Avcorp announces 2007 Annual Financial Results



    VANCOUVER, March 31 /CNW/ - Avcorp (AVP on the Toronto Stock Exchange)
today announced its financial results for the year ended December 31, 2007.
    During the year ended December 31, 2007, the Company recorded a loss of
$1,719,000 on $110,283,000 revenue, as compared to a net income of $1,450,000
from $103,850,000 revenue for the preceding year. There was a 6% increase in
revenue over 2006; and the Company delivered 921 major structures to its
customers, a 15% increase over the 801 units which were delivered during 2006.
The strengthening of the Canadian dollar as compared to the US dollar,
relative to the rates of exchange in effect during 2006, has reduced revenues
by $4,153,000 and negatively affected operating margins.
    Cash flows from operating activities provided $3,071,000 of cash, as
compared to $5,006,000 during the previous year. The Company has a working
capital surplus of $4,417,000 as at December 31, 2007 (December 31, 2006:
$9,600,000) and an accumulated deficit of $53,204,000 at December 31, 2007
(December 31, 2006: $50,605,000).
    The acquisition of Comtek Advanced Structures Ltd. on December 31, 2007
provides an estimated $37 million order backlog to the existing base of
$441 million.

    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 750 skilled employees and
385,000 square feet of facilities Avcorp offers integrated composite and
metallic aircraft structures to aircraft manufacturers, a distinct advantage
in the pursuit of contracts for new aircraft designs, which require
lower-cost, light-weight, strong, reliable structures. Avcorp is a Canadian
public company traded on the Toronto Stock Exchange (TSX:AVP). 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.

    
    Consolidated Balance Sheets
    For years ended December 31, 2007 and 2006
    (in thousands of Canadian dollars)

                                                           2007         2006
                                                              $            $
    Assets
    Current assets
    Accounts receivable                                  12,224        8,394
    Inventories                                          17,801       19,421
    Prepayments                                           2,401        1,611
    Other assets                                            138            -
                                                    -------------------------
                                                         32,564       29,426
    Prepaid rent                                            481        1,500
    Development costs                                     1,545        1,186
    Property, plant and equipment                        20,310       15,746
    Investment                                              759          759
    Warranty claim receivable                             1,454            -
    Intangible assets                                     2,620            -
    Goodwill                                                571            -
                                                    -------------------------
                                                         60,304       48,617
                                                    -------------------------
                                                    -------------------------
    Liabilities
    Current liabilities
    Bank indebtedness                                    11,279        5,564
    Accounts payable and accrued liabilities             14,812       13,525
    Current portion of long-term debt                     2,056          737
                                                    -------------------------
                                                         28,147       19,826
    Deferred gain                                           501          548
    Lease inducement                                      1,060        1,159
    Deferred tooling revenues                             2,676        3,434
    Long-term debt                                        6,761        4,957
    Warranty provision                                    1,454            -
    Future income tax liability                           1,186            -
                                                    -------------------------
                                                         41,785       29,924
                                                    -------------------------
    Shareholders' Equity
    Capital stock                                        61,194       55,600
    Preferred shares                                      7,672       11,454
    Contributed surplus                                   2,857        2,244
    Deficit                                             (53,204)     (50,605)
                                                    -------------------------
                                                         18,519       18,693
                                                    -------------------------
                                                         60,304       48,617
                                                    -------------------------
                                                    -------------------------



    Consolidated Statements of Operations and Comprehensive Income (Loss)
    For years ended December 31, 2007 and 2006
    (in thousands of Canadian dollars, except number of shares and
     per share amounts)

                                                           2007         2006
                                                              $            $
                                                    -------------------------

    Revenues                                            110,283      103,850
                                                    -------------------------
    Cost of sales and expenses
    Cost of sales                                        98,442       89,561
    Administrative and general expenses                   9,562        7,665
    Depreciation                                          3,395        3,138
    Foreign exchange (gain) loss                         (1,321)           3
                                                    -------------------------

                                                        110,078      100,367
                                                    -------------------------

    Income from operations                                  205        3,483

    Interest expense and financing charges               (2,094)      (2,033)

    Unrealized derivative gain                              170            -
                                                    -------------------------
                                                    -------------------------

    Income (loss) before income taxes                    (1,719)       1,450

    Income taxes                                              -            -
                                                    -------------------------

    Income (loss) and comprehensive income (loss)
     for the year                                        (1,719)       1,450
                                                    -------------------------
                                                    -------------------------

    Basic earnings (loss) per common share                (0.06)        0.06
                                                    -------------------------
                                                    -------------------------

    Basic weighted average number of shares
     outstanding (000's)                                 29,674       24,964
                                                    -------------------------
                                                    -------------------------

    Diluted earnings (loss) per common share              (0.06)        0.06
                                                    -------------------------
                                                    -------------------------

    Diluted weighted average number of shares
     outstanding (000's)                                 29,674       25,872
                                                    -------------------------
                                                    -------------------------



    Consolidated Statements of Deficit
    For years ended December 31, 2007 and 2006
    (in thousands of Canadian dollars)
                                                           2007         2006
                                                              $            $
                                                    ------------  -----------
    Deficit - Beginning of year as previously
     reported                                           (50,605)     (51,529)

    Adoption of financial instruments standards              40            -
                                                    ------------  -----------

    Deficit - Beginning of year as restated             (50,565)     (51,529)

    Income (loss) for the year                           (1,719)       1,450

    Preferred share dividends                              (920)        (526)

                                                    ------------  -----------

    Deficit - End of year                               (53,204)     (50,605)
                                                    ------------  -----------
                                                    ------------  -----------



    Consolidated Statements of Cash Flows
    For years ended December 31, 2007 and 2006
    (in thousands of Canadian dollars)

                                                           2007         2006
                                                              $            $

    Cash flows from operating activities
    Income (loss) for the year                           (1,719)       1,450
    Items not affecting cash                              4,790        3,556
                                                    -------------------------

                                                          3,071        5,006

    Change in non-cash items related to operating
     activities                                          (1,323)      (4,238)
                                                    -------------------------

                                                          1,748          768
                                                    -------------------------

    Cash flows from investing activities
    Purchase of property, plant and equipment            (5,020)      (2,111)
    Payments relating to development costs                 (744)        (873)
    Proceeds from sale of property, plant and
     equipment                                               15           21
    Acquisition of Comtek Advanced Structures Ltd.       (2,073)           -
                                                    -------------------------
                                                         (7,822)      (2,963)
    Cash flows from financing activities
    Net proceeds from bank indebtedness                   4,790       (2,282)
    Proceeds from current and long-term debt                858          490
    Proceeds from sale and leaseback of property,
     plant and equipment                                  1,903            -
    Repayment of current and long-term debt              (2,581)      (7,263)
    Issue of common shares                                1,680        4,720
    Issue of warrants                                       411            -
    Issue of preferred shares                                 -        7,635
    Preferred share dividends                              (920)        (526)
    Share issue expense                                     (67)        (579)
                                                    -------------------------

                                                          6,074        2,195
                                                    -------------------------

    Net change in cash and cash equivalents                   -            -

    Cash and cash equivalents - Beginning of year             -            -
                                                    -------------------------

    Cash and cash equivalents - End of year                   -            -
                                                    -------------------------
                                                    -------------------------

    Interest paid                                         1,244        1,377
                                                    -------------------------
                                                    -------------------------
    





For further information:

For further information: Sandi DiPrimo, Investor Relations Contact,
(604) 587-4938


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