COM DEV International Ltd. has announced fourth quarter and year-end financial results for the three- and twelve-month periods ended Oct. 31, 2012. All amounts are stated in Canadian dollars unless otherwise noted.
COM DEV’s fiscal 2012 revenues of $208.6 million increased by $4.4 million or 2.1 per cent compared to $204.1 million the previous year. The revenue split between the three market segments was 48 per cent commercial, 33 per cent civil and 20 per cent 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 per cent were commercial, 28 per cent were civil, and 24 per cent 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 Oct. 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 per cent, 36 per cent and 28 per cent respectively, compared to 49 per cent 30 per cent and 21 per cent at Oct. 31, 2011. The company expects to convert approximately 86 per cent of the total backlog into revenue during fiscal 2013.
Consolidated gross margin was $53.7 million in fiscal 2012, representing 26 per cent of total revenues, compared to $46.0 million or 23 per cent 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 research and development (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 Oct. 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 Oct. 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 Jan. 9, 2013.
