DataWind Reports Record Revenues of $14.0 Million, up 109%, for Fiscal Second Quarter 2016

MISSISSAUGA, ON--(Marketwired - Nov 12, 2015) -  DataWind Inc. (TSX: DW), a leader in the delivery of internet access in emerging markets, reported financial results for its fiscal second quarter 2016 ended September, 30, 2015. All amounts are in Canadian dollars.

Fiscal Q2 2016 Financial and Operational Highlights

• Revenues were a record for the fifth consecutive quarter, totaling $14.0 million, increasing 13% from the previous quarter and up 109% from the same year-ago quarter.
• Revenue was driven by record unit sales of 235,000, up 8% from 218,000 in the previous quarter and up 93% from 122,000 in the same year-ago quarter.
• Gross profit totaled a record $3.9 million, up 31% from the previous quarter and up 282% from the same year-ago quarter.
• Adjusted EBITDA for the quarter totaled $5,000, marking the first adjusted EBITDA positive quarter in the company's history. This compares to adjusted EBITDA losses of $425,000 during the previous quarter and $3.3 million in the year ago quarter.
• Partnered with Telenor Communications, its second major carrier in India, making the company's smartphones and tablets available through 1,800 Telenor retail locations across India
• Expanded retail distribution network in India with Iris Computers' 2,500 channel partners
• Relocated final assembly from China and initiated shipments of tablets from new Indian assembly facility which reduces import duties and expands gross margins
• Began development of mobile educational app for children without access to teachers in partnership with Mitacs to be delivered on DataWind's connected tablets

Management Commentary
"We made tremendous progress during the quarter -- both improving our margins and managing our expenses, while working to expand our distribution channels in order to meet the strong demand for our Internet-connect mobile devices," said Suneet Singh Tuli, president and CEO of DataWind.

"As a result, both sales and gross margins were at record levels, driving quarterly adjusted EBITDA positive results for the first time in our history.

"Building on our success, we are well positioned to capitalize on the significant opportunities we see for the remainder of fiscal 2016 and beyond which include geographic expansion and our high-margin advertising platform."

Financial Summary
Revenue for the second quarter of 2016 increased 109% to $14.0 million compared to $6.7 million in the same year-ago quarter. The increase was driven by increased sales channel expansion, as well as a greater ability to meet demand as the result of increased production capacity that was driven by the addition of working capital provided by an equity funding completed in July 2014.

Gross profit was $3.9 million or 28.2% of sales in Q2 2016, compared to $1.0 million or 15.4% in the same year-ago period. The increase in gross margin was primarily due to an improved product distribution mix which more effectively met channel requirements, as well as improved cost control with subcontracted manufacturers.

Research and development (R&D) costs were $413,000 in the quarter, compared to $427,000 in the year-ago period. The decrease in R&D spending was due to a decrease in non-recurring engineering costs.

General and administrative (G&A) costs, which include sales, marketing expenses and salaries, were $3.6 million in the second quarter, as compared to $1.9 million in the same year-ago period. The increase in expenses were due to an additional $419,000 in salary costs as a result of increased headcount, $435,000 in sales and marketing expenses, and $197,000 of legal and professional costs.

Net loss in Q2 2016 was $2.0 million or $(0.09) per common share, compared to $3.2 million or $(0.15) per common share in Q2 2015. The narrowing loss was due to increased sales of and related improvement in gross margins offset by an increase in G&A costs.

Adjusted EBITDA for the quarter totaled $5,000, improving from a loss of $425,000 in the previous quarter and a loss of $3.3 million in the year-ago quarter.

Working capital was $11.2 million at September 30, 2015, compared to $12.0 million at June 30, 2015.

DataWind expects to file its Management's Discussion and Analysis ("MD&A") and full Financial Statements with SEDAR before the filing deadline.

Conference Call
DataWind management will host a conference call presentation later today to discuss these financial results, followed by a question and answer period.

Interested parties can listen to the live presentation by dialing the toll-free number or by clicking the webcast link below.

Date: Thursday, November 12, 2015
Time: 5:00 p.m. Eastern time
Toll-free number: 888-523-1225
International number: 719-785-1753
Conference ID: 994309
Webcast: http://www.visualwebcaster.com/event.asp?id=102973

Please call the conference telephone number 10 minutes before the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Liolios Investor Relations at 949-574-3860.

A replay of the call will be available by telephone after the call ends on the same day through December 12, 2015 and via the Investor Information section of the DataWind website at www.datawind.com.

Toll-free replay number: 888-203-1112
International replay number: 719-457-0820
Conference ID: 994309

About DataWind
DataWind is a leader in providing affordable mobile Internet connectivity in emerging markets. The company's patented, cloud-based technology reduces up to 97% the amount of data needed for web browsing, providing a broadband experience on any network -- even on legacy 2G networks that are still prevalent in developing countries. DataWind also provides economical smartphones and tablets that come bundled with one year of unlimited internet access, making it the largest tablet provider in India only behind Samsung. DataWind's unique solution offers broad social and economic benefits for the billions of people around the world for whom an Internet connection was previously out of reach. DataWind is traded on the Toronto Stock Exchange (TSX: DW). For more information visit www.datawind.com.

Adjusted EBITDA
Adjusted net loss before interest, taxes, depreciation and amortization ("Adjusted EBITDA") is a non-IFRS measure and excludes finance costs, interest income, income tax expense or recovery, depreciation and amortization and income and expenses of a non-recurring, unusual or one-time nature. Adjusted EBITDA is a measure used by management, the retail industry and investors as an indicator of the Company's operating performance, ability to incur and service debt, and as a valuation metric. While Adjusted EBITDA is a non-IFRS measure, management believes that it is an important indicator of operating performance because it excludes the effect of financing and investing activities by eliminating the effects of interest and depreciation and removes the impact of certain non-recurring items that are not indicative of our ongoing operating performance. Therefore, management believes Adjusted EBITDA gives investors greater transparency in assessing the Company's result of operations.

These measures do not have any standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other reporting issuers. Adjusted EBITDA should not be considered in isolation or as an alternative to measures prepared in accordance with IFRS.

Forward-Looking Information
This press release includes certain forward-looking statements that are based upon current expectations, which involve risks and uncertainties associated with our business and the environment in which the business operates. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements, including those identified by the expressions "anticipate", "believe", "plan", "estimate", "expect", "intend" and similar expressions to the extent they relate to the Company or its management. The forward- looking statements are not historical facts, but reflect management's current expectations regarding future results or events. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations. The Company does not undertake or accept any obligation to release publicly any updates or revisions to any forward-looking statements to reflect any change in the Company's expectations, except as prescribed by applicable securities laws.

Key assumptions made in preparing the forward-looking statements contained in this MD&A include, but are not limited to, the following: the Company will continue to successfully increase its sales volumes, the Company will be able to maintain its gross margin, and the Company will continue to effectively manage the transition from private to public entity by hiring key senior and middle management and effectively rolling out and adopting appropriate policy changes.

No securities regulatory authority has either approved or disapproved the contents of this press release/media advisory.

DataWind Inc.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION
As at September 30, 2015 and March 31, 2015
(in thousands of Canadian dollars except per share data and except where indicated)
(Unaudited)
ASSETS		September 2015				March 2015
Current assets
Cash and cash equivalents		$	7,337			$	10,698
Trade and other receivables			21,538				14,087
Inventories			7,567				7,163
			36,442				31,948
Non-current assets
Property and equipment			260				156
Total Assets		$	36,702			$	32,104
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities		$	12,693			$	10,671
Loans and borrowings			12,565				7,273
Total Liabilities			25,258				17,944
SHAREHOLDERS' EQUITY
Share capital			52,168				52,168
Contributed surplus			3,404				3,339
Accumulated other comprehensive income(loss)			80				(332	)
Deficit			(44,208	)			(41,015	)
Total Shareholders' Equity			11,444				14,160
Total Liabilities and Shareholders' Equity		$	36,702			$	32,104
The accompanying notes are an integral part of the condensed consolidated interim financial statements.

DataWind Inc. CONDENSED CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS Three and six month periods ended September 30, 2015 and 2014 (in thousands of Canadian dollars except per share data and except where indicated) (Unaudited)
		Three Months Ended September 30,								Six Months Ended September 30,
			2015				2014				2015				2014
Revenue		$	14,015			$	6,712			$	26,412			$	12,177
Cost of goods sold			10,067				5,679				19,453				10,346
Gross profit			3,948				1,033				6,959				1,831
Operating expenses:
Research and development			413				427				753				823
Administration cost			3,551				1,878				6,663				3,996
IPO transaction costs			-				2,058				-				2,058
Foreign exchange loss/(gain)			1,176				(98	)			978				(125	)
Total operating expenses			5,140				4,265				8,394				6,752
Operating loss			(1,192	)			(3,232	)			(1,435	)			(4,921	)
Finance and other income			1				36				21				36
Finance expense			(814	)			(2	)			(1,779	)			(25	)
Loss before income taxes			(2,005	)			(3,198	)			(3,193	)			(4,910	)
Tax expense			-				-				-				-
Net loss			(2,005	)			(3,198	)			(3,193	)			(4,910	)
Other comprehensive income:
Unrealized foreign exchange translation gain			1,290				68				412				85
Net comprehensive loss for the period		$	(715	)		$	(3,130	)		$	(2,781	)		$	(4,825	)
Net loss per share
Basic		$	(0.09	)		$	(0.15	)		$	(0.14	)		$	(0.27	)
Weighted Average number of shares outstanding			22,057,623				21,484,186				22,057,623				18,474,497

DataWind Inc.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
Six month periods ended September 30, 2015 and September 30, 2014
(in thousands of Canadian dollars except per share data and except where indicated)
(Unaudited)
		Six month period ended September 30
Cash flows from operating activities		2015				2014
Net loss for the period		$	(3,193	)		$	(4,910	)
Non-cash items:
Depreciation of property and equipment			37				21
Finance Expenses			1,779				25
Stock based compensation			65				358
			(1,312	)			(4,506	)
Changes in non-cash working capital items
Trade and other receivables			(7,451	)			(4,327	)
Inventories			(404	)			(2,168	)
Accounts payable and accrued liabilities			2,022				4,399
Net cash used in operating activities			(7,145	)			(6,602	)
Cash flows from investing activities
Addition of property and equipment during the period			(122	)			(61	)
Net cash used in investing activities			(122	)			(61	)
Cash flows from financing activities
Issuance of common shares			-				30,001
Share issue cost			-				(3,490	)
Issuance of special warrants			-				896
Loan used during the period			6,323				-
Loan repaid during the period			(1,031	)			(125	)
Interest paid during the period			(241	)			-
Net cash provided by financing activities			5,051				27,282
Net change in cash and cash equivalents			(2,216	)			20,619
Cash and cash equivalents - beginning of period			10,698				747
Exchange (gains)/losses			(1,145	)			77
Cash and cash equivalents - end of period		$	7,337			$	21,443

DataWind Inc.
RECONCILIATION OF NET INCOME (LOSS) TO EBITDA
As at September 30, 2015, June 30, 2015 and September 30, 2014
(in thousands of Canadian dollars except per share data and except where indicated)
(Unaudited)
			Three-month periods ended
(in CAD "000" except per share amounts)			Sep, 2015		Jun, 2015		Sep, 2014
Net loss			$ (2,005)		$ (1,188)		$ (3,198)
	Depreciation/amortization expenses		21		16		12
	Extended Payment Finance (i)		370		547		-
	Finance costs		444		418		2
	Finance and other income		(1)		(20)		(36)
	Foreign exchange translation (gain)/loss		1,176		(198)		(98)
Adjusted EBITDA (ii)			$ 5		$ (425)		$ (3,318)
Adjusted EBITDA loss per share			$ 0.00		$ (0.02)		$ (0.18)

(i)	Extended Payment Finance represents finance cost paid to third party for financing of Chinese manufactures for the extended payment terms for material.
(ii)	Adjusted EBITDA is a measure used by management, the retail industry and investors as an indicator of the Company's performance, ability to incur and service debt and as a valuation metric. Adjusted EBITDA is a non-IFRS measure.