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Norsat Announces Fourth Quarter and Fiscal Year 2016 Financial Results

Press Release From: Norsat International Inc.
Posted: Wednesday, March 8, 2017

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 fiscal year ended December 31, 2016.

Financial Highlights

For the three months ended December 31, 2016

  • $10.7 million in revenue for the quarter, an increase of 13% compared to $9.5 million for the same period last year
  • Gross profit margin of 44% for the quarter, an increase of 3% from 41% for the same period last year.
  • Government repayment obligation recorded during the quarter was $2.1 million (consisting of a current portion of $0.3 million and long-term provisions of $1.8 million), compared to $nil for the same period last year.  Based on the Company’s recent history of strong financial performance, it was determined that it is probable that future government repayments will be required to be made under the terms of Strategic Aerospace & Defense Initiative (“SADI”) programs.  Based on management’s best estimates for forecast revenues between 2017 and 2032, the present value of the total estimated government repayment obligation for the same periods would be approximately $2.1 million.
  • Deferred income tax expense for the quarter was $0.1 million, compared to deferred income tax recovery of $3.8 million for the same period last year. The recovery for the three months ended December 31, 2015 was based on an assessment of the Company’s history of profitability and its ability to realize deferred income tax assets.
  • Net (loss) earnings for the quarter were ($0.2 million), or ($0.04) per share, basic and diluted, compared to $5.9 million, or $1.03 per share, basic and diluted, for the same period last year.
  • Adjusted EBITDA(1) of $2.2 million for the quarter, an increase of 52% from $1.5 million for the same period last year.

For the year ended December 31, 2016

  • $38.0 million in revenue for the year, an increase of 5% compared to $36.1 million for 2015.
  • Gross profit margin of 45% for the year, an increase of 4% from 41% for 2015.
  • Government repayment obligation recorded during the year was $2.1 million (consisting of a current portion of $0.3 million and long-term provisions of $1.8 million), compared to $nil for 2015.  Based on the Company’s recent history of strong financial performance, it was determined that it is probable that future government repayments will be required to be made under the terms of SADI programs.  Based on management’s best estimates for forecast revenues between 2017 and 2032, the present value of the total estimated government repayment obligation for the same periods would be approximately $2.1 million.
  • Deferred income tax expense for the year was $1.2 million, compared to deferred income tax recovery of $3.8 million for 2015. The recovery for the year ended December 31, 2015 was based on an assessment of the Company’s history of profitability and its ability to realize deferred income tax assets.
  • Net earnings were $3.3 million for the year, or $0.57 and $0.56 per share, basic and diluted, compared to $8.7 million, or $1.50 per share, basic and diluted, for 2015.
  • $15.0 million of cash and cash equivalents at December 31, 2016, an increase of $10.4 million compared to $4.6 million at December 31, 2015.
  • $26.6 million of working capital at December 31, 2016, an increase of $7.2 million compared to $19.4 million at December 31, 2015.
  • Adjusted EBITDA(1) of $7.6 million for the year, an increase of 44% from $5.3 million for 2015.

“We are very pleased with the fourth quarter and annual results. Our revenue for the quarter and year grew 13% and 5%, respectively, compared to the same periods in 2015. From a Sinclair Technologies division perspective, we benefited from an improved U.S. economy and also larger deliveries of our products suitable for use in positive train control deployments.   The Satellite Communications division benefited from an increase in military orders as well as deliveries of our ATOM products to Harris Corporation,” said Dr. Amiee Chan, President and CEO of Norsat.  “We also continued to manage our cost structure while also challenging ourselves to develop and market new products and solutions. Overall we achieved another period of profitability and we reported a record Adjusted EBITDA of $2.2 million and $7.6 million, for the 2016 fourth quarter and 2016 year, respectively,” added Dr. Chan.

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 8, 2017 at 8:30 am Pacific Time (11:30 am Eastern Time) to discuss its financial results for the fourth quarter and fiscal year ended December 31, 2016. To access the conference call, please dial toll-free 1-888-886-7786 or 416-764-8658. The conference call title is: ‘Investor Call – Q4 2016’. 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/

- Read the full financial report on the Norsat website.

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.

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