MISSISSAUGA, ON--(Marketwired - Aug 13, 2015) - DataWind Inc. (
Fiscal Q1 2016 Financial and Operational Highlights
- Revenues were a record for the fourth consecutive quarter, totaling $12.4 million, increasing 12% from the previous quarter and up 127% from the same year-ago quarter.
- Revenue was driven by record unit sales of 218,000, up 18% from 184,000 in the previous quarter and up 151% from 87,000 in the same year-ago quarter.
- Gross profit totaled a record $3.0 million, up 3% from the previous quarter and up 275% from the same year-ago quarter.
- During the quarter, the company's subcontractors completed the transfer of tablet final assembly from China to India, which is expected to substantially lower import duties of as high as 13%. Subsequent to the quarter end, the company began shipping units from this facility.
- Adjusted EBITDA loss for the quarter totaled $425,000, an 88% reduction from the previous quarter and 71% reduction from the year-ago quarter.
- Introduced bundling of one year of unlimited internet access via DataWind's proprietary internet delivery technology with every smartphone and tablet sold in India, with plans to introduce worldwide.
Management Commentary
"Improved distribution channels and increasing demand for our uniquely-capable Internet-connect mobile devices helped generate another quarter of record revenue and gross profit," said Suneet Singh Tuli, president and CEO of DataWind.
"The recent transfer of the final assembly of all DataWind tablets to India has dramatically lowed our import duties that had been as high as 13%.
"Looking forward, we will continue to be focused on expanding our distribution channels in India in order to meet the pent-up demand for our low cost internet device, as we further develop our new advertising platform which will add a third, high-margin revenue component to our business model."
Financial Summary
Revenue for the first fiscal quarter of 2016 increased 127% to $12.4 million compared to $5.5 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. Production capacity was improved by the addition of working capital that was provided by an equity funding complete in July 2014.
Gross profit was $3.0 million or 24.3% of sales in Q1 2016, compared to $799,000 or 14.6% 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 $340,000 in the quarter, compared to $396,000 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 and marketing expenses, were $3.1 million in the first quarter, as compared to $1.9 million in the same year-ago period. The increase in expenses were due to an additional $500,000 in salary costs (as a result of increased headcount), $740,000 in sales and marketing expenses, and $18,000 of legal and professional costs.
Net loss in Q1 2016 was $1.4 million or $(0.06) per common share, compared to $1.7 million or $(0.12) per common share in Q1 2015. The narrowing in loss were due to increased sales of DataWind smartphones and tablets and related improvement in gross margins.
Adjusted EBITDA loss for the quarter totaled $425,000, improving 88% from a loss of $3.6 million in the previous quarter and improving 71% from a loss of $1.5 million in the year-ago quarter.
Working capital was $12.0 million at June 30, 2015, compared to $14.0 million at March 31, 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, August 13, 2015
Time: 2:30 p.m. Eastern time
Toll-free number: 888-438-5524
International number: 719-457-2661
Conference ID: 2056169
Webcast: http://www.visualwebcaster.com/event.asp?id=102745
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 Group at 949-574-3860.
A replay of the call will be available by telephone after the call ends on the same day through September 13, 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: 2056169
About DataWind
DataWind is a leader in low-cost Internet connectivity for emerging markets. DataWind's mission is to bring the Internet, which has the ability to create tremendous social and economic benefits, to billions of unconnected people in the developing world. The Company's Internet Delivery Platform offers a low-cost Internet browsing solution by bundling an affordable tablet device with an inexpensive, pre-paid Internet service plan. DataWind is traded on the Toronto Stock Exchange (DW.TO). 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 contains "forward-looking information" within the meaning of applicable Canadian securities legislation. Such forward-looking information includes information with respect to our goals, beliefs, plans, expectations, anticipations, estimates and intentions. Forward-looking information is identified by the use of terms and phrases such as "may," "would," "should," "could," "expect," "intend," "estimate," "anticipate," "plan," "foresee," "believe," and "continue," or the negative of these terms and similar terminology, including references to assumptions. Please note, however, that not all forward-looking information contains these terms and phrases. Forward-looking information is based upon a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond our control. These risks and uncertainties could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking information. These risks and uncertainties include, but are not limited to, the risk factors identified in the Company's prospectus dated June 27, 2014, which is available on the SEDAR website at www.sedar.com. Consequently, all of the forward-looking information contained herein is qualified by the foregoing cautionary statements, and there can be no guarantee that the results or developments that we anticipate will be realized or, even if substantially realized, that they will have the expected consequences or effects on our business, financial condition or results of operation. Unless otherwise noted or the context otherwise indicates, the forward-looking information contained herein is provided as of the date hereof, and we do not undertake to update or amend such forward-looking information whether as a result of new information, future events or otherwise, except as may be required by applicable law.
No securities regulatory authority has either approved or disapproved the contents of this press release/media advisory.
| DataWind Inc. | ||||||||
| CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION | ||||||||
| As at June 30, 2015 and March 31, 2015 | ||||||||
| (in thousands of Canadian dollars except per share data and except where indicated) | ||||||||
| (Unaudited) | ||||||||
| ASSETS | June 2015 | March 2015 | ||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 10,315 | $ | 10,698 | ||||
| Trade and other receivables | 16,645 | 14,087 | ||||||
| Inventories | 9,964 | 7,163 | ||||||
| 36,924 | 31,948 | |||||||
| Non-current assets | ||||||||
| Property and equipment | 170 | 156 | ||||||
| Total Assets | $ | 37,094 | $ | 32,104 | ||||
| LIABILITIES | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued liabilities | $ | 13,516 | $ | 10,671 | ||||
| Loans and borrowings | 11,452 | 7,273 | ||||||
| Total Liabilities | 24,968 | 17,944 | ||||||
| SHAREHOLDERS' EQUITY | ||||||||
| Share capital | 52,168 | 52,168 | ||||||
| Contributed surplus | 3,371 | 3,339 | ||||||
| Accumulated other comprehensive income(loss) | (1,012 | ) | (332 | ) | ||||
| Deficit | (42,401 | ) | (41,015 | ) | ||||
| Total Shareholders' Equity | 12,126 | 14,160 | ||||||
| Total Liabilities and Shareholders' Equity | $ | 37,094 | $ | 32,104 | ||||
| The accompanying notes are an integral part of the condensed consolidated interim financial statements. | ||||||||
| DataWind Inc. | ||||||||
| CONDENSED CONSOLIDATED INTERIM STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS | ||||||||
| Three months ended June 30, 2015 and 2014 | ||||||||
| (in thousands of Canadian dollars except per share data and except where indicated) | ||||||||
| (Unaudited) | ||||||||
| Three Months ended June 30 | ||||||||
| 2015 | 2014 | |||||||
| Revenue | $ | 12,397 | $ | 5,465 | ||||
| Cost of goods sold | 9,387 | 4,666 | ||||||
| Gross profit | 3,010 | 799 | ||||||
| Operating expenses: | ||||||||
| Research and development | 340 | 396 | ||||||
| Administration cost | 3,111 | 1,866 | ||||||
| Total operating expenses | 3,451 | 2,262 | ||||||
| Operating loss | (441 | ) | (1,463 | ) | ||||
| Finance and other income | 20 | - | ||||||
| Finance expense | (965 | ) | (248 | ) | ||||
| Loss before income taxes | (1,386 | ) | (1,711 | ) | ||||
| Tax expense | - | - | ||||||
| Net loss | (1,386 | ) | (1,711 | ) | ||||
| Other comprehensive income, net of tax: | ||||||||
| Foreign exchange translation gain/(loss) | (680 | ) | 17 | |||||
| Net comprehensive loss for the period | (2,066 | ) | (1,694 | ) | ||||
| Net loss per share | ||||||||
| Basic and diluted | (0.06 | ) | (0.11 | ) | ||||
| Weighted average number of shares outstanding: | ||||||||
| Basic | 22,057,623 | 15,431,734 | ||||||
| The accompanying notes are an integral part of the condensed consolidated interim financial statements. | ||||||||
| DataWind Inc. | |||||||||
| CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS | |||||||||
| Three month periods ended June 30, 2015 and June 30, 2014 | |||||||||
| (in thousands of Canadian dollars except per share data and except where indicated) | |||||||||
| (Unaudited) | |||||||||
| 2015 | 2014 | ||||||||
| Cash flows from operating activities | |||||||||
| Net loss for the period | $ | (1,386 | ) | $ | (1,711 | ) | |||
| Non-cash items: | |||||||||
| Unrealized exchange gains (losses) | (880 | ) | 17 | ||||||
| Depreciation of property and equipment | 16 | 9 | |||||||
| Finance Expenses | 418 | 248 | |||||||
| Stock based compensation | 32 | 284 | |||||||
| (1,800 | ) | (1,377 | ) | ||||||
| Changes in non-cash working capital items | |||||||||
| Accounts receivable | (2,558 | ) | (3,407 | ) | |||||
| Accounts payable and accrued liabilities | 2,845 | (967 | ) | ||||||
| Inventories | (2,801 | ) | 5,416 | ||||||
| Net cash used in operating activities | (4,314 | ) | (335 | ) | |||||
| Cash flows from investing activities | |||||||||
| Addition of property and equipment during the year | (14 | ) | (9 | ) | |||||
| Net cash used in investing activities | (14 | ) | (9 | ) | |||||
| Cash flows from financing activities | |||||||||
| Issuance of special warrant | 896 | ||||||||
| Loans and borrowings | 4, 179 | 265 | |||||||
| Net cash provided by financing activities | 4,179 | 1,161 | |||||||
| Net change in cash and cash equivalents | (149 | ) | 817 | ||||||
| Cash and cash equivalents - beginning of period | 10,698 | 737 | |||||||
| Exchange gains (losses) | (234 | ) | 16 | ||||||
| Cash and cash equivalents - end of period | 10,315 | 1,570 | |||||||
| DataWind Inc. | ||||||||||||
| RECONCILIATION OF NET INCOME (LOSS) TO EBITDA | ||||||||||||
| As at June 30, 2015 and March 31, 2015 | ||||||||||||
| (in thousands of Canadian dollars except per share data and except where indicated) | ||||||||||||
| (Unaudited) | ||||||||||||
| (in CAD "000" except per share amounts) | June, 2015 |
March, 2015 |
June, 2014 |
|||||||||
| Net loss | $ | (1,386 | ) | $ | (4,453 | ) | $ | (1,711 | ) | |||
| Depreciation/amortization expenses | 16 | 13 | 9 | |||||||||
| Extended Payment Finance (i) | 547 | 624 | 224 | |||||||||
| Finance costs | 418 | 294 | 24 | |||||||||
| Finance and other income | (20 | ) | (36 | ) | - | |||||||
| Adjusted EBITDA (ii) | (425 | ) | (3,558 | ) | (1,454 | ) | ||||||
| Adjusted EBITDA loss per share | $ | (0.02 | ) | $ | (0.16 | ) | $ | (0.10 | ) | |||
| (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. |
Contact Information:
Company Contact:
Dan Hilton
Chief Financial Officer
DataWind Inc.
+1(613) 277-3266
Investor Relations:
Michael Koehler
Liolios Group, Inc.
+1(949) 574-3860