- Management to Host Conference Call at
8:30 am Pacific Time (11:30 am Eastern Time) -
VANCOUVER, March 8, 2017 /CNW/ - Norsat
International Inc. ("Norsat" or the "Company") (TSX: NII and NYSE
MKT: NSAT), a provider of unique and customized communication
solutions for remote and challenging applications, today reported
financial results for the fourth quarter and fiscal year ended
December 31, 2016.
Financial Highlights
For the three months ended December
31, 2016
- $10.7 million in revenue for
the quarter, an increase of 13% compared to $9.5 million for the same period last year.
- Gross profit margin of 44% for the quarter, an increase
of 3% from 41% for the same period last year.
- Government repayment obligation recorded during the quarter
was $2.1 million (consisting of a
current portion of $0.3 million and
long-term provisions of $1.8
million), compared to $nil for the same period last
year. Based on the Company's recent history of strong financial
performance, it was determined that it is probable that future
government repayments will be required to be made under the terms
of Strategic Aerospace & Defense Initiative ("SADI") programs.
Based on management's best estimates for forecast revenues between
2017 and 2032, the present value of the total estimated government
repayment obligation for the same periods would be approximately
$2.1 million.
- Deferred income tax expense for the quarter was $0.1 million, compared to deferred income tax
recovery of $3.8 million for the same
period last year. The recovery for the three months ended
December 31, 2015 was based on an
assessment of the Company's history of profitability and its
ability to realize deferred income tax assets.
- Net (loss) earnings for the quarter were ($0.2 million), or ($0.04) per share, basic and diluted,
compared to $5.9 million, or
$1.03 per share, basic and diluted,
for the same period last year.
- Adjusted EBITDA(1) of $2.2
million for the quarter, an increase of 52% from
$1.5 million for the same period last
year.
For the year ended December 31,
2016
- $38.0 million in revenue for
the year, an increase of 5% compared to $36.1 million for 2015.
- Gross profit margin of 45% for the year, an increase of
4% from 41% for 2015.
- Government repayment obligation recorded during the year was
$2.1 million (consisting of a current
portion of $0.3 million and long-term
provisions of $1.8 million),
compared to $nil for 2015. Based on the Company's recent history of
strong financial performance, it was determined that it is probable
that future government repayments will be required to be made under
the terms of SADI programs. Based on management's best estimates
for forecast revenues between 2017 and 2032, the present value of
the total estimated government repayment obligation for the same
periods would be approximately $2.1
million.
- Deferred income tax expense for the year was $1.2 million, compared to deferred income tax
recovery of $3.8 million for 2015.
The recovery for the year ended December 31,
2015 was based on an assessment of the Company's history of
profitability and its ability to realize deferred income tax
assets.
- Net earnings were $3.3 million
for the year, or $0.57 and
$0.56 per share, basic and
diluted, compared to $8.7
million, or $1.50 per share,
basic and diluted, for 2015.
- $15.0 million of cash and cash
equivalents at December 31, 2016,
an increase of $10.4 million compared
to $4.6 million at December 31, 2015.
- $26.6 million of working
capital at December 31, 2016, an
increase of $7.2 million compared to
$19.4 million at December 31, 2015.
- Adjusted EBITDA(1) of $7.6 million for the year, an increase of 44%
from $5.3 million for 2015.
|
______________________________
|
|
|
(1) Adjusted EBITDA is a measure that
the Company uses to reflect the results of its core earnings.
Adjusted EBITDA is defined as earnings before income tax expense,
financing costs, depreciation and amortization, foreign exchange
gain or loss, corporate development costs, write-down of inventory,
impairment charges or recoveries, discontinued operations and other
non-cash charges.
|
|
"We are very pleased with the fourth quarter and annual results.
Our revenue for the quarter and year grew 13% and 5%, respectively,
compared to the same periods of 2015. From a Sinclair Technologies
division perspective, we benefited from an improved U.S. economy
and also larger deliveries of our products suitable for use in
positive train control deployments. The Satellite
Communications division benefited from an increase in military
orders as well as deliveries of our ATOM products to Harris
Corporation," said Dr. Amiee Chan,
President and CEO of Norsat. "We also continued to manage our
cost structure while also challenging ourselves to develop and
market new products and solutions. Overall we achieved
another period of profitability and we reported a record Adjusted
EBITDA of $2.2 million and
$7.6 million, for the 2016 fourth
quarter and 2016 year, respectively," added Dr. Chan.
A full set of financial statements and Management's Discussion
and Analysis for Norsat is available at www.norsat.com and will be
available at www.sedar.com.
Conference Call Details
Norsat will host a
conference call today, March 8, 2017
at 8:30 am Pacific Time (11:30 am Eastern Time) to discuss its financial
results for the fourth quarter and fiscal year ended December 31, 2016. To access the conference call,
please dial toll-free 1-888-886-7786 or 416-764-8658. The
conference call title is: 'Investor Call – Q4 2016'. Please connect
approximately 10 – 15 minutes prior to the beginning of the call to
ensure participation. A digital recording and transcript of the
call will be available after the live call at:
http://www.norsat.com/investors/financial-information/conference-call-recordings/
|
Norsat
International Inc.
|
|
|
|
Consolidated
Statements of Financial Position
|
|
|
|
(Expressed in United
States dollars)
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
December 31,
2016
|
December 31,
2015
|
|
ASSETS
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
|
15,044,742
|
$
|
4,585,754
|
|
Trade and other
receivables
|
8,263,447
|
8,987,392
|
|
Inventories
|
10,462,354
|
10,956,524
|
|
Prepaid expenses and
other
|
332,676
|
394,617
|
|
34,103,219
|
24,924,287
|
|
Non-current
assets
|
|
|
|
Property and
equipment, net
|
616,495
|
558,609
|
|
Intangible assets,
net
|
4,176,244
|
4,724,490
|
|
Goodwill
|
4,097,751
|
4,097,751
|
|
Investment tax
credits recoverable
|
4,820,185
|
4,985,139
|
|
Deferred income tax
assets
|
1,185,907
|
2,218,848
|
|
14,896,582
|
16,584,837
|
|
Total
assets
|
$
|
48,999,801
|
$
|
41,509,124
|
|
|
|
|
LIABILITIES
|
|
|
|
Current
liabilities
|
|
|
|
Trade and other
payables
|
$
|
2,774,889
|
$
|
1,906,703
|
|
Accrued
liabilities
|
2,685,970
|
2,375,107
|
|
Warranty
provision
|
869,259
|
947,682
|
|
Deferred
revenue
|
1,217,083
|
286,432
|
|
7,547,201
|
5,515,924
|
|
Non-current
liabilities
|
|
|
|
Long-term
provisions
|
1,863,542
|
-
|
|
Long-term deferred
revenue
|
70,014
|
45,889
|
|
Total
liabilities
|
9,480,757
|
5,561,813
|
|
SHAREHOLDERS'
EQUITY
|
|
|
|
Issued
capital
|
40,016,360
|
39,850,648
|
|
Treasury
shares
|
(431,208)
|
(320,750)
|
|
Contributed
surplus
|
4,276,584
|
4,318,487
|
|
Accumulated other
comprehensive loss
|
(4,395,651)
|
(4,673,811)
|
|
Retained
earnings/(deficit)
|
52,959
|
(3,227,263)
|
|
Total
shareholders' equity
|
39,519,044
|
35,947,311
|
|
Total liabilities
and shareholders' equity
|
$
|
48,999,801
|
$
|
41,509,124
|
|
|
|
|
|
|
Norsat
International Inc.
|
|
|
|
|
|
Consolidated
Statements of Earnings and Comprehensive Income
|
|
|
|
(Expressed in United
States dollars)
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three months ended
December 31
|
Year Ended
December 31
|
|
2016
|
2015
|
2016
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
10,672,174
|
$
|
9,460,306
|
$
|
38,041,159
|
$
|
36,099,611
|
|
Cost of
sales
|
5,983,518
|
5,574,566
|
20,897,651
|
21,453,153
|
|
Gross
profit
|
4,688,656
|
3,885,740
|
17,143,508
|
14,646,458
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
Selling and
distributing
|
981,553
|
1,153,893
|
4,702,019
|
4,876,579
|
|
General and
administrative
|
1,169,208
|
1,347,995
|
3,887,482
|
4,090,758
|
|
Product
development
|
692,196
|
708,467
|
3,061,308
|
2,873,054
|
|
Less: Government
contributions
|
(350,231)
|
(342,886)
|
(1,494,466)
|
(1,309,671)
|
|
Add: Government
repayment obligation
|
2,128,333
|
-
|
2,128,333
|
-
|
|
Loss/(gain) on
foreign exchange
|
132,313
|
(1,141,356)
|
262,987
|
(793,154)
|
|
Interest and bank
charges
|
23,660
|
30,272
|
105,057
|
140,215
|
|
Total
expenses
|
4,777,032
|
1,756,385
|
12,652,720
|
9,877,781
|
|
|
|
|
|
|
Earnings before
income taxes
|
(88,376)
|
2,129,355
|
4,490,788
|
4,768,677
|
|
|
|
|
|
|
Current income tax
expense/(recovery)
|
1,561
|
-
|
12,671
|
(66,068)
|
|
Deferred income tax
expense/(recovery)
|
112,323
|
(3,812,780)
|
1,197,895
|
(3,815,486)
|
|
113,884
|
(3,812,780)
|
1,210,566
|
(3,881,554)
|
|
|
|
|
|
|
Net
earnings
|
$
|
(202,260)
|
$
|
5,942,135
|
$
|
3,280,222
|
$
|
8,650,231
|
|
|
|
|
|
|
Other
comprehensive income/(loss)
|
|
|
|
|
|
Items that may
subsequently be reclassified to income:
|
|
|
|
|
|
Gain/(loss) on
translation of foreign subsidiaries
|
85,018
|
(1,059,257)
|
278,160
|
(1,639,848)
|
|
Total
comprehensive (loss)/income
|
$
|
(117,242)
|
$
|
4,882,878
|
$
|
3,558,382
|
$
|
7,010,383
|
|
|
|
|
|
|
Net
(loss)/earnings per share
|
|
|
|
|
|
Basic (loss)/earnings
per share
|
$
|
(0.04)
|
$
|
1.03
|
$
|
0.57
|
$
|
1.50
|
|
Diluted
(loss)/earnings per share
|
$
|
(0.04)
|
$
|
1.03
|
$
|
0.56
|
$
|
1.50
|
|
|
|
|
|
|
Weighted average
number of shares outstanding
|
|
|
|
|
|
Basic
|
5,768,622
|
5,759,400
|
5,767,971
|
5,758,179
|
|
Diluted
|
5,935,132
|
5,775,035
|
5,897,354
|
5,777,619
|
|
|
|
|
|
|
Norsat
International Inc.
|
|
|
|
|
|
Consolidated
Statements of Cash Flows
|
|
|
|
|
|
(Expressed in United
States dollars)
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
December 31
|
Year ended
December 31
|
|
|
2016
|
2015
|
2016
|
2015
|
|
|
|
|
|
|
|
Cash and cash
equivalents provided by/(used in)
|
|
|
|
|
|
Operating
activities:
|
|
|
|
|
|
Net (loss)/earnings
for the period
|
$
|
(202,260)
|
$
|
5,942,135
|
$
|
3,280,222
|
$
|
8,650,231
|
|
Income taxes
paid
|
-
|
-
|
(11,110)
|
(43,270)
|
|
Adjustments for items
not affecting cash:
|
|
|
|
|
|
Depreciation and
amortization
|
207,276
|
317,127
|
840,002
|
1,295,634
|
|
Write-off of
intangible assets and property and equipment
|
(12,064)
|
-
|
18,809
|
31,139
|
|
Unrealized foreign
exchange loss/(gain)
|
99,503
|
(910,533)
|
281,316
|
(562,331)
|
|
Acquisition loan cost
amortization
|
-
|
-
|
-
|
2,262
|
|
Other
expense/(income)
|
-
|
161,292
|
-
|
(37,705)
|
|
Current income tax
expense/(recovery)
|
1,561
|
-
|
12,671
|
(66,068)
|
|
Deferred income tax
expense/(recovery)
|
112,323
|
(3,812,780)
|
1,197,895
|
(3,815,486)
|
|
Share-based
payments
|
76,234
|
67,616
|
270,643
|
247,876
|
|
Vesting of
RSUs
|
-
|
-
|
-
|
-
|
|
Government
contributions
|
(350,231)
|
(342,886)
|
(1,494,466)
|
(1,309,671)
|
|
Government repayment
obligation
|
2,128,333
|
-
|
2,128,333
|
-
|
|
Changes in non-cash
working capital
|
586,301
|
(1,802,646)
|
2,706,023
|
(3,704,611)
|
|
Net cash flows
provided by/(used in) operating activities
|
2,646,976
|
(380,675)
|
9,230,338
|
688,000
|
|
|
|
|
|
|
|
Investing
activities:
|
|
|
|
|
|
Purchase of
intangible assets, property and
|
|
|
|
|
|
equipment, net of
SADI
|
(75,887)
|
(35,700)
|
(362,987)
|
(193,286)
|
|
Net cash flows
used in investing activities
|
(75,887)
|
(35,700)
|
(362,987)
|
(193,286)
|
|
|
|
|
|
|
|
Financing
activities:
|
|
|
|
|
|
Repayment of
acquisition loan
|
-
|
-
|
-
|
(2,286,762)
|
|
Proceeds from
exercise of share purchase options
|
3,574
|
-
|
12,723
|
-
|
|
Purchase of treasury
shares, including purchase costs
|
(4,108)
|
(7,460)
|
(270,015)
|
(295,390)
|
|
Government
contributions
|
406,486
|
438,437
|
1,866,722
|
1,271,648
|
|
Net cash flows
provided by/(used in) financing activities
|
405,952
|
430,977
|
1,609,430
|
(1,310,504)
|
|
|
|
|
|
|
|
Effect of foreign
currency translation on
|
|
|
|
|
|
cash and cash
equivalents
|
(3,767)
|
(365,834)
|
(17,793)
|
(112,189)
|
|
|
|
|
|
|
|
Increase/(decrease)
in cash and cash equivalents
|
2,973,274
|
(351,232)
|
10,458,988
|
(927,979)
|
|
Cash and cash
equivalents, beginning of period
|
12,071,468
|
4,936,986
|
4,585,754
|
5,513,733
|
|
Cash and cash
equivalents, end of period
|
$
|
15,044,742
|
$
|
4,585,754
|
$
|
15,044,742
|
$
|
4,585,754
|
|
|
|
|
|
|
Norsat
International Inc.
|
|
|
|
|
|
Reconciliation of
IFRS to non-IFRS Measures
|
|
|
|
|
|
(Expressed in United
States dollars)
|
|
|
|
|
|
|
|
|
|
|
Three months ended
December 31
|
Year ended
December 31
|
|
2016
|
2015
|
2016
|
2015
|
|
Net (loss)/earnings
for the period
|
$
|
(202,260)
|
$
|
5,942,135
|
$
|
3,280,222
|
$
|
8,650,231
|
|
Interest
(income)/expense
|
(7,167)
|
(728)
|
(15,950)
|
20,572
|
|
Depreciation and
amortization
|
207,276
|
317,127
|
840,002
|
1,295,634
|
|
Tax
expense/(recovery)
|
113,884
|
(3,812,780)
|
1,210,566
|
(3,881,554)
|
|
EBITDA(2)
|
$
|
111,733
|
$
|
2,445,754
|
$
|
5,314,840
|
$
|
6,084,883
|
|
Loss/(gain) on
foreign exchange
|
132,313
|
(1,141,356)
|
262,987
|
(793,154)
|
|
Other
expenses/(income)
|
-
|
161,292
|
-
|
(37,705)
|
|
Corporate development
costs
|
116,000
|
-
|
135,160
|
-
|
|
Long term portion of
government repayment obligation
|
1,863,542
|
-
|
1,863,542
|
-
|
|
Adjusted
EBITDA(2)
|
$
|
2,223,588
|
$
|
1,465,690
|
$
|
7,576,529
|
$
|
5,254,024
|
|
|
(2) We
disclose non-IFRS measures as we believe they provide useful
information on actual operating results and assist in comparisons
from one period to another. Readers are cautioned that non-IFRS
measures do not have any standardized meaning prescribed by IFRS
and therefore may not be comparable to similar measures presented
by other companies. For a more detailed description of non-IFRS
measures, please refer to 2016 Annual Management's Discussion and
Analysis posted on Norsat's website and SEDAR.
|
|
About Norsat International Inc.
Founded in 1977, Norsat International Inc. is a provider of
unique and customized communication solutions for remote and
challenging applications. Norsat's products and services include
leading-edge product design and development, production,
distribution and infield support and service of fly-away satellite
terminals, microwave components, antennas, Radio Frequency (RF)
conditioning products, maritime based satellite terminals and
remote network connectivity solutions. More information is
available at www.norsat.com, via email at investor@norsat.com or by
phone at 1-604-821-2800.
Forward Looking Statements
The discussion and analysis of this news release contains
forward-looking statements concerning anticipated developments in
Norsat's operations in future periods, the adequacy of its
financial resources and other events or conditions that may occur
in the future. Forward-looking statements are frequently, but not
always, identified by words such as "expects," "anticipates,"
"believes," "intends," "estimates,", "predicts," "potential,"
"targeted," "plans," "possible" and similar expressions, or
statements that events, conditions or results "will," "may,"
"could" or "should" occur or be achieved. These forward-looking
statements include, without limitation, statements about Norsat's
market opportunities, strategies, competition, expected activities
and expenditures as it pursues its business plan, the adequacy of
available cash resources and other statements about future events
or results. Forward-looking statements are statements about the
future and are inherently uncertain, and actual achievements of the
Company or other future events or conditions may differ materially
from those reflected in the forward-looking statements due to a
variety of risks, uncertainties and other factors, such as business
and economic risks and uncertainties. The forward-looking
statements are based on the beliefs, expectations and opinions of
management on the date the statements are made. Consequently, all
forward-looking statements made in this news release are qualified
by this cautionary statement and there can be no assurance that
actual results or anticipated developments will be realized. For
the reasons set forth above, investors should not place undue
reliance on forward-looking statements. These forward-looking
statements are made as of the date of this news release and Norsat
assumes no obligation to update or revise them to reflect new
events or circumstances, other than as required by law.
SOURCE Norsat International Inc.