Satellite company Com Dev International Ltd. is replacing its chief executive officer, John Keating, effective immediately, a move that comes after the company's recent warning of a looming loss and falling revenues.
The Cambridge, Ont., company said late Wednesday that Mr. Keating will step down immediately and leave the board. The satellite technology maker has appointed Mike Pley as interim CEO while it searches for a replacement for Mr. Keating.
“Com Dev wishes to express its gratitude for the significant contribution that Mr. Keating has made to the company and wishes him well in his future endeavours,” said Com Dev's chairman Terry Reidel.
“The company is moving on to the next phase of development in its business plan with a renewed focus on profitability and the board of directors was of the view a new vision was required at this time.”
Last week, Com Dev revised its 2010 outlook downward for the second time this summer, hitting the company's stock price.
The satellite technology maker said that its third quarter ended July 31 will produce a $1.7-million loss instead of an expected profit and its 2010 annual revenue will be lower than last year's, rather than modestly higher.
Analysts had previously projected that Com Dev would report a profit for the third quarter and substantially higher revenue than the $52-million it is now projecting for the three-month period.
In issuing the financial warning, Mr. Keating said last week that the company had been grappling with rising costs of five satellite programs.
“Collectively, those programs are 86 per cent complete and are expected to represent a steadily decreasing proportion of our revenues, falling from five per cent of Q3 2010 revenues to less than 2 per cent of revenues by the second half of next year,” Mr. Keating said in a statement.
“We believe we have taken the appropriate steps to fully address the expected costs on these five programs, so they won't continue to generate negative gross margins.”
The company is a global designer and manufacturer of space hardware subsystems with facilities in Canada, the United Kingdom and the United States. Its products are sold to major satellite prime contractors for use in communications, space science, remote sensing and military satellites.
Com Dev shares were halted near the end of the trading day before the Keating announcement Wednesday.
The Canadian Press