Net earnings increased 11% to $11.1 million for the first quarter from $10.0 million for 2003. Net earnings per diluted common share increased to $0.28 for the quarter from $0.26 for the first quarter 2003. Net earnings are after expensing non-cash costs associated with the Company's long-term incentive plan and stock options, resulting in a two cent decrease to our first quarter earnings per share. For the first quarter of 2004, earnings before income taxes, amortization and interest expense ("EBITDA") increased to $24.0 million. Cash flow from operations, prior to non-cash working capital items, increased to $18.1 million for 2004 from $16.7 million for the first quarter of 2003. As at March 31, 2004 the Company's order backlog amounted to $724 million. During the first quarter of 2004, the Company adopted CICA Handbook section 3870 - Stock-Based Compensation and Other Stock-Based Payments. In accordance with the provisions of this section the Company has accounted retroactively for all employee stock options granted or settled since January 1, 2002, using the fair value method.
Operational Highlights MDA provides customers around the world with essential information for decision making. MDA operates 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, this group achieved several milestones: MDA is positioning itself as a key player on international exploration missions. In addition to its work on the U.S.-based NASA Phoenix Mars mission scheduled for 2007, the Company won two key study contracts for the European Space Agency's planned Mars missions, including a soil sample return. For one of the studies, the Company will act as prime contractor to ESA to determine how to safely land a spacecraft on Mars, and enable it to rendezvous in orbit with another spacecraft to return a Mars sample to Earth. The Company is participating in a study that could lead to a 3D lunar surface mapping project to create a topographic atlas of the moon. In the Earth Observation area, MDA began work on the design of its second small satellite mission. The satellite is expected to carry a hyperspectral instrument capable of collecting detailed information about the Earth for applications such as agriculture and forestry management. The design phase is being funded by the Canadian Space Agency. For the European Space Agency, MDA has been selected to provide processing and simulation software for the AEOLUS satellite to be launched in 2007. The Company's systems will be used to generate wind speed measurement information for weather forecasting purposes. The Company was awarded a very strategic multi-million dollar contract for an image processing system for DigitalGlobe's next generation WorldView satellite. DigitalGlobe has been selected by the U.S. government to supply 0.5-meter resolution imagery. Continuing in the high resolution information market, the Company commissioned three 1-meter resolution OrbView-3 satellite ground stations - one in the U.S. and two internationally. MDA was also awarded its first international ground station contract associated with RADARSAT-2 by DELCAN International Corporation. The end user is part of the Ministry of Environment and Renewable Natural Resources of Venezuela, and it intends to use the ground station to supply images and derived land information to civilian and government clients in Venezuela and neighbouring countries. In addition, the Company was awarded a $53 million contract for an Earth Observation System. In other project news, the satellite bus for RADARSAT-2 was accepted for shipment by MDA and will soon be arriving at the integration facility to join the payload extendable support structure, beginning the integration phase of RADARSAT-2. In the Canadian Defence area, the Company was awarded a contract for a reconfigurable satellite ground terminal demonstration project promising highly flexible information delivery solutions. The Company is also providing Remotely Operated Vehicle Trainers to the Canadian Navy for use on its Kingston Class Maritime Coastal Defence vessels. In the E-Government Systems Modernization area, the Company completed the pilot phase and commenced operation of its new electronic filing technology. In the U.K., the Company rolled out an enhanced National Land Information Service channel with two new products and implemented an automated Value Added Tax solution across the Hub and channels. The Information Products group aims to provide everything there is to know about a parcel of land. Since the last report, the Information Products group achieved the following milestones: MDA extended the supply of satellite information to several customers for the prevention of navigational and environmental disasters, and for agricultural assessment purposes. The Company was awarded $3.6 million in land information business by various defence intelligence customers with options for another $4 million. In the state and local government market, the Company booked several information delivery contracts, including three worth over $1 million, for applications ranging from building inventory updates to hard surface condition assessments. In the Legal and Asset Information area, MDA launched two new electronic filing services for BC OnLine: Corporate Online, a new service allowing the public to file forms pertaining to the new Business Corporations Act over the Internet, and the electronic filing of land titles. E-filing permits a two-way flow of information between databases and users, where users can view and submit information. In the U.S., MDA continued its push into the growing Automated Valuation Model (AVM) market. The Company renewed its reseller agreement with Freddie Mac for the Home Value Explorer product suite, and introduced its own proprietary AVM - Valuator. Users of Valuator can instantly generate accurate valuations on residential properties across the nation. Valuator represents MDA's latest commitment to being a leading property valuation information provider in the U.S. In England and Wales, NLIS Hub transactions are over 7,200 per week, compared to 6,600 at last report. The number of Local Authorities electronically connected continues to increase, and now accounts for 69% of all NLIS searches. At this date, 294 Local Authorities are able to handle search requests electronically, an increase from 285 at last report. With regard to Differential Pricing, 186 Local Authorities have now agreed to participate, versus 170 at last report. Transactions at MDA's NLIS Channel, Transaction OnLine, continued to grow and two new online products for use by real estate conveyancers were launched: the ability to identify current planning applications in the area surrounding the property in question, and commercial environment reports that provide an environmental risk assessment on a property.