million, or $0.31 loss per common share, compared to net loss of
$3.8 million, or $0.21 earnings per common share, for the same period in the previous year. Net loss for Q1 2015 was a flow-through effect from the decrease in revenues during the quarter.

Liquidity
As at March 31, 2015, the Company had cash and cash equivalents totaling $17.7 million and working capital of $14.9 million

Conference Call

Baylin will hold a conference call to discuss its 2015 first quarter financial results today, May 14, 2015, at 8:00 a.m. (EDT). The call will be hosted by Randy Dewey, Interim President & Chief Executive Officer. All interested parties are invited to participate. 

DIAL IN NUMBER:

(647) 427-7450
(888) 231-8191

Conference ID #

36600476

TAPED REPLAY:

416-849-0833 or 1-855-859-2056
Available until 12:00 midnight (EDT) Thursday, May 21, 2015
Reference number: 36600476

LIVE WEBCAST:

http://bit.ly/1Frpn3y

Webcast will be archived for one year

 

(1)    Non-IFRS Measures

Baylin uses EBITDA and Adjusted EBITDA to measure its strength and its future ability to generate and sustain earnings. EBITDA refers to earnings before interest (finance expenses, net), taxes, depreciation, and amortization and discontinued operations. Adjusted EBITDA refers to EBITDA less items of an exceptional nature that are outside of the ordinary course of business. Such items include, but are not limited to, certain exceptional, non-recurring share-based compensation, capital gains and losses, restructuring costs, recognition of significant provisions and other significant non-cash transactions. We do not believe these items reflect the underlying performance of our business. EBITDA and Adjusted EBITDA are non-IFRS performance measures. We believe that, in addition to net earnings, EBITDA and Adjusted EBITDA are useful complementary measures of pre-tax profitability and are commonly used by the financial and investment community for valuation purposes.

About Baylin

Baylin (TSX: BYL) is a leading global technology company with more than 37 years of experience in designing, producing and supplying innovative antennas for the mobile, broadband and wireless infrastructure industries. We strive to meet our customers’ needs by being their trusted partner from initial design to production with an extensive portfolio of custom engineered solutions as well as leading edge off-the-shelf antenna product.

Forward Looking Statements

Certain statements contained in this news release, including all statements that are not historical facts, contain forward-looking statements and forward-looking information within the meaning of applicable securities laws.  Often, but not always, forward-looking statements or information can be identified by the use of words such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate” or “believes” or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. With respect to forward-looking statements and information contained herein, we have made numerous assumptions. Although our management believes that the assumptions made and the expectations represented by such statement or information are reasonable, therecan be no assurance that any forward-looking statement or information referenced herein will prove to be accurate. Forward-looking statements and information by their nature are based on assumptions and involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statement or information. Such risks, uncertainties and other factors include, among other things those risks identified in Baylin’s annual information form dated March 20, 2015 filed on SEDAR at www.sedar.com.

Although we have attempted to identify factors that would cause actual actions, events or results to differ materially from those disclosed in the forward-looking statements or information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. Also, many of the factors are beyond the control of Baylin. Accordingly, readers should not place undue reliance on forward-looking statements or information. Baylin undertakes no obligation to reissue or update any forward-looking statements or information as a result of new information or events after the date hereof except as may be required by law. All forward-looking statements and information herein are qualified by this cautionary statement.

SOURCE Baylin Technologies Inc.

For further information please contact:

Investor relations: Conrad Seguin, TMX Equicom, T: (416) 815-0700 ext. 251, cseguin@tmxequicom.com