CAMBRIDGE, ON, Nov. 30 /CNW/ - COM DEV International Ltd. (TSX:CDV) today announced preliminary financial results for the three-month period ended October 31, 2009. All figures cited in this news release are based on preliminary financial data and are subject to change as a result of the year-end audit process. All amounts are stated in Canadian dollars.
Management currently expects fourth quarter results to be as follows:
- Revenue of $56 to $58 million
- Gross margin of 25%
- Net income of less than $1 million
- New orders of $66 to $68 million
- Backlog of $162 to $164 million at October 31, 2009
- Cash balance of $21 million at October 31, 2009
"We expect to report full year revenue growth of 14% and net income growth of over 20%, however, fourth quarter results were affected by disappointing performance in two of our domestic government programs," said John Keating, CEO of COM DEV International. "It has become apparent that the level of work required to satisfy the program requirements, was underestimated. In addition, we have identified problems with project management processes in the division, and in the fourth quarter we also experienced challenges with subcontractors that have since been resolved. We expect the combined effect of these issues to be a $4.3 million shortfall to both revenue and net income compared to our forecasts for the division. Today we announced that Dave Lizius has assumed the role of President of COM DEV Canada. Dave is a seasoned veteran of COM DEV and the space industry, and we believe he is the right person to lead the division as they address these issues, and move forward to capitalize on the government market opportunities in Canada."
In the fourth quarter management also expects to record an unrealized foreign exchange loss of $1.5 million on the Company's portfolio of currency hedges due to the late October strengthening of the US dollar versus the Canadian dollar. This exchange loss is based on the mark-to-market valuation calculation using the spot rate of exchange on October 31, 2009, and varies daily as the spot rate changes.
Mr. Keating continued: "We are encouraged by the preliminary results from our other three divisions which comprise over 80% of our business, and by our prospects for fiscal 2010. We expect to report record orders of nearly $250 million for 2009, and our sales pipeline remains full. In 2010 we anticipate revenue growth of at least 10%. Several very promising new business initiatives should begin to show traction towards the end of the year."
COM DEV expects to reports its complete financial results for fiscal 2009 on January 11, 2010.
A conference call will be held Monday, November 30, 2009 at 8:30 am EST to discuss this announcement. To access the call, please visit www.newswire.ca for webcast directions, or dial 416-644-3426 or 1-800-731-5319. A replay of the call will be available for one week at 416-640-1917 or 1-877-289-8525, access code 4188702 followed by the number sign.
About COM DEV
COM DEV International Ltd. (www.comdevintl.com) is a leading global designer and manufacturer of space hardware subsystems. With facilities in Canada, the United Kingdom and the United States, COM DEV manufactures advanced products and subsystems that are sold to major satellite prime contractors for use in communications, space science, remote sensing and military satellites.
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.
SOURCE COM DEV International Ltd.
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