Investor Conference Call on August 8, 2019 at 8:00
a.m. ET
- Revenue for the second quarter of 2019 was $47.8 million, an increase of $15.3 million or 46.8% over the prior year
period.
- Gross profit grew to $17.6
million in the second quarter of 2019, compared to
$13.0 million in the second quarter
of 2018.
- Adjusted EBITDA(2) was $5.7 million in the second quarter of 2019,
compared to $2.9 million in the
second quarter of 2018.
TORONTO, Aug. 7, 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 six months ended June 30,
2019. All amounts are stated in Canadian dollars unless otherwise
indicated.
QUARTERLY HIGHLIGHTS
Key highlights for the three and six months ended June 30,
2019 include the following:
- Revenue grew to $47.8 million in
the second quarter of 2019, an increase of $15.3 million or 46.8% over the second quarter of
2018. The increase was primarily due to higher revenue from
Asia Pacific and Advantech
Wireless products combined with the addition of revenue from Alga
Microwave products. (Alga Microwave was acquired in July 2018.)
- Gross profit was $17.6 million in
the second quarter of 2019, an increase of $4.6 million over the second quarter of 2018.
Gross margin(3) was 36.9% in the second quarter of 2019
compared to 40.1% in the prior year period. Gross
margin(3) was impacted by sales mix. Asia Pacific revenue was a higher percentage
of sales for the second quarter of 2019 compared to the second
quarter of 2018.
- Adjusted EBITDA(2) was $5.7
million in the second quarter of 2019 compared to
$2.9 million in the second quarter of
2018. Adjusted EBITDA(2) for the second quarter of 2019
excludes certain non-recurring and one-time expenses of
$0.8 million which were primarily
expenses related to the closure of the Galtronics' New Jersey office and consulting fees paid to
Advantech Wireless Inc. (the consulting agreement will not be
extended subsequent to the expiry on December 31, 2019).
- The Company's net cash at June 30,
2019 decreased from December 31,
2018 primarily due to repayment of a portion of the Crown
Capital Fund IV, LP loan, capital expenditures, debt servicing,
cash taxes, settlement of stock options and an increase in non-cash
working capital.
"We are pleased with the Company's revenue growth in the second
quarter of 2019 which was driven primarily by Asia Pacific being awarded several new
platforms from a major customer", stated Randy Dewey, Baylin's President and Chief
Executive Officer. "We are also pleased with the changes that
we have implemented in Advantech's operations since the acquisition
in 2018 which are driving improved performance", added Mr.
Dewey.
"Following the refinancing in March
2019 of a $33 million term
loan, resulting in significantly lower borrowing costs, in
July 2019 we completed an interest
rate swap which has fixed a portion of the interest rate on the
Company's existing term loan locking in a relatively low interest
rate until maturity in 2022", 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)
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|
2019
|
|
2018
|
2019
|
2018
|
|
$
|
|
$
|
$
|
$
|
Revenue
|
47,831
|
|
32,578
|
86,864
|
62,016
|
Gross
profit
|
17,644
|
|
13,048
|
31,975
|
23,610
|
Income (loss) before
income taxes
|
1,620
|
|
643
|
(3,812)
|
(3,827)
|
Income tax expense
(recovery)
|
(34)
|
|
351
|
435
|
488
|
Net income
(loss)
|
1,654
|
|
292
|
(4,247)
|
(4,315)
|
Basic and diluted
income (loss) per share
|
$0.04
|
|
$0.01
|
($0.11)
|
($0.13)
|
EBITDA(1)
|
4,976
|
|
2,524
|
8,005
|
481
|
Adjusted
EBITDA(2)
|
5,738
|
|
2,889
|
9,252
|
4,335
|
Current
assets
|
84,518
|
|
55,500
|
84,518
|
55,500
|
Total
assets
|
179,103
|
|
115,991
|
179,103
|
115,991
|
Current
liabilities
|
53,579
|
|
26,431
|
53,579
|
26,431
|
Non-current
liabilities
|
51,512
|
|
32,676
|
51,512
|
32,676
|
Total
liabilities
|
105,091
|
|
59,107
|
105,091
|
59,107
|
|
(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.
|
(3) See "Non-GAAP
Measures". Gross margin refers to gross profit divided by
revenue.
|
A copy of the Company's unaudited interim condensed consolidated
financial statements for the three and six months ended
June 30, 2019 and corresponding management's discussion
and analysis (the "MD&A") are available under the Company's
SEDAR profile on www.sedar.com.
OUTLOOK
Management expects that the changes implemented at Advantech
Wireless and Alga Microwave will result in improved manufacturing
efficiencies and increasing profitability in the second half of
2019 and into 2020.
Management believes that its portfolio of small cells positions
the Company well to defend its strong market share position.
The Company's recently launched base station antennas have all
been approved for the market by key customers and we expect to
receive orders for this product line in the second half of
2019.
We have seen some early 5G contract wins and expect this
momentum to continue in 2019 and accelerate thereafter.
The Company has conditionally sold its Kirkland, Quebec facility for $7.1 million and has negotiated the terms of a
long-term lease to continue operating out of the facility. Baylin
expects the sale to close in the third quarter of 2019.
INVESTOR CONFERENCE CALL
Baylin will hold a conference call on August 8, 2019 at 8:00
a.m. (ET) to discuss its financial results for the three and
six months ended June 30, 2019. 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:
|
August 8,
2019
|
Time:
|
8:00 a.m.
(ET)
|
Dial-in
Number:
|
888-231-8191 or
647-427-7450
|
Conference
ID#:
|
1890437
|
|
|
Webcast:
https://event.on24.com/wcc/r/1924934/D3ECDF989C2272DC21837FD4414789A9
|
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.