MISSISSAUGA, ON, July 6, 2015 /CNW/ - DataWind Inc. ("DataWind" or the "Company") (TSX: DW), a leader in the delivery of internet access in emerging markets, today announced its financial results for the three and 12 months ended March, 31, 2015. All figures are in Canadian dollars unless otherwise noted.
- Announced a national carrier relationship in India with Reliance enabling the Company to bundle internet delivery service with all hardware sold in that country.
- All smartphones and tablets sold in India are now being bundled with internet services with Reliance.
- Expanded sales channels to more than 70 retail partners, representing more than 4,000 retail locations across India.
- Fourth quarter 2015 unit sales exceeded 180,000, up 27% quarter-over-quarter and 173% year-over-year.
- Revenue of $11.04 million and $31.5 million for the fourth quarter and fiscal 2015, respectively, up 107% and 35%, for the same periods last year.
- Gross profit of $2.92 million and $6.05 million for the fourth quarter and fiscal 2015, respectively, up 205% and 142% over the same periods last year.
- Gross profit expected to continue to grow as recurring internet revenues increase and facilities for final assembly of product in India ready to launch later this quarter.
- Net Loss of $4.5 and $11.6 million for the fourth quarter and fiscal 2015, respectively, compared to a net loss of $1.4 million and $4.5 million, for the same periods last year.
"In fiscal 2015, we began new chapter for DataWind as a public company following our IPO," said Suneet Singh Tuli, President and Chief Executive Officer of DataWind. "Over the year, our business grew and evolved to better serve our primary target market, India. We increased our inventory, added new devices to our product offering and expanded our distribution network. Most significantly, we now offer India-wide internet service coverage on all our devices, positioning the Company to accelerate adoption of our devices and build a strong base of recurring revenue."
Mr. Tuli added: "Our focus in fiscal 2016 will be on expanding our distribution network in India to drive increased sales of our devices to grow our subscriber base. In addition, we will continue building-out our advertising platform and we will look to partner with wireless carriers in Asia and Latin America. We are excited for the growth of our business in 2016 and beyond."
Revenue for the three months ended March 31, 2015 was $11.04 million compared to $5.5 million for the fourth quarter 2014, an increase of $5.5 million, or 98%.
Revenue for fiscal 2015 was $31.5 million compared to $23.4 million in fiscal 2014, up $8.1 million, or 35%. Sales growth was fueled by increased sales channel expansion as well as an increase in working capital availability post the July 8th, 2014 financing which provided the Company with the ability to fund its inventory to meet demand.
Gross profit was $2.9 million, or 26.4%, of sales in Q4 2015 compared to $0.96 million, or 17.1%, in the same period last year.
For fiscal 2015, gross profit was $6.05 million, or 19.2%, of sales compared to $2.5 million, or 10.7%, in fiscal 2014. The improvement in margin is primarily attributable to the reduction in lower margin sales to government institutions, management improving its ability to assess product mix and cost control with sub-contract manufacturers, a reduction in gross margin interest from Tablet Investments, partially offset by an increase in manufacturing interest paid for extended payment terms.
General and Administrative
General and administrative (G&A) costs, which include sales and marketing expenses, were $6.14 million and $13.08 million for the fourth quarter and fiscal 2015, respectively. This is compared to $2.06 million and $5.4 million in the corresponding periods last year.
For the year ended March 31, 2015, a significant portion of the increase in sales and marketing costs in India was due to higher marketing and selling expenses. The company ramped up its call center operations in India, expanded its sales team outside India and assisted its retail distribution channels with training and support. The Company also incurred additional costs relating to the Reliance partnership announcement.
Research and Development
Research and development (R&D) costs were $1.0 million in the fourth quarter of 2015, compared to $0.22 million in the same period last year. For fiscal 2015, R&D costs were $2.4 million compared to $1.3 million in fiscal 2014.
The increase in R&D spending can be attributed to higher NRE costs, several new hires, a reduction in the associated tax recoveries and development work related to new product releases. R&D is a key focus for DataWind, and the Company will continue to invest in R&D to enhance its cutting edge, proprietary, cloud-based internet delivery platform.
Net loss in Q4 2015 was $4.4 million, or $0.22 per common share, compared to a net loss of $1.4 million or $0.09 per common share, for the same period in the previous year.
In fiscal 2015, net loss was $11.6 million, or $0.57 per share, compared to $4.5 million or $0.30 per share, in fiscal 2014.
Working capital was $14.0 million at March 31, 2015 compared to working capital of $18.1 million at December 31, 2014. The change in working capital is the result of the operational loss in the quarter.
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Tuesday, July 07, 2015
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DataWind is a leader in low-cost Internet connectivity for emerging markets. DataWind's mission is to bring the Internet, which has the ability to create tremendous social and economic benefits, to billions of unconnected people in the developing world. The Company's Internet Delivery Platform offers a low-cost Internet browsing solution by bundling an affordable tablet device with an inexpensive, pre-paid, 2G Internet service plan. DataWind is traded on the Toronto Stock Exchange (TSX: DW). For more information visit www.datawind.com.
This press release contains "forward-looking information" within the meaning of applicable Canadian securities legislation. Such forward-looking information includes information with respect to our goals, beliefs, plans, expectations, anticipations, estimates and intentions. Forward-looking information is identified by the use of terms and phrases such as "may," "would," "should," "could," "expect," "intend," "estimate," "anticipate," "plan," "foresee," "believe," and "continue," or the negative of these terms and similar terminology, including references to assumptions. Please note, however, that not all forward-looking information contains these terms and phrases. Forward-looking information is based upon a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond our control. These risks and uncertainties could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking information. These risks and uncertainties include, but are not limited to, the risk factors identified in the Company's prospectus dated June 27, 2014, which is available on the SEDAR website at www.sedar.com. Consequently, all of the forward-looking information contained herein is qualified by the foregoing cautionary statements, and there can be no guarantee that the results or developments that we anticipate will be realized or, even if substantially realized, that they will have the expected consequences or effects on our business, financial condition or results of operation. Unless otherwise noted or the context otherwise indicates, the forward-looking information contained herein is provided as of the date hereof, and we do not undertake to update or amend such forward-looking information whether as a result of new information, future events or otherwise, except as may be required by applicable law.
No securities regulatory authority has either approved or disapproved the contents of this press release.
SOURCE DataWind Inc.
For further information: Conrad Seguin, TMX Equicom, (416) 815-0700 ext. 251, [email protected]