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Northstar Electronics, Inc. (NEIK) Reports 2010 and First Quarter 2011 Results

Dépèche transmise le 23 mai 2011 par Business Wire

VANCOUVER, British Columbia--(BUSINESS WIRE)--Northstar Electronics, Inc. (OTCBB: NEIK), specializing in advanced sonar technology for Homeland Security and Defense and Aeronautics Contract Manufacturing, reported its 2010 year end and first quarter 2011 results.

“Although we are disappointed in the quarterly results, we are confident that, going forward, we can turn around this performance as we increase work levels on contracts in hand and work toward additional new business, as well as raising more working capital.”

For 2010, reported total revenues were US$3,186,964 compared with US$3,913,134 in 2009. The Company incurred a net loss from operations of US$1,330,328 or $0.04 per share compared with a net loss of US$998,165 or $0.03 per share in 2009. Total revenues included sales of US$3,186,964 and US$nil in recovery of Research and Development costs. The Company showed an 18% decrease in total revenues in 2010 over 2009 due to a delay in one contract start-up and production delays incurred with another during the fourth quarter. These situations resulted in an increase in expenses of 33% due to high carrying costs. Subsequent to the year-end, new contract activity returned but with temporary lower than anticipated production levels.

During the third quarter, Northstar’s 100% owned subsidiary, Northstar Network Ltd., received an increase of $9.1 million to its Master Purchase Order (MPO) from Lockheed Martin Aeronautics for the P3/CP140 MLU program. This increase more than doubled the number of aircraft to 113 under this program. Production and deliveries were maintained on the existing contract and additional parts were also provided to Lockheed Martin’s Greenville operations for on-ground aircraft.

Although a contract increase was announced for the P3/CP140 MLU program, work did not start until after the year-end due to customer delays. Work was expanded on L-3 Communications (MAPPSs) console production and the first shipset was delivered for their Frigate Upgrade program in November. Northstar completed a new bid for work on a specialized underwater sonar system in December and a bid for submarine control console upgrades for Victoria Class submarines submitted to Lockheed Martin’s MS2 Division.

Company Reports First Quarter

For the quarter ended March 31, 2011, the Company reported total revenues of USD$183,975 compared with USD$1,277,583 in 2010. This represents an 85.6% decrease over the comparative period of 2010. A net loss of USD$581,216 resulted for the period compared to a net loss of USD$124,270 for the same period of 2010. The net loss per share increased to $0.02.

The predominant reason for the change in financial results for the quarter is the delay in project start-ups carried over from the year-end and the lack of sufficient capital funding. With funding support in place, the Company believes that much stronger financial results will be achieved in the future.

In the first quarter, comparative expenses increased by $267,606 representing a 63.8% increase over the comparative period for 2010. This loss increase was partially due to maintaining staff operation levels while funding support was being sought for production purposes and awaiting significant start-up on the new addition to the P3/CP140 MLU Project. Also, interest on government loans and on several trade payables contributed to the loss. Subsequent to the end of the quarter, new Purchase Orders commenced to flow at a higher than expected rate. Revenue generation on these orders started during the subsequent period.

Dr. Wilson Russell, Northstar’s CEO, stated, “Although we are disappointed in the quarterly results, we are confident that, going forward, we can turn around this performance as we increase work levels on contracts in hand and work toward additional new business, as well as raising more working capital.”

For further information contact, NorthStar Electronics, Inc., www.northstarelectronics.com, #604-685-0364 and/or Rich Kaiser, Investor Relations, yes@yesinternational.com, #800-631-8127 and/or Ms. Beverly Jedynak, Media Relations, Martin Janis & Co., b.jedynak-janispr@att.net, (312) 943-1000 Ext. 12.

Safe Harbor:

Included in this release are forward-looking statements within the meaning of Section 27A- Securities Act of 1993, as amended, and Section 21E-Securities Exchange Act of 1934, as amended, and is subject to the safe harbor created by those sections. The Company’s actual results could differ materially from those anticipated in the forward-looking statements.

Business Wire

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