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COM DEV Announces Fourth Quarter and Year-End Fiscal 2012 Results

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 COMDEV

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 applicableCanadian securities laws. Forward-looking 
statements may include financial and other projections, as well as statements 
regardingCOM DEV'sfuture plans, objectives or economic performance, or the 
assumptions underlying any of the foregoing.COM DEVuses 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 byCOM DEVin light ofits 
experience andits perception of historical trends, current conditions and 
expected future developments, as well as other factorsCOM DEVbelieves are 
appropriateunder therelevant circumstances. However, whether actual 
results and developments will conform toCOM DEV'sexpectations and 
predictions is subject to any number of risks, assumptions and 
uncertainties. Many factors could causeCOM DEV'sactual 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)
                                                                                                            
                                                                                                            


                                         Accumulated
For the year                                    Other                                 Non-ended October                               Comprehensive     Share     Treasury   controlling   Contributed
31, 2012              Total      Deficit        Loss         Capital     Stock      Interest      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
                                 









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

Craig MacPhail TMX Equicom Tel: (416) 815-0700 ext. 290 
cmacphail@tmxequicom.com

SOURCE: Com Dev International Ltd.

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CO: Com Dev International Ltd.
ST: Ontario
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-0- Jan/10/2013 21:00 GMT


 
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