Communication Systems International Inc CSY
Shares issued 6,463,100 Feb 23 close $0.90
Tue 23 Feb 99
Communication Systems International Inc. Reports 1998 Year End Results
Record Profit on 90% Revenue Growth
TSE STOCK SYMBOL: CSY
For detailed financials, visit:
equicomgroup.com
CALGARY, Feb. 23 /CNW/ - Communication Systems International Inc. ("CSI"),
a leading supplier of high accuracy differential global positioning systems
("DGPS"), today reported year end and fourth quarter results for the period
ended December 31, 1998. For the year, revenues grew 90% to $8,350,000,
compared with $4,405,000 for 1997. Earnings for the year were $423,000, or
$0.07 per share, compared with a loss of $3,919,000, or ($0.65) per share,
in 1997.
CSI's improved financial performance in 1998 was due to several factors,
including: (1) the new generation SBX-2 core technology with its enhanced
features and lower price; (2) other new products released during 1998; (3)
increased demand from new markets, such as the Geographical Information
Systems (GIS) market which grew over 300% during 1998; and (4) continued
expansion in the worldwide network of beacon reference stations.
Fourth quarter revenues were up sharply to $2,367,000 -- 4 times the 1997
fourth quarter revenues of $579,000. Earnings for the three months ended
December 31, 1998 were $115,000, or $0.02 per share, compared with a loss
of $2,042,000, or ($0.33) per share for the same period in 1997. "This
completes four consecutive quarters of profitability for the Company,"
stated Stephen Verhoeff, CSI's Chairman and CEO. "We have been successful
in returning to growth and profitability and expect to continue our growth
in 1999."
Gross margins for 1998 improved substantially to 43% from 7% in 1997.
Margins in 1997 were particularly low due to extensive product development
delays and related low sales volume. With the successful introduction of
CSI's new SBX-2 technology in January 1998, sales volumes reached record
levels and margins returned to anticipated levels. The Company expects to
maintain gross margins in 1999.
Total expenses for the year decreased 25% as part of an expense reduction
program initiated during the second half of 1997. Management will continue
to closely monitor expenses through 1999. Inventory turnover was also
improved in 1998, drawing inventory at the end of the year down to $726,000
from $1,333,000 at the end of 1997.
CSI remains debt free and has been adding to its cash position with
positive earnings and cash flow. As of December 31, 1998, CSI held
approximately $1.2 million in cash with working capital of $2.3 million.
Throughout 1998, CSI's Engineering team produced several new products
providing an entirely new suite of SBX-2 based GPS/DGPS receivers. 1998
also saw the introduction of CSI's L-Band receiver, which provides
dual-mode capability for differential beacon or satellite signals. The
Company is optimistic about the L-Band receiver's prospects in 1999.
As part of CSI's OEM customer strategy, the Company received ISO 9002
certification in December. This certification will assist the Company in
negotiating with larger customers who require high levels of consistency
and quality.
Industry trends remain positive. During the year the US Government approved
funding to continue the implementation of the National DGPS for seamless
coverage of differential beacon reference stations throughout the
continental US.
Based in Calgary, Canada, CSI was established in 1990 and has grown to
become a leading global manufacturer of Differential GPS beacon receivers,
combined DGPS/GPS receivers, OEM circuit boards and antenna systems. Its
products are employed worldwide in many DGPS applications, including
marine, precision farming, geographic information systems, automatic
vehicle location, hydrographic surveying, commercial fishing and
recreational uses. The common shares of CSI trade on the Toronto Stock
Exchange under the trading symbol "CSY", with approximately 6.4 million
shares outstanding.
FOR INVESTOR INQUIRIES:
Cory Pala, Investor Relations
Phone: (800) 385-5451 ext. 223
Fax: (416) 815-0080
E-mail: mailto:cpala@equicomgroup.com
Internet: equicomgroup.com
RELATED LINKS:
Communication Systems International
csi-dgps.com
The Equicom Group
equicomgroup.com
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