COM DEV Announces Third Quarter Fiscal 2009 Results



    CAMBRIDGE, ON, Sept. 3 /CNW/ - COM DEV International Ltd. (TSX:CDV) today
announced its third quarter financial results for the three-month period ended
July 31, 2009. All amounts are stated in Canadian dollars unless otherwise
noted.

    
    Third Quarter Highlights

    -   Revenue was $61.5 million, an increase of 19% over the $51.5 million
        recorded in the third quarter of 2008.

    -   Gross margin was 29%, compared to 26% in Q3 2008.

    -   Net income was $5.2 million, or $0.07 per share, compared to
        $4.3 million or $0.06 per share for the prior year period.

    -   New orders won in the third quarter totaled $45 million, compared to
        $95 million a year earlier and $50 million in the second quarter of
        fiscal 2009.

    -   Backlog at July 31, 2009 was $156 million, compared to $173 million
        three months earlier.

    -   During the quarter the Company established a subsidiary,
        exactEarth(TM) Ltd, to implement full commercialization of its
        space-based AIS technology.
    

    "Excellent operational performance in the third quarter allowed us to
deliver our best gross margin percentage in over two years, and our best ever
in dollar terms," said John Keating, CEO of COM DEV. "Our business development
team has been very busy pursuing new contracts as satellite order activity has
been very healthy. For fiscal 2009 we remain on track to achieve record orders
and revenue growth of at least 15%."

    Financial Review

    COM DEV's fiscal 2009 third quarter revenues of $61.5 million represented
an increase of $10.0 million or 19% over the third quarter of 2008. While
revenues declined by $2.6 million compared to the record level of Q2 2009, the
strengthening of the Canadian dollar versus the U.S. dollar during the third
quarter negatively impacted reported revenues by $3.5 million, and gross
margin by $2.5 million. The revenue split between the three market segments
was 52% commercial, 32% civil and 16% military, compared to a 59/26/15 split
in the third quarter of 2008. On a year-to-date basis, revenues of $182.1
million are 21% higher than revenues in the first nine months of fiscal 2008.
Management continues to anticipate full year revenue growth of at least 15%.
    COM DEV received new orders totaling $45 million during the quarter, of
which 60% were commercial, 23% were civil, and 17% were military. In Q3 2008
the Company booked $95 million of new orders, with a commercial/civil/military
split of 38/43/19.
    Order backlog at quarter-end was $156 million, compared to a backlog of
$173 million three months earlier, and $161 million one year ago. Backlog was
split between the Company's commercial, civil and military sectors at a ratio
of 46%, 35% and 19% respectively, compared to 45%, 40% and 15% at the end of
Q2 2009.
    Gross margin was $18.0 million in Q3 2009, representing 29% of revenues,
compared to $13.1 million or 26% of revenues in Q3 2008. Improved margins
reflect the positive impacts of a stronger U.S. dollar compared to a year
earlier, and higher volumes of work flowing through the organization during
the period.
    Net research and development expense in Q3 2009 was $3.6 million,
representing a $1.5 million increase from one year earlier, but a $0.9 million
decrease from Q2 2009 levels. Gross R&D spending of $4.5 million in the
quarter was consistent with $4.6 million in Q3 2008 and down from $5.5 million
in Q2 2009. The year-over-year increase in net R&D expense was due to a
reduction in outside funding to $0.9 million in the current quarter, compared
to $2.5 million a year earlier, and $1.0 million in Q2 2009.
    Selling, general and administrative expenses were $8.5 million in the
third quarter, compared to $6.5 million in Q3 2008. As a percentage of total
revenue, SG&A was 14%, compared to 13% a year earlier. The increase is due to
the incremental SG&A cost of the COM DEV USA operations, increased foreign
exchange rate impact on those U.S. costs, increased long-term incentive
compensation costs, higher selling and business development costs and the
increased costs of the exactEarth initiative.
    Net income for the quarter was $5.2 million, up from $4.3 million in Q3
2008, while earnings per share were $0.07, compared to $0.06 a year earlier.
Net income improved from $4.9 million in Q2 2009.
    COM DEV ended the quarter with $19.8 million of cash and equivalents,
compared to $31.9 million at April 30, 2009. During the third quarter the
Company used $6.2 million of cash for operating activities, $1.8 million for
financing activities, primarily for debt repayment, and $4.2 million for
investing activities, including the $2.2 million purchase of a 30,000 square
foot building in Cambridge, Ontario to provide office and lab space to the
Company's Missions Development Group and its exactEarth subsidiary.
    At July 31, 2009, the Company had outstanding debt of $21.5 million
including the current portion. Its operating line of credit, renegotiated
during the third quarter to a maximum of $32 million, was not drawn upon.
    COM DEV's basic share count averaged 76,100,289 (fully diluted:
76,185,520) in the third quarter, and stood at 76,100,289 on July 31, 2009.

    Conference Call

    A conference call will be held Thursday, September 3, 2009 at 5:00 pm EDT
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)
                                  Unaudited

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

      Revenue                                        $   61,451   $   51,483
      Cost of revenue                                    43,440       38,123
                                                    ------------ ------------
      Gross margin                                       18,011       13,360
                                                    ------------ ------------
      Research and development costs                      4,531        4,576
      Research and development recovery                     912        2,492
                                                    ------------ ------------
      Net research and development                        3,619        2,084
      Selling and general expenses                        8,519        6,541
                                                    ------------ ------------
      Operating income                                    5,873        4,735
      Interest expense                                       44          594
      Foreign exchange loss (gain)                          510         (148)
      Other expense                                          83           10
                                                    ------------ ------------
    Income before non-controlling interest                5,236        4,279
      Non-controlling interest                               (5)          (6)
                                                    ------------ ------------
    Net income                                       $    5,241   $    4,285
                                                    ------------ ------------
                                                    ------------ ------------

    Earnings per share
    Basic and diluted earnings per share             $     0.07   $     0.06



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

    For the nine months ended July 31                    2009         2008
    -------------------------------------------------------------------------

      Revenue                                        $  182,066   $  150,528
      Cost of revenue                                   131,611      113,553
                                                    ------------ ------------
      Gross margin                                       50,455       36,975
                                                    ------------ ------------
      Research and development costs                     13,902       11,983
      Research and development recovery                   2,943        4,922
                                                    ------------ ------------
      Net research and development                       10,959        7,061
      Selling and general expenses                       23,994       21,886
                                                    ------------ ------------
      Operating income                                   15,502        8,028
      Interest expense                                      366          363
      Foreign exchange loss (gain)                          423         (122)
      Other expense                                         290          186
                                                    ------------ ------------
    Income before non-controlling interest               14,423        7,601
      Non-controlling interest                              (25)           7
                                                    ------------ ------------
    Net income                                       $   14,448   $    7,594
                                                    ------------ ------------
                                                    ------------ ------------

    Earnings per share
    Basic and diluted earnings per share             $     0.20   $     0.11



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

                                                        As at       As at
                                                       July 31,   October 31,
                                                         2009        2008
    -------------------------------------------------------------------------

    Assets
      Current
        Cash and cash equivalents                    $   19,802   $   16,102
        Accounts receivable                              38,634       41,085
        Inventory                                        64,395       45,941
        Prepaids and other                                5,221        1,772
        Income taxes recoverable                          4,395        2,819
        Future income tax assets - current                3,957        3,957
                                                    ------------ ------------
                                                        136,404      111,676
      Property, plant and equipment                      66,346       70,748
      Intangible assets                                  16,071       14,625
      Goodwill                                            2,378        2,522
      Future income tax assets - long term                3,958        3,958
                                                    ------------ ------------
      Total assets                                   $  225,157   $  203,529
                                                    ------------ ------------
                                                    ------------ ------------

    Liabilities
      Current
        Accounts payable and accrued liabilities     $   29,897   $   35,467
        Deferred revenue                                 15,007       14,828
        Current portion of loans payable                  6,583        6,203
                                                    ------------ ------------
                                                         51,486       56,498
                                                    ------------ ------------

      Long term
        Loans payable                                    14,912       23,223
        Employee future benefits                          1,895        2,224
                                                    ------------ ------------
                                                         16,807       25,447
                                                    ------------ ------------

      Total liabilities                                  68,294       81,945
                                                    ------------ ------------

    Non-controlling interest                                499          524
                                                    ------------ ------------

    Shareholders' equity
      Share capital                                     345,946      323,975
      Contributed surplus                                 2,514        1,879
      Deficit                                          (189,617)    (204,065)
      Accumulated other comprehensive income             (2,479)        (729)
                                                    ------------ ------------
      Total shareholders' equity                        156,364      121,060
                                                    ------------ ------------

    Total liabilities and shareholders' equity       $  225,157   $  203,529
                                                    ------------ ------------
                                                    ------------ ------------



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

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

    Operating activities
      Net income                                     $    5,241   $    4,285
      Amortization                                        2,809        3,086
      Gain on disposal of assets                            (15)           -
      Stock compensation expense                            271          206
      Employee stock option plan awards                      40           38
      Unrealized foreign exchange loss on
       long term debt                                         -          199
      Unrealized foreign exchange (gain) loss
       on derivatives                                    (2,847)         198
      Non-controlling interest                               (5)          (6)
                                                    ------------ ------------
                                                          5,494        8,006
      Net change in non-cash working capital items      (11,657)      (5,770)
                                                    ------------ ------------
    Operating activities                                 (6,163)       2,236
                                                    ------------ ------------

    Financing activities
      Shares issued                                         (60)           -
      Advance of long term debt                               -       18,174
      Repayment of long term debt                        (1,711)      (1,110)
                                                    ------------ ------------
    Financing activities                                 (1,771)      17,064
                                                    ------------ ------------

    Investing activities
      Acquisition of capital assets                      (2,821)      (3,210)
      Proceeds on disposal of property, plant,
       and equipment                                         18            -
      Acquisition of intangible assets                   (1,439)        (357)
      Business acquisition                                    -      (13,111)
                                                    ------------ ------------
    Investing activities                                 (4,242)     (16,678)
                                                    ------------ ------------
    Effect of exchange rate changes on cash                  82         (370)
                                                    ------------ ------------

    Net (decrease) increase in cash                     (12,094)       2,252
    Cash and cash equivalents, beginning of period       31,896        8,875
                                                    ------------ ------------
    Cash and cash equivalents, end of period         $   19,802   $   11,127
                                                    ------------ ------------
                                                    ------------ ------------

    Interest paid                                    $      205   $      612
                                                    ------------ ------------
                                                    ------------ ------------



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

    For the nine months ended July 31                    2009         2008
    -------------------------------------------------------------------------

    Operating activities
      Net income                                     $   14,448   $    7,594
      Amortization                                        8,500        7,030
      Gain on disposal of assets                            (41)        (211)
      Stock compensation expense                            657          605
      Employee stock option plan awards                     137          134
      Unrealized foreign exchange loss on
       long term debt                                         -          842
      Unrealized foreign exchange (gain) loss
       on derivatives                                    (5,482)       2,870
      Non-controlling interest                              (25)           7
                                                    ------------ ------------
                                                         18,194       18,871
      Net change in non-cash working capital items      (20,937)     (31,672)
                                                    ------------ ------------
    Operating activities                                 (2,743)     (12,801)
                                                    ------------ ------------

    Financing activities
      Shares issued                                      21,813            2
      Advance of long term debt                               -       18,174
      Repayment of long term debt                        (5,325)      (2,011)
                                                    ------------ ------------
    Financing activities                                 16,487       16,165
                                                    ------------ ------------

    Investing activities
      Acquisition of capital assets                      (5,708)      (9,109)
      Proceeds on disposal of property, plant,
       and equipment                                         44          213
      Acquisition of intangible assets                   (3,952)        (992)
      Business acquisition                                 (140)     (13,485)
                                                    ------------ ------------
    Investing activities                                 (9,756)     (23,373)
                                                    ------------ ------------
    Effect of exchange rate changes on cash                (288)        (306)
                                                    ------------ ------------

    Net increase (decrease) in cash from
     continuing operations                                3,700      (20,315)
    Net cash used in discontinued operations                  -         (271)
                                                    ------------ ------------
    Net increase (decrease) in cash                       3,700      (20,586)
    Cash and cash equivalents, beginning of period       16,102       31,713
                                                    ------------ ------------
    Cash and cash equivalents, end of period         $   19,802   $   11,127
                                                    ------------ ------------
                                                    ------------ ------------

    Interest paid                                    $      780   $    1,079
                                                    ------------ ------------
                                                    ------------ ------------



     COM DEV International Ltd.
     Consolidated Statements of Changes in Equity
     (Canadian dollars in thousands)
     Unaudited

                                            Accumulated
    For the nine                               Other
     months ended                          Comprehensive   Share  Contributed
     July 31, 2009        Total    Deficit     Income     Capital   Surplus
    -------------------------------------------------------------------------

    Balance, October
     31, 2008          $ 121,060  $(204,065) $    (729) $ 323,975  $   1,879

    Comprehensive
     income
      Net Income          14,448     14,448          -          -          -
      Foreign currency
       translation
       adjustments
       (net of taxes
       of $nil)           (1,750)         -     (1,750)         -          -
                       ---------- ---------- ---------- ---------- ----------
                          12,698     14,448     (1,750)         -          -
    Common stock issued   21,812                           21,971       (159)
    Value of ESOP awards     137          -          -          -        137
    Expense recognized
     for stock-based
     compensation            657          -          -          -        657
                       ---------- ---------- ---------- ---------- ----------
    Balance,
     July 31, 2009     $ 156,364  $(189,617) $  (2,479) $ 345,946  $   2,514
                       ---------- ---------- ---------- ---------- ----------
                       ---------- ---------- ---------- ---------- ----------

    -------------------------------------------------------------------------

    For the nine
     months ended
     July 31, 2008

    Balance, October
     31, 2007          $ 106,424  $(216,444) $  (1,993) $ 323,862  $     999

    Comprehensive
     income
      Net Income           7,594      7,594          -          -          -
      Foreign currency
       translation
       adjustments
       (net of taxes
       of $nil)              133          -        133          -          -
                       ---------- ---------- ---------- ---------- ----------
                           7,727      7,594        133          -          -
    Common stock issued        2          -          -        113       (111)
    Value of ESOP awards     134          -          -          -        134
    Expense recognized
     for stock-based
     compensation            605          -          -          -        605
                       ---------- ---------- ---------- ---------- ----------
    Balance,
     July 31, 2008     $ 114,892  $(208,850) $  (1,860) $ 323,975  $   1,627
                       ---------- ---------- ---------- ---------- ----------
                       ---------- ---------- ---------- ---------- ----------
    

    %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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