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Offshore Systems International Reports Fiscal Third Quarter and Nine Month Earnings & Revenues
Vancouver, Canada -- Offshore Systems International Ltd. (TSX: OSI / OTCBB: OFSYF) today announced its financial results and operating highlights for the third quarter and nine months ended August 31, 2003.
"OSI's businesses have continued to achieve solid performance and demonstrate strong fundamentals." said John Jacobson, President and CEO Offshore Systems International. "Our revenue and profitability eased modestly in the third quarter, primarily related to the timing and recognition of new orders in the Navigation Systems unit that were delayed to after August 31st. After an in-depth review of our business plan, I am confident that the resources of OSI's business units are focused on those revenue opportunities where we can achieve the greatest return in the near term."
Financial Highlights
For the third quarter of 2003, revenues decreased 16% to $2.3 million (US$1.7 million) compared with $2.7 million in the same quarter last year. Net loss for the third quarter was $338,797 (US$246,129), equal to $0.01 (US$0.01) per diluted share, compared to net earnings of $536,535, or $0.02 a diluted share, in the year-earlier third quarter.
For the nine months ended August 31, 2003, revenues decreased 10% to $8.8 million (US$6.1 million) from $9.8 million for the nine months ended August 31, 2002. Net earnings decreased to $61,613 (US$42,462), equal to $0.00 (US$0.00) per diluted share, from $1.1 million, or $0.04 a diluted share, in the first nine months of fiscal 2002.
At August 31, 2003, the company had working capital of $6.8 million including cash and cash equivalents of $5.1 million (US$3.6 million) compared to working capital of $4.4 million at fiscal 2002 year-end.
Offshore Systems' total order backlog at the end of the fiscal 2003 third quarter was in excess of $3.9 million (US$2.8 million) including option backlog of $2.7 million (US$1.9 million) versus $6.1 million at November 30, 2002 including option backlog of $2.4 million.
Operational Highlights
In June 2003, the Company announced:
- that its nautical charting and land-mapping division, OSI Geomatics, has been awarded a contract by a large US mapping company valued at more than CDN$1.0 million. Under the contract, OSI Geomatics will provide data production services in support of a state-wide mapping project, and
- that Lockheed Martin UK has teamed with Kelvin Hughes Ltd. and OSL to bid into the initial competitive stage of the United Kingdom's Ministry of Defence's requirement for WECDIS, which is being considered for installation into all Royal Navy ships. The team includes Babcock Design and Technology Ltd who would manage the task of ship-fitting design and the installation of the systems into the Fleet.
In July 2003, the Company announced:
- Standard & Poor's had initiated research coverage of its stock, and
- its systems division, OSL, had joined negotiations with the Royal Australian Navy. OSL, together with its industrial team-mates Nautronix Ltd. of Fremantle, Australia, and Scientific Management Associates of Lane Cove NSW, Australia, had been selected as the "Preferred Tenderer" by the Royal Australian Navy for its SEA1430 Phase 2A fleet-wide electronic chart navigation systems procurement. Along with the May 29, 2003 announcement of the contract with the Royal New Zealand Navy, OSI has now disclosed the identity of both of the "shortlisted" opportunities announced on March 6, 2003.
In September 2003, the Company announced:
- the appointment of Mr. Peter W. Roberts, the Chief Financial Officer of Sierra Wireless, Inc., to the Company's Board of Directors and its Audit Committee.
- its nautical charting and land-mapping division, OSI Geomatics, had received new orders worth more than $1,500,000. The group of orders span the end of the company's third quarter and the beginning of the fourth quarter.
- that Taglich Brothers, Inc. commenced research coverage of the Company. The Initial Research Report is available on Taglich Brothers' website and on the Company's website.
About Offshore Systems International
Offshore Systems International Ltd. (OSI) was founded in 1977 and is a leader in delivering products and systems for situational awareness. The company provides display systems and geo-spatial data within mission-critical applications for several defense and commercial customers. OSI conducts its operations through three business units: Geomatics (data production and distribution), Navigation Systems, and Applications (products and services for command and control systems). OSI's common shares are listed for trading on the Toronto Stock Exchange (TSX: OSI) and OTC Bulletin Board (OTCBB: OFSYF). For more information, visit www.osl.com.
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.
Offshore Systems International Ltd.
Selected Consolidated Financial Information (Unaudited)
(Canadian dollars - Canadian GAAP)
| Statement of Earnings Information |
Three months ended August 31 2003 (unaudited)
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Nine months ended August 31 2003 (unaudited)
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2003
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2002
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2003
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2002
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| Revenue |
2,275,153 |
2,697,781 |
8,796,354 |
9,810,751 |
| Earnings for the period |
(338,797) |
536,535 |
61,613 |
1,115,852 |
| Basic earnings per share |
(0.01) |
0.02 |
0.00 |
0.04 |
| Fully diluted earnings per share |
(0.01) |
0.02 |
0.00 |
0.04 |
| Balance Sheet Information |
August 31 2003 (unaudited)
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November 30 2002 (unaudited)
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| Cash and cash equivalents |
5,056,362 |
3,244,048 |
| Working capital |
6,838,112 |
4,449,492 |
| Current assets |
9,364,780 |
8,810,568 |
| Total assets |
11,293,638 |
10,766,438 |
| Current liabilities |
2,526,668 |
4,361,076 |
| Long-term debt |
232,948 |
372,717 |
| Total liabilities |
2,759,616 |
4,733,793 |
| Shareholder's equity |
8,534,022 |
6,032,645 |
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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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