Investor Conference Call on March 11, 2021 at 8:00
a.m. ET
TORONTO, March 10, 2021 /CNW/ - Baylin Technologies Inc.
(TSX: BYL) (the "Company" or "Baylin"), a leading diversified
global wireless technology company focused on research, design,
development, manufacturing and sales of passive and active radio
frequency products, terrestrial microwave products, and services,
today announced its financial results for the three and twelve
months ended December 31, 2020. All amounts are stated in
Canadian dollars unless otherwise indicated.
KEY HIGHLIGHTS
Key highlights for the twelve months ended December 31,
2020 include the following:
- Revenue was $119.7 million in
fiscal 2020, a decrease of $33.6
million or 21.9% compared to fiscal 2019.
- Continued reduction in operating expenses. Operating expenses
(excluding goodwill impairment) in fiscal 2020 decreased by
$13.5 million compared to fiscal
2019.
- Adjusted EBITDA(2) was $6.4
million in fiscal 2020 compared to $13.8 million in fiscal 2019.
- Completed a $5 million private
placement financing of 6.67 million units comprised of one common
share and one-half of a common share purchase warrant. The net
proceeds were used to repay outstanding debt and for general
working capital purposes.
- Net cash as at December 31, 2020
decreased $2.0 million from
December 31, 2019 primarily due to
ongoing capital expenditures to complete the new facility in
Vietnam, principal and interest
payments and cash taxes, offset by a decrease in non-cash working
capital and proceeds from the private placement.
Key highlights for the three months ended December 31, 2020
include the following:
- Revenue was $25.6 million in the
fourth quarter of 2020, a decrease of $4.4
million or 14.8% compared to the fourth quarter of
2019.
- Net cash as at December 31, 2020
decreased $0.3 million from
September 30, 2020 mainly due to
capital expenditures, principal and interest payments, cash taxes,
an increase in non-cash working capital and repayment of a portion
of the Revolving Facility, offset by proceeds from the private
placement. The Term Loan and Revolving Facility were reduced by
$3.9 million in the fourth quarter of
2020.
RECENT DEVELOPMENTS
The coronavirus (COVID-19) pandemic had a significant impact on
revenue, sales mix and margins in 2020. Although Asia Pacific sales volumes increased in the
third quarter of 2020, surpassing expectations, and fourth quarter
revenue was somewhat ahead of each of the first and second quarters
of 2020, new lockdown measures in North
America and Europe resulted
in lower Asia Pacific revenue in
the fourth quarter of 2020 compared to the third quarter.
Infrastructure revenue was impacted throughout 2020 by delays in
small cell deployments due to site approval delays caused by
municipality shutdowns and slower than expected services.
Additionally, the 10-month delay in completion of the 5G C-band
spectrum auction (conducted by the U.S. Federal Communications
Commission) impacted both Infra-structure and Satcom revenue. We
continued to experience delays in the completion of the Massive
MIMO (MMU) factory in Vietnam.
Nevertheless, we expect final commissioning to be completed in the
second quarter of 2021 which could put us in a position to commence
production in the second half of 2021.
The cost reduction initiatives which were implemented in 2020
have resulted in a reduction of annualized expenses of
approximately $20 million. In the
fourth quarter of 2020, operating expenses were $3.8 million lower than the fourth quarter of
2019.
On February 22, 2021, the Company
gave notice that it has elected to exercise its right to accelerate
the expiry date of the Common Warrants to 30 days after delivery of
the notice. On February 26, 2021,
67,000 Common Warrants were exercised.
SELECTED FINANCIAL
INFORMATION
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The table below
discloses selected financial information for the periods
indicated.
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(in $000's except
per share amounts)
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Twelve Months
Ended December 31,
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2020
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2019
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2018
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$
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$
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$
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Revenue
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119,739
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153,323
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136,214
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Gross
profit
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35,401
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54,939
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50,841
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Loss before income
taxes (including goodwill impairment: 2020 - $3,000; 2019 -
$12,693)
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(17,811)
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(18,601)
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(10,624)
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Income tax (recovery)
expense
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(887)
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1,013
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(5,180)
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Net loss (including
goodwill impairment: 2020 - $3,000; 2019 - $12,693)
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(16,924)
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(19,614)
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(5,444)
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Basic and diluted net
loss per share
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($0.42)
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($0.49)
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($0.13)
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EBITDA(1)
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-
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(3,853)
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2,733
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Adjusted
EBITDA(2) (2018 & 2019: revised to include non-cash
compensation)
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6,350
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13,801
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17,817
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Current
assets
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58,021
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64,293
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79,937
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Total
assets
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133,473
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147,557
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170,517
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Current
liabilities
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36,470
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36,848
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35,077
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Non-current
liabilities
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48,140
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51,828
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53,613
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Total
liabilities
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84,610
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88,676
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88,690
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The table below discloses selected financial information for the
three months ended December 31, 2020 compared to the
prior year period.
(in $000's except
per share amounts)
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Three Months Ended
December 31,
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2020
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2019
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$
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$
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Revenue
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25,591
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30,029
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Gross
profit
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6,725
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10,752
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Loss before income
taxes (including goodwill impairment: 2020 - $3,000; 2019 -
$12,693)
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(8,282)
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(14,222)
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Income tax
expense
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1,109
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427
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Net loss (including
goodwill impairment: 2020 - $3,000; 2019 - $12,693)
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(9,391)
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(14,649)
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Basic and diluted net
loss per share
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($0.23)
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($0.36)
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EBITDA(1)
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(3,988)
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(12,682)
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Adjusted
EBITDA(2) (2019: revised to include non-cash
compensation)
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(445)
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2,140
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(1) See "Non-GAAP
Measures". EBITDA refers to operating income (loss) plus
depreciation and amortization.
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(2) See "Non-GAAP
Measures". Adjusted EBITDA refers to EBITDA plus the sum of: a)
acquisition expenses, fair value step up of inventory acquired as
part of an acquisition, expenses for litigation relating to
acquisition agreements, expenses relating to planned restructuring
post an acquisition, impairment on fixed and intangible assets
(including goodwill) post an acquisition; b) expenses to
permanently close/relocate a facility, shut down a line of
business, eliminate positions; c) corporate re-organization
expenses; and, d) non-cash compensation.
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(3) See "Non-GAAP
Measures". Gross margin refers to gross profit divided by
revenue.
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A copy of the Company's consolidated financial statements for
the three and twelve months ended December 31, 2020 and
corresponding management's discussion and analysis (the "MD&A")
are available under the Company's SEDAR profile on
www.sedar.com.
OUTLOOK
Although COVID-19 is continuing to have an impact on our
financial results in the first quarter of 2021, which we expect
will result in a comparable quarter to the fourth quarter of 2020,
we nevertheless remain optimistic that financial results will
improve in 2021.
The outlook for the Wireless Infrastructure business line has
improved significantly for several reasons:
- Completion of the 5G spectrum auction in December 2020, which will spur new investments
across our carrier partners;
- Several projects delayed in 2020 are now scheduled for
2021;
- New carrier supplier status wins for small cells for which
revenue is expected to commence in the first quarter of 2021;
and,
- BSA wins with a tier one North American carrier.
The outlook for the Asia
Pacific business line for 2021 has also improved due to pent
up demand across numerous consumer segments resulting from the
COVID-19 lockdowns in North
America and Europe in 2020.
Furthermore, Asia Pacific has
secured additional key model wins with its key customers and
likewise has aggressively pushed into other product segments such
as wearables, tablets and laptops.
The Embedded Antenna business line is expected to continue to
perform well in 2021 with gross margin expected to improve in the
first quarter of 2021 due to a capital investment which will
automate a portion of the manufacturing process of one of its
highest volume products. The increase in consumer demand for Wi-Fi
6 products, coupled with recent large platform wins in this market,
have this business expecting growth for 2021. Furthermore, we have
moved into the automotive antenna market, resulting in two
long-term automotive contracts that are expected to start in
mid-2021.
The Satcom business line has seen a significant increase in
military proposals and contract wins to new and existing customers
for large opportunities that are expected to commence shipments in
early 2021. The launch of our new Summit Series II solid state
power amplifier has achieved early success with a key customer win,
and our first system is on track to be delivered in the first
quarter of 2021, with other awards expected to be delivered soon
afterwards. We believe that there is no other platform in the
market that can deliver the capabilities of our Summit Series II
and that it will open up multi-million dollar opportunities in both
our traditional GEO domain and the rapidly emerging LEO
constellations.
CHIEF FINANCIAL OFFICER
Michael Wolfe, the Company's
Chief Financial Officer, will be leaving the Company to pursue
other opportunities. He will remain in his current role for the
time being in order to ensure an orderly transition of his
responsibilities.
Randy Dewey, President and Chief
Executive Officer, said: "It has been a tremendous pleasure working
with Michael. He has been a key member of the management team and
will be missed. I wish him all the best in the future."
INVESTOR CONFERENCE CALL
Baylin will hold a conference call on March 11, 2021 at 8:00
a.m. (ET) to discuss its financial results for the three and
twelve months ended December 31, 2020. 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:
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March 11,
2021
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Time:
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8:00 a.m.
(ET)
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Dial-in
Number:
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888-231-8191 or
647-427-7450
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Conference
ID#:
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8946747
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Webcast: https://produceredition.webcasts.com/starthere.jsp?ei=1427573&tp_key=0742f67ad0
FORWARD-LOOKING STATEMENTS
This press release includes forward-looking information and
forward-looking statements (together, "forward-looking statements")
within the meaning of applicable securities laws. They are not
statements of historical fact. Rather, they are disclosure
regarding conditions, developments, events or financial performance
that we expect or anticipate may or will occur in the future
including, among other things, information or statements concerning
our objectives and strategies to achieve those objectives,
statements with respect to management's beliefs, estimates,
intentions and plans, and statements concerning anticipated future
circumstances, events, expectations, operations, performance or
results. Forward-looking statements can be identified generally by
the use of forward-looking terminology, such as "anticipate",
"believe", "could", "should", "would", "estimate", "expect",
"forecast", "indicate", "intend", "likely", "may", "outlook",
"plan", "potential", "project", "seek", "target", "trend" or "will"
or the negative or other variations of these words or other
comparable words or phrases and is intended to identify
forward-looking statements, although not all forward-looking
statements contain these words.
The forward-looking statements in this press release include
statements concerning the continuing effect of the COVID-19
pandemic on our business, the outlook for our business lines
otherwise, timing of new products and revenue, and timing of
commencement of production from our new factory in Vietnam. Forward-looking information and
statements are based on certain assumptions and estimates made by
us in light of the experience and perception of historical trends,
current conditions, expected future developments, including
projected growth in sales of passive and active radio frequency and
terrestrial microwave products and services, and other factors we
believe are appropriate and reasonable in the circumstances, but
there can be no assurance that such assumptions and estimates will
prove to be correct.
Many factors could cause our actual results, level of activity,
performance or achievements or future events or developments to
differ materially from those expressed or implied by the
forward-looking statements, including the risk factors discussed in
the Company's most recent Annual Information Form, which is
available under the Company's profile on SEDAR at www.sedar.com.
All the forward-looking statements made in this press release are
qualified by these cautionary statements and other cautionary
statements or factors in this press release. There can be no
assurance that the actual results or developments will be realized
or, even if substantially realized, 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. is a leading diversified global
wireless technology company. Baylin focuses on research, design,
development, manufacturing and sales of passive and active radio
frequency products, terrestrial microwave 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.