COM DEV Announces Solid Third Quarter Fiscal 2013 Results
CAMBRIDGE, ON, Sept. 6, 2013 /CNW/ - COM DEV International Ltd. (TSX:CDV) today announced third quarter results for the three-month period ended July 31, 2013. All amounts are stated in Canadian dollars unless otherwise noted.
Third Quarter Highlights
- Revenue was $54.2 million, which, while down slightly over third quarter 2012 revenues of $54.5 million, generated $1.3 more in gross margins than the comparable period a year earlier.
- 27% gross margin in the core space equipment business, up from 26% in Q3 2012, reflecting the mix of contracts underway and the Company's solid performance on those contracts.
- Net income attributable to shareholders was $5.1 million, or $0.07 per share compared to $4.0 million or $0.05 per share in Q3 2012.
- exactEarth™, the Company's data services business, achieved a major milestone in Q3 with its first quarter of positive EBITDA, at $0.1 million. exactEarth™ also generated $4.8 million in new business in the quarter.
- exactEarth™ now has 91 customers and 68 active trials underway, up from 38 customers and 45 trials in the second quarter of 2012.
"Revenue was down slightly from last year due to less satellites being awarded in the first half of the year," said Michael Pley, CEO of COM DEV. "Despite this, we achieved solid growth in net income and gross margin. Announcements of new satellites have increased in the second half of the year which, as these are awarded, we expect will translate into revenue growth later this year and into the next fiscal year."
Financial Review
COM DEV's fiscal 2013 third quarter revenues of $54.2 million decreased by $0.3 million or 0.6 percent compared to $54.5 million the previous year, yet the Company achieved increased gross margins on that revenue over the prior year. The revenue split between the three market segments was 54 percent commercial, 27 percent civil and 19 percent military, compared to a 45/35/20 split in 2012. In general, bidding and order activity remains robust.
COM DEV received new orders totaling $36.6 million during the quarter, of which 81 percent were commercial, 5 percent were civil, and 14 percent were military. Since the start of our third quarter, there have been 14 satellites awarded which management expects will positively affect the Company's order flow and backlog in the upcoming quarter and into the first two quarters of fiscal year 2014.
In the third quarter of 2012 the Company booked $62.1 million of new orders, with a commercial/civil/military split of 14/47/39.
Order backlog at July 31, 2013 was $131.0 million compared to $140.3 million at the end of the third quarter of fiscal 2012. Backlog was split between the Company's commercial, civil and military sectors at a ratio of 47 percent, 38 percent and 15 percent respectively, compared to 29 percent 40 percent and 31 percent at April 30, 2012.
Consolidated gross margin was $14.7 million in fiscal Q3 2013, an increase of $1.3 million over fiscal Q3 2012 gross margins of $13.4 million. Total gross margins in Q3 2013 were 27 percent, up from 25 percent of revenues in Q3 2012. The Space Segment gross margin percentage in Q3 2013 increased to 27 percent from 26 percent in Q3 2012 as a result of effective execution of contracts in progress, and normal variations in the mix of contracts within the business. The Data Services Segment gross margin percentage also increased due to higher revenue from its growing customer base, offsetting the higher operations costs of the expanded constellation of low earth orbiting satellites owned and operated by exactEarth™.
COM DEV recorded a net research and development expense of $0.4 million in Q3 2013, compared to a net recovery of $0.5 million in Q3 2012. Gross R&D spending increased to $2.8 million from $2.5 million while R&D funding from external sources decreased to $0.4 million from $0.7 million. The Company also recognized $2.0 million of Investment Tax Credits (ITCs) in Q3 2013, compared to $2.3 million in Q3 2012, which helped to offset income tax expense.
General expenses in Q3 2013 at $4.7 million and selling expenses at $3.0 million were unchanged from the same quarter in the prior year. Selling expenses fluctuate from quarter to quarter and year to year depending on the volume of bids and proposal work that is underway.
Net income attributable to shareholders was $5.1 million in Q3 2013, compared to $4.0 million in 2012. The increase in net income is the result of higher gross margin, with lower other expense, and higher foreign exchange gain offsetting higher R&D costs. The net income attributable to shareholders reflects the Company's consolidated income adjusted by 27 percent minority interest of exactEarth™'s net loss in the data services segment.
The Company generated $2.0 million of cash from operating activities in Q3 2013, compared with 2012 when $0.7 million was generated.
The Company's basic share count stood at 76,423,288 on September 6, 2013.
Conference Call
A conference call will be held Friday, September 6, 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. The company has a staff of 1,300, annual revenues of $208 million, and facilities in Canada, the United Kingdom and the United States. COM DEV designs, manufactures and integrates advanced products, 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 defence applications. The company has won contracts to supply its equipment on over 900 spacecraft. COM DEV's majority-owned subsidiary, exactEarth Ltd., provides satellite data services for global maritime surveillance.
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 Statement of Operations | |||||||
(Canadian dollars in thousands, except for per share figures) | |||||||
Unaudited | |||||||
For the three months ended July 31 | 2013 | 2012 | |||||
Revenue | $ | 54,157 | $ | 54,543 | |||
Cost of revenue | 39,468 | 41,113 | |||||
Gross margin | 14,689 | 13,430 | |||||
Research and development costs | 2,755 | 2,519 | |||||
Research and development recovery | (441) | (758) | |||||
Investment tax credits recoverable | (1,957) | (2,293) | |||||
Net research and development expense (recovery) | 357 | (532) | |||||
Selling expenses | 2,953 | 3,014 | |||||
General expenses | 4,724 | 4,733 | |||||
Operating income | 6,655 | 6,215 | |||||
Interest expense | 153 | 246 | |||||
Foreign exchange gain | (601) | (175) | |||||
Other expense | 368 | 735 | |||||
Income before income taxes | $ | 6,735 | $ | 5,409 | |||
Income tax expense | 1,939 | 1,813 | |||||
Net income | $ | 4,796 | $ | 3,596 | |||
Attributable to: | |||||||
Shareholders | $ | 5,101 | $ | 4,013 | |||
Non-controlling interest | (305) | (417) | |||||
$ | 4,796 | $ | 3,596 | ||||
Other comprehensive income: | |||||||
Foreign currency translation | 378 | 515 | |||||
Comprehensive Income | $ | 5,174 | $ | 4,111 | |||
Earnings per share (note 8) | |||||||
Basic and diluted earnings per share | $ | 0.07 | $ | 0.05 |
COM DEV International Ltd. | |||||||
Consolidated Interim Statement of Operations | |||||||
(Canadian dollars in thousands, except for per share figures) | |||||||
Unaudited | |||||||
For the nine months ended July 31 | 2013 | 2012 | |||||
Revenue | $ | 161,669 | $ | 151,862 | |||
Cost of revenue | 118,618 | 113,004 | |||||
Gross margin | 43,051 | 38,858 | |||||
Research and development costs | 8,108 | 10,155 | |||||
Research and development recovery | (1,580) | (3,546) | |||||
Investment tax credits recoverable | (5,581) | (6,131) | |||||
Net research and development expense | 947 | 478 | |||||
Selling expenses | 8,503 | 8,573 | |||||
General expenses | 14,211 | 14,012 | |||||
Operating income | 19,390 | 15,795 | |||||
Interest expense | 440 | 749 | |||||
Foreign exchange gain | (1,064) | (1,688) | |||||
Other expense (income) | 473 | (1,029) | |||||
Income before income taxes | $ | 19,541 | $ | 17,763 | |||
Income tax expense | 6,121 | 5,556 | |||||
Net income | $ | 13,420 | $ | 12,207 | |||
Attributable to: | |||||||
Shareholders | $ | 14,470 | $ | 13,437 | |||
Non-controlling interest | (1,050) | (1,230) | |||||
$ | 13,420 | $ | 12,207 | ||||
Other comprehensive income: | |||||||
Foreign currency translation | 830 | 39 | |||||
Comprehensive Income | $ | 14,250 | $ | 12,246 | |||
Earnings per share | |||||||
Basic and diluted earnings per share | $ | 0.19 | $ | 0.18 |
COM DEV International Ltd. | |||||||||||
Consolidated Interim Statements of Financial Position | |||||||||||
(Canadian dollars in thousands) | |||||||||||
Unaudited | |||||||||||
As at July 31, 2013 |
As at October 31, 2012 |
As at November 1, 2011 |
|||||||||
Assets | |||||||||||
Current assets | |||||||||||
Cash and cash equivalents | $ | 31,841 | $ | 25,794 | $ | 27,618 | |||||
Accounts receivable | 39,352 | 41,722 | 47,563 | ||||||||
Inventory (note 3) | 58,445 | 64,763 | 46,147 | ||||||||
Prepaids and other | 3,990 | 3,214 | 1,421 | ||||||||
Income taxes recoverable | 2,262 | 2,266 | 2,159 | ||||||||
Investment tax credits-current | 2,408 | 2,162 | 4,684 | ||||||||
Total current assets | 138,298 | 139,921 | 129,592 | ||||||||
Non-current assets | |||||||||||
Property, plant and equipment | 89,170 | 86,000 | 73,973 | ||||||||
Intangible assets | 14,134 | 14,600 | 15,576 | ||||||||
Goodwill | 2,268 | 2,205 | 2,200 | ||||||||
Investment tax credits | 5,251 | 2,124 | 9,493 | ||||||||
Deferred income tax assets | 11,664 | 14,728 | 1,779 | ||||||||
Total non-current assets | 122,487 | 119,657 | 103,021 | ||||||||
Total Assets | $ | 260,785 | $ | 259,578 | $ | 232,613 | |||||
Liabilities | |||||||||||
Current liabilities | |||||||||||
Accounts payable and accrued liabilities | $ | 24,412 | $ | 30,622 | $ | 25,830 | |||||
Income taxes payable | 500 | 851 | 302 | ||||||||
Provisions | 854 | 430 | 1,172 | ||||||||
Billings in excess of costs and earnings on contracts in progress | 16,141 | 22,448 | 9,977 | ||||||||
Current portion of loans payable | 4,506 | 3,978 | 8,867 | ||||||||
Total current liabilities | 46,413 | 58,329 | 46,148 | ||||||||
Non-current liabilities | |||||||||||
Loans Payable | 16,657 | 16,358 | 14,687 | ||||||||
Accounts payable and accrued liabilities | 273 | 525 | 930 | ||||||||
Employee future benefits | 3,762 | 3,719 | 4,494 | ||||||||
Total non-current liabilities | 20,692 | 20,602 | 20,111 | ||||||||
Total liabilities | $ | 67,105 | $ | 78,931 | $ | 66,259 | |||||
Shareholders' equity | |||||||||||
Share capital | 346,349 | 345,876 | 345,666 | ||||||||
Treasury stock | (775) | (432) | - | ||||||||
Contributed surplus | 7,951 | 9,298 | 9,570 | ||||||||
Accumulated other comprehensive income (loss) | 742 | (88) | (138) | ||||||||
Non-controlling interest | 6,267 | 7,317 | 8,976 | ||||||||
Deficit | (166,854) | (181,324) | (197,720) | ||||||||
Total shareholders' equity | 193,680 | 180,647 | 166,354 | ||||||||
Total liabilities and shareholders' equity | $ | 260,785 | $ | 259,578 | $ | 232,613 |
COM DEV International Ltd. | ||||||||
Consolidated Interim Statements of Cash Flows | ||||||||
(Canadian dollars in thousands) | ||||||||
Unaudited | ||||||||
For the three months ended July 31 | 2013 | 2012 | ||||||
Operating activities | ||||||||
Net income | $ | 4,796 | $ | 3,596 | ||||
Amortization | 2,694 | 2,249 | ||||||
(Gain) Loss on disposal of assets | - | (106) | ||||||
Defined benefit plan expenses | 126 | 157 | ||||||
Defined benefit plan contributions | (238) | (301) | ||||||
Stock based compensation expense | 380 | 398 | ||||||
Employee stock ownership plan awards | 42 | 45 | ||||||
Non-cash loan adjustments | 254 | 206 | ||||||
Investment tax credits recoverable | (1,957) | (2,293) | ||||||
Deferred income tax expense (recovery) | 884 | (1,190) | ||||||
Unrealized foreign exchange (gain) loss on derivatives | (398) | 795 | ||||||
Cash settlement of restricted stock units | (834) | (216) | ||||||
5,749 | 3,340 | |||||||
Net Change in non-cash working capital items | (3,754) | (2,604) | ||||||
Operating activities | 1,995 | 736 | ||||||
Financing activities | ||||||||
Shares issued | 60 | - | ||||||
Purchase of treasury stock | (458) | - | ||||||
Advance of long term debt | 1,445 | 17,308 | ||||||
Repayment of long term debt | (781) | (15,980) | ||||||
Financing activities | 266 | 1,328 | ||||||
Investing activities | ||||||||
Acquisition of property, plant and equipment | (3,257) | (5,371) | ||||||
Proceeds on disposal of property, plant and equipment | 17 | 105 | ||||||
Acquisition of intangible assets | (345) | (485) | ||||||
Investing activities | (3,585) | (5,751) | ||||||
Effect of exchange rate changes on cash | 64 | (540) | ||||||
Net decrease in cash | (1,260) | (4,227) | ||||||
Cash and cash equivalents, beginning of the period | 33,101 | 21,157 | ||||||
Cash and cash equivalents, end of the period | $ | 31,841 | $ | 16,930 | ||||
Interest paid | $ | 124 | $ | 240 | ||||
Taxes paid | $ | 485 | $ | 91 |
COM DEV International Ltd. | |||||||||
Consolidated Interim Statements of Cash Flows | |||||||||
(Canadian dollars in thousands) | |||||||||
Unaudited | |||||||||
For the nine months ended July 31 | 2013 | 2012 | |||||||
Operating activities | |||||||||
Net income | $ | 13,420 | $ | 12,207 | |||||
Amortization | 8,095 | 6,832 | |||||||
Gain on disposal of assets | (5) | (2,273) | |||||||
Defined benefit plan expenses | 399 | 469 | |||||||
Defined benefit plan contributions | (469) | (1,512) | |||||||
Stock based compensation expense | 1,053 | 1,312 | |||||||
Employee stock ownership plan awards | 152 | 164 | |||||||
Non-cash loan adjustments | 781 | 491 | |||||||
Investment tax credits recoverable | (5,581) | (6,131) | |||||||
Deferred income tax expense | 3,092 | 1,755 | |||||||
Unrealized foreign exchange gain on derivatives | (112) | (1,373) | |||||||
Cash settlement of restricted stock units | (867) | (1,097) | |||||||
19,958 | 10,844 | ||||||||
Net Change in non-cash working capital items | (808) | (2,707) | |||||||
Operating activities | 19,150 | 8,137 | |||||||
Financing activities | |||||||||
Shares issued | 66 | - | |||||||
Purchase of treasury stock | (1,594) | (355) | |||||||
Advance of long term debt | 1,985 | 17,308 | |||||||
Repayment of long term debt | (1,939) | (20,667) | |||||||
Financing activities | (1,482) | (3,714) | |||||||
Investing activities | |||||||||
Acquisition of property, plant and equipment | (8,783) | (14,296) | |||||||
Proceeds on disposal of property, plant and equipment | 60 | 2,306 | |||||||
Acquisition of intangible assets | (1,552) | (1,891) | |||||||
Investing activities | (10,275) | (13,881) | |||||||
Effect of exchange rate changes on cash | (1,346) | (1,230) | |||||||
Net increase (decrease) in cash | 6,047 | (10,688) | |||||||
Cash and cash equivalents, beginning of the period | 25,794 | 27,618 | |||||||
Cash and cash equivalents, end of the period | $ | 31,841 | $ | 16,930 | |||||
Interest paid | $ | 405 | $ | 773 | |||||
Taxes paid | $ | 707 | $ | 260 |
COM DEV International Ltd. | ||||||||||||||||||||||||
Consolidated Interim Statements of Changes in Equity | ||||||||||||||||||||||||
(Canadian dollars in thousands) | ||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||
For the nine months ended July 31, 2013 | Total | Deficit | Accumulated Other Comprehensive Income (Loss) |
Share Capital |
Treasury Stock |
Non- controlling Interest |
Contributed Surplus |
|||||||||||||||||
Balance, October 31, 2012 | $ | 180,647 | $ | (181,324) | $ | (88) | $ | 345,876 | $ | (432) | $ | 7,317 | $ | 9,298 | ||||||||||
Comprehensive income | 14,250 | 14,470 | 830 | - | - | (1,050) | - | |||||||||||||||||
Common stock issued | 66 | - | - | 473 | - | - | (407) | |||||||||||||||||
Expense recognized for ESOP awards | 152 | - | - | - | - | - | 152 | |||||||||||||||||
Treasury stock | (1,594) | - | - | - | (1,594) | - | - | |||||||||||||||||
Settlement of long-term incentive plans | (894) | - | - | - | 1,251 | - | (2,145) | |||||||||||||||||
Expense recognized for long-term incentive plans | 765 | - | - | - | - | - | 765 | |||||||||||||||||
Expense recognized for stock-based compensation | 288 | - | - | - | - | - | 288 | |||||||||||||||||
Balance, July 31, 2013 | $ | 193,680 | $ | (166,854) | $ | 742 | $ | 346,349 | $ | (775) | $ | 6,267 | $ | 7,951 | ||||||||||
For the nine months ended July 31, 2012 | ||||||||||||||||||||||||
Balance, October 31, 2011 | $ | 166,355 | $ | (197,720) | $ | (138) | $ | 345,666 | $ | - | $ | 8,977 | $ | 9,570 | ||||||||||
Comprehensive income | 12,244 | 13,437 | 37 | - | - | (1,230) | - | |||||||||||||||||
Common stock issued | - | - | - | 196 | - | - | (196) | |||||||||||||||||
Expense recognized for ESOP awards | 164 | - | - | - | - | - | 164 | |||||||||||||||||
Treasury stock (note 8) | (11) | - | - | - | (11) | - | - | |||||||||||||||||
Settlement of long-term incentive plans | (1,441) | - | - | - | - | - | (1,441) | |||||||||||||||||
Expense recognized for long-term incentive plans | 1,054 | - | - | - | - | - | 1,054 | |||||||||||||||||
Expense recognized for stock-based compensation | 258 | - | - | - | - | - | 258 | |||||||||||||||||
Balance, July 31, 2012 | $ | 178,623 | $ | (184,283) | $ | (101) | $ | 345,862 | $ | (11) | $ | 7,747 | $ | 9,409 |
SOURCE: Com Dev International Ltd.
For further information:
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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