Wi2Wi Corporation: Financial Results for Third Quarter Ended September 30, 2015
TORONTO, ON Wi2Wi Corporation ("Wi2Wi" or the "Company") (TSX Venture: YTY) is pleased to announce its unaudited condensed consolidated interim financial results for the three and nine month periods ending September 30, 2015.
- Company renewed multiple year purchasing agreements with four Fortune 100 companies in avionics and space markets. Negotiations with other marquee customers are in progress.
- Company also received Preferred Supplier Status with a Fortune 100 company.
- Revenue for nine month period increased 250% over the year earlier period, due to acquisition of precision timing devices business.
- While gross margin as a percentage of revenue has decreased due to business changes, the progress being made optimizing manufacturing processes should help increase the margins in the future.
- The Company is looking to develop new products in timing devices, frequency controllers, RF and microwave filters, and wireless connectivity solutions, while leveraging its strengths in the exploding Internet of Things market.
- The significant increase in revenues over the corresponding period was due to a combination of wireless connectivity solutions revenues, and revenues from the acquisition of a frequency control devices and timing devices business. The Company typically receives multiyear purchasing agreements from its avionics and space industries customers. The Company has renewed with four of its Fortune 100 customers, and is in the process of renewing with other marquee customers purchase agreements for products and services in avionics and space industries. Such agreements are typically reviewed and revised in the third and fourth quarters of the calendar year and can cause some seasonality in the business.
- The gross margin as a percentage of revenue has decreased because the frequency control and precision devices business historically yielded a lower margin. However, successful efforts in manufacturing cost reductions - including improving manufacturing yield, increasing efficiencies, and optimising manufacturing batch sizes, should help increase the margins in the future. While this process will take some time to implement, initial results are very favourable. In addition, the Company is reviewing its pricing and has been successful in obtaining price increases for some its legacy products.
- The increase in research and development expenses is due to combination of wireless connectivity and frequency control and precision devices business. The Company is looking to develop new products in timing devices, frequency control devices, RF and microwave filters, and wireless connectivity solutions.
- Liquidity and Capital Resources: As of September 30, 2015, the Company had cash of $1,185 compared to $387 as of September 30, 2014, and $645 as at December 31, 2014. The Company had a net working capital of $350 as of September 30, 2015 compared to working capital deficit of $401, as of December 31, 2014 respectively and shareholders of equity of $1,985 and $1,128 at September 30, 2015 and December 31, 2014 respectively.
- Company exchanged debt for shares (issued October 28, 2015), amounting to approximately $3.7 million. This included a secured subordinated convertible debenture, a note payable and certain other liabilities. At the conclusion of these transactions, the company's liabilities were reduced, and, correspondingly, shareholders of equity was increased materially.
- On August 25, 2015 the Company settled a claim by a former executive of the Company for payment of $325 and issuance of 1 million common shares on the Company
"This is an increasingly exciting time for us as the substantial improvements we are making in our operations and our business are now beginning to be revealed in our financial results," said Zach Mathews, President and Chief Executive Officer of the Company. "We have reduced our debt with the issuance of shares and announced a number of new products. We expect to see particularly strong growth in the coming months and years resulting from several new initiatives in the Internet of Things ("IoT") arena - the fastest growing market in the wireless world - as well as from the new design and engineering centre we are setting up in India to help us with this IoT space, especially in Asia."
For further information, please contact:
President and Chief Executive Officer