OSI Geospatial Inc. Reports 2010 First Quarter Results

OTTAWA, April 14 /CNW Telbec/ - OSI Geospatial Inc. (TSX: OSI) today announced its financial results for the first quarter of fiscal year 2010 ending February 28, 2010, reported in Canadian dollars and in accordance with Canadian Generally Accepted Accounting Principles (GAAP).

For the first quarter of 2010, OSI Geospatial Inc. reported consolidated revenue of $3.4 million compared to $5.7 million reported in the first quarter of 2009. The Company reported a net income of $4.0 million before taxes and a net income after taxes of $2.1 million compared with net loss of $844,000 before taxes and net loss after taxes of $697,000 in the first quarter of 2009. The first quarter of 2010 included a gain before tax of $5.2 million on the sale of its non-core soldier systems intellectual property ("IP").

For the first quarter of 2010, the net income attributable to common shareholders was $2.0 million or $0.04 per share, compared to a net loss of $853,000 or $0.02 per share in the first quarter of 2009.

OSI Geospatial is working to divest non-core assets that are not aligned with its maritime strategy. The funds from the sale of these non-core assets will be used to strengthen the Company's balance sheet, provide resources to further develop its core technologies and expand its marketing capabilities in support of developing its high-growth maritime niche markets.

"In early 2009, we communicated our intention to divest assets that do not support the development our maritime business. The sale of our soldier systems IP marks an important step in realizing this strategy and will provide the resources to move our maritime market growth strategy forward," said Ken Kirkpatrick, President and CEO. "Over the past three years, we have expanded our addressable maritime markets around the world and positioned the Company to take advantage of the growth opportunities that these markets present for our leading technologies."

    
    First Quarter Highlights

    -   Signed a US$6.5 million contract to sell its soldier systems
        intellectual property to Harris Corporation.
    -   Signed a $5.7 million contract to provide the U.S. Army with
        engineering services to develop and support a deployed command and
        control system.
    -   Secured follow-on contracts valued at approximately $1.8 million with
        the U.S. Department of Defence to provide advanced training
        technology development.
    -   Successfully completed engineering studies that were required to
        determine the scope of work required to integrate ECPINS(R) into the
        systems that are being delivered for the UK Navy Astute Submarine and
        T45 Destroyer programs.
    -   Closed $1.6 million in mapping contracts.
    

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.
    (Incorporated under the laws of the Province of British Columbia, Canada)
    Interim Consolidated Balance Sheets (Unaudited)

                                                  February 28,   November 30,
    In thousands of Canadian dollars                     2010           2009
    -------------------------------------------------------------------------

    Assets
    ------
    Current assets
    Cash and cash equivalents                     $     2,852    $       315
    Restricted cash                                       263              -
    Accounts receivable and unbilled revenue            4,832          5,880
    Inventory                                           1,053          1,139
    Prepaid expenses and deposits                         480            375
    Current portion of future income tax asset            181          1,041
                                                 ----------------------------
                                                        9,661          8,750

    Restricted cash                                       373              -
    Deferred development costs                            546            653
    Future income tax asset                                80            113
    Equipment and furnishings                           1,334          1,473
    Intangible and other assets                           380            446
    Goodwill                                            4,305          4,324
                                                 ----------------------------
                                                  $    16,679    $    15,759
                                                 ----------------------------
                                                 ----------------------------
    Liabilities
    -----------
    Current liabilities
    Bank indebtedness                             $         -    $       599
    Factored advances payable                              74            240
    Accounts payable and accrued liabilities            2,637          3,806
    Income taxes payable                                1,068              -
    Unearned revenue                                      279            550
    Current portion of deferred rent                       41             41
    Current portion of capital lease
     obligation                                            54             68
                                                 ----------------------------
                                                        4,153          5,304

    Deferred rent                                         249            260
    Capital lease obligation                               48             54
    Unearned revenue                                      150            178
                                                 ----------------------------
                                                        4,600          5,796
                                                 ----------------------------

    Shareholders' Equity
    --------------------
    Issued and outstanding
      Class A, Series A preference shares                  30             30
      Class B, Series 2 preference shares               3,237          5,383
      Common shares                                    30,769         29,876
                                                 ----------------------------
                                                       34,036         35,289
    Warrants                                            4,546          4,546
    Contributed surplus                                 4,603          3,322
    Accumulated deficit                               (29,759)       (31,838)
    Accumulated other comprehensive loss               (1,347)        (1,356)
                                                 ----------------------------
                                                       12,079          9,963
                                                 ----------------------------
                                                  $    16,679    $    15,759
                                                 ----------------------------
                                                 ----------------------------



    OSI Geospatial Inc.
    Interim Consolidated Statements of Income (Loss) and Deficit (Unaudited)

    In thousands of Canadian dollars,         Three months ended February 28,
     except share related data                           2010           2009
    -------------------------------------------------------------------------

    Revenue
    Maritime navigation and tactical solutions    $     1,406    $     3,522
    Advanced technology research and development        1,924          1,943
    Mapping                                               114            259
                                                 ----------------------------

                                                        3,444          5,724

    Cost of sales                                       2,338          4,005
                                                 ----------------------------

    Gross profit                                        1,106          1,719
                                                 ----------------------------
    Expenses (income)
    General and administrative                          1,267          1,209
    Sales and marketing                                   665            813
    Engineering                                           176            301
    Amortization                                           87            113
    Interest expense                                       38             31
    Foreign exchange gain                                 (10)             -
    Technology Partnerships Canada royalty                 69             96
                                                 ----------------------------
                                                        2,292          2,563
                                                 ----------------------------
    Net loss before other items                        (1,186)          (844)

    Gain on sale of intellectual property               5,227              -
                                                 ----------------------------

    Net income (loss) before income taxes               4,041           (844)
                                                 ----------------------------

    Future income tax (recovery)                          888           (152)
    Current income tax expense                          1,071              5
                                                 ----------------------------
    Income tax expense (recovery)                       1,959           (147)
                                                 ----------------------------
    Net income (loss)                                   2,082           (697)

    Accumulated deficit, beginning of period          (31,838)       (24,121)
    Dividends on Class B preference shares                 (3)            (3)
                                                 ----------------------------
    Accumulated deficit, end of period            $   (29,759)   $   (24,821)
                                                 ----------------------------
                                                 ----------------------------
    Net income (loss) attributable to common
     shareholders
      Basic                                       $     1,951    $      (853)
      Diluted                                           2,082           (853)

    Earnings (loss) per share
      Basic                                       $      0.04    $     (0.02)
      Diluted                                            0.04          (0.02)

    Weighted average number of common shares
     outstanding
      Basic                                        48,733,766     46,956,439
      Diluted                                      57,659,553     46,956,439



    OSI Geospatial Inc.
    Interim Consolidated Statements of Cash Flows (Unaudited)

                                              Three months ended February 28,
    In thousands of Canadian dollars                     2010           2009
    -------------------------------------------------------------------------
    Cash flows from (used in) operating
     activities
    Net income (loss) for the period              $     2,082    $      (697)
      Items not affecting cash
        Amortization                                      124            161
        Gain on disposal of intellectual property      (5,227)             -
        Stock-based compensation                           28              -
        Future income taxes                               888           (152)
                                                 ----------------------------

                                                       (2,105)          (688)
                                                 ----------------------------
    Changes in non-cash operating working
     capital items
      Accounts receivable                               1,036          2,014
      Inventory                                            86            356
      Prepaid expenses and deposits                      (103)          (220)
      Accounts payable and accrued liabilities         (1,164)        (1,331)
      Income taxes payable                              1,070              5
      Deferred rent                                       (10)           (10)
      Unearned revenue                                   (299)            10
                                                 ----------------------------

                                                          616            824
                                                 ----------------------------

                                                       (1,489)           136
                                                 ----------------------------
    Cash flows from (used in) investing
     activities
    Increase in restricted cash                          (638)             -
    Development costs deferred                            (25)           (18)
    Additions to equipment and furnishings                (10)           (30)
    Additions to intangibles and other assets               -             (2)
    Proceeds from disposal of intellectual
     property and related tangible assets,
     net of costs to dispose                            5,444              -
                                                 ----------------------------

                                                        4,771            (50)
                                                 ----------------------------
    Cash flows used in financing activities
    Repayment of bank indebtedness                       (599)           (66)
    Factored advances payable                            (165)             -
    Repayment of capital lease obligation                 (20)           (14)
    Class B preference share dividends declared
     and paid                                              (3)            (3)
                                                 ----------------------------

                                                         (787)           (83)
                                                 ----------------------------
    Effect of foreign exchange on cash
     balances                                              42             (3)
                                                 ----------------------------

    Increase in cash and cash equivalents               2,537              -

    Cash and cash equivalents - beginning of
     period                                               315              -
                                                 ----------------------------

    Cash and cash equivalents - end of period     $     2,852    $         -
                                                 ----------------------------
                                                 ----------------------------
    

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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