Common Stock Listed
Toronto
Trading Symbol: AVP
VANCOUVER, May 14, 2012 /PRNewswire/ - Avcorp Industries Inc. (TSX: AVP) (the
"Company" or "Avcorp") today announced its financial results for the
quarter ended March 31, 2012.
During the quarter ended March 31, 2012, the Company recorded income
from operations of $860,000 on $25,006,000 revenue, as compared to a
$517,000 operating loss on $20,916,000 revenue for the same quarter in
the preceding year; and net income for the current quarter of $151,000
as compared to a net loss of $1,258,000 for the quarter ended March 31,
2011.
A combination of continued sales growth, improvements in both operating
efficiencies and production quality levels, as well as continued
stringent cost controls have netted a $1,409,000 profitability
improvement for the first quarter 2012 relative to the same quarter in
2011.
Earnings before interest, taxes, depreciation and amortization (EBITDA)
was positive $1,951,000 for the quarter ended March 31, 2012 compared
to a positive EBITDA of $213,000 for the quarter ended March 31, 2011.
The Company's improved gross margins have contributed significantly to
the $1,738,000 improvement in EBITDA.
Cash flows from operating activities during the quarter ended March 31,
2012 utilized $267,000 of cash as compared to utilizing $3,391,000 of
cash during the quarter ended March 31, 2011. The Company has a
working capital surplus of $16,494,000 as at March 31, 2012 (December
31, 2011: $14,663,000 surplus).
About Avcorp
Avcorp designs and builds major airframe structures for some of the
world's leading aircraft companies, including BAE, Boeing, Bombardier
and Cessna. With more than 50 years of experience, 500 skilled
employees and 354,000 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. Its Burlington
location also offers composite repairs for commercial aircraft. Avcorp
is a Canadian public company, traded on the Toronto Stock Exchange
(TSX:AVP).
(signed)
MARK VAN ROOIJ
PRESIDENT and CHIEF EXECUTIVE OFFICER
Forward-Looking Statements
This management discussion and analysis should be read in conjunction
with the Company's audited financial statements. Certain statements in
this report 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 ability of the
Company to renegotiate its debt agreements under which it is in
default; (b) the extent to which the Company is able to achieve savings
from its restructuring plans; (c) uncertainty in estimating the amount
and timing of restructuring charges and related costs; (d) changes in
worldwide economic and political conditions that impact interest and
foreign exchange rates; (e) the occurrence of work stoppages and
strikes at key facilities of the Company or the Company's customers or
suppliers; (f) government funding and program approvals affecting
products being developed or sold under government programs; (g) cost
and delivery performance under various program and development
contracts; (h) the adequacy of cost estimates for various customer care
programs including servicing warranties; (i) the ability to control
costs and successful implementation of various cost reduction programs;
(j) the timing of certifications of new aircraft products; (k) the
occurrence of further downturns in customer markets to which the
Company products are sold or supplied or where the Company offers
financing; (l) changes in aircraft delivery schedules or cancellation
of orders; (m) the Company's ability to offset, through cost
reductions, raw material price increases and pricing pressure brought
by original equipment manufacturer customers; (n) the availability and
cost of insurance; (o) the Company's ability to maintain portfolio
credit quality; (p) the Company's access to debt financing at
competitive rates; and (q) uncertainty in estimating contingent
liabilities and establishing reserves tailored to address such
contingencies.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(unaudited, prepared in accordance with IFRS, expressed in thousands of
Canadian dollars)
|
|
March 31, 2012
|
December 31, 2011
|
|
ASSETS
|
|
|
|
Current assets
|
|
|
|
Cash
|
$ 6,014
|
$ 3,778
|
|
Accounts receivable
|
11,113
|
12,160
|
|
Inventories
|
19,550
|
19,418
|
|
Prepayments and other assets
|
1,470
|
1,396
|
|
|
38,147
|
36,752
|
|
Non-current assets
|
|
|
|
Prepaid rent
|
146
|
146
|
|
Development costs
|
5,440
|
5,540
|
|
Property, plant and equipment
|
11,966
|
12,523
|
|
Total assets
|
55,699
|
54,961
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
Current liabilities
|
|
|
|
Accounts payable and accrued liabilities
|
10,264
|
10,694
|
|
Current portion of long-term debt
|
1,310
|
1,505
|
|
Preferred shares
|
10,079
|
9,890
|
|
|
21,653
|
22,089
|
|
Non-current liabilities
|
|
|
|
Deferred gain
|
299
|
311
|
|
Lease inducement
|
641
|
666
|
|
Deferred program revenues
|
19,548
|
18,671
|
|
Long-term debt
|
12,081
|
12,027
|
|
Warranty provisions
|
85
|
85
|
|
|
54,307
|
53,849
|
|
Equity
|
|
|
|
Capital stock
|
73,360
|
73,251
|
|
Equity component of convertible loan
|
453
|
453
|
|
Contributed surplus
|
3,444
|
3,424
|
|
Deficit
|
(75,865)
|
(76,016)
|
|
|
1,392
|
1,112
|
|
Total liabilities and equity
|
55,699
|
54,961
|
|
|
|
|
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(unaudited, prepared in accordance with IFRS, expressed in thousands of
Canadian dollars, except number of shares and per share amounts)
|
FOR THE QUARTER ENDED MARCH 31
|
2012
|
|
2011
|
|
|
|
|
|
|
Revenues
|
$ 25,006
|
|
$ 20,916
|
|
|
|
|
|
|
Cost of sales
|
20,725
|
|
18,632
|
|
|
|
|
|
|
Gross profit
|
4,281
|
|
2,284
|
|
|
|
|
|
|
Administrative and general expenses
|
3,309
|
|
2,635
|
|
Office equipment depreciation
|
114
|
|
169
|
|
Other (gains) and losses - net
|
(2)
|
|
(3)
|
|
|
|
|
|
|
Operating Income (loss)
|
860
|
|
(517)
|
|
|
|
|
|
|
Foreign exchange (gain) loss
|
112
|
|
204
|
|
Finance costs
|
597
|
|
537
|
|
|
|
|
|
|
Income (loss) before income tax
|
151
|
|
(1,258)
|
|
|
|
|
|
|
Income tax expense
|
-
|
|
-
|
|
|
|
|
|
|
Loss and total comprehensive loss for the period
|
151
|
|
(1,258)
|
|
|
|
|
|
|
Earnings (loss) per share:
|
|
|
|
|
Basic earnings (loss) per common share
|
0.00
|
|
(0.01)
|
|
Diluted earnings (loss) per common share
|
0.00
|
|
(0.01)
|
|
|
|
|
|
|
Basic weighted average number of shares outstanding (000's)
|
203,862
|
|
195,505
|
|
|
|
|
|
|
Diluted weighted average number of shares outstanding (000's)
|
204,984
|
|
228,231
|
|
|
|
|
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, prepared in accordance with IFRS, expressed in thousands of
Canadian dollars)
|
FOR THE QUARTER ENDED MARCH 31
|
2012
|
|
2011
|
|
|
|
|
|
|
Cash flows from operating activities
|
|
|
|
|
Profit (loss) before tax
|
$ 151
|
|
$ (1,258)
|
|
|
Adjustment for items not affecting cash:
|
|
|
|
|
|
|
Accretion on convertible loan
|
22
|
|
21
|
|
|
|
Accrued interest and government royalties
|
342
|
|
321
|
|
|
|
Amortization and depreciation
|
767
|
|
846
|
|
|
|
Deferred tooling revenue amortization and reclassification to revenue
|
(3,256)
|
|
(222)
|
|
|
|
Development cost amortization
|
436
|
|
88
|
|
|
|
Fair value of warrants amortization
|
44
|
|
-
|
|
|
|
Preferred share dividends accrued
|
189
|
|
189
|
|
|
|
Provision for loss-making contracts
|
55
|
|
(91)
|
|
|
|
Provision for obsolete inventory
|
(13)
|
|
(47)
|
|
|
|
Stock based compensation
|
20
|
|
45
|
|
|
|
Other items
|
(44)
|
|
(61)
|
|
|
(1,287)
|
|
(169)
|
|
Changes in non-cash working capital
|
|
|
|
|
|
Accounts receivable
|
1,704
|
|
(3,021)
|
|
|
Inventories
|
(174)
|
|
(1,004)
|
|
|
Prepayments and other assets
|
(74)
|
|
267
|
|
|
Accounts payable and accrued liabilities
|
(436)
|
|
546
|
|
|
Warranty provision
|
-
|
|
(10)
|
|
Net cash from operating activities
|
(267)
|
|
(3,391)
|
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
Purchase of equipment
|
(167)
|
|
(194)
|
|
Payments relating to development costs and tooling
|
(336)
|
|
(333)
|
|
Net cash from investing activities
|
(503)
|
|
(527)
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
(Decrease) increase in bank indebtedness
|
-
|
|
(32)
|
|
Payment of interest
|
(253)
|
|
(205)
|
|
Proceeds from customer funding of program introduction
|
3,476
|
|
4,371
|
|
Repayment of current and long-term debt
|
(217)
|
|
(216)
|
|
Net cash from financing activities
|
3,006
|
|
3,918
|
|
|
|
|
|
|
Net increase (decrease) in cash
|
2,236
|
|
-
|
|
|
|
|
|
|
Cash - Beginning of period
|
3,778
|
|
-
|
|
|
|
|
|
|
Cash - End of period
|
6,014
|
|
-
|
|
|
|
|
|
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(unaudited, prepared in accordance with IFRS, expressed in thousands of
Canadian dollars, except number of shares)
|
|
Share capital
|
Equity
component
convertible
loan
|
Contributed
surplus
|
Deficit
|
Total
equity
|
|
|
Shares
|
Amount
|
|
|
|
|
|
|
|
|
|
Balance December 31, 2010
|
195,505,323
|
$ 72,927
|
$ 453
|
$ 2,662
|
$ (73,561)
|
$ 2,481
|
|
|
|
|
|
|
|
|
|
Stock based compensation expense
|
-
|
-
|
-
|
45
|
-
|
45
|
|
|
|
|
|
|
|
|
|
Loss for the quarter
|
-
|
-
|
-
|
-
|
(1,258)
|
(1,258)
|
|
|
|
|
|
|
|
|
|
Balance March 31, 2011
|
195,505,323
|
72,927
|
453
|
2,707
|
(74,819)
|
1,268
|
|
|
|
|
|
|
|
|
|
Balance December 31, 2011
|
201,994,113
|
73,251
|
453
|
3,424
|
(76,016)
|
1,112
|
|
|
|
|
|
|
|
|
|
Issue of common shares
|
2,323,521
|
109
|
-
|
-
|
-
|
109
|
|
|
|
|
|
|
|
|
|
Stock-based compensation expense
|
-
|
-
|
-
|
20
|
-
|
20
|
|
|
|
|
|
|
|
|
|
Income for the period
|
-
|
-
|
-
|
-
|
151
|
151
|
|
|
|
|
|
|
|
|
|
Balance March 31, 2012
|
204,317,634
|
73,360
|
453
|
3,444
|
(75,865)
|
1,392
|
SOURCE Avcorp Industries Inc.
