Market Overview

MDA reports third quarter 2012 results


RICHMOND, BC, Nov. 5, 2012 /CNW/ - MacDonald, Dettwiler and Associates Ltd. (TSX:MDA), a provider of essential information solutions, today reported financial results for the quarter ended September 30, 2012.

For continuing operations, third quarter operating earnings1 were $28 million ($0.89 per share) on revenues of $171 million. This is compared to operating earnings of $30 million ($0.73 per share) and revenues of $182 million for the third quarter of 2011. Net earnings this quarter were $41 million ($1.30 per share) compared to $41 million ($0.98 per share) for the third quarter of last year.

Funded order backlog at September 30, 2012 was $752 million (June 30, 2012 - $656 million). Orders booked during the third quarter included contracts to provide the communications payload solution for the HYLAS-3 satellite and to extend surveillance services for the Australian Defence Force. The Company continues to work on the communications payload solution for the AMOS-6 satellite under an authorization to proceed as the terms of the contract are being finalized.

Financial Highlights

($ millions, except per common share amounts) Three months ended
September 30,
Nine months ended
September 30,
2012 2011 2012 2011
Results from continuing operations        
Revenues 171.4 181.5 507.4 582.9
Operating earnings1 28.2 30.3 86.2 85.8
Operating earnings per share1, diluted 0.89 0.73 2.71 2.08
Net earnings 41.2 40.5 73.7 100.4
Net earnings per share, diluted 1.30 0.98 2.31 2.44
Results from discontinued operations        
Gain (loss) on sale of discontinued operations,
    net of income taxes
- (1.2) - 53.0
Weighted average number of common shares outstanding:
Basic2 31.8 41.2 31.8 41.2
Diluted2 31.8 41.2 31.8 41.2

1 See section "Non-IFRS Financial Measures" in this earnings release.
2 On October 4, 2011, the Company repurchased and cancelled 9,433,962 of its common shares at a price of $53 per common share under a substantial issuer bid. The shares repurchased represented approximately 22.9% of the common shares outstanding at October 4, 2011.

MDA's unaudited consolidated financial statements and management's discussion and analysis for the three and nine months ended September 30, 2012 are available at:

About MDA

MDA is a unique global communications and information company providing operational solutions to commercial and government organizations worldwide.

MDA's business is focused on markets and customers with strong repeat business potential. In addition the Company conducts a significant amount of advanced technology development.

MDA's well-established global customer base is served by more than 5,000 employees operating from 18 offices located in the United States, Canada, and internationally.

The Company's common shares trade under the symbol TSX:MDA.

Investor/Analyst Conference Call Today

MDA President and CEO Daniel Friedmann and Executive Vice President and CFO Anil Wirasekara will be available on a Conference Call today, November 5, 2012 at 2:30 p.m. Pacific (5:30 p.m. Eastern) to explain the financial results of the Company and to answer questions.

To participate, dial 1-888-231-8191 in Canada or the United States
In Toronto, dial 1-647-427-7450

Telephone replay will be available until November 19, 2012 at the following numbers:

Toll free, International, dial 1-855-859-2056
In Toronto, dial 1-416-849-0833
Password:  25148116

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Related Websites:

Non-IFRS Financial Measures

In addition to results reported in accordance with IFRS, the Company discloses operating earnings and operating earnings per share as supplemental indicators of its financial performance. The Company defines operating earnings as net earnings excluding the after-tax effects of specified items affecting comparability, including share-based compensation, fair value adjustments on financial instruments not subject to hedge accounting, write-downs and other gains or losses. Operating earnings per share is calculated using diluted weighted average shares outstanding. The Company uses operating earnings and operating earnings per share as a more meaningful way to compare financial results from one period to another.

Operating earnings and operating earnings per share do not have any standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other companies. The Company cautions readers to consider these non-IFRS financial measures in addition to, and not as an alternative for, measures calculated in accordance with IFRS.

($ millions) Three months ended
September 30,
Nine months ended
September 30,
2012 2011 2012 2011
Operating earnings from continuing operations 28.2 30.3 86.2 85.8
Items affecting comparability:        
Share-based compensation 11.0 13.7 (17.7) 8.4
Fair value adjustments on equity forward contracts (1.0) (3.5) 4.1 2.8
Business acquisition costs (2.7) - (4.6) -
Foreign exchange timing differences on certain
  project-related foreign exchange forward contracts
  not subject to hedge accounting
2.7 3.1 2.5 1.8
Foreign exchange gain (loss) on translation of
  intercompany balances
4.9 (6.2) 4.3 (3.6)
Foreign exchange gain (loss) on conversion and
   translation of foreign cash balances
(1.5) 3.7 (2.7) 5.5
Tax on items affecting comparability (0.4) (0.6) 1.6 (0.3)
Net earnings from continuing operations 41.2 40.5 73.7 100.4

Forward-Looking Statements

This earnings release and the associated conference call and webcast, which includes a business update, third quarter 2012 results, and question and answer session, contain certain forward-looking statements and information, which reflect the current view of MacDonald, Dettwiler and Associates Ltd. (the "Company" or "MDA") with respect to future events and financial performance. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may", "will", "would", "could", "should", "expect", "intend", "estimate", "anticipate", "plan", "foresee", "believe" or "continue" or the negatives of such terms or variations of them or similar terminology. Any such forward-looking statements are based on MDA's current expectations, estimates, projections and assumptions made in light of its experience and perception of historical trends. Forward-looking statements are subject to risks and uncertainties, many of which are beyond MDA's control and the effects of which can be difficult to predict. MDA's actual results of operations could differ materially from historical results or current expectations.

With regard to the acquisition of Space Systems/Loral, Inc. ("SS/L"), there can be no assurance that MDA will realize the anticipated benefits or results due to risks which include, but are not limited to: the ability to promptly and effectively integrate the businesses of MDA and SS/L; higher than anticipated integration costs; diversion of management time on acquisition-related issues; and failure to obtain the consent or other agreement of certain counterparties whose consent or agreement is required in order for MDA to acquire certain business relationships. The anticipated benefits from the acquisition may not be realized in the time frame anticipated or at all due to risks which include, but are not limited to: changes in general economic and market conditions; customer demand for SS/L's products and services; laws and regulations and their enforcement; and the degree of competition in the business areas in which SS/L operates.

Other risks that could cause actual results to differ from current expectations include, but are not limited to: changes in government priorities, funding levels, contracts and regulations; failure of third parties and subcontractors to complete contracts for which the Company is the prime contractor; risks of performance on firm fixed price construction contracts; changes in estimates of total revenues and costs on contracts; potential for product liability or the occurrence of defects in software and other products and resulting loss of revenue and loss of the Company's reputation; quality issues and failure of systems to meet performance requirements; failure of the Company to manage its acquisitions and breaches of contracts and indemnities and related risks on divestitures; partial or complete satellite failure; dependence on electronic systems and data and system security threats; detrimental reliance on third parties for data; dependence on key employees, potential for work stoppages and lack of oversight over a U.S. proxy board and management; failure to anticipate changes in technology, technical standards and offerings or comply with the requisite standards; failure to maintain technological advances and market positions; significant competition; potential infringement of the intellectual property rights of others through licensed software or otherwise; inadequate protection of the Company's intellectual property rights; exposure to foreign currency fluctuations; changes in law and economic and political conditions; inability of suppliers or subcontractors to effect technology transfer; changes in customer security requirements and the resulting cancellation of contracts; failure to maintain business alliances; uncertainty in financing arrangements; failure of counterparties in financing arrangements and financial derivative contracts; wrongful call on letters of credit and performance bonds; and insufficient insurance against material claims or losses.

You are referred to the risk factors described in MDA's most recent annual Management's Discussion and Analysis, Annual Information Form and other documents on file with the Canadian securities regulatory authorities, available on SEDAR, or The forward-looking statements and information contained in this earnings release and the associated conference call and webcast represent MDA's views only as of today's date. MDA disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, other than as required by law, rule or regulation. You should not place undue reliance on forward-looking statements.

The Toronto Stock Exchange has neither approved nor disapproved the form or content of this release.



SOURCE MacDonald, Dettwiler and Associates Ltd.

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