All amounts are stated in Canadian dollars unless otherwise noted.
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Third Quarter Highlights
- Revenue was $50.5 million, a 4 percent decrease from revenue of $52.3 million in the third quarter of fiscal 2010
- Gross margin in the core space equipment business was 29 percent, compared to 19 percent in Q3 2010
- Net income attributable to shareholders was $4.2 million, or $0.05 per share, an increase of $6.0 million compared to a net loss of $1.7 million or $(0.02) per share in the third quarter of 2010
- New orders won in the third quarter totaled $47 million, compared to $47 million a year earlier and $28 million in the second quarter of 2011. When expected follow-on orders from current Authority to Proceed (ATP) contracts are considered, the third quarter total reached $74 million compared to $69 million a year earlier, and $42 million in the second quarter of 2011
- Backlog at July 31, 2011 was $123 million, plus an additional $27 million in follow-on orders expected from ATPs already awarded, for an expected backlog of $150 million, up from an expected total backlog of $144 million a year earlier
- Majority-owned subsidiary exactEarth commissioned its recently launched AIS payload during the quarter, and subsequently launched two additional satellites to bring its constellation to five
"The third quarter was one of solid execution," said Michael Pley, CEO of COM DEV. "Gross margins continue to recover, as the impact of the remaining low margin programs diminishes and the more recently added contracts perform to our expectations. Having also maintained effective control over operating expenses, we recorded our best quarterly profit in over two years. Our data services segment achieved important milestones during the quarter. "exactEarth continued to gain market traction with $3.9 million in new contracts awarded in the third quarter. This brings total customer orders for the year to $6.4 million, and supports the current expectation that market traction for the full year will reach $10 million in orders for this important new business segment. In addition to winning customer contracts for this new service, exactEarth continued to build out its constellation of satellites. Its EV2 satellite, launched in April, completed commissioning, and was officially placed into operational service during the quarter. Subsequent to the end of the third quarter, two additional satellites were launched, which, when commissioning is complete, will bring the total number of operational exactEarth satellites to five. Three additional satellites are either built or under construction for future launches."
Mr. Pley continued, "One area of the business that has performed below our expectations has been the civil space segment, which has been affected by a slowdown in near-term orders from our government customers. This has caused us to reduce our revenue estimates for the year to a decline of 5-to-7 percent from fiscal 2010 levels. We have taken steps to properly size our business for the current revenue opportunity, resulting in a one-time termination charge of $2.2 million this quarter and ongoing savings of $5 million annually. We believe the Company remains well positioned to continue to improve profitability through fiscal 2012."
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