Home » Business News » 2014 » March » March 14, 2014

Baylin Technologies Announces 2013 Fourth Quarter and Year-End Financial Results

March 14, 2014 - Toronto, ON

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 and 12 months ended December 31, 2013. All figures are stated in United States dollars unless otherwise noted.

Fiscal Year 2013 Highlights

  • Revenue increased by 16.5% to $80.1 million from $68.7 million in 2012.
  • Antennas shipped increased by 16.3% to 200 million units from 172 million units in 2012.
  • Gross profit increased by 10.0% to $25.2 million from $22.9 million in 2012.
  • Adjusted EBITDA from continuing operations increased by 25.5% to $10.8 million from $8.6 million in 2012.
  • The Company completed its initial public offering ("IPO") in November 2013, raising gross proceeds of $47 million.
  • Total cash and cash equivalents were $45.1 million at December 31, 2013, compared to $7.0 million at December 31, 2012, with the increase principally the result of proceeds from the Company's IPO.

"It was a successful year overall for Baylin, highlighted by solid year-over-year revenue and Adjusted EBITDA growth and the completion of our IPO in November," said Ephraim Ulmer, President and Chief Executive Officer, Baylin. "We now have a strong balance sheet and the resources to expand our customer base and diversify our revenue. The underlying trends in our markets -- specifically the rapid growth in mobile data traffic and devices -- are driving demand for sophisticated, highly engineered antenna systems. While near-term sales will be affected by lower allocations on a key product platform, with our 35-year track record of innovation we are well positioned to capitalize on market growth over the long term. In addition to our expansion in Vietnam, we are focused on leveraging our investment in LTE antenna solutions to win new mobile OEM customers. Based on the strong early results in wireless infrastructure, we are also investing to expand this segment of our business."

Selected Financial Information
(In thousands of United States dollars except per share amounts)

---------------------------- ----------------------------
Three Months Ended Dec 31 Year Ended Dec 31
---------------------------- ----------------------------
% %
2013 2012 Change 2013 2012 Change
---------- ---------- ------ ---------- ---------- ------
Revenue 14,264 20,369 (30%) 80,071 68,709 17%
Gross profit 3,143 6,789 (54%) 25,217 22,924 10%
R&D 2,093 1,786 17.2 7,392 6,588 12%
expenses 702 2,834 (75%) 14,379 9,874 32%
EBITDA(1) (278) 2,499 (111%) 10,822 8,623 26%
Net income 359 1,748 (79%) 829 1,376 (40%)
Net income per
Basic 0.02 0.16 (88%) 0.07 0.13 (46%)
Diluted 0.02 0.16 (88%) 0.07 0.13 (46%)
---------- ---------- ------ ---------- ---------- ------

Issued and
shares 18,733,918 11,283,343 66% 18,733,918 11,283,343 66%
---------- ---------- ------ ---------- ---------- ------

The Company's complete financial statements and Management's Discussion & Analysis for 2013 are available at and

Financial Summary

Full Year
Revenue for 2013 was $80.1 million, up from 2012 revenue of $68.7 million. The year-over-year increase of 16% reflects new project wins and an increase in market share with key customers. During 2013, one of the Company's key customers launched new products incorporating the Company's antennas, which was the main reason for the revenue increase. Overall, the Company sold approximately 200 million antennas in 2013, compared to approximately 172 million antennas in 2012.

Gross profit for 2013 was $25.2 million (31.5% of revenue), compared with $22.9 million (33.4% of revenue) in 2012. The increase in gross profit dollars was the result of higher sales volumes. The decrease in gross profit percentage reflects the change in product mix resulting in higher subcontracting costs, as well as a reduction in average selling prices in late 2013, which is typical within the industry following the initial launch of new products.

Research and development ("R&D") expenses increased by 12.2% in 2013, driven principally by continued investment in new technologies and product designs, an increase in costs for patent registrations and maintenance, and non-recurring, non-cash share-based compensation to the Company's Chief Technical Officer, which occurred prior to the completion of the Company's IPO.

General and administrative ("G&A") expenses for 2013 increased by $4.3 million over 2012. These expenses for 2013 include $6.1 million in non-recurring, non-cash share-based compensation costs that occurred prior to the Company's IPO, as well as the extinguishment of the annuity liability for the Company's former founder, which was a $2.0 million non-cash item.

Adjusted EBITDA(1) for 2013 increased by 25.5% to $10.8 million, compared with adjusted EBITDA(1) of $8.6 million in 2012. Net income for 2013 was $0.8 million, compared with $1.4 million in 2012. Net income for 2013 was affected mainly by the non-cash transactions referred to above.

Fourth Quarter
Revenue for Q4 2013 was $14.3 million, compared with $20.4 million in Q4 2012. The year-over-year decrease largely reflects the timing of customer product launches and end consumer demand in the mobile handset business, which have historically been the major factors driving the quarterly fluctuations in the Company's revenue. New product launches can significantly impact the level of net sales in any particular quarter.

Adjusted EBITDA(1) for Q4 2013 was $(0.3) million, compared with adjusted EBITDA(1) of $2.5 million for Q4 2012, reflecting lower sales and gross profit levels in Q4 2013.

As at December 31, 2013, the Company had cash and cash equivalents totaling $45.1 million. In Q4 2013, the Company completed its IPO and raised gross proceeds of $47 million. The IPO significantly improved the Company's liquidity and enabled it to expand and execute key growth strategies.


The antenna industry has grown, and is expected to continue to grow, with the proliferation of mobile devices and the exponential growth in mobile data traffic. These trends place new demands on designers and manufacturers of mobile devices and have resulted in a need for increasingly complex, innovative and highly engineered antenna solutions, specifically for LTE devices. The current trends in wireless communication, coupled with Baylin's stable financial position and 35-year history as an innovative antenna supplier, position the Company for long-term growth. Going forward, the Company plans to continue to grow and diversify its customer base by strengthening its product portfolios and particularly expanding the wireless infrastructure offering.

In the near term, the Company expects revenue in the first half of 2014 to be affected by a lower-than-expected allocation on a major product launch from its largest customer. The Company maintains a close relationship with this customer and supplies multiple devices and platforms. To offset the short-term impact from this platform, management is highly focused on growing and diversifying its customer base. The Company's strategic priorities for 2014 include continuing to secure significant contracts with the leading OEMs in the mobile sector, investing in advanced research and development, new product introductions, and continued enhancement of existing product lines. In addition to its organic growth initiatives, Baylin will pursue strategic acquisitions to accelerate growth and diversify its business, with a focus on the wireless infrastructure segment.

Conference Call

Baylin will hold a conference call to discuss its 2013 fourth quarter and year-end financial results today, March 14, 2014, at 8:30 a.m. (EDT). The call will be hosted by Ephraim Ulmer, President & CEO, and Yuval Katzir, CFO. All interested parties are invited to participate.

(647) 427-7450
(888) 231-8191

Conference ID #

416-849-0833 or 1-855-859-2056
Available until 12:00 midnight (EDT) Friday, March 21, 2014
Reference number: 8941629

Webcast will be archived for one year

(1) Non-IFRS Measures

Baylin uses EBITDA from continuing operations and Adjusted EBITDA from continuing operations to measure its strength and our future ability to generate and sustain earnings. EBITDA from continuing operations refers to earnings before interest (finance expenses, net), taxes, depreciation, and amortization and discontinued operations. Adjusted EBITDA from continuing operations refers to EBITDA from continuing operations 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. We do not believe these items reflect the underlying performance of our business. EBITDA from continuing operations and Adjusted EBITDA from continuing operations are non-IFRS performance measures. We believe that, in addition to net earnings, EBITDA from continuing operations and Adjusted EBITDA from continuing operations are useful complementary measures of pre-tax profitability and are commonly used by the financial and investment community for valuation purposes.

About Baylin

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 results "may", "could", "would", "might" or "will" be taken, occur or be achieved. With respect to forward-looking statements and information contained herein, we have made numerous assumptions. Although our management believes that the assumptions made and the expectations represented by such statement or information are reasonable, there can be no assurance that any forward-looking statement or information referenced herein will prove to be accurate. Forward-looking statements and information by their nature are based on assumptions and involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statement or information. Such risks, uncertainties and other factors include, among other things those risks identified in Baylin's prospectus filed on SEDAR at

Although we have attempted to identify factors that would cause actual actions, events or results to differ materially from those disclosed in the forward-looking statements or information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. Also, many of the factors are beyond the control of Baylin. Accordingly, readers should not place undue reliance on forward-looking statements or information. Baylin undertakes no obligation to reissue or update any forward-looking statements or information as a result of new information or events after the date hereof except as may be required by law. All forward-looking statements and information herein are qualified by this cautionary statement.

 CONSOLIDATED STATEMENTS OF FINANCIAL POSITIONU.S. dollars in thousands December 31, ------------------------ 2013 2012 ----------- ------------ASSETS CURRENT ASSETS: Cash and cash equivalents $ 45,058 $ 6,997 Trade receivables, net 8,905 14,247 Other accounts receivable 1,895 1,318 Loan to related party - 150 Inventories 5,493 5,195 ----------- ------------ 61,351 27,907 ----------- ------------NON-CURRENT ASSETS: Property, plant and equipment 21,420 13,680 Lease deposits 1,033 563 Loan to related party - 1,521 Deferred taxes 921 530 ----------- ------------ 23,374 16,294 ----------- ------------ $ 84,725 $ 44,201 =========== ============ CONSOLIDATED STATEMENTS OF FINANCIAL POSITIONU.S. dollars in thousands December 31, ---------------------------- 2013 2012 ------------- -------------LIABILITIES AND EQUITY CURRENT LIABILITIES: Credit from banks and others $ 6,685 $ 12,859 Trade payables 9,479 11,644 Other accounts payable 3,462 2,342 Convertible loans from shareholder - 400 Income tax payable 356 646 ------------- ------------- 19,982 27,891NON-CURRENT LIABILITIES: Loans from banks 1,630 28 Long-term loans from shareholder - 3,293 Finance lease liabilities 1,661 178 Employee benefit liabilities, net 1,358 1,290 Deferred taxes 500 200 Other long-term liabilities - 1,759 ------------- ------------- 5,149 6,748 TOTAL LIABILITIES: 25,131 34,639 ------------- ------------- EQUITY Share capital and premium 80,766 33,235 Foreign currency translation reserve 3,672 3,193 Capital reserve from transactions with non- controlling interests 101 101 Share-based payment reserve 620 - Accumulated deficit (25,565) (26,967) ------------- ------------- Total equity 59,594 9,562 ------------- ------------- $ 84,725 $ 44,201 ============= ============= CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOMEU.S. dollars in thousands, except share data Year ended December 31, ---------------------------- 2013 2012 ------------- ------------- Revenues $ 80,071 $ 68,709 Cost of revenues 54,854 45,785 ------------- ------------- Gross profit 25,217 22,924 Operating expenses:Selling and marketing expenses 2,760 2,644Research and development expenses 7,392 6,588General and administrative expenses 11,657 7,320Other income, net (38) (90) ------------- ------------- 21,771 16,462 ------------- ------------- Operating income 3,446 6,462 Finance income 203 44Finance expense (1,759) (1,436) ------------- ------------- Income before income taxes 1,890 5,070Income taxes (1,061) (557) ------------- ------------- Income from continuing operations 829 4,513Loss from discontinued operations, net - (3,137) ------------- ------------- Net income 829 1,376 ------------- ------------- Other comprehensive income (loss) (net of tax effect): Amounts not to be reclassified subsequently to profit or loss:Remeasurement loss from defined benefit plans (36) (248) ------------- ------------- Total (36) (248) ------------- ------------- Amounts to be reclassified to profit or loss under specific conditions:Adjustments arising from translation of foreign operations 479 285Reclassification to profit or loss upon sale of foreign operation - (30) ------------- ------------- Total 479 255 ------------- ------------- Total other comprehensive income 443 7 ------------- ------------- Total comprehensive income $ 1,272 $ 1,383 ============= ============= CONSOLIDATED STATEMENTS OF CASH FLOWSU.S. dollars in thousands Year ended December 31, 2013 2012 -------------- -------------Cash flows from operating activities: Net income from continuing operations $ 829 $ 4,513 -------------- ------------- Adjustments to reconcile net income to net cash provided by (used in) operating activities: Adjustments to the profit or loss items: Share-based payment 6,602 -Extinguishment of other long-term liabilities (2,030) -Depreciation and amortization 2,709 2,161Finance expense, net 1,556 1,392Loss from sale of property, plant and equipment 95 -Income taxes 1,061 557Change in employee benefit liabilities, net 16 (19) -------------- ------------- 10,009 4,091 -------------- -------------Changes in asset and liability items: Decrease (increase) in trade receivables 5,513 (3,263)Increase in other accounts receivable (309) (257)Increase in inventories (152) (1,405)Increase (decrease) in trade payables (2,369) 4,000Increase (decrease) in other accounts payable 1,062 (220) -------------- ------------- 3,745 (1,145) -------------- -------------Cash paid and received during the year for: Interest paid (1,125) (1,170)Interest received 45 10Taxes paid (1,558) (720) -------------- ------------- (2,638) (1,880) -------------- ------------- Net cash provided by operating activities from continuing operations 11,945 5,579Net cash used in operating activities from discontinued operations - (2,342) -------------- ------------- $ 11,945 $ 3,237 -------------- ------------- CONSOLIDATED STATEMENTS OF CASH FLOWSU.S. dollars in thousands Year ended December 31, ------------------------------ 2013 2012 -------------- --------------Cash flows from investing activities: Purchase of property, plant and equipment $ (6,130) $ (1,498)Rental lease deposits (541) -Proceeds from sale of property, plant and equipment 197 36Collection of long-term loans 2,280 234 -------------- -------------- Net cash used in investing activities from continuing operations (4,194) (1,228)Net cash provided by investing activities from discontinued operations - 330 -------------- -------------- (4,194) (898) -------------- --------------Cash flows from financing activities: Issuance of share capital, net 41,202 490Receipt of long-term loans from banks 3,230 -Receipt of long-term loan from shareholder - 1,370Repayment of long-term loans from shareholders (5,275) (836)Repayment of other long-term liabilities (142) (127)Repayment of finance lease liabilities (1,246) -Repayment of long-term loans (400) -Receipt (repayment) of short-term credit from banks and others, net (6,891) 1,200 -------------- -------------- Net cash provided by financing activities from continuing operations 30,478 2,097Net cash used in financing activities from discontinued operations - (890) -------------- -------------- 30,478 1,207 Exchange differences on balances of cash and cash equivalents (168) 149 -------------- -------------- Increase in cash and cash equivalents 38,061 3,695Cash and cash equivalents at the beginning of the year 6,997 3,302 -------------- -------------- Cash and cash equivalents at the end of the year $ 45,058 $ 6,997 ============== ==============

For further information, please contact:
Investor relations:
Conrad Seguin
TMX Equicom
T: (416) 815-0700 ext. 251
Email Contact


Comment on this story