DragonWave Reports Fourth Quarter and Full Fiscal Year 2015 Results
Full-Year Revenue Growth of 75%
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E-mailOTTAWA, CANADA -- (Marketwired) -- 05/12/15 -- 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 the fourth quarter and full fiscal year 2015 ended February 28, 2015. All figures are in U.S. dollars and were prepared in accordance with U.S. generally accepted accounting principles ("GAAP").
Revenue for the fourth quarter of fiscal year 2015 was $43.7 million, compared with $47.3 million in the third quarter and $17.9 million in the fourth quarter of the prior fiscal year. Revenue through the Nokia channel represented 46% of total revenue in the fourth quarter fiscal year 2015, versus 50% in the third quarter and 68% in fourth quarter of fiscal year 2014.
Gross profit margin was 19.4% for the fourth quarter of fiscal year 2015, compared with 16.3% in the third quarter and 14.5% in the fourth quarter of the prior fiscal year.
Net loss applicable to shareholders in the fourth quarter of fiscal year 2015 was ($2.3) million or ($0.03) per basic and diluted share. This compares to a net loss applicable to shareholders of ($3.8) million or ($0.05) per basic and diluted share in the third quarter of fiscal year 2015 and ($11.6) million or ($0.20) per basic and diluted share in the fourth quarter of fiscal year 2014.
"We are pleased with the significant progress in our Q4 results which were within $1 million of break-even Adjusted Cashflow from Operations, despite uneven timing of equipment orders and installation services revenue," said DragonWave President and CEO Peter Allen. "As we look forward, we expect double-digit year-over-year revenue growth in fiscal year 2016 and the strongest contribution to revenue growth in fiscal year 2016 is expected to come from expanding direct business with current and new Tier one mobile operators. Within this we expect revenue in Q1 to be in the $30 to $33 million range."
See "Non-GAAP Financial Measures" below for a reconciliation of Adjusted Cashflow from Operations to the most directly comparable measure calculated in accordance with GAAP and presented in DragonWave's financial statements.
Cash and cash equivalents totaled $23.7 million at the end of the fourth quarter of fiscal year 2015, compared to $29.5 million at the end of the third quarter, and $19.0 million at the end of the fourth quarter of fiscal year 2014.
Revenue for the full fiscal year 2015 was $157.8 million, compared with $90.0 million for the prior fiscal year. Net loss applicable to shareholders for the full fiscal year was ($21.5) million or ($0.32) per basic and diluted share, compared with ($34.2) million or ($0.83) per basic and diluted share in the prior fiscal year.
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 May 13, 2015.
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 Dial-in: (877) 312-9202
International Dial-in: (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, including a range of products ideally suited to support the emergence of underlying small cell networks. 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®, Horizon® and Avenue® are registered trademarks of DragonWave Inc.
Non-GAAP Financial Measures
This press release contains certain information that is not consistent with financial measures prescribed under GAAP. We break out "Adjusted Cashflow from Operations" also called "Adjusted EBITDA". This measure corresponds to earnings before interest, taxes, depreciation and amortization less elements that are non-cash in nature. Because it omits non-cash items, we feel that Adjusted Cashflow from Operations/Adjusted EBITDA better represents the cash impact of the results of operations in the applicable period. Adjusted Cashflow from Operations/Adjusted EBITDA does not have any standardized meaning prescribed by GAAP and is therefore unlikely to be comparable to similar measures presented by other companies, and is not designed to replace other measures of financial performance or the statement of operations as an indicator of performance. This measure should not be considered in isolation or as a substitute for other measures of performance calculated according to GAAP. Consistent improvement in Adjusted Cashflow from Operations/Adjusted EBITDA is one of management's primary objectives. Reducing cash usage from drivers other than working capital and capital investments is an important objective for us and we believe this financial measure is therefore useful to investors in evaluating our operating performance.
The most directly comparable GAAP measure presented in our financial statements for the three and twelve months ended February 28, 2015 to "Adjusted Cashflow from Operations/Adjustment EBITDA" is "Net Loss". A reconciliation of "Adjusted Cashflow from Operations/Adjusted EBITDA" to "Net Loss" is included in the table below.
Forward-Looking Statements
Certain statements in this release constitute forward-looking statements or forward-looking information as defined by 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, as well as our expectations regarding Q1 and full year FY2016 revenues. 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. Our guidance on Q1 revenue is subject to assumptions, including the timing of orders from our principal channel partner. Our guidance on full year FY 2016 revenues is also subject to assumptions, including the progression of roll-outs with two tier one mobile operators, levels of ongoing demand from our principal channel partner, and the capacity of supply chain to scale to meet demand.
Forward-looking statements are provided to help external stakeholders understand DragonWave's expectations as of the date of this release and may not be appropriate for other purposes. 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, as a result of the risks identified above as well as other risks identified in our publicly filed documents. Material risks and uncertainties relating to our business are described under the heading "Risks and Uncertainties" in the MD&A dated May 12, 2015 and in the Company's Annual Information Form 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. 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.
CONSOLIDATED BALANCE SHEETS
Expressed in US $000's except share amounts
As at As at
February 28, February 28,
2015 2014
----------------------------
Assets
Current Assets
Cash and cash equivalents 23,692 18,992
Trade receivables 48,626 17,408
Inventory 24,294 30,416
Other current assets 5,834 5,909
Deferred tax asset 61 69
----------------------------
102,507 72,794
Long Term Assets
Property and equipment 4,322 3,168
Deferred tax asset 1,485 1,536
Deferred financing cost 18 60
Intangible assets 794 1,635
Goodwill 11,927 11,927
----------------------------
18,546 18,326
Total Assets 121,053 91,120
----------------------------
----------------------------
Liabilities
Current Liabilities
Accounts payable and accrued liabilities 40,163 29,964
Deferred revenue 830 984
Capital lease obligation 514 1,795
----------------------------
41,507 32,743
Long Term Liabilities
Debt facility 32,400 15,000
Other long term liabilities 1,139 574
Warrant liability 1,239 1,360
----------------------------
34,778 16,934
Shareholders' equity
Capital stock 220,952 198,593
Contributed surplus 8,388 7,118
Deficit (175,921) (154,505)
Accumulated other comprehensive loss (9,618) (9,682)
----------------------------
Total Shareholders' equity 43,801 41,524
Non-controlling interests 967 (81)
----------------------------
Total Equity 44,768 41,443
Total Liabilities and Equity 121,053 91,120
----------------------------
----------------------------
Shares issued & outstanding 75,290,818 58,008,746
CONSOLIDATED STATEMENTS OF OPERATIONS
Expressed in US $000's except share and per share amounts
Three months ended Year ended
February 28, February 28, February 28, February 28,
2015 2014 2015 2014
--------------------------------------------------------
REVENUE 43,742 17,857 157,766 90,011
Cost of sales 35,245 15,268 129,772 79,348
--------------------------------------------------------
Gross profit 8,497 2,589 27,994 10,663
--------------------------------------------------------
EXPENSES
Research and
development 3,766 4,863 16,812 19,948
Selling and
marketing 3,745 3,165 13,975 13,201
General and
administrative 3,793 3,762 16,930 17,087
--------------------------------------------------------
11,304 11,790 47,717 50,236
--------------------------------------------------------
Loss before other
items (2,807) (9,201) (19,723) (39,573)
Amortization of
intangible assets (207) (404) (1,188) (1,900)
Accretion expense (59) (48) (168) (222)
Interest expense (452) (440) (1,557) (1,750)
Warrant issuance
expenses - - (221) (662)
(Loss) / Gain on
change in estimate (234) (553) 67 2,759
Gain on contract
amendment - - - 5,702
Gain on sale of
fixed assets - - 18 -
Fair value
adjustment -
warrant liability 979 (352) 2,007 3,235
Foreign exchange
gain (loss) 327 (311) 846 (1,530)
--------------------------------------------------------
Loss before income
taxes (2,453) (11,309) (19,919) (33,941)
Income tax
(recovery) expense (330) 128 717 398
--------------------------------------------------------
Net Loss (2,123) (11,437) (20,636) (34,339)
Net (Income) Loss
Attributable to
Non-Controlling
Interest (145) (162) (884) 97
--------------------------------------------------------
Net Loss applicable
to shareholders (2,268) (11,599) (21,520) (34,242)
Net loss per share
Basic (0.03) (0.20) (0.32) (0.83)
Diluted (0.03) (0.20) (0.32) (0.83)
Weighted Average
Shares Outstanding
Basic 75,276,644 57,062,936 68,111,696 41,438,383
Diluted 75,276,644 57,062,936 68,111,696 41,438,383
Reconciliation of Adjusted Cashflow from Operations/Adjusted EBITDA to Net
Loss
Expressed in US $000's
FY15 FY15 FY15 FY15
Q4 Q3 Q2 Q1
------------------------------------
Adjusted Cashflow from
Operations/Adjusted EBITDA (872) (3,362) (4,103) (5,024)
Include the following items:
Amortization (446) (519) (658) (697)
Options expense (302) (321) (288) (359)
Inventory provisions (1,187) (272) (1,223) (90)
Amortization of intangible assets (207) (333) (339) (309)
Accretion expense (59) (69) - (40)
Interest expense (452) (301) (379) (425)
(Loss) / Gain on change in estimate (234) 200 - 101
Gain on sale of fixed assets - 18 - -
Warrant issuance expenses - - (221) -
Fair value adjustment - warrant
liability 979 1,880 (1,002) 150
Foreign exchange gain (loss) 327 145 253 121
Income taxes 330 (502) (450) (95)
------------------------------------
Net Loss (2,123) (3,436) (8,410) (6,667)
------------------------------------
------------------------------------
Contacts: Investor Contact: Russell Frederick Chief Financial Officer DragonWave Inc. [email protected] 613-599-9991 ext 2253 Media Contact: Nadine Kittle Marketing Communications DragonWave Inc. [email protected] 613-599-9991 ext 2262 Becky Obbema Interprose Public Relations (for DragonWave) [email protected] (408) 778-2024
Source: DragonWave Inc.
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