CAMBRIDGE, ON, April 12, 2012 /CNW/ - COM DEV International Ltd. (TSX:CDV) today announced first quarter financial results for the three-month period ended January 31, 2012.  The first quarter fiscal 2012 results are COM DEV's first set of consolidated financial statements prepared under International Financial Reporting Standards (IFRS).  All amounts are stated in Canadian dollars unless otherwise noted.

First Quarter Highlights

• Revenue was $47.2 million in the first quarter of 2012, a 6% decrease from revenue of $50.3 million in the first quarter of 2011.
• Gross margin in the core Space Equipment business was 29%, compared to 20% in Q1 2011.
• Net income attributable to shareholders was $3.6 million, or $0.05 per share, an increase of $3.5 million compared to $77,000 or $0.00 per share in the first quarter of 2011.
• New orders won in the first quarter totaled $45 million, compared to $59 million a year earlier and $54 million in the fourth quarter of 2011.
• Backlog at January 31, 2012 was $125 million, compared to $129 million at October 31, 2011.
• exactEarth signed six new customers in the quarter, surpassing 30 customers in total.

"We continue to make progress on our top priority of improving profitability," said Michael Pley, CEO of COM DEV.  "Solid execution throughout the organization led to our highest gross margin percentage in over two years and effective control of operating expenses.  While overall revenue growth has been slow, we expect to build momentum as the fiscal year progresses."

Segmented Results

COM DEV reports results in two business segments.  The Space Equipment segment represents the Company's traditional manufacturing operations, while the Data Services segment consists primarily of the maritime tracking services offered by exactEarth Ltd.  Selected segmented results for the fiscal first quarter are as follows.

Three months ended January 31 (unaudited, in thousands of dollars)

	Space Equipment			Data Services			Consolidated *
	2012	2011		2012	2011		2012	2011
Revenue	45,195	50,105		2,014	159		47,209	50,264
Gross margin	12,941	10,258		(74)	(1,248)		13,050	8,633
Gross margin %	29%	20%		-	-		28%	17%
Net income	4,586	2,220		(1,588)	(2,420)		3,181	(577)

* Consolidated figures may not equal the sum of the two segments due to intra-segment adjustments.  Please see Note 13 to the Consolidated Financial Statements for additional details.

Financial Review

Effective the first quarter of fiscal 2012, COM DEV began reporting its financial results in accordance with IFRS.  All figures in this news release, including prior year comparable results, are presented in accordance with IFRS.  As a result, some prior-year figures may differ from those originally reported under Canadian Generally Accepted Accounting Principles (GAAP).  For more detailed information regarding the Company's transition to IFRS, please refer to the Company's Management Discussion and Analysis, Consolidated Financial Statements, and in particular Note 15 to the financial statements, all filed on SEDAR at www.sedar.com.

COM DEV's fiscal 2012 first quarter revenues of $47.2 million decreased by $3.1 million or 6% compared to $50.3 million a year earlier.  Revenues in the civil and military sectors were relatively stable in comparison to the first quarter of 2011, while revenues in the commercial sector declined by $3.5 million.  The decline in commercial revenues is related to a significant inflow of new orders at the end of fiscal 2010, which resulted in a higher-than-normal level of backlog in the commercial portion of the business and a high level of revenue in the early part of 2011.  The revenue split between the three market segments in Q1 2012 was 58% commercial, 26% civil and 16% military, compared to a 61/24/15 split in the first quarter of 2011.

COM DEV received new orders totaling $45 million in the first quarter, of which 53% were commercial, 36% were civil, and 11% were military. In last year's first quarter the Company booked $59 million of new orders, with a commercial/civil/military split of 48/11/40.

Order backlog at January 31, 2012 was $125 million, compared to $129 million three months earlier, and $159 million one year earlier.  An additional $35 million of follow-on orders are expected to be realized from ATPs already received; COM DEV only includes these ATP amounts in orders and backlog once the final contracts are in place.  Backlog was split between the Company's commercial, civil and military sectors at a ratio of 46%, 33% and 21% respectively, compared to 47%, 25% and 28% at January 31, 2011.  The Company expects to convert approximately 74% of the total backlog into revenue during fiscal 2012.

Consolidated gross margin was $13.1 million in the first quarter, representing 28% of total revenues, compared to $8.6 million or 17% of revenues in Q1 2011.  The improvement is attributable to strong results in the core equipment business, continued progress in the data services business, and a reduced impact from the one remaining program out of the five which had a significant drag on the Q1 2011 gross margin.  Gross margin in the Space Equipment segment was $12.9 million, or 29% of segment revenues.

COM DEV recorded a net research and development expense of $1.0 million in the first quarter of 2012, compared to $1.0 million a year earlier.  Gross R&D spending of $3.8 million, R&D recovery of $1.8 million, and a recognized Investment Tax Credit of $1.0 million were all consistent with the Q1 2011 figures.

Selling expenses were $2.6 million in Q1 2012, unchanged from Q1 2011.  Selling expenses fluctuate from quarter to quarter depending on the bids and proposal work that is underway.  General expenses of $4.4 million were unchanged from the previous year.

Net income attributable to shareholders was $3.6 million in the first quarter of 2012, compared to $77,000 a year earlier.  The increase is due primarily to improved gross margins, as well as a gain on foreign exchange, partially offset by higher other expenses and a higher income tax expense.  Net income in the Space Equipment segment was $4.6 million, compared to $2.2 million in Q1 2011, while the $1.6 million net loss in the Data Services segment compares to a $2.4 million net loss a year earlier.

COM DEV ended the first quarter with $23.5 million of cash and equivalents, compared to $27.6 million at October 31, 2011.  Operating activities generated $5.4 million of cash in the quarter.  At January 31, 2012, COM DEV had outstanding debt of $21.2 million including the current portion, and the Company's $32 million credit facility was not drawn upon.

The Company's basic share count stood at 76,187,035 on April 12, 2012.

Conference Call

A conference call will be held Thursday, April 12, 2012 at 5:00 pm EDT to discuss this announcement.  To access the call, dial 647-427-7450 or 1-888-231-8191.  To access the live webcast, please visit the Company's website at www.comdevintl.com or www.newswire.ca for directions.  Participants will require Windows Media Player™ to listen to the webcast.

About COM DEV

COM DEV International Ltd. (www.comdevintl.com) is a leading global provider of space hardware and services.  With facilities in Canada, the United Kingdom and the United States, COM DEV manufactures advanced subsystems and microsatellites that are sold to major satellite prime contractors, government agencies and satellite operators, for use in communications, space science, remote sensing and defense applications. COM DEV's majority-owned subsidiary, exactEarth Ltd., provides satellite data services.

This news release contains statements that, to the extent they are not recitations of historical fact, may constitute "forward-looking statements" within the meaning of applicable Canadian securities laws. Forward-looking statements may include financial and other projections, as well as statements regarding COM DEV's future plans, objectives or economic performance, or the assumptions underlying any of the foregoing. COM DEV uses words such as "may", "would", "could", "will", "likely", "expect", "anticipate", "believe", "intend", "plan", "forecast", "project", "estimate" and similar expressions to identify forward-looking statements. Any such forward-looking statements are based on assumptions and analyses made by COM DEV in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors COM DEV believes are appropriate under the relevant circumstances. However, whether actual results and developments will conform to COM DEV's expectations and predictions is subject to any number of risks, assumptions and uncertainties.  Many factors could cause COM DEV's actual results, historical financial statements, or future events to differ materially from those expressed or implied by the forward-looking statements contained in this news release.  These factors include, without limitation: uncertainty in the global economic environment; fluctuations in currency exchange rates; delays in the purchasing decisions of COM DEV's customers; the competition COM DEV faces in its industry and/or marketplace; and the possibility of technical, logistical or planning issues in connection with the deployment of COM DEV's products or services.

The triangular logo and the word COM DEV are each registered trademarks and the property of COM DEV Ltd. All rights reserved.

COM DEV International Ltd. Consolidated Statements of Operations (Canadian dollars in thousands, except for per share figures) Unaudited
For the three months ended January 31								2012			2011
	Revenue						$	47,209		$	50,264
	Cost of revenue							34,159			41,631
	Gross margin							13,050			8,633
	Research and development costs							3,783			3,824
	Research and development recovery							1,768			1,790
	Investment tax credits recoverable							1,040			1,000
	Net research and development expense							975			1,034
	Selling expenses							2,613			2,579
	General expenses							4,398			4,406
	Operating income							5,064			614
	Interest expense							246			126
	Foreign exchange (gain) loss							(355)			184
	Other expense (income)							211			(119)
Income before income taxes							$	4,962		$	423
	Income tax expense							1,781			1,000
Net income (loss)							$	3,181		$	(577)
Attributable to:
	Shareholders						$	3,610		$	77
	Non-controlling interest							(429)			(654)
							$	3,181		$	(577)
Earnings per share
Basic and diluted earnings per share							$	0.05		$	0.00

See accompanying notes to consolidated financial statements

COM DEV International Ltd. Consolidated Statements of Financial Position (Canadian dollars in thousands) Unaudited
							As at January 31, 2012			As at October 31, 2011			As at November 1, 2010
Assets
	Current
		Cash and cash equivalents					$	23,521		$	27,618		$	17,436
		Accounts receivable						38,154			47,563			44,357
		Inventory						51,584			46,147			61,359
		Prepaids and other						1,943			1,422			3,274
		Income taxes recoverable						4,788			4,788			4,615
		Investment tax credit - current						4,684			4,684			774
								124,674			132,222			131,815
	Non-current
		Property, plant and equipment						77,670			73,973			73,517
		Intangible assets						16,066			15,576			17,962
		Goodwill						2,209			2,200			2,252
		Investment tax credit						10,533			9,493			1,000
		Deferred income tax assets						-			1,088			6,301
Total assets							$	231,152		$	234,552		$	232,847
Liabilities
	Current
		Accounts payable and accrued liabilities					$	25,069		$	25,830		$	27,625
		Income taxes payable						310			302			-
		Provisions						927			1,172			897
		Deferred revenue						6,002			9,977			26,737
		Current portion of loans payable						8,615			8,867			6,401
								40,923			46,148			61,660
	Non-current
		Loans payable						12,593			14,687			10,115
		Accounts payable and accrued liabilities						647			930			968
		Employee future benefits						4,554			4,494			5,299
		Deferred income tax liabilities						382			-			-
								18,176			20,111			16,382
	Total liabilities							59,099			66,259			78,042
Shareholders' equity
	Share capital							345,666			345,666			346,068
	Contributed surplus							10,128			9,570			7,435
	Deficit							(192,172)			(195,782)			(207,026)
	Non-controlling interest							8,548			8,977			8,328
	Accumulated other comprehensive loss							(117)			(138)			-
	Total shareholders' equity							172,053			168,293			154,805
Total liabilities and shareholders' equity							$	231,152		$	234,552		$	232,847

See accompanying notes to consolidated financial statements

COM DEV International Ltd. Consolidated Statements of Cash Flows (Canadian dollars in thousands) Unaudited
For the three months ended January 31							2012			2011
Operating activities
	Net income (loss)						$	3,181		$	(577)
	Amortization							2,543			2,690
	Loss on disposal of assets							30			-
	Defined benefit plan expenses							159			216
	Defined benefit plan contributions							(250)			(207)
	Stock compensation expense							491			375
	Employee stock ownership plan awards							67			63
	Investment tax credits recoverable							(1,040)			(1,000)
	Deferred tax expense							1,781			1,000
	Unrealized foreign exchange (gain) loss on derivatives							(422)			37
								6,540			2,597
	Net change in non-cash working capital items							(1,100)			797
Operating activities								5,440			3,394
Financing activities
	Shares issued							-			514
	Non-controlling interest investment, net							-			4
	Repayment of long term debt							(2,439)			(1,504)
Financing activities								(2,439)			(986)
Investing activities
	Acquisition of property, plant and equipment							(5,200)			(1,836)
	Proceeds on disposal of property, plant and equipment							4			-
	Acquisition of intangible assets							(1,502)			(1,173)
Investing activities								(6,698)			(3,009)
Effect of exchange rate changes on cash								(400)			(113)
Net decrease in cash								(4,097)			(714)
Cash and cash equivalents, beginning of period								27,618			17,436
Cash and cash equivalents, end of period							$	23,521		$	16,722
Interest paid							$	262		$	107
Taxes paid							$	165		$	-

 See accompanying notes to consolidated financial statements

COM DEV International Ltd. Consolidated Statements of Comprehensive Income (Canadian dollars in thousands, except for per share figures) Unaudited
For the three months ended January 31							2012			2011
Net Income (loss)							$	3,181		$	(577)
Other comprehensive income (loss):
	Foreign currency translation adjustment (net of taxes of $nil)							21			(374)
Comprehensive income (loss)							$	3,202		$	(951)

 

COM DEV International Ltd. Consolidated Statements of Changes in Equity (Canadian dollars in thousands) Unaudited
For the three months ended January 31, 2012		Total			Deficit			Accumulated Other Comprehensive Loss			Share Capital			Non-controlling interest			Contributed Surplus
Balance, October 31, 2011		$	168,293		$	(195,782)		$	(138)		$	345,666		$	8,977		$	9,570
Comprehensive income
	Net income (loss)		3,181			3,610			-			-			(429)			-
	Foreign currency translation adjustments (net of taxes of $nil)		21			-			21			-			-			-
			3,202			3,610			21			-			(429)			-
Expense recognized for ESOP awards			67			-			-			-			-			67
Expense recognized for stock-based compensation and long-term incentive plans			491			-			-			-			-			491
Balance, January 31, 2012		$	172,053		$	(192,172)		$	(117)		$	345,666		$	8,548		$	10,128
For the three months ended January 31, 2011
Balance, October 31, 2010		$	154,805		$	(207,026)		$	-		$	346,068		$	8,328		$	7,435
Comprehensive income
	Net Income		(577)			77			-			-			(654)			-
	Foreign currency translation adjustments (net of taxes of $nil)		(374)			-			(374)			-			-			-
			(951)			77			(374)			-			(654)			-
Common stock issued			514			-			-			741			-			(227)
Expense recognized for ESOP awards			63			-			-			-			-			63
Non-controlling interest investment			4			-			-			-			-			4
Expense recognized for stock-based compensation and long-term incentive plans			375			-			-			-			-			375
Balance, January 31, 2011		$	154,810		$	(206,949)		$	(374)		$	346,809		$	7,674		$	7,650

See accompanying notes to consolidated financial statements 

 

 

 

 

For further information:

Gary Calhoun
Chief Financial Officer
Tel:  (519) 622-2300 ext. 2826
gary.calhoun@comdev.ca 

Jeff Codispodi
The Equicom Group
Tel: (416) 815-0700 ext. 261
jcodispodi@equicomgroup.com