Mr. Gary Calhoun reports

COM DEV ANNOUNCES SECOND QUARTER FISCAL 2011 RESULTS

Com Dev International Ltd. has released second-quarter financial results for the three-month period ended April 30, 2011.

Second-quarter highlights:

• Revenue was $54.2-million, a 10-per-cent decrease from revenue of $60.4-million in the second quarter of fiscal 2010.

• Gross margin in the core space equipment business was 23 per cent, compared with 20 per cent in Q2 2010.

• Net income attributable to shareholders was $3.0-million, or four cents per share, compared with $4.1-million or five cents per share in the second quarter of the previous year.

• New orders won in the second quarter totalled $28-million, compared with $33-million a year earlier and $59-million in the first quarter of fiscal 2011.

• Backlog at April 30, 2011, was $128-million, compared with $157-million three months earlier, but unchanged from the second quarter of the previous year.

• Majority-owned subsidiary exactEarth won a multimillion-dollar order from the Canadian government, launched an AIS satellite payload and procured two additional AIS satellites to add to its constellation.

"Second-quarter results met our expectations as we focused on our priorities of completing certain challenging programs, controlling costs and returning to our normal gross margin range," said Michael Pley, chief executive officer of Com Dev. "We grew margins in our core business, even in the face of currency headwinds and the ongoing impact of the difficult programs. With three of those five programs now completed and the others scheduled to be shipped within the next few months, we expect to see continuing improvements to revenue and margins in the second half of the year."

Mr. Pley continued: "We have been especially pleased with recent progress at exactEarth. Our team has made great strides towards building out its satellite constellation, which will result in a significant strengthening of its service levels. This, in turn, has contributed to solid customer interest, as evidenced by the recent booking of over $2-million of orders from government agencies in a number of countries."

Segmented results

Com Dev reports results in two business segments. The space equipment segment represents the company's traditional manufacturing operations, while the data services segment consists primarily of the maritime tracking services offered by exactEarth Ltd. Selected segmented results for the fiscal second quarter are as follows.

            THREE MONTHS ENDED APRIL 30, 2011 
              (in thousands of dollars)

              Space equipment Data services Consolidated *
                  2011   2010    2011  2010    2011   2010

Revenue         52,088 58,545   2,076 1,870  54,164 60,415
Gross margin    12,310 12,883     256 1,296  11,676 13,051
Gross margin %     23%    20%     12%   69%     22%    22%
Net income       4,760  5,147   (845)    86   3,025  4,105

* Consolidated figures may not equal the sum of the two
segments due to intrasegment adjustments.

The company's basic share count stood at 76,467,535 on June 9, 2011.

Conference call

A conference call will be held Thursday, June 9, 2011 at 5 p.m. EDT to discuss this announcement. To access the live webcast, please visit the company's website for directions. Participants will require Windows Media Player to listen to the webcast.

              
             CONSOLIDATED STATEMENTS OF OPERATIONS             
 (Canadian dollars in thousands, except for per-share figures) 
                                      
For the three months ended April 30              2011       2010

Revenue                                      $ 54,164   $ 60,415
Cost of revenue                                42,488     47,364
Gross margin                                   11,676     13,051
Research and development costs                  3,125      3,022
Research and development recovery               1,942        728
Investment tax credits recoverable              1,800          -
Net research and development                    (617)      2,294
Selling expenses                                2,896      3,124
General expenses                                4,282      4,871
Operating income                                5,115      2,762
Interest expense                                  204        141
Foreign exchange loss (gain)                       85    (1,457)
Other expense (income)                            314       (24)
Net income before income taxes                $ 4,512    $ 4,102
Income tax expense                              1,800          -
Net income                                    $ 2,712    $ 4,102
Attributable to
Shareholders                                  $ 3,025    $ 4,105
Non-controlling interest                        (313)        (3)
Earnings per share
Basic and diluted earnings per share            $0.04      $0.05

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