For immediate release: February 17, 2004
MDA Reports Year End and Fourth Quarter 2003 Results
Richmond, B.C. - MacDonald, Dettwiler and Associates Ltd. (TSX: MDA) today released the Company's financial results for the fourth quarter of 2003.
Results from Operations
Fourth Quarter 2003:
Fourth quarter 2003 revenues increased to $159.2 million. This compares to revenues of $154.5 million for the fourth quarter of 2002. Information Systems revenues decreased to $70.0 million compared to $80.2 million for the fourth quarter last year. Information Products revenues increased to $89.2 million, compared to $74.3 million for the fourth quarter a year ago.
Net earnings for the quarter increased to $11.6 million ($0.30 per common share diluted), compared to net earnings for the 2002 fourth quarter of $10.3 million ($0.27 per common share diluted).
Year Ended 2003:
December 31, 2003 revenues amounted to $626.5 million, an increase of 10% over 2002. Information Systems contributed $295.2 million of these revenues compared to $315.7 million for the year ended December 31, 2002. Information Products had revenues of $331.3 million, compared to $254.8 million for the year ended December 31, 2002.
Net earnings increased 18% to $43.7 million for the year from $37.0 million for 2002. Net earnings per diluted common share increased to $1.13 for the year ended December 31, 2003 from $0.97 for the year ended December 31, 2002.
The strengthening of the Canadian dollar during 2003 has reduced the reported results from our foreign operations when comparing to the previous year. From an accounting perspective, a strengthening of the Canadian dollar decreases the translation of our foreign operations financial results. Consolidated revenues for 2003, based on constant 2002 exchange rates, would have been $649 million, an increase of 14% from the prior year and net earnings would have been $44.9 million, an increase of 21% from the prior year, or $1.16 per diluted earnings per share.
For the year ended December 31, 2003, earnings before income taxes, amortization and interest expense (EBITDA) increased to $100.2 million, from $87.5 million for the prior year. EBITDA as a percentage of revenues increased from 15.3% for the year ended December 31, 2002 to 16.0% of revenues for the year ended December 31, 2003.
As at December 31, 2003 the Company's order backlog amounted to $756 million.
MDA provides essential information from anywhere in the world for decision making in the workplace, through two principal groups - Information Systems and Information Products.
The Information Systems Group provides mission critical information systems that help organizations achieve their prime operational objectives. Since the last report, MDA achieved several milestones:
The Company has taken a major step in the small satellite market by becoming the prime contractor to develop and operate Canada's first multi-purpose information delivery and scientific research small satellite mission. Called CASSIOPE, this mission represents the next generation of lighter, more compact, and more affordable missions. CASSIOPE will also be used to demonstrate MDA's potential new information delivery service called CASCADE. If it proceeds to commercialization, CASCADE will be the first space-based digital courier service able to pick up and deliver huge data packages.
The Company has made significant inroads into the exciting market for planetary exploration. MDA was awarded a contract by the Canadian Space Agency for Phase A of the NASA Scout Mission Phoenix that will go to Mars in 2007. This marks the beginning of our involvement in a multiphase program to develop Canada's contribution to the Phoenix mission, a system that will provide valuable and essential information on Martian polar climate.
MDA was also awarded a study contract from the European Space Agency, for a Phase A study on the robotic rover and scientific payload that could fly on the 2009 ExoMars mission.
The Company was awarded several study contracts for work on autonomous satellite servicing in space and for the next generation of advanced radar satellite missions. We also won additional work from The Boeing Company to provide new elements for the Orbital Express Program, a major U.S. advanced technology demonstrator to reconfigure and refuel satellites in Earth orbit.
In the Earth Observation area, MDA received approval to proceed with initial work on a new, very high-resolution optical satellite ground segment, a major U.S. initiative.
The Company also completed the commissioning of the OrbView 3 high-resolution satellite ground segment for Orbimage.
In the Defence area, Canada's Department of National Defence awarded MDA a technology demonstration contract for a state-of-the-art, automated, underwater surveillance system capable of detecting surface and subsurface vessels bearing illegal immigrants, drug traffickers, and military threats along Canada's rugged, often isolated coastlines.
Continuing with Defence, MDA entered the second phase of a four-phase contract with the Department of National Defence as Prime Contractor to deliver a new imaging and surveillance radar system for Canada's fleet of CP-140 Aurora patrol aircraft. Phase Two, with a value of approximately $100 million, includes detailed design work, followed by the manufacture of five baseline CP-140 imaging radar systems that will be fully tested and qualified for the Department of National Defence.
In the area of E-Government Modernization, the Company delivered a pilot system that facilitates the online submission of land title documents in British Columbia. MDA designed, built, tested and is bringing online the electronic filing system that will be fully implemented in the second quarter of 2004. BC OnLine will be the operational interface with the public for accepting electronic filings.
In the United Kingdom, we continued work on existing contracts and booked a contract with South Norfolk Council, under our Local Authority Modernization Program. This program assists local governments to transition their operations to electronic service delivery.
The Information Products Group aims to provide everything there is to know about a parcel of land.
Since the last report, the MDA Geographic Information Products Group saw continued demand for RADARSAT-1 image products as we completed several RADARSAT-1 downlink agreement renewals and new applications for our RADARSAT-1 information continued to expand. For example, in Italy, we provided a customer with RADARSAT-1 data to create products that measure land movement to within millimeters. The information from these measurements is used to determine areas at risk from subsidence, volcanic and earthquake activity, and flooding.
In the state and local government market, the Company booked several information delivery contracts for applications ranging from city mapping to county planning and transportation management.
In defence intelligence, we had a record year with total orders of about $70 million. The Company's secure 24-7 production centre is being used to generate the information products from satellite imagery.
In the Legal and Asset Information area, we continue to expand our product offerings:
In British Columbia, BC OnLine transaction levels continued at record highs, and we added a new e-conveyancing service. This allows lawyers and notaries across the province to complete real estate-related transactions electronically, saving time and resources.
In the United States, we are working with customers to integrate customized MDA products directly into their workflow. We contracted with two of the top ten banks in the United States to provide property information solutions such as an online subscription tool that will provide monthly updates of customized sales comparables for marketing purposes.
We launched a number of new and upgraded products designed to capture a larger share of the real estate marketing business that traditionally grows as the number of refinancings declines. The real estate marketing products contain up-to-date information on property valuations, ownership, and encumbrances, giving lenders valuable information to obtain valid sales leads for their financial services.
In England and Wales, our National Land Information System (NLIS) Hub continued to perform well. Transactions are over 6,600 per week, compared to 6,200 at last report. The number of Local Authorities electronically connected continues to increase, and now account for 65% of all NLIS searches. At this point, 285 Local Authorities are able to handle search requests electronically. That's up from 242 at last report.
With regard to Differential Pricing, 170 Local Authorities have now agreed to participate, versus 156 at last report.
At Transaction Online, our NLIS Channel, the first of our new value-added products and services was rolled out to the online property conveyancing community. Legal Indemnity Insurance protects against all types of risk connected to a property being bought or sold. The insurance risk is backed by UK industry leader Countrywide Legal Indemnities Limited, and has been specifically endorsed by the Law Society of England and Wales.
Investor/Analyst Conference Call Today
MDA President and CEO Daniel Friedmann and Vice President and CFO Anil Wirasekara will be available on a Conference Call today, February 17th at 1:30 pm Pacific (4:30pm Eastern) to explain the financial results of MDA and to answer questions.
For more information, please contact:
MDA External Relations