Wellington Drive 3rd quarter result shows 25% increase

27th October 2016

For Immediate Release

Wellington Drive 3rd quarter result shows 25% increase in 3rd quarter revenues

Wellington Drive’s unaudited result for the 3rd quarter ended 30 September (Q3) is consistent with earlier guidance.

Revenue for the quarter was $6.3m compared to $5.1m for the same period in 2015 – a 25% improvement. The EBIT1 result for the quarter was a loss of $895k. The EBITDA3 result, adjusted to exclude foreign exchange revaluations of the Mandatory Convertible Preference Shares (MCPS), was a loss for the quarter of $427k (versus a $607k loss for Q3 2015).

Year to date revenues are 34% above the same period in 2015, demonstrating continuing growth momentum. Revenue achievement year to date has already exceeded 2015 full year figures. Gross margins improved to 23.6% for the first three quarters of 2016, from 21.9% for the same period last year, with Q3 Gross margin at 25.7%. Whilst further supply chain cost reductions will have less measurable impact, we are seeing some benefits flowing with overall volume increases.

The business is anticipating stronger revenues in Q4 and is confident that the Company will achieve its full year guidance of significantly higher revenues than those recorded for 2015 and the possibility of a modest EBITDA profit.

Q3 2016 Highlights:
· Revenue growth of 25% to NZD$6.3m (or in US Dollar terms 34% to USD$4.5m). The average USD / NZD rate in Q3 was 0.703 compared to 0.656 for the same period in 2015;
· Continued growth in SCS Connect and ECR2 product shipments;
· Further supply chain cost reductions improving gross margin to 25.7% for the quarter; and
· Secured a $2m debt facility from SuperLife to support growth working capital for SCS Connect and other new products.

CEO Greg Allen commented “Our revenue in Q3 was higher than Q3 last year. We took a dip after the highs of the first and second quarters but that was expected due to the usual seasonal factors. We continue to build growth momentum with our new ECR2 and SCS products as we enter Q4 and are also seeing an uptick in demand for our ECR1 motor product. We expect a strong Q4, closer to revenue levels earlier in the year, and are targeting achievement of a modest EBITDA profit for the full year. Next year is looking exciting for the Company, with continued demand increases for our new products, and we expect to update our 2017 guidance as demand for the new season is known. The team is currently focused on putting in place additional supply chain capacity and customer field support to meet its 2017 requirements.”

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