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Com Dev swings to Q2 loss on shutting down US operations, acquisition costs

Last updated: 06:13 12 Jun 2015 AEST, First published: 04:13 12 Jun 2015 AEST

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Com Dev booked orders worth C$43.8 million in the second quarter, up from C$35.2 million a year earlier.

Com Dev International (TSE:CDV) fell in morning trading after manufacturer of satellite equipment swung to a loss in its fiscal second quarter, hurt by the closing of its U.S. operations, acquisition related costs and higher selling expenses.

Shares were down 0.9 percent at C$5.81 at 1:45 p.m. in Toronto. The stock has rallied 45 percent so far this year.

Net loss was C$3.5 million, or C$0.05 loss per share, for the period ended April 30, compared to net income of C$5.0 million, or C$0.07 per share, a year earlier, the Cambridge, Ontario-based company said in a statement today.

"This year has been one of our most active periods ever for executing on new strategic initiatives to strengthen the Company," chief executive officer Michael Pley said in the statement.

The company recognized a loss of C$1.7 million in connection with the planned sale of its land and building in El Segundo, California. It shut down its U.S. operation earlier this year because contracts for U.S. military communication satellites had dried up.

Com Dev also incurred costs associated with its $20.2 million acquisition of Pacific Wave Systems, a California-based manufacturer of waveguide equipment it bought in the second quarter.

The company said selling expenses increased by C$1.1 million due to the increased volume of bids and proposal work, and the addition of selling expenses from MESL Microwave, a company in Scotland it acquired in December.

"Most of these initiatives had short-term impacts on our second quarter results, but I believe they position us very favourably for longer-term growth and operational improvements," Pley said.

Second-quarter revenue increased 3.9 percent to C$56.4 million.

Com Dev booked orders worth C$43.8 million in the second quarter, up from C$35.2 million a year earlier. 

Com Dev said it will pay a dividend of three cents a common share, payable on June 30 to shareholders of record on June 19.

 

 

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