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Avcorp announces 2013 Second Quarter Financial Results



            Avcorp announces 2013 Second Quarter Financial Results

PR Newswire

VANCOUVER, Aug. 6, 2013

VANCOUVER, Aug. 6, 2013 /PRNewswire/ - Avcorp Industries Inc. (TSX: AVP) (the
"Company" or "Avcorp") today announced its financial results for the quarter
ended June 30, 2013.

During the  quarter ended  June 30,  2013, the  Company recorded  income  from 
operations of  $393,000  on  $20,492,000  revenue,  as  compared  to  $411,000 
operating income on $25,192,000 revenue for the same quarter in the  preceding 
year; and net income for the current quarter of $1,596,000 as compared to  net 
income of $13,000 for the quarter ended June 30, 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 
programs.

Earnings before interest,  taxes, depreciation and  amortization (EBITDA)  was 
positive $3,066,000 for the quarter ended June 30, 2013 compared to a positive
EBITDA of $1,656,000  for the quarter  ended June 30,  2012.  The increase  in 
EBITDA was primarily as a result of current quarter court-awarded interest and
foreign exchange gain.

Cash flows from operating  activities during the quarter  ended June 30,  2013 
utilized $4,347,000 of cash as compared to utilizing $1,469,000 of cash during
the quarter ended June 30, 2012.   The increase in operating cash  utilization 
over the  same  quarter  in  the  prior  year  is  primarily  attributable  to 
recognition of revenues which were funded in a previous period and increase in
other receivables, offset  by collection  of trade accounts  receivable and  a 
number of non-cash  expenses.  The Company  has a working  capital surplus  of 
$31,492,000 as at June 30, 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  June 30, 2013  is 
$53,671,000 (December 31, 2012: $55,375,000).

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 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).

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)

                                           June 30, 2013   December 31, 2012
ASSETS                                                                      
Current assets                                                              
Cash                                          $    2,812          $    2,597
Accounts receivable                                7,977               7,944
Inventories                                       16,564              16,572
Prepayments and other assets                       1,139               1,634
Other receivable                                  29,939              27,391
                                                  58,431              56,138
Non-current assets                                                          
Prepaid rent                                         146                 146
Development costs                                  2,048               2,718
Property, plant and equipment, net                 8,994               9,633
                                                            
Total assets                                      69,619              68,635
                                                                            
LIABILITIES AND EQUITY                                                      
Current liabilities                                                         
Bank indebtedness                                  6,496               2,122
Accounts payable and accrued liabilities           8,558               7,859
Current portion of long-term debt                    862                 692
Preferred shares                                  11,023              10,646
                                                  26,939              21,319
Non-current liabilities                                                     
Deferred gain                                        239                 263
Lease inducement                                     518                 567
Deferred program revenues                         10,424              17,514
Long-term debt                                     3,835               4,300
Warranty provisions                                   85                  85
                                                  42,040              44,048
Equity                                                                      
Capital stock                                     77,672              76,423
Contributed surplus                                3,578               3,539
Deficit                                         (53,671)            (55,375)
                                                  27,579              24,587
                                                            
Total liabilities and equity                      69,619              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)

                                    Three months ended        Six months ended
FOR THE PERIOD ENDED JUNE 30          2013        2012        2013        2012
                                                                      
Revenues                         $  20,492   $  25,192   $  40,438   $  50,198
                                                                      
Cost of sales                       18,101      20,490      34,970      41,215
                                                                      
Gross profit                         2,391       4,702       5,468       8,983
                                                                      
Administrative and general           2,975       4,164       5,476       7,475
expenses
Office equipment depreciation          152         127         288         241
Other operating income             (1,129)           -     (1,129)         (4)
                                                                      
Operating Income                       393         411         833       1,271
                                                                      
Foreign exchange gain              (1,494)       (191)     (1,427)        (79)
Finance costs                          291         589         556       1,186
                                                                      
Income before income tax             1,596          13       1,704         164
                                                                      
Income tax expense                       -           -           -           -
                                                                      
Income and total comprehensive       1,596          13       1,704         164
income for the period
                                                                      
Earnings per share:                                                           
Basic earnings per common             0.01        0.00        0.01        0.00
share
Diluted earnings per common           0.01        0.00        0.01        0.00
share
                                                                      
Basic weighted average number      269,464     204,420     262,221     204,123
of shares outstanding (000's)
                                                                      
Diluted weighted average           271,070     204,420     263,520     204,579
number of shares outstanding
(000's)

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

                                 Three months ended         Six months ended
FOR THE PERIOD ENDED JUNE          2013        2012        2013         2012
30
Cash flows from (used in)                                                   
operating activities
Income before tax             $   1,596   $      13   $   1,704   $      164
  Adjustment for items not                                                  
  affecting cash:
    Accrued interest and            102         335         181          677
    government royalties
    Depreciation                    535         789       1,067        1,556
    Deferred tooling            (5,080)     (3,162)     (9,543)      (6,418)
    revenue amortization
    and reclassification to
    revenue
    Development cost                644         445         980        1,036
    amortization and
    write-off
    Preferred share                 188         188         377          377
    dividends accrued
    Provision for obsolete            -          30       (103)           17
    inventory
    Other items                    (15)        (59)        (22)           38
                                (2,030)     (1,421)     (5,359)      (2,553)
Changes in non-cash working                                                 
capital
  Accounts receivable               333         600         848        2,304
  Inventories                        77       1,381         111        1,207
  Prepayments and other             145         (1)         495         (75)
  assets
  Other receivable              (2,548)           -     (2,548)            -
  Accounts payable and            (324)     (2,028)         690      (2,464)
  accrued liabilities
                                                                   
Net cash from (used in)         (4,347)     (1,469)     (5,763)      (1,581)
operating activities
                                                                            
Cash flows from (used in)                                                   
investing activities
Purchase of equipment             (191)       (134)       (428)        (301)
Payments relating to              (196)       (123)       (310)        (614)
development costs and
tooling
                                                                   
Net cash from (used in)           (387)       (257)       (738)        (915)
investing activities
                                                                            
Cash flows from (used in)                                                   
financing activities
Increase in bank                  2,207           -       4,374            -
indebtedness
Payment of interest               (102)       (243)       (182)        (496)
Repayment of current and          (279)       (276)       (296)        (493)
long-term debt
Proceeds from customer            1,571       2,613       1,571        6,089
funding of program
introduction
Proceeds from issuance of         1,249           -       1,249            -
common shares
                                                                   
Net cash from financing           4,646       2,094       6,716        5,100
activities
                                                                   
Net increase (decrease) in         (88)         368         215        2,604
cash
                                                                   
Cash - Beginning of period        2,900       6,014       2,597        3,778
                                                                   
Cash - End of period              2,812       6,382       2,812        6,382
                                                                              

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        $       $   453      $  3,424          $       $ 
December 31,                 73,251                               (76,016)    1,112
2011
                                                                              
Issue of         3,439,238      168             -             -          -      168
common
shares
                                                                              
Stock based              -        -             -            44          -       44
compensation
expense
                                                                              
Income for               -        -             -             -        164      164
the period
                                                                              
Balance June   205,433,351   73,419           453         3,468   (75,852)    1,488
30, 2012
                                                                              
Balance        254,898,072   76,423             -         3,539   (55,375)   24,587
December 31,
2012
                                                                            
Issue of        25,489,807    1,249             -             -          -    1,249
common
shares
                                                                              
Stock-based              -        -             -            39          -       39
compensation
expense
                                                                              
Income for               -        -             -             -      1,704    1,704
the period
                                                                              
Balance June   280,387,879   77,672             -         3,578   (53,671)   27,579
30, 2013
                                                                              
                                                                              

 

SOURCE Avcorp Industries Inc.

Contact:

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