Attention Business/Financial Editors:
COM DEV announces first quarter results for fiscal 2000
Company believes it is on track to achieve promised
return to profitability this year
CAMBRIDGE, ON, March 6 /CNW/ - COM DEV International Ltd. (TSE:CDV) today
announced results for the first quarter ended January 31, 2000. The improved
operating results confirm that the Company is on track with its stated plan to
return to profitability in fiscal 2000.
Revenue increased in the quarter to $42.0 million from $40.6 million in
the fourth quarter of 1999, compared to $41.9 million in the first quarter of
fiscal 1999. This growth was led by continued strong growth in the Wireless
Group.
The Company's loss narrowed in the first quarter to $3.9 million or 12
cents per share, substantially down from a net loss of $5.2 million or 16
cents per share, in the fourth quarter of 1999.
Keith Ainsworth, chief executive officer stated, "During the first
quarter we have laid the foundation to improve both revenue and margins during
the balance of the year. More significantly however, we have made great
progress implementing our new strategy of addressing very specific new
markets. The burgeoning broadband wireless internet market represents a huge
opportunity for us. It is a natural opportunity for our new software defined
radios and we have every expectation of being a major player in this area." He
went on to add, "The improving trends in customer demand and relationships are
already reflected in our much greater level of bid activity. When combined
with our improving operating margins, I firmly believe the stage has now been
set for a very successful turnaround."
Wireless Group
Revenue for the Wireless Group in the first quarter of 2000 was $26.4
million, compared with $23.1 million in the fourth quarter of 1999, and $16.5
million in the first quarter of 1999. This quarter-over-quarter progress is in
line with the Wireless Group's plan for the year.
"We've made good progress this quarter towards meeting our business plan
objectives for the year," said Peter Scovell, president of the Wireless Group.
"Strong top line growth together with margin and efficiency improvements have
resulted in significant improvement in our operating performance. We
anticipate continued margin improvement as a result of these steps we have
taken to reduce fixed-costs. In addition, we have investments in new products
and capabilities that will begin to pay off this year and will contribute to
continuing growth over the long term".
Highlights for the quarter are summarized in the following:
- The complete integration of California-based Lober & Walsh Engineering,
Inc. into the Wireless Group to form the nucleus of the company's new
wireless software and digital hardware product development centre.
- The escalation of the Group's major RF conditioning supply contract
beyond $50 million including the supply of product from our facility in
Suzhou, China.
- The appointment of experienced industry executives to positions in the
Group. Mr. Roger Boivin was appointed as vice president of Marketing
and Sales and Mr. Kim Chong was appointed as vice president of Global
Manufacturing Operations.
- The launch of the Group's new TDMA Cellular/PCS Base Station product.
The new TDMA Base Station, features COM DEV's software defined radio
design and scaleable architecture. It is the first product resulting
from the new wireless software and digital hardware development centre.
During the first quarter, this product completed beta trials and saw
its first commercial installation with a Caribbean customer. The
underlying radio technology used in this product provides the
foundation for future broadband wireless internet products now in
development.
Space Group
Space Group revenue for the first quarter was $15.6 million compared with
$17.5 million in the fourth quarter of 1999 because of programs delayed into
the second quarter. However, the order backlog at the end of the quarter has
grown to $44 million, reflecting $19 million in new orders.
Highlights for the quarter are summarized in the following:
- The award of a $10.6 million contract with Lockheed Martin for the
supply of multiplexers and switches for the NSS-7 (New Skies)
satellite.
- The award of a contract for the supply of Space Group's core
multiplexer and switch products for the OPTUS C1 program being built by
Mitsubishi Electric Corporation.
- The award of the definition phase contract for a new Canadian program
that will provide satellite-based multimedia services to the Americas
and the Caribbean. The innovative, multimedia geostationary orbit
satellite will use a new multi-beam design that is enabled by COM DEV's
Beam(x)Link(TM) processor technology. As a result this program has
significant potential for follow-on development and production
contracts.
- An important breakthrough was made in improving yield on certain switch
products that were responsible for reducing Space Group's operating
margins in previous quarters.
"A strong and growing order forecast together with these process
improvements, will result in significant improvement in both revenue and
margins in the latter quarters of fiscal 2000", said John Keating, president
of Space Group.
Financing
On February 8, 2000 the Company announced plans to complete an equity
financing by way of a rights offering. This offering was made to all
shareholders of record on February 18, 2000. This financing is scheduled to
close on March 15, 2000. It is expected to raise approximately $36 million.
Under the terms of the rights offering, each registered common shareholder is
entitled to one right for each common share held. Rights holders are entitled
to purchase one common share at a subscription price of $4.60 for every four
rights held. The rights will expire at 5:00 p.m. (EST) on March 10, 2000. The
rights are listed for trading on the TSE under the symbol CDV.RT and trading
will terminate at 12:00 p.m. (EST) on March 10, 2000.
COM DEV International Ltd (TSE:CDV), is a leading manufacturer of space
and ground-based wireless communications products and subsystems, and consists
of two operating units: the Wireless Group and the Space Group. The Wireless
Group manufactures ground-based infrastructure subsystems used in microwave
and radio frequency systems, such as GSM, TDMA and CDMA-based digital
telephone systems, and wireless local loop networks. These products are sold
primarily to major PCS wireless equipment vendors. The Space Group
manufactures advanced products that are sold to the major satellite prime
contractors for use in commercial communications satellites.
COM DEV employs more than 1,300 people in facilities in Ontario, New
Brunswick, the United States, the United Kingdom and China.
This news release may contain certain forward-looking statements that
involve risks and uncertainties. Actual results may differ materially
from results indicated in any forward-looking statements. The company
cautions that, among other things, in view of the rapid changes in the
wireless communications markets and technologies, and other risks
including the cost and market acceptance of the company's new products,
the level of individual customer procurements and, and general economics
circumstances, the company's business prospects may be materially
different from forward-looking statements made by the company.
Consolidated Statement of Income
(Unaudited)
(Canadian dollars in thousands, except for per share figures)
For the three months ended January 31 2000 1999
-------------------------------------------------------------------------
Revenue $ 41,958 $ 41,894
Cost of revenue 34,925 32,557
---------- ----------
Gross margin 7,033 9,337
Research and development 4,119 3,715
Selling and general expenses 6,231 7,510
---------- ----------
Operating loss (3,317) (1,888)
Financial (600) (106)
Income from discontinued operation -- 53
---------- ----------
Net loss $ (3,917) $ (1,941)
---------- ----------
---------- ----------
Loss per share
Basic $ (0.12) $ (0.06)
Fully diluted $ (0.12) $ (0.06)
Weighted average number of shares
Outstanding
Basic 32,213,439 32,115,090
Fully diluted 36,711,264 36,462,915
Consolidated Balance Sheet
(Unaudited)
(Canadian dollars in thousands)
As at January 31 2000 1999
-------------------------------------------------------------------------
Current assets
Cash $ 306 $ 7,226
Accounts receivable 43,169 28,691
Inventory 38,927 44,241
Prepaids and other 2,404 2,712
Income taxes recoverable 3,969 7,044
---------- ----------
88,775 89,914
Investments 2,020 --
Product development -- 7,542
Capital assets 66,811 72,501
Goodwill 8,242 29,905
---------- ----------
Total assets $165,848 $199,862
Current liabilities
Bank indebtedness $ 7,472 $ 5,995
Accounts payable and accrued liabilities 34,473 28,840
Deferred revenue 13,023 4,501
Current portion of loans payable 34,090 4,234
---------- ----------
89,058 43,570
Long term liabilities
Loans payable 5,968 9,328
---------- ----------
Total liabilities 95,026 52,898
---------- ----------
Shareholders' equity
Share capital 163,762 163,762
Deficit (87,241) (17,128)
Currency translation adjustment (5,699) 330
---------- ----------
Total shareholders' equity 70,822 146,964
---------- ----------
Total liabilities and shareholders' equity $165,848 $199,862
---------- ----------
---------- ----------
Consolidated Cash Flows Statement
(Unaudited)
(Canadian dollars in thousands)
For the three months ended January 31 2000 1999
-------------------------------------------------------------------------
Cash flows from operating activities
Net loss $ (3,917) $ (1,941)
Items not requiring any outlay of cash
Amortization 2,444 3,487
Other (853) 82
---------- ----------
(2,326) 1,628
Net changes in non-cash working capital items
related to operations 140 (3,217)
---------- ----------
Cash used in operating activities (2,186) (1,589)
---------- ----------
Cash flows from financing activities
Increase in loans payable 3,120 2,624
---------- ----------
Cash flows from financing activities 3,120 2,624
---------- ----------
Cash flows from investing activities
Acquisition of capital assets (606) (3,960)
Investments (220) --
---------- ----------
Cash flows used in investing activities (826) (3,960)
---------- ----------
Net increase (decrease) in cash and
cash equivalents 108 (2,925)
Cash and cash equivalents beginning of period (7,274) 4,156
---------- ----------
Cash and cash equivalents, end of period $ (7,166) $ 1,231
---------- ----------
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%SEDAR: 00003673E
-0- 03/06/2000
For further information: Investor Relations/Media Contact: Ron Holdway, Vice President Corporate Development, Tel: (519)
622-5004, Fax: (519) 622-6391, E-mail: investor.relations@comdev.ca; Analyst Contact: David Belbeck, Chief Financial
Officer, Tel: (519) 622-2300 ext. 2288, Fax: (519) 622-2158, E-mail: david.belbeck@comdev.ca; Website: www.comdev.ca; To
request a free copy of this organization's annual report, please go to www.newswire.ca and click on reports@cnw. |
