MISSISSAUGA, Ontario, Nov. 21, 2016 (GLOBE NEWSWIRE) -- DataWind Inc. (TSX:DW), a leader in the delivery of Internet access in emerging markets, reported financial results for its fiscal fourth quarter and full year 2016 ended March 31, 2016. All amounts are in Canadian dollars.
Fiscal Q4 and Full Year 2016 Highlights
- Fiscal 2016 revenue totaled a record $59.7 million, up 89% from 2015. Record revenue for the seventh consecutive quarter totaled $17.8 million, up 15% sequentially and up 64% from the same year-ago quarter.
- Fiscal 2016 gross margins reached a record 29.8% compared with 19.2% in 2015. For the fourth quarter of 2016, gross margins totaled 35.2%, up from 29.4% sequentially and 24.9% a year ago.
- Adjusted EBITDA loss for fiscal 2016 totaled $196,000 compared with an adjusted EBITDA loss of $11.8 million for 2015. For the quarter, adjusted EBITDA was positive for the third consecutive quarter, totaling a record $118,000, compared with $106,000 in the previous quarter and an adjusted EBITDA loss of $5.0 million in the year-ago quarter.
- Surpassed Samsung as the leading tablet provider in India in the fourth quarter, selling 34% of all tablets.
Balance Sheet Highlights
- Cash totaled $230,000 at March 31, 2016.
- Subsequent to the quarter’s end the company closed a bought deal financing which netted $2.6 million after expenses and saw further improvements in revenue and receivables collections during the quarter ended June 30, 2016 and estimates its cash to be approximately $5.0 million at June 30, 2016.
Unit Sales Highlights - Includes Q1 Fiscal 2017 Unit Sales
- For fiscal 2016, unit sales were a record 1.0 million, up 94% from 2015. For the quarter, unit sales were a record 340,000, up 36% sequentially and up 85% from the same year-ago quarter.
- Sales for Q1 2017 have surpassed 385,000 units which represents another record quarter for the company.
Management Commentary
"A significant increase in our ability to deliver products to our customers drove another quarter and year of record revenue, unit sales and adjusted EBITDA," said Suneet Singh Tuli, president and CEO of DataWind.
“Our results for both the quarter and year reflect the increasing demand for Internet connectivity which drove our strong results. In fact, we sold 34% of all tablets and have been the largest provider of tablets in India for two consecutive quarters. Further, in the sub-Rs. 5,000 market (approximately $75), we sold 74% of all tablets, which is remarkable considering this market segment is the largest and fastest growing segment in all of India."
Financial Summary
Revenue
Revenue for the fourth quarter of fiscal 2016 increased 64% to $17.8 million compared with $10.8 million in the same year-ago quarter.
Revenue for fiscal 2016 increased 89% to $59.7 million compared with $31.5 million in 2015.
The increases were driven by the expansion of sales regions, carrier relationships and sales channels. Additionally, the company experienced an increase in sales from its TV home shopping partners.
Unit Sales
Unit sales totaled a record 340,000 for the fourth quarter of fiscal 2016, up 36% from 251,000 last quarter and up 85% from 184,000 in the same year-ago quarter.
Unit sales totaled 1.0 million for fiscal 2016, up 94% from 538,000 in fiscal 2015.
Gross Profit
Gross profit was $6.2 million or 35.0% of sales in Q4 2016, compared with $2.7 million or 24.9% in the same year-ago period.
For fiscal 2016, gross profit totaled $17.8 million or 29.8% of revenue compared with $6.0 million or 19.2% of revenue for 2015. Gross margins continued to improve due to increased efficiency meeting channel requirements, improved cost control with subcontracted manufacturers and reduced import duties. Looking forward, hardware margins are expected to stabilize below 30% while increased Internet service sales should allow the overall margin to continue to rise.
Research and Development (R&D)
R&D costs for the fourth quarter ended March 31, 2016 were negative $506,000 due to the application of government R&D credits, compared with $990,000 during the fourth quarter ended March 31, 2015.
R&D costs decreased from $2.4 million in fiscal 2015 to $632,000 in fiscal 2016, driven by the application of government R&D credits, which were applied during the fourth quarter of fiscal 2016.
General and Administrative (G&A)
G&A costs, which include sales, marketing expenses and salaries, were $6.9 million in the fourth quarter, as compared with $6.1 million in the same year-ago period.
For fiscal 2016, G&A costs totaled $17.7 million compared with $13.9 million in 2015.The increase in expenses were due to increased salaries and expenses related to the significant growth in sales channels, logistics and customer support.
Net Loss
Net loss in Q4 2016 was $1.6 million or $(0.07) per common share, compared with $4.7 million or $(0.21) per common share in Q4 2015.
Net loss in fiscal 2016 was $5.3 million or $(0.24) per common share, compared with $11.2 million or $(0.57) per common share in fiscal 2015. The narrowing loss was due to increased sales and related improvement in gross margins offset by an increase in G&A costs.
Adjusted EBITDA
Adjusted EBITDA for the quarter totaled $118,000, improving from an adjusted EBITDA loss of $5.0 million in the year-ago quarter.
For the fiscal year 2016, adjusted EBITDA loss totaled $196,000, improving from a loss of $11.8 million in fiscal 2015.
Balance Sheet
Working capital was $9.0 million at March 31, 2016 compared with $10.7 million at December 31, 2015.
Subsequent to the quarter-end, the company received $2.6 million of net proceeds from the bought deal completed subsequent to quarter’s end. This, coupled with improving net earnings has increased the company’s cash balance to $5.0 million at June 30, 2016.
For more information, please refer to the company’s MD&A and full financial statements that have been filed with SEDAR.
Conference Call
DataWind management will hold a conference call followed by a question and answer period on Wednesday, November 23, 2016 at 4:15 p.m. Eastern time to discuss these results.
Interested parties can listen to the live presentation by dialing the toll-free number or by clicking the webcast link below.
Date: Wednesday, November 23, 2016
Time: 4:15 p.m. Eastern time
Toll-free number: +1(844) 647-5492
International number: +1(661) 378-9451
Conference ID: 24453312
Webcast: http://edge.media-server.com/m/p/6ajizroy
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 at +1(949) 574-3860.
A replay of the call will be available after the call ends through December 23, 2016 via webcast link on the Investor Information section of the DataWind website at www.datawind.com.
About DataWind
DataWind, Inc. is the 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. 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.
- Tables to follow -
| DataWind Inc. | ||||||||||||||||||||||
| CONSOLIDATED STATEMENT OF FINANCIAL POSITION | ||||||||||||||||||||||
| as at March 31, 2016 | ||||||||||||||||||||||
| (in thousands of Canadian dollars except per share data and except where indicated) | ||||||||||||||||||||||
| ASSETS | 2016 | 2015 | ||||||||||||||||||||
| Current assets | ||||||||||||||||||||||
| Cash and cash equivalents | $ | 230 | $ | 10,698 | ||||||||||||||||||
| Trade and other receivables | 29,467 | 14,087 | ||||||||||||||||||||
| Inventories | 10,036 | 7,163 | ||||||||||||||||||||
| 39,733 | 31,948 | |||||||||||||||||||||
| Non-current assets | ||||||||||||||||||||||
| Property and equipment | 218 | 156 | ||||||||||||||||||||
| Total Assets | $ | 39,951 | $ | 32,104 | ||||||||||||||||||
| LIABILITIES | ||||||||||||||||||||||
| Current liabilities | ||||||||||||||||||||||
| Accounts payable and accrued liabilities | $ | 18,607 | $ | 10,671 | ||||||||||||||||||
| Loans and borrowings | 12,291 | 7,273 | ||||||||||||||||||||
| Total Liabilities | 30,898 | 17,944 | ||||||||||||||||||||
| SHAREHOLDERS’ EQUITY | ||||||||||||||||||||||
| Share capital | 52,276 | 52,168 | ||||||||||||||||||||
| Contributed surplus | 3,521 | 3,339 | ||||||||||||||||||||
| Accumulated other comprehensive loss | (223 | ) | (332 | ) | ||||||||||||||||||
| Deficit | (46,521 | ) | (41,015 | ) | ||||||||||||||||||
| Total Shareholders' Equity | 9,053 | 14,160 | ||||||||||||||||||||
| Total Liabilities and Shareholders' Equity | $ | 39,951 | $ | 32,104 | ||||||||||||||||||
| DataWind Inc. | ||||||||
| CONSOLIDATED STATEMENT OF LOSS AND COMPREHENSIVE LOSS | ||||||||
| years ended March 31, 2016 | ||||||||
| (in thousands of Canadian dollars except per share data and except where indicated) | ||||||||
| 2016 | 2015 | |||||||
| Revenue | $ | 59,675 | $ | 31,543 | ||||
| Cost of goods sold | 41,919 | 25,496 | ||||||
| Gross profit | 17,756 | 6,047 | ||||||
| Operating expenses: | ||||||||
| Research and development | 632 | 2,370 | ||||||
| Administration cost | 17,648 | 13,867 | ||||||
| IPO transaction costs | - | 1,688 | ||||||
| Foreign exchange translation loss/(gain) | 1,151 | (788 | ) | |||||
| Total operating expenses | 19,431 | 17,137 | ||||||
| Operating loss | (1,675 | ) | (11,090 | ) | ||||
| Finance and other income/(expense) | (6 | ) | 124 | |||||
| Finance expense | (3,825 | ) | (631 | ) | ||||
| Loss before income taxes | (5,506 | ) | (11,597 | ) | ||||
| Income tax expense | - | - | ||||||
| Net loss | (5,506 | ) | (11,597 | ) | ||||
| Other comprehensive income, net of income tax: | ||||||||
| Unrealized foreign exchange translation gain | 109 | 383 | ||||||
| Net comprehensive loss for the period | $ | (5,397 | ) | $ | (11,214 | ) | ||
| Net loss per share | ||||||||
| Basic and diluted | $ | (0.25 | ) | $ | (0.57 | ) | ||
| Weighted average number of shares outstanding: | ||||||||
| Basic and Diluted | 22,078,868 | 20,204,317 | ||||||
| DataWind Inc. | |||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
| years ended March 31, 2016 and 2015 | |||||||
| (in thousands of Canadian dollars except per share data and except where indicated) | |||||||
| 2016 | 2015 | ||||||
| Cash flows from operating activities | |||||||
| Net loss for the year | $ | (5,506 | ) | $ | (11,597 | ) | |
| Cash flows from operating activities Adjustments for: | |||||||
| Foreign exchange translation loss/(gain) | 1,151 | (789 | ) | ||||
| Depreciation of property and equipment | 87 | 67 | |||||
| Finance Expenses | 3,825 | 631 | |||||
| Share based compensation | 182 | 511 | |||||
| (261 | ) | (11,177 | ) | ||||
| Changes in non-cash working capital items | |||||||
| Trade and other receivables | (15,380 | ) | (10,467 | ) | |||
| Accounts payable and accrued liabilities | 7,936 | 2,021 | |||||
| Inventories | (2,873 | ) | (5,580 | ) | |||
| Net cash used in operating activities | (10,578 | ) | (25,203 | ) | |||
| Cash flows from investing activities | |||||||
| Addition of property and equipment | (141 | ) | (61 | ) | |||
| Net cash used in investing activities | (141 | ) | (61 | ) | |||
| Cash flows from financing activities | |||||||
| Issuance of common shares on exercise of warrants | 108 | 26,874 | |||||
| Proceeds of loans during the year | 6,024 | 7,148 | |||||
| Loans repaid during the year | (1,167 | ) | - | ||||
| Interest paid during the year | (3,525 | ) | (631 | ) | |||
| Net cash provided by financing activities | 1,440 | 33,391 | |||||
| Net change in cash and cash equivalents | (9,279 | ) | 8,127 | ||||
| Cash and cash equivalents – beginning of year | 10,698 | 747 | |||||
| Effect of foreign exchange rates on balances of cash held in foreign currencies | (1,189 | ) | 1,824 | ||||
| Cash and cash equivalents – end of year | 230 | 10,698 | |||||
| DataWind Inc. | |||||||||||||||
| RECONCILIATION OF QUARTERLY NET LOSS TO ADJUSTED EBITDA | |||||||||||||||
| (in thousands of Canadian dollars except per share data and except where indicated) | |||||||||||||||
| A reconciliation of the Company’s quarterly net loss to Adjusted EBITDA is outlined in the following table: | |||||||||||||||
| (in CAD "000" except per share amounts) | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | ||||||||||
| Net loss | $ | (1,640 | ) | $ | (509 | ) | $ | (2,005 | ) | $ | (1,188 | ) | $ | (4,676 | ) |
| Depreciation/amortization expenses | 265 | 25 | 21 | 16 | 33 | ||||||||||
| Extended payment finance (i) | 564 | 344 | 370 | 547 | - | ||||||||||
| Finance costs | 623 | 516 | 444 | 418 | 306 | ||||||||||
| Finance and other income | 27 | - | (1 | ) | (20 | ) | (76 | ) | |||||||
| Foreign exchange translation (gain)/loss | 279 | (269 | ) | 1,176 | (198 | ) | (562 | ) | |||||||
| Adjusted EBITDA (ii) | 118 | 106 | 5 | (425 | ) | (4,975 | ) | ||||||||
| Adjusted EBITDA loss per share | $ | 0.01 | $ | 0.00 | $ | 0.00 | $ | (0.02 | ) | $ | (0.20 | ) | |||
| (i) Extended Payment Finance represents finance cost paid to Chinese manufacturer or its financing agent 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. | |||||||||||||||
Please see the SEDAR filings for the complete consolidated financial statements which include footnotes that are an integral part of these statements.