VANCOUVER, Nov. 13, 2014 /CNW/ - Avcorp Industries Inc. (TSX: AVP) (the "Company" or "Avcorp") today announced its financial results for the quarter ended September 30, 2014.
Revenue for the quarter ended September 30, 2014 was $14,675,000 as compared to $19,767,000 for the quarter ended September 30, 2013. Current quarter revenues have decreased relative to same quarter in the previous year primarily as a result of a decrease in quantities delivered for two defence programs and one commercial business jet program, in part offset by strong current quarter aircraft component repairs revenue.
During the quarter ended September 30, 2014, the Company recorded a loss from operations of $2,321,000 on $14,675,000 revenue, as compared to $211,000 operating loss on $19,767,000 revenue for the same quarter in the preceding year; and a net loss for the current quarter of $2,229,000 as compared to net loss of $1,139,000 for the quarter ended September 30, 2013.
Cash flows from operating activities during the quarter ended September 30, 2014 utilized $1,152,000 of cash as compared to providing $25,595,000 of cash during the quarter ended September 30, 2013. The primary use of cash from operations during the current quarter is due to operating losses reflecting temporary reduced customer demand. During the nine months ended September 30, 2014 the Company utilized $3,276,000 cash from operating activities as compared to providing $21,403,000 cash for the same period in 2013. The primary causes of operating cash movement during the nine month period ended September 30, 2014 and 2013 were the same circumstances as existed during the three month periods noted above, however, collection of an Other Receivable during the third quarter 2013 provided cash during 2013. As at September 30, 2014 the Company had $1,180,000 cash on hand (December 31, 2013: $7,012,000).
The Company has a working capital surplus of $8,797,000 as at September 30, 2014 as compared to a $14,213,000 surplus on December 31, 2013. The Company's accumulated deficit as at September 30, 2014 is $61,783,000 (December 31, 2013: $57,723,000).
About Avcorp
Avcorp designs and builds major airframe structures for some of the world's leading aircraft companies, including BAE Systems, Boeing and Bombardier. With more than 50 years of experience, over 380 skilled employees and 340,000 square feet of facilities in Delta BC and Burlington ON, 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. Our Burlington location also offers composite repairs for commercial aircraft. Avcorp is a Canadian public company traded on the Toronto Stock Exchange (TSX:AVP).
(signed)
PETER GEORGE
CHIEF EXECUTIVE OFFICER, AVCORP GROUP
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 STATEMENTS OF FINANCIAL POSITION
(unaudited, prepared in accordance with IFRS, expressed in thousands of Canadian dollars)
| September 30, 2014 |
December 31, 2013 |
|
| ASSETS |
||
| Current assets |
||
| Cash |
$ 1,180 |
$ 7,012 |
| Accounts receivable |
8,879 |
8,845 |
| Inventories |
12,461 |
14,940 |
| Prepayments and other assets |
945 |
1,306 |
| 23,465 |
32,103 |
|
| Non-current assets |
||
| Prepaid rent |
146 |
146 |
| Development costs |
3,019 |
1,240 |
| Property, plant and equipment |
8,392 |
8,704 |
| Total assets |
35,022 |
42,193 |
| LIABILITIES AND EQUITY |
||
| Current liabilities |
||
| Accounts payable and accrued liabilities |
9,303 |
7,645 |
| Current portion of long-term debt |
281 |
199 |
| Preferred shares |
- |
36 |
| Deferred program revenues |
5,084 |
10,010 |
| 14,668 |
17,890 |
|
| Non-current liabilities |
||
| Deferred gain |
180 |
216 |
| Lease inducement |
395 |
469 |
| Long-term debt |
152 |
67 |
| 15,395 |
18,642 |
|
| Equity |
||
| Capital stock |
77,910 |
77,681 |
| Contributed surplus |
3,500 |
3,593 |
| Deficit |
(61,783) |
(57,723) |
| 19,627 |
23,551 |
|
| Total liabilities and equity |
35,022 |
42,193 |
CONSOLIDATED STATEMENTS OF (LOSS) INCOME AND COMPREHENSIVE (LOSS) INCOME
(unaudited, prepared in accordance with IFRS, expressed in thousands of Canadian dollars, except number of shares and per share amounts)
| Three months ended |
Nine months ended |
|||
| FOR THE PERIOD ENDED SEPTEMBER 30 |
2014 |
2013 |
2014 |
2013 |
| Revenues |
$ 14,675 |
$ 19,767 |
$ 53,360 |
$ 60,205 |
| Cost of sales |
14,274 |
16,493 |
48,898 |
51,463 |
| Gross profit |
401 |
3,274 |
4,462 |
8,742 |
| Administrative and general expenses |
2,579 |
2,816 |
8,220 |
8,292 |
| Office equipment depreciation |
143 |
144 |
432 |
432 |
| Other operating (income) loss |
- |
525 |
- |
(604) |
| Operating (Loss) Income |
(2,321) |
(211) |
(4,190) |
622 |
| Finance costs – net |
16 |
284 |
36 |
840 |
| Foreign exchange (gain) loss |
(108) |
644 |
(173) |
(783) |
| Write-down and loss on disposal of equipment |
- |
- |
7 |
- |
| (Loss) Income before income tax |
(2,229) |
(1,139) |
(4,060) |
565 |
| Income tax expense |
- |
- |
- |
- |
| (Loss) Income and total comprehensive (loss) income for the period |
(2,229) |
(1,139) |
(4,060) |
565 |
| (Loss) Earnings per share: |
||||
| Basic (loss) earnings per common share |
(0.01) |
(0.00) |
(0.01) |
0.00 |
| Diluted (loss) earnings per common share |
(0.01) |
(0.00) |
(0.01) |
0.00 |
| Basic weighted average number of shares outstanding (000's) |
283,083 |
280,390 |
282,732 |
268,344 |
| Diluted weighted average number of shares outstanding (000's) |
283,083 |
280,390 |
282,732 |
269,877 |
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, prepared in accordance with IFRS, expressed in thousands of Canadian dollars)
| Three months ended |
Nine months ended |
||||||
| FOR THE PERIOD ENDED SEPTEMBER 30 |
2014 |
2013 |
2014 |
2013 |
|||
| Cash flows from (used in) operating activities |
|||||||
| (Loss) Income before income tax |
$ (2,229) |
$ (1,139) |
$ (4,060) |
$ 565 |
|||
| Adjustment for items not affecting cash: |
|||||||
| Accrued interest and government royalties |
10 |
94 |
26 |
275 |
|||
| Depreciation |
417 |
494 |
1,192 |
1,561 |
|||
| Development cost amortization |
1 |
875 |
137 |
1,855 |
|||
| Loss on settlement |
- |
525 |
- |
525 |
|||
| Preferred share dividends accrued |
- |
186 |
- |
563 |
|||
| Provision for loss-making contracts |
129 |
- |
98 |
- |
|||
| Provision for obsolete inventory |
(9) |
(156) |
40 |
(259) |
|||
| Write-down and loss on disposal of equipment |
- |
- |
7 |
- |
|||
| Other items |
(4) |
7 |
(81) |
(15) |
|||
| (1,685) |
886 |
(2,641) |
5,070 |
||||
| Changes in non-cash working capital |
|||||||
| Accounts receivable |
954 |
(251) |
1,960 |
597 |
|||
| Inventories |
(97) |
(197) |
2,341 |
(86) |
|||
| Prepayments and other assets |
137 |
180 |
338 |
675 |
|||
| Other receivables |
- |
29,380 |
- |
26,832 |
|||
| Accounts payable and accrued liabilities |
(463) |
(1,003) |
1,645 |
(313) |
|||
| Deferred program revenues |
2 |
(3,400) |
(6,919) |
(11,372) |
|||
| Net cash from (used in) operating activities |
(1,152) |
25,595 |
(3,276) |
21,403 |
|||
| Cash flows from (used in) investing activities |
|||||||
| Proceeds from sale of equipment |
21 |
- |
589 |
- |
|||
| Purchase of equipment |
(127) |
(218) |
(917) |
(646) |
|||
| Payments relating to development costs and tooling |
(511) |
(25) |
(1,916) |
(335) |
|||
| Net cash from (used in) investing activities |
(617) |
(243) |
(2,244) |
(981) |
|||
| Cash flows from (used in) financing activities |
|||||||
| Increase (Decrease) in bank indebtedness |
- |
(6,496) |
- |
(2,122) |
|||
| Payment of interest |
(11) |
(95) |
(28) |
(277) |
|||
| Proceeds from issuance of common shares |
- |
- |
142 |
1,249 |
|||
| Redemption of preferred shares and accrued dividends |
- |
- |
(36) |
- |
|||
| Repayment of current and long-term debt |
(67) |
(170) |
(390) |
(466) |
|||
| Net cash from (used in) financing activities |
(78) |
(6,761) |
(312) |
(1,616) |
|||
| Net increase (decrease) in cash |
(1,847) |
18,591 |
(5,832) |
18,806 |
|||
| Cash - Beginning of period |
3,027 |
2,812 |
7,012 |
2,597 |
|||
| Cash - End of period |
1,180 |
21,403 |
1,180 |
21,403 |
|||
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(unaudited, prepared in accordance with IFRS, expressed in thousands of Canadian dollars, except number of shares)
| Share capital |
||||||
| Shares |
Amount |
Contributed |
Deficit |
Total |
||
| Balance December 31, 2012 |
254,898,072 |
$ 76,423 |
$ 3,539 |
$ (55,375) |
$ 24,587 |
|
| Issue of common shares |
25,493,080 |
1,258 |
- |
- |
1,258 |
|
| Stock based compensation expense |
- |
- |
45 |
- |
45 |
|
| Income for the period |
- |
- |
- |
565 |
565 |
|
| Balance September 30, 2013 |
280,391,152 |
77,681 |
3,584 |
(54,810) |
26,455 |
|
| Balance December 31, 2013 |
280,391,152 |
77,681 |
3,593 |
(57,723) |
23,551 |
|
| Issue of common shares |
2,691,500 |
142 |
- |
- |
142 |
|
| Stock-based compensation expense |
- |
- |
(6) |
- |
(6) |
|
| Transfer to share capital on exercise of |
- |
87 |
(87) |
- |
- |
|
| Loss for the period |
- |
- |
- |
(4,060) |
(4,060) |
|
| Balance September 30, 2014 |
283,082,652 |
77,910 |
3,500 |
(61,783) |
19,627 |
|
SOURCE: Avcorp Industries Inc.
For further information: Sandi DiPrimo, Investor Relations Contact 604-587-4938 or email [email protected]
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