Revenue Increase of 48.6% Driven by Recent
Acquisitions, Wireless Infrastructure and Embedded
Solutions
Investor Conference Call on March 14, 2019 at 8:00
a.m. ET
- Revenue for the 12 months ended December 31, 2018
was $136.2 million, an
increase of 48.6% over the prior year.
- Gross profit grew to $50.8
million in fiscal 2018, compared to $28.3 million in fiscal 2017.
- Adjusted EBITDA(2) was $15.3 million in fiscal 2018, compared to
$5.0 million in fiscal 2017.
- Revenue and gross profit increased in the fourth quarter of
2018 by 47.9% and 54.1%, respectively, as compared to the same
period in fiscal 2017.
- Adjusted EBITDA(2) in the fourth quarter of 2018
was $3.9 million.
TORONTO, March 13, 2019 /CNW/ - Baylin Technologies Inc.
(TSX: BYL) (the "Company" or "Baylin"), a leading, diversified,
global wireless technology management company focused on research,
design, development, manufacturing and sales of passive and active
radio frequency products and services, today announced its
financial results for the three and twelve months ended
December 31, 2018. All amounts are stated in Canadian dollars
unless otherwise indicated.
Key highlights for the twelve months ended December 31,
2018 include the following:
- Baylin completed two strategic acquisitions of: (i) the radio
frequency, terrestrial microwave and antenna equipment divisions of
Advantech Wireless Inc. ("Advantech Wireless"); and, (ii) the
issued and outstanding shares of Alga Microwave Inc. ("Alga
Microwave").
- Revenue grew to $136.2 million in
fiscal 2018, an increase of $44.6
million or 48.6% over fiscal 2017.
- Gross profit was $50.8 million in
fiscal 2018, an increase of $22.5
million over fiscal 2017. Gross margin was 37.3%
in fiscal 2018, improved by six percentage points compared to gross
margin of 30.9% in the prior year. Gross margin was
negatively impacted by a $3.7 million
fair value increase applied to the inventory acquired in connection
with the acquisitions of Advantech Wireless and Alga
Microwave. Excluding this one-time impact, gross margin was
40.1% in 2018.
- Adjusted EBITDA(2) was $15.3
million in fiscal 2018 compared to $5.0 million in fiscal 2017. Certain
non-recurring and one-time expenses ("non-recurring items") of
$12.6 million were incurred in fiscal
2018, which were primarily expenses related to the acquisitions of
Advantech Wireless and Alga Microwave, fair value increases applied
to the inventory acquired in connection with the acquisitions of
Advantech Wireless and Alga Microwave, consulting fees paid to the
vendor of Advantech Wireless and other non-recurring
items.
- Cash on hand at December 31, 2018 was $20.9 million, a reduction of $14.3 million from December 31, 2017. The
decrease was primarily due to: (i) cash utilized for payment of a
portion of the purchase price for Advantech Wireless and related
fees and expenses; (ii) cash utilized for payment of a portion of
the purchase price for Alga Microwave and related fees and
expenses; and, (iii) an increase in non-cash working capital;
offset by an increase in cash from: (i) a $33 million term loan from Crown Capital Fund IV,
LP; and, (ii) completion of a bought deal public offering of
subscription receipts and unsecured convertible debentures for
aggregate gross proceeds of $40.25
million.
- The Company's net loss was due to expenses related to the
acquisitions of Advantech Wireless and Alga Microwave, consulting
fees paid to the vendor of Advantech Wireless, the fair value
adjustment of the convertible debentures and other non-recurring
expenses.
Key highlights for the three months ended December 31, 2018
include the following:
- Revenue grew to $36.0 million in
the fourth quarter of fiscal 2018, an increase of $11.7 million or 47.9% over the fourth quarter of
fiscal 2017
- Adjusted EBITDA(2) was $3.9
million in the fourth quarter of fiscal 2018 compared to
$1.3 million in the fourth
quarter of fiscal 2017.
- The move of Advantech Wireless operations into the Alga
Microwave facility was completed in December
2018.
"We are very pleased with the Company's progress in 2018",
stated Randy Dewey, Baylin's
President and Chief Executive Officer. "The Company's revenue
base has continued to diversify with growth in the Embedded Antenna
and Wireless Infrastructure Groups and through the acquisitions of
Advantech Wireless and Alga Microwave", added Mr. Dewey.
"The Company achieved higher gross margins in fiscal 2018 due to
a higher percentage of revenue from our Wireless Infrastructure
products as well as the two acquisitions that we completed this
year, which has resulted in the continuing year over year growth of
the Company's Adjusted EBITDA" stated Michael Wolfe, Baylin's Chief Financial
Officer.
SELECTED FINANCIAL INFORMATION
Selected financial information of the Company is summarized
below for the periods indicated:
(in $000's
except per share amounts)
|
|
|
|
|
|
|
|
|
Twelve Months
Ended December 31,
|
|
|
2018
|
|
2017
|
|
2016
|
|
|
$
|
|
$
|
|
$
|
Revenue
|
|
136,214
|
|
91,642
|
|
84,133
|
Gross
Profit
|
|
50,841
|
|
28,345
|
|
23,504
|
Income (loss) before
income taxes
|
|
(10,624)
|
|
(3,773)
|
|
(2,678)
|
Income tax
expense
|
|
(5,180)
|
|
436
|
|
2
|
Net income
(loss)
|
|
(5,444)
|
|
(4,209)
|
|
(2,680)
|
Basic and diluted
income (loss) per share
|
|
($0.13)
|
|
($0.17)
|
|
($0.15)
|
EBITDA(1)
|
|
2,733
|
|
2,306
|
|
602
|
Adjusted
EBITDA(2)
|
|
15,293
|
|
4,954
|
|
1,816
|
Current
assets
|
|
79,937
|
|
64,666
|
|
43,031
|
Total
assets
|
|
170,517
|
|
84,882
|
|
65,006
|
Current
liabilities
|
|
35,077
|
|
26,873
|
|
22,114
|
Non-current
liabilities
|
|
53,613
|
|
2,183
|
|
1,462
|
Total
liabilities
|
|
88,690
|
|
29,056
|
|
23,576
|
|
(1) See
"Non-GAAP Measures". EBITDA refers to earnings before interest,
income taxes, depreciation and amortization.
|
(2) See
"Non-GAAP Measures". Adjusted EBITDA refers to operating income
(loss) plus depreciation and amortization plus non-recurring
items.
|
The table below discloses selected financial information for the
fourth quarter of fiscal 2018 compared to the prior year
period.
|
|
|
|
|
|
|
(in
$000's)
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
|
2018
|
|
2017
|
|
Change
|
|
|
$
|
|
$
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
36,009
|
|
24,351
|
|
47.9%
|
|
|
|
|
|
|
|
Cost of
Revenue
|
|
24,946
|
|
17,173
|
|
45.3%
|
|
|
|
|
|
|
|
Gross
Profit
|
|
11,063
|
|
7,178
|
|
54.1%
|
|
|
|
|
|
|
|
Gross Margin
%
|
|
30.7%
|
|
29.5%
|
|
4.1%
|
Revenue in the fourth quarter of fiscal 2018 was $36.0 million, representing a 47.9% increase over
the fourth quarter of fiscal 2017.
Gross margin was 30.7% in the fourth quarter of fiscal 2018.
Gross margin was negatively impacted by a $3.7 million fair value increase applied to the
inventory acquired in connection with the acquisitions of Advantech
Wireless and Alga Microwave, an adjustment recorded in the fourth
quarter. Excluding this one-time impact, gross margin was
41.3% in the fourth quarter of 2018.
A copy of the Company's audited consolidated financial
statements for the year ended December 31,
2018 and corresponding management's discussion and analysis
(the "MD&A") are available under the Company's SEDAR profile on
www.sedar.com.
OUTLOOK
Management believes that the Company has gained access to
technology through the strategic acquisitions of Advantech Wireless
and Alga Microwave that will accelerate growth by broadening the
Company's product offering and better positioning the Company for
development of products for 5G (the fifth generation of cellular
mobile communications).
Having completed the move of Advantech Wireless operations into
the Alga Microwave facility in December
2018, management expects improved manufacturing efficiencies
and cost reductions in 2019.
Research and development expenses are expected to increase in
2019 for small cell, base station and 5G antenna products.
Management is expecting revenue growth as these new
products hit the market.
A continued focus on controlling spending, optimizing
manufacturing efficiencies and managing liquidity will continue in
2019 in an effort to hold the margin gains we have achieved over
the last several years.
INVESTOR CONFERENCE CALL
Baylin will hold a conference call on March 14, 2019 at 8:00
a.m. (ET) to discuss its financial results for the year
ended December 31, 2018. The call
will be hosted by Randy Dewey,
President and Chief Executive Officer, Michael Wolfe, Chief Financial Officer and
Daniel Kim, Executive Vice President
of Corporate Development. All interested parties are invited to
participate using the dial-in details provided below.
Date:
|
March 14,
2019
|
Time:
|
8:00 a.m.
(ET)
|
Dial-in
Number:
|
888-231-8191 or
647-427-7450
|
Conference
ID#:
|
6678762
|
|
Webcast:
https://event.on24.com/wcc/r/1924919/4F99B06DAB35A55F0B6ED4338329DA73
|
FORWARD-LOOKING STATEMENTS
Certain statements contained in this press release constitute
"forward-looking statements" that involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance, objectives or achievements of the Company, or industry
results, to be materially different from any future results,
performance, objectives or achievements expressed or implied by
such forward-looking statements. Forward-looking statements are
frequently, but not always, identified by words such as "expects,"
"anticipates," "believes," "intends," "estimates,", "predicts,"
"potential," "targeted," "plans," "possible" and similar
expressions, or statements that events, conditions or results
"will," "may," "could" or "should" occur or be achieved. The
forward-looking statements in this press release include, but are
not limited to, statements regarding the Company's expected product
pipeline, plans to expand the Company's business into new markets,
the Company's ability to achieve organizational efficiencies, and
other statements regarding the Company's plans, objectives and
expectations. These statements reflect the Company's current views
regarding future events and operating performance and are based on
information currently available to the Company as of the date of
this press release. These forward-looking statements involve a
number of risks, uncertainties and assumptions and should not be
read as guarantees of future performance or results and will not
necessarily be accurate indications of whether or not such
performance or results will be achieved. Those assumptions and
risks include, but are not limited to, the Company's ability to
successfully allocate capital as needed and to develop new
products, as well as the fact that the Company's results of
operations and business outlook are subject to significant risk,
volatility and uncertainty. Additional factors that could cause
actual results, performance or achievements to differ materially
include, but are not limited to the risk factors discussed in the
Company's Annual Information Form dated March 13, 2019 which is available on the
Company's profile at www.sedar.com. All of the forward-looking
statements made in this press release are qualified by these
cautionary statements and other cautionary statements or factors
contained herein, and there can be no assurance that the actual
results or developments will be realized or, even if substantially
realized, that they will have the expected consequences to, or
effects on, the Company. Unless required by applicable securities
law, the Company does not intend and does not assume any obligation
to update these forward-looking statements.
NON-GAAP MEASURES
This press release includes a number of measures that are not
prescribed by Canadian generally accepted accounting principles
("GAAP") and as such may not be comparable to similar measures
presented by other companies. We believe these measures are
commonly employed to measure performance in our industry and are
used by analysts, investors, lenders and interested parties to
evaluate financial performance and our ability to incur and service
debt to support our business activities. While management of the
Company believes that non-GAAP measures are helpful supplemental
information, they should not be considered in isolation as an
alternative to net income, cash flows generated by operating,
investing or financing activities, or other financial statement
data presented in accordance with GAAP. See "Non-GAAP Measures" on
page 2 of the MD&A for further information.
ABOUT BAYLIN
Baylin Technologies Inc. (TSX: BYL) is a diversified leading
global wireless technology management company. Baylin focuses on
research, design, development, manufacturing and sales of passive
and active radio-frequency products and services. Baylin aspires to
meet its customers' needs and anticipate the direction of the
market. For further information, please visit
www.baylintech.com.
SOURCE Baylin Technologies Inc.