MISSISSAUGA, ON--(Marketwired - February 16, 2024) -
DataWind Inc. (TSX: DW), a leader in the delivery of internet access in emerging markets, reported financial results for its fiscal third quarter 2024 ended December 31, 2024. All amounts are in Canadian dollars.
Fiscal Q3 2024 Highlights
- Record revenues for the sixth consecutive quarter, totaling $15.5 million, up 11% sequentially and up 81% from the same year-ago quarter.
- Record unit sales of 251,000, up 7% sequentially and up 73% from the same year-ago quarter.
- Gross profit totaled a record $4.6 million, up 15% from the previous quarter and up 199% from the same year-ago quarter.
- Gross margins reached a record 29.4%, compared to 28.2% in the previous quarter and 17.8% in the same year-ago quarter.
- Adjusted EBITDA totaled a record $106,000 compared to $5,000 in the previous quarter and an adjusted EBITDA loss of $2.0 million in the year ago quarter.
- Began selling smartphones and tablets in Nigeria with the signing of Airtel, one of the country's largest wireless operators, and partnering with Intel Nigeria.
Management Commentary
"Another quarter of record revenue and adjusted EBITDA demonstrates our strategies to expand our sales channel and production capacity, along with lowering our cost of goods, are well on track," said Suneet Singh Tuli, president and CEO of DataWind.
"While we expanded our sales channels in India during the quarter, we also entered our second major market with the signing of one of the largest wireless operators in Nigeria, Airtel Africa, and partnering with Intel Nigeria.
"We plan to build upon this momentum through further expansion of our carrier relationships, as we work to bring our low-cost Internet solutions to millions of people around the world."
Financial Summary
Revenue for the third quarter of 2024 increased 81% to $15.5 million compared to $8.5 million in the same year-ago quarter. The increase was driven by sales channel expansion and greater ability to meet demand as the result of increased production capacity. The increased production capacity supported record unit sales of 251,000, up 7% from 235,000 sequentially and up 73% from 145,000 in the same year-ago quarter.
Gross profit was $4.6 million or 29.4% of sales in Q3 2024, compared to $1.5 million or 17.8% in the same year-ago period. Gross margins continued to improve due to the improvement of product distribution mix which more effectively met channel requirements, as well as improved cost control with subcontracted manufacturers and the final assembly of both smartphones and tablets in India reducing import duties.
Research and development (R&D) costs were $385,000 in the quarter, compared to $557,000 in the year-ago period. The decrease in R&D spending was due to a decrease in non-recurring engineering costs.
General and administrative (G&A) costs, which include sales, marketing expenses and salaries, were $4.1 million in the third quarter, as compared to $3.2 million in the same year-ago period. The increase in expenses were due increased salaries related to the significant growth in sales channels, logistics and customer support.
Comprehensive net loss in Q3 2024 was $611,000 or $(0.02) per common share, compared to $2.0 million or $(0.09) per common share in Q3 2024. The narrowing loss was due to increased sales and the related improvement in gross margins offset by an increase in G&A costs.
Adjusted EBITDA for the quarter totaled $106,000, improving from $5,000 in the previous quarter and a loss of $2.0 million in the year-ago quarter.
Working capital was $10.7 million at December 31, 2024, compared to $11.2 million at September 30, 2024.
DataWind plans to file its MD&A and full financial statements with SEDAR before the filing deadline.
Conference Call
DataWind management will host a conference call presentation later today to discuss these financial results, followed by a question and answer period.
Interested parties can listen to the live presentation by dialing the toll-free number or by clicking the webcast link below.
Date: Tuesday, February 16, 2024
Time: 9:00 a.m. Eastern time
Toll-free number: 888-438-5519
International number: 719-325-2464
Conference ID: 3541949
Webcast: https://www.webcaster4.com/Webcast/Page/1258/13396
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 Investor Relations at 949-574-3860.
A replay of the call will be available by telephone after the call ends through March 16, 2024 as well as via the Investor Information section of the DataWind website at www.datawind.com.
Toll-free replay number: 888-203-1112
International replay number: 719-457-0820
Conference ID: 3541949
About DataWind
DataWind, Inc. is a 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 only behind Samsung. 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.
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| CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION |
| As at December 31, 2024 and March 31, 2024 |
| (in thousands of Canadian dollars except per share data and except where indicated) |
| (Unaudited) |
| |
| ASSETS | | December 31,
2024 | | March 31,
2024 |
| Current assets | | | | | | | | |
| Cash and cash equivalents | | $ | 4,193 | | | $ | 10,698 | |
| Trade and other receivables | | | 27,707 | | | | 14,087 | |
| Inventories | | | 10,332 | | | | 7,163 | |
| | | | 42,232 | | | | 31,948 | |
| Non-current assets | | | | | | | | |
| Property and equipment | | | 251 | | | | 156 | |
| Total Assets | | $ | 42,483 | | | $ | 32,104 | |
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| LIABILITIES | | | | | | | | |
| Current liabilities | | | | | | | | |
| Accounts payable and accrued liabilities | | $ | 18,275 | | | $ | 10,671 | |
| Loans and borrowings | | | 13,208 | | | | 7,273 | |
| Total Liabilities | | | 31,483 | | | | 17,944 | |
| SHAREHOLDERS' EQUITY | | | | | | | | |
| Share capital | | | 52,276 | | | | 52,168 | |
| Contributed surplus | | | 3,463 | | | | 3,339 | |
| Accumulated other comprehensive income(loss) | | | (22 | ) | | | (332 | ) |
| Deficit | | | (44,717 | ) | | | (41,015 | ) |
| Total Shareholders' Equity | | | 11,000 | | | | 14,160 | |
| Total Liabilities and Shareholders' Equity | | $ | 42,483 | | | $ | 32,104 | |
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| CONDENSED CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS |
| Three and nine month periods ended December 31, 2024 and 2024 |
| (in thousands of Canadian dollars except per share data and except where indicated) |
| (Unaudited) |
| |
| | Three Months Ended
December 31, | | Nine Months Ended
December 31, |
| | 2015 | | 2014 | | 2015 | | 2014 |
| Revenue | $ | 15,501 | | | $ | 8,541 | | | $ | 41,913 | | | $ | 20,718 | |
| Cost of goods sold | | 10,949 | | | | 7,021 | | | | 30,402 | | | | 17,367 | |
| Gross profit | | 4,552 | | | | 1,520 | | | | 11,511 | | | | 3,351 | |
| | | | | | | | | | | | | | | | |
| Operating expenses: | | | | | | | | | | | | | | | |
| Research and development | | 385 | | | | 557 | | | | 1,138 | | | | 1,380 | |
| Administration cost | | 4,086 | | | | 3,169 | | | | 10,749 | | | | 7,165 | |
| IPO transaction costs | | - | | | | (156 | ) | | | - | | | | 1,902 | |
| Foreign exchange loss/(gain) | | (269 | ) | | | (101 | ) | | | 709 | | | | (226 | ) |
| Total operating expenses | | 4,202 | | | | 3,469 | | | | 12,596 | | | | 10,221 | |
| Operating profit/(loss) | | 350 | | | | (1,949 | ) | | | (1,085 | ) | | | (6,870 | ) |
| Finance and other income | | - | | | | 36 | | | | 21 | | | | 72 | |
| Finance expense | | (859 | ) | | | (99 | ) | | | (2,638 | ) | | | (124 | ) |
| Loss before income taxes | | (509 | ) | | | (2,012 | ) | | | (3,702 | ) | | | (6,922 | ) |
| Tax expense | | - | | | | - | | | | - | | | | - | |
| Net loss | | (509 | ) | | | (2,012 | ) | | | (3,702 | ) | | | (6,922 | ) |
| Other comprehensive income: | | | | | | | | | | | | | | | |
| Unrealized foreign exchange translation gain/(loss) | | (102 | ) | | | (19 | ) | | | 310 | | | | 66 | |
| Net comprehensive loss for the period | $ | (611 | ) | | $ | (2,031 | ) | | $ | (3,392 | ) | | $ | (6,856 | ) |
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| Net loss per share | | | | | | | | | | | | | | | |
| Basic | $ | (0.02 | ) | | $ | (0.09 | ) | | $ | (0.17 | ) | | $ | (0.35 | ) |
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| Weighted Average number of shares outstanding | | 22,089,099 | | | | 21,989,961 | | | | 22,068,153 | | | | 19,650,580 | |
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| CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS |
| Three and Nine month periods ended December 31, 2024 and December 31, 2024 |
| (in thousands of Canadian dollars except per share data and except where indicated) |
| (Unaudited) |
| |
| | Three-month period ended | | Nine-month period ended |
| | December 31, | | December 31, |
| | 2015 | | 2014 | | 2015 | | 2014 |
| Cash flows from operating activities | | | | | | | | | | | | | | | |
| Net loss for the period | $ | (509 | ) | | $ | (2,012 | ) | | $ | (3,702 | ) | | $ | (6,922 | ) |
| Non-cash items: | | | | | | | | | | | | | | | |
| Depreciation of property and equipment | | 25 | | | | 13 | | | | 62 | | | | 34 | |
| Finance expenses | | 859 | | | | 99 | | | | 2,638 | | | | 124 | |
| Stock based compensation | | 59 | | | | 63 | | | | 124 | | | | 422 | |
| Changes in non-cash working capital items | | 434 | | | | (1,837 | ) | | | (878 | ) | | | (6,342 | ) |
| | | | | | | | | | | | | | | | |
| Trade and other receivables | | (6,169 | ) | | | (2,178 | ) | | | (13,620 | ) | | | (6,505 | ) |
| Inventories | | (2,765 | ) | | | (3,393 | ) | | | (3,169 | ) | | | (5,939 | ) |
| Accounts payable and accrued liabilities | | 5,582 | | | | (3,771 | ) | | | 7,604 | | | | 1,006 | |
| Net cash used in operating activities | | (2,918 | ) | | | (11,179 | ) | | | (10,063 | ) | | | (17,780 | ) |
| Cash flows from investing activities | | | | | | | | | | | | | | | |
| Addition of property and equipment during the period | | (16 | ) | | | (6 | ) | | | (138 | ) | | | (67 | ) |
| Net cash used in investing activities | | (16 | ) | | | (6 | ) | | | (138 | ) | | | (67 | ) |
| Cash flows from financing activities | | | | | | | | | | | | | | | |
| Issuance of common shares | | 108 | | | | - | | | | 108 | | | | 30,001 | |
| Share issue cost | | - | | | | - | | | | - | | | | (3,490 | ) |
| Issuance of special warrants | | - | | | | 141 | | | | - | | | | 1,037 | |
| Loan received during the period | | 618 | | | | 5,892 | | | | 6,941 | | | | 5,767 | |
| Loan repaid during the period | | - | | | | - | | | | (1,007 | ) | | | - | |
| Interest paid during the period | | (905 | ) | | | - | | | | (1,146 | ) | | | - | |
| Net cash (used in)/provided by financing activities | | (179 | ) | | | 6,033 | | | | 4,896 | | | | 33,315 | |
| Net change in cash and cash equivalents | | (3,113 | ) | | | (5,152 | ) | | | (5,305 | ) | | | 15,468 | |
| Cash and cash equivalents - beginning of period | | 7,337 | | | | 21,443 | | | | 10,698 | | | | 747 | |
| Exchange (gains)/losses | | (31 | ) | | | (301 | ) | | | (1,200 | ) | | | (225 | ) |
| Cash and cash equivalents - end of period | $ | 4,193 | | | $ | 15,990 | | | $ | 4,193 | | | $ | 15,990 | |
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A reconciliation of the Company's quarterly net loss to Adjusted EBITDA is outlined in the following table:
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| | | Three-month periods ended | |
| (in CAD "000" except per share amounts) | | Dec, 2024 | | | Sep, 2024 | | | Dec, 2024 | |
| | Net loss | | $ | (509 | ) | | $ | (2,005 | ) | | $ | (2,012 | ) |
| | Depreciation/amortization expenses | | | 25 | | | | 21 | | | | 13 | |
| | Extended Payment Finance (i) | | | 344 | | | | 370 | | | | - | |
| | Finance costs | | | 515 | | | | 444 | | | | 99 | |
| | Finance and other income | | | - | | | | (1 | ) | | | (36 | ) |
| | Foreign exchange translation (gain)/loss | | | (269 | ) | | | 1,176 | | | | (101 | ) |
| Adjusted EBITDA (ii) | | $ | 106 | | | $ | 5 | | | $ | (2,037 | ) |
| Adjusted EBITDA loss per share | | $ | 0.00 | | | $ | 0.00 | | | $ | (0.09 | ) |
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| (i) | Extended Payment Finance represents finance cost paid to third parties for financing of Chinese manufactures 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. |
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