PARIS — Satellite component builder Com Dev International of Canada on June 5 said it has cut costs and reduced losses at its U.S. operation following the decline in military satellite orders and that the Canadian parent is confident of making an acquisition in the coming months.
Among the acquisition targets are component makers in Southern California, near Com Dev USA’s El Segundo plant.
“We have a fair number of them in the funnel right now and I would hope to be able to announce something before the end of the fiscal year,” Com Dev Chief Executive Mike Pley said during a conference call with investors. Com Dev’s fiscal year ends Oct. 31.
Com Dev said there are initial signs that some U.S. military satellite programs, including the Wideband Global System of telecommunications satellites, may be extended, providing fresh work for Com Dev USA. But if that happens it will not be until late 2015, Pley said.
Cambridge, Ontario-based Com Dev reported a slight decline in revenue for the three months ending April 30 compared with the same period a year ago, but Pley said the shortfall had nothing to do with the state of the satellite telecommunications business, which he said remains strong.
Pley said Com Dev counts 10 telecommunications satellite orders so far in the six months ending April 30 and expects another 12 to be contracted through October. Com Dev finds at least some work on most commercial telecommunications satellites ordered from U.S. or European suppliers.
“The order pipeline is solid,” Pley said, reminding investors that satellite orders do not flow evenly throughout the years but come in bunches followed by dry spells.
Com Dev owns a majority stake in exactEarth, which is developing a business in providing ship-identification data to coastal authorities through a constellation of small satellites that capture signals emitted from the vessels.
Five exactEarth satellites have been launched, with three more to come by the end of 2015. A fourth satellite was scheduled for launch this month as one of several secondary passengers aboard a Russian Soyuz rocket but was pulled from the vehicle by order of the Canadian government.
Canadian officials acted in protest against Russia’s annexation of the Crimean region of Ukraine.
Peter Mabson, president of exactEarth, said the company is still negotiating with the Canadian government on possible compensations for having missed the launch date. He declined to go into details or predict when the satellite would be launched, or on what rocket.
The exactEarth business now is focused on providing data on larger ships, but the company is expanding its reach to investigate whether a similar service might be provided to yachts and other leisure vessels, which number some 8 million.
It remains unclear how far maritime regulations will go in requiring Automatic Identification System (AIS) terminals on smaller ships. Such regulations for larger vessels have provided the market access that has helped exactEarth and its U.S. competitor, Orbcomm, which is developing a similar business.
Mabson said that while several governments, notably Norway — which has one AIS satellite in orbit and another under construction — have their own AIS plans, none of them has a constellation with the capacity of exactEarth and none poses a competitive threat to the company.
Follow Peter on Twitter: @pbdes
