COM DEV Announces Fourth Quarter and Year End Fiscal 2009 Results

CAMBRIDGE, ON, Jan. 11 /CNW/ - COM DEV International Ltd. (TSX:CDV) today announced fourth quarter and year end financial results for the three- and twelve-month periods ended October 31, 2009. All amounts are stated in Canadian dollars unless otherwise noted.

    
    Fiscal Year 2009 Highlights

    -   Revenue was $240.4 million, a 14% increase over the fiscal 2008 total
        of $210.3 million.
    -   Gross margin was 27%, compared to 26% in 2008.
    -   Net income was $15.3 million, or $0.21 per share, compared to a net
        income of $12.4 million or $0.18 per share the previous year.
    -   New orders totaled $249 million in the fiscal year, compared to
        $230 million in 2008.
    -   COM DEV established subsidiary exactEarth(TM) Ltd to commercialize
        space-based AIS and other data services.

    Fourth Quarter Highlights

    -   Q4 2009 revenue was $58.3 million, compared to $59.8 million recorded
        a year earlier.
    -   Gross margin was 25%, compared to 29% in the fourth quarter of 2008.
    -   Net income was $0.9 million, or $0.01 per share, compared to
        $4.8 million or $0.07 per share in Q4 2008.
    -   New orders won in the fourth quarter totaled $67 million, compared to
        $60 million a year earlier and $45 million in the third quarter of
        fiscal 2009.
    -   Backlog at October 31, 2009 was $163 million, compared to
        $156 million at the end of Q3 2009.
    

"We had a successful year overall in 2009, despite a weaker than expected finish in the fourth quarter," said John Keating, CEO of COM DEV. "We improved results in every major financial category, including orders, revenue, gross margin, and profitability, even as we continued to invest heavily in new growth initiatives. I believe some of these initiatives, along with a strong backlog and healthy sales pipeline, will contribute to our continued growth in 2010. We continue to expect revenue to increase by at least 10% on the year."

Financial Review

Fiscal 2009 revenues of $240.4 million increased by $30.1 million or 14% compared to the previous year. Revenues grew in all three market segments during the year, with a revenue split of 58% commercial, 26% civil and 16% military, compared to a 60/25/15 split in fiscal 2008. The growth was attributable to the high level of backlog at the start of 2009, strong order bookings and a significant revenue contribution from COM DEV USA. Management continues to anticipate full year revenue growth of at least 10% in fiscal 2010.

COM DEV received new orders totaling $249 million during the year, of which 55% were commercial, 22% were civil, and 23% were military. In fiscal 2008 the Company booked $230 million of new orders, with a commercial/civil/military split of 50/36/14. Order backlog at year-end was $163 million, up moderately from $156 million on July 31, 2009, and from $158 million at the end of fiscal 2008. Backlog was split between the Company's commercial, civil and military sectors at a ratio of 43%, 36% and 20% respectively, compared to 46%, 35% and 19% three months earlier. The Company expects to convert approximately 89% of the total backlog into revenue during fiscal 2010.

Gross margin was $64.9 million in 2009, representing 27% of revenues, compared to $54.1 million or 26% of revenues in 2008. Improved margins resulted from higher production throughput during the year, partially offset by disappointing performance on two domestic government programs.

Total research and development spending increased less than 1% to $17.5 million in 2009, and as a percentage of revenue fell to 7.3% from 8.3% a year earlier. External R&D funding fell by 50% from 2008 levels due mainly to a drop off of funding on a domestic government R&D program. As a result, net R&D spending increased $4.0 million to $13.6 million. Management expects net R&D spending to decrease in fiscal 2010.

Selling, general and administrative expense increased by $3.5 million to $33.1 million in 2009, while as a percentage of total revenue, SG&A remained consistent at 14%. The increase in costs is attributable to start-up activities in the exactEarth subsidiary, SG&A expenses at the El Segundo facility, and selling costs that were $1.2 million higher during the year as a result of the high level of bidding activity.

Fiscal 2009 net income of $15.3 million increased by $2.9 million or 24% compared to 2008 net income of $12.4 million.

COM DEV ended the year with $21.4 million of cash and equivalents, compared to $16.1 million at October 31, 2008. Operating activities generated $10.1 million of cash in 2009. Financing activities generated $14.8 million of cash, as debt repayment was more than offset by $21.7 million of proceeds from a share offering completed in the second quarter. The Company used $21.2 million of cash for investing activities during the year, including the purchase of a 30,000 square foot building in Cambridge, and continued development of key technology needed in the Company's Mission Development Group (MDG) and in its exactEarth subsidiary.

COM DEV had outstanding debt of $20.0 million at year end including the current portion. During the year, the Company increased its available line of credit to a maximum of $32 million from $27 million. At October 31, 2009, this facility was not drawn upon.

The Company's basic share count averaged 73,551,227 (fully diluted: 73,604,941) in fiscal 2009, and stood at 76,100,289 on October 31, 2009.

A complete set of audited financial statements and management's discussion and analysis for the quarter and year ended October 31, 2009, have been filed on SEDAR at www.sedar.com.

Change to Board of Directors

COM DEV also announced that Keith Ainsworth has resigned from the Company's Board of Directors.

"On behalf of the board and the entire company, I would like to thank Keith for his decades of contributions to COM DEV," said Terry Reidel, Chairman of the Board of Directors. "Keith joined the company in 1975 as an engineer and rose through the ranks to ultimately serve as CEO and Chairman. His many contributions are highly appreciated."

Conference Call

A conference call will be held Monday, January 11, 2010 at 5:00 pm EST 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)

    For the three months ended October 31              2009             2008
    -------------------------------------------------------------------------

      Revenue                                    $   58,344       $   59,820
      Cost of revenue                                43,942           42,674
                                                 -----------      -----------
      Gross margin                                   14,402           17,146
                                                 -----------      -----------
      Research and development costs                  3,573            5,398
      Research and development recovery                 971            2,910
                                                 -----------      -----------
      Net research and development                    2,602            2,488
      Selling and general expenses                    9,071            7,645
                                                 -----------      -----------
      Operating income                                2,729            7,013
      Interest expense                                  167              482
      Foreign exchange loss                           1,579            1,497
      Other expense                                     138              269
                                                 -----------      -----------
    Income before non-controlling interest              845            4,765
      Non-controlling interest                          (13)             (20)
                                                 -----------      -----------
    Net income                                   $      858       $    4,785
                                                 -----------      -----------
                                                 -----------      -----------

    Earnings per share
    Basic and diluted earnings per share         $     0.01       $     0.07




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

    For the year ended October 31                      2009             2008
    -------------------------------------------------------------------------
      Revenue                                    $  240,410       $  210,348
      Cost of revenue                               175,553          156,227
                                                 -----------      -----------
      Gross margin                                   64,857           54,121
                                                 -----------      -----------
      Research and development costs                 17,475           17,381
      Research and development recovery               3,914            7,832
                                                 -----------      -----------
      Net research and development                   13,561            9,549
      Selling and general expenses                   33,065           29,531
                                                 -----------      -----------
      Operating income                               18,231           15,041
      Interest expense                                  533              845
      Foreign exchange loss                           2,002            1,375
      Other expense                                     428              455
                                                 -----------      -----------
    Income before non-controlling interest           15,268           12,366
      Non-controlling interest                          (38)             (13)
                                                 -----------      -----------
    Net income                                   $   15,306       $   12,379
                                                 -----------      -----------
                                                 -----------      -----------

    Earnings per share
    Basic and diluted earnings per share
     from continuing operations                       $0.21            $0.18
    Basic weighted average number of shares      73,551,227       68,057,380
    Diluted weighted average number of shares    73,604,941       68,332,462



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

                                                      As at            As at
                                                 October 31,      October 31,
                                                       2009             2008
    -------------------------------------------------------------------------
    Assets
      Current
        Cash and cash equivalents                $   21,404       $   16,102
        Accounts receivable                          53,674           41,085
        Inventory                                    51,114           45,941
        Prepaids and other                            3,112            1,772
        Income taxes recoverable                      4,615            2,819
        Future income tax assets - current            6,192            3,957
                                                 -----------      -----------
                                                    140,111          111,676
      Property, plant and equipment                  69,537           66,863
      Intangible assets                              21,459           18,510
      Goodwill                                        2,388            2,522
      Future income tax assets - long term            1,723            3,958
                                                 -----------      -----------
      Total assets                               $  235,218       $  203,529
                                                 -----------      -----------
                                                 -----------      -----------

    Liabilities
      Current
        Accounts payable and accrued
         liabilities                             $   32,939       $   35,467
        Deferred revenue                             22,510           14,828
        Current portion of loans payable              6,587            6,203
                                                 -----------      -----------
                                                     62,036           56,498
                                                 -----------      -----------

      Long term
        Loans payable                                13,401           23,223
        Employee future benefits                      1,872            2,224
                                                 -----------      -----------
                                                     15,273           25,447
                                                 -----------      -----------

      Total liabilities                              77,309           81,945
                                                 -----------      -----------


    Non-controlling interest                            486              524
                                                 -----------      -----------

    Shareholders' equity
      Share capital                                 345,885          323,975
      Contributed surplus                             2,804            1,879
      Deficit                                      (188,759)        (204,065)
      Accumulated other comprehensive income         (2,507)            (729)
                                                 -----------      -----------
      Total shareholders' equity                    157,423          121,060
                                                 -----------      -----------

    Total liabilities and shareholders' equity   $  235,218       $  203,529
                                                 -----------      -----------
                                                 -----------      -----------



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

    For the three months ended October 31              2009             2008
    -------------------------------------------------------------------------

    Operating activities
      Net income                                 $      858       $    4,785
      Amortization                                    2,800            2,862
      Loss on disposal of assets                         41              119
      Defined benefit expenses                          398              202
      Stock compensation expense                        241              207
      Employee stock option plan awards                  48               45
      Unrealized foreign exchange loss on long
       term debt                                          -              686
      Unrealized foreign exchange (gain) loss
       on derivatives                                 1,843            3,128
      Non-controlling interest                          (13)             (20)
                                                 -----------      -----------
                                                      6,216           12,014
      Net change in non-cash working capital
       items                                          6,598             (472)
                                                 -----------      -----------
    Operating activities                             12,814           11,541
                                                 -----------      -----------

    Financing activities
      Shares issued                                     (61)               -
      Repayment of long term debt                    (1,597)          (1,309)
                                                 -----------      -----------
    Financing activities                             (1,658)          (1,309)
                                                 -----------      -----------

    Investing activities
      Acquisition of capital assets                  (7,309)            (501)
      Proceeds on disposal of property, plant,
       and equipment                                     35                -
      Acquisition of intangible assets               (3,595)          (3,502)
      Business acquisition                                -              (40)
      Employee future benefits contributions           (584)            (264)
                                                 -----------      -----------
    Investing activities                            (11,453)          (4,307)
                                                 -----------      -----------
    Effect of exchange rate changes on cash           1,899             (870)
                                                 -----------      -----------

    Net increase in cash from continuing
     operations                                       1,602            5,055
    Net cash used in discontinued operations              -              (80)
                                                 -----------      -----------
    Net increase in cash                              1,602            4,975
    Cash and cash equivalents, beginning of
     period                                          19,802           11,127
                                                 -----------      -----------
    Cash and cash equivalents, end of period     $   21,404       $   16,102
                                                 -----------      -----------
                                                 -----------      -----------

    Interest paid                                $      186       $      376
                                                 -----------      -----------
                                                 -----------      -----------


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

    For the year ended October 31                      2009             2008
    -------------------------------------------------------------------------

    Operating activities
      Net income                                 $   15,306       $   12,379
      Amortization                                   11,300            9,891
      Gain on disposal of assets                          -              (92)
      Defined benefit expenses                          398              202
      Stock compensation expense                        898              812
      Employee stock option plan awards                 185              179
      Unrealized foreign exchange loss on long
       term debt                                          -            1,528
      Unrealized foreign exchange (gain) loss
       on derivatives                                (3,639)           5,998
      Non-controlling interest                          (38)             (13)
                                                 -----------      -----------
                                                     24,410           30,884
      Net change in non-cash working capital
       items                                        (14,339)         (32,144)
                                                 -----------      -----------
    Operating activities                             10,071           (1,260)
                                                 -----------      -----------

    Financing activities
      Shares issued                                  21,752                2
      Advance of long term debt                           -           18,174
      Repayment of long term debt                    (6,923)          (3,320)
                                                 -----------      -----------
    Financing activities                             14,829           14,856
                                                 -----------      -----------

    Investing activities
      Acquisition of capital assets                 (13,016)          (9,610)
      Proceeds on disposal of property, plant,
       and equipment                                     79              213
      Acquisition of intangible assets               (7,548)          (4,494)
      Business acquisition                             (140)         (13,525)
      Employee future benefits contributions           (584)            (264)
                                                 -----------      -----------
    Investing activities                            (21,209)         (27,680)
                                                 -----------      -----------
    Effect of exchange rate changes on cash           1,611           (1,176)
                                                 -----------      -----------

    Net increase (decrease) in cash from
     continuing operations                            5,302          (15,260)
    Net cash used in discontinued operations              -             (351)
                                                 -----------      -----------
    Net increase (decrease) in cash                   5,302          (15,611)
    Cash and cash equivalents, beginning of year     16,102           31,713
                                                 -----------      -----------
    Cash and cash equivalents, end of year       $   21,404       $   16,102
                                                 -----------      -----------
                                                 -----------      -----------

    Interest paid                                $      965       $    1,456
                                                 -----------      -----------
                                                 -----------      -----------
    

SOURCE COM DEV International Ltd.

For further information: 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

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