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COM DEV Announces Second Quarter Fiscal 2009 Results

^{Published on 2009-06-11 13:08:40, Last Modified on 2009-06-11 13:12:05 - Market Wire}
 

 Company reports record revenue; increases revenue guidance for the year CAMBRIDGE, ON, June 11 /CNW/ - COM DEV International Ltd. (TSX:CDV) today announced its second quarter financial results for the three-month period ended April 30, 2009. All amounts are stated in Canadian dollars unless otherwise noted. Second Quarter Highlights - Revenue was $64.1 million, an increase of 18% over the $54.2 million recorded in the second quarter of 2008. - Gross margin was 28%, compared to 24% in Q2 2008. - Net income was $4.9 million, or $0.07 per share, compared to $2.0 million or $0.03 per share for the prior year period. - New orders won in the second quarter totaled $50 million, compared to $42 million a year earlier and $88 million in the first quarter of fiscal 2009. - Backlog at April 30, 2009 was $173 million, compared to $189 million three months earlier. - The Company completed an equity financing which raised gross proceeds of $23 million, primarily to fund the commercialization of its AIS technology. - Subsequent to the end of the quarter, the Company entered into an agreement to purchase a building in Cambridge, Ontario with 30,000 square feet of office and lab space. The building will be occupied by COM DEV's Mission Development Group and newly formed subsidiary exactEarth(TM) Ltd. "We generated record revenue in the second quarter and grew our margins and our bottom line, even as we continued to invest in the growth of the Company," said John Keating, CEO of COM DEV. "The space sector remains healthy in the face of broader economic challenges. With a solid backlog and bright prospects for continuing strength in our new order activity, we are sufficiently confident to raise our revenue guidance to growth of at least 15% in fiscal 2009." Financial Review COM DEV's fiscal 2009 second quarter revenues of $64.1 million represented an increase of $9.9 million or 18% over the second quarter of 2008. The revenue split between the three market segments was 58% commercial, 26% civil and 16% military, compared to a 61/27/12 split in the second quarter of 2008. On a year-to-date basis, revenues of $120.6 million are 22% higher than revenues in the first six months of fiscal 2008. Management now anticipates full year revenue growth of at least 15%, compared to earlier guidance of growth of at least 10%. COM DEV received new orders totaling $50 million during the quarter, of which 64% were commercial, and the remainder were civil. In Q2 2008 the Company booked $42 million of new orders, with a commercial/civil/military split of 64/34/2. Order backlog at quarter-end was $173 million, compared to a record backlog of $189 million three months earlier, and $120 million one year ago. Backlog was split between the Company's commercial, civil and military sectors at a ratio of 45%, 40% and 15% respectively, compared to 44%, 35% and 21% at the end of Q1 2009. Gross margin was $17.8 million in Q2 2009, representing 28% of revenues, compared to $12.8 million or 24% of revenues in Q2 2008. Improved margins reflect the positive impacts of a stronger U.S. dollar, and higher volumes of work flowing through the organization during the period. Net research and development expense was $4.5 million in the quarter, compared to $3.0 million in the second quarter of 2008. The increase was due to a combination of lower outside funding than the prior year, and spending on a development project which the Company believes holds potential for future work in both Europe and North America. Gross R&D spending in the quarter was $5.5 million, compared to $4.6 million in Q2 2008. Outside funding was $1.0 million in the current quarter, compared to $1.7 million a year earlier. Selling, general and administrative expenses were $8.1 million in the second quarter, compared to $8.5 million in Q2 2008, while as a percentage of total revenue, SG&A was 13%, down from 16% a year earlier. Reduced costs associated with the work of the Special Committee were partly offset by increased costs related to bidding activities, business development, and corporate development. Net income for the quarter was $4.9 million, up from $2.0 million in Q2 2008, while earnings per share were $0.07, compared to $0.03 a year earlier. COM DEV ended the quarter with $31.9 million of cash and equivalents, compared to $9.2 million at January 31, 2009. Operating activities generated $7.2 million of cash in Q2 2009, while financing activities generated $19.6 million, primarily due to the issuance of 7,797,000 new common shares. At April 30, 2009, the Company had outstanding debt of $25.5 million including the current portion, and its $27 million line of credit facility was not drawn upon. COM DEV's basic share count averaged 73,790,688 (fully diluted: 74,009,630) in the second quarter, and stood at 76,100,289 on April 30, 2009. Conference Call A conference call will be held Thursday, June 11, 2009 at 5:30 pm EDT to discuss this announcement. 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(TM) to listen to the webcast. 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: the determinations made by the special committee of COM DEV's board of directors which is charged with reviewing COM DEV's historical stock option granting practices; the determinations made by outside advisors, auditors and others with respect to this ongoing review; unanticipated developments and delays encountered during this ongoing review; developments relating to COM DEV's communication with the Ontario Securities Commission during this ongoing review; additional corrections that may be required based on factual findings and analysis obtained during this ongoing review; legal and accounting developments regarding stock option grants and interpretations of such guidance; 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 Statements of Operations (Canadian dollars in thousands, except for per share figures) Unaudited For the three months ended April 30 2009 2008 ------------------------------------------------------------------------- Revenue $ 64,104 $ 54,165 Cost of revenue 46,338 41,349 ------------ ------------ Gross margin 17,766 12,816 ------------ ------------ Research and development costs 5,525 4,633 Research and development recovery 987 1,673 ------------ ------------ Net research and development 4,538 2,960 Selling and general expenses 8,082 8,497 ------------ ------------ Operating income 5,146 1,359 Interest income (101) (168) Foreign exchange loss (gain) 315 (544) Other expense 99 109 ------------ ------------ Income before non-controlling interest 4,833 1,962 Non-controlling interest (20) (2) ------------ ------------ Net income $ 4,853 $ 1,964 ------------ ------------ ------------ ------------ Earnings per share Basic and diluted earnings per share $ 0.07 $ 0.03 COM DEV International Ltd. Consolidated Statements of Operations (Canadian dollars in thousands, except for per share figures) Unaudited For the six months ended April 30 2009 2008 ------------------------------------------------------------------------- Revenue $ 120,615 $ 99,045 Cost of revenue 88,171 75,430 ------------ ------------ Gross margin 32,444 23,615 ------------ ------------ Research and development costs 9,371 7,407 Research and development recovery 2,031 2,430 ------------ ------------ Net research and development 7,340 4,977 Selling and general expenses 15,475 15,345 ------------ ------------ Operating income 9,629 3,293 Interest expense (income) 322 (231) Foreign exchange (gain) loss (87) 26 Other expense 207 176 ------------ ------------ Income before non-controlling interest 9,187 3,322 Non-controlling interest (20) 13 ------------ ------------ Net income $ 9,207 $ 3,309 ------------ ------------ ------------ ------------ Earnings per share Basic and diluted earnings per share $ 0.13 $ 0.05 COM DEV International Ltd. Consolidated Balance Sheets (Canadian dollars in thousands) Unaudited As at As at April 30, October 31, 2009 2008 ------------------------------------------------------------------------- Assets Current Cash and cash equivalents $ 31,896 $ 16,102 Accounts receivable 38,433 41,085 Inventory 60,891 45,941 Prepaids and other 2,962 1,772 Income taxes recoverable 3,852 2,819 Future income tax assets - current 3,957 3,957 ------------ ------------ 141,991 111,676 Property, plant and equipment 71,806 71,960 Intangible assets 12,407 13,413 Goodwill 2,618 2,522 Future income tax assets - long term 3,958 3,958 ------------ ------------ Total assets $ 232,780 $ 203,529 ------------ ------------ ------------ ------------ Liabilities Current Accounts payable and accrued liabilities $ 31,630 $ 35,467 Deferred revenue 21,271 14,828 Current portion of loans payable 7,145 6,203 ------------ ------------ 60,046 56,498 ------------ ------------ Long term Loans payable 18,318 23,223 Employee future benefits 2,121 2,224 ------------ ------------ 20,439 25,447 ------------ ------------ Total liabilities 80,485 81,945 ------------ ------------ Non-controlling interest 505 524 ------------ ------------ Shareholders' equity Share capital 346,007 323,975 Contributed surplus 2,203 1,879 Deficit (194,858) (204,065) Accumulated other comprehensive income (1,562) (729) ------------ ------------ Total shareholders' equity 151,790 121,060 ------------ ------------ Total liabilities and shareholders' equity $ 232,780 $ 203,529 ------------ ------------ ------------ ------------ COM DEV International Ltd. Consolidated Statements of Cash Flows (Canadian dollars in thousands) Unaudited For the three months ended April 30 2009 2008 ------------------------------------------------------------------------- Operating activities Net income from continuing operations $ 4,853 $ 1,964 Amortization 2,842 2,025 Gain on disposal of assets (26) (211) Stock compensation expense 156 122 Employee stock option plan awards 97 111 Unrealized foreign exchange (gain) loss on long term debt - 81 Non-controlling interest (20) (2) ------------ ------------ 7,902 4,090 Net change in non-cash working capital items (730) (5,951) ------------ ------------ Operating activities 7,172 (1,861) ------------ ------------ Financing activities Shares issued 21,615 - Repayment of long term debt (2,045) (502) ------------ ------------ Financing activities 19,570 (502) ------------ ------------ Investing activities Acquisition of capital assets (3,897) (2,745) Proceeds on disposal of capital assets 26 213 Acquisition of intangible assets (86) (208) Business acquisition (140) (297) ------------ ------------ Investing activities (4,097) (3,037) ------------ ------------ Effect of exchange rate changes on cash 8 9 ------------ ------------ Net increase (decrease) in cash 22,653 (5,391) Cash and cash equivalents, beginning of period 9,243 14,266 ------------ ------------ Cash and cash equivalents, end of period $ 31,896 $ 8,875 ------------ ------------ ------------ ------------ Interest paid $ 228 $ 249 ------------ ------------ ------------ ------------ COM DEV International Ltd. Consolidated Statements of Cash Flows (Canadian dollars in thousands) Unaudited For the six months ended April 30 2009 2008 ------------------------------------------------------------------------- Operating activities Net income from continuing operations $ 9,207 $ 3,309 Amortization 5,691 3,944 Gain on disposal of assets (26) (211) Stock compensation expense 386 399 Employee stock option plan awards 97 96 Unrealized foreign exchange (gain) loss on long term debt - 643 Non-controlling interest (20) 13 ------------ ------------ 15,335 8,193 Net change in non-cash working capital items (11,915) (23,230) ------------ ------------ Operating activities 3,420 (15,037) ------------ ------------ Financing activities Shares issued 21,873 2 Repayment of long term debt (3,615) (902) ------------ ------------ Financing activities 18,258 (900) ------------ ------------ Investing activities Acquisition of capital assets (5,194) (6,217) Proceeds on disposal of capital assets 26 213 Acquisition of intangible assets (206) (317) Business acquisition (140) (374) ------------ ------------ Investing activities (5,514) (6,695) ------------ ------------ Effect of exchange rate changes on cash (370) 65 ------------ ------------ Net increase (decrease) in cash from continuing operations 15,794 (22,567) Net cash used in discontinued operations - (271) ------------ ------------ Net increase (decrease) in cash 15,794 (22,838) Cash and cash equivalents, beginning of period 16,102 31,713 ------------ ------------ Cash and cash equivalents, end of period $ 31,896 $ 8,875 ------------ ------------ ------------ ------------ Interest paid $ 677 $ 468 ------------ ------------ ------------ ------------ COM DEV International Ltd. Consolidated Statements of Changes in Equity (Canadian dollars in thousands) Unaudited Accumulated For the six Other months ended Comprehensive Share Contributed April 30, 2009 Total Deficit Income Capital Surplus ------------------------------------------------------------------------- Balance, October 31, 2008 $ 121,060 $(204,065) $ (729) $ 323,975 $ 1,879 Comprehensive income Net Income 9,207 9,207 - - - Foreign currency translation adjustments (net of taxes of $nil) (833) - (833) - - ---------- ---------- ---------- ---------- ---------- 8,374 9,207 (833) - - Common stock issued 21,873 22,032 (159) Value of ESOP awards 97 - - - 97 Expense recognized for stock-based compensation 386 - - - 386 ---------- ---------- ---------- ---------- ---------- Balance, April 30, 2009 $ 151,790 $(194,858) $ (1,562) $ 346,007 $ 2,203 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ------------------------------------------------------------------------- For the six months ended April 30, 2008 Balance, October 31, 2007 $ 106,424 $(216,444) $ (1,993) $ 323,862 $ 999 Comprehensive income Net Income 3,309 3,309 - - - Foreign currency translation adjustments (net of taxes of $nil) 129 - 129 - - ---------- ---------- ---------- ---------- ---------- 3,438 3,309 129 - - Common stock issued 2 - - 113 (111) Value of ESOP awards 96 - - - 96 Expense recognized for stock-based compensation 399 - - - 399 ---------- ---------- ---------- ---------- ---------- Balance, April 30, 2008 $ 110,360 $(213,135) $ (1,864) $ 323,975 $ 1,383 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- %SEDAR: 00003673E 

For further information: Gary Calhoun, Chief Financial Officer, Tel: (519) 622-2300 ext. 2826, Fax: (519) 622-2158, [ gary.calhoun@comdev.ca ]; Jeff Codispodi, The Equicom Group, Tel: (416) 815-0700 ext. 261, Fax: (416) 815-0080, [ jcodispodi@equicomgroup.com ]