Avcorp announces 2007 Second Quarter Results
- revenue increase by 13% over second quarter 2006
- net income increases over comparable quarter last year
- quarter on quarter EBITDA growth hits 42%
VANCOUVER, Aug. 14 /CNW/ - Avcorp Industries Inc. (AVP on the Toronto
Stock Exchange) today announces results for the quarter ended June 30, 2007.
The second quarter of 2007 saw a 13% increase in revenue over the same
quarter in 2006. For the quarter ended June 30, 2007, the Company recorded net
income of $817,000 on $29,352,000 revenue.
The strengthening of the Canadian dollar, relative to the US dollar has
decreased revenues, diminishing the full impact of operational performance
improvements. However, the highest revenues and net income in two years has
driven EBITDA to exceed prior year's second quarter EBITDA by over $600,000.
Cash flows from operating activities provided $1,163,000 of cash,
primarily from operating income, as compared to $1,013,000 during the same
quarter last year. The Company has a working capital surplus of $8,052,000 as
at June 30, 2007.
The Company has invested over $2,800,000 in new equipment and
infrastructure. Technology upgrades in high-speed machining, and
implementation of non-destructive (ultrasonic) testing equipment allows the
Company to augment its quality assurance systems and bring currently
out-sourced work in-house thereby reducing costs.
Subsequent to June 30, 2007, the Company agreed to a placement of 840,000
units at $2.20 per unit; 287,500 units are to be subscribed for by insiders of
the Company. Each unit consists of one share and one warrant, where one
warrant entitles the holder the right to purchase one additional share at
$2.40 per share for a 24-month period from the closing date. Gross proceeds
from the placement amount to $1,848,000. The net proceeds of the financing
will be used for working capital.
The Company has also seen 417,200 of the convertible preferred shares,
issued at a price of $10.00 per share, converted into common shares leaving
782,800 convertible preferred shares outstanding with a conversion price of
$1.75 to July 10, 2008.
About Avcorp
Avcorp designs and builds major airframe structures for some of the
world's leading aircraft companies, including Boeing, Bombardier, and Cessna.
With 50 years of experience, more than 650 skilled employees and a 300,000
square foot facility near Vancouver, Canada, the Company's depth and breadth
of capabilities are unique in the aerospace industry for a company of its
size. Avcorp is a Canadian public company traded on the Toronto Stock
Exchange. More information is available at www.avcorp.com.
(signed) (signed)
MARK VAN ROOIJ PAUL KALIL
CHIEF EXECUTIVE OFFICER PRESIDENT
Forward-Looking Statements
This release should be read in conjunction with the Company's unaudited
financial statements contained in the Company's Annual Report and with the
quarterly financial statements and accompanying notes filed with Sedar
(www.sedar.com).
Certain statements in this release and other oral and written statements
made by the Company from time to time are forward-looking statements,
including those that discuss strategies, goals, outlook or other
non-historical matters; or projected revenues, income, returns or other
financial measures. These forward-looking statements are subject to risks and
uncertainties that may cause actual results to differ materially from those
contained in the statements, including the following: (a) the extent to which
the Company is able to achieve savings from its restructuring plans; (b)
uncertainty in estimating the amount and timing of restructuring charges and
related costs; (c) changes in worldwide economic and political conditions that
impact interest and foreign exchange rates; (d) the occurrence of work
stoppages and strikes at key facilities of the Company or the Company's
customers or suppliers; (e) government funding and program approvals affecting
products being developed or sold under government programs; (f) cost and
delivery performance under various program and development contracts; (g) the
adequacy of cost estimates for various customer care programs including
servicing warranties; (h) the ability to control costs and successful
implementation of various cost reduction programs; (i) the timing of
certifications of new aircraft products; (j) the occurrence of further
downturns in customer markets to which the Company products are sold or
supplied or where the Company offers financing; (k) changes in aircraft
delivery schedules or cancellation of orders; (l) the Company's ability to
offset, through cost reductions, raw material price increases and pricing
pressure brought by original equipment manufacturer customers; (m) the
availability and cost of insurance; (n) the Company's ability to maintain
portfolio credit quality; (o) the Company's access to debt financing at
competitive rates; and (p) uncertainty in estimating contingent liabilities
and establishing reserves tailored to address such contingencies.
Balance Sheets
as at June 30, 2007 and December 31, 2006
(unaudited, in thousands of Canadian dollars)
June 30 December 31
2007 2006
$ $
Assets
Current assets
Accounts receivable 11,142 8,394
Inventories 18,776 19,421
Prepayments 2,091 1,611
Convertible loan receivable 804 -
Other assets 689 40
---------------------------
33,502 29,466
Development costs 1,460 1,186
Property, plant and equipment 17,569 15,746
Investment 759 759
Prepaid rent 1,500 1,500
---------------------------
54,790 48,657
---------------------------
---------------------------
Liabilities
Current liabilities
Bank indebtedness 9,982 5,564
Accounts payable and accrued liabilities 14,503 13,525
Current portion of long-term debt 965 737
---------------------------
25,450 19,826
Deferred gain 524 548
Lease inducement 1,109 1,159
Deferred tooling revenues 2,860 3,434
Long-term debt 5,064 4,957
---------------------------
35,007 29,924
---------------------------
Shareholders' Equity
Capital stock 57,861 55,600
Preferred shares 9,447 11,454
Contributed surplus 2,373 2,244
Deficit (49,898) (50,565)
---------------------------
19,783 18,733
---------------------------
54,790 48,657
---------------------------
---------------------------
Nature of operations and going concern
Statements of Operations and Other Comprehensive Income
For the three and six months ended June 30, 2007 and June 30, 2006
(unaudited, in thousands of Canadian dollars, except number of shares and
per share amounts)
three months ended six months ended
June 30 June 30
2007 2006 2007 2006
$ $ $ $
-------------------- --------------------
Revenues 29,352 25,874 56,709 52,707
-------------------- --------------------
Cost of sales and expenses
Cost of sales 25,775 22,238 49,770 45,661
Administrative and general
expenses 2,332 2,014 4,260 3,801
Depreciation 783 791 1,545 1,599
Foreign exchange (gain) loss (397) (9) (300) (1)
-------------------- --------------------
28,493 25,034 55,275 51,060
-------------------- --------------------
Income from Operations 859 840 1,434 1,647
Interest expense and
financing charges (570) (575) (937) (1,260)
Interest Income 4 - 4 -
Unrealized derivative gains 524 - 691 -
-------------------- --------------------
-------------------- --------------------
Income before income taxes 817 265 1,192 387
Income taxes - - - -
-------------------- --------------------
Income and other comprehensive
income for the period 817 265 1,192 387
-------------------- --------------------
-------------------- --------------------
Basic earnings per common share 0.03 0.01 0.04 0.02
-------------------- --------------------
-------------------- --------------------
Basic weighted average number
of shares outstanding (000's) 28,676 24,011 28,332 24,021
-------------------- --------------------
-------------------- --------------------
Diluted earnings per
common share 0.02 0.01 0.04 0.02
-------------------- --------------------
-------------------- --------------------
Diluted weighted average
number of shares outstanding
(000's) 33,903 24,011 33,793 24,021
-------------------- --------------------
-------------------- --------------------
Statements of Deficit
For the three and six months ended June 30, 2007 and June 30, 2006
(unaudited, in thousands of Canadian dollars)
three months ended six months ended
June 30 June 30
2007 2006 2007 2006
$ $ $ $
-------------------- --------------------
Deficit - Beginning of period
as previously reported (50,464) (51,407) (50,605) (51,529)
Adoption of financial
instruments standards - - 40 -
-------------------- --------------------
Deficit - Beginning of period
as restated (50,464) (51,407) (50,565) (51,529)
Income for the period 817 265 1,192 387
Preferred share dividends (251) - (525) -
-------------------- --------------------
Deficit - End of period (49,898) (51,142) (49,898) (51,142)
-------------------- --------------------
-------------------- --------------------
Statements of Cash Flows
For the three and six months ended June 30, 2007 and June 30, 2006
(unaudited, in thousands of Canadian dollars)
three months ended six months ended
June 30 June 30
2007 2006 2007 2006
$ $ $ $
Cash flows from operating
activities
Income for the period 817 265 1,192 387
Items not affecting cash 346 748 1,072 1,877
-------------------- --------------------
1,163 1,013 2,264 2,264
Change in non-cash items
related to operating
activities 87 (170) (1,643) (2,660)
-------------------- --------------------
1,250 843 621 (396)
-------------------- --------------------
Cash flows from investing
activities
Purchase of property, plant
and equipment (772) (259) (2,802) (343)
Payments relating to
capitalized development costs (232) (672) (537) (717)
Advance on convertible loan
receivable (804) - (804) -
Proceeds from sale of property,
plant and equipment 10 - 15 21
-------------------- --------------------
(1,798) (931) (4,128) (1,039)
Cash flows from financing
activities
Net proceeds from bank
indebtedness 1,032 (106) 4,418 523
Proceeds from current and
long-term debt 800 - 858 490
Repayment of current and
long-term debt (1,050) (1,592) (1,479) (2,294)
Issue of common shares 17 1,792 243 2,733
Preferred share dividends (251) - (525) -
Share issue expense - (6) (8) (17)
-------------------- --------------------
548 88 3,507 1,435
-------------------- --------------------
Net change in cash and cash
equivalents - - - -
Cash and cash equivalents
- Beginning of period - - - -
-------------------- --------------------
Cash and cash equivalents
- End of period - - - -
-------------------- --------------------
-------------------- --------------------
Interest paid 258 404 547 778
-------------------- --------------------
-------------------- --------------------
For further information: Sandi DiPrimo, Investor Relations Contact,
(604) 587-4938
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