COM DEV Announces First Quarter FY2008 Results



    CAMBRIDGE, ON, March 6 /CNW/ - COM DEV International Ltd. (TSX:CDV) today
announced its first quarter financial results for the three-month period ended
January 31, 2008. All amounts are stated in Canadian dollars unless otherwise
noted.

    
    First Quarter Highlights

    -  Revenue was $44.9 million, an increase of 14% over the $39.5 million
       recorded in Q1 2007.

    -  Gross margin was 22%, compared to 29% in the first quarter of 2007.

    -  Net income was $1.4 million, or $0.02 per share, compared to
       $5.6 million or $0.08 per share for the prior year period.

    -  New orders won in the first quarter totaled $33 million, compared to
       $22 million a year earlier and $55 million in the fourth quarter of
       fiscal 2007.

    -  Backlog at quarter-end was $133 million, compared to $146 million at
       2007 year-end.

    -  Subsequent to quarter-end COM DEV acquired the Passive Microwave
       Devices product line of L-3 Communications Electron Technologies Inc.
       for US$12.2 million.
    

    "For the third consecutive quarter, we established a new record for
revenues recorded in a single quarter by COM DEV Space. The achievement is
especially meaningful for having occurred in what is traditionally the slowest
quarter of our fiscal year," said John Keating, CEO of COM DEV. "While our
profitability continues to be impacted by the start up costs of our U.S.
operations, and an unfavourable currency environment, we expect to overcome
both challenges this year, in part through ongoing strong growth. We remain
confident in our estimate of 10 to 15% revenue growth on the year."

    Financial Review

    COM DEV's fiscal 2008 first quarter revenues of $44.9 million represented
an increase of $5.4 million or 14% over the previous year. Historically, first
quarter revenues are the lowest of the year. In Q1 2008 the Company benefited
from high levels of backlog and more employees to address that workload. The
revenue split between the three segments was 64% commercial, 23% civil and 13%
military. Management continues to expect annual revenue growth of 10-15% in
fiscal 2008.
    New orders totaled $33 million during the quarter, of which 48% were
commercial, 48% were civil, and 4% were military. Backlog at quarter end was
$133 million, down sequentially for the first time in four quarters, but was
49% higher than the same quarter last year. Backlog was split between the
Company's commercial, civil and military sectors at a ratio of 53%, 37% and
10% respectively, compared to 57%, 30% and 13% at the end of fiscal 2007.
    First quarter gross profit was $10.1 million, compared to $11.3 million
in Q1 2007. The gross margin of 22%, while down from 29% a year earlier,
represented an improvement from the 11% margin experienced in the fourth
quarter of 2007, and was within management's guidance of the low 20% levels
for early fiscal 2008. The Company expects to see margins continue to move
towards its longer term margin guidance of mid to high twenty percent levels.
    Selling, general and administrative expenses were $6.1 million in the
first quarter, an increase of $2.0 million over the same period last year. The
increase was attributable to $1.1 million of expenses related to the start-up
of operations in California, and $0.8 million of costs associated with
activity related to the Board appointed Special Committee's review of historic
stock option granting practices.
    Net research and development expense of $2.0 million was 28% higher than
the Q1 2007 amount. Total R&D spending (before funding) of $2.8 million was
below the levels seen in recent quarters, but management expects R&D spending
to ramp up over the next three quarters, based on near and medium-term
opportunities for product development and customer expansions.
    Net income for the quarter was $1.3 million, down from $5.6 million in Q1
2007, while earnings per share were $0.02, down from $0.08 in Q1 2007.
    COM DEV ended the first quarter of 2008 with $14.3 million of cash and
equivalents compared to $31.7 million at October 31, 2007. Cash used in
operating activities was $13.3 million, compared to $10.5 million of cash
generated from operating activities in the previous quarter last year.
    The Company's basic share count averaged 68,037,092 (fully diluted:
68,160,789) in the first quarter of fiscal 2008, and stood at 68,037,418 on
January 31, 2008.

    Conference Call

    A conference call will be held today Thursday, March 6, 2008 at 5:30 pm
EST 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.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: the determinations made by the special committee
of COM DEV's board of directors which is charged with reviewing COM DEV's
historical stock option granting practices; the determinations made by outside
advisors, auditors and others with respect to this ongoing review;
unanticipated developments and delays encountered during this ongoing review;
developments relating to COM DEV's communication with the Ontario Securities
Commission during this ongoing review; additional corrections that may be
required based on factual findings and analysis obtained during this ongoing
review; legal and accounting developments regarding stock option grants and
interpretations of such guidance; 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.

    
                         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                 2008        2007
    -------------------------------------------------------------------------

      Revenue                                          $  44,880   $  39,454
      Cost of revenue                                     34,817      28,171
                                                      ----------- -----------
      Gross margin                                        10,063      11,283
                                                      ----------- -----------
      Research and development costs                       2,774       2,526
      Research and development recovery                      757         954
                                                      ----------- -----------
      Net research and development                         2,017       1,572
      Selling and general expenses                         6,112       4,096
                                                      ----------- -----------
      Operating income                                     1,934       5,615
      Interest income                                        (63)       (218)
      Foreign exchange loss                                  570         123
      Other expense                                           67          55
                                                      ----------- -----------
    Income before non-controlling interest and income
    taxes                                                  1,360       5,655
      Non-controlling interest                                15          36
      Income tax expense                                       -           -
                                                      ----------- -----------
    Net income                                         $   1,345   $   5,619
                                                      ----------- -----------
                                                      ----------- -----------

    Earnings per share
    Basic and diluted earnings per share               $    0.02   $    0.08



                         COM DEV International Ltd.
                         Consolidated Balance Sheets
                       (Canadian dollars in thousands)
                                  Unaudited

                                                         As at       As at
                                                      January 31, October 31,
                                                          2008        2007
    -------------------------------------------------------------------------
    Assets
      Current
        Cash and cash equivalents                      $  14,266   $  31,713
        Accounts receivable                               34,717      35,523
        Inventory                                         33,154      25,611
        Prepaids and other                                 2,831       4,864
        Income taxes recoverable                           1,499         956
        Future income tax assets - current                 3,958       3,957
                                                      ----------- -----------
                                                          90,425     102,624
    Capital assets                                        56,564      54,890
    Intangible assets                                      3,936       3,939
    Future income tax assets - long term                   3,958       3,958
                                                      ----------- -----------
    Total assets                                       $ 154,883   $ 165,411
                                                      ----------- -----------
                                                      ----------- -----------

    Liabilities
      Current
        Accounts payable and accrued liabilities       $  18,986   $  25,435
        Deferred revenue                                  17,545      23,204
        Current portion of loans payable                   1,846       1,720
        Current liabilities - discontinued operations        128         399
                                                      ----------- -----------
                                                          38,505      50,758
                                                      ----------- -----------

      Long term
        Loans payable                                      7,728       7,692
                                                      ----------- -----------
                                                           7,728       7,692
                                                      ----------- -----------

      Total liabilities                                   46,233      58,450
                                                      ----------- -----------


    Non-controlling interest                                 552         537
                                                      ----------- -----------

    Shareholders' equity
      Share capital                                      323,864     323,862
      Contributed surplus                                  1,261         999
      Deficit                                           (215,099)   (216,444)
      Accumulated other comprehensive income              (1,928)     (1,993)
      Total shareholders' equity                         108,098     106,424
                                                      ----------- -----------

    Total liabilities and shareholders' equity         $ 154,883   $ 165,411
                                                      ----------- -----------
                                                      ----------- -----------



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

    For the three months ended January 31                 2008        2007
    -------------------------------------------------------------------------
    Cash flows used in operating activities
      Net income from continuing operations            $   1,346   $   5,619
      Amortization                                         1,919       1,796
      Stock compensation expense                             262         259
      Unrealized foreign exchange loss on long term
       debt                                                  562           -
      Non-controlling interest                                15          36
                                                      ----------- -----------
                                                           4,104       7,710
      Net change in non-cash working capital items       (17,356)    (18,224)
                                                      ----------- -----------
    Cash flows used in operating activities              (13,252)    (10,514)
                                                      ----------- -----------

    Cash flows (used in) from financing activities
      Shares issued                                            2         546
      Repayment of long term debt                           (400)       (162)
                                                      ----------- -----------
    Cash flows (used in) from financing activities          (398)        384
                                                      ----------- -----------

    Cash flows used in investing activities
      Acquisition of capital assets                       (3,472)       (705)
      Acquisition of intangible assets                      (109)        (67)
                                                      ----------- -----------
    Cash flows used in investing activities               (3,581)       (772)
                                                      ----------- -----------
    Effect of exchange rate changes on cash                   56         490
                                                      ----------- -----------

    Net decrease in cash from continuing operations      (17,175)    (10,412)
    Net cash used in discontinued operations                (271)        (96)
                                                      ----------- -----------
    Net decrease in cash                                 (17,446)    (10,508)
    Cash and cash equivalents, beginning of period        31,713      25,711
                                                      ----------- -----------
    Cash and cash equivalents, end of period           $  14,267   $  15,203
                                                      ----------- -----------
                                                      ----------- -----------

    Interest paid                                      $     218   $      10
                                                      ----------- -----------
                                                      ----------- -----------
    

    %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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