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OSI reports Second Quarter financial results
Vancouver, Canada — Offshore Systems International Ltd. (OSI) (TSX: OSI, OTCBB: OFSYF) today announced its financial results for the second quarter and first six months ended May 31, 2004.
“OSI has developed exceptionally well in the first half of the year,” said John Jacobson, President and CEO Offshore Systems International. “Revenues for the first six months improved and our earnings more than doubled over the comparable period in 2003. Our total backlog* grew to $22.6 million based on some key contract signings, and our current contract mix has a significant proportion of software deliveries, increasing our gross profit margins to 64% from 58%. We are building for the future with a new $3.76 million investment from Technology Partnerships Canada and an internally funded commitment of over half a million dollars so far in business and product development expenses to fuel our new OSI Applications business unit. We see tremendous opportunity in electronic geography, and we are moving aggressively to win our share.”
Financial Highlights
For the second quarter of fiscal 2004, revenues decreased 6 % to $2.8 million compared with $3.0 million in the same quarter last year. For the first half of fiscal 2004, revenues increased 4% to $6.8 million compared with $6.5 million in the first half last year. Earnings for the second quarter were $298,670, or $0.01 per diluted share, compared to earnings of $152,162, or $0.00 per diluted share, in the same quarter last year. Earnings for the first six months ended May 31, 2004 were $850,461, or $0.03 per diluted share, compared to earnings of $400,410, or $0.01 a diluted share, in the same period last year.
During the first half of the fiscal year, the Company received and claimed $851,542 as part of a strategic investment of $3.76 million from Technology Partnerships Canada with the remainder of the investment to be earned by the Company before March 2007.
At May 31, 2004, the company had current assets of $11.5 million versus current liabilities of $2.6 million, which resulted in working capital increasing $0.9 million to $9.0 million from $8.1 million at November 30, 2003. Cash and cash equivalents were $1.0 million at May 31, 2004 versus $3.8 million at November 30, 2003.
The Company’s total order backlog* at the end of the second quarter was approximately $22.6 million including option backlog* of $13.9 million versus $5.4 million at May 31, 2003 including option backlog of $2.9 million.
Operational Highlights
- March 2004: The Company announced that its teaming partner, Nautronix Ltd., 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 including options 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.
- May 2004: The Company announced that Technology Partnerships Canada, an agency of Industry Canada, will be making a strategic investment of $3.76 million in a research and development initiative dedicated to improving geographical display capabilities in defense and navigation systems.
- May 2004: The Company announced that the Canadian Department of National Defence has invited OSI to demonstrate its newest product, COP-IDS, as part of the Joint Warrior Interoperability Demonstration event hosted by the U.S. Chairman of the Joint Chiefs of Staff.
- June 2004: OSI Geomatics was awarded a prime contract for land mapping by the City of Brampton, Ontario, in the amount of $271,000. This brings to seven the number of prime contracts OSI Geomatics has won with state and local governments in the first two months of the Company’s fiscal second quarter.
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 Definitions
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. There is no guarantee or certainty that the Company’s customers will elect to exercise their contract option backlog. 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.
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Jane Hayward
Investor Relations |
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