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Gold/Mining/Energy : Com Dev International -- Ignore unavailable to you. Want to Upgrade?

To: Constance Collard who wrote (135)	3/22/2000 5:10:00 PM
From: Bid daddy	Read Replies (1) \| Respond to of 216

Contracts breathe life into Com Dev Stephen Miles Financial Post, with files from news services Investors are playing a waiting game with Com Dev International Ltd. The Cambridge, Ont.-based wireless phone and satellite equipment maker is coming off a year of horror in which it lost $2.17 a share and underwent a corporate restructuring to get its business affairs back in order. However, there are promising signs the 26-year-old firm is poised for a turnaround. But winning back the confidence of investors may be a harder task. In recent years, Com Dev stock (CDV/TSE) has performed terribly. After trading as high as $38 in 1997, it crumbled to a record low of $2.40 last April after a string of losses sent investors fleeing in droves. After a mid-year revival, the shares once again lost more than a third of their value last August after Com Dev warned it would lose $6-million in its fiscal third quarter, rather than the $2-million that had been expected. It also said it would lay off 200 workers as part of a restructuring program designed to cut annual costs by $8-million to $10-million. Since then, the shares have steadily been clawing their way back. After breaking through $4 in November they bumped along in the $6 range until the middle of last month when they moved sharply higher. They peaked at $12.60 on Feb. 29 and have settled back amid the volatility of the sector, ending yesterday down 55½ at $9.75. Com Dev's business is divided into two main units -- space and wireless. Wireless revenue rose steadily in fiscal 1999 and in its fourth quarter was up 75% to $23.1-million, from $13.2-million a year earlier. Space group revenue fell throughout the year and was down 25% in the fourth quarter at $17.5-million, from $23.2-million. However, several new supply contracts in both divisions are responsible for bringing the stock back to life, analysts say. On Feb. 21, the wireless group won a contract worth at least $50-million to supply radio frequency conditioning equipment components to a global supplier of CDMA and GSM wireless networks. The company said the value of the deal has the potential to escalate over the life of the contract. Three days later, a $10-million space hardware contract with Lockheed Martin Commercial Space Systems to supply microwave equipment for a new satellite that will provide telecommunications services to the Atlantic region was announced. "This program represents another major vote of confidence for our core space products", said John Keating, president of Com Dev space group. "It demonstrates that our filter and switching technology will play an important and growing role in the continuing build-out of the satellite component of global, wireless infrastructure." There was more good news on Feb. 29 when Com Dev announced the commercial launch of its cellular base station, GlobalCell IID. This month, the company produced further evidence its restructuring plans were working when it reported better operating results for its first quarter ended Jan. 31, 2000. Revenue rose to $42-million, from $40.6-million in the fourth quarter of 1999, while its loss narrowed to $3.9-million (2½ a share) from a loss of $5.2-million (16½) in the previous quarter. "During the first quarter we have laid the foundation to improve both revenue and margins," said Keith Ainsworth, chief executive. "More significantly, however, we have made great progress implementing our new strategy of addressing very specific new markets. When combined with our improving operating margins, I firmly believe the stage has now been set for a very successful turnaround." The wireless communications industry is experiencing rapid worldwide growth, due in part to improvements in communications products such as cellular, PCS/PCN, global satellite telephones and wireless data systems. Research group Via Satellite forecasts there will be 227 million subscribers to mobile satellite services by 2006. There are proposals for the launch of 486 high-speed satellites between 2001 and 2005. At current growth rates, world satellite industry revenue is predicted to rise to $190-billion (US) in 2007 from $51.2-billion (US) in 1997, 50% of which will be in satellite services. The consensus estimate of analysts polled by First Call Corp. is for earnings of 2½ a share in fiscal 2000 and 22½ in fiscal 2001. Tony Yue, an analyst at Canaccord Capital Corp. in Vancouver, has a "market perform" rating on the shares, though he acknowledged that recent developments "are pointing to a positive year" for the company. Based on the recent booking of more than $65-million in new business -- $17-million for the space group and $48-million for wireless -- and continued progress in operating efficiency, management is expecting a return to profitability in fiscal 2000 and to a 15% increase in revenue, Mr. Yue wrote in a recent report. He is at the bullish end of the scale on earnings expectations. "We maintain our 8½ EPS forecast for fiscal 2000 and think that Com Dev will begin to show positive earnings in the second half of the fiscal year," he said. COM DEV INTERNATIONAL LTD.: CEO: Keith Ainsworth Ticker: CDV Listed: Toronto Stock Exchange Head office: 155 Sheldon Drive, Cambridge, Ont., N1R 7H6 Telephone: (519) 622-2300