SOURCE: Baylin Technologies

Baylin Technologies

May 15, 2014 09:01 ET

Baylin Technologies Announces First Quarter 2014 Results

TORONTO, ON--(Marketwired - May 15, 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 months ended March 31, 2014. All figures are stated in United States dollars unless otherwise noted.

First Quarter 2014 Highlights

  • Revenue was $11.3 million in Q1 2014 compared to $17.7 million in Q1 2013
  • Gross profit for Q1 2014 was $2.5 million, compared to $5.9 million for Q1 2013
  • Adjusted EBITDA in Q1 2014 was $(1.8) million as compared to 2.4 million for Q1 2013
  • Total cash and cash equivalents were $36.8 million at March 31, 2014

"As we communicated in our last quarterly conference call, our first quarter revenues saw a decrease, mainly as a result of lower sales with our key mobile customer," said Ephraim Ulmer, President and CEO. "We continue to market our innovative patented new LTE antenna technology for mobile and broadband, and the interest from large handset manufacturers has been very positive. We expect this interest to translate into new customer wins in the coming quarters. As part of our diversification strategy, we have also made great strides growing our infrastructure business. Major wireless carriers worldwide, including North America, have already approved our technology for use in their in-building deployments. In the first quarter we saw our revenue for this segment exceed half of the entire revenue reported for this segment in 2013."

 
Selected Financial Information
(In thousands of United States dollars except per share amounts)
     
    Three Months Ended Mar 31
     
    2014   2013   % Change
Revenue   11,251   17,695   (36.4)
Gross profit   2,525   5,886   (57.1)
R&D   1,832   1,694   8.1
Operating expenses   3,154   2,337   35.0
Operating income (loss)   (2,461)   1,855   (232.7)
Adjusted EBITDA1   (1,767)   2,358   (174.9)
Net income (Loss)   (3,850)   1,352   (384.8)
Net income (loss) per share            
  Basic and Diluted   (0.21)   0.12   (275.0)
             
Issued and outstanding            
  Common shares   18,733,918   N/A    
             
             

The Company's complete financial statements and Management's Discussion & Analysis for Q1 2014 are available at baylintech.com/investor-relations/ and www.sedar.com/.

Financial Summary

First Quarter

Revenue for Q1 2014 was $11.3 million, a decrease of 36.4% from Q1 2013 revenue of $17.7 million. The quarter-over-quarter change was driven primarily by a decrease in customer orders over the period.

Gross profit for Q1 2014 was $2.5 million, yielding a gross margin of 22.4%, as compared to Q1 2013 gross profit of $5.9 million and gross margin of 33.3%. The quarter-over-quarter decrease in gross margin was the result of a difference in product mix coupled with a decreased allocation in the number of new projects during Q1 2014.

Research and Development ("R&D") expenses for Q1 2014 were $1.8 million, an 8.1% increase over $1.7 million in Q1 2013. The increase was a result of the additional costs incurred for patent registrations and maintenance.

General and Administrative ("G&A") expenses for Q1 2014 were $2.1 million, a $0.3 million increase compared to $1.8 million for Q1 2013. The increase in G&A expenses were related to payroll expenses as a result of additional managers being hired at the end of 2013.

Sales and Marketing expenses for Q1 2014 were $1.1 million, a 111.6% increase compared to $0.5 million in Q1 2013. The increased expense was the result of additional new business development activity.

Financial expenses increased during Q1 2014 mainly due to the currency exchange rate fluctuation of the CAD versus our operating currency, the USD, as it impacts the carrying value of the Company's cash and cash equivalents balance.

Overall, the Q1 2014 loss was mainly due to a $2.5 million operating loss and $1.3 million in financial expenses attributed to foreign exchange losses due to the depreciation of the CAD

As at March 31, 2014, Baylin had working capital of $36.7 million, compared with $41.4 million at December 31, 2013. As at March 31, 2014 there were 18.7 million common shares outstanding.

Q1 2014 CONFERENCE CALL

WHEN: Thursday, May 15, 2014 at 12:30PM EDT

CONFERENCE CALL/WEBCAST: You can join the call by dialing 647-427-7450 or 1-888-231-8191 and referencing conference ID: 42088044. A live audio webcast will be available through http://bit.ly/1mleunE. An archived replay of the webcast will be available for 365 days.

(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 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.

 
INTERIM CONDENSED CONSOLIDATED STATMENTS OF FINANCIAL POSITION
U.S dollars in thousands
         
    March 31,   December 31,
    2014   2013
    Unaudited   Audited
ASSETS            
             
CURRENT ASSETS:            
  Cash and cash equivalents   $ 36,810   $ 45,058
  Trade receivables, net     7,232     8,905
  Other accounts receivable     1,472     1,895
  Inventories     5,758     5,493
             
      51,272     61,351
             
NON-CURRENT ASSETS:            
  Property, plant and equipment     21,390     21,420
  Lease deposits     1,025     1,033
  Deferred taxes     949     921
             
      23,364     23,374
             
    $ 74,636   $ 84,725
             
             
         
  March 31,   December 31,  
  2014   2013  
  Unaudited   Audited  
LIABILITIES AND EQUITY            
             
CURRENT LIABILITIES:            
  Credit from banks and others $ 3,766   $ 6,685  
  Trade payables   7,737     9,479  
  Other accounts payable   2,710     3,462  
  Income tax payable   330     356  
             
    14,543     19,982  
             
NON-CURRENT LIABILITIES:            
  Loans from banks   1,330     1,630  
  Finance lease liabilities   1,278     1,661  
  Employee benefit liabilities   1,408     1,358  
  Deferred taxes   500     500  
             
    4,516     5,149  
             
TOTAL LIABILITIES:   19,059     25,131  
             
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY:            
  Share capital and premium   80,766     80,766  
  Foreign currency translation reserve   3,448     3,672  
  Capital reserve from transactions with non-controlling interests   101     101  
  Share-based payment reserve   677     620  
  Accumulated deficit   (29,415 )   (25,565 )
             
  Total equity   55,577     59,594  
             
  $ 74,636   $ 84,725  
             
             
INTERIM CONDENSED
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
U.S dollars in thousands, except per share data
       
    Three months ended
March 31,
 
    2014     2013  
                 
Revenues   $ 11,251     $ 17,695  
                 
Cost of revenues     8,726       11,809  
                 
Gross profit     2,525       5,886  
                 
Operating expenses:                
Selling and marketing expenses     1,073       507  
Research and development expenses     1,832       1,694  
General and administrative expenses     2,081       1,802  
Other expenses, net     -       28  
                 
      4,986       4,031  
                 
Operating income (loss)     (2,461 )     1,855  
                 
Finance income     168       36  
Finance expense     (1,499 )     (299 )
                 
Income (loss) before income taxes     (3,792 )     1,592  
Income tax     (58 )     (240 )
                 
Net income (loss)     (3,850 )     1,352  
                 
Other comprehensive income (loss):                
                 
Amounts to be reclassified to profit or loss under specific conditions:                
Adjustments arising from translating financial statements of foreign operations     (224 )     (7 )
                 
Total other comprehensive loss     (224 )     (7 )
                 
Total comprehensive income (loss)   $ (4,074 )   $ 1,345  
                 
Basic and diluted earnings (loss) per share (in US dollars)   $ (0.21 )   $ 0.12  
                 
                 
                 
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
U.S dollars in thousands
       
    Three months ended
March 31,
 
    2014     2013  
Cash flows from operating activities:                
                 
Net income (loss)   $ (3,850 )   $ 1,352  
                 
Adjustments to reconcile net income (loss) to net cash used in operating activities:                
                 
Adjustments to the profit or loss items:                
                 
Share-based compensation     57       -  
Depreciation of property, plant and equipment     694       503  
Finance expense, net     1,331       263  
Income tax     58       240  
Change in employee benefit liabilities, net     64       98  
                 
      2,204       1,104  
Changes in asset and liability items:                
                 
Decrease in trade receivables     1,614       2,217  
Decrease (increase) in other accounts receivable     387       (1,937 )
Decrease (increase) in inventories     (312 )     301  
Decrease in trade payable     (1,661 )     (2,591 )
Decrease in other accounts payable     (737 )     (263 )
                 
      (709 )     (2,273 )
Cash paid and received during the period for:                
                 
Interest paid     (126 )     (215 )
Interest received     117       -  
Taxes paid     (66 )     (162 )
                 
      (75 )     (377 )
                 
Net cash used in operating activities   $ (2,430 )   $ (194 )
                 

Contact Information

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