COM DEV announces return to profitability in third quarter
Fourth consecutive quarter of revenue growth
CAMBRIDGE, ON, Aug. 30 /CNW/ - COM DEV International Ltd. (TSE: CDV)
today announced its results for the third quarter ended July 31, 2000.
The Company returned to profitability and posted its fourth consecutive
quarter of revenue growth. The Company expects to sustain these positive
trends as COM DEV Wireless and COM DEV Space, the Company's two operating
divisions, continue to report growing demand for their products.
Revenue increased by 32% in the quarter to $50.5 million from $38.3
million in the third quarter of 1999. For the nine months ended July 31, 2000,
revenue was $137.4 million compared to $121.8 million for the same period in
the prior year.
For the quarter, net income was $1.6 million (three cents per share). The
net income figure includes finance charges and a gain on the Company's
investment in the SpaceBridge Networks Corporation. Operating profit was $0.2
million compared to an operating loss of $11.7 million before one-time
additional costs recorded in the third quarter of 1999.
"During the third quarter, we continued to see success from our
restructuring program. We have returned to profitability as outlined in the
plan I described to shareholders during our Annual General Meeting in April
2000." said Keith Ainsworth, COM DEV's President and Chief Executive Officer.
"Steady expansion in bid activity and new orders, combined with across-the-
board productivity improvements in both divisions, indicates that these
positive trends will continue."
COM DEV Wireless
Revenue for COM DEV Wireless in the third quarter of 2000 was $25.0
million, compared with $19.5 million in the third quarter of 1999. For the
nine months ended July 31, 2000, revenue was $74.8 million compared to $53.2
million in the prior year, an increase of 41%.
"This quarter has been marked by very strong demand for COM DEV Wireless'
core products," said Roger Boivin, President of COM DEV Wireless. "Significant
order growth from new customers, increasing levels of satisfaction from
existing customers and ongoing efficiency improvements are providing steady
and continuing improvement in our operating performance. We are aggressively
pursuing development of our new high-speed wireless Internet system,"
continued Mr. Boivin. "It has the potential to generate incremental growth
over the next three to five years that will add new dimension to our current
operations."
COM DEV Space
COM DEV Space revenue for the third quarter grew to $25.5 million
compared to $18.8 million in the third quarter of 1999, an increase of 36%.
Order backlog at the end of the quarter was $81 million.
"I am very pleased with our results," said John Keating, President of COM
DEV Space. "COM DEV Space continues to build a very robust order book. In
addition, our efforts to improve efficiency and control costs are generating
steady increases in our overall profitability".
About COM DEV
COM DEV International Ltd. is a leading producer of wireless
infrastructure and the largest Canadian-owned designer and manufacturer of
space hardware subsystems. It operates through two divisions: COM DEV Wireless
and COM DEV Space that together employ more than 1,200 people at facilities in
Ontario, New Brunswick, the United States, the United Kingdom and China.
An analyst conference call will take place at 10:00 am EST on Thursday 31
August, 2000. The conference call will be web cast live via COM DEV's web site
and will be archived for one year. To access the call, visit the COM DEV web
site at www.comdev.cc for further instructions.
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 competitive product offerings and pricing, and
general economic 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 July 31 2000 1999
------------------------------------------------------------------------
Revenue $ 50,514 $ 38,273
Cost of revenue 37,774 39,505
----------- -----------
Gross margin 12,740 (1,232)
Research and development 5,941 5,187
Selling and general expenses 6,573 5,330
----------- -----------
Operating income (loss) 226 (11,749)
Financial (780) (827)
Dilution gain 2,124 --
Restructuring provision -- (13,960)
Loss from discontinued operations -- (2,291)
Provision for discontinued operations -- (30,394)
----------- -----------
Net income (loss) $ 1,570 $ (59,221)
----------- -----------
Basic earnings (loss) per share $ 0.04 $ (1.84)
Fully diluted earnings (loss) per share $ 0.03 $ (1.84)
Basic weighted average number of shares 40,381,697 32,213,439
Fully diluted weighted average number of shares 45,103,651 36,561,264
For the nine months ended July 31 2000 1999
------------------------------------------------------------------------
Revenue $ 137,407 $ 121,827
Cost of revenue 108,916 102,565
----------- -----------
Gross margin 28,491 19,262
Research and development 14,370 13,794
Selling and general expenses 18,625 19,233
----------- -----------
Operating loss (4,504) (13,765)
Financial (1,945) (1,371)
Dilution gain 2,124 --
Restructuring provision -- (13,960)
Loss from discontinued operations -- (3,420)
Provision for discontinued operations -- (30,394)
----------- -----------
Net loss $ (4,325) $ (62,910)
----------- -----------
Basic loss per share $ (0.12) $ (1.95)
Fully diluted loss per share $ (0.12) $ (1.95)
Basic weighted average number of shares 36,326,681 32,180,197
Fully diluted weighted average
number of shares 41,048,635 36,618,251
Consolidated Balance Sheet
(Unaudited)
(Canadian dollars in thousands)
As at July 31 2000 1999
------------------------------------------------------------------------
Current assets
Cash $ 904 $ 171
Accounts receivable 38,735 40,408
Inventory 49,330 43,865
Prepaids and other 2,594 2,824
Income taxes recoverable 1,480 6,894
------------ ------------
93,043 94,162
Investments 4,624 1,800
Capital assets 63,268 70,772
Goodwill 7,759 7,560
------------ ------------
Total assets $ 168,694 $ 174,294
------------ ------------
------------ ------------
Current liabilities
Bank indebtedness $ 7,434 $ 14,949
Accounts payable and accrued
liabilities 34,787 49,434
Deferred revenue 10,651 4,149
Current portion of loans payable 2,655 1,778
------------ ------------
55,527 70,310
Long term liabilities
Loans payable 4,751 18,561
------------- ------------
Total liabilities 60,278 88,871
------------ ------------
Shareholders' equity
Share capital 201,186 163,762
Deficit (88,820) (78,097)
Currency translation adjustment (3,950) (242)
------------ ------------
Total shareholders' equity 108,416 85,423
------------ ------------
Total liabilities and shareholders' equity $ 168,694 $ 174,294
------------ ------------
Number of shares outstanding 40,402,411 32,213,439
Fully diluted number of shares outstanding 45,124,364 36,561,264
Consolidated Cash Flows Statement
(Unaudited)
(Canadian dollars in thousands)
For the nine months ended July 31 2000 1999
------------------------------------------------------------------------
Cash flows from operating activities
Net loss $ (4,325) $ (62,910)
Items not requiring any outlay of cash
Amortization 8,020 10,195
Other (740) 25,162
------------ ------------
2,955 (27,553)
Net changes in non-cash working capital
items related to operations (4,098) 5,723
------------ ------------
Cash used in operating activities (1,143) (21,830)
------------ ------------
Cash flows from financing activities
Common shares issued (net of cost) 36,253 --
Increase (decrease) in loans payable (31,846) 20,365
------------ ------------
Cash flows from financing activities 4,407 20,365
------------ ------------
Cash flows from investing activities
Acquisition of capital assets (2,644) (4,704)
Investments (700) (1,800)
------------ ------------
Cash flows used in investing activities (3,344) (6,504)
------------ ------------
Net decrease in cash and cash equivalents (80) (7,969)
Cash and cash equivalents, beginning of
period 984 8,140
------------ ------------
Cash and cash equivalents, end of
period $ 904 $ 171
------------ ------------
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%SEDAR: 00003673E
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