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Offshore Systems International Reports Record Fiscal Second-Quarter and First-Half Earnings & Revenues
Company Also Reports S.E.C. Filing for Stock Trading in U.S.
Vancouver, Canada - July 23, 2002 - Offshore Systems International Ltd. (TSX: OSI), a marine electronic navigation company with a strong defense niche, today announced record operating results for its fiscal second quarter and first half ended May 31, 2002.
Financial Highlights
For the fiscal second quarter of 2002, revenues increased 135% to C$3,827,452 (US$2,433,063) compared with C$1,631,966 in the same quarter last year. Net earnings increased to C$311,465 (US$197,994), equal to C$0.01 (US$0.01X) per diluted share, up from C$11,413 (US$7,347), or C$0.00 (US$0.00) a diluted share, in the year-earlier second quarter.
For fiscal first half of 2002, revenues increased 102% C$7,112,970 (US$ 4,495,336) from C$3,521,330 for the six months ended May 31, 2001, an increase of C$3,591,640. Net earnings to C$579,317 (US$366,123), equal to C$0.02(US$0.01) per diluted share, from C$23,588 (US$15,398), or C$0.00 (US$0.00) a diluted share, in the first six months of fiscal 2001.
The balance sheet continued to strengthen in the quarter. At May 31, 2002, the company had current assets of C$6,431,630 (US$4,210,560) versus current liabilities of C$3,073,757 (US$1,988,712) - a current ratio of 2.1 to 1 versus 1.9 to1 at November 30, 2001 (the end of the prior fiscal year) - and working capital increased C$509,722 (US$386,133) to C$3,357,873 (US$2,198,280) from C$2,848,151 (US$1,812,147) at fiscal 2001 year-end. Cash and cash equivalents were C$1,701,932 (US$1,114,194) at May 31, 2002 versus C$2,037,625 (US$1,296,447) at November 30, 2001, and the decrease was due to the timing of certain contract-related cash flows.
Offshore Systems' order backlog at the end of the fiscal 2002 second quarter was in excess of C$5,769,000 (US$3,777,000) versus C$800,000 (US$524,000) the year earlier. Order backlog as of July 1, 2002 was more than C$7,300,000 (US$4,800,000).
"We are pleased to report our tenth profitable quarter in a row," said John Jacobson, President and CEO Offshore Systems International. "The second quarter reflected continued strong growth in sales and earnings. Importantly, the significant increase in revenues did not require a corresponding increase in sales, general and administrative expenses - in fact, SG&A as a percent of sales was down versus a year ago - resulting in a material increase in profitability.
"Moreover," Mr. Jacobson continued, "the recently announced teaming relationship with Lockheed Martin Corporation is a major milestone for our company . The list of application opportunities for our proprietary advanced technology has now expanded significantly and, although the sales cycle can be lengthy in the military/defense marketplace, Offshore's positioning has never been stronger because of both external and internal developments."
The company CEO added, "I am also pleased to report that Offshore Systems has just filed with the U.S. Securities and Exchange Commission a registration statement in Form 20F that, subject to approval by the SEC, will enable Offshore to become a registered foreign issuer for the trading of its common shares directly in the United States and making Offshore's stock more accessible to American investors."
Quarter in Review
In March 2002, Offshore announced the advanced military version of its proprietary ECPINS -M (Electronic Chart Precise Integrated Navigation System-Military) software technology. The latest version of Offshore's technology enables 'inter-operability' of systems across different military forces, both within national defense organizations and between allied nations, which is a key requirement now by allied military forces around the world.
Also in March, Offshore announced that it had signed a memorandum of agreement with a leading Command and Control Systems company, Terma A/S of Denmark. The non-exclusive agreement will lead to the joint development of a new Electronic Chart system product for Command and Control applications to meet specific Royal Danish Navy requirements.
In May 2002, Offshore reported that it had received C$1.3 million (US$850,000) in new orders from the U.S. Coast Guard. These new orders are for Offshore's ECPINS-M systems, and for electronic charts and chart services.
Recent Corporate Developments
In June 2002, a joint announcement was issued on a teaming agreement between Offshore and Lockheed Martin Corporation Naval Electronics and Surveillance Systems division to market the world's most advanced navigation software to U.S. Navy ships, completely eliminating the need for paper navigation charts.
Also in June 2002, Offshore reported that it received C$2.2 million (US$1.4 million) in new orders from the U.S. Coast Guard. These orders are for additional Offshore proprietary ECPIN® -M systems as well as systems upgrades.
Offshore Systems International Ltd.
Selected Consolidated Financial Information (Unaudited)
(Canadian dollars - Canadian GAAP)
| Statement of Earnings Information |
Three months ended May 31 2002 (unaudited)
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Six months ended May 31 2002 (unaudited)
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2002
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2001
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2002
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2001
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| Revenue |
3,827,452 |
1,631,966 |
7,112,970 |
3,521,330 |
| Earnings for the period |
311,465 |
11,413 |
579,317 |
23,588 |
| Basic earnings per share |
0.01 |
0.00 |
0.02 |
0.00 |
| Fully diluted earnings per share |
0.01 |
0.00 |
0.02 |
0.00 |
| Balance Sheet Information |
May 31 2002 (unaudited)
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November 30 2001 (unaudited)
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| Cash and cash equivalents |
1,701,932 |
2,037,625 |
| Working capital |
3,357,873 |
2,848,151 |
| Current assets |
6,431,630 |
6,022,312 |
| Total assets |
7,961,410 |
7,375,007 |
| Current liabilities |
3,037,757 |
3,174,161 |
| Long-term debt |
312,592 |
371,484 |
| Total liabilities |
3,386,349 |
3,545,645 |
| Shareholder's equity |
4,647,307 |
3,829,362 |
The Company
Founded in 1977, Offshore Systems designs, develops and markets the proprietary ECPINS®; line of electronic chart navigation systems for ships. ECPINS® helps to reduce the risk of navigation-related incidents by giving bridge crews a precise, real-time display of their position, course and speed, against a background of fixed obstacles and other navigational hazards. Offshore Systems has developed a strong market position in military navigation, and has ECPINS® systems deployed with the United States Coast Guard, the Canadian Navy, the Royal Danish Navy and the United States Navy.
Forward-Looking Statements
This news release contains discussion of items that may constitute forward-looking statements within the meaning of securities laws including Section 27a of the Securities Act of 1933, as amended, and Section 21e of the Securities Exchange Act of 1934, as amended, with respect to achieving corporate objectives, developing additional project interests, OSI's analysis of opportunities in the acquisition and development of various project interests and other matters. These statements are made under the 'safe harbour' provisions of the Private Securities Litigation Reform Act of 1995 and, as such, involve known and unknown risks and uncertainties and other factors that may cause the actual results to be materially different from the results implied herein. Although Offshore Systems International believes the expectations reflected in such forward-look statements are based on reasonable assumptions, it can give no assurances that its expectations will be achieved. Factors that could cause actual results to differ from expectations include the effects of general economic conditions, changing foreign exchange rates, actions by government authorities, uncertainties associated with contract negotiations, industry supply.
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Jane Hayward
Investor Relations |
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| Phone: (613) 287-0462 |
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| Toll-Free: (888) 880-9797 |
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