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Quarterly Results
COM DEV Announces First Quarter FY2008 Results
CAMBRIDGE - COM DEV International Ltd. announced its first quarter financial results for the three-month period ended January 31, 2008. All amounts are stated in Canadian dollars unless otherwise noted.
First Quarter Highlights
- Revenue was $44.9 million, an increase of 14% over the $39.5 million
recorded in Q1 2007.
- Gross margin was 22%, compared to 29% in the first quarter of 2007.
- Net income was $1.4 million, or $0.02 per share, compared to
$5.6 million or $0.08 per share for the prior year period.
- New orders won in the first quarter totaled $33 million, compared to
$22 million a year earlier and $55 million in the fourth quarter of
fiscal 2007.
- Backlog at quarter-end was $133 million, compared to $146 million at
2007 year-end.
- Subsequent to quarter-end COM DEV acquired the Passive Microwave
Devices product line of L-3 Communications Electron Technologies Inc.
for US$12.2 million.
"For the third consecutive quarter, we established a new record for
revenues recorded in a single quarter by COM DEV Space. The achievement is
especially meaningful for having occurred in what is traditionally the slowest
quarter of our fiscal year," said John Keating, CEO of COM DEV. "While our
profitability continues to be impacted by the start up costs of our U.S.
operations, and an unfavourable currency environment, we expect to overcome
both challenges this year, in part through ongoing strong growth. We remain
confident in our estimate of 10 to 15% revenue growth on the year."
Financial Review
COM DEV's fiscal 2008 first quarter revenues of $44.9 million represented
an increase of $5.4 million or 14% over the previous year. Historically, first
quarter revenues are the lowest of the year. In Q1 2008 the Company benefited
from high levels of backlog and more employees to address that workload. The
revenue split between the three segments was 64% commercial, 23% civil and 13%
military. Management continues to expect annual revenue growth of 10-15% in
fiscal 2008.
New orders totaled $33 million during the quarter, of which 48% were
commercial, 48% were civil, and 4% were military. Backlog at quarter end was
$133 million, down sequentially for the first time in four quarters, but was
49% higher than the same quarter last year. Backlog was split between the
Company's commercial, civil and military sectors at a ratio of 53%, 37% and
10% respectively, compared to 57%, 30% and 13% at the end of fiscal 2007.
First quarter gross profit was $10.1 million, compared to $11.3 million
in Q1 2007. The gross margin of 22%, while down from 29% a year earlier,
represented an improvement from the 11% margin experienced in the fourth
quarter of 2007, and was within management's guidance of the low 20% levels
for early fiscal 2008. The Company expects to see margins continue to move
towards its longer term margin guidance of mid to high twenty percent levels.
Selling, general and administrative expenses were $6.1 million in the
first quarter, an increase of $2.0 million over the same period last year. The
increase was attributable to $1.1 million of expenses related to the start-up
of operations in California, and $0.8 million of costs associated with
activity related to the Board appointed Special Committee's review of historic
stock option granting practices.
Net research and development expense of $2.0 million was 28% higher than
the Q1 2007 amount. Total R&D spending (before funding) of $2.8 million was
below the levels seen in recent quarters, but management expects R&D spending
to ramp up over the next three quarters, based on near and medium-term
opportunities for product development and customer expansions.
Net income for the quarter was $1.3 million, down from $5.6 million in Q1
2007, while earnings per share were $0.02, down from $0.08 in Q1 2007.
COM DEV ended the first quarter of 2008 with $14.3 million of cash and
equivalents compared to $31.7 million at October 31, 2007. Cash used in
operating activities was $13.3 million, compared to $10.5 million of cash
generated from operating activities in the previous quarter last year.
The Company's basic share count averaged 68,037,092 (fully diluted:
68,160,789) in the first quarter of fiscal 2008, and stood at 68,037,418 on
January 31, 2008.
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