OTTAWA, CANADA--(Marketwired - Oct. 9, 2013) - DragonWave Inc. (TSX:DWI)(NASDAQ:DRWI) a leading global supplier of packet microwave radio systems for mobile and access networks, today announced financial results for its second quarter ended August 31, 2013. All figures are in U.S. dollars and were prepared in accordance with U.S. generally accepted accounting principles.
Revenue for the second quarter of fiscal year 2014 was $25.5 million, compared with $24.5 million in the first quarter of fiscal year 2014 and $44.2 million in the second quarter of fiscal year 2013. Revenue from the Nokia Solutions and Networks ("NSN") channel represented 61% of revenue in the fiscal quarter.
Gross margin for the second quarter of fiscal year 2014 was 11.0%, compared with 11.5% in the first quarter of fiscal year 2014 and 15% in the second quarter of fiscal year 2013.
Highlights to date include:
- Our balance sheet was strengthened by adding approximately $23.5 million of cash through an equity offering that closed on September 23, 2013.
- In India we are experiencing strong activity. This includes new orders, an increased pipeline, and we are particularly pleased to be short-listed as a supplier in a large greenfield build.
- In North America we have received an initial order associated with a new project with a major carrier.
- We have reduced our operating expenses again in our second quarter. We continue to look for savings in logistics and other areas.
"I am pleased that we are making progress on multiple fronts" said DragonWave President and CEO, Peter Allen.
Net loss applicable to shareholders in the second quarter of fiscal year 2014 was $10.5 million or ($0.28) per basic and diluted share. This compares to a net loss applicable to shareholders of $6.6 million or ($0.17) per basic and diluted share in the first quarter of fiscal year 2014 and net loss of $1.1 million or ($0.03) per basic and diluted share in the second quarter of fiscal year 2013.
Cash, cash equivalents, and restricted cash totaled $9.8 million at the end of the second quarter of fiscal year 2014, compared to $23.4 million at the end of the first quarter of fiscal year 2014. Cash, cash equivalents and restricted cash reported at August 31, 2013 do not include the proceeds of the Company's public offering of units which closed on September 23, 2013.
Webcast and Conference Call Details:
The DragonWave management team will discuss the results on a webcast and conference call beginning at 8:30 a.m. Eastern Time on October 10, 2013.
The live webcast and presentation slides will be available at the Investor Relations section of the DragonWave website at: http://investor.dragonwaveinc.com/events.cfm
An archive of the webcast will be available at the same link.
Conference call dial-in numbers:
- Toll-free North America: (877) 312-9202
- International: (408) 774-4000
About DragonWave
DragonWave® is a leading provider of high-capacity packet microwave solutions that drive next-generation IP networks. DragonWave's carrier-grade point-to-point packet microwave systems transmit broadband voice, video and data, enabling service providers, government agencies, enterprises and other organizations to meet their increasing bandwidth requirements rapidly and affordably. The principal application of DragonWave's products is wireless network backhaul. Additional solutions include leased line replacement, last mile fiber extension and enterprise networks. DragonWave's corporate headquarters is located in Ottawa, Ontario, with sales locations in Europe, Asia, the Middle East and North America. For more information, visit http://www.dragonwaveinc.com.
DragonWave® and Horizon® are registered trademarks of DragonWave Inc.
Forward-Looking Statements
Certain statements in this release constitute forward-looking statements within the meaning of applicable securities laws. Forward-looking statements include statements as to DragonWave's growth opportunities and the potential benefits of, and demand for, DragonWave's products. These statements are subject to certain assumptions, risks and uncertainties, including our view of the relative position of DragonWave's products compared to competitive offerings in the industry. Readers are cautioned not to place undue reliance on such statements. DragonWave's actual results, performance, achievements and developments may differ materially from the results, performance, achievements or developments expressed or implied by such statements. Risk factors that may cause the actual results, performance, achievements or developments of DragonWave to differ materially from the results, performance, achievements or developments expressed or implied by such statements can be found in the public documents filed by DragonWave with U.S. and Canadian securities regulatory authorities. DragonWave assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by law.
Forward-looking statements are provided to assist external stakeholders in understanding DragonWave's expectations as of the date of this release and may not be appropriate for other purposes. Material risks and uncertainties relating to our business are described under the heading "Risks and Uncertainties" in the MD&A dated October 9, 2013 and in the Company's Annual Information Form dated May 17, 2013 and other public documents filed by DragonWave with Canadian and United States securities regulatory authorities, which are available at www.sedar.com and www.sec.gov, respectively.
| CONSOLIDATED STATEMENTS OF OPERATIONS | |
| Expressed in US $000's except share and per share amounts | |
| | | | | | |
| | | | | | | | | |
| | Three months ended | | Six months ended | |
| | August 31, | | August 31, | | August 31, | | August 31, | |
| | 2013 | | 2012 | | 2013 | | 2012 | |
| | | | | | | | | |
| REVENUE | 25,453 | | 44,157 | | 49,985 | | 57,131 | |
| | Cost of sales | 22,659 | | 37,414 | | 44,371 | | 46,255 | |
| Gross profit | 2,794 | | 6,743 | | 5,614 | | 10,876 | |
| | | | | | | | | |
| EXPENSES | | | | | | | | |
| | Research and development | 4,783 | | 12,139 | | 10,085 | | 16,538 | |
| | Selling and marketing | 3,175 | | 4,357 | | 6,557 | | 8,015 | |
| | General and administrative | 4,433 | | 8,513 | | 9,181 | | 13,783 | |
| | 12,391 | | 25,009 | | 25,823 | | 38,336 | |
| Income (loss) before amortization of intangible assets and other items | (9,597 | ) | (18,266 | ) | (20,209 | ) | (27,460 | ) |
| | | | | | | | | |
| | Amortization of intangible assets | (437 | ) | (1,199 | ) | (996 | ) | (1,741 | ) |
| | Accretion expense | (56 | ) | (30 | ) | (121 | ) | (52 | ) |
| | Restructuring expense | - | | - | | - | | (798 | ) |
| | Interest income (expense) | (380 | ) | (740 | ) | (918 | ) | (711 | ) |
| | Impairment of intangible assets | - | | (1,148 | ) | - | | (4,017 | ) |
| | Gain on change in estimate | 342 | | 352 | | 342 | | 1,542 | |
| | Gain on contract amendment | - | | - | | 5,285 | | - | |
| | Gain on purchase of business | - | | 19,397 | | - | | 19,397 | |
| | Foreign exchange gain (loss) | (397 | ) | 462 | | (495 | ) | (541 | ) |
| Income (loss) before income taxes | (10,525 | ) | (1,172 | ) | (17,112 | ) | (14,381 | ) |
| | | | | | | | | |
| | Income tax expense (recovery) | 76 | | - | | 168 | | (572 | ) |
| Net Income (loss) | (10,601 | ) | (1,172 | ) | (17,280 | ) | (13,809 | ) |
| | | | | | | | | |
| | Net Loss Attributable to Non-Controlling Interest | 92 | | 50 | | 146 | | 108 | |
| Net Income (loss) applicable to shareholders | (10,509 | ) | (1,122 | ) | (17,134 | ) | (13,701 | ) |
| | | | | | | | | |
| Income (loss) per share | | | | | | | | |
| | Basic | (0.28 | ) | (0.03 | ) | (0.45 | ) | (0.37 | ) |
| | Diluted | (0.28 | ) | (0.03 | ) | (0.45 | ) | (0.37 | ) |
| | | | | | | | | |
| Weighted Average Shares Outstanding | | | | | | | | |
| | Basic | 38,112,887 | | 37,992,859 | | 38,086,403 | | 36,962,103 | |
| | Diluted | 38,112,887 | | 37,992,859 | | 38,086,403 | | 36,962,103 | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| CONSOLIDATED BALANCE SHEETS |
|
| Expressed in US $000's except share amounts |
|
| |
|
| |
|
|
|
|
| |
As at |
|
As at |
|
| |
August 31, |
|
February 28, |
|
| |
2013 |
|
2013 |
|
| Assets |
|
|
|
|
| Current Assets |
|
|
|
|
| |
Cash and cash equivalents |
8,858 |
|
22,959 |
|
| |
Restricted cash |
968 |
|
- |
|
| |
Trade receivables |
20,832 |
|
35,452 |
|
| |
Inventory |
32,917 |
|
32,722 |
|
| |
Other current assets |
5,618 |
|
6,077 |
|
| |
Contingent receivable |
- |
|
13,843 |
|
| |
Deferred tax asset |
54 |
|
69 |
|
| |
69,247 |
|
111,122 |
|
| Long Term Assets |
|
|
|
|
| |
Property and equipment |
4,504 |
|
7,444 |
|
| |
Deferred tax asset |
1,568 |
|
1,581 |
|
| |
Deferred financing cost |
- |
|
149 |
|
| |
Intangible assets |
1,975 |
|
2,771 |
|
| |
Goodwill |
11,927 |
|
11,927 |
|
| |
19,974 |
|
23,872 |
|
| |
|
|
|
|
| Total Assets |
89,221 |
|
134,994 |
|
| |
|
|
|
|
| Liabilities |
|
|
|
|
| Current Liabilities |
|
|
|
|
| |
Accounts payable and accrued liabilities |
30,964 |
|
56,962 |
|
| |
Debt facility |
15,000 |
|
15,000 |
|
| |
Deferred revenue |
848 |
|
1,163 |
|
| |
Capital lease obligation |
2,551 |
|
3,251 |
|
| |
Contingent liabilities |
200 |
|
255 |
|
| |
49,563 |
|
76,631 |
|
| |
|
|
|
|
| Long Term Liabilities |
|
|
|
|
| |
Capital lease obligation |
- |
|
1,451 |
|
| |
Other long term liabilities |
693 |
|
783 |
|
| |
Contingent liabilities |
- |
|
519 |
|
| |
693 |
|
2,753 |
|
| |
|
|
|
|
| Commitments |
|
|
|
|
| |
|
|
|
|
| Shareholders' equity |
|
|
|
|
| |
Capital stock |
179,589 |
|
179,429 |
|
| |
Contributed surplus |
6,638 |
|
6,047 |
|
| |
Deficit |
(137,331 |
) |
(120,197 |
) |
| |
Accumulated other comprehensive loss |
(9,743 |
) |
(9,685 |
) |
| Total Shareholder's equity |
39,153 |
|
55,594 |
|
| |
|
|
|
|
| |
Non-controlling interests |
(188 |
) |
16 |
|
| Total Equity |
38,965 |
|
55,610 |
|
| |
|
|
|
|
| Total Liabilities and Equity |
89,221 |
|
134,994 |
|
| |
|
|
|
|
| |
|
|
|
|
| Shares issued & outstanding |
38,123,880 |
|
38,048,297 |
|
| |
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|