TORONTO, ON–(Marketwired – August 13, 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 June 30, 2014. All figures are stated in United States dollars unless otherwise noted.
Second Quarter 2014 Highlights
Revenue was $10.8 million in Q2 2014, compared to $28.1 million for Q2 2013
Gross profit for Q2 2014 was $2.0 million, compared to $10.6 million for Q2 2013
Adjusted EBITDA in Q2 2014 was $(2.6) million, compared to 6.2 million for Q2 2013
Total cash and cash equivalents were $32.8 million at June 30, 2014
“As we communicated at the beginning of the year, our financial results for the first half of 2014 were negatively affected by our mobile business,” said Ephraim Ulmer, President and CEO. “However, as a result of the industry moving away from IMA antenna technology and back towards LDS antenna technology, our Vietnam expansion and our new 4GA LTE antenna technology, we are confident that our mobile business will see a turnaround late this year and into 2015. Our infrastructure antenna business continues to grow strongly, providing revenue diversification. The revenues year to date in infrastructure are greater than the total revenues we reported in 2013. Our focus going forward is to secure contracts from mobile OEMs and to continue building on the momentum in our infrastructure business.”
Selected Financial Information
(In thousands of United States dollars except per share amounts)
The Company’s complete financial statements and Management’s Discussion & Analysis for Q2 2014 are available at baylintech.com/investor-relations/ and www.sedar.com/.
Revenue for Q2 2014 was $10.8 million, a decrease of 61.8% from Q2 2013 revenue of $28.1 million. The year-over-year decrease was as a result of a substantial reduction in orders from a key mobile customer.
Gross profit for Q2 2014 was $2.0 million, yielding a gross margin of 18.8%, as compared to Q2 2013 gross profit of $10.6 million and gross margin of 37.5%. The year-over-year decrease was a result of price reductions for the Company’s traditional antenna products.
Research and Development (“R&D”) expenses for Q2 2014 were $1.8 million, a 5.9% decrease over $1.9 million in Q2 2013. This reduction was due to a decrease in payrolls during the period.
General and Administrative (“G&A”) expenses for Q2 2014 were $2.6 million, a $0.3 million increase compared to $2.3 million for Q2 2013. Professional service costs increased during the period, mainly due to additional compliance and regulatory expenses associated with a public listing.
Sales and Marketing expenses for Q2 2014 were $0.9 million, a 26.5% increase compared to $0.7 million in Q2 2013. The Company saw increased costs as part of its continuing efforts to gain market share and to support its business development activities. Most of the increase was related to trade shows and exhibitions.
The Q2 2014 net loss was mainly due to reduced order volume for the Company’s mobile antenna products by one of its key customers.
As at June 30, 2014, Baylin had working capital of $33.2 million, compared with $41.4 million at December 31, 2013.
As at June 30, 2014 there were 18.7 million common shares outstanding.
(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. 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. Baylin does not believe these items reflect the underlying performance of its business. EBITDA and Adjusted EBITDA are non-IFRS performance measures.
Baylin believes 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.
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