Baylin Announces Strong Financial Results for Fiscal 2024

• Revenue increased $10.5 million or 14.4% over fiscal 2023.
• Gross profit increased $6.0 million or 21.1% over fiscal 2023.
• Adjusted EBITDA⁽²⁾ increased $5.6 million over fiscal 2023.
• Gross margin of 41.1%, an increase of 5.7% over fiscal 2023.

Investor Conference Call on March 20, 2025 at 10:00 a.m. ET

TORONTO, March 19, 2025 /CNW/ - Baylin Technologies Inc. (TSX: BYL) (OTCQB: BYLTF) (the "Company" or "Baylin"), a diversified global wireless technology company focused on the research, design, development, manufacture, and sale of passive and active radio frequency and satellite communications products, and the provision of supporting services, today announced its financial results for the three and twelve months ended December 31, 2024. All amounts are stated in Canadian dollars unless otherwise indicated.

FISCAL YEAR SUMMARY

Continuing Operations

• Revenue of $83.6 million in fiscal 2024, an increase of $10.5 million or 14.4% compared to fiscal 2023. The increase was primarily due to a sales volume increase in the Embedded Antenna and Wireless Infrastructure business lines compared to the prior fiscal year.
• Gross profit of $34.4 million in fiscal 2024, an increase of $6.0 million or 21.1% compared to fiscal 2023. The increase was primarily due to an increase in both revenue and higher gross margin in the Wireless Infrastructure business line.
• Gross margin of 41.1% in fiscal 2024 compared to 38.9% in fiscal 2023. The higher gross margin in fiscal 2024 was due to improved product mix mainly generated by higher sales of multibeam, small cell and innovative antennas in the Wireless Infrastructure business line.
• Adjusted EBITDA of $5.4 million in fiscal 2024, an increase of $5.6 million compared to negative $0.2 million in fiscal 2023. The increase in Adjusted EBITDA in fiscal 2024 was mainly due to a combination of both stronger revenue and higher gross margin discussed above.
• Net loss of $8.5 million in fiscal 2024 compared to a net loss of $8.2 million in fiscal 2023. The net loss in fiscal 2024 was mainly due to an operating loss of $4.5 million, which included an impairment charge of $2.6 million for the Satcom business line, interest and other finance expenses, as well as an unfavourable adjustment of $1.5 million based on the fair market value of the Company's convertible debentures. On a per share basis, a net loss of $0.05 per share in fiscal 2024 compared to a net loss of $0.10 per share in fiscal 2023.
• Net debt⁽³⁾ of $14.3 million at December 31, 2024, an increase of $1.5 million from December 31, 2023.
• Backlog⁽⁴⁾ of $30.2 million at December 31, 2024 compared to $31.2 million at December 31, 2023. Backlog increased to $30.6 million at February 28, 2025.

Discontinued Operations (representing the Mobile and Network ("M&N") business line)

• Adjusted EBITDA from discontinued operations of negative $1.7 million in fiscal 2024 compared to negative $2.3 million in fiscal 2023. The decreased loss in Adjusted EBITDA was primarily due to lower operating expenses of the M&N business line in the second half of fiscal 2024 as a result of the completion of sale of GTK in July 2024.
• Net income from discontinued operations of $0.6 million in fiscal 2024 compared to a net loss of $5.6 million in fiscal 2023. The net income from discontinued operations in fiscal 2024 was mainly due to a gain on sale of the M&N business line in the amount of $4.1 million. On a per share basis, a net income of $nil per share in fiscal 2024 compared to a net loss of $0.06 per share in fiscal 2023.

FOURTH QUARTER SUMMARY

Continuing Operations

• Revenue of $20.8 million in the fourth quarter of 2024, an increase of $4.7 million or 28.9% compared to the fourth quarter of 2023. The increase in revenue in the fourth quarter of 2024 was also due to sales volume increases in the Embedded Antenna and Wireless Infrastructure business lines.
• Gross profit of $7.9 million in the fourth quarter of 2024, an increase of $2.2 million or 38.8% compared to the fourth quarter of 2023. The increase in gross profit in the fourth quarter of 2024 was also due to improved revenue and gross margin.
• Gross margin of 37.9% in the fourth quarter of 2024 compared to 35.2% in the fourth quarter of 2023. The higher gross margin in the fourth quarter of 2024 was primarily attributable to stronger revenue recovery and favourable product mix in the Wireless Infrastructure business line.
• Adjusted EBITDA of $1.8 million in the fourth quarter of 2024, an increase of $3.8 million compared to negative $2.0 million in the fourth quarter of 2023. The increase in Adjusted EBITDA in the fourth quarter of 2024 was also due to the increase in revenue and gross profit as discussed above and a reclassification of $2.0 million from cash based to non-cash based share compensation.
• Net loss of $4.9 million in the fourth quarter of 2024 compared to a net loss of $6.9 million in the fourth quarter of 2023. The net loss in the fourth quarter of 2024 was primarily due to an operating loss of $4.4 million, which included an impairment charge of $2.6 million for the Satcom business line. On a per share basis, a net loss of $0.03 per share in the fourth quarter of 2024 compared to a net loss of $0.07 per share in the fourth quarter of 2023.

Discontinued Operations (representing the Mobile and Network business line)

• Adjusted EBITDA from discontinued operations of negative $0.4 million in the fourth quarter of 2024 compared to negative $0.7 million in the fourth quarter of 2023. The decreased loss in Adjusted EBITDA was due to the reasons noted above.
• Net income from discontinued operations of $3.7 million in the fourth quarter of 2024 compared to a net loss of $1.1 million in the fourth quarter of 2023. The net income from discontinued operations in the fourth quarter of 2024 was mainly due to reclassifying the gain on sale of the M&N business line to discontinued operations in this quarter. On a per share basis, a net income of $0.03 per share in the fourth quarter of 2024 compared to a net loss of $0.01 per share in the fourth quarter of 2023.

SELECTED FINANCIAL INFORMATION

The table below discloses selected financial information for the periods indicated.

A copy of the Company's audited consolidated financial statements for the year ended December 31, 2024 and corresponding management's discussion and analysis (the "MD&A") for the three and twelve months ended December 31, 2024 are available under the Company's profile on SEDAR+ at www.sedarplus.ca.

RECENT DEVELOPMENTS

Products

The Company's products continue to be used in a wide variety of applications. In the fourth quarter of 2024:

• Wireless Infrastructure's multibeam antennas were selected for a wide variety of events and venues, including Taylor Swift concerts at Rogers Stadium in Toronto and BC Place in Vancouver; these patented antennas have now been deployed by all three national carriers in Canada, all three national carriers in the United States and both national carriers in Mexico.
• Satcom received sales orders for its high-power ground station antennas to support a cislunar communications network, which is part of NASA's Artemis lunar space program, and for other products used in the Government of Canada's North Warning System, a radar surveillance system comprising 47 radar sites extending across the Arctic from the western part of Yukon to the southern coast of Labrador.

Sale of the Mobile and Network Business

On July 9, 2024, the Company announced that it had entered into an agreement with a Korean strategic acquirer under which the Company agreed to sell Galtronics Korea Co., Ltd. ("GTK") and Galtronics Vietnam Company Limited ("GTV"). On July 30, 2024, the Company completed the sale of GTK and recognized a gain on sale of $0.9 million. On December 27, 2024, the Company completed the sale of GTV following the receipt of Vietnamese regulatory approvals and recognized a gain on sale of $3.2 million.

Credit Facilities

The Company is in the process of settling with our lender an amended and restated credit agreement to extend the revolving credit facility (the "Revolving Facility") until April 30, 2026. We anticipate being able to settle the new agreement prior to the current maturity date of the Revolving Facility on March 31, 2025 or another short term extension will be obtained while the new agreement is finalized.

Management Changes

Mr. Cliff Gary was appointed Chief Financial Officer of the Company effective January 1, 2025. Mr. Gary was previously the Company's Vice President Finance. He replaced Mr. Dan Nohdomi, the former Senior Vice President and Chief Financial Officer of the Company, who resigned effective December 31, 2024.

Share Consolidation

The Board of Directors has approved a consolidation (the "Consolidation") of all its issued and outstanding shares on the basis of 40 pre-consolidation common shares for one post-consolidation common share. There are 151,421,995 common shares currently outstanding. Following the Consolidation, and assuming there is no change in the number of common shares outstanding, there will be approximately 3,785,549 common shares outstanding.

The Consolidation is subject to shareholder approval at the Company's upcoming Annual and Special Meeting of Shareholders (the "Meeting") on May 8, 2025. Further information about the Consolidation will be included in the management information circular for the Meeting, which, following mailing, will be available under the Company's profile on SEDAR+ at www.sedarplus.ca. The Consolidation is also subject to approval of the Toronto Stock Exchange.

OUTLOOK

The Company delivered strong financial performance in fiscal 2024, with substantial increases in revenue, gross profit and Adjusted EBITDA compared to fiscal 2023. Both Embedded Antenna and Wireless Infrastructure exceeded expectations, but Satcom was flat in revenue attainment in 2024 which fell below expectations. The macroeconomic environment in 2025 remains a concern, including uncertainty concerning the level of inflation and interest rates generally, impacts of US tariffs and retaliatory tariffs from countries subject to US tariffs, as well as government purchasing behaviour changes driven by the new US government administration. In addition to their effect on inflation, tariffs could also affect exchange rates and disrupt supply chains on which the Company relies in producing its products. For now, we expect revenue growth from both Embedded Antenna and Wireless Infrastructure business lines in 2025 but offset by higher operating costs incurred to support business development, resulting in a combined financial performance comparable to 2024, which was a very strong year. Satcom is currently expected to deliver lower revenue than 2024, and is also more likely to be adversely affected by the 25% US tariff on imported Canadian goods. See "Tariffs" below. We continue to prioritize product mix, emphasizing products that generate higher margins and gross profit, with a view to growing Adjusted EBITDA and positive cash flows while reducing the overall debt.

Embedded Antenna Business Line

We expect Embedded Antenna will continue to perform strongly in 2025, although at levels slightly below those in 2024. Revenue is expected to be higher but customer delays and the impact of tariffs on customers could affect revenue attainment. The number of active bids for new projects remains at a strong level. The Embedded Antenna business closed 2024 with a record high level of backlog, which has grown further as at the end of February 2025.

Wireless Infrastructure Business Line

In 2025, Wireless Infrastructure expects continuing strong sales of its higher margin multibeam and innovative small cell antennas as well as stadium deployments throughout the year. We are continuing to leverage the competitive advantages that these products afford in order to open up new global opportunities and drive sales with wireless carriers and third-party operators who operate wireless mobile networks for their customers. We are continuing to expand into new markets, particularly in Europe and Mexico, where we have not previously had sales. Although there remains a risk of spending cutbacks by carriers and third party operators, we expect to see further spending on multibeam and small cell antennas continue in 2025, which will drive higher sales volumes for the business. Based on our current assessment, we expect fiscal 2025 to reflect improvements in revenue, gross profit and Adjusted EBITDA over 2024.

Satcom Business Line

Satcom expects to generate lower revenue in 2025 compared to 2024 mainly due to a reduction in demand for its products, particularly its specialized custom engineered products, such as high powered amplifiers for use in military, government, and broadcast applications. Satcom's revenue may also be negatively affected by US tariffs. See "Tariffs" below.

We continue to see softness in the commercial lower power market, but broadcast applications remain solid. Our Genesis and Summit lines of solid-state power amplifiers are generating sales from clients due to the improvements in performance, monitoring and failover they provide over our older technology and products of our competitors. Importantly, these new amplifiers are consistent in architecture, meaning they will allow the business to simplify supply chain requirements over time and thereby improve efficiencies in manufacturing.

We expect to see continued opportunities for military and other government-related uses as many western countries continue to maintain high levels of defence and scientific spending. Conversely, the new US government administration and the Department of Government Efficiency activities may cause some delay in orders due to uncertainty with our customers. Our plan is to retire legacy products and replace them with the new Genesis architecture.

Improving production efficiencies in our facilities in order to address the backlog and improve overall revenue attainment continues to remain an important priority, particularly in our Kirkland, Quebec facility.

Tariffs

On February 1, 2025, the President of the United States by executive order announced a 25% tariff on imports from Canada (other than energy or energy resources, for which a 10% tariff will apply) and an additional 10% tariff on imports from China (subsequently increased to 20%), to become effective on February 4, 2025. The Canada tariff was initially paused until March 4, 2025, and is currently in effect except for goods that are compliant with the Canada-United States-Mexico Agreement.

The Company is taking steps to avoid or mitigate the effect of the tariffs.

The Embedded Antenna business line is not expected to be affected directly by the increase in the China tariff. Although its products are manufactured in our facility in China, they are shipped from China to contract manufacturers elsewhere in Asia for embedding in the final products of those contract manufacturers. This has been our experience with the previous US tariffs levied on imports from China starting in 2018. However, there remains a risk that the additional tariffs could impact future order volumes for Embedded Antenna's products.

Wireless Infrastructure's products are also manufactured in our facility in China but are then purchased by Galtronics USA for delivery to customers in various jurisdictions, including the United States. We are in working with our US customers, and considering other measures, to mitigate the effect of the China tariff.

In the case of Satcom, most of its products are produced in Canada, of which a significant proportion - between 40% and 50% annually - is delivered to customers in the United States. The Company is assessing various options to avoid or mitigate the effect of the Canada tariff, which may include a change in the structure and operation of its business, and other measures, so that its products remain competitive in the US market. Nevertheless, the Canada tariff could result in delays or cancellations of existing orders and reduced new orders for Satcom's products, impacting Satcom's backlog and its revenue from reduced sales.

There can be no assurance (i) as to the timing or term of the existing tariffs or whether they will be lifted at all; or (ii) that our efforts to avoid or mitigate the effect of the tariffs will be sufficient or adequate to counteract (in whole or in part) the potential negative financial or other impacts the tariffs may have on our business, and those impacts may be material.

INVESTOR CONFERENCE CALL

Baylin will hold a conference call on Thursday, March 20, 2025 at 10:00 a.m. (ET) to discuss its financial results for the three and twelve months ended December 31, 2024. The conference call will be hosted by Leighton Carroll, Chief Executive Officer, and Cliff Gary, Chief Financial Officer. All interested parties are invited to participate using the dial-in details provided below.

FORWARD-LOOKING INFORMATION AND STATEMENTS

This press release includes forward-looking information and forward-looking statements (together, "forward-looking statements") within the meaning of applicable securities laws. Forward-looking statements are not statements of historical fact. Rather, forward-looking statements are disclosure regarding conditions, developments, events or financial performance that we expect or anticipate may or will occur in the future including, among other things, information or statements concerning our objectives and strategies to achieve those objectives, statements with respect to management's beliefs, estimates, intentions and plans, and statements concerning anticipated future circumstances, events, expectations, operations, performance or results. Forward-looking statements can be identified generally by the use of forward-looking terminology, such as "anticipate", "believe", "could", "should", "would", "estimate", "expect", "forecast", "indicate", "intend", "likely", "may", "outlook", "plan", "potential", "project", "seek", "target", "trend" or "will" or the negative or other variations of these words or other comparable words or phrases and is intended to identify forward-looking statements, although not all forward-looking statements contain these words.

The forward-looking statements in this press release include statements concerning the outlook for our business generally and each of our business lines in particular, including our expectation for future financial performance, the effect of the macroeconomic environment, higher interest rates, timing of and potential impacts from US tariffs and retaliatory tariffs from countries subject to US tariffs, and other disruptions to our business and financial performance. Forward-looking statements are based on certain assumptions and estimates made by us in light of the experience and perception of historical trends, current conditions, expected future developments, including projected growth in the sales of passive and active radio frequency and satellite communications products, and supporting services, and other factors we believe are appropriate and reasonable in the circumstances, but there can be no assurance that such assumptions and estimates will prove to be correct.

Many factors could cause our actual results, level of activity, performance or achievements or future events or developments to differ materially from those expressed or implied by the forward-looking statements, including the risk factors discussed in the Company's most recent Annual Information Form, which is available under the Company's profile on SEDAR+ at www.sedarplus.ca. All the forward-looking statements made in this press release are qualified by these cautionary statements and other cautionary statements or factors in this press release. There can be no assurance that the actual results or developments will be realized or, even if substantially realized, will have the expected consequences to, or effects on, the Company. Unless required by applicable securities law, the Company does not intend and does not assume any obligation to update any forward-looking statements.

NON-IFRS MEASURES

This press release includes a number of measures that are not recognized under International Financial Reporting Standards ("IFRS"), do not have any standardized meaning under IFRS and as such may not be comparable to similar measures presented by other companies. Management believes that these measures provide useful information to analysts, investors and other interested parties regarding the Company's financial condition and results of operation as they provide additional key metrics of the Company's performance. While management believes that non-IFRS measures provide useful supplemental information, they are not intended to represent, and should not be considered as alternatives to, net income (loss), cash flows generated by operating, investing or financing activities, or other financial statement data presented in accordance with IFRS. For further information, see "Non-IFRS Measures" on page 3 of the MD&A.

ABOUT BAYLIN

Baylin Technologies Inc. is a diversified global wireless technology company focused on the research, design, development, manufacture, and sale of passive and active radio frequency and satellite communications products, and the provision of supporting services.

For further information, please visit www.baylintech.com. 

SOURCE Baylin Technologies Inc.