COM DEV Announces First Quarter Fiscal 2013 Results
CAMBRIDGE, ON, March 11, 2013 /CNW/ - COM DEV International Ltd. (TSX:CDV) today announced first quarter results for the three-month period ended January 31, 2013. All amounts are stated in Canadian dollars unless otherwise noted.
First Quarter Highlights
- Revenue was $52.3 million, a 10.7 percent increase from $47.2 million in the first quarter of 2012.
- Net income attributable to shareholders was $4.6 million or $0.06 per share, compared to $3.6 million or $0.05 per share in the first quarter of 2012.
- The Company booked $61.8 million in new orders, compared to $45.2 million in the first quarter of 2012 and $56.1 million in the fourth quarter of 2012.
- Increased gross margins in the space equipment business of 28.4 percent compared to 27.8 percent in Q1 2012
- Increase in exactEarth customer base to 62 from 16 in Q1 2012. There are also 64 trials currently underway.
"We are very pleased with the growth in earnings and gross margins in the first quarter of fiscal 2013, which reflects the results of our focus on profitability and sustainability without any legacy issues," stated Michael Pley, President and CEO. "As well, we have secured new contracts in all of our divisions which will contribute to continued growth."
Financial Review
COM DEV's fiscal 2013 first quarter revenues of $52.3 million increased by $5.1 million or 10.8 percent compared to $47.2 million the previous year. The revenue split between the three market segments was 44 percent commercial, 34 percent civil and 22 percent military, compared to a 58/26/16 split in 2012. It is important to note that communication satellite programs are increasingly being seen in the civil segment as emerging country national governments use satellites as an efficient means to provide communications infrastructure. These programs draw on the Company's same core equipment as the more traditional commercial market segments. In general, bidding and order activity remains robust.
COM DEV received new orders totaling $61.8 million during the quarter, of which 58 percent were commercial, 41 percent were civil, and one percent were military. In fiscal Q1 2012 the Company booked $45 million of new orders, with a commercial/civil/military split of 53/36/11. Included in the new orders are orders received under Authorities to Proceed (ATPs) which allows a subcontractor to start work on a project while the full contract negotiations are concluded. An additional $20.7 million of follow-on orders are expected to be realized from ATPs already received; COM DEV only includes these ATP amounts in orders and backlog once the final contracts are in place. Included in the total orders for Q1 were $1.8 million in orders for exactEarth.
Order backlog at January 31, 2013 was $148 million, compared to $125.3 million at Q1 2012. Backlog was split between the Company's commercial, civil and military sectors at a ratio of 43 percent, 39 percent and 18 percent respectively, compared to 46 percent, 33 percent and 21 percent at January 31, 2012. The Company expects to convert approximately 79 percent of the total backlog into revenue during fiscal 2013.
Consolidated gross margin was $13.6 million in fiscal Q1 2013, representing 26.1 percent of total revenues, compared to $13.1 million or 27.6 percent of revenues in Q1 2012. The decrease is net of an increase in the space equipment gross margin percentage, offset by a decrease in the data segment gross margin percentage due to higher depreciation from the commissioning of two exactEarthTM satellites and higher related operations costs for down-linking, back-hauling, and processing higher volumes of data.
COM DEV recorded a net research and development expense of $0.5 million in Q1 2013, compared to $1.0 million in Q1 2012. Gross R&D spending declined to $2.6 million from $3.8 million while R&D funding from external sources decreased to $0.5 million from $1.8 million. The Company also recognized $1.6 million of Investment Tax Credits (ITCs) in Q1 2013, compared to $1.0 million in Q1 2012.
Selling expenses were unchanged from the same quarter in the prior year and general expenses increased by $0.1 million over Q1 2012. Selling expenses fluctuate from quarter to quarter depending on the volume of work and proposals that are underway.
Net income attributable to shareholders was $4.6 million in Q1 2013, compared to $3.6 million in Q1 2012. The $1.0 million increase was the result of higher gross margin, lower interest and other expenses, as well as lower expenses for taxes net of investment tax credit.
The Company generated $3.9 million of cash from operating activities in Q1 2013, compared with 2012 when $5.6 million was generated. The Company invested $3.1 million in working capital in Q1 2013 which compares to the $0.8 million invested in working capital in Q1 2012. This increase in working capital was mainly due to decreases in accounts payable and deferred revenue, partially offset by a decrease in accounts receivable.
The Company's basic share count stood at 76,293,147 on March 11, 2013.
Conference Call
A conference call will be held Monday, March 11, 2013 at 8:00 am EDT to discuss this announcement. To access the call, dial 647-427-7450 or 1-888-231-8191. 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™ to listen to the webcast.
About COM DEV
COM DEV International Ltd. (www.comdevintl.com) is a leading global provider of space hardware and services. With facilities in Canada, the United Kingdom and the United States, COM DEV manufactures advanced subsystems and microsatellites that are sold to major satellite prime contractors, government agencies and satellite operators, for use in communications, space science, remote sensing and defense applications. COM DEV's majority-owned subsidiary, exactEarth Ltd., provides satellite data services.
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 Interim Statements of Operations | |||||||||||||
| (Canadian dollars in thousands, except for per share figures) | |||||||||||||
| Unaudited | |||||||||||||
| For the three months ended January 31 | 2013 | 2012 | |||||||||||
| Revenue | $ | 52,283 | $ | 47,209 | |||||||||
| Cost of revenue | 38,658 | 34,159 | |||||||||||
| Gross margin | 13,625 | 13,050 | |||||||||||
| Research and development costs | 2,576 | 3,783 | |||||||||||
| Research and development recovery | 481 | 1,768 | |||||||||||
| Investment tax credits recoverable | 1,613 | 1,040 | |||||||||||
| Net research and development expense | 482 | 975 | |||||||||||
| Selling expenses | 2,573 | 2,613 | |||||||||||
| General expenses | 4,539 | 4,398 | |||||||||||
| 6,031 | 5,064 | ||||||||||||
| Interest expense | 118 | 246 | |||||||||||
| Foreign exchange gain | (352) | (355) | |||||||||||
| Other (income) expense | (162) | 211 | |||||||||||
| Income before income taxes | $ | 6,427 | $ | 4,962 | |||||||||
| Income tax expense | 2,250 | 1,781 | |||||||||||
| Net income | $ | 4,177 | $ | 3,181 | |||||||||
| Attributable to: | |||||||||||||
| Shareholders | $ | 4,589 | $ | 3,610 | |||||||||
| Non-controlling interest | (412) | (429) | |||||||||||
| $ | 4,177 | $ | 3,181 | ||||||||||
| Other comprehensive income: | |||||||||||||
| Foreign currency translation | 190 | 21 | |||||||||||
| Comprehensive income | $ | 4,367 | $ | 3,202 | |||||||||
| Earnings per share | |||||||||||||
| Basic and diluted earnings per share | $0.06 | $0.05 | |||||||||||
| COM DEV International Ltd. | ||||||||||
| Consolidated Interim Statements of Financial Position | ||||||||||
| (Canadian dollars in thousands) | ||||||||||
| Unaudited | ||||||||||
| As at January 31, 2013 |
As at October 31, 2012 |
|||||||||
| Assets | ||||||||||
| Current | ||||||||||
| Cash and cash equivalents | $ | 26,386 | $ | 25,794 | ||||||
| Accounts receivable | 39,943 | 41,722 | ||||||||
| Inventory | 62,425 | 64,763 | ||||||||
| Prepaid and other | 3,437 | 3,214 | ||||||||
| Income taxes recoverable | 4,846 | 4,801 | ||||||||
| Investment tax credits - current | 2,220 | 2,162 | ||||||||
| 139,257 | 142,456 | |||||||||
| Non-current | ||||||||||
| Property, plant and equipment | 85,925 | 86,000 | ||||||||
| Intangible assets | 14,623 | 14,600 | ||||||||
| Goodwill | 2,222 | 2,205 | ||||||||
| Investment tax credits | 2,891 | 2,124 | ||||||||
| Deferred income tax assets | 12,536 | 13,629 | ||||||||
| Total assets | $ | 257,454 | $ | 261,014 | ||||||
| Liabilities | ||||||||||
| Current | ||||||||||
| Accounts payable and accrued liabilities | $ | 25,421 | $ | 31,175 | ||||||
| Income taxes payable | 977 | 851 | ||||||||
| Provisions | 483 | 430 | ||||||||
| Billings in excess of costs and earnings on contracts in progress | 20,265 | 22,448 | ||||||||
| Current portion of loans payable | 3,992 | 3,978 | ||||||||
| 51,138 | 58,882 | |||||||||
| Non-current | ||||||||||
| Loans payable | 16,294 | 16,358 | ||||||||
| Accounts payable and accrued liabilities | 733 | 834 | ||||||||
| Employee future benefits | 3,880 | 3,719 | ||||||||
| 20,907 | 20,911 | |||||||||
| Total liabilities | 72,045 | 79,793 | ||||||||
| Shareholders' equity | ||||||||||
| Share capital | 345,884 | 345,876 | ||||||||
| Treasury stock | (891) | (432) | ||||||||
| Contributed surplus | 8,967 | 8,695 | ||||||||
| Deficit | (175,558) | (180,147) | ||||||||
| Non-controlling interest | 6,905 | 7,317 | ||||||||
| Accumulated other comprehensive loss | 102 | (88) | ||||||||
| Total shareholders' equity | 185,409 | 181,221 | ||||||||
| Total liabilities and shareholders' equity | $ | 257,454 | $ | 261,014 | ||||||
| COM DEV International Ltd. | ||||||||
| Consolidated Interim Statements of Cash Flows | ||||||||
| (Canadian dollars in thousands) | ||||||||
| Unaudited | ||||||||
| For the three months ended January 31 | 2013 | 2012 | ||||||
| Operating activities | ||||||||
| Net income | $ | 4,177 | $ | 3,181 | ||||
| Amortization | 2,601 | 2,543 | ||||||
| (Gain) loss on disposal of assets | (5) | 30 | ||||||
| Defined benefit plan expenses | 135 | 159 | ||||||
| Defined benefit plan contributions | - | (250) | ||||||
| Stock based compensation expense | 469 | 491 | ||||||
| Employee stock ownership plan awards | 62 | 67 | ||||||
| Amortization of issue costs, effective interest, and unrealized foreign exchange on loans | 243 | 126 | ||||||
| Investment tax credits recoverable | (1,613) | (1,040) | ||||||
| Deferred income tax expense | 1,093 | 1,470 | ||||||
| Payment of withholding tax on behalf of employees upon settlement of restricted stock units | (33) | - | ||||||
| Unrealized foreign exchange loss (gain) on derivatives | 127 | (422) | ||||||
| 7,256 | 6,355 | |||||||
| Net change in non-cash working capital items | (3,139) | (789) | ||||||
| Operating activities | 4,117 | 5,566 | ||||||
| Financing activities | ||||||||
| Shares issued | 6 | - | ||||||
| Purchase of treasury stock | (511) | - | ||||||
| Repayment of long-term debt | (293) | (2,472) | ||||||
| Financing activities | (798) | (2,472) | ||||||
| Investing activities | ||||||||
| Acquisition of property, plant and equipment | (1,739) | (5,200) | ||||||
| Proceeds on disposal of property, plant and equipment | 43 | 4 | ||||||
| Acquisition of intangible assets | (727) | (1,502) | ||||||
| Business acquisitions | - | - | ||||||
| Investing activities | (2,423) | (6,698) | ||||||
| Effect of exchange rate changes on cash | (304) | (493) | ||||||
| Net (decrease) increase in cash | 592 | (4,097) | ||||||
| Cash and cash equivalents, beginning of the period | 25,794 | 27,618 | ||||||
| Cash and cash equivalents, end of the period | $ | 26,386 | $ | 23,521 | ||||
| Interest paid | $ | 148 | $ | 262 | ||||
| Taxes paid | $ | 222 | $ | 165 | ||||
| COM DEV International Ltd. | ||||||||||||||||||||
| Consolidated Interim Statements of Changes in Equity | ||||||||||||||||||||
| (Canadian dollars in thousands) | ||||||||||||||||||||
| Unaudited | ||||||||||||||||||||
| For the three months ended January 31, 2013 | Total | Deficit | Accumulated Other Comprehensive Loss |
Share Capital |
Treasury Stock |
Non- controlling Interest |
Contributed Surplus |
|||||||||||||
| Balance, October 31, 2012 | $ | 181,221 | $ | (180,147) | $ | (88) | $ | 345,876 | $ | (432) | $ | 7,317 | $ | 8,695 | ||||||
| Comprehensive income | 4,367 | 4,589 | 190 | - | - | (412) | - | |||||||||||||
| Common stock issued | 6 | - | - | 8 | - | - | (2) | |||||||||||||
| Expense recognized for ESOP awards | 62 | - | - | - | - | - | 62 | |||||||||||||
| Treasury stock | (511) | - | - | - | (511) | - | - | |||||||||||||
| Settlement of long-term incentive plans | - | - | - | - | 52 | - | (52) | |||||||||||||
| Transfer of long-term incentive plans to liabilities for future cash settlements | (205) | - | - | - | - | - | (205) | |||||||||||||
| Expense recognized for long-term incentive plans | 367 | - | - | - | - | - | 367 | |||||||||||||
| Expense recognized for stock-based compensation | 102 | - | - | - | - | - | 102 | |||||||||||||
| Balance, January 31, 2013 | $ | 185,409 | $ | (175,558) | $ | 102 | $ | 345,884 | $ | (891) | $ | 6,905 | $ | 8,967 | ||||||
| For the three months ended January 31, 2012 | ||||||||||||||||||||
| Balance, October 31, 2011 | $ | 168,293 | $ | (195,782) | $ | (138) | $ | 345,666 | $ | - | $ | 8,977 | $ | 9,570 | ||||||
| Comprehensive income | 3,202 | 3,610 | 21 | - | - | (429) | - | |||||||||||||
| Expense recognized for ESOP awards | 67 | - | - | - | - | - | 67 | |||||||||||||
| Expense recognized for long-term incentive plans | 408 | - | - | - | - | - | 408 | |||||||||||||
| Expense recognized for stock-based compensation | 83 | - | - | - | - | - | 83 | |||||||||||||
| Balance, January 31, 2012 | $ | 172,053 | $ | (192,172) | $ | (117) | $ | 345,666 | $ | - | $ | 8,548 | $ | 10,128 | ||||||
SOURCE: Com Dev International Ltd.
Gary Calhoun
Chief Financial Officer
Tel: (519) 622-2300 ext. 2826
[email protected]
Craig MacPhail
TMX Equicom
Tel: (416) 815-0700 ext. 290
[email protected]
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