quarterly report q1 2013 · 2019. 2. 14. · 4 quarterly report / q1 2013 january ‐ march >...

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QUARTERLY REPORT / Q1 2013

Quarterly ReportQ1 2013

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3. Q1 Quick Summary

5. CEO update

6. Schilling´s Monthly

7. Business focus

9. Market Outlook

11. Result of Operation

12. Cash flow

13. Financial statements

16. Notes

18. Financial Calendar

Content

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Positive EBITDA in a continuous challenging market

56.3% Revenue increased 56.3%

over the same period last

year

New exciting opportunities for Secure Mobility in EMEA

Focus with EasySmart in North America resulted in an all‐time high activation rate per quarter to date

Decrease in operating expenses

achieved as a result from the cost

saving program initiated in 2012

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JANUARY ‐ MARCH

> Revenue was NOK 18.2 (11.7) million, representing an increase of 56.3% over the same period last year.

> EBITDA ended at NOK 1.7 (‐6.3) million, representing a reduced loss of NOK 8.0 million over

the same period last year. > Continuing operating earnings per share amounted to NOK 0.00 (‐0.14). > Total net cash flow amounted to NOK ‐5.5 (‐10.2) million. > The cash balance at the end of the period was NOK 11.4 (24.6) million.

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Birdstep Technology ASAInterim report

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I am delighted to begin my second quarterly report with the news that Q1 sales exceeded expectations, closing with a 56.3% increase Yr/Yr. The majority of our revenue growth has been driven by renewed de‐mand from North American opera‐

tors for our Smart Mobile Data offering. Our solu‐tions alleviate data contention over their cellular networks and help them maintain visibility and control of an exceptional end user experience. Also our second line of business, Secure Mobility, ex‐ceeded its sales targets this quarter. We are gain‐ing continuous traction across the EMEA region with the expansion of the reseller network. Addi‐tionally Birdstep launched its SafeMove Portable Security in February and has during the quarter begun to address new customer demands in Saudi Arabia. Greatly contributing to our success in Q1 has been an overhaul of our sales and product development processes that has put greater emphasis upon effi‐ciency, accountability and direct customer en‐gagement. We have also gained clear visibility across our business and that of our customers’ and are now better positioned to prioritize, align and focus resources on opportunities we believe we can win. Also contributing to our Q1 results has been our ability to continuously reduce OPEX as a result of the cost‐saving program initiated a year ago. The combined result of Q1 sales and Q1 OPEX reductions is a Q1 positive EBITDA of NOK 1.7 mil‐lion compared to NOK –6.3 million in Q1 2012. Our current planning and management of the busi‐ness is structured upon this trajectory and we are focused on maximizing execution in Q2 to the ben‐efit of our customers, employees and shareholders. Now we can look at how Birdstep is addressing the challenges operators have with Big Data as it re‐lates to the increasing amounts of information in their networks. Birdstep provides Smart Data solu‐tions for making better sense of the customer ex‐

perience. We often hear from our customers that their network based analytic tools do not provide insights into the customer experience from the perspective of the subscribers end‐device. For ex‐ample a user is reporting no connectivity yet the operator’s tools indicate good coverage. Birdstep provides a solution to this dilemma with our Smart Mobile Data products which enable operators to collect and analyze real‐time information directly from the smartphone, tablet and laptop which augments their Big Data solutions to provide a more accurate end‐to‐end view of the customer experience. On May 21‐23 at the CTIA event in Las Vegas, USA, Birdstep is launching our EasyAnalytics and Smart ANDSF solutions. These new products will for the first time provide operators with subscriber device policy and analytics to proactively improve their customer’s Quality of Experience. Today we are trialing EasyAnalytics and SmartANDSF with a lead‐ing North American operator. In conclusion, we are very happy with our strong Q1 results. We will continue the focus and disci‐plines in our processes which worked so well for us in Q1. In addition we are launching a new range of products which I am very excited about. I look forward to reporting back to you again next quarter.

Lonnie Schilling, CEO

The CEO update

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JANUARY The Customers

I see myself as an engaged and active participant in

meetings and in communication. To actively be a

part of the sales process allows me to steer the

company’s efforts in the right direction for cus‐

tomers. I spent a total of 2 weeks in North America

and another week in Europe meeting with our key

customers and potential customers. It became

clear to me what they expected and required from

Birdstep; to step up and prove that we can be a

partner and not simply a vendor. We know that to

achieve this we must ensure we have their trust by

correctly setting expectations and never undera‐

chieve! FEBRUARY The Market

The team and I had a busy but rewarding week at

the annual Mobile World Congress, the premier

mobile industry event. During all four days the

Birdstep stand hosted visitors from new and exist‐

ing customers, partners, analysts and journalists

from around the world. Needless to say, we met

some very interesting people and had some excit‐

ing and productive conversations with many to

follow up back in the office.

MARCH Sales!

We held the company´s first Global Sales Confer‐

ence, combining the strengths of our Secure Mobil‐

ity and Smart Mobile Data teams to prioritize and

align all our resources on the most strategic busi‐

ness in 2013. We left the event a stronger, more

determined team with a clear approach; grow the

pipeline with new opportunities, qualify those op‐

portunities, prioritize, commit, execute and close

the business! With this new level of discipline in

the sales process our visible pipeline is growing

daily and we’ve qualified and are executing on the

largest volume of opportunities in the Birdstep’s

history!

Schilling´s Monthly

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Continuous focus with EasySmart in North America

Also this quarter the commercial rollout of

SPRINT’s data offload project with Birdstep’s

EasySmart solution resulted in Birdstep’s highest

activation rate per quarter to date. Phase two of

this leading North American operator’s offload

project, which ensures continued volume deploy‐

ments, is now approved and commercially de‐

ployed. This is the first ever EasySmart 1.4 com‐

mercial deployment.

Besides from ongoing trials with Tier 1 operators

Birdstep has also started up several EasySmart

trials in in the US and Asia with Tier 2 & 3 opera‐

tors. The company is also gaining interest and new

business opportunities for its EasyHelp and

EasyAnalytics in the US and Asia.

Secure Mobility is gaining increased interest for its new products in the EMEA region

Besides from new projects in Finland and UK Se‐

cure Mobility also won a few strategically im‐

portant trials in the EMEA region; > First order for SafeMove Connection Tracking

module was received from Thames Water, an

award winning UK utilities company.

> First SafeMove Mobile VPN and SafeMove

Mobile Router trials were installed together

with Goodmill and Four Systems in Saudi Ara‐

bia.

> The company won three SafeMove license

upgrade deals and one new SafeMove license

deal from four different Finnish ministries.

> SafeMove Portable Security was launched.

First trial request from Saudi Arabia was re‐

ceived.

> SafeMove Mobile Access business continued

to gain interest and grow in Finnish govern‐

ment. One new trial was delivered to a Finnish

governmental company in Q1.

Business Focus

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Strategic Partnerships and Reseller Agreements

Birdstep has during the quarter signed a partner‐

ship with one of the world´s leading provider of Wi‐

Fi software and services. This partnership provides

Birdstep with a Crowd‐sourcing Solution, as well as

enabling access to paid hot‐spots. It provides the

partner with a vehicle for facilitating data offload

from operators 3G/4G Networks to Wi‐Fi.

Birdstep also continues to grow its presence and

influence within the Cisco (NASDAQ: CSCO) account

to help grow sales and close new projects within

the targeted areas.

The company is working towards a partnership

with a UK based hardware manufacturer for pro‐

fessional mobile data workers and solution provid‐

ers. The idea is that the company will start building

a SafeMove environment and first public safety

customer trials are expected in Q2 or Q3.

Milestones & Significant Events

> Birdstep reported positive EBITDA and a sales

growth of 56.3% Yr/Yr. This was the first time

the company, in its current structure, achieved

such strong growth numbers.

> Continuous focus with EasySmart in North

America resulted in an all‐time high activation

rate per quarter to date.

> Birdstep received requests and started POCs

(Proof of Concepts) for its Secure Mobility solu‐

tions in Saudi Arabia.

> The company´s first Global Sales Conference

was held.

> Birdstep attended Mobile World Congress in

Barcelona.

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Birdstep focuses on four areas of critical im‐

portance for the cellular market in the face of rap‐

idly expanding mobile data services. These are;

intelligent data onload and offload between cellu‐

lar and Wi‐Fi, intelligent marketing capabilities,

secure mobile communications and smart data

analytics. Together they enable service providers to

maximize data related revenue opportunities over

the coming years while keeping costs under con‐

trol.

Rapid proliferation of bandwidth‐hungry applica‐

tions is already causing severe congestion over

cellular RAN (Radio Access Network) and backhaul

networks. This is creating strong demand for our

Smart Mobile Data solutions around the world and

especially in North America and the Asia Pacific

regions. By providing visibility across the Wi‐Fi as

well as cellular infrastructure, our Smart Mobile

Data products are generating equal interest in Eu‐

rope, where many operators are more concerned

with ensuring an optimal customer experience

once data has been offloaded.

We also go further in helping operators understand

and respond to their customers’ changing behavior

with a continuously expanding range of products

that provide detailed analytics on services and data

types. Our aim now is to help operators strike the

optimum balance between data delivery costs and

the customer experience. They will achieve this by

making decisions about which applications and

services they keep on the cellular network andwhich to offload to their Wi‐Fi network. This differ‐

Market Outlook

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entiated offload capability will be available later

this year. During the same timeframe Birdstep will

deliver the ability for EasyAnalytics on the mobile

device to dynamically update and modify subscrib‐

er policy in the EasyANDSF policy server based on

changing conditions of the network or usage char‐

acteristics.Another clear trend is the significant growth of

mobile advertising which has been forecasted to be

worth $13B by 2015. To address this new oppor‐

tunity Birdstep is helping mobile operators gain

new revenues from mobile advertising. This is

achieved by taking advantage of their subscriber

and mobile device intelligence to uniquely person‐

alize the delivery of ads to mobile users. Birdstep’s

solutions will enable the mobile operator to offer a

customer‐centric solution to reach target audienc‐

es across access network types and end user devic‐

es, while providing users the best experience for

viewing rich media and video advertisements.

Thegrowinguseofmobiledataintheworkforce,coupled with the trend towardsWi‐Fi offload,increase the importance of strong end to endsecurity. Thepopularity ofBring YourOwnDe‐vice (BYOD) for employees is generating greatinterestfrombothoperatorsandenterprisecus‐tomers for our SafeMove product. Those prod‐ucts secure customer devices and protect dataduring transit through standardized encryptiontechnologies. We are meeting this growing de‐mandbyexpandingoursecuremobilityportfolioto more platforms, having recently launchedSafeMove Mobile Router Toolkit and the

SafeMove Toolkit for Android. Our Secure Mobility

solutions are gainingparticularly strong tractionacross the EMEA region with the expansion ofthe reseller network, witnessed by a few newdealsandtrialsinQ1.

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First quarter

First quarter revenue was NOK 18.2 (11.7) million,

which represents an increase in revenue of 56.3%

over the same quarter last year. The increase in

revenue compared to the same quarter last year is

due to growing usage of our product Easy Smart,

specifically in North America.

Salaries and wages were NOK 10.4 (9.7) million.

The increase in salaries and wages is due to a de‐

crease in capitalized R&D.

The number of employees ending as at 31.03.2013

was 58 (64).

Other operating expenses for the quarter was NOK 5.5 (6.9) million. The decrease is a result of the

overall cost reduction program started in Q1 2012.

The quarterly Other financial items, net of 0.7 NOK

consists of currency gains from re‐evaluating inter‐

nal loans within the group.

As a result of the above factors, Income (Loss) from

continuing operations NOK 0.4 (‐9.6) million was

recorded in the quarter.

Result of operations

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Cash flow

First quarter

Cash flow for the quarter was negative and our net cash balance decreased with NOK 5.5 million to NOK

11.4 million. Last year the cash balance decreased with NOK 10.2 million.

Cash flow

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Financial statements

Condensed Consolidation Statements of Comprehensive Income (In thousands of NOK, except share and per share date)

Condensed Consolidated Statements of Operations

(In thousands of NOK, except share and per share data)

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Condensed Consolidation Balance Sheets (In thousands of NOK, except share and per share date)

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Condensed Consolidated Statements of Cash Flows

(In thousands of NOK)

Condensed Consolidated Statements of Changes in Shareholders’ Equity (In thousands of NOK, except share and per share date)

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Accounting Policies

The accompanying consolidated financial state‐

ments are prepared under International Financial

Reporting Standards (IFRS). Our fiscal year runs

from January 1 to December 31.

The accompanying condensed consolidated state‐

ments of operations and cash flows cover the three

first months of 2013, and the related information

on Birdstep included in these notes to the financial

statements is unaudited. In the opinion of man‐

agement, such interim statements include all ad‐

justments, which consist only of the normally re‐

curring adjustments necessary for a fair presenta‐

tion of the consolidated results of operations, fi‐

nancial position and cash flows for each period

presented. The interim consolidated results are not

necessarily indicative of results for the full year.

The same accounting policies and methods of

computation are followed in the interim financial

statements as those of the most recent annual

financial statements.

These interim financial statements are presented in

Norwegian crowns (NOK). The functional currency

of Birdstep’s foreign operations is the currency of

the country in which the operations are conducted.

The accounts of Birdstep are translated into the

reporting currency, NOK, using exchange rates in

effect at period‐end for assets and liabilities, and at

average exchange rates during the period for the

results of operations.

EBITDA is equivalent to operating income (loss)

excluding both discontinued operations and non‐

cash charges, such as depreciation and amortiza‐

tion.

Income per share is calculated by dividing net in‐

come available to common shareholders for the

period by the weighted average number of com‐

mon shares outstanding during the period.

As of March 31, 2013, the Company has 91.984.627

shares issued and 91.963.572 shares outstanding,

the difference of 21.055 representing treasury

shares.

Notes

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Segment Reporting

Risks

This report contains statements regarding the fu‐

ture in connection with the company’s growth ex‐

pectations, general and specific market outlook

and objectives. All statements about the future are

subject to inherent risks and uncertainties, and

many factors can lead to actual profits and devel‐

opments deviating substantially from that which

has been expressed or implied in such statements.

Birdstep Technology is exposed to various forms of

market, operational and financial risks.

Financial instruments that potentially subject Bird‐

step to concentrations of credit risks consist pri‐

marily of cash and accounts receivable. Birdstep

performs ongoing evaluations of customers’ finan‐

cial condition to determine if any reserve for po‐

tential uncollectible amounts is needed. As of De‐

cember 31, 2012, no potential uncollectible

amounts had been made.

The company’s various risks have been described in

the Annual Report/ Prospectus in further detail and

no other risks has been identified.

The Company is divided into two separate operating segments (Smart Mobile Data and Secure Mobility).

*InQ42012awritedownofintangibleassetsofNOK6.9 millionwasmadeinSecureMobility

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Q1 Earnings Report May 3rd Birdstep Technology ASA invites to a phone con‐ference following the announcement of the Q1 Earnings Report at 10.00 CET May 3rd

Phone numbers for the conference are as follows:

SE: 08‐505 56 478 NO: +47 235 00 205 UK: +44 207 660 20 78 US: +1 877 679 29 93

Annual General Meeting May 15th Birdstep Technology ASA invites to Annual General Meeting at 13.00 CET May 15th Meeting will take place at: Hotel Continental

Stortingsgaten 24/26 Oslo Link to registration and all documentation can be found at www.birdstep.com

Preliminary financial calendar, with reservations for changes: Earnings Reports 3. May 2013 Q1 2013 ‐ Interim financial report 16. Aug 2013 Q2 2013 ‐ Interim financial report 5. Nov 2013 Q3 2013 ‐ Interim financial report Annual General Meeting 15. May 2013

Birdstep Technology ASA invites to a phone confer‐ence following the announcement of the quarterly earnings reports. Time and call‐in details or place of the events above will be communicated at a later stage via OSE, Oslo Stock Exchange and www.birdstep.com

Financial Calendar

quarterly report q1 2013 · 2019. 2. 14. · 4 quarterly report / q1 2013 january ‐ march >...

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