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Avcorp announces 2013 First Quarter Financial Results

            Avcorp announces 2013 First Quarter Financial Results

PR Newswire

VANCOUVER, May 9, 2013

VANCOUVER, May 9, 2013 /PRNewswire/ - Avcorp Industries Inc. (TSX: AVP) (the
"Company" or "Avcorp") today announced its financial results for the quarter
ended March 31, 2013.

During the quarter  ended March  31, 2013,  the Company  recorded income  from 
operations of  $440,000  on  $19,946,000  revenue,  as  compared  to  $860,000 
operating income on $25,006,000 revenue for the same quarter in the  preceding 
year; and net income for  the current quarter of  $108,000 as compared to  net 
income of $151,000 for the quarter ended March 31, 2012.

Current quarter revenues have decreased from the same quarter in the preceding
year primarily  as  a result  of  the  wind-down of  Cessna  Aircraft  Company 
(Cessna) programs.

Earnings before interest,  taxes, depreciation and  amortization (EBITDA)  was 
positive $1,241,000  for  the quarter  ended  March  31, 2013  compared  to  a 
positive EBITDA  of $1,951,000  for the  quarter ended  March 31,  2012.  The 
decline in EBITDA was primarily as a result of reduced revenues.

Cash flows from operating activities during  the quarter ended March 31,  2013 
utilized $1,416,000 of cash as compared  to utilizing $267,000 of cash  during 
the quarter ended March 31, 2012.  The Company has a working capital  surplus 
of $30,902,000 as at March 31, 2013 which has decreased from the December  31, 
2012 $34,819,000 surplus, as a result of an increase in bank indebtedness  and 
accounts payable. The Company's accumulated deficit  as at March 31, 2013  is 
$55,267,000 (December 31, 2012: $55,375,000).

On May 9, 2013, the Company completed a private placement, which was  approved 
by the Toronto Stock Exchange on  April 18, 2013, of 25,489,807 common  shares 
at $0.049  per share  for  gross proceeds  of approximately  $1,249,000.  The 
subscriber in  the private  placement  was Panta  Canada B.V.  ("Panta"),  the 
principal of which is a director  of the Company. Following completion of  the 
private placement, Panta  owns approximately 57.9%  of the outstanding  common 
shares of Avcorp.

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 400 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.  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)

MARK VAN ROOIJ
PRESIDENT and CHIEF EXECUTIVE OFFICER

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)

                                        March 31, 2013 December 31, 2012
ASSETS                                                                 
Current assets                                                         
Cash                                         $ 2,900        $ 2,597
Accounts receivable                               7,525             7,944
Inventories                                      16,641            16,572
Prepayments and other assets                      1,283             1,634
Other receivable                                 27,391            27,391
                                                55,740            56,138
Non-current assets                                                     
Prepaid rent                                        146               146
Development costs                                 2,496             2,718
Property, plant and equipment, net                9,338             9,633
Total assets                                     67,720            68,635
                                                                      
LIABILITIES AND EQUITY                                                 
Current liabilities                                                    
Bank indebtedness                                 4,289             2,122
Accounts payable and accrued liabilities          8,877             7,859
Current portion of long-term debt                   837               692
Preferred shares                                 10,835            10,646
                                                24,838            21,319
Non-current liabilities                                                
Deferred gain                                       251               263
Lease inducement                                    543               567
Deferred program revenues                        13,148            17,514
Long-term debt                                    4,138             4,300
Warranty provisions                                  85                85
                                                43,003            44,048
Equity                                                                 
Capital stock                                    76,423            76,423
Contributed surplus                               3,561             3,539
Deficit                                        (55,267)          (55,375)
                                                24,717            24,587
Total liabilities and equity                     67,720            68,635

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                                   2013     2012
                                                                    
Revenues                                                    $ 19,946 $ 25,006
                                                                    
Cost of sales                                                  16,869   20,725
                                                                    
Gross profit                                                    3,077    4,281
                                                                    
Administrative and general expenses                             2,502    3,309
Office equipment depreciation                                     136      114
Other (gains) and losses - net                                    (1)      (2)
                                                                    
Operating Income                                                  440      860
                                                                    
Foreign exchange loss                                              67      112
Finance costs                                                     265      597
                                                                    
Income before income tax                                          108      151
                                                                    
Income tax expense                                                  -        -
                                                                    
Income and total comprehensive income for the period              108      151
                                                                    
Earnings per share:                                                         
Basic earnings per common share                                  0.00     0.00
Diluted earnings per common share                                0.00     0.00
                                                                    
Basic weighted average number of shares outstanding (000's)   254,898  203,862
                                                                    
Diluted weighted average number of shares outstanding         255,898  204,890
(000's)

CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, prepared in accordance with IFRS, expressed in thousands of
Canadian dollars)

FOR THE QUARTER ENDED MARCH 31                                  2013      2012
       
Cash flows from operating activities                                        
Income before tax                                            $ 108 $ 151
    Adjustment for items not affecting cash:                              
    Accrued interest and government royalties                79       342
    Depreciation                                            532       767
    Deferred tooling revenue amortization and           (4,463)   (3,256)
         reclassification to revenue
    Development cost amortization and write-off             336       436
    Preferred share dividends accrued                       189       189
    Provision for obsolete inventory                      (103)      (13)
    Other items                                             (7)        97
                                                            (3,329)   (1,287)
Changes in non-cash working capital                                         
    Accounts receivable                                        515     1,704
    Inventories                                                 34     (174)
    Prepayments and other assets                               350      (74)
     Accounts payable and accrued liabilities                 1,014     (436)
Net cash from operating activities                           (1,416)     (267)
                                                                           
Cash flows from investing activities                                        
Purchase of equipment                                          (237)     (167)
Payments relating to development costs and tooling             (114)     (336)
Net cash from investing activities                             (351)     (503)
                                                                           
Cash flows from financing activities                                        
Increase in bank indebtedness                                  2,167         -
Payment of interest                                             (80)     (253)
Proceeds from customer funding of program introduction             -     3,476
Repayment of current and long-term debt                         (17)     (217)
Net cash from financing activities                             2,070     3,006
Net increase in cash                                             303     2,236
Cash - Beginning of period                                     2,597     3,778
Cash - End of period                                           2,900     6,014

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(unaudited, prepared in accordance with IFRS, expressed in thousands of
Canadian dollars, except number of shares)

                                         Equity
                   Share capital       component
                                    convertible Contributed             Total
                  Shares      Amount        loan     surplus   Deficit  equity
                                                                 
Balance         201,994,113 $ 73,251     $ 453    $ 3,424         $      $
December 31,                                                  (76,016)   1,112
2011
                                                                 
Issue of common   2,323,521      109           -           -         -     109
shares
                                                                 
Stock based               -        -           -          20         -      20
compensation
expense
                                                                 
Income for the            -        -           -           -       151     151
quarter
                                                                 
Balance March   204,317,634   73,360         453       3,444  (75,865)   1,392
31, 2012
                                                                 
Balance         254,898,072   76,423           -       3,539  (55,375)  24,587
December 31,
2012
                                                                 
Stock-based               -        -           -          22         -      22
compensation
expense
                                                                 
Income for the            -        -           -           -       108     108
quarter
                                                                 
Balance March   254,898,072   76,423           -       3,561  (55,267)  24,717
31, 2013







SOURCE Avcorp Industries Inc.

Contact:

Contact:Sandi DiPrimo, Investor Relations Contact 604-587-4938
 
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