OSI Geospatial Inc. Reports 2009 Fourth Quarter and Year End Results

OTTAWA, March 1 /CNW Telbec/ - OSI Geospatial Inc. (TSX: OSI) today announced its financial results for the fourth quarter of fiscal year 2009 and 12 months ending November 30, 2009, reported in Canadian dollars and in accordance with Canadian Generally Accepted Accounting Principles (GAAP). The Company previously announced that it will present its results during a conference call scheduled for 5:00PM, Eastern Time, today March 1, 2010.

For the fourth quarter of 2009, OSI Geospatial Inc. reported consolidated revenue of $4.7 million, a decrease of 42% from the $8.1 million reported in the fourth quarter of 2008. The consolidated revenue for the full year of 2009 was $23.0 million compared to $26.9 million in the prior year, a decrease of 14%.

For the fourth quarter of 2009, the Company reported a net loss of $5.7 million before taxes and a net loss after taxes of $5.7 million compared with net earnings of $363,000 before taxes and earnings after taxes of $1.0 million in the fourth quarter of 2008. The fourth quarter of 2009 includes a one-time restructuring charge of $387,000 and a non-cash goodwill impairment charge of $4.5 million. For the 12 months ending November 30, 2009, the Company reported a net loss of $7.9 million before taxes and $7.7 million after taxes compared to a $2.4 million loss before taxes and a $1.4 million loss after taxes in the same period of 2008. The 12 months ending November 30, 2009 includes a one-time restructuring charge of $652,000 and a non-cash goodwill impairment charge of $4.5 million.

For the fourth quarter of 2009, the net loss attributable to common shareholders was $5.9 million or $0.12 per share, compared to a net income of $873,000 or $0.02 per share in 2008. For the full year of 2009, the net loss attributable to common shareholders was $8.3 million or $0.18 per share compared to the net loss available to common shareholders of $2.0 million or $0.04 per share in the prior year.

"In the fourth quarter, the Company recorded a non-cash goodwill impairment charge of approximately $4.5 million. This action is primarily the result of the sustained decrease in market capitalization, reduced operating forecasts, and the divestiture of a non-core asset," said Ken Kirkpatrick, president and CEO. "Subsequent to the fourth quarter, we announced the divestiture of our soldier systems intellectual property for US$6.5 million. These funds will significantly strengthen our balance sheet and provide us with the resources to take advantage of the growth opportunities that our niche maritime markets present for our world-leading technologies."

Conference Call

OSI Geospatial will present the results from the 2009 fourth quarter at 5:00PM Eastern Time (2:00 PM Pacific Time), Monday, March 1, 2010. To listen to the conference call live by telephone, dial +1-800-319-4610 for participants in North America or +1-604-638-5340 for international participants approximately ten minutes before the call is scheduled to begin. A telephone playback will be available beginning approximately one hour after the call. Dial +1-800-319-6413 for North American callers or +1-604-638-9010 for international callers. Enter access code 7826 followed by the number sign. A replay version of the webcast can be accessed on the Company's investor website at http://www.osigeospatial.com/investors/default.htm.

About OSI Geospatial

OSI Geospatial Inc. delivers advanced geospatial systems and software that enable shared real-time situational awareness for military, safety and security applications. Our products and services enable our customers to integrate and visualize live data with any combination of sensor data, imagery, maps and charts. This capability provides our customers with enhanced operational performance, safety and security through shared real-time situational awareness. OSI Geospatial systems and software are in use by military, government, and commercial customers around the world. The Company is publicly traded on the Toronto Stock Exchange. For additional information please visit www.osigeospatial.com.

Forward-Looking Statements

This press release contains forward-looking statements and information which reflect the current view of OSI Geospatial Inc. ("OSI") with respect to future events and financial performance. Any such forward-looking statements are subject to risks and uncertainties, and OSI's actual results of operations could differ materially from historical results or current expectations. Additional information on these and other potential factors that could affect OSI's financial results are detailed in disclosure documents filed from time to time with the applicable Canadian securities regulatory authorities.

The Toronto Stock Exchange has neither approved nor disapproved the form or content of this release.

Copyright (C) 2010 OSI Geospatial Inc. and its affiliated or related companies. ECPINS and COP-IDS are registered trademarks of Offshore Systems Ltd., an OSI Geospatial company. iGEN is a registered trademark of CHI Systems Inc., an OSI Geospatial company. Other company brand, product and service names are for identification purposes only and may be either trademarks, service marks or registered trademarks of their respective owners. Data subject to change without notice.

    
    OSI Geospatial Inc.
    Consolidated Balance Sheets (unaudited)
    As at November 30, 2009 and 2008

    In thousands of Canadian dollars                        2009        2008
    -------------------------------------------------------------------------

    Assets
    ------
    Current assets
    Cash                                              $      315  $        -
    Accounts receivable and unbilled revenue               5,880      11,183
    Inventory                                              1,139       1,407
    Prepaid expenses and deposits                            375         388
    Current portion of future income tax asset             1,041         338
                                                      -----------------------
                                                           8,750      13,316
    Deferred development costs                               653         437
    Future income tax asset                                  113         823
    Equipment and furnishings                              1,473       1,735
    Intangible and other assets                              446         732
    Goodwill                                               4,324      10,269
                                                      -----------------------
                                                      $   15,759  $   27,312
                                                      -----------------------
                                                      -----------------------
    Liabilities
    -----------
    Current liabilities
    Bank indebtedness                                 $      599  $    2,015
    Factored advances payable                                240           -
    Accounts payable and accrued liabilities               3,806       4,519
    Income taxes payable                                       -           9
    Unearned revenue                                         550         256
    Current portion of deferred rent                          41          41
    Current portion of capital lease obligations              68          88
                                                      -----------------------
                                                           5,304       6,928
    Deferred rent                                            260         347
    Capital lease obligation                                  54         156
    Unearned revenue                                         178         290
                                                      -----------------------
                                                           5,796       7,721
                                                      -----------------------

    Shareholders' Equity
    --------------------
    Issued and outstanding
      Class A, Series A preference shares                     30          30
      Class B, Series 2 preference shares                  5,383       5,731
      Common shares                                       29,876      29,748
                                                      -----------------------
                                                          35,289      35,509

    Warrants                                               4,546       4,898

    Contributed surplus                                    3,322       2,674

    Accumulated deficit                                  (31,838)    (24,121)

    Accumulated other comprehensive income                (1,356)        631
                                                      -----------------------
                                                           9,963      19,591
                                                      -----------------------
                                                      $   15,759  $   27,312
                                                      -----------------------
                                                      -----------------------


    OSI Geospatial Inc.
    Consolidated Statements of Operations (unaudited)
    For the years ended November 30, 2009 and 2008

    In thousands of Canadian dollars,
    except share related data                               2009        2008
    -------------------------------------------------------------------------

    Revenue
    Maritime systems                                  $    8,159  $   12,396
    Land and air systems                                  11,077      10,154
    Mapping                                                3,758       4,312
                                                      -----------------------

                                                          22,994      26,862

    Cost of sales                                         15,541      17,077
                                                      -----------------------

    Gross profit                                           7,453       9,785
                                                      -----------------------
    Expenses (income)
    General and administrative                             5,275       5,621
    Sales and marketing                                    3,164       4,086
    Engineering                                              872       1,179
    Technology Partnerships Canada royalty                   394         562
    Amortization                                             433         497
    Interest expense                                         111         137
    Interest income                                           (8)         (8)
    Foreign exchange (gain) loss                              (6)         74
    Loss on disposal of equipment and furnishings              -          28
                                                      -----------------------
                                                          10,235      12,176
                                                      -----------------------
    Net loss before other items                           (2,782)     (2,391)

    Other items
    Goodwill impairment charge                            (4,453)          -
    Restructuring costs                                     (652)          -
                                                      -----------------------

    Net loss before income taxes                          (7,887)     (2,391)
                                                      -----------------------

    Future income tax recovery                              (187)       (802)
    Current income tax (recovery) expense                     11        (220)
                                                      -----------------------
    Income tax recovery                                     (176)     (1,022)
                                                      -----------------------
    Net loss                                          $   (7,711) $   (1,369)
                                                      -----------------------
                                                      -----------------------
    Net loss available to common shareholders         $   (8,315) $   (1,994)
                                                      -----------------------
                                                      -----------------------
    Loss per share
      Basic and diluted                               $    (0.18) $    (0.04)

    Weighted average number of common shares
     outstanding
      Basic and diluted                               47,250,113  46,956,439



    OSI Geospatial Inc.
    Consolidated Statements of Cash Flows (unaudited)
    For the years ended November 30, 2009 and 2008

    In thousands of Canadian dollars                        2009        2008
    -------------------------------------------------------------------------
    Cash flows from (used in) operating activities
    Net loss for the year                             $   (7,711) $   (1,369)
      Items not affecting cash
        Amortization                                         637         724
        Loss on disposal of intangible assets and
         equipment and furnishings                             -          28
        Stock-based compensation                              66          21
        Goodwill impairment charge                         4,453           -
        Future income taxes                                 (187)       (802)
                                                      -----------------------
                                                          (2,742)     (1,398)
                                                      -----------------------
    Changes in non-cash working capital items
      Accounts receivable and unbilled revenue             4,785       2,797
      Inventory                                              265        (181)
      Prepaid expenses and deposits                          (24)        165
      Accounts payable and accrued liabilities              (496)     (1,315)
      Income taxes payable                                   (16)       (157)
      Unearned revenue                                       186         153
      Deferred rent                                          (41)        (42)
                                                      -----------------------
                                                           4,659       1,420
                                                      -----------------------

                                                           1,917          22
                                                      -----------------------
    Cash flows used in investing activities
    Development costs deferred                              (237)       (294)
    Additions to equipment and furnishings                  (164)       (182)
    Additions to intangible and other assets                 (24)        (99)
                                                      -----------------------

                                                            (425)       (575)
                                                      -----------------------
    Cash flows from (used in) financing activities
    Advances from (repayments of) bank indebtedness       (1,361)      1,089
    Factored advances payable                                240           -
    Repayment of capital lease obligations                   (95)        (50)
    Issue of shares related to exercise of stock
     options                                                   9           -
    Class B preference share dividends declared and
     paid                                                     (6)       (332)
                                                      -----------------------
                                                          (1,213)        707
                                                      -----------------------
    Effect of foreign exchange on cash balances               36        (154)
                                                      -----------------------

    Increase in cash and cash equivalents                    315           -

    Cash and cash equivalents - beginning of year              -           -
                                                      -----------------------
    Cash and cash equivalents - end of year           $      315  $        -
                                                      -----------------------
                                                      -----------------------
    

SOURCE OSI Geospatial Inc.

For further information: For further information: Sandy Oneschuk, Investor Relations, (613) 287-8004 or +1-888-880-9797, (613) 287-0466 (FAX), invest@osigeospatial.com

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