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OSI reports financial results for Q4 and 2004 fiscal year-end
Vancouver, Canada — Offshore Systems International Ltd. (TSX: OSI/ OTCBB: OFSYF) today reported earnings of $114,741, or $0.00 per diluted share for the fiscal year ended November 30, 2004, compared to earnings of $385,369, or $0.01 per diluted share for fiscal 2003.
The Company also announced a loss of $251,851, or $0.01 per diluted share for the three months ended November 30, 2004, compared to earnings of $323,756, or $0.01 per diluted share for the fourth quarter the previous year.
OSI President and CEO, John Jacobson, said the Company’s results for fiscal 2004 were buoyed by major contract wins, and reflect significant investment in the development of new products and markets, a decline in Geomatics revenues and profits, and an uptrend to higher regulatory compliance and governance costs.
For fiscal 2004, revenue increased 17% to $13.5 million versus $11.5 million for fiscal 2003. Fourth quarter revenue increased 36% to $3.7 million, versus $2.7 million for the same quarter last year.
In 2004, significant revenues were derived from key contracts with the Royal Navy of the UK through partner Lockheed Martin UK, the Royal Australian Navy through partner Nautronix Ltd., the US Coast Guard, the Royal New Zealand Navy and the Portuguese Navy through partner SICOM (Sistemas de Comunições, Lda).
While the major investment in new products and markets and commitment to best-practice governance impacted the bottom line for the year, Jacobson said they were “important steps for the Company’s future and building shareholder value.”
He added the results really don’t reflect that “this was the best year in the Company’s history for winning new contracts. We secured our two biggest orders ever, with fleet wins for both the Royal Navy and the Royal Australian Navy, bringing our total fleet contracts to six and increasing our backlog to record levels. We’ve been very successful and consistently proven our ability to land significant positions with the leading navies of the world.”
Jacobson said that “for a new entrant to the defence industry to establish such a strong customer list is a great achievement. The key contract wins and expanded naval customer list position OSI as the leader for naval electronic chart navigation systems in 2004. The Company’s flagship ECPINS® (Electronic Chart Precise Integrated Navigation System) product is installed or contracted to be installed on approximately 342 naval vessels.”
The strong growth in new contract bookings in 2004 is reflected in the year over year revenue and total backlog* increase, with total backlog* reaching record levels during the year.
At November 30, 2004, the Company’s total backlog* was $21.1 million, including option backlog* of $12.7 million, compared to $3.3 million -- $2.4 million in option backlog* – at the same time last year. The increased total backlog* resulted from OSI and its partners securing contracts with the Royal Navy and Royal Australian Navy in fiscal 2004.
Current assets totalled $11.0 million and current liabilities $2.7 million at year-end. The resulting working capital* position of $8.3 million is up from $8.1 million at November 30, 2003. Cash and cash equivalents were $251,000 at November 30, 2004, compared to $3.8 million in fiscal 2003.
“Our focus for the year was to continue to build the business for future growth,” said Jacobson. “While investing more than $1 million in research and new product rollouts and absorbing the substantial increases in regulatory compliance and governance costs, we still reported a profit for fiscal 2004.
“We are solidly positioned to continue to expand our opportunities in 2005 and deliver long-term value to shareholders.”
Conference Call
As previously announced, the Company will host a live conference call on Wednesday February 2, 2005 at 11:00 a.m. Eastern Daylight Time (8:00 a.m. Pacific Daylight Time) by calling 416-850-1243 in Toronto or 1-800-814-4861. A taped replay of the conference call will be available until February 9 at 11:59 p.m. Eastern Daylight Time by calling 416-640-1917 in Toronto or 1-877-289-8525, pass code 21111340#.
A live audio webcast of the conference call will also be available at OSI’s website at www.osil.com. Following the meeting, the webcast will be archived at www.osil.com for approximately 90 days.
About Offshore Systems International Ltd.
Offshore Systems International Ltd. (OSI) is the pioneer in geo-spatial intelligence and the world leading fleet supplier of electronic chart systems for navigation and situational awareness in NATO and allied markets. The Company’s core competency is electronic geography and the production, management and display of many forms of geographic data. The Company provides display systems and data for several defense, government and commercial customers, and conducts its operations through three business units: OSI Navigation Systems (moving map display systems and software), OSI Applications (situational awareness products and services for command and control systems) and OSI Geomatics (digital map and electronic chart data production services: land and marine). OSI’s common shares are listed for trading on the Toronto Stock Exchange (TSX: OSI) and the OTC Bulletin Board (OTCBB: OFSYF).
Please visit OSI’s website at www.osil.com for more information and the latest Company updates.
*Non-GAAP Definitions: Total backlog, firm backlog, option backlog and working capital 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. Working capital is defined as current assets less current liabilities.
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.
Offshore Systems International Ltd.
Selected Consolidated Financial Information (Unaudited)
(Canadian dollars - Canadian GAAP)
| Statement of Earnings Info |
Three months
ended Nov 30 2004 (unaudited)
|
Years ended
Nov 30 2004
(unaudited)
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2004
|
2003
|
2004
|
2003
|
| Revenue |
3,696,137 |
2,724,439 |
13,451,303 |
11,520,793 |
Earnings (loss) for
the period |
(251,851) |
323,756 |
114,741 |
385,369 |
| Basic earnings per share |
(0.01) |
0.01 |
0.00 |
0.01 |
| Fully diluted earnings per share |
(0.01) |
0.01 |
0.00 |
0.01 |
| Balance Sheet Information |
November 30 2004
(unaudited)
|
November 30 2003
(unaudited)
|
| Cash and cash equivalents |
251,037 |
3,837,555 |
| Working capital |
8,287,798 |
8,071,926 |
| Current assets |
10,964,025 |
10,377,836 |
| Total assets |
12,310,738 |
11,728,257 |
| Current liabilities |
2,676,227 |
2,305,910 |
| Long-term debt |
- |
187,384 |
| Total liabilities |
2,676,227 |
2,493,294 |
| Shareholder's equity |
9,634,511 |
9,234,963 |
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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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