MDA reports full year and fourth quarter 2010 results

RICHMOND, BC, Feb. 28 /CNW/ - MacDonald, Dettwiler and Associates Ltd. (TSX: MDA), a provider of essential information solutions, today reported financial results for the full year and fourth quarter ended December 31, 2010.

The Company continued to achieve solid results. Total operating earnings(1) for the year increased to $148 million ($3.61 per share) from $107 million ($2.64 per share) for the prior year.

On January 4, 2011, the Company completed the sale of its property information business. Results for the property information business have been reclassified as discontinued operations for all periods presented.

Financial Highlights

    <<
    -------------------------------------------------------------------------
    ($ millions, except earnings per
     diluted common share amounts)     Q4-2010   Q4-2009 Year-2010 Year-2009
    -------------------------------------------------------------------------
    Total
    -----
     (from continuing and
     discontinued operations)
    Revenues                             299.3     237.5   1,066.6   1,000.9
    Operating earnings(1)                 44.9      26.9     147.6     107.1
    Operating earnings per share(1),
     diluted                              1.09      0.66      3.61      2.64
    Net earnings (loss)                  (54.2)     30.2      40.7     108.4
    Net earnings (loss) per share,
     diluted                             (1.32)     0.74      0.99      2.67

    From continuing operations
    --------------------------
    Revenues                             209.2     129.1     689.0     518.4
    Operating earnings(1)                 31.2      19.1      97.0      67.2
    Operating earnings per share(1),
     diluted                              0.76      0.47      2.37      1.65
    Net earnings                           5.9      21.5      63.0      69.9
    Net earnings per share, diluted       0.14      0.53      1.54      1.72

    From discontinued operations
    ----------------------------
    Revenues                              90.1     108.4     377.6     482.5
    Operating earnings(1)                 13.7       7.8      50.6      39.9
    Operating earnings per share(1),
     diluted                              0.33      0.19      1.24      0.98
    Net earnings (loss)                  (60.1)      8.6     (22.3)     38.5
    Net earnings (loss) per share,
     diluted                             (1.46)     0.21     (0.54)     0.95

    Weighted average number of common
     shares outstanding:
    (millions)
      Basic                               41.0      40.5      40.8      40.5
      Diluted                             41.1      40.8      40.9      40.7
    -------------------------------------------------------------------------
    (1) See section "Non-GAAP Financial Measures" in this earnings release.
    >>

The Company's continuing operations achieved strong results for the full year. Revenues grew 33% to $689 million and operating earnings, net of taxes, increased 44% to $97 million ($2.37 per share) compared to last year. Net earnings were impacted by the recent enactment of Canadian tax laws regarding stock-based compensation, which resulted in the Company foregoing related tax deductions of $13 million, as well as the variability of stock-based compensation, mark-to-market adjustments and other items affecting comparability. Consequently, net earnings per share from continuing operations were $1.54 for the year compared to $1.72 for 2009.

Order backlog from continuing operations at December 31, 2010 was $998 million (September 30, 2010 - $1,103 million).

The Company had accumulated foreign currency translation losses on its investment in the property information business due to the appreciation of the Canadian dollar relative to the U.S. dollar and British pound since the dates of when each of the businesses was acquired. With the sale, the Company was required to include the cumulative translation losses in the carrying value of the net assets of discontinued operations when impairment tests were performed at year-end, resulting in an impairment charge of $2.18 per share for the write-down of goodwill and intangible assets. As a result, total net earnings per share were $0.99 for the year.

MDA's audited consolidated financial statements and management's discussion and analysis for the year ended December 31, 2010 are available at: http://www.mdacorporation.com/corporate/investor/financial_reports.cfm

About MDA

MDA provides advanced information solutions that capture and process vast amounts of data, produce essential information, and improve the decision making and operational performance of business and government organizations worldwide.

Focused on markets and customers with strong repeat business potential, MDA delivers a broad spectrum of information solutions, ranging from complex operational systems, to tailored information services, to electronic information products.

The Company's common shares trade on the Toronto Stock Exchange under the symbol TSX:MDA.

Investor/Analyst Conference Call Today

MDA President and CEO Daniel Friedmann and Executive Vice President and CFO Anil Wirasekara will be available on a Conference Call today, February 28, 2011 at 2:30 p.m. Pacific (5:30 p.m. Eastern) to explain the financial results of the Company and to answer questions.

A FINANCIAL SUMMARY presentation will be discussed at the conference call; it can be viewed by clicking on the box labeled "FINANCIAL SUMMARY" using the following link: http://www.mdacorporation.com/corporate/investor/

    <<
    To participate, dial 1-888-231-8191 in Canada or the United States
    International: 1-647-427-7450
    >>

The Conference Call will also be Webcast live and archived at: http://www.mdacorporation.com/investor/events.cfm

Telephone replay will be available until 11:59 p.m. Eastern Time (8:59 p.m. Pacific Time) March 7, 2011 at the following numbers:

    <<
    Toll free - International 1-800-642-1687
    Toronto: 1-416-849-0833
    Pass Code: 28390074
    >>

Related Websites:

www.mdacorporation.com

Non-GAAP Financial Measures

In addition to results reported in accordance with Canadian GAAP, the Company discloses operating earnings as a supplemental indicator of its financial performance. Operating earnings does not have any standardized meaning prescribed by Canadian GAAP and therefore may not be comparable to similar measures presented by other companies. Readers are cautioned not to view this non-GAAP financial measure as an alternative to financial measures calculated in accordance with Canadian GAAP.

Operating earnings is defined as net earnings adjusted for specified items affecting comparability, including stock-based compensation, mark-to-market adjustments on financial instruments not subject to hedge accounting, write-downs and other gains or losses. The Company uses operating earnings and operating earnings per share as a more meaningful way to compare financial results from one period to another.

    <<
    -------------------------------------------------------------------------
    ($ millions)                       Q4-2010   Q4-2009 Year-2010 Year-2009
    -------------------------------------------------------------------------
    Operating earnings from continuing
     operations                           31.2      19.1      97.0      67.2
    Items affecting comparability:
      Stock-based compensation           (16.9)    (11.6)    (28.1)    (19.3)
      Fair value adjustments on equity
       forward contracts                   5.9      14.7       8.9      23.3
      Fair value adjustments on foreign
       exchange forward contracts tied
       to certain projects not subject
       to hedge accounting                (6.4)        -      (9.9)        -
      Fair value adjustments on
       interest rate swap contracts not
       subject to hedge accounting           -       0.1         -       0.1
      Tax on items affecting
       comparability                       5.1      (0.8)      8.1      (1.4)
      Foregone tax deductions on
       stock-based compensation          (13.0)        -     (13.0)        -
    -------------------------------------------------------------------------
    Net earnings from continuing
     operations                            5.9      21.5      63.0      69.9
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    ($ millions)                       Q4-2010   Q4-2009 Year-2010 Year-2009
    -------------------------------------------------------------------------
    Operating earnings from
     discontinued operations              13.7       7.8      50.6      39.9

    Items affecting comparability:
      Stock-based compensation            (3.2)     (2.9)     (5.8)     (5.0)
      Fair value adjustments on equity
       forward contracts                   1.1       3.8       1.9       6.2
      Impairment of goodwill and
       intangible assets                (123.8)        -    (123.8)        -
      Foreign exchange gain (loss) on
       translation of intercompany
       balances                           (0.9)        -       6.5         -
      Restructuring expense                  -         -      (2.9)     (3.5)
      Fair value adjustments on
       interest rate swap contracts not
       subject to hedge accounting           -       0.2         -       0.2
      Tax on items affecting
       comparability                      37.4      (0.3)     35.6       0.7
      Non-recurring tax adjustment
       related to disposition             15.6         -      15.6         -
    -------------------------------------------------------------------------
    Net earnings (loss) from
     discontinued operations             (60.1)      8.6     (22.3)     38.5
    -------------------------------------------------------------------------
    >>

Forward-Looking Statements

This earnings release and the associated conference call and webcast, which includes a business update, full year and fourth quarter 2010 results, and question and answer session, contain certain forward-looking statements and information, which reflect the current view of MacDonald, Dettwiler and Associates Ltd. (the "Company" or "MDA") with respect to future events and financial performance. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may", "will", "expect", "intend", "anticipate", "plan", "foresee", "believe" or "continue" or the negatives of such terms or variations of them or similar terminology. Any such forward-looking statements are based on MDA's current expectations, estimates, projections and assumptions made in light of its experience and perception of historical trends. Any such forward-looking statements are subject to risks and uncertainties and MDA's actual results of operations could differ materially from historical results or current expectations. The risks that could cause actual results to differ from current expectations include: changes in government priorities, funding levels, contracts and regulations; failure of third parties and subcontractors to complete contracts for which the Company is the prime contractor; risks of performance on firm fixed price construction contracts; changes in estimates of total revenues and costs on contracts; potential for product liability, loss of the Company's reputation; failure of systems to meet performance requirements; failure of the Company to manage its acquisitions and indemnities and related risks on divestitures; satellite failure; dependency on electronic systems including data corruption; detrimental reliance on third parties for data; failure to recruit required management and employees and potential for work stoppages; failure to anticipate changes in technology, technical standards and offerings or comply with the requisite standards; failure to maintain technological advances and market positions; significant competition; infringement of the intellectual property rights of others through licensed software or otherwise; inadequate protection of the Company's intellectual property rights; exposure to foreign currency fluctuations; changes in economic and political conditions; inability of suppliers or subcontractors to effect technology transfer; failure to maintain business alliances; uncertainty in financing arrangements; failure of counterparties in financing arrangements and financial derivative contracts; wrongful call on letters of credit and performance bonds; and insufficient insurance against material claims or losses.

For additional information with respect to certain of these risks or factors, reference should be made to MDA's most recent annual Management's Discussion and Analysis, Annual Information Form and other documents on file with the Canadian securities regulatory authorities, available on SEDAR, www.sedar.com or www.mdacorporation.com. The forward-looking statements and information contained in this earnings release and the associated conference call and webcast represent MDA's views only as of today's date. MDA disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, other than as required by law, rule or regulation. You should not place undue reliance on forward-looking statements.

The Toronto Stock Exchange has neither approved nor disapproved the form or content of this release.

SOURCE MacDonald, Dettwiler and Associates Ltd.

For further information: Wendy Keyzer, MDA External Relations, (604) 231-2743, wendy@mdacorporation.com


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