MISSISSAUGA, Ontario, Nov. 14, 2017 (GLOBE NEWSWIRE) -- DataWind Inc. (TSX:DW), a leader in the delivery of internet access in emerging markets, reported financial results for its fiscal 2018 Q2 results ending September 30, 2017. All amounts are in Canadian dollars.
Financial and Operational Highlights
- Revenues of $5.3 million during the three months ending September 30, 2017 representing a decrease of 75.1% over the three months ending September 30, 2016, and a decrease of 33.9% over the three months ending June 30, 2017. The revenue decrease was primarily due to the impact of demonetization in India, and the impact of GST, which increased sales tax from 5% to 18%.
- Quarterly gross margin in Q2 2018 is 26.7% compared to 25.2% in Q1 2018 and 30.7% in Q2 2017.
- Adjusted EBITDA for the quarter ended September 30, 2017 is ($1.7 million) compared to EBITDA of $(4.2 million) for the quarter ended June 30, 2017 representing an improvement of $2.5 million.
Management Commentary
Our fiscal 2018-year quarter Q2 results have been impacted by the demonetization of currency in India in November 2016 and the implementation of GST in July 2017. GST replaced sales taxes in India, which ranged around 5% for the Company’s products in most Indian states. The Company also enjoyed a waiver of the sales tax by manufacturing in the state of Telangana, which resulted in an effective 0% sales tax. GST for tablet computers has been imposed at 18%, in India, causing a reduction in affordability for the consumer. DataWind is actively working with government officials in an attempt to have the GST rate reduced.
For more information, please refer to the company’s MD&A and full financial statements that have been filed with SEDAR.
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. 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 Press Release 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.
Contact:
Suneet S. Tuli
Chief Executive Officer
DataWind Inc.
+1(905) 671-0202