OTTAWA, CANADA--(Marketwired - Oct. 14, 2015) - 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 second quarter of fiscal year 2016. All figures are in U.S. dollars and were prepared in accordance with U.S. generally accepted accounting principles ("GAAP").
Revenue for the second quarter of fiscal year 2016 was $26.9 million, compared with $26.3 million in the first quarter of fiscal year 2016 and $37.9 million in the second quarter of the fiscal year 2015. Revenue from the Nokia channel represented 37% of revenue in the first quarter of this fiscal year, versus 52% in the first quarter of fiscal year 2016 and 60% in second quarter of fiscal year 2015.
Gross profit in the second quarter of fiscal year 2016 was 14.8%, compared with 21.1% in the first quarter of fiscal year 2015 and 15.5% in the second quarter of fiscal year 2015.
Net loss attributable to shareholders in the second quarter of fiscal year 2016 was ($21.0) million or ($0.28) per basic and diluted share. The second quarter loss included a one-time, non-cash impairment of goodwill and deferred tax assets of $13.4 million. This compares to a net loss attributable to shareholders of ($6.0) million or ($0.08) per basic and diluted share in the first quarter of fiscal year 2016 and ($8.9) million or ($0.14) per basic and diluted share in the second quarter of fiscal year 2015.
"It has been a difficult quarter, but we are pleased that we have been able to resolve the product issues on our new Harmony Enhanced product and believe this will be a world class product going forward." said DragonWave President and CEO, Peter Allen.
Cash and cash equivalents totaled $13.1 million at the end of the second quarter of fiscal year 2016, compared to $18.9 million at the end of the first quarter of fiscal year 2016.
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 15, 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.
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 forward opportunities and the potential benefits of, and demand for, DragonWave's products, as well as our expectations regarding Q3 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 Q3 revenue is subject to assumptions, including the timing of orders from our principal channel partner.
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 October 14, 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 | |||||
| (Unaudited) | |||||
| As at | As at | ||||
| August 31, | February 28, | ||||
| 2015 | 2015 | ||||
| Assets | |||||
| Current Assets | |||||
| Cash and cash equivalents | 13,075 | 23,692 | |||
| Trade receivables | 37,290 | 48,626 | |||
| Inventory | 27,202 | 24,294 | |||
| Other current assets | 5,306 | 5,834 | |||
| Deferred tax asset | 61 | 61 | |||
| 82,934 | 102,507 | ||||
| Long Term Assets | |||||
| Property and equipment | 4,603 | 4,322 | |||
| Deferred tax asset | - | 1,485 | |||
| Deferred financing cost | - | 18 | |||
| Intangible assets | 790 | 794 | |||
| Goodwill | - | 11,927 | |||
| 5,393 | 18,546 | ||||
| Total Assets | 88,327 | 121,053 | |||
| Liabilities | |||||
| Current Liabilities | |||||
| Debt facility | 32,802 | - | |||
| Accounts payable and accrued liabilities | 31,193 | 40,163 | |||
| Deferred revenue | 2,587 | 830 | |||
| Capital lease obligation | 360 | 514 | |||
| 66,942 | 41,507 | ||||
| Long Term Liabilities | |||||
| Debt facility | - | 32,400 | |||
| Other long term liabilities | 2,269 | 1,139 | |||
| Warrant liability | 344 | 1,239 | |||
| 2,613 | 34,778 | ||||
| Shareholders' equity | |||||
| Capital stock | 221,118 | 220,952 | |||
| Contributed surplus | 8,753 | 8,388 | |||
| Deficit | (202,847 | ) | (175,921 | ) | |
| Accumulated other comprehensive loss | (9,618 | ) | (9,618 | ) | |
| Total Shareholders' equity | 17,406 | 43,801 | |||
| Non-controlling interests | 1,366 | 967 | |||
| Total Equity | 18,772 | 44,768 | |||
| Total Liabilities and Equity | 88,327 | 121,053 | |||
| Shares issued & outstanding | 75,433,905 | 75,290,818 | |||
| CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||
| Expressed in US $000's except share and per share amounts | |||||||||
| (Unaudited) | |||||||||
| Three months ended | Six months ended | ||||||||
| August 31, | August 31, | August 31, | August 31, | ||||||
| 2015 | 2014 | 2015 | 2014 | ||||||
| REVENUE | 26,917 | 37,933 | 53,257 | 66,704 | |||||
| Cost of sales | 22,932 | 32,040 | 43,723 | 54,925 | |||||
| Gross profit | 3,985 | 5,893 | 9,534 | 11,779 | |||||
| EXPENSES | |||||||||
| Research and development | 3,875 | 4,859 | 8,108 | 9,559 | |||||
| Selling and marketing | 3,052 | 3,308 | 6,296 | 6,673 | |||||
| General and administrative | 3,603 | 3,998 | 7,089 | 7,989 | |||||
| 10,530 | 12,165 | 21,493 | 24,221 | ||||||
| Loss before other items | (6,545 | ) | (6,272 | ) | (11,959 | ) | (12,442 | ) | |
| Goodwill impairment | (11,927 | ) | - | (11,927 | ) | - | |||
| Amortization of intangible assets | (149 | ) | (339 | ) | (332 | ) | (648 | ) | |
| Accretion expense | (61 | ) | - | (132 | ) | (40 | ) | ||
| Interest expense | (560 | ) | (379 | ) | (1,091 | ) | (804 | ) | |
| Warrant issuance expenses | - | (221 | ) | - | (221 | ) | |||
| Gain on change in estimate | - | - | - | 101 | |||||
| Fair value adjustment - warrant liability | 373 | (1,002 | ) | 895 | (852 | ) | |||
| Foreign exchange (loss) gain | (214 | ) | 253 | (294 | ) | 374 | |||
| Loss before income taxes | (19,083 | ) | (7,960 | ) | (24,840 | ) | (14,532 | ) | |
| Income tax expense | 1,620 | 450 | 1,687 | 545 | |||||
| Net Loss | (20,703 | ) | (8,410 | ) | (26,527 | ) | (15,077 | ) | |
| Net Income Attributable to Non-Controlling Interest | (269 | ) | (454 | ) | (399 | ) | (419 | ) | |
| Net Loss attributable to shareholders | (20,972 | ) | (8,864 | ) | (26,926 | ) | (15,496 | ) | |
| Net loss per share | |||||||||
| Basic | (0.28 | ) | (0.14 | ) | (0.36 | ) | (0.25 | ) | |
| Diluted | (0.28 | ) | (0.14 | ) | (0.36 | ) | (0.25 | ) | |
| Weighted Average Shares Outstanding | |||||||||
| Basic | 75,372,314 | 63,894,060 | 75,335,426 | 61,056,200 | |||||
| Diluted | 75,372,314 | 63,894,060 | 75,335,426 | 61,056,200 | |||||
Contact Information:
Peter Allen
President & CEO
DragonWave Inc.
investor@dragonwaveinc.com
+1-613-599-9991 ext 2222
Media Contact:
Nadine Kittle
Marketing Communications
DragonWave Inc.
nkittle@dragonwaveinc.com
+1-613-599-9991 ext 2262
Media Contact:
Becky Obbema
Interprose Public Relations
(for DragonWave)
Becky.Obbema@interprosepr.com
+1-408-778-2024