EX-99.1 2 exhibit99-1.htm NEWS RELEASE DATED MARCH 2, 2016 Exhibit 99.1
Exhibit 99.1

 

For Immediate Release

NORSAT ANNOUNCES FOURTH QUARTER AND
FISCAL YEAR 2015 FINANCIAL RESULTS

- Management to Host Conference Call at 8:30 am Pacific Time (11:30 am Eastern Time) -

Vancouver, British Columbia – March 4, 2016 -- 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 full year ended December 31, 2015.

Financial Highlights

For the three months ended December 31, 2015

  • $9.5 million in revenue for the quarter, compared to $9.4 million for the same period last year.

  • Gross profit margin of 41% for the quarter, an increase of 6% from 35% for the same period last year.

  • Net earnings for the quarter were $5.9 million, including the deferred income tax recovery of $3.8 million, or $1.03 per share, basic and diluted, an increase of $5.8 million from $51,000, or $0.01 per share, basic and diluted, for the same period last year.

  • Adjusted EBITDA is a measure 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.

    • Adjusted EBITDA of $1.5 million for the quarter, an increase of 97% from $0.7 million for the same period last year.

  • Deferred income tax recovery for the quarter was $3.8 million, compared to $70,000 for the same period last year. The recovery was based on an assessment of the Company’s history of profitability and its ability to realize deferred income tax assets.

For the year ended December 31, 2015

  • $36.1 million in revenue for the year, consistent with revenue of $36.2 million in 2014.

  • Gross profit margin of 41% for the year, compared to 40% for 2014.

  • Net earnings were $8.7 million for the year, including the deferred income tax recovery of $3.8 million, or $1.50 per share, basic and diluted, an increase of $4.5 million from $4.2 million, or $0.73 per share, basic and diluted, for 2014.

  • $4.6 million of cash and cash equivalents at December 31, 2015, compared to $5.5 million at December 31, 2014.

  • No bank debt outstanding as the Company repaid the remaining balance during the second quarter in 2015. Bank debt at December 31, 2014 was $2.4 million.

  • $19.4 million of working capital at December 31, 2015, compared to $13.8 million at December 31, 2014.




 

  • Adjusted EBITDA of $5.3 million for the year, an increase of 12% from $4.7 million for 2014.

  • Deferred income tax recovery for the year was $3.8 million, compared to $0.3 million for 2014. The recovery was based on an assessment of the Company’s history of profitability and its ability to realize deferred income tax assets.

“Fiscal 2015 demonstrated continued solid operating results as we continued to work through the sizable backlog of orders booked earlier in the year.” said Dr. Amiee Chan, President and CEO of Norsat. “We have been experiencing increased demand for components including our successful and expanding ATOM product line and solutions supplied to militaries around the globe which is driving improvements in our Satellite Communications segment. Offsetting the improved results within the Satellite Communications segment was a continuation of headwinds within our Land Mobile Radio (LMR) segment both in the U.S. and particularly in the Canadian public safety markets. Partially offsetting the softness in LMR was an increase in sales of our positive train control (PTC) products as railroads worked toward the December 31, 2015 deadline. In late December 2015, the deadline for certain railroads to install PTC technologies was extended to December 31, 2018 with a possibility of further extending the deadline to the 2020 year if railroads meet certain conditions. Therefore, we believe the program’s scope will continue over the coming years as thousands of locomotives and miles of track still need equipment to enable PTC to be fully operational, providing Norsat with a strong backlog of order flow for years to come.”

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 4, 2016 at 8:30 am Pacific Time (11:30 am Eastern Time) to discuss its financial results for the fourth quarter and full year ended December 31, 2015. To access the conference call, please dial toll-free 1-888-886-7786 or 416-764-8658. The conference call title is: ‘Norsat Investor Call’. 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, except when otherwise indicated)

             
    December 31, 2015     December 31, 2014  
ASSETS            
Current assets            
Cash and cash equivalents $ 4,585,754   $ 5,513,733  
Trade and other receivables   8,987,392     7,570,110  
Inventories   10,956,524     10,120,374  
Prepaid expenses and other   394,617     435,433  
    24,924,287     23,639,650  
Non-current assets            
Property and equipment, net   558,609     855,978  
Intangible assets, net   4,724,490     6,360,336  
Goodwill   4,097,751     4,736,470  
Investment tax credits recoverable   4,985,139     1,910,040  
Deferred income tax assets   2,218,848     1,360,959  
    16,584,837     15,223,783  
Total assets $ 41,509,124   $ 38,863,433  
LIABILITIES            
Current liabilities            
Trade and other payables $ 1,906,703   $ 2,831,911  
Accrued liabilities   2,375,107     2,601,163  
Provisions   947,682     766,371  
Taxes payable   -     120,038  
Deferred revenue   286,432     1,169,816  
Current liabilities before acquisition loan   5,515,924     7,489,299  
Acquisition loan   -     2,371,266  
    5,515,924     9,860,565  
Non-current liabilities            
Long-term deferred revenue   45,889     18,426  
Total liabilities   5,561,813     9,878,991  
SHAREHOLDERS' EQUITY            
Issued capital   39,850,648     39,850,648  
Treasury shares   (320,750 )   (326,527 )
Contributed surplus   4,318,487     4,371,778  
Accumulated other comprehensive loss   (4,673,811 )   (3,033,963 )
Deficit   (3,227,263 )   (11,877,494 )
Total shareholders' equity   35,947,311     28,984,442  
Total liabilities and shareholders' equity $ 41,509,124   $ 38,863,433  

 




 

Norsat International Inc.
Consolidated Statements of Earnings and Comprehensive Income
(Expressed in United States dollars, except when otherwise indicated)

    Three months ended December 31     Year ended December 31  
    2015     2014     2015     2014  
Revenue $ 9,460,306   $ 9,370,908   $ 36,099,611   $ 36,179,180  
Cost of sales   5,574,566     6,109,777     21,453,153     21,800,384  
Gross profit   3,885,740     3,261,131     14,646,458     14,378,796  
Expenses:                        
Selling and distributing   1,153,893     1,526,622     4,876,579     5,413,026  
General and administrative   1,347,995     918,238     4,090,758     4,028,640  
Product development   708,467     749,120     2,873,054     2,845,898  

Less: Government contributions

   (342,886 )   (374,947 )   (1,309,671 )   (1,266,824 )
(Gain)/loss on foreign exchange   (1,141,356 )   362,405     (793,154 )   (586,020 )
Interest and bank charges   30,272     95,783     140,215     242,844  
Total expenses   1,756,385     3,277,221     9,877,781     10,677,564  
Earnings/(loss) before income taxes   2,129,355     (16,090 )   4,768,677     3,701,232  
Current income taxexpense/(recovery)   -     3,178     (66,068 )   (214,355 )
Deferred income tax recovery   (3,812,780 )   (69,792 )   (3,815,486 )   (279,168 )
Net earnings $ 5,942,135   $ 50,524   $ 8,650,231   $ 4,194,755  
Other comprehensive income                        

Exchange differences on translation of operations in currencies other than United States dollars

   (1,059,257 )   48,816     (1,639,848 )   (1,718,485 )
Total comprehensive income $ 4,882,878   $ 99,340   $ 7,010,383   $ 2,476,270  
Net earnings per share                        

Basic earnings per share

 $ 1.03   $ 0.01   $ 1.50   $ 0.73  

Diluted earnings per share

 $ 1.03   $ 0.01   $ 1.50   $ 0.73  
Weighted average number of shares outstanding                        

Basic

   5,759,400     5,763,897     5,758,179     5,757,518  

Diluted

   5,775,035     5,770,099     5,777,619     5,761,472  

 




 

Norsat International Inc.
Consolidated Statements of Cash Flows
(Expressed in United States dollars, except when otherwise indicated)

    Three months ended December 31     Year ended December 31  
    2015     2014     2015     2014  
Cash and cash equivalents (used in)/provided by                        
Operating activities:                        
Net earnings for the period $ 5,942,135   $ 50,524   $ 8,650,231   $ 4,194,755  
Income taxes (paid)/recovered   -     -     (43,270 )   57,549  
Adjustments for items not affecting cash:                        

Depreciation and amortization

   317,127     375,027     1,295,634     1,274,536  

Write-off of property and equipment

   -     46,708     31,139     46,708  

Unrealized foreign exchange (gain)/loss

   (910,533 )   362,405     (562,331 )   (586,020 )

Acquisition loan cost amortization

   -     6,786     2,262     27,146  

Other expenses/(income)

   161,292     -     (37,705 )   -  

Current income taxexpense/(recovery)

   -     3,178     (66,068 )   (214,356 )

Deferred income tax recovery

   (3,812,780 )   (69,792 )   (3,815,486 )   (279,168 )

Share-based payments

   67,616     105,076     247,876     272,064  

Vesting of RSUs

   -     (10,895 )   -     (69,495 )

Government contributions

   (342,886 )   (374,947 )   (1,309,671 )   (1,266,824 )

Changes in non-cash working capital

   (1,802,646 )   1,095,383     (3,704,611 )   463,711  
Net cash flows (used in)/provided by operating activities   (380,675 )   1,589,453     688,000     3,920,606  
Investing activities:                        
Purchase of intangible assets, property and equipment   (35,700 )   (216,788 )   (193,286 )   (623,286 )

Government contributions for acquisition of property and equipment

   -     22,492     -     49,043  
Net cash flows used in investing activities   (35,700 )   (194,296 )   (193,286 )   (574,243 )
Financing activities:                        
Repayment of acquisition loan   -     (480,000 )   (2,286,762 )   (1,920,000 )
Purchase of treasury shares, including purchase costs   (7,460 )   (6,121 )   (295,390 )   (117,906 )
Government contributions   438,437     -     1,271,648     997,783  
Net cash flows provided by/(used in) financing activities   430,977     (486,121 )   (1,310,504 )   (1,040,123 )

Effect of foreign currency translation on cash and cash equivalents

   (365,834 )   207,052     (112,189 )   (65,102 )
(Decrease)/increase in cash and cash equivalents   (351,232 )   1,116,088     (927,979 )   2,241,138  
Cash and cash equivalents, beginning of period   4,936,986     4,397,645     5,513,733     3,272,595  
Cash and cash equivalents, end of period $ 4,585,754   $ 5,513,733   $ 4,585,754   $ 5,513,733  

 




 

Norsat International Inc.
Reconciliation of IFRS to non-IFRS Measures
(Expressed in United States dollars, except when otherwise indicated)

    Three months ended December 31     Year ended December 31  
    2015     2014     2015     2014  
Net earnings for the period $ 5,942,135   $ 50,524   $ 8,650,231   $ 4,194,755  
Interest (income)/expense   (728 )   20,798     20,572     114,602  
Depreciation and amortization   317,127     375,027     1,295,634     1,274,536  
Tax recovery   (3,812,780 )   (66,614 )   (3,881,554 )   (493,523 )
EBITDA(1) $ 2,445,754   $ 379,735   $ 6,084,883   $ 5,090,370  
(Gain)/loss on foreign exchange   (1,141,356 )   362,405     (793,154 )   (586,020 )
Other expenses/(income)   161,292     -     (37,705 )   -  
Acquisition costs   -     -     -     180,000  
Adjusted EBITDA(1) $ 1,465,690   $ 742,140   $ 5,254,024   $ 4,684,350  
(1)     

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 2015 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.

###

For further information, contact:

Dr. Amiee Chan Mr. Arthur Chin
President & CEO Chief Financial Officer
Tel: 604-821-2800 Tel: 604-821-2800
Email: achan@norsat.com Email: achin@norsat.com