SOURCE: Baylin Technologies

Baylin Technologies

March 14, 2014 07:00 ET

Baylin Technologies Announces 2013 Fourth Quarter and Year-End Financial Results

TORONTO, ON--(Marketwired - Mar 14, 2014) - Baylin Technologies Inc. (TSX: BYL), a global provider of innovative antenna solutions for the mobile, broadband and wireless infrastructure markets, today announced its financial results for the three and 12 months ended December 31, 2013. All figures are stated in United States dollars unless otherwise noted.

Fiscal Year 2013 Highlights

  • Revenue increased by 16.5% to $80.1 million from $68.7 million in 2012.
  • Antennas shipped increased by 16.3% to 200 million units from 172 million units in 2012.
  • Gross profit increased by 10.0% to $25.2 million from $22.9 million in 2012.
  • Adjusted EBITDA from continuing operations increased by 25.5% to $10.8 million from $8.6 million in 2012.
  • The Company completed its initial public offering ("IPO") in November 2013, raising gross proceeds of $47 million.
  • Total cash and cash equivalents were $45.1 million at December 31, 2013, compared to $7.0 million at December 31, 2012, with the increase principally the result of proceeds from the Company's IPO.

"It was a successful year overall for Baylin, highlighted by solid year-over-year revenue and Adjusted EBITDA growth and the completion of our IPO in November," said Ephraim Ulmer, President and Chief Executive Officer, Baylin. "We now have a strong balance sheet and the resources to expand our customer base and diversify our revenue. The underlying trends in our markets -- specifically the rapid growth in mobile data traffic and devices -- are driving demand for sophisticated, highly engineered antenna systems. While near-term sales will be affected by lower allocations on a key product platform, with our 35-year track record of innovation we are well positioned to capitalize on market growth over the long term. In addition to our expansion in Vietnam, we are focused on leveraging our investment in LTE antenna solutions to win new mobile OEM customers. Based on the strong early results in wireless infrastructure, we are also investing to expand this segment of our business."

Selected Financial Information  
(In thousands of United States dollars except per share amounts)  
    Three Months Ended Dec 31     Year Ended Dec 31  
    2013   2012   % Change     2013   2012   % Change  
Revenue   14,264   20,369   (30 %)   80,071   68,709   17 %
Gross profit   3,143   6,789   (54 %)   25,217   22,924   10 %
R&D   2,093   1,786   17.2     7,392   6,588   12 %
Operating expenses   702   2,834   (75 %)   14,379   9,874   32 %
Adjusted EBITDA1   (278 ) 2,499   (111 %)   10,822   8,623   26 %
Net income   359   1,748   (79 %)   829   1,376   (40 %)
Net income per share                            
  Basic   0.02   0.16   (88 %)   0.07   0.13   (46 %)
  Diluted   0.02   0.16   (88 %)   0.07   0.13   (46 %)
Issued and outstanding                            
  Common shares   18,733,918   11,283,343   66 %   18,733,918   11,283,343   66 %

The Company's complete financial statements and Management's Discussion & Analysis for 2013 are available at and

Financial Summary

Full Year
Revenue for 2013 was $80.1 million, up from 2012 revenue of $68.7 million. The year-over-year increase of 16% reflects new project wins and an increase in market share with key customers. During 2013, one of the Company's key customers launched new products incorporating the Company's antennas, which was the main reason for the revenue increase. Overall, the Company sold approximately 200 million antennas in 2013, compared to approximately 172 million antennas in 2012.

Gross profit for 2013 was $25.2 million (31.5% of revenue), compared with $22.9 million (33.4% of revenue) in 2012. The increase in gross profit dollars was the result of higher sales volumes. The decrease in gross profit percentage reflects the change in product mix resulting in higher subcontracting costs, as well as a reduction in average selling prices in late 2013, which is typical within the industry following the initial launch of new products.

Research and development ("R&D") expenses increased by 12.2% in 2013, driven principally by continued investment in new technologies and product designs, an increase in costs for patent registrations and maintenance, and non-recurring, non-cash share-based compensation to the Company's Chief Technical Officer, which occurred prior to the completion of the Company's IPO. 

General and administrative ("G&A") expenses for 2013 increased by $4.3 million over 2012. These expenses for 2013 include $6.1 million in non-recurring, non-cash share-based compensation costs that occurred prior to the Company's IPO, as well as the extinguishment of the annuity liability for the Company's former founder, which was a $2.0 million non-cash item.

Adjusted EBITDA1 for 2013 increased by 25.5% to $10.8 million, compared with adjusted EBITDA1 of $8.6 million in 2012. Net income for 2013 was $0.8 million, compared with $1.4 million in 2012. Net income for 2013 was affected mainly by the non-cash transactions referred to above.

Fourth Quarter
Revenue for Q4 2013 was $14.3 million, compared with $20.4 million in Q4 2012. The year-over-year decrease largely reflects the timing of customer product launches and end consumer demand in the mobile handset business, which have historically been the major factors driving the quarterly fluctuations in the Company's revenue. New product launches can significantly impact the level of net sales in any particular quarter.

Adjusted EBITDA1 for Q4 2013 was $(0.3) million, compared with adjusted EBITDA1 of $2.5 million for Q4 2012, reflecting lower sales and gross profit levels in Q4 2013.

As at December 31, 2013, the Company had cash and cash equivalents totaling $45.1 million. In Q4 2013, the Company completed its IPO and raised gross proceeds of $47 million. The IPO significantly improved the Company's liquidity and enabled it to expand and execute key growth strategies.


The antenna industry has grown, and is expected to continue to grow, with the proliferation of mobile devices and the exponential growth in mobile data traffic. These trends place new demands on designers and manufacturers of mobile devices and have resulted in a need for increasingly complex, innovative and highly engineered antenna solutions, specifically for LTE devices. The current trends in wireless communication, coupled with Baylin's stable financial position and 35-year history as an innovative antenna supplier, position the Company for long-term growth. Going forward, the Company plans to continue to grow and diversify its customer base by strengthening its product portfolios and particularly expanding the wireless infrastructure offering.

In the near term, the Company expects revenue in the first half of 2014 to be affected by a lower-than-expected allocation on a major product launch from its largest customer. The Company maintains a close relationship with this customer and supplies multiple devices and platforms. To offset the short-term impact from this platform, management is highly focused on growing and diversifying its customer base. The Company's strategic priorities for 2014 include continuing to secure significant contracts with the leading OEMs in the mobile sector, investing in advanced research and development, new product introductions, and continued enhancement of existing product lines. In addition to its organic growth initiatives, Baylin will pursue strategic acquisitions to accelerate growth and diversify its business, with a focus on the wireless infrastructure segment.

Conference Call

Baylin will hold a conference call to discuss its 2013 fourth quarter and year-end financial results today, March 14, 2014, at 8:30 a.m. (EDT). The call will be hosted by Ephraim Ulmer, President & CEO, and Yuval Katzir, CFO. All interested parties are invited to participate. 

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

Conference ID # 

416-849-0833 or 1-855-859-2056
Available until 12:00 midnight (EDT) Friday, March 21, 2014
Reference number: 8941629

Webcast will be archived for one year

(1) Non-IFRS Measures

Baylin uses EBITDA from continuing operations and Adjusted EBITDA from continuing operations to measure its strength and our future ability to generate and sustain earnings. EBITDA from continuing operations refers to earnings before interest (finance expenses, net), taxes, depreciation, and amortization and discontinued operations. Adjusted EBITDA from continuing operations refers to EBITDA from continuing operations 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 from continuing operations and Adjusted EBITDA from continuing operations are non-IFRS performance measures. We believe that, in addition to net earnings, EBITDA from continuing operations and Adjusted EBITDA from continuing operations 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 35 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, there can 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 prospectus filed on SEDAR at

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.

U.S. dollars in thousands
    December 31,
    2013   2012
CURRENT ASSETS:            
  Cash and cash equivalents   $ 45,058   $ 6,997
  Trade receivables, net     8,905     14,247
  Other accounts receivable     1,895     1,318
  Loan to related party     -     150
  Inventories     5,493     5,195
      61,351     27,907
  Property, plant and equipment     21,420     13,680
  Lease deposits     1,033     563
  Loan to related party     -     1,521
  Deferred taxes     921     530
      23,374     16,294
    $ 84,725   $ 44,201
U.S. dollars in thousands
    December 31,  
    2013     2012  
CURRENT LIABILITIES:                
  Credit from banks and others   $ 6,685     $ 12,859  
  Trade payables     9,479       11,644  
  Other accounts payable     3,462       2,342  
  Convertible loans from shareholder     -       400  
  Income tax payable     356       646  
      19,982       27,891  
  Loans from banks     1,630       28  
  Long-term loans from shareholder     -       3,293  
  Finance lease liabilities     1,661       178  
  Employee benefit liabilities, net     1,358       1,290  
  Deferred taxes     500       200  
  Other long-term liabilities     -       1,759  
      5,149       6,748  
TOTAL LIABILITIES:     25,131       34,639  
  Share capital and premium     80,766       33,235  
  Foreign currency translation reserve     3,672       3,193  
  Capital reserve from transactions with non-controlling interests     101       101  
  Share-based payment reserve     620       -  
  Accumulated deficit     (25,565 )     (26,967 )
 Total equity     59,594       9,562  
    $ 84,725     $ 44,201  
U.S. dollars in thousands, except share data  
    Year ended December 31,  
    2013     2012  
Revenues   $ 80,071     $ 68,709  
Cost of revenues     54,854       45,785  
Gross profit     25,217       22,924  
Operating expenses:                
Selling and marketing expenses     2,760       2,644  
Research and development expenses     7,392       6,588  
General and administrative expenses     11,657       7,320  
Other income, net     (38 )     (90 )
      21,771       16,462  
Operating income     3,446       6,462  
Finance income     203       44  
Finance expense     (1,759 )     (1,436 )
Income before income taxes     1,890       5,070  
Income taxes     (1,061 )     (557 )
Income from continuing operations     829       4,513  
Loss from discontinued operations, net     -       (3,137 )
Net income     829       1,376  
Other comprehensive income (loss) (net of tax effect):                
Amounts not to be reclassified subsequently to profit or loss:                
Remeasurement loss from defined benefit plans     (36 )     (248 )
Total     (36 )     (248 )
Amounts to be reclassified to profit or loss under specific conditions:                
Adjustments arising from translation of foreign operations     479       285  
Reclassification to profit or loss upon sale of foreign operation     -       (30 )
Total     479       255  
Total other comprehensive income     443       7  
Total comprehensive income   $ 1,272     $ 1,383  
U.S. dollars in thousands  
    Year ended December 31,  
    2013     2012  
Cash flows from operating activities:            
Net income from continuing operations   $ 829     $ 4,513  
Adjustments to reconcile net income to net cash provided by (used in) operating activities:                
Adjustments to the profit or loss items:                
Share-based payment     6,602       -  
Extinguishment of other long-term liabilities     (2,030 )     -  
Depreciation and amortization     2,709       2,161  
Finance expense, net     1,556       1,392  
Loss from sale of property, plant and equipment     95       -  
Income taxes     1,061       557  
Change in employee benefit liabilities, net     16       (19 )
      10,009       4,091  
Changes in asset and liability items:                
Decrease (increase) in trade receivables     5,513       (3,263 )
Increase in other accounts receivable     (309 )     (257 )
Increase in inventories     (152 )     (1,405 )
Increase (decrease) in trade payables     (2,369 )     4,000  
Increase (decrease) in other accounts payable     1,062       (220 )
      3,745       (1,145 )
Cash paid and received during the year for:                
Interest paid     (1,125 )     (1,170 )
Interest received     45       10  
Taxes paid     (1,558 )     (720 )
      (2,638 )     (1,880 )
Net cash provided by operating activities from continuing operations     11,945       5,579  
Net cash used in operating activities from discontinued operations     -       (2,342 )
    $ 11,945     $ 3,237  
U.S. dollars in thousands  
    Year ended December 31,  
    2013     2012  
Cash flows from investing activities:            
Purchase of property, plant and equipment   $ (6,130 )   $ (1,498 )
Rental lease deposits     (541 )     -  
Proceeds from sale of property, plant and equipment     197       36  
Collection of long-term loans     2,280       234  
Net cash used in investing activities from continuing operations     (4,194 )     (1,228 )
Net cash provided by investing activities from discontinued operations     -       330  
      (4,194 )     (898 )
Cash flows from financing activities:                
Issuance of share capital, net     41,202       490  
Receipt of long-term loans from banks     3,230       -  
Receipt of long-term loan from shareholder     -       1,370  
Repayment of long-term loans from shareholders     (5,275 )     (836 )
Repayment of other long-term liabilities     (142 )     (127 )
Repayment of finance lease liabilities     (1,246 )     -  
Repayment of long-term loans     (400 )     -  
Receipt (repayment) of short-term credit from banks and others, net     (6,891 )     1,200  
Net cash provided by financing activities from continuing operations     30,478       2,097  
Net cash used in financing activities from discontinued operations     -       (890 )
      30,478       1,207  
Exchange differences on balances of cash and cash equivalents     (168 )     149  
Increase in cash and cash equivalents     38,061       3,695  
Cash and cash equivalents at the beginning of the year     6,997       3,302  
Cash and cash equivalents at the end of the year   $ 45,058     $ 6,997  

Contact Information

  • For further information, please contact:
    Investor relations:
    Conrad Seguin
    TMX Equicom
    T: (416) 815-0700 ext. 251
    Email Contact