23% revenue growth Q3 2017 and 2018 profit target confirmed

® is a registered Trade Mark of Wellington Drive Technologies Ltd in New Zealand
Wellington Drive Technologies LtdWT8962
21 Arrenway Drive,Rosedale, Auckland0632, New Zealand
PO Box 302-533,North Harbour, North ShoreCity0751, New Zealand
Telephone: +64 9 9 477 0415, Fax: + 64 9 479 5540
Email:info@wdtl.comWebsite:www.wdtl.comPage1of3
16
th
November2017
ForImmediateRelease
Wellington Drivedelivers 23% revenue growth in 3
rd
Quarter and
confirmsnet profittargetfor 2018
Q32017summary
ContinuedstrongrevenuegrowthwithNZDrevenueincreasing23%toNZ$7.8m.In
USDterms,revenuewas28%higheratUSD$5.7mcomparedtoUSD$4.4min2016.
Yeartodaterevenuesaretracking26%higherthan2016,demonstratingWellington
Drive’scontinuedproductsalesmomentumandsuccesswithnewcustomerwins.
ECMotorvolumesincreased14%year-on-yearandSCSConnectvolumesincreased
260%overthesameperiodin2016.
USAandCanadarevenuewasup121%andLatinAmericarose38%onlastyear,while
AsiaPacificrevenuewasunchanged.EMEA(Europe,MiddleEastandAfrica)revenue
waslowerthanQ32016reflectingthedifficultcompetitiveandmacro-economic
environmentintheregion.
MomentumfortheSCSdataservicesofferingremainedstrong,withbookeddatarevenue
at$136kyeartodatecomparedto$2kin2016.Futuredatarevenuesheldonthebalance
sheetat30
th
September2017amountedto$800k.
WellingtonDrivesuccessfullycompletedamulti-storetrialinLatinAmericaforour
SmarterCoolerconcept.ThetrialconsistedoftheWellingtonSCSConnectandour
partner’s(iProximity)proximitymarketingservices.Weworkedwithbeveragebrand
advertisingteamstodesignanddeliveran‘atCooler’consumerexperiencethat
demonstratedsignificantimprovementinthecustomer’sbeveragesales.
Yeartodategrossmarginsimprovedto23.7%from23.4%forthesameperiodlastyear.
ThediscreteQ3grossmarginof20%wasdisappointinglylowerthanQ3lastyear.The
mainreasonsforthequarterlydeclinewereproductmixbiasingtowardsourlowest
margincustomers,temporarydelaysinthestartupofourlowestcostSCSmanufacturing
solution(thesedelayshavenowbeenresolved)andsomeincreasesincommodityprices
flowingintounitcostsonourlegacymotorproducts.Whilecustomerdrivenmixis
somethingwecannotcontrol;allotherfactorsarebeingresolvedandwillnotadversely
impactproductcostin2018.InQ42017weexpecttoachievelowerproductcostsfor
ourSCSConnectandECR2motorsthaninpreviousquarters.
TheEBITDA
1
lossforQ3of$943kwasworsethanthe$532klossinQ32016.Thiswas
duetoadeliberateincreaseincostsforhigherheadcountandmarketingcostsrequiredto

® is a registered Trade Mark of Wellington Drive Technologies Ltd in New Zealand
Wellington Drive TechnologiesLtdWT8962
Page2of3
supportnewproductrevenuegrowthandcustomersupport,(69staffatSeptember2017
comparedto61atSeptember2016).
Theunauditedresultis:
NZDQ3-$000’sYTD-$000’s
20172016Change20172016Change
Revenue7,7876,30723.5%31,57925,027+26%
GrossProfit1,5691,6457,4985,856
%20.1%26.1%-6.0%23.7%23.4%+0.3%
EBITDA
1
(943)(532)59(484)
EBIT
2
(1,390)(789)(1,208)(1,594)
Lossfortheperiod
3
(1,488)(1,065)(2,001)(2,395)
Q42017updateand2018outlook
Beveragecustomersarefinalisingtheir2017Q4productrequirementslaterthaninprevious
yearsandasofearlyNovemberthebusinesshadstillnotreceivedallofitsdemand
informationfromcustomers.ReasonsforthesedemanddelaysincludeOEM’splanningto
carrylessinventoryovertheyearendandanoverallpushbycustomerstoputmoreloadinto
Q12018.Thislatenessinfirmingupdemandandunwillingnesstobuildupinventories
couldalsocreateshort-termQ4capacityconstraintsinWellington’ssupplier’sfactoriesin
theeventwedoreceiveanyordersurgelateinthequarter.Despitethisbackdropweare
anticipatingstrongerrevenuesandareturntoprofitinQ4.
Wellington’s previous guidance was for 25% to 35% revenue growthfor 2017and for
EBITDA
1
earnings in the range of $1.5m to $2.1m. Currentcustomerdemanddelays, which
have seen as much as $1m of revenue move from Q4 to Q1,and the possibility of further
demanddelaysmeanthat theEBITDA
1
performance for 2017 willlikely beat the lower end
ofthis guidance and possiblybelow if the late surge in demand does not eventuate this year.
LookingforwardtofirstquarterandFY2018,Wellington’sprovisionalforecastslook
positiveandindicateacontinuationofourgrowthtrend.TheCompany’sprovisional
forecastsforFY2018indicateEBITDA
1
inthe$2mto$4mrangeandaccordinglyweare
targetinganetprofitresult.
CEOGregAllencommented“Wecontinuetobesatisfiedwithourtoplinegrowthtrendin
Q3butmarginandprofitperformancewasdisappointingforthequarter.Whilewehad
expectedtomakealossinQ3duetoseasonalityofdemand,itturnedoutworsethan
forecast.WedoexpectastrongerQ4,closertorevenueandmarginlevelsseenearlierinthe
year,subjecttothecaveatthatthoselaterQ4ordersarereducingournormalrevenue
visibility.OurECR2motorandSCSConnectIoTsolutioncontinuetounderpinourgrowth
andweareworkingonnewsoftwareandhardwaredevelopmentstofurthercomplement
theseproducts.Ourdigitalmarketingsolutions,providedbyiProximity,arebeingmarketed
globallywithmultiplecustomers,furtherdemonstratingourmoveawayfrompurehardware
tobecomeahardwareenabledsoftwareandsolutionsbusiness.WebelieveiProximity’s
digitalmarketingsolutionprovidesadditionalincentivesforourbeveragecustomerstoadopt
ourSCSConnectproductrangeintotheircoolernetworks.TheCompany’sprovisional
FY2018growthandearningsoutlookareunderpinnedbytheexpectationofaddingfurther

® is a registered Trade Mark of Wellington Drive Technologies Ltd in New Zealand
Wellington Drive TechnologiesLtdWT8962
Page3of3
newcustomers,continuinggrowthindemandforournewproductsandlowersupplychain
costs.”
AboutWellingtonDriveTechnologies
WellingtonDriveTechnologiesisaleadingglobalproviderofenergyefficientelectronicmotors,airflowssolutionsand
‘CloudConnected’refrigerationcontrolsolutionsforthecommercialrefrigerationmarkets.Itservessomeoftheworld’s
leadingfoodandbeveragebrandsandrefrigeratormanufacturerswithadvancedproductsandsolutionsthatimprovetheir
productsales,reducetheircostsandreducesenergyconsumption.WellingtonisheadquarteredinAuckland,NewZealand,
andislistedontheNewZealandstockexchangeunderthetickersymbolNZ:WDT
Notes:
Note1-EBITDAisEarningsbeforeInterest,Taxation,Depreciation,AmortisationandImpairment.Wellington
hasalwaysreportedtheEBITDAresultbecausethisistheprofitperformancemeasurethatavoidsthe
distortionscausedbydifferencesinamortisationandimpairmentpolicies.
Note2-EBITisEarningsbeforeInterestandTaxation
Note3–Lossfortheperiodisthestatutoryresultaftertaxation
___________________________________________________________________________
Contact:
Greg AllenHoward Milliner
Chief Executive OfficerChief Financial Officer
Phone +1-778-238-6494+64-9-477-4500