COM DEV Announces Second Quarter Results
CAMBRIDGE, ON, May 30 /CNW/ - COM DEV International Ltd. (TSE:CDV) today
announced results for the second quarter ended April 30, 2001. As previously
forecast, quarter-over-quarter growth stalled because of difficult conditions
in the wireless subsystems part of the Company's business. These conditions
are due entirely to continuing sector weakness in North America and Europe.
Notwithstanding, on a year-over-year basis, revenue increased 22% to $54.6
million compared with $44.9 million in the second quarter of 2000, and
increased 32% to $114.6 million for the first six months of 2001 compared with
$86.9 million for the same period in the prior year. In this quarter, COM DEV
Wireless and COM DEV Space generated revenue of $22.4 million and $32.2
million, respectively.
Before finance charges and the ongoing M/ERGY investment, the Company
generated a profit of $3.6 million compared with a loss of $1.4 million in the
second quarter a year ago. After finance charges and M/ERGY development costs,
the Company recorded a net loss for the second quarter of $4.0 million or nine
cents per share.
For the six months ended April 30, 2001, operating income before finance
charges and M/ERGY expenses was $8.4 million compared to a loss of $4.7
million for the same period in the prior year. The net loss for the six months
ended April 30, 2001 was $4.5 million versus a loss of $5.9 million for the
same period in 2000.
Highlights of the second quarter:
- M/ERGY unveiled at the CTIA trade show in Las Vegas to positive
industry reception.
- $32 million additional financing completed.
- John Keating, President of COM DEV Space promoted to Chief Operating
Officer (COO).
CEO's Assessment
Except for the wireless subsystems part of our business, revenue was up
in every sector, including China. Our wireless subsystem business continues to
deal with across-the-sector weakness as customers cut back inventories in the
face of uncertain demand. Management has already taken action to reduce costs
in this part of our business and will continue to seek ways to minimize the
adverse effects of this situation. In addition, there appears to be
consolidation amongst our competitors and customers that we are currently
assessing to determine how they may affect our strategies. While our customers
are reluctant to forecast their requirements beyond 30 days, there are now
macro-economic forecasts from government and banking sources that suggest our
markets should pick up in the next calendar year. The space side of our
business continues to enjoy strong demand for its full range of products. We
see this trend continuing for some time. Our China operations have continued
to show improvements and we believe that they are now also positioned to begin
generating profit next year. As reported previously, we have achieved strong
sales of our TDMA base station product in Nigeria. Financing assistance from
Canada's Export Development Corporation (EDC) has ensured that we have
received prompt payment in what is generally considered a market with above
average risks.
The M/ERGY high-speed wireless Internet system development continues to
go well and remains on schedule to be ready for production in January 2002.
Several recent announcements by large telecommunications companies regarding
the adoption of the 1xEVDO standard have reinforced our position as a pioneer
in the use of this standard with M/ERGY. These announcements will also help
ensure that there will be a good selection of third party 1xEVDO terminals for
customers to choose from when using our M/ERGY infrastructure.
In summary, given that we have been able to achieve progress in certain
key parts of our business despite the very turbulent times we have been facing
in our global wireless markets, I remain optimistic about our long term
prospects. However, due to the lack of any forward market visibility from our
customers, it would not be meaningful for us to attempt to provide a
prediction for the balance of the year. |
