Attention Business/Financial Editors:
Com Dev announces results for the first quarter of fiscal 1999
CAMBRIDGE, ON, March 11 /CNW/ - COM DEV International Ltd. (TSE/ME:CDV)
today announced results for the first quarter ended January 31, 1999. These
results reflect an improvement in the operating performance of the company and
are in line with market expectations. Revenue increased in the quarter to
$45.1 million from $39.7 million in the fourth quarter of 1998, but was down
from $53.2 million in the first quarter of fiscal 1998. This sequential
quarterly growth results from improvements in each area of the company. The
company recorded a loss for the first quarter of $1.9 million or 6 cents per
share compared with a net loss of $3.7 million or 11 cents per share in the
fourth quarter of 1998 and with a net income of $4.5 million or 14 cents per
share in the first quarter of 1998.
''The steps we have taken to improve our bottom line are reflected in
better results for the first quarter,'' said Val O'Donovan, chairman and CEO
of COM DEV International. ''We remain on track with our plans for a return to
profitability towards the end of this year.''
Space Group
Revenue for the Space Group for the first quarter was $25.4 million, an
increase over fourth quarter revenue of $23.2 million, compared to $28.5
million in the first quarter of 1998. The order backlog at the end of the
quarter was $61 million, reflecting $14 million in new orders for the quarter.
''The Space Group's performance during the first quarter was solid, and
consistent with our projections,'' said Alan Winter, president of the Space
Group. ''As we had forecasted, the satellite industry remained robust during
the quarter, and this resulted in a steady flow of business.''
During the quarter the Space Group continued to win orders for its core
products from its customers, including Lockheed Martin, Hughes, Alcatel, TRW,
Matra Marconi and Space Systems Loral. It also won two development contracts:
one from the Canadian Space Agency for optical systems for a remote sensing
satellite, and another from the European Space Agency for new antenna pointing
mechanisms for multimedia satellites. In addition, the Space Group received
definition contracts for flight hardware for the SkyBridge satellite system.
Wireless Group
Revenue for the Wireless Group in the first quarter of 1999 was $16.5
million, compared with $13.3 million in the fourth quarter of 1998, and $24.7
million in the first quarter of 1998. This quarter-over-quarter progress is in
line with the Wireless Group's plan for the year.
''We've made solid progress this quarter towards meeting our business
plan objectives for the year,'' said John Keating, president of the Wireless
Group.
The Wireless Group increased revenue and improved its performance in the
quarter, winning contracts from Nortel, Siemens, Allied Signal and a Chinese
original equipment manufacturer.
''The two contracts from Nortel totalling $49 million are particularly
significant,'' Keating added, ''because they solidify our position with one of
our key customers.''
In addition, the group has continued to invest in the design and
manufacturing technologies which will enable continued long-term growth.
Wireless Systems
The Wireless Systems operation generated revenue of $3.2 million,
consistent with the level of revenue in the fourth quarter of 1998. During the
quarter, all of the systems products of the company were co-located in
Camarillo, California and the company's systems capabilities were strengthened
through the acquisition of certain assets and staff from the Celcore operation
of Alcatel USA. These activities now position the group well for revenue and
margin growth in future quarters.
COM DEV International Ltd., a member of the TSE 300 (TSE/ME:CDV), is a
leading manufacturer of space and ground-based wireless communications
products and subsystems, and consists of three operating units: the Space
Group, the Wireless Group, and Wireless Systems.
The Space Group manufactures advanced products that are sold to the major
satellite prime contractors for use in commercial communications satellites.
The Wireless Group manufactures ground-based infrastructure subsystems used in
microwave and radio frequency systems, such as GSM and CDMA-based digital
telephone systems, and wireless local loop networks. These products are sold
primarily to major PCS wireless equipment vendors. Wireless Systems
manufactures advanced analog and digital coverage products, including base
station, switches and indoor distribution systems, all of which are sold to
wireless system operators.
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 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 1999 1998
-------------------------------------------------------------------------
Revenue $ 45,062 $ 53,234
Cost of revenue 35,591 38,271
-----------------------------
Gross margin 9,471 14,963
Selling and general expenses 11,306 10,643
-----------------------------
Operating income (loss) (1,835) 4,320
Financial (106) 221
-----------------------------
Net income (loss) $ (1,941) $ 4,541
-----------------------------
-----------------------------
Earnings (loss) per share
Basic $ (0.06) $0.14
Fully diluted $ (0.06) $0.14
Weighted average number of shares
outstanding
Basic 32,115,090 32,113,227
Fully diluted 36,462,915 33,341,227
Consolidated Balance Sheet
(Unaudited)
(Canadian dollars in thousands)
As at January 31 1999 1998
-------------------------------------------------------------------------
Current assets
Cash $7,226 $61,468
Accounts receivable 28,691 41,862
Inventory 44,241 57,100
Prepaids and other 2,712 7,221
Income taxes recoverable 7,044 6,464
-----------------------------
89,914 174,115
Product development 7,542 --
Capital assets 72,501 66,359
Goodwill 29,905 7,868
-----------------------------
Total assets $199,862 $248,342
-----------------------------
-----------------------------
Current liabilities
Bank indebtedness $5,995 $30,811
Accounts payable and accrued liabilities 28,840 29,840
Deferred revenue 4,501 1,413
Current portion of loans payable 4,234 4,638
-----------------------------
43,570 66,702
Long term liabilities
Loans payable 9,328 9,647
-----------------------------
Total liabilities 52,898 76,349
-----------------------------
Shareholders' equity
Share capital 163,762 163,762
Retained earnings (deficit) (17,128) 7,972
Currency translation adjustment 330 259
-----------------------------
Total shareholders' equity 146,964 171,993
-----------------------------
Total liabilities and shareholders' equity $199,862 $248,342
-----------------------------
-----------------------------
Consolidated Statement of Changes in Financial Position
(Unaudited)
(Canadian dollars in thousands)
For the three months ended January 31 1999 1998
-------------------------------------------------------------------------
Cash used in operations
Net income (loss) (1,941) 4,541
Items not requiring any outlay of cash
Amortization 3,487 1,817
Other 82 165
-----------------------------
1,628 6,523
Net changes in non-cash working capital
items related to operations (3,217) (29,418)
-----------------------------
Total cash used in operations (1,589) (22,895)
-----------------------------
Cash provided by financing activities
Increase in loans payable 2,624 774
Redemption of options - (267)
-----------------------------
Total cash provided by financing activities 2,624 507
-----------------------------
Cash used in investing activities
Acquisition of capital assets (3,960) (8,428)
-----------------------------
Total cash used in investing activities (3,960) (8,428)
-----------------------------
Net decrease in cash (2,925) (30,816)
Net cash, beginning of period 4,156 61,473
-----------------------------
Net cash, end of period 1,231 30,657
-----------------------------
-----------------------------
Net cash consists of cash net of bank indebtedness
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