Wescam third-quarter results
Wescam Inc WSC
Shares issued 14,467,602 Sep 7 close $4.85
Wed 8 Sept 99 News Release
Mr. Rick Ziemski reports
Wescam had consolidated net earnings applicable to common shares of
$2.9-million for the third quarter of fiscal 1999 compared with
$1.2-million for the third quarter of fiscal 1998. Revenue increased 60 per
cent to $34.7-million from $21.7-million for the third quarter in the prior
year. The earnings per common share for the third quarter of fiscal 1999
were 20 cents, compared with nine cents in the third quarter of 1998.
Earnings before interest, taxes, depreciation and amortization) for the
third quarter of 1999 were $8.4-million compared with $3.9-million in 1998.
The net earnings of $2.9-million for the third quarter reflect the
following: operational earnings of $2.2-million; an after-tax gain of
$1.4-million related to the sale of certain non core business assets of
Versatron Corporation, a U.S. subsidiary; and a writedown of the assets of
the company's U.K. subsidiary, Wescam Europe Limited (formerly known as TV2
Limited), in the amount of $0.7-million which is reflected primarily in
depreciation and amortization. Wescam sold the non core assets of Versatron
for cash consideration of $9.8-million with an additional $3.0-million
contingent on future contract awards. Based on the terms of the acquisition
of Versatron in December, 1995, the company has an obligation to the former
Versatron shareholders of approximately $4.4-million related to this sale.
Consolidated net earnings applicable to common shares for the first three
quarters of fiscal 1999 were $3.1-million compared with net earnings of
$1.2-million in 1998. Revenue for the first three quarters of the year
amounted to $82.8-million compared with $52.7-million for the same period
in 1998. The earnings per common share totalled 22 cents versus nine cents
in 1998. Year to date EBITDA for 1999 was $12.4-million compared with
$7.4-million in the first three quarters of fiscal 1998.
The company's backlog at the end of the third quarter of fiscal 1999
amounted to $104.9-million, compared with $103.3-million at the end of the
same period in 1998.
The public safety and surveillance division generated $27.8-million, or
80.1 per cent of third quarter revenue, compared with $14.9-million, or
68.7 per cent in the third quarter of the previous year. The entertainment
division generated $6.9-million, or 19.9 per cent of the revenue for the
period, compared with $6.8-million, or 31.3 per cent in 1998.
"We are pleased with the company's third quarter results and the consistent
strength of our backlog," said Mark Chamberlain, Wescam's president and
chief executive officer. "The 87-per-cent increase in sales in our public
safety and surveillance division is primarily a result of the higher
delivery rate of Wescam camera systems pertaining to a number of large
program contracts. The sale of the actuator business is an indicator of the
company's focus on its core business and has added approximately
$3.0-million to working capital."
CONSOLIDATED STATEMENT OF EARNINGS
Three months ended
(thousands of dollars)
July 31 Aug. 1
1999 1998
Revenue $ 34,720 $ 21,747
Cost of sales 22,260 13,232
--------- ----------
Gross profit 12,460 8,515
--------- ----------
Expenses
Research and
development 3,029 1,516
Administrative 2,394 1,614
Selling 1,847 1,490
Depreciation and
amortization 2,066 1,718
Gain on sale
of assets (3,223) -
--------- ----------
6,113 6,338
--------- ----------
Operating income
(loss) 6,347 2,177
--------- ----------
Interest on
long-term debt 199 182
Other interest and
finance charges 156 199
Interest income (19) (2)
--------- ----------
336 379
--------- ----------
Earnings (loss)
before income taxes 6,011 1,798
--------- ----------
Income taxes
Current 3,022 591
Deferred - (6)
--------- ----------
Income taxes 3,022 585
--------- ----------
Net earnings (loss) $2,989 $1,213
--------- ----------
Interest on equity
component of
convertible
debenture 84 -
--------- ----------
Net earnings (loss)
applicable to
common shares $2,905 $1,213
========= ==========
Earnings per share 20 cents 9 cents
CONSOLIDATED STATEMENT OF EARNINGS
Nine months ended
(thousands of dollars)
July 31 Aug. 1
1999 1998
Revenue $ 82,762 $ 52,714
Cost of sales 54,406 31,578
--------- ----------
Gross profit 28,356 21,136
--------- ----------
Expenses
Research and
development 7,284 3,981
Administrative 7,075 5,353
Selling 4,775 4,387
Depreciation and
amortization 4,967 4,480
Gain on sale
of assets (3,223) -
--------- ----------
20,878 18,201
--------- ----------
Operating income
(loss) 7,478 2,935
--------- ----------
Interest on
long-term debt 620 527
Other interest and
finance charges 612 503
Interest income (41) (22)
--------- ----------
1,191 1,008
--------- ----------
Earnings (loss)
before income taxes 6,287 1,927
--------- ----------
Income taxes
Current 2,790 711
Deferred 127 (16)
--------- ----------
Income taxes 2,917 695
--------- ----------
Net earnings (loss) $3,370 $1,232
--------- ----------
Interest on equity
component of
convertible
debenture 244 -
--------- ----------
Net earnings (loss)
applicable to
common shares $3,126 $1,232
========= ==========
Earnings per share 22 cents 9 cents
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