NORSAT RE-ESTABLISHES PROFITABILITY IN THIRD QUARTER
norsat.com
SURREY BRITISH COLUMBIA, CANADA, November 10, 1998 (TSE symbol NII; NASDAQ symbol NSATF) Strong consumer satellite sales
combined with increased global distribution of satellite and cable products enabled NII Norsat International Inc. to restore is profitability in the third
quarter.
Third quarter sales increased to $18 million, from $14 million during the same period last year. Norsat reported net earnings from continuing operations of
$227 thousand or 0.01 per share, down from earnings of $399 thousand for the third quarter of 1997, but up significantly over the net loss of $651
thousand reported in the second quarter of this year.
Sales for the first nine months of 1998 increased by 10 per cent, to $44 million. However, due to the loss in the first half, Norsat posted a net loss of $734
thousand or $0.04 per share, compared to net earnings from continuing operations of $1.5 million or $0.08 for the same period in 1997.
I am pleased with the efforts of our people to remain focused on the business and identify new opportunities that position the Company for future growth,
says Robert Bucher, Norsats newly appointed president and chief executive officer. In addition we have added knowledge and business expertise with the
appointment to our Board of Directors of Dr. Moe Barakat (president of InfoMagnetics Technologies Corporation), Ross Smith (former managing partner
of KPMG) and Dr. John MacDonald (former chairman of MacDonald Dettwiler and Associates Ltd.). These strengths, combined with continued
investment in high value products and global distribution, support the Companys commitment to consistent, quarter-to-quarter earnings improvements.
Diamond Pacific, Inc.
Norsats U.S. consumer satellite distribution subsidiary, Diamond Pacific, Inc. continued to report strong sales and position itself for significant future
growth.
During the quarter, DPI was named a Master System Operator (MSO) by US Satellite Broadcasting (USSB), complementing previous agreements with
DIRECTV and Hughes DIRECPC. DPI also succeeded in signing over 200 dealers to handle MDU installations.
These key achievements, together with the expansion of its nationwide distribution network, solidified Diamond Pacifics role as a leading provider to the
MDU market, which is projected to approach $5 billion for satellite television by the year 2007.
Aurora Distributing
In Canada, Aurora Distributing continued to grow marketshare and rebuild its position as the countrys number one supplier of consumer satellite equipment.
With the establishment of an aggressive marketing program combined with Auroras strengths in service and customer satisfaction, the subscriber base grew
by nearly 50 per cent in the quarter, making it the single most successful period in the divisions history.
Auroras future growth in Canada was also supported by Norsat concluding the litigation process related to the sale of U.S. satellite systems.
Satellite and Cable Division
During the third quarter, Norsat expanded its global reach and supported its position as the premier supplier of satellite and cable system technology. The
divisions sales were in line with expectations. Significant international orders were delivered to Shantou Radio and TV Equipment Company, as part of an
ongoing partnership in China and Pouyet in Argentina, a company focussed on pay television markets in South America.
Satellite and Cable introduced a new line of products for North American private cable systems used in hospitals, hotels and to support the MDU market
through the Diamond Pacific distribution network.
Investment in product development increased to three per cent of sales highlighting the Companys commitment to this side of the business, as demonstrated
earlier this year by the acquisition of IMT Communications Systems Inc. Expenditures were focused on Ka-band technology designed specifically for
high-speed, two-way information networks, poised for implementation in Europe.
Norsats objective is better than average industry growth rates and profitability, says Bucher. As the premier product and service provider in both
commercial and consumer markets, we are positioned to fully capitalize on the tremendous opportunities available to us in the global satellite industry.
NII Norsat International Inc. designs, engineers and distributes products for use in the satellite wireless communications and cable television industries. It
also distributes consumer satellite equipment and home entertainment systems through its Aurora Distributing division in Canada and through its U.S.
subsidiary, Diamond Pacific, Inc.
Three months ended Sept. 30
Nine months ended Sept. 30
1998
1997*
1998
1997*
Sales
$ 17,800
$ 14,073
$ 43,779
$ 39,733
Earnings before interest, taxes,
depreciation and amortization
534
700
279
2,340
Net earnings (loss) from
continuing operations
227
399
(734)
1,512
Net earnings (loss) per share from
continuing operations
$ 0.01
$ 0.02
$ (0.04)
$ 0.08
Shares issued
20,833,362
19,788,410
* Restated for discontinued operations adjustment
This document may contain certain forward-looking information and statements concerning the Companys operations, performance and financial condition, including, in
particular, the likelihood of the Companys success in developing and expanding its business. These statements are based upon a number of assumptions and estimates that
are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of the Company. Actual results may differ materially from those
expressed or implied by such forward-looking statements.
For more information contact:
Derick J. Walker
Corporate Communications
NII NORSAT INTERNATIONAL INC.
Phone (604) 597-6283 Fax (604) 597-6214
norsat.com info@norsat. |
