MISSISSAUGA, ONTARIO–(Marketwired – July 19, 2017) – DataWind Inc. (TSX:DW), a leader in the delivery of internet access in emerging markets, reported financial results for its fiscal 2017 year ending March 31, 2017. All amounts are in Canadian dollars.
Financial and Operational Highlights
- Revenues for the year ending March 31, 2016 were $57.8 million, a drop of 3% over the previous fiscal year, due to the impact of demonetization in India. Revenues of $8.29 million during the three months ended March 31, 2017 representing an increase of 20.8% over the three months ended December 31, 2016 and a decrease of 53.3% over the three months ended March 31, 2016.
- 1,026,272 units were sold during the year ended March 31, 2017 compared to 1,043,514 units sold during the previous year.
- Gross margin for the year ended March 31, 2017 is 29.8% which is consistent with the year ended March 31, 2016.
- Adjusted EBITDA for the year ended March 31, 2017 is ($25.3 million) compared to EBITDA of $(0.2 million) for the year ended March 31, 2016 representing a deterioration of $25.1 million.
Management Commentary
Our fiscal 2017 year-end results have been impacted by the demonetization of 86% of the currency in circulation in India. “In November 2016, the Indian government demonetized all Rs.500 and Rs.1000 notes in circulation (approximately $7 and $14 USD). These currency notes represented 86% of the value of all currency in circulation in India at the time. The government’s action resulted in a severe cash-crunch for our target customers. As a result, we saw a significant decrease in sales in the last two quarters of the fiscal year, as Indian people spent what little physical cash they have on necessities.” said Suneet Singh Tuli, president and CEO of DataWind.
“Due to the slowdown, caused by demonetization and financial destress experienced by key distributors, we have made moved our business model primarily to our own TV home shopping distribution channel. By investing in our own TV based distribution network, we have seen collections improve, and we have become less dependent on third parties to sell our products.”
The Company established how it recognizes sales, as a result of its direct to consumer sales via TV infomercials. Revenue for this segment is recognized upon product delivery to the enduser, compared to at time of shipping for distribution channels. As a result of this, during the fourth quarter of the year inventory of $6.5 million that was in transit to direct customers, was subsequently after year end recorded as revenue of $7.6 million at the time of delivery to the end customer.
“The launch of our data plans is a key focus for the Company. Revenue from non-hardware based revenue sources increased to $5.3 million in fiscal 2017 compared to $1.5 million in the previous year, a 242% increase. Looking beyond the demonetization in India, we believe we are in a strong position to regain our momentum and ultimately be the go-to provider of low-cost Internet access to developing countries,” said Suneet Singh Tuli.
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.
Suneet S. Tuli
Chief Executive Officer
+1 (905) 671-0202
www.datawind.com
