OSI Geospatial Inc. Reports 2010 Fourth Quarter and Year End Results

OTTAWA, Feb. 25 /CNW/ - OSI Geospatial Inc. (TSX: OSI) ("OSI Geospatial") today announced its financial results for the fourth quarter of fiscal year 2010 and 12 months ending November 30, 2010, reported in Canadian dollars and in accordance with Canadian Generally Accepted Accounting Principles (GAAP).

For the fourth quarter of 2010, OSI Geospatial reported consolidated revenue from continuing operations of $4.6 million, an increase of 15% from the $4.0 million reported in the fourth quarter of 2009. The consolidated revenue for the full year of 2010 from continuing operations was $13.5 million compared to $19.2 million in the prior year, a decrease of 30%.

For the fourth quarter of 2010, the Company reported a net loss from continuing operations of $0.8 million before taxes and a net loss from continuing operations after taxes of $0.5 million compared with net loss from continuing operations of $5.3 million before taxes and losses from continuing operations after taxes of $5.3 million in the fourth quarter of 2010. The fourth quarter of 2009 includes a one-time restructuring charge of $0.4 million and a non-cash goodwill impairment charge of $4.0 million. For the 12 months ending November 30, 2010, the Company reported a net loss from continuing operations of $0.1 million before taxes and $0.2 million after taxes compared to a $7.4 million loss before taxes and a $7.7 million loss after taxes in the same period of 2009. The 12 months ending November 30, 2010, include a one-time loss on sublease of $0.4 million, a restructuring charge of $0.9 million and a gain on sale of intellectual property of $5.2 million.  The 12 months ending November 30, 2009 include a one-time restructuring charge of $0.7 million and a non-cash goodwill impairment charge of $4.0 million.

During 2010, the Company engaged in a plan to sell its mapping business unit. The sale closed on January 31, 2011, for proceeds of $1.15 million.  The Mapcon business unit is presented as a discontinued operation in the Company's 2010 results.  The loss from discontinued operations for the 12 months ended November 30, 2010, was $0.1 million compared with $0.3 million for the 12 months ended November 30, 2009.

For the fourth quarter of 2010, the net loss available to common shareholders was $0.6 million or $0.01 per share, compared to a net loss available to common shareholders of $5.9 million or $0.12 per share in 2009. For the full year of 2010, the net loss available to common shareholders was $0.5 million or $0.01 per share compared to the net loss available to common shareholders of $8.3 million or $0.18 per share in the prior year.

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. 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 © 2011 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
As at November 30, 2010 and 2009

In thousands of Canadian dollars 2010 2009
Assets        
Current assets        
Cash and cash equivalents $ 758 $ 315
Restricted cash   513   -
Accounts receivable and unbilled revenue   3,522   3,897
Income taxes recoverable   131   -
Inventory   921   1,139
Prepaid expenses and deposits   292   367
Current portion of future income tax asset   101   1,041
Current assets held-for-sale   2,812   2,525
    9,050   9,284
         
Restricted cash   61   -
Deferred development costs   551   653
Future income tax asset   124   113
Equipment and furnishings   1,025   1,196
Intangible and other assets   314   275
Goodwill   4,198   4,324
  $ 15,323 $ 15,845
Liabilities        
Current liabilities        
Bank indebtedness $ - $ 685
Factored advances payable   325   240
Accounts payable and accrued liabilities   2,929   2,868
Unearned revenue   310   547
Current portion of capital lease obligations   25   68
Current portion of deferred rent   41   34
Current portion of accrued loss on sublease   134   -
Current liabilities held-for-sale   1,190   997
    4,954   5,439
         
Capital lease obligation   28   54
Unearned revenue   65   178
Deferred rent   219   211
Accrued loss on sublease   234   -
    5,500   5,882
Shareholders' Equity        
Issued and outstanding        
  Class A, Series A preference shares   30   30
  Class B, Series 2 preference shares   2,457   5,383
  Common shares   31,112   29,876
    33,599   35,289
         
Warrants   -   4,546
         
Contributed surplus   9,765   3,322
         
Accumulated deficit   (32,025)   (31,838)
         
Accumulated other comprehensive loss   (1,516)   (1,356)
    9,823   9,963
  $ 15,323 $ 15,845



OSI Geospatial Inc.        
Consolidated Statements of Operations
For the years ended November 30, 2010 and 2009

In thousands of Canadian dollars, except share related data   2010   2009
Revenue        
Maritime navigation and tactical solutions $ 6,059 $ 9,562
Advanced technology research and development   7,442   9,674
    13,501   19,236
         
Cost of sales   8,456   12,924
         
Gross profit   5,045   6,312
         
Expenses (income)        
General and administrative   4,461   4,640
Sales and marketing   2,333   2,777
Engineering   534   872
Technology Partnerships Canada royalty   288   394
Amortization   318   390
Interest expense   70   111
Interest income   (11)   (8)
Foreign exchange loss   24   1
Loss on disposal of equipment and furnishings   10   -
    8,027   9,177
         
Loss before other items   (2,982)   (2,865)
         
Other items (expenses) recovery        
Gain on sale of intellectual property   5,214   -
Loss on sublease   (373)   -
Goodwill impairment charge   -   (4,027)
Restructuring costs   (852)   (652)
Income (loss) before income taxes   1,007   (7,544)
         
Future income tax expense (recovery)   931   (187)
Current income tax expense   186   9
Income tax expense (recovery)   1,117   (178)
Net loss from continuing operations   (110)   (7,366)
Net loss from discontinued operations   (72)   (345)
Net loss $ (182) $ (7,711)
         
Net loss available to common shareholders $ (540) $ (8,315)
         
Basic and diluted loss per share        
  Continuing operations $ (0.01) $ (0.17)
  Discontinued operations   (0.00)   (0.01)
  Net loss   (0.01)   (0.18)
         
Weighted average number of common shares
outstanding
       
  Basic and diluted   51,513,586   47,250,113

OSI Geospatial Inc.        
Consolidated Statements of Cash Flows
November 30, 2010 and 2009

In thousands of Canadian dollars         2010             2009
Cash flows from (used in) operating activities        
Net loss from continuing operations $ (110) $ (7,366)
  Items not affecting cash        
    Amortization   385   506
    Stock-based compensation   207   66
    Gain on sale of intellectual property   (5,214)   -
    Goodwill impairment charge   -   4,027
    Future income taxes   931   (187)
    Loss on disposal of equipment and furnishings   10   -
    Loss on sublease   373   -
    (3,418)   (2,954)
Changes in non-cash working capital items        
  Accounts receivable and unbilled revenue   319   4,049
  Inventory   218   265
  Prepaid expenses and deposits   70   (20)
  Accounts payable and accrued liabilities   (148)   (328)
  Income taxes payable   (131)   (16)
  Unearned revenue   (347)   182
  Deferred rent   (34)   (34)
    (53)   4,098
Cash provided by continuing operations   (3,471)   1,144
Cash provided by discontinued operations   108   773
Cash provided by operating activities   (3,363)   1,917
Cash flows from (used in) investing activities        
Net increase in restricted cash   (589)   -
Development costs deferred   (30)   (237)
Additions to equipment and furnishings   (81)   (148)
Additions to intangible and other assets   (195)   (24)
Proceeds from sale of intellectual property and related tangible assets, net of costs to dispose   5,431   -
Discontinued operations   (74)   (16)
    4,462   (425)
Cash flows from (used in) financing activities        
Net repayments of bank indebtedness   (685)   (1,275)
Net advances from factoring facilities   89   240
Repayment of capital lease obligations   (66)   (95)
Issuance of shares related to exercise of stock options   -   9
Class B preference share dividends declared and paid   (5)   (6)
    (667)   (1,127)
Effect of foreign exchange on cash balances   15   36
         
Increase in cash and cash equivalents   447   401
         
Cash and cash equivalents - beginning of year   401   -
Cash and cash equivalents - end of year $ 848 $ 401
 
Cash and cash equivalents, continuing operations $ 758 $ 315
Cash and cash equivalents, discontinued operations   90   86
  $ 848 $ 401

SOURCE OSI Geospatial Inc.

For further information:

Jim Girard
Vice President Finance
+1 778 373 4600
+1 778 373 0027 (FAX)
invest@osigeospatial.com

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