NovAtel Inc. Reports Financial Results for the Third Quarter 2002.Business Editors & High Tech WritersCALGARY Calgary (kăl`gərē), city (1991 pop. 710,677), S Alta., Canada, at the confluence of the Bow and Elbow rivers. The largest city in Alberta and the fastest-growing major city in Canada, Calgary is a corporate, transportation, and financial , Alberta--(BUSINESS WIRE)--Nov. 4, 2002 NovAtel Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :NGPS), a global positioning systems Global Positioning System: see navigation satellite. Global Positioning System (GPS) Precise satellite-based navigation and location system originally developed for U.S. military use. manufacturer, today announced results for the third quarter ended September September: see month. 28, 2002. Revenues in the third quarter 2002 were CDN (Content Delivery Network) A system of distributed content on a large intranet or the public Internet in which copies of content are replicated and cached throughout the network. $6.8 million (US $4.3 million) compared to CDN $6.9 million (US $4.4 million) in the same period a year ago. The Company is reporting a net loss for the third quarter 2002 of CDN $(308,000) (US $(196,000)) or CDN $(0.04) (US $(0.03)) per share compared with a net income of CDN $79,000 (US$50,000) or CDN $0.01 (US $0.01) per share in the same period a year ago. "As expected, the third quarter was challenging for our company," said Jon JON Jonah JON Jesus of Nazareth JON Job Order Number JON Johnston Island, US, Outlying Islands (Airport Code) Ladd, President and Chief Executive Officer. "In our last earnings conference call, we had forecast a loss for the third quarter of between $0.5 and $1.0 million, as a result of a timing shift of certain customer orders into the fourth quarter of this year. I am pleased that, through a combination of cost control measures and increased contract engineering revenue, we were able to limit the third quarter loss to $308,000, and to remain profitable year to date." "While our overall revenue for the quarter remained relatively flat year over year, revenue from our Special Applications business grew 38%, primarily from continued growth in the precision agriculture market and increased engineering service contracts," continued Ladd. "Our Aerospace/Defense business decreased 42% year over year, primarily due to the timing of certain large government-funded contracts. In the third quarter last year, we had $1.4 million revenue associated with the EGNOS (European Geostationary Navigation Overlay Service) A European system of earth stations and satellites that improves the tracking accuracy of the GPS and GLONASS navigation systems down to approximately 15 feet. program in Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). , compared to negligible  This article or section is written like a personal reflection or and may require .Please [ improve this article] by rewriting this article or section in an . revenue from EGNOS in the same period this year. The majority of our Aerospace/Defense revenue this quarter came from engineering service contracts, tied to US aviation augmentation AUGMENTATION, old English law. The name of a court erected by Henry VIII., which was invested with the power of determining suits and controversies relating to monasteries and abbey lands. programs, that were awarded to us during the past two quarters." "Our Geomatics Geomatics is the discipline of gathering, storing, processing, and delivering of geographic information, or spatially referenced information. Overview The term "Geomatics" refers to:
During the conference call scheduled for later today, the company will be providing an update on its guidance for the balance of 2002 and an update on Point, Inc. The company will have a conference call today at 4:30 p.m. E.T. Participants may access the NovAtel Inc. conference call by dialing 1-888-280-8277 (North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. ) or 416-695-9711 (International), reservation number T372788C. This call is also being web cast and can be accessed at Novatel's web site www.novatel.com or at www.companyboardroom.com. A replay of the conference call will be available until November November: see month. 8, 2002 by dialling 1-888-509-0082 (North America) or 416-695-9731 (International), or until February February: see month. 3, 2003 at the web addresses noted above. NovAtel Inc. designs, markets and supports a broad range of products that determine precise geographic locations using the Global Positioning System (GPS (1) (General Print Server) An IBM mainframe feature that lets TN3270 clients access LPD/LPR printers via the SNA/VTAM network. See TN3270 and VTAM. (2) (Global Positioning S ) and is the principal supplier of reference receivers to WAAS (Wide Area Augmentation System) A system of earth stations and satellites that improves the tracking accuracy of the GPS navigation system to approximately 10 feet. ground networks around the world. NovAtel's GPS products are used principally for applications in precision markets such as the surveying, geographic information systems geographic information system (GIS) Computerized system that relates and displays data collected from a geographic entity in the form of a map. The ability of GIS to overlay existing data with new information and display it in colour on a computer screen is used primarily to , aviation, marine, mining, machine control, agriculture and precise timing markets. For further information please visit the Company's website at www.novatel.com. Certain statements in this news release constitute forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company, or developments in the Company's industry, to differ materially from the anticipated results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, but are not limited to, operating results of subsidiaries and joint ventures, establishing and maintaining effective distribution channels, certification and market acceptance of the Company's new products, impact and timing of large orders, credit risks of customers and joint ventures, financing of joint ventures, pricing pressures in the market and other competitive factors, maintaining technological leadership, timing of revenue recognition in connection with certain contracts, the ability to maintain supply of products from subcontract sub·con·tract n. A contract that assigns some of the obligations of a prior contract to another party. intr. & tr.v. sub·con·tract·ed, sub·con·tract·ing, sub·con·tracts manufacturers, the procurement The fancy word for "purchasing." The procurement department within an organization manages all the major purchases. of components to build products, and the impact of industry consolidations, together with the other risks and uncertainties described in Management's Discussion and Analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial of Financial Condition and Results of Operations herein and in the Company's other filings with the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. Securities and Exchange Commission.
NOVATEL INC.
CONSOLIDATED BALANCE SHEETS
(in Canadian $ thousands)
September 28, December 31,
2002 2001
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ASSETS
Current assets:
Cash and short term investments $ 6,206 $ 4,794
Accounts receivable 5,459 6,050
Related party receivables 1,213 665
Related party notes receivable 1,850 1,595
Inventories 5,642 6,562
Prepaid expenses and deposits 331 286
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Total current assets 20,701 19,952
Capital assets 2,398 2,854
Intangible assets 2,050 2,487
Deferred development costs 2,492 2,528
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Total assets $ 27,641 $ 27,821
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued
liabilities $ 4,068 $ 4,469
Related party payables 618 418
Notes payable 2,214 1,964
Deferred revenue and customer deposits 229 202
Provision for future warranty costs 363 285
Capital lease obligation
- current portion 216 330
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Total current liabilities 7,708 7,668
Deferred gain on sale/leaseback
of capital assets 717 814
Capital lease obligation
- long-term portion 122 253
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Total liabilities 8,547 8,735
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Shareholders' equity:
Capital stock 35,556 35,596
Contributed surplus 13 25
Deficit (16,475) (16,535)
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Total shareholders' equity 19,094 19,086
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Total liabilities and
shareholders' equity $ 27,641 $ 27,821
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NOVATEL INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in Canadian $ thousands, except per share data)
Three months Nine months
ended ended
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Sep. 28, Sep. 29, Sep. 28, Sep. 29,
2002 2001 2002 2001
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Revenues $ 6,812 $ 6,905 $ 22,110 $ 20,425
Cost of sales 3,787 3,533 11,423 10,269
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Gross profit 3,025 3,372 10,687 10,156
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Operating expenses:
Research and development 1,078 1,477 4,009 5,224
Selling and marketing 1,246 856 3,295 2,620
General and administration 1,032 1,040 3,154 3,002
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Total operating expenses 3,356 3,373 10,458 10,846
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Operating income (loss) (331) (1) 229 (690)
Interest income, net 25 24 53 122
Other income (expense) 43 68 (159) (75)
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Income (loss) before income taxes (263) 91 123 (643)
Provision for income taxes 45 12 63 13
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Net income (loss) $ (308)$ 79 $ 60 $ (656)
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Net income (loss) per share
(basic) $ (0.04)$ 0.01 $ 0.01 $ (0.09)
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Weighted average shares
outstanding (basic) 7,676 7,693 7,679 7,692
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Net income (loss) per share
(diluted) $ (0.04)$ 0.01 $ 0.01 $ (0.09)
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