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OSI reports first quarter fiscal 2004 financial results
Vancouver, Canada -- Offshore Systems International Ltd. (OSI) (TSX: OSI, OTCBB: OFSYF) today announced its financial results for the first quarter ended February 29, 2004.
“It was an outstanding first quarter for the company, highlighted by a 13 per cent increase in revenues and a doubling of earnings per share over the comparable period last year,” said John Jacobson, President and CEO Offshore Systems International. “Our improved financial performance reflects the major contract win with the Royal Navy of the United Kingdom, where OSI is delivering software and services. With a significant increase in our total backlog* to more than $18 million at quarter end and good momentum in all areas of our business, we anticipate solid financial performance in fiscal 2004.”
Financial Highlights
For the first quarter of fiscal 2004, revenues increased 13% to $4.0 million, compared with $3.6 million in the same quarter last year. Earnings for the first quarter were $551,791, or $0.02 per diluted share, compared with earnings of $248,248, or $0.01 per diluted share, in the same period last year.
At February 29, 2004, the company had current assets of $10.5 million versus current liabilities of $2.2 million, which resulted in working capital increasing $0.2 million to $8.3 million. Cash and cash equivalents were $1.7 million at February 29, 2004, compared with $3.8 million at November 30, 2003.
The Company’s total backlog at the end of the first quarter was in excess of $18 million, including option backlog of $11.0 million. This compares with a total order backlog of $3.3 million at November 30, 2003, including option backlog of $2.5 million. Subsequent to February 29, 2004 the company recorded an additional $6.5 million in total orders, including $3.5 million of option backlog.
Operational Highlights
- December 2003: Announced the delivery of developer tool kits and support for the COP-IDS server platform. This is expected to extend the capabilities of third-party application developers and increase the availability of additional products for potential COP-IDS™ customers.
- December 2003: The Canadian Navy awarded OSI an $800,000 follow-on contract for deployment of navigation systems on new training vessels, with deliveries to commence in April 2004.
- January 2004: The Company announced a major fleet contract with the United Kingdom Royal Navy. OSI, as part of a successful teaming arrangement with Lockheed Martin UK and Kelvin Hughes Ltd., will begin to deliver ECPINS® software to the Royal Navy fleet in mid-2004. The total value of the contract, including long term maintenance and support and options for auxiliary systems, is approximately $17.5 million. Approximately $3 million will be realized in the first year of the contract. The balance of the contract represents options for additional product and services of $3.5 million, and maintenance and support over a 30-year period. Subsequent to quarter end, the Royal Navy exercised $4.8 million of options for maintenance and support, which is now included in firm backlog.
- January 2004: The Company announced that it had signed a contract with Teekay Shipping Limited’s (Teekay) (NYSE:TK) operational headquarters in Vancouver. OSI will supply electronic navigation systems to Teekay with delivery and installation of up to 25 systems beginning in 2004.
- February 2004: OSI Geomatics was awarded a contract for land mapping by the city of Corvallis, Oregon. OSI is the prime contractor, the tenth contract in which the company has secured prime contractor status, further enhancing its ability to successfully compete for larger agreements.
- March 2004: The Company announced that its teaming partner, Nautronix Ltd., has signed the final prime contract to supply the Royal Australian Navy with a fleet installation of OSI’s ECPINS-M electronic chart navigation system. The total contract value to OSI Navigation Systems is approximately $8 million, $4.5 million of which will be realized over 12 to 18 months beginning in September 2004.
- March 2004: The Naval and Ground Systems Division of Terma A/S, a leading systems integrator in military command and control applications, has integrated OSI's COP-IDS™ software into their next generation of naval command and control systems. This system has been delivered to the Royal Danish Navy, successfully concluded sea trials and has been ordered by the Royal Danish Navy.
About Offshore Systems International Ltd.
Offshore Systems International Ltd (OSI) is a leader in electronic geography. The company’s core strengths lie in the ability to produce, manage and display many forms of geographic data. The company provides display systems and data for several defense, government and commercial customers. OSI conducts its operations through three business units: OSI Geomatics (data production and distribution), OSI Navigation Systems, and OSI 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 the OTC Bulletin Board (OTCBB: OFSYF). For more information please visit www.osil.com.
*Non-GAAP Definition
Total backlog, firm backlog and option backlog are non-GAAP measures that do not have a standardized meaning and are likely not comparable to similar measures presented by other issuers. These measures, also do not have a comparable GAAP measure. Total backlog is the total of the firm and option backlogs. Firm backlog consists of firm, fixed, signed orders issued to the Company and executable by the Company subsequent to the balance sheet date. Option backlog consists of unexercised contract options at the balance sheet date and indefinite-quantity contracts executable by the Company subsequent to the balance sheet date. Should our customers elect to exercise contract options or place orders against indefinite-quantity contracts, the option backlog converts to firm backlog.
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-looking 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, and industry supply.
Conference Call – First quarter 2004 financial results
The conference call to discuss the first quarter 2004 financial results will take place on Tuesday, April 6, 2004 at 11:00 a.m. Eastern Time (8:00 a.m. Pacific Time). To join the call, dial 416-405-9310 in Toronto or 1-877-211-7911 outside Toronto. Please call in prior to the scheduled start to secure a line; you will then be put on hold until the call begins. A taped replay of the conference call will be available until April 13, 2004 at 11:59 p.m. Eastern Time by calling 416-695-5800 in Toronto or 1-800-408-3053, passcode 3029261.
A live audio webcast of the conference call will be available at OSI’s website at www.osil.com/whatsnew.html. Please connect at least 15 minutes prior to the conference call to ensure adequate time for any software download that may be needed to hear the webcast. Following the meeting, the webcast will be archived at www.osil.com for approximately 90 days.
ECPINS and COP-IDS™ are trademarks of Offshore Systems Limited. All other trade names mentioned are trademarks and/or registered trademarks of their respective owners.
Offshore Systems International Ltd.
Selected Consolidated Financial Information (Unaudited)
(Canadian dollars - Canadian GAAP)
| Statement of Earnings Information |
Three months ended February 29 2004(unaudited)
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2004
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2003
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| Revenue |
4,029,760 |
3,563,175 |
| Earnings (loss) for the period |
551,791 |
248,248 |
| Basic earnings per share |
0.02 |
0.01 |
| Fully diluted earnings per share |
0.02 |
0.01 |
| Balance Sheet Information |
February 29 2004
(unaudited)
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November 30 2003
(unaudited)
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| Cash and cash equivalents |
1,716,195
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3,837,555 |
| Working capital |
8,292,690
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8,071,926 |
| Current assets |
10,538,062
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10,377,836 |
| Total assets |
12,131,976
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11,728,257 |
| Current liabilities |
2,245,372
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2,305,910 |
| Long-term debt |
140,539 |
187,384 |
| Total liabilities |
2,385,911 |
2,493,294 |
| Shareholder's equity |
9,746,065 |
9,234,963 |
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Jane Hayward
Investor Relations |
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| Phone: (613) 287-8004 |
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