Norsat Announces First Quarter Fiscal Year 2016 Financial Results

- Management to Host Conference Call at 8:30 am Pacific Time (11:30 am Eastern Time) -

VANCOUVER, May 4, 2016 /CNW/ - Norsat International Inc. ("Norsat" or the "Company") (TSX: NII and NYSE MKT: NSAT), a provider of unique and customized communication solutions for remote and challenging applications, today reported financial results for the first quarter ended March 31, 2016.

Quarter Highlights

  • $9.6 million in revenue for the quarter, an increase of 14% compared to $8.4 million for the same period last year.
  • Gross profit margin of 44% for the quarter, an increase of 4% from 40% for the same period last year.
  • Net earnings for the quarter were $1.2 million, or $0.20 per share, basic and diluted, compared to $0.6 million, or $0.10 per share, basic and diluted, for the same period last year.
  • $7.2 million of cash and cash equivalents at March 31, 2016, an increase of $2.6 million compared to $4.6 million at December 31, 2015. 
  • $21.2 million of working capital at March 31, 2016, an increase of $1.8 million compared to $19.4 million at December 31, 2015.
  • Adjusted EBITDA1 of $1.7 million for the quarter, an increase of 78% from $0.9 million for the same period last year.

"We are very pleased with the first quarter results. Despite continued headwinds in our Sinclair Technologies division, our total revenue has increased by 14% as our Satellite Communications division delivered a significant number of satellite terminals to a major Eurasian defense contractor during the quarter, bringing total shipments to-date of approximately $2.8 million of our $4.2 million contract.  The timing of product deliveries on our large order resulted in strong quarterly results," said Dr. Amiee Chan, President and CEO of Norsat. "We have also continued to manage our cost structure and were able to deliver another strong quarter of profitability and Adjusted EBITDA. To capitalize on new market opportunities over the coming years, we have continued with our product development initiatives during the quarter and we were able to introduce new products and solutions, including the introduction of the MEDIAN series of Ku-band Block Up Converters ("BUCs") and ATOM 250 Watt Ku-band BUCs and solid-state power amplifiers," added Dr. Chan.

_______________________
1
Adjusted EBITDA is a measure that the Company uses to reflect the results of its core earnings. Adjusted EBITDA is defined as earnings before income tax expense, financing costs, depreciation and amortization, foreign exchange gain or loss, corporate development costs, write-down of inventory, impairment charges or recoveries, discontinued operations and other non-cash charges.

A full set of financial statements and Management's Discussion and Analysis for Norsat is available at www.norsat.com and will be available at www.sedar.com.

Conference Call Details
Norsat will host a conference call today, May 4, 2016 at 8:30 am Pacific Time (11:30 am Eastern Time) to discuss its fiscal year 2016 first quarter results. To access the conference call, please dial toll-free 1-888-886-7786 or 416-764-8658. The conference call title is: 'Norsat Investor Call'. Please connect approximately 10 – 15 minutes prior to the beginning of the call to ensure participation. A digital recording and transcript of the call will be available after the live call at: http://www.norsat.com/investors/financial-information/conference-call-recordings/

Norsat International Inc.

Condensed Interim Consolidated Statements of Financial Position

(Expressed in United States dollars, except when otherwise indicated)

(Unaudited)









March 31, 2016

December 31, 2015

ASSETS



Current assets



Cash and cash equivalents

$

7,171,748

$

4,585,754

Trade and other receivables

8,582,428

8,987,392

Inventories

10,693,529

10,956,524

Prepaid expenses and other

337,162

394,617


26,784,867

24,924,287

Non-current assets



Property and equipment, net

518,744

558,609

Intangible assets, net

4,550,131

4,724,490

Goodwill

4,090,962

4,097,751

Investment tax credits recoverable

5,076,349

4,985,139

Deferred income tax assets

1,784,413

2,218,848


16,020,599

16,584,837

Total assets

$

42,805,466

$

41,509,124




LIABILITIES 



Current liabilities



Trade and other payables

$

2,323,728

$

1,906,703

Accrued liabilities

2,223,207

2,375,107

Provisions

870,889

947,682

Taxes payable

-

-

Deferred revenue

191,415

286,432


5,609,239

5,515,924

Non-current liabilities



Long-term deferred revenue

25,068

45,889

Total liabilities

5,634,307

5,561,813

SHAREHOLDERS' EQUITY



Issued capital

39,850,648

39,850,648

Treasury shares

(320,750)

(320,750)

Contributed surplus

4,363,363

4,318,487

Accumulated other comprehensive loss

(4,656,874)

(4,673,811)

Deficit

(2,065,228)

(3,227,263)

Total shareholders' equity

37,171,159

35,947,311

Total liabilities and shareholders' equity

$

42,805,466

$

41,509,124

 

Norsat International Inc.

Condensed Interim Consolidated Statements of Earnings and Comprehensive Income

(Expressed in United States dollars, except when otherwise indicated)

(Unaudited)







Three months ended March 31


2016

2015







Revenue

$

9,553,427

$

8,410,325

Cost of sales

5,378,280

5,052,482

Gross profit

4,175,147

3,357,843




Expenses:



Selling and distributing 

1,403,942

1,266,993

General and administrative 

882,101

1,024,457

Product development 

783,995

758,776


Less: Government contributions

(379,475)

(331,024)

(Gain)/loss on foreign exchange

(49,159)

177,749

Interest and bank charges

26,800

35,398

Total expenses

2,668,204

2,932,349




Earnings before income taxes

1,506,943

425,494




Current income tax recovery

-

(66,068)

Deferred income tax expense/(recovery)

344,908

(68,125)

Net earnings

$

1,162,035

$

559,687




Other comprehensive income (loss)



Items that may subsequently be reclassified to income:




Exchange differences on translation of operations




in currencies other than United States dollars

16,937

(543,779)

Total comprehensive income

$

1,178,972

$

15,908




Net earnings per share




Basic earnings per share

$

0.20

$

0.10


Diluted earnings per share

$

0.20

$

0.10




Weighted average number of shares outstanding




Basic

5,766,952

5,766,177


Diluted

5,789,421

5,788,977

 

Norsat International Inc.

Condensed Interim Consolidated Statements of Cash Flows

(Expressed in United States dollars, except when otherwise indicated)

(Unaudited)









Three months ended March 31



2016

2015





Cash and cash equivalents provided by/(used in)



Operating activities:



Net earnings for the period

$

1,162,035

$

559,687

Adjustments for items not affecting cash:




Depreciation and amortization

229,328

328,049


Write-off of property and equipment

-

31,139


Unrealized foreign exchange loss

24,856

177,748


Acquisition loan cost amortization

-

2,262


Current income tax recovery

-

(66,068)


Deferred income tax expense/(recovery)

344,908

(68,125)


Share-based payments 

44,876

53,951


Government contributions 

(379,475)

(331,024)

Changes in non-cash working capital 

233,338

(911,428)

Net cash flows provided by/(used in) operating activities

1,659,866

(223,809)




Investing activities:



Purchase of intangible assets, property and equipment

(23,418)

(56,095)

Net cash flows used in investing activities

(23,418)

(56,095)




Financing activities:



Repayment of acquisition loan

-

(980,000)

Government contributions

954,460

763,484

Net cash flows provided by/(used in) financing activities

954,460

(216,516)




Effect of foreign currency translation on




cash and cash equivalents

(4,914)

340,221




Increase/(decrease) in cash and cash equivalents

2,585,994

(156,199)

Cash and cash equivalents, beginning of period

4,585,754

5,513,733

Cash and cash equivalents, end of period

$

7,171,748

$

5,357,534

 

Norsat International Inc.



Reconciliation of IFRS to non-IFRS Measures



(Expressed in United States dollars, except when otherwise indicated)







Three months ended March 31


2016

2015

Net earnings for the period

$

1,162,035

$

559,687

Interest (income)/expense

(1,558)

14,505

Depreciation and amortization

229,328

328,049

Tax expense/(recovery)

344,908

(134,193)

EBITDA(2)

$

1,734,713

$

768,048

(Gain)/loss on foreign exchange 

(49,159)

177,749

Adjusted EBITDA(2)

$

1,685,554

$

945,797

(2)

We disclose non-IFRS measures as we believe they provide useful information on actual operating results and assist in
comparisons from one period to another. Readers are cautioned that non-IFRS measures do not have any standardized
meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other companies.
For a more detailed description of non-IFRS measures, please refer to Management's Discussion and Analysis for the
three months ended March 31, 2016 posted on Norsat's website and SEDAR.



About Norsat International Inc.

Founded in 1977, Norsat International Inc. is a provider of unique and customized communication solutions for remote and challenging applications. Norsat's products and services include leading-edge product design and development, production, distribution and infield support and service of fly-away satellite terminals, microwave components, antennas, Radio Frequency (RF) conditioning products, maritime based satellite terminals and remote network connectivity solutions. More information is available at www.norsat.com, via email at investor@norsat.com or by phone at 1-604-821-2800.

Forward Looking Statements

The discussion and analysis of this news release contains forward-looking statements concerning anticipated developments in Norsat's operations in future periods, the adequacy of its financial resources and other events or conditions that may occur in the future. Forward-looking statements are frequently, but not always, identified by words such as "expects," "anticipates," "believes," "intends," "estimates,", "predicts," "potential," "targeted," "plans," "possible" and similar expressions, or statements that events, conditions or results "will," "may," "could" or "should" occur or be achieved. These forward-looking statements include, without limitation, statements about Norsat's market opportunities, strategies, competition, expected activities and expenditures as it pursues its business plan, the adequacy of available cash resources and other statements about future events or results. Forward-looking statements are statements about the future and are inherently uncertain, and actual achievements of the Company or other future events or conditions may differ materially from those reflected in the forward-looking statements due to a variety of risks, uncertainties and other factors, such as business and economic risks and uncertainties. The forward-looking statements are based on the beliefs, expectations and opinions of management on the date the statements are made. Consequently, all forward-looking statements made in this news release are qualified by this cautionary statement and there can be no assurance that actual results or anticipated developments will be realized. For the reasons set forth above, investors should not place undue reliance on forward-looking statements. These forward-looking statements are made as of the date of this news release and Norsat assumes no obligation to update or revise them to reflect new events or circumstances, other than as required by law.

SOURCE Norsat International Inc.

For further information: Dr. Amiee Chan, President & CEO, Tel: 604-821-2800, Email: achan@norsat.com; Mr. Arthur Chin, Chief Financial Officer, Tel: 604-821-2800, Email: achin@norsat.com

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