COM DEV Announces Fourth Quarter and Year-End Fiscal 2012 Results
CAMBRIDGE, ON, Jan. 10, 2013 /CNW/ - COM DEV International Ltd. (TSX:CDV) today announced fourth quarter and year-end financial results for the three- and twelve-month periods ended October 31, 2012. All amounts are stated in Canadian dollars unless otherwise noted.
Fiscal Year 2012 Highlights
- Revenue was $208.6 million, a 2.2 percent increase from $204.1 million in fiscal year 2011.
- Gross margins averaged 25.8 percent compared to 22.6 percent in fiscal 2011.
- Net income attributable to shareholders was $15.6 million or $0.21 per share, an increase of $4.4 million compared to $11.2 million or $0.15 per share
- Backlog at October 31, 2012 was $139 million, plus an additional $38.9 million in follow-on orders expected from Authorities to Proceed (ATPs) already awarded, for an expected backlog of $177.9 million, compared to an expected total backlog of $149.4 million a year earlier.
- Majority-owned subsidiary exactEarth launched, and successfully put into commercial service, the EV-1 satellite carrying an advanced second generation AIS payload, and had orders of $13.3 million, compared to $9.1 million in 2011.
Fourth Quarter Highlights
- Revenue was $56.7 million, a 13.8 percent increase from $49.8 million in the fourth quarter of 2011.
- Gross margins averaged 26.2 percent compared to 24.1 percent in fiscal 2011.
- Net income attributable to shareholders was $2.8 million or $0.04 per share, (net of a $2.5 million charge for reduction in force), compared to $6.2 million or $0.08 per share in the fourth quarter of 2011.
- The Company booked $56.1 million in new orders, compared to $54.2 million in the fourth quarter of 2011 and $62.1 million in the third quarter of 2012.
- The final of the five programs identified by the Company as negatively impacting the Company's results in fiscal 2011 and fiscal 2012 was delivered.
"Our priority in 2012 was to continue to drive increased profitability by taking a disciplined approach to our operations," stated Michael Pley, President and CEO. "I'm very pleased to say that we achieved success. Our net income of $15.6 million was a 39 percent increase over $11.2 million in fiscal 2011 and gross margins increased to about 26 percent from 23 percent last year."
Financial Review
COM DEV's fiscal 2012 revenues of $208.6 million increased by $4.4 million or 2.1 percent compared to $204.1 million the previous year. The revenue split between the three market segments was 48 percent commercial, 33 percent civil and 20 percent military, compared to a 58/23/19 split in 2011. It is important to note that communication satellite programs are increasingly being seen in the civil segment as emerging country national governments use satellites as an efficient means to provide communications infrastructure. These programs draw on the Company's same core equipment as the more traditional commercial market segments. In general, bidding and order activity remains robust.
COM DEV received new orders totaling $222.7 million during the year, of which 48 percent were commercial, 28 percent were civil, and 24 percent were military. In fiscal 2011 the Company booked $187.7 million of new orders, with a commercial/civil/military split of 58/22/20.
Order backlog at October 31, 2012 was $139 million, compared to $140 million three months earlier, and $129 million at the end of fiscal 2011. An additional $38.9 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 36 percent, 36 percent and 28 percent respectively, compared to 49 percent 30 percent and 21 percent at October 31, 2011. The Company expects to convert approximately 86 percent of the total backlog into revenue during fiscal 2013.
Consolidated gross margin was $53.7 million in fiscal 2012, representing 26 percent of total revenues, compared to $46.0 million or 23 percent of revenues in 2011. The improvement was primarily the result of reduced impact from five programs which negatively affected gross margins by $8 million in 2011. In fiscal 2012, the negative impact from these programs was reduced to $0.6 million with the last program being completed before calendar year-end.
COM DEV recorded a net research and development expense of $2.6 million in 2012, compared to a recovery of $4.4 million in 2011. Gross R&D spending declined to $12.9 million from $17.2 million while R&D funding from external sources decreased to $4.3 million from $7.0 million. The Company also recognized $6.0 million of Investment Tax Credits (ITCs) in 2012, compared to $14.6 million in 2011.
Selling expenses were $11.6 million in 2012, compared to $11.4 million in 2011. Selling expenses fluctuate from quarter to quarter depending on the bids and proposal work that is underway. General expenses were $19.3 million, up from $17.6 million a year earlier, as a result of increased administrative headcount driven by new Canadian government Controlled Goods security clearance process requirements and exactEarth spending.
Net income attributable to shareholders was $15.6 million in 2012, compared to $11.2 million in 2011. The $4.4 million increase was the result of improved gross margins, foreign exchange gains versus a loss in prior year, lower other expense and lower interest expense.
COM DEV ended the year with $25.8 million of cash and equivalents, compared to $27.6 million at October 31, 2011. Operating activities generated $20.7 million of cash for the year, compared to $11.3 million in fiscal 2011. Financing activities used $5.2 million of cash in 2012, primarily due to the establishment of a new credit agreement by the Company, and the resulting net reduction of its long term debt. The Company invested $18.1 million of cash for capital assets in its core equipment business, and its exactEarth™ subsidiary. At October 31, 2012, COM DEV had outstanding debt of $20.3 million including the current portion, and the Company's $20 million credit facility was not drawn upon.
The Company's basic share count stood at 76,290,146 on January 9, 2013.
Conference Call
A conference call will be held Thursday, January 10, 2013 at 5:00 pm EST 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) | |||||||||||
| For the year ended October 31 | 2012 | 2011 | |||||||||
| Revenue | $ | 208,553 | $ | 204,082 | |||||||
| Cost of revenue | 154,816 | 158,053 | |||||||||
| Gross margin | 53,737 | 46,029 | |||||||||
| Research and development costs | 12,839 | 17,141 | |||||||||
| Research and development recovery | 4,281 | 6,961 | |||||||||
| Investment tax credits recoverable | 5,968 | 14,563 | |||||||||
| Net research and development expense (recovery) | 2,590 | (4,383) | |||||||||
| Selling expenses | 11,617 | 11,409 | |||||||||
| General expenses | 19,340 | 17,638 | |||||||||
| 20,190 | 21,365 | ||||||||||
| Interest expense | 1,418 | 888 | |||||||||
| Foreign exchange (gain) loss | (2,313) | 914 | |||||||||
| Other expense | 2,572 | 3,009 | |||||||||
| Income before income taxes | $ | 18,513 | $ | 16,554 | |||||||
| Income tax expense | 4,537 | 7,360 | |||||||||
| Net income | $ | 13,976 | $ | 9,194 | |||||||
| Attributable to: | |||||||||||
| Shareholders | $ | 15,635 | $ | 11,244 | |||||||
| Non-controlling interest | (1,659) | (2,050) | |||||||||
| $ | 13,976 | $ | 9,194 | ||||||||
| Earnings per share | |||||||||||
| Basic and diluted earnings per share | $ 0.21 | $ 0.15 | |||||||||
| Basic weighted average number of shares | 76,253,170 | 76,394,409 | |||||||||
| Diluted weighted average number of shares | 76,406,473 | 76,460,835 | |||||||||
| COM DEV International Ltd. | ||||||||||||||
| Consolidated Statements of Financial Position | ||||||||||||||
| (Canadian dollars in thousands) | ||||||||||||||
| As at | As at | As at | ||||||||||||
| October 31, | October 31, | November 1, | ||||||||||||
| 2012 | 2011 | 2010 | ||||||||||||
| Assets | ||||||||||||||
| Current | ||||||||||||||
| Cash and cash equivalents | $ | 25,794 | $ | 27,618 | $ | 17,436 | ||||||||
| Accounts receivable | 41,722 | 47,563 | 44,357 | |||||||||||
| Inventory | 64,763 | 46,147 | 61,359 | |||||||||||
| Prepaid and other | 3,214 | 1,421 | 3,273 | |||||||||||
| Income taxes recoverable | 4,801 | 4,788 | 4,615 | |||||||||||
| Investment tax credits - current | 2,162 | 4,684 | 774 | |||||||||||
| 142,456 | 132,221 | 131,814 | ||||||||||||
| Non-current | ||||||||||||||
| Property, plant and equipment | 86,000 | 73,973 | 73,517 | |||||||||||
| Intangible assets | 14,600 | 15,576 | 17,962 | |||||||||||
| Goodwill | 2,205 | 2,200 | 2,252 | |||||||||||
| Investment tax credits | 2,124 | 9,493 | - | |||||||||||
| Deferred income tax assets | 13,629 | 1,088 | 7,301 | |||||||||||
| Total assets | $ | 261,014 | $ | 234,551 | $ | 232,846 | ||||||||
| Liabilities | ||||||||||||||
| Current | ||||||||||||||
| Accounts payable and accrued liabilities | $ | 31,175 | $ | 25,830 | $ | 27,626 | ||||||||
| Income taxes payable | 851 | 302 | - | |||||||||||
| Provisions | 430 | 1,172 | 897 | |||||||||||
| Billings in excess of costs and earnings on contracts in progress | 22,448 | 9,977 | 26,737 | |||||||||||
| Current portion of loans payable | 3,978 | 8,867 | 6,401 | |||||||||||
| 58,882 | 46,148 | 61,661 | ||||||||||||
| Non-current | ||||||||||||||
| Loans payable | 16,358 | 14,687 | 10,115 | |||||||||||
| Accounts payable and accrued liabilities | 834 | 930 | 968 | |||||||||||
| Employee future benefits | 3,719 | 4,494 | 5,299 | |||||||||||
| 20,911 | 20,111 | 16,382 | ||||||||||||
| Total liabilities | 79,793 | 66,259 | 78,043 | |||||||||||
| Shareholders' equity | ||||||||||||||
| Share capital | 345,876 | 345,666 | 346,068 | |||||||||||
| Treasury stock | (432) | - | - | |||||||||||
| Contributed surplus | 8,695 | 9,570 | 7,435 | |||||||||||
| Deficit | (180,147) | (195,782) | (207,026) | |||||||||||
| Non-controlling interest | 7,317 | 8,976 | 8,326 | |||||||||||
| Accumulated other comprehensive loss | (88) | (138) | - | |||||||||||
| Total shareholders' equity | 181,221 | 168,292 | 154,803 | |||||||||||
| Total liabilities and shareholders' equity | $ | 261,014 | $ | 234,551 | $ | 232,846 | ||||||||
| On behalf of the Board: | |||||
| Terry Reidel | Kym Anthony | ||||
| Chairman of the Board | Chairman of the Audit Committee | ||||
| COM DEV International Ltd. | |||||||||||
| Consolidated Statements of Cash Flows | |||||||||||
| (Canadian dollars in thousands) | |||||||||||
| For the year ended October 31 | 2012 | 2011 | |||||||||
| Operating activities | |||||||||||
| Net income | $ | 13,976 | $ | 9,194 | |||||||
| Amortization | 9,643 | 11,248 | |||||||||
| Gain on disposal of assets | (2,312) | (253) | |||||||||
| Defined benefit plan expenses | 614 | 404 | |||||||||
| Defined benefit plan contributions | (2,190) | (944) | |||||||||
| Stock based compensation expense | 1,448 | 1,599 | |||||||||
| Employee stock ownership plan awards | 217 | 222 | |||||||||
| Fair value adjustment for SODP loan | - | (78) | |||||||||
| Investment tax credits recoverable | (5,968) | (14,563) | |||||||||
| Deferred income tax recovery (expense) | (12,541) | 6,213 | |||||||||
| Unrealized foreign exchange (gain) loss on derivatives | (1,928) | 2,920 | |||||||||
| 959 | 15,962 | ||||||||||
| Net change in non-cash working capital items | 19,717 | (4,640) | |||||||||
| Operating activities | 20,676 | 11,322 | |||||||||
| Financing activities | |||||||||||
| Shares issued | 10 | 514 | |||||||||
| Shares repurchased and cancelled | - | (514) | |||||||||
| Non-controlling interest investment, net | - | 2,612 | |||||||||
| Cash settlement of restricted stock units | (1,123) | - | |||||||||
| Purchase of treasury stock | (787) | - | |||||||||
| Advance of long-term debt | 18,388 | 15,522 | |||||||||
| Repayment of long-term debt | (21,730) | (8,093) | |||||||||
| Financing activities | (5,242) | 10,041 | |||||||||
| Investing activities | |||||||||||
| Acquisition of property, plant and equipment | (18,100) | (9,903) | |||||||||
| Proceeds on disposal of property, plant and equipment | 3,618 | 1,568 | |||||||||
| Acquisition of intangible assets | (2,553) | (2,118) | |||||||||
| Investing activities | (17,035) | (10,453) | |||||||||
| Effect of exchange rate changes on cash | (223) | (728) | |||||||||
| Net (decrease) increase in cash | (1,824) | 10,182 | |||||||||
| Cash and cash equivalents, beginning of year | 27,618 | 17,436 | |||||||||
| Cash and cash equivalents, end of year | $ | 25,794 | $ | 27,618 | |||||||
| Interest paid | $ | 934 | $ | 950 | |||||||
| Taxes paid | $ | 260 | $ | - | |||||||
| COM DEV International Ltd. | |||||||||||
| Consolidated Statements of Comprehensive Income | |||||||||||
| (Canadian dollars in thousands) | |||||||||||
| For the year ended October 31 | 2012 | 2011 | |||||||||
| Net income | $ | 13,976 | $ | 9,194 | |||||||
| Other comprehensive income (loss): | |||||||||||
| Foreign currency translation adjustment (net of taxes of nil) | 50 | (138) | |||||||||
| Comprehensive income | $ | 14,026 | $ | 9,056 | |||||||
| COM DEV International Ltd. | ||||||||||||||||||||||
| Consolidated Statements of Changes in Equity | ||||||||||||||||||||||
| (Canadian dollars in thousands) | ||||||||||||||||||||||
| For the year ended October 31, 2012 | Total | Deficit | Accumulated Other Comprehensive Loss |
Share Capital |
Treasury Stock |
Non- controlling Interest |
Contributed Surplus |
|||||||||||||||
| Balance, October 31, 2011 | $ | 168,292 | $ | (195,782) | $ | (138) | $ | 345,666 | $ | - | $ | 8,976 | $ | 9,570 | ||||||||
| Comprehensive income | 14,026 | 15,635 | 50 | - | - | (1,659) | - | |||||||||||||||
| Common stock issued | 10 | - | - | 210 | - | - | (200) | |||||||||||||||
| Expense recognized for ESOP awards | 217 | - | - | - | - | - | 217 | |||||||||||||||
| Treasury stock | (432) | - | - | - | (432) | - | - | |||||||||||||||
| Settlement of long-term incentive plans | (1,478) | - | - | - | - | - | (1,478) | |||||||||||||||
| Transfer of long-term incentive plans to liabilities for future cash settlements | (603) | - | - | - | - | - | (603) | |||||||||||||||
| Expense recognized for long-term incentive plans | 828 | - | - | - | - | - | 828 | |||||||||||||||
| Expense recognized for stock-based compensation | 361 | - | - | - | - | - | 361 | |||||||||||||||
| Balance, October 31, 2012 | $ | 181,221 | $ | (180,147) | $ | (88) | $ | 345,876 | $ | (432) | $ | 7,317 | $ | 8,695 | ||||||||
| For the year ended October 31, 2011 | ||||||||||||||||||||||
| Balance, October 31, 2010 | $ | 154,803 | $ | (207,026) | $ | - | $ | 346,068 | $ | - | $ | 8,326 | $ | 7,435 | ||||||||
| Comprehensive income | ||||||||||||||||||||||
| Net Income | 9,194 | 11,244 | - | - | (2,050) | - | ||||||||||||||||
| Foreign currency translation adjustments (net of taxes of $nil) | (138) | - | (138) | - | - | - | ||||||||||||||||
| Comprehensive income | 9,056 | 11,244 | (138) | - | - | (2,050) | - | |||||||||||||||
| Common stock issued | 514 | - | - | 871 | - | - | (357) | |||||||||||||||
| Common stock repurchased and cancelled | (514) | - | - | (1,273) | - | - | 759 | |||||||||||||||
| Expense recognized for ESOP awards | 222 | - | - | - | - | - | 222 | |||||||||||||||
| Non-controlling interest investment | 2,612 | - | - | - | - | 2,700 | (88) | |||||||||||||||
| Expense recognized for long-term incentive plans | 1,323 | - | - | - | - | - | 1,323 | |||||||||||||||
| Expense recognized for stock-based compensation | 276 | - | - | - | - | - | 276 | |||||||||||||||
| Balance, October 31, 2011 | $ | 168,292 | $ | (195,782) | $ | (138) | $ | 345,666 | $ | - | $ | 8,976 | $ | 9,570 |
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SOURCE: Com Dev International Ltd.
Gary Calhoun
Chief Financial Officer
Tel: (519) 622-2300 ext. 2826
[email protected]
Craig MacPhail
TMX Equicom
Tel: (416) 815-0700 ext. 290
[email protected]
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