CAMBRIDGE, ON, Sept. 3 /CNW/ - COM DEV International Ltd. (TSX:CDV) today
announced its third quarter financial results for the three-month period ended
July 31, 2009. All amounts are stated in Canadian dollars unless otherwise
noted.Third Quarter Highlights
- Revenue was $61.5 million, an increase of 19% over the $51.5 million
recorded in the third quarter of 2008.
- Gross margin was 29%, compared to 26% in Q3 2008.
- Net income was $5.2 million, or $0.07 per share, compared to
$4.3 million or $0.06 per share for the prior year period.
- New orders won in the third quarter totaled $45 million, compared to
$95 million a year earlier and $50 million in the second quarter of
fiscal 2009.
- Backlog at July 31, 2009 was $156 million, compared to $173 million
three months earlier.
- During the quarter the Company established a subsidiary,
exactEarth(TM) Ltd, to implement full commercialization of its
space-based AIS technology."Excellent operational performance in the third quarter allowed us to
deliver our best gross margin percentage in over two years, and our best ever
in dollar terms," said John Keating, CEO of COM DEV. "Our business development
team has been very busy pursuing new contracts as satellite order activity has
been very healthy. For fiscal 2009 we remain on track to achieve record orders
and revenue growth of at least 15%."
Financial Review
COM DEV's fiscal 2009 third quarter revenues of $61.5 million represented
an increase of $10.0 million or 19% over the third quarter of 2008. While
revenues declined by $2.6 million compared to the record level of Q2 2009, the
strengthening of the Canadian dollar versus the U.S. dollar during the third
quarter negatively impacted reported revenues by $3.5 million, and gross
margin by $2.5 million. The revenue split between the three market segments
was 52% commercial, 32% civil and 16% military, compared to a 59/26/15 split
in the third quarter of 2008. On a year-to-date basis, revenues of $182.1
million are 21% higher than revenues in the first nine months of fiscal 2008.
Management continues to anticipate full year revenue growth of at least 15%.
COM DEV received new orders totaling $45 million during the quarter, of
which 60% were commercial, 23% were civil, and 17% were military. In Q3 2008
the Company booked $95 million of new orders, with a commercial/civil/military
split of 38/43/19.
Order backlog at quarter-end was $156 million, compared to a backlog of
$173 million three months earlier, and $161 million one year ago. Backlog was
split between the Company's commercial, civil and military sectors at a ratio
of 46%, 35% and 19% respectively, compared to 45%, 40% and 15% at the end of
Q2 2009.
Gross margin was $18.0 million in Q3 2009, representing 29% of revenues,
compared to $13.1 million or 26% of revenues in Q3 2008. Improved margins
reflect the positive impacts of a stronger U.S. dollar compared to a year
earlier, and higher volumes of work flowing through the organization during
the period.
Net research and development expense in Q3 2009 was $3.6 million,
representing a $1.5 million increase from one year earlier, but a $0.9 million
decrease from Q2 2009 levels. Gross R&D spending of $4.5 million in the
quarter was consistent with $4.6 million in Q3 2008 and down from $5.5 million
in Q2 2009. The year-over-year increase in net R&D expense was due to a
reduction in outside funding to $0.9 million in the current quarter, compared
to $2.5 million a year earlier, and $1.0 million in Q2 2009.
Selling, general and administrative expenses were $8.5 million in the
third quarter, compared to $6.5 million in Q3 2008. As a percentage of total
revenue, SG&A was 14%, compared to 13% a year earlier. The increase is due to
the incremental SG&A cost of the COM DEV USA operations, increased foreign
exchange rate impact on those U.S. costs, increased long-term incentive
compensation costs, higher selling and business development costs and the
increased costs of the exactEarth initiative.
Net income for the quarter was $5.2 million, up from $4.3 million in Q3
2008, while earnings per share were $0.07, compared to $0.06 a year earlier.
Net income improved from $4.9 million in Q2 2009.
COM DEV ended the quarter with $19.8 million of cash and equivalents,
compared to $31.9 million at April 30, 2009. During the third quarter the
Company used $6.2 million of cash for operating activities, $1.8 million for
financing activities, primarily for debt repayment, and $4.2 million for
investing activities, including the $2.2 million purchase of a 30,000 square
foot building in Cambridge, Ontario to provide office and lab space to the
Company's Missions Development Group and its exactEarth subsidiary.
At July 31, 2009, the Company had outstanding debt of $21.5 million
including the current portion. Its operating line of credit, renegotiated
during the third quarter to a maximum of $32 million, was not drawn upon.
COM DEV's basic share count averaged 76,100,289 (fully diluted:
76,185,520) in the third quarter, and stood at 76,100,289 on July 31, 2009.
Conference Call
A conference call will be held Thursday, September 3, 2009 at 5:00 pm EDT
to discuss this announcement. To access the live webcast, please visit the
Company's website at www.comdevintl.com or www.newswire.ca for directions.
Participants will require Windows Media Player(TM) to listen to the webcast.
About COM DEV
COM DEV International Ltd. (www.comdevintl.com) is a leading global
designer and manufacturer of space hardware subsystems. With facilities in
Canada, the United Kingdom and the United States, COM DEV manufactures
advanced products and subsystems that are sold to major satellite prime
contractors for use in communications, space science, remote sensing and
military satellites.
This news release contains statements that, to the extent they are not
recitations of historical fact, may constitute "forward-looking statements"
within the meaning of applicable Canadian securities laws. Forward-looking
statements may include financial and other projections, as well as statements
regarding COM DEV's future plans, objectives or economic performance, or the
assumptions underlying any of the foregoing. COM DEV uses words such as "may",
"would", "could", "will", "likely", "expect", "anticipate", "believe",
"intend", "plan", "forecast", "project", "estimate" and similar expressions to
identify forward-looking statements. Any such forward-looking statements are
based on assumptions and analyses made by COM DEV in light of its experience
and its perception of historical trends, current conditions and expected
future developments, as well as other factors COM DEV believes are appropriate
under the relevant circumstances. However, whether actual results and
developments will conform to COM DEV's expectations and predictions is subject
to any number of risks, assumptions and uncertainties. Many factors could
cause COM DEV's actual results, historical financial statements, or future
events to differ materially from those expressed or implied by the
forward-looking statements contained in this news release. These factors
include, without limitation: uncertainty in the global economic environment;
fluctuations in currency exchange rates; delays in the purchasing decisions of
COM DEV's customers; the competition COM DEV faces in its industry and/or
marketplace; and the possibility of technical, logistical or planning issues
in connection with the deployment of COM DEV's products or services.The triangular logo and the word COM DEV are each registered trademarks
and the property of COM DEV Ltd. All rights reserved.
COM DEV International Ltd.
Consolidated Statements of Operations
(Canadian dollars in thousands, except for per share figures)
Unaudited
For the three months ended July 31 2009 2008
-------------------------------------------------------------------------
Revenue $ 61,451 $ 51,483
Cost of revenue 43,440 38,123
------------ ------------
Gross margin 18,011 13,360
------------ ------------
Research and development costs 4,531 4,576
Research and development recovery 912 2,492
------------ ------------
Net research and development 3,619 2,084
Selling and general expenses 8,519 6,541
------------ ------------
Operating income 5,873 4,735
Interest expense 44 594
Foreign exchange loss (gain) 510 (148)
Other expense 83 10
------------ ------------
Income before non-controlling interest 5,236 4,279
Non-controlling interest (5) (6)
------------ ------------
Net income $ 5,241 $ 4,285
------------ ------------
------------ ------------
Earnings per share
Basic and diluted earnings per share $ 0.07 $ 0.06
COM DEV International Ltd.
Consolidated Statements of Operations
(Canadian dollars in thousands, except for per share figures)
Unaudited
For the nine months ended July 31 2009 2008
-------------------------------------------------------------------------
Revenue $ 182,066 $ 150,528
Cost of revenue 131,611 113,553
------------ ------------
Gross margin 50,455 36,975
------------ ------------
Research and development costs 13,902 11,983
Research and development recovery 2,943 4,922
------------ ------------
Net research and development 10,959 7,061
Selling and general expenses 23,994 21,886
------------ ------------
Operating income 15,502 8,028
Interest expense 366 363
Foreign exchange loss (gain) 423 (122)
Other expense 290 186
------------ ------------
Income before non-controlling interest 14,423 7,601
Non-controlling interest (25) 7
------------ ------------
Net income $ 14,448 $ 7,594
------------ ------------
------------ ------------
Earnings per share
Basic and diluted earnings per share $ 0.20 $ 0.11
COM DEV International Ltd.
Consolidated Balance Sheets
(Canadian dollars in thousands)
Unaudited
As at As at
July 31, October 31,
2009 2008
-------------------------------------------------------------------------
Assets
Current
Cash and cash equivalents $ 19,802 $ 16,102
Accounts receivable 38,634 41,085
Inventory 64,395 45,941
Prepaids and other 5,221 1,772
Income taxes recoverable 4,395 2,819
Future income tax assets - current 3,957 3,957
------------ ------------
136,404 111,676
Property, plant and equipment 66,346 70,748
Intangible assets 16,071 14,625
Goodwill 2,378 2,522
Future income tax assets - long term 3,958 3,958
------------ ------------
Total assets $ 225,157 $ 203,529
------------ ------------
------------ ------------
Liabilities
Current
Accounts payable and accrued liabilities $ 29,897 $ 35,467
Deferred revenue 15,007 14,828
Current portion of loans payable 6,583 6,203
------------ ------------
51,486 56,498
------------ ------------
Long term
Loans payable 14,912 23,223
Employee future benefits 1,895 2,224
------------ ------------
16,807 25,447
------------ ------------
Total liabilities 68,294 81,945
------------ ------------
Non-controlling interest 499 524
------------ ------------
Shareholders' equity
Share capital 345,946 323,975
Contributed surplus 2,514 1,879
Deficit (189,617) (204,065)
Accumulated other comprehensive income (2,479) (729)
------------ ------------
Total shareholders' equity 156,364 121,060
------------ ------------
Total liabilities and shareholders' equity $ 225,157 $ 203,529
------------ ------------
------------ ------------
COM DEV International Ltd.
Consolidated Statements of Cash Flows
(Canadian dollars in thousands)
Unaudited
For the three months ended July 31 2009 2008
-------------------------------------------------------------------------
Operating activities
Net income $ 5,241 $ 4,285
Amortization 2,809 3,086
Gain on disposal of assets (15) -
Stock compensation expense 271 206
Employee stock option plan awards 40 38
Unrealized foreign exchange loss on
long term debt - 199
Unrealized foreign exchange (gain) loss
on derivatives (2,847) 198
Non-controlling interest (5) (6)
------------ ------------
5,494 8,006
Net change in non-cash working capital items (11,657) (5,770)
------------ ------------
Operating activities (6,163) 2,236
------------ ------------
Financing activities
Shares issued (60) -
Advance of long term debt - 18,174
Repayment of long term debt (1,711) (1,110)
------------ ------------
Financing activities (1,771) 17,064
------------ ------------
Investing activities
Acquisition of capital assets (2,821) (3,210)
Proceeds on disposal of property, plant,
and equipment 18 -
Acquisition of intangible assets (1,439) (357)
Business acquisition - (13,111)
------------ ------------
Investing activities (4,242) (16,678)
------------ ------------
Effect of exchange rate changes on cash 82 (370)
------------ ------------
Net (decrease) increase in cash (12,094) 2,252
Cash and cash equivalents, beginning of period 31,896 8,875
------------ ------------
Cash and cash equivalents, end of period $ 19,802 $ 11,127
------------ ------------
------------ ------------
Interest paid $ 205 $ 612
------------ ------------
------------ ------------
COM DEV International Ltd.
Consolidated Statements of Cash Flows
(Canadian dollars in thousands)
Unaudited
For the nine months ended July 31 2009 2008
-------------------------------------------------------------------------
Operating activities
Net income $ 14,448 $ 7,594
Amortization 8,500 7,030
Gain on disposal of assets (41) (211)
Stock compensation expense 657 605
Employee stock option plan awards 137 134
Unrealized foreign exchange loss on
long term debt - 842
Unrealized foreign exchange (gain) loss
on derivatives (5,482) 2,870
Non-controlling interest (25) 7
------------ ------------
18,194 18,871
Net change in non-cash working capital items (20,937) (31,672)
------------ ------------
Operating activities (2,743) (12,801)
------------ ------------
Financing activities
Shares issued 21,813 2
Advance of long term debt - 18,174
Repayment of long term debt (5,325) (2,011)
------------ ------------
Financing activities 16,487 16,165
------------ ------------
Investing activities
Acquisition of capital assets (5,708) (9,109)
Proceeds on disposal of property, plant,
and equipment 44 213
Acquisition of intangible assets (3,952) (992)
Business acquisition (140) (13,485)
------------ ------------
Investing activities (9,756) (23,373)
------------ ------------
Effect of exchange rate changes on cash (288) (306)
------------ ------------
Net increase (decrease) in cash from
continuing operations 3,700 (20,315)
Net cash used in discontinued operations - (271)
------------ ------------
Net increase (decrease) in cash 3,700 (20,586)
Cash and cash equivalents, beginning of period 16,102 31,713
------------ ------------
Cash and cash equivalents, end of period $ 19,802 $ 11,127
------------ ------------
------------ ------------
Interest paid $ 780 $ 1,079
------------ ------------
------------ ------------
COM DEV International Ltd.
Consolidated Statements of Changes in Equity
(Canadian dollars in thousands)
Unaudited
Accumulated
For the nine Other
months ended Comprehensive Share Contributed
July 31, 2009 Total Deficit Income Capital Surplus
-------------------------------------------------------------------------
Balance, October
31, 2008 $ 121,060 $(204,065) $ (729) $ 323,975 $ 1,879
Comprehensive
income
Net Income 14,448 14,448 - - -
Foreign currency
translation
adjustments
(net of taxes
of $nil) (1,750) - (1,750) - -
---------- ---------- ---------- ---------- ----------
12,698 14,448 (1,750) - -
Common stock issued 21,812 21,971 (159)
Value of ESOP awards 137 - - - 137
Expense recognized
for stock-based
compensation 657 - - - 657
---------- ---------- ---------- ---------- ----------
Balance,
July 31, 2009 $ 156,364 $(189,617) $ (2,479) $ 345,946 $ 2,514
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
-------------------------------------------------------------------------
For the nine
months ended
July 31, 2008
Balance, October
31, 2007 $ 106,424 $(216,444) $ (1,993) $ 323,862 $ 999
Comprehensive
income
Net Income 7,594 7,594 - - -
Foreign currency
translation
adjustments
(net of taxes
of $nil) 133 - 133 - -
---------- ---------- ---------- ---------- ----------
7,727 7,594 133 - -
Common stock issued 2 - - 113 (111)
Value of ESOP awards 134 - - - 134
Expense recognized
for stock-based
compensation 605 - - - 605
---------- ---------- ---------- ---------- ----------
Balance,
July 31, 2008 $ 114,892 $(208,850) $ (1,860) $ 323,975 $ 1,627
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------%SEDAR: 00003673E
For further information: Gary Calhoun, Chief Financial Officer, Tel:
(519) 622-2300 ext. 2826, Fax: (519) 622-2158, gary.calhoun@comdev.ca; Jeff
Codispodi, The Equicom Group, Tel: (416) 815-0700 ext. 261, Fax: (416)
815-0080, jcodispodi@equicomgroup.com
