COM DEV Announces Second Quarter Fiscal 2012 Results

CAMBRIDGE, ON, June 7, 2012 /CNW/ - COM DEV International Ltd. (TSX:CDV) today announced second quarter financial results for the six-month period ended April 30, 2012.  All amounts are stated in Canadian dollars unless otherwise noted.

Second Quarter Highlights

  • Revenue was $50.1 million in the second quarter of 2012, a 6% decrease from revenue of $53.1 million in the second quarter of 2011.
  • Gross margin in the core Space Equipment business was 24%, compared to 22% in Q2 2011.
  • Net income attributable to shareholders was $5.2 million, or $0.07 per share, an increase of $4.0 million compared to $1.3 million or $0.02 per share in the second quarter of 2011.
  • New orders won in the second quarter totaled $59 million, compared to $28 million a year earlier and $45 million in the first quarter of 2012.
  • Backlog at April 30, 2012 was $134 million, plus an additional $19 million in follow-on orders expected from Authorities to Proceed (ATPs) already awarded.

"Margins and profitability showed year-over-year improvement once again this quarter," said Michael Pley, CEO of COM DEV.  "A healthy level of orders in the quarter, driven by strong activity in the commercial market, positions us well to grow revenue in the coming quarters.  We expect revenue in the second half of the year to exceed the $97 million of first half revenues by approximately 10 percent."

Segmented Results

COM DEV reports results in two business segments.  The Space Equipment segment represents the Company's traditional manufacturing operations, while the Data Services segment consists primarily of the maritime tracking services offered by exactEarth Ltd.  Selected segmented results for the fiscal second quarter are as follows.

Three months ended April 30 (unaudited, in thousands of dollars)

  Space Equipment   Data Services   Consolidated *
  2012 2011   2012 2011   2012 2011
Revenue 47,580 51,025   2,530 2,076   50,110 53,101
Gross margin 12,065 11,543   335 174   12,378 11,032
Gross margin % 24% 22%   13% 8%   25% 21%
Net income 6,305 2,908   (1,034) (929)   5,249 1,294

* Consolidated figures may not equal the sum of the two segments due to intra-segment adjustments.  Please see Note 12 to the Unaudited Interim Consolidated Financial Statements for additional details.

Financial Review

COM DEV's fiscal 2012 second quarter revenues of $50.1 million decreased by $3.0 million or 6% compared to $53.1 million a year earlier.  Revenues in the civil and military sectors were relatively stable in comparison to the second quarter of 2011, while revenues in the commercial sector declined by $2.7 million.  The decline in commercial revenues is related to a significant inflow of new orders at the end of fiscal 2010, which resulted in a higher-than-normal level of backlog in the commercial portion of the business and a high level of revenue in the early part of 2011.  The revenue split between the three market segments in Q2 2012 was 54% commercial, 28% civil and 18% military, compared to a 56/27/17 split in the second quarter of 2011.

COM DEV received new orders totaling $59 million in the second quarter, of which 73% were commercial, 1% was civil, and 26% were military. In last year's second quarter the Company booked $28 million of new orders, with a commercial/civil/military split of 71/22/7.

Order backlog at April 30, 2012 was $134 million, compared to $125 million three months earlier, and $131 million one year earlier.  An additional $19 million of follow-on orders are expected to be realized from ATPs already received; COM DEV only includes these ATP amounts in orders and backlog once the final contracts are in place.  Backlog was split between the Company's commercial, civil and military sectors at a ratio of 55%, 21% and 24% respectively, compared to 48%, 24% and 28% at April 30, 2011.  The Company expects to convert approximately 71% of the total backlog into revenue during fiscal 2012.

Consolidated gross margin was $12.4 million in the second quarter, representing 25% of total revenues, compared to $11.0 million or 21% of revenues in Q2 2011.  The improvement is attributable to stronger results in the core equipment business, continued progress in the Data Services segment, and a reduced impact from the one remaining program out of the five which had a significant drag on gross margin in the second quarter of last year.  Gross margin in the Space Equipment segment was $12.1 million, or 24% of segment revenues.

COM DEV recorded a net research and development expense of $35,000 in the second quarter of 2012, compared to $1.0 million a year earlier.  A $1.5 million increase in investment tax credits recoverable more than offset the effect of a reduction in R&D recovery.

Selling expenses were $2.9 million in Q2 2012, unchanged from Q2 2011.  Selling expenses fluctuate from quarter to quarter depending on the bids and proposal work that is underway.  General expenses of $4.9 million increased by $0.6 million from the previous year, as a result of additional expenses under the long term incentive plan and increased costs driven by new Controlled Goods regulations.

Net income attributable to shareholders was $5.2 million in the second quarter of 2012, compared to $1.3 million a year earlier.  The increase is due primarily to improved gross margins, a gain on foreign exchange, and a net gain on the sale of underutilized IP assets, partially offset by higher income tax expense.  Net income in the Space Equipment segment was $6.3 million, compared to $2.9 million in Q2 2011, while the $1.0 million net loss in the Data Services segment compares to a $0.9 million net loss a year earlier.

COM DEV ended the second quarter with $21.2 million of cash and equivalents, compared to $23.5 million at January 31, 2012.  Operating activities generated $2.6 million of cash in the quarter.  At April 30, 2012, COM DEV had outstanding debt of $19.2 million including the current portion, and the Company's $32 million credit facility was not drawn upon.

The Company's basic share count stood at 76,285,147 on June 7, 2012.

Conference Call

A conference call will be held Thursday, June 7, 2012 at 5:00 pm EDT to discuss this announcement.  To access the call, dial 647-427-7450 or 1-888-231-8191.  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™ to listen to the webcast.

About COM DEV

COM DEV International Ltd. (www.comdevintl.com) is a leading global provider of space hardware and services.  With facilities in Canada, the United Kingdom and the United States, COM DEV manufactures advanced subsystems and microsatellites that are sold to major satellite prime contractors, government agencies and satellite operators, for use in communications, space science, remote sensing and defense applications. COM DEV's majority-owned subsidiary, exactEarth Ltd., provides satellite data services.

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 April 30     2012   2011  
                     
  Revenue          $ 50,110    $ 53,101  
  Cost of revenue       37,732   42,069  
  Gross margin       12,378   11,032  
  Research and development costs     3,853   4,199  
  Research and development recovery   1,020   1,942  
  Investment tax credits recoverable    2,798   1,300  
  Net research and development expense   35   957  
  Selling expenses       2,946   2,909  
  General expenses       4,881   4,282  
  Operating income       4,516   2,884  
  Interest expense       257   204  
  Foreign exchange (gain) loss     (1,158)   85  
  Other (income) expense     (1,975)   314  
Income before income taxes      $ 7,392    $ 2,281  
  Income tax expense        2,527   1,300  
Net income          $ 4,865    $ 981  
                     
Attributable to:              
  Shareholders        $ 5,249    $ 1,294  
  Non-controlling interest       (384)   (313)  
               $ 4,865    $ 981  
                     
Earnings per share               
Basic and diluted earnings per share     $0.07   $0.02  
                     
                     
                     
 COM DEV International Ltd.   
 Consolidated Statements of Operations   
 (Canadian dollars in thousands, except for per share figures)   
 Unaudited   
                     
For the six months ended April 30     2012   2011  
                     
  Revenue           $ 97,319    $ 103,365  
  Cost of revenue       71,891   83,700  
  Gross margin       25,428   19,665  
  Research and development costs     7,636   8,023  
  Research and development recovery   2,788   3,732  
  Investment tax credits recoverable    3,838   2,300  
  Net research and development expense   1,010   1,991  
  Selling expenses       5,559   5,488  
  General expenses       9,279   8,688  
  Operating income  
 
     
 
  9,580   3,498  
  Interest expense     503   330  
  Foreign exchange (gain) loss     (1,513)   269  
  Other (income) expense     (1,764)   195  
Income before income taxes      $ 12,354    $ 2,704  
  Income tax expense        4,308   2,300  
Net income          $ 8,046    $ 404  
                     
Attributable to:              
  Shareholders        $ 8,859    $ 1,371  
  Non-controlling interest       (813)   (967)  
               $ 8,046    $ 404  
                     
Earnings per share               
Basic and diluted earnings per share     $0.12   $0.02  
                     
                     
                     
 COM DEV International Ltd.   
 Consolidated Statements of Financial Position   
 (Canadian dollars in thousands)   
 Unaudited   
              As at   As at  
              April 30,   October 31,  
              2012   2011  
 Assets                 
   Current                 
     Cash and cash equivalents       $ 21,157    $ 27,618  
     Accounts receivable       37,588   47,563  
     Inventory         54,792   46,147  
     Prepaids and other        3,868   1,422  
     Income taxes recoverable     4,693   4,788  
     Investment tax credit - current     4,612   4,684  
              126,710   132,222  
   Non-current                 
     Property, plant and equipment     79,701   73,973  
     Intangible assets       15,234   15,576  
     Goodwill          2,165   2,200  
     Investment tax credit        7,239   9,493  
     Deferred income tax assets      3,562   1,088  
 Total assets           $ 234,611    $ 234,552  
                     
 Liabilities                 
   Current                 
     Accounts payable and accrued liabilities     $ 25,600    $ 25,830  
     Income taxes payable      400   302  
     Provisions          435   1,172  
     Deferred revenue        8,727   9,977  
     Current portion of loans payable      7,838   8,867  
              43,000   46,148  
                     
   Non-current                 
     Loans payable        11,314   14,687  
     Accounts payable and accrued liabilities    319   930  
     Employee future benefits      4,318   4,494  
              15,951   20,111  
                     
   Total liabilities        58,951   66,259  
                     
 Shareholders' equity               
   Share capital       345,862   345,666  
   Treasury Stock        (355)   -  
   Contributed surplus        9,526   9,570  
   Deficit          (186,923)   (195,782)  
   Non-controlling interest        8,164   8,977  
   Accumulated other comprehensive loss    (614)   (138)  
   Total shareholders' equity      175,660   168,293  
                     
 Total liabilities and shareholders' equity     $ 234,611    $ 234,552  
                     
                     
                     
                     
 COM DEV International Ltd.   
 Consolidated Statements of Cash Flows   
 (Canadian dollars in thousands)   
 Unaudited   
                     
For the three months ended April 30     2012   2011  
                     
Operating activities              
  Net income          $ 4,865    $ 981  
  Amortization       2,040   2,674  
  Gain on disposal of assets     (2,197)   (282)  
  Defined benefit plan expenses     153   205  
  Defined benefit plan contributions     (961)   (201)  
  Stock compensation expense      423   288  
  Employee stock ownership plan awards    52   50  
  Investment tax credits recoverable    (2,798)   (1,300)  
  Deferred tax expense       2,527   1,300  
  Unrealized foreign exchange (gain) loss on derivatives    421   77  
              4,525   3,792  
  Net change in non-cash working capital items   (1,968)   3,915  
Operating activities       2,557   7,707  
                     
Financing activities              
  Non-controlling interest investment, net   -   2,616  
  Cash settlement of restricted stock units    (881)   -  
  Purchase of treasury stock      (355)   -  
  Advance of long term debt     -   15,000  
  Repayment of long term debt     (2,185)   (1,827)  
Financing activities       (3,421)   15,789  
                     
Investing activities              
  Acquisition of property, plant and equipment    (3,725)   (1,190)  
  Proceeds on disposal of property, plant and equipment   2,197   1,466  
  Acquisition of intangible assets      96   70  
Investing activities       (1,432)   346  
Effect of exchange rate changes on cash   (68)   (770)  
                     
Net (decrease) increase in cash     (2,364)   23,072  
Cash and cash equivalents, beginning of period    23,521   16,722  
Cash and cash equivalents, end of period    $ 21,157    $ 39,794  
                     
Interest paid          $ 271    $ 162  
Taxes paid          $ 4    $ -  
                     
                     
                     
 COM DEV International Ltd.   
 Consolidated Statements of Cash Flows   
 (Canadian dollars in thousands)   
 Unaudited   
                     
For the six months ended April 30     2012   2011  
                     
Operating activities              
  Net income          $ 8,046    $ 404  
  Amortization       4,583   5,364  
  Gain on disposal of assets     (2,167)   (282)  
  Defined benefit plan expenses     312   421  
  Defined benefit plan contributions     (1,211)   (408)  
  Stock compensation expense      914   663  
  Employee stock ownership plan awards    119   113  
  Investment tax credits recoverable    (3,838)   (2,300)  
  Deferred tax expense       4,308   2,300  
  Unrealized foreign exchange (gain) loss on derivatives    -   114  
              11,066   6,389  
  Net change in non-cash working capital items   (3,068)   4,712  
Operating activities       7,998   11,101  
                     
Financing activities              
  Shares issued       -   514  
  Non-controlling interest investment, net   -   2,620  
  Cash settlement of restricted stock units    (881)   -  
  Purchase of treasury stock      (355)   -  
  Advance of long term debt     -   15,000  
  Repayment of long term debt     (4,624)   (3,331)  
Financing activities       (5,860)   14,803  
                     
Investing activities              
  Acquisition of property, plant and equipment    (8,925)   (3,026)  
  Proceeds on disposal of property, plant and equipment   2,201   1,466  
  Acquisition of intangible assets      (1,406)   (1,103)  
Investing activities       (8,130)   (2,663)  
Effect of exchange rate changes on cash   (469)   (883)  
                     
Net increase (decrease) in cash     (6,461)   22,358  
Cash and cash equivalents, beginning of period   27,618   17,436  
Cash and cash equivalents, end of period    $ 21,157    $ 39,794  
                     
Interest paid          $ 533    $ 269  
Taxes paid          $ 169    $ -  
                     
                     
                     
 COM DEV International Ltd.   
 Consolidated Statements of Comprehensive Income   
 (Canadian dollars in thousands, except for per share figures)   
 Unaudited   
                     
For the three months ended April 30     2012   2011  
                     
Net Income          $ 4,865    $ 981  
                     
Other comprehensive income (loss):            
  Foreign currency translation adjustment (net of taxes of $nil)   (497)   (848)  
                     
Comprehensive income        $ 4,368    $ 133  
                     
                     
                     
COM DEV International Ltd.  
 Consolidated Statements of Comprehensive Income   
 (Canadian dollars in thousands, except for per share figures)   
 Unaudited   
                     
For the six months ended April 30     2012   2011  
                     
Net Income          $ 8,046    $ 404  
                     
Other comprehensive income (loss):            
  Foreign currency translation adjustment (net of taxes of $nil)   (476)   (1,222)  
                     
Comprehensive income (loss)      $ 7,570    $ (818)  

 

 COM DEV International Ltd. 
 Consolidated Statements of Changes in Equity 
 (Canadian dollars in thousands) 
 Unaudited 
                             
                             
For the six months ended April 30, 2012 Total   Deficit   Accumulated Other Comprehensive Loss   Share Capital   Treasury Stock   Non-controlling Interest   Contributed Surplus
                             
Balance, October 31, 2011  $ 168,293    $ (195,782)    $ (138)    $ 345,666    $ -    $ 8,977    $ 9,570
                             
Comprehensive income 7,570   8,859   (476)   -   -   (813)   -
                             
Common stock issued -   -   -   196       -   (196)
Expense recognized for ESOP awards 119   -   -   -       -   119
Treasury stock (355)   -   -   -   (355)   -   -
Expense recognized for stock-based compensation and long-term incentive plans 914   -   -   -       -   914
Settlement of long-term incentive plans (881)   -   -   -       -   (881)
Balance, April 30, 2012  $ 175,660    $ (186,923)    $ (614)    $ 345,862    $ (355)    $ 8,164    $ 9,526
                             
                             
For the six months ended April 30, 2011                          
                             
Balance, October 31, 2010  $ 154,805    $ (207,026)    $ -    $ 346,068    $ -    $ 8,328    $ 7,435
                             
Comprehensive income (818)   1,371   (1,222)   -   -   (967)   -
                             
Common stock issued 514   -   -   871   -   -   (357)
Expense recognized for ESOP awards 113   -   -   -   -   -   113
Non-controlling interest investment  2,620   -   -   -   -   2,700   (80)
Expense recognized for stock-based compensation and long-term incentive plans 664   -   -   -   -   -   664
Balance, April 30, 2011  $ 157,898    $ (205,655)    $ (1,222)    $ 346,939    $ -    $ 10,061    $ 7,775

 

SOURCE Com Dev International Ltd.

For further information:

Gary Calhoun
Chief Financial Officer
Tel:  (519) 622-2300 ext. 2826
gary.calhoun@comdev.ca

Jeff Codispodi
The Equicom Group
Tel: (416) 815-0700 ext. 261
jcodispodi@equicomgroup.com

Profil de l'entreprise

Com Dev International Ltd.

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