COM DEV Announces First Quarter FY2007 Results



    Company achieves 21% revenue growth in seasonally slow quarter

    CAMBRIDGE, ON, March 15 /CNW/ - COM DEV International Ltd. (TSX:CDV)
today announced its first quarter financial results for the three-month period
ended January 31, 2007.

    
    First Quarter Highlights

    -   Revenue was $39.5 million, an increase of 21% over the $32.7 million
        recorded in Q1 2006.
    -   Gross margin was 29%, compared to 30% in the first quarter of 2006.
    -   Net income was $5.6 million, or $0.08 per share, compared to
        $4.2 million or $0.07 per share for the prior year period.
    -   New orders won in the first quarter totaled $22 million, compared to
        $28 million a year earlier and $45 million in the fourth quarter of
        fiscal 2006.
    -   Backlog at quarter-end was $89 million, compared to $108 million at
        2006 year-end.
    -   The Company announced expansion plans for its Cambridge, Ontario
        production facility to accommodate an expected increase in the volume
        of business.
    -   The Company continued to build its capability in the U.S., targeting
        the civil and military markets, in addition to evaluating acquisition
        candidates.
    

    "We are pleased to report very healthy growth rates and margins in the
shortest, and traditionally weakest quarter of our fiscal year," said John
Keating, CEO of COM DEV. "All three market segments experienced double digit
growth, with the outlook for the commercial space sector looking particularly
strong as operators continue to order satellites to meet growing demand. The
backlog decline this quarter is of no significant concern to us. We expect to
see lumpiness in our order intake, especially from the civil and military
markets. In fact, on the basis of current bidding activity we are anticipating
a significant increase in new orders in the second quarter."

    Financial Review

    COM DEV's fiscal 2007 first quarter revenues of $39.5 million represented
an increase of $6.8 million or 21% over the previous year. This was the
largest revenue figure the Company has ever reported in a fiscal first
quarter. The revenue split between the three segments was 47% commercial, 28%
civil and 25% military. Management continues to expect revenue growth of at
least 10% in fiscal 2007.
    The Company received new orders totaling $22 million during the quarter,
of which 49% were commercial, 21% were civil, and 30% were military. With
revenues for the period exceeding new orders, backlog at quarter-end declined
to $89 million from $108 million three months earlier. Backlog was split
between the Company's commercial, civil and military sectors at a ratio of
30%, 36% and 34% respectively, compared to 31%, 47% and 22% at the end of
fiscal 2006.
    On the basis of current bidding and negotiation activity, COM DEV's
management anticipates that new order levels in the second quarter of fiscal
2007 will be well above that seen in the first quarter. In particular, a
follow-on order opportunity in excess of $30 million for a major civil space
project is in the final approval stage. While there is no guarantee that COM
DEV will receive this order, or that the contract will be awarded during the
second quarter of fiscal 2007, management is optimistic that the approval will
be completed in the near term.
    First quarter gross profit was $11.3 million, compared to $9.8 million in
Q1 2006. The gross margin of 29%, while on the high end of management's target
range of mid to high 20's, is slightly down from the exceptionally high gross
margin of 30% achieved in the first quarter of 2006. As disclosed a year ago,
Q1 2006 margins benefited from several factors including the awarding of
follow-on work in the defense sector. Gross margins in the first quarter of
2007 benefited from a strengthening U.S. dollar.
    COM DEV experienced operating leverage in the quarter as overall
operating expenses grew at a slower rate than revenues. Net research and
development expense increased by 11% to $1.6 million, and selling, general and
administrative expense also grew by 11% to $4.0 million compared to
$3.6 million a year earlier. Net income grew by 34% to $5.6 million in Q1
2007, while earnings per share increased by 1 cent over the previous year to
$0.08. During that time the Company's average basic share count increased from
59,912,161 to 67,375,654 shares.
    COM DEV ended the first quarter of 2007 with $15.2 million of cash and
equivalents compared to $25.7 million at October 31, 2006. Cash used in
operating activities was $10.5 million, compared to $8.5 million of cash
generated from operating activities in Q1 2006. The cash use has funded the
Company's growth, including a $9 million investment in inventory, all of which
is earmarked for specific customer projects. The Company's approved credit
facilities totaling $45 million remain undrawn.

    Conference Call

    A conference call will be held today Thursday, March 15, 2007 at 5:30 pm
EDT to discuss this announcement. To access the live webcast, please visit the
Company's website at www.comdev.ca 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.comdev.ca) based in Cambridge, Ontario,
is the largest Canadian-based designer and manufacturer of space hardware
subsystems.
    COM DEV, with facilities in Canada and the United Kingdom, manufactures
advanced products and subsystems that are sold to major satellite prime
contractors for use in communications, space science, remote sensing and
military satellites.

    COM DEV and COM DEV Space are registered trademarks of COM DEV
    International Ltd. This news release may contain certain forward-looking
    statements that involve risks and uncertainties. Actual results may
    differ materially from results indicated in any forward-looking
    statements. The company cautions that, among other things, in view of the
    rapid changes in communications markets and technologies, and other risks
    including the cost and market acceptance of the company's new products,
    the level of individual customer procurements and competitive product
    offerings and pricing, and general economic circumstances, the company's
    business prospects may be materially different from forward-looking
    statements made by the company.



    
                         COM DEV International Ltd.
                         Consolidated Balance Sheets
                       (Canadian dollars in thousands)
                                  Unaudited
                                                        As at          As at
                                                   January 31,    October 31,
                                                         2007           2006
    -------------------------------------------------------------------------
    Assets
      Current
        Cash and cash equivalents                  $   15,203     $   25,711
        Accounts receivable                            37,654         39,372
        Inventory                                      33,396         24,302
        Prepaids and other                              1,926          2,016
        Income taxes recoverable                          383            383
                                                   -----------    -----------
                                                       88,562         91,784
      Capital assets                                   36,223         36,950
      Intangible assets                                 4,147          4,165
                                                   -----------    -----------
      Total assets                                 $  128,932     $  132,899
                                                   -----------    -----------
                                                   -----------    -----------
    Liabilities
      Current
        Accounts payable and accrued
         liabilities                               $   16,752     $   24,145
        Deferred revenue                                9,456         13,004
        Current portion of loans payable                  169            265
        Current liabilities - discontinued
         operations                                     1,626          1,721
                                                   -----------    -----------
                                                       28,003         39,135
                                                   -----------    -----------
      Long term
        Loans payable                                     266            444
        Long term liabilities - discontinued
         operations                                        35             36
                                                   -----------    -----------
                                                          301            480
                                                   -----------    -----------

      Total liabilities                                28,304         39,615
                                                   -----------    -----------

    Non-controlling interest                              513            477
                                                   -----------    -----------
    Shareholders' equity
      Share capital                                   321,550        320,948
      Contributed surplus                                 783            580
      Deficit                                        (221,704)      (227,436)
      Accumulated other comprehensive income             (514)        (1,285)
                                                   -----------    -----------
      Total shareholders' equity                      100,115         92,807
                                                   -----------    -----------

    Total liabilities and shareholders' equity     $  128,932     $  132,899
                                                   -----------    -----------
                                                   -----------    -----------



                         COM DEV International Ltd.
                    Consolidated Statements of Operations
        (Canadian dollars in thousands, except for per share figures)
                                  Unaudited

    For the three months ended January 31                2007           2006
    -------------------------------------------------------------------------

      Revenue                                      $   39,454     $   32,707
      Cost of revenue                                  28,171         22,902
                                                   -----------    -----------
      Gross margin                                     11,283          9,805
                                                   -----------    -----------
      Research and development costs                    2,526          2,206
      Research and development recovery                   954            784
                                                   -----------    -----------
      Net research and development                      1,572          1,422
      Selling and general expenses                      4,096          3,582
                                                   -----------    -----------
      Operating income                                  5,615          4,801
      Interest (income) expense                          (218)           555
      Foreign exchange loss (gain)                        123           (288)
      Other expense                                        55            319
                                                   -----------    -----------
    Income before non-controlling interest              5,655          4,215
      Non-controlling interest                             36             27
                                                   -----------    -----------
    Net income                                     $    5,619     $    4,188
                                                   -----------    -----------
                                                   -----------    -----------
    Earnings per share
    Basic and diluted earnings per share                $0.08          $0.07



                         COM DEV International Ltd.
                    Consolidated Statements of Cash Flows
                       (Canadian dollars in thousands)
                                  Unaudited

    For the three months ended January 31                2007           2006
    -------------------------------------------------------------------------

    Cash flows (used in) from operating
     activities
      Net income from continuing operations        $    5,619    $     4,188
      Amortization                                      1,796          1,684
      Loss on disposal of assets                            -            (26)
      Convertible debenture - accretion and
       interest                                             -            187
      Stock compensation expense                          259             78
      Non-controlling interest                             36             27
                                                   -----------    -----------
                                                        7,710          6,138
      Net change in non-cash working capital
       items                                          (18,224)         2,391
                                                   -----------    -----------
    Cash flows (used in) from operating
     activities                                       (10,514)         8,529
                                                   -----------    -----------
    Cash flows from (used in) financing
     activities
      Shares issued                                       546              -
      Repayment of long term debt                        (162)          (178)
                                                   -----------    -----------
    Cash flows from (used in) financing
     activities                                           384           (178)
                                                   -----------    -----------
    Cash flows (used in) from investing
     activities
      Acquisition of capital assets                      (705)          (478)
      Proceeds on disposal of capital assets                -             27
      Acquisition of intangible assets                    (67)           (68)
      Business acquisition                                  -         (5,261)
                                                   -----------    -----------
    Cash flows used in investing activities              (772)        (5,780)
                                                   -----------    -----------
    Effect of exchange rate changes on cash               490           (130)
                                                   -----------    -----------
    Net (decrease) increase in cash for
     continuing operations                            (10,412)         2,441
    Net cash used in discontinued operations              (96)          (114)
                                                   -----------    -----------
    Net (decrease) increase in cash                   (10,508)         2,327
    Cash and cash equivalents, beginning
     of period                                         25,711          6,179
                                                   -----------    -----------
    Cash and cash equivalents, end of period       $   15,203     $    8,506
                                                   -----------    -----------
                                                   -----------    -----------

    Interest paid                                  $       10     $      712
                                                   -----------    -----------
                                                   -----------    -----------
    

    %SEDAR: 00003673E




For further information:

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

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