Norsat serves global customers primarily through three business units: Sinclair Technologies, Satellite Solutions and Microwave Products. All financial results are reported in U.S. dollars and have been prepared in accordance with International Financial Reporting Standards (“IFRS”), unless otherwise stated.
First Quarter 2013 Overview
- On March 28, 2013, Norsat was awarded a Cdn$13.3 million repayable contribution from the Canadian Government’s Strategic Aerospace and Defence Initiative (SADI) for research and development
- First quarter revenue was $8.4 million, compared to $10.4 million during the same period in 2012
- Gross margin was 40 percent, compared to 44 percent in Q1 2012
- EBITDA was $0.8 million, compared to $1.2 million in Q1 2012
“The first quarter of 2013 was a challenging period with sales negatively affected by the US government’s budget sequestration and by ongoing economic uncertainty in some of our markets,” said Dr. Amiee Chan, President and CEO of Norsat. “Total first quarter sales declined to $8.4 million, from $10.4 million a year ago, reflecting moves by customers to cut back inventory levels and delay programs.
“In light of the more constrained market conditions, we maintained strict cost discipline across our operations and were successful in decreasing total expenses, net of government funding, by $0.8 million, or 22 percent, in the first quarter. This, in turn, helped us maintain positive first quarter EBITDA results. We also continued to pursue our strategy of broadening our portfolio of products and services, while diversifying our customer base as we responded to changes in our traditional markets.
“I am pleased to report that we boosted our R&D program with the award of a Cdn$13.3 million repayable contribution from the Canadian Government’s Strategic Aerospace and Defence Initiative. This contribution will enhance our strategic research and development program going forward and will help maintain our leadership position in the development of innovative new products and technologies. Norsat has a long history of excellence in research and development and the contribution from SADI ensures that we will remain at the forefront of communications technology development.
“Subsequent to the quarter end, on April 16, 2013, we also closed a definitive agreement to acquire a U.S.-based satellite communication systems business. Norsat paid US$530,170 and financed the transaction with cash from operations. This is an exciting development that advances our core business by augmenting our product portfolio and enhancing intellectual property (IP) for our Satellite Solutions and Microwave business unit. Strategically, the acquisition is consistent with our ongoing growth strategy. Through it, we will broaden the products, services and solutions we can provide to customers. The expanded sales team, together with the larger product and services portfolio it brings, will also enable us to address new market opportunities in the US and around the world. Accordingly, we believe the acquisition will create strong value for shareholders,” said Dr. Chan.
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