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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Avcorp Industries Inc | TSX:AVP | Toronto | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.105 | 0.105 | 0.11 | 0 | 01:00:00 |
VANCOUVER, April 1, 2019 /CNW/ - Avcorp Industries Inc. (TSX: AVP) (the "Company", "Avcorp" or the "Avcorp Group") today announced its financial results for the year ended December 31, 2018. All amounts are in Canadian currency unless otherwise stated.
2018 Highlights
Key fiscal year 2018 financial results include:
Highlights Subsequent to Year-End
Since December 31, 2018 key developments include:
Review of 2018 Financial Results
For the year ended December 31, 2018, the Avcorp Group recorded income from operations totaling $26,917,000 from $170,710,000 revenue, as compared to $53,773,000 operating losses from $149,444,000 revenue for the previous year. It should be noted that 2018 operating income benefited by $13,732,000 income from amortization of an unfavourable contract liability and onerous contracts provision into income (December 31, 2017: $4,545,000 reduction in operating income). During the third quarter 2018 production of a certain unfavourable contract was modified after the customer stopped issuing purchase orders to the Company and redirected production requirements to another supplier, giving rise to the full amortization of the unfavourable contracts liability and related onerous contract provision into income. This has been recorded in Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) as a contract modification in the amount of $41,470,000. On August 20, 2018, the Company entered into a settlement agreement with a customer, in the amount of $2,219,000, which provided the Company a net settlement in satisfaction of existing and potential claims, causes of action, and disputes between the Company and its customer. Increased sales and continued consolidation of operating costs have resulted in reduced current year operating losses, in comparison to 2017 after the benefit of amortization to income of unfavourable contracts liability and onerous contracts provisions, and the income impact of a claim settlement and contract modification, have been removed.
During the year ended December 31, 2018, cash flows from operating activities, excluding the impact of changes in non‑cash working capital, utilized $11,632,000 of cash as compared with utilization of $42,257,000 of cash during the year ended December 31, 2017; a significant improvement, primarily attributable to a reduction in operating losses during 2018 in comparison to 2017.
As at December 31, 2018, the Company had $2,051,000 cash on hand (December 31, 2017: $5,212,000) and had utilized $85,840,000 of its operating line of credit (December 31, 2017: $61,283,000). The Company has a working capital deficit of $71,503,000 as at December 31, 2018 which has increased from the December 31, 2017 $63,038,000 deficit. Working capital surplus/deficit is defined as the difference between current assets and current liabilities. However, the Company's accounts receivable, contract assets, and inventories net of accounts payable, amount to a $22,000,000 surplus as at December 31, 2018 (December 31, 2017: $38,464,000 surplus). The Company's accumulated deficit as at December 31, 2018 is $132,878,000 (December 31, 2017: $157,185,000).
About Avcorp
The Avcorp Group designs and builds major airframe structures for some of the world's leading aircraft companies, including BAE Systems, Boeing, Bombardier, Lockheed Martin and Subaru Corporation. The Avcorp Group has more than 60 years of experience, over 650 skilled employees and 636,000 square feet of facilities. Avcorp Structures & Integration located in Delta British Columbia, Canada is dedicated to metallic and composite aerostructures assembly and integration; Avcorp Engineered Composites located in Burlington Ontario, Canada is dedicated to design and manufacture of composite aerostructures, and Avcorp Composite Fabrication located in Gardena California, USA has advanced composite aerostructures fabrication capabilities for composite aerostructures. The Avcorp Group 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. Comtek Advanced Structures Ltd., at our Burlington, Ontario, Canada location also provides aircraft operators with aircraft structural component repair services for commercial aircraft.
Avcorp Composite Fabrication Inc. is wholly owned by Avcorp US Holdings Inc. Both companies are incorporated in the State of Delaware, USA, and are wholly owned subsidiaries of Avcorp Industries Inc.
Comtek Advanced Structures Ltd., incorporated in the Province of Ontario, Canada, is a wholly owned subsidiary of Avcorp Industries Inc.
Avcorp Industries Inc. is a federally incorporated reporting company in Canada and traded on the Toronto Stock Exchange (TSX:AVP).
(signed)
AMANDEEP KALER
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) changes in worldwide economic and political conditions that impact interest and foreign exchange rates; (b) the occurrence of work stoppages and strikes at key facilities of the Corporation or the Corporation's customers or suppliers; (c) government funding and program approvals affecting products being developed or sold under government programs; (d) cost and delivery performance under various program and development contracts; (e) the adequacy of cost estimates for various customer care programs including servicing warranties; (f) the ability to control costs and successful implementation of various cost reduction programs; (g) the timing of certifications of new aircraft products; (h) the occurrence of downturns in customer markets to which the Corporation products are sold or supplied or where the Corporation offers financing; (i) changes in aircraft delivery schedules or cancellation of orders; (j) the Corporation's ability to offset, through cost reductions, raw material price increases and pricing pressure brought by original equipment manufacturer customers; (k) the availability and cost of insurance; (l) the Corporation's ability to maintain portfolio credit quality; (m) the Corporation's access to debt financing at competitive rates; (n) uncertainty in estimating contingent liabilities and establishing reserves tailored to address such contingencies; and (o) integration of newly acquired operations and associated expenses may adversely affect profitability.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(expressed in thousands of Canadian dollars)
AS AT DECEMBER 31 | 2018 | 2017 |
ASSETS | ||
Current assets | ||
Cash | $2,051 | $5,212 |
Accounts receivable | 23,442 | 18,942 |
Contract assets | 24,762 | - |
Inventories | 15,601 | 42,781 |
Prepayments and other assets | 6,076 | 4,390 |
71,932 | 71,325 | |
Non-current assets | ||
Prepaid rent and security | 146 | 146 |
Development costs | 11,755 | 8,623 |
Property, plant and equipment | 28,416 | 29,318 |
Intangibles | 3,137 | 3,864 |
Investment in AVS-SYS | 682 | - |
Total assets | 116,068 | 113,276 |
LIABILITIES AND EQUITY | ||
Current liabilities | ||
Bank indebtedness | 85,840 | 61,283 |
Accounts payable and accrued liabilities | 41,805 | 23,259 |
Current portion of term debt | 5,510 | 1,285 |
Customer advance | 6,334 | 7,227 |
Contract liability | 2,137 | 17,131 |
Unfavourable contracts liability | - | 16,881 |
Onerous contract provision | 1,809 | 7,297 |
143,435 | 134,363 | |
Non-current liabilities | ||
Guarantee fee | 2,994 | 575 |
Deferred gain and lease inducement | - | 100 |
Term debt | 2,800 | 1,885 |
Contract liability | 2,862 | 110 |
Unfavourable contracts liability | - | 27,579 |
Onerous contract provision | 121 | 6,069 |
152,212 | 170,681 | |
(Deficiency) Equity | ||
Capital stock | 86,219 | 82,905 |
Contributed surplus | 5,370 | 6,979 |
Accumulated other comprehensive income | 5,145 | 9,896 |
Accumulated deficit | (132,878) | (157,185) |
(36,144) | (57,405) | |
Total liabilities and (deficiency) equity | 116,068 | 113,276 |
CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)
(expressed in thousands of Canadian dollars, except number of shares and per share amounts)
AS AT DECEMBER 31 | 2018 | 2017 |
Revenues | $170,710 | $149,444 |
Cost of sales | 155,753 | 181,296 |
Gross profit (loss) | 14,957 | (31,852) |
Administrative and general expenses | 23,466 | 21,580 |
Office equipment depreciation | 623 | 341 |
Net contract modification | (41,470) | - |
Net claim position | 5,421 | - |
Operating income (loss) | 26,917 | (53,773) |
Finance costs – net | 5,774 | 2,806 |
Foreign exchange loss | 770 | 1,944 |
Net loss on sale of equipment | - | 15 |
Income (loss) before income tax | 20,373 | (58,538) |
Income tax expense | - | - |
Income (loss) for the period | 20,373 | (58,538) |
Other comprehensive (loss) income | (4,751) | 5,178 |
Net income (loss) and total comprehensive income (loss) for the period | 15,622 | (53,360) |
Income (loss) per share: | ||
Basic income (loss) per common share | 0.06 | (0.18) |
Diluted income (loss) per common share | 0.06 | (0.18) |
Basic weighted average number of shares outstanding (000's) | 345,651 | 318,019 |
Diluted weighted average number of shares outstanding (000's) | 345,993 | 318,019 |
CONSOLIDATED STATEMENTS OF CASH FLOWS
(expressed in thousands of Canadian dollars)
AS AT DECEMBER 31 | 2018 | 2017 |
Cash flows (used in) operating activities | ||
Net income (loss) for the year | $20,373 | $(58,538) |
Adjustment for items not affecting cash: | ||
Interest expense | 5,765 | 2,216 |
Depreciation | 4,482 | 4,153 |
Development cost amortization | 3,291 | 1,924 |
Intangible assets amortization | 1,379 | 1,299 |
Non-cash financing cost accretion | 9 | 589 |
Loss on disposal of equipment | - | 15 |
Provision for unfavourable contracts | (4,617) | (9,058) |
Provision for onerous contracts | (9,115) | 13,603 |
Provision for doubtful accounts | 543 | 921 |
Provision for obsolete inventory | (928) | (678) |
Stock based compensation | (445) | 720 |
Net contract modification | (41,470) | - |
Provision for claim | 7,640 | - |
Unrealized foreign exchange | 1,558 | 712 |
Other items | (97) | (135) |
Cash flows (used in) operating activities before changes in non-cash working capital | (11,632) | (42,257) |
Changes in non-cash working capital | ||
Accounts receivable | (2,922) | 6,546 |
Contract assets | (6,108) | - |
Inventories | 2,509 | 869 |
Prepayments and other assets | (805) | (693) |
Accounts payable and accrued liabilities | 9,820 | (6,636) |
Customer advance payable | (2,660) | (3,702) |
Contract liability | (4,231) | 3,269 |
Net cash (used in) operating activities | (16,029) | (42,604) |
Cash flows (used in) from investing activities | ||
Proceeds from consideration receivable | - | 12,378 |
Proceeds from sale of equipment | - | 20 |
Purchase of equipment | (1,429) | (2,744) |
Addition of developed software | (371) | (571) |
Payments relating to development costs and tooling | (6,410) | (5,347) |
Investment in AVS-SYS | (551) | - |
Net cash (used in) from investing activities | (8,761) | 3,736 |
Cash flows from (used in) financing activities | ||
Increase in bank indebtedness | 17,961 | 46,872 |
Payment of interest | (2,862) | (1,331) |
Proceeds from term debt | 6,601 | 1,473 |
Repayment of term debt | (294) | (6,275) |
Net cash from financing activities | 21,406 | 40,739 |
Net (decrease) increase in cash | (3,384) | 1,871 |
Net foreign exchange difference | 223 | (619) |
Cash - Beginning of the period | 5,212 | 3,960 |
Cash - End of the period | 2,051 | 5,212 |
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(expressed in thousands of Canadian dollars, except number of shares)
Capital Stock | ||||||
Number | Amount | Contributed | Accumulated | Accumulated | Total | |
Balance at December 31, 2016 | 307,141,184 | 80,302 | 6,744 | (98,647) | 4,718 | (6,883) |
Issue of common shares | 30,263,318 | 2,118 | - | - | - | 2,118 |
Transfer to share capital on exercise of warrants | - | 485 | (485) | - | - | - |
Stock-based compensation expense | - | - | 718 | - | - | 718 |
Cancellation of issued stock options | - | - | 2 | - | - | 2 |
Unrealized currency gain on translation for the period | - | - | - | - | 5,178 | 5,178 |
Net loss for the year | - | - | - | (58,538) | - | (58,538) |
Balance at December 31, 2017 | 337,404,502 | 82,905 | 6.979 | (157,185) | 9,896 | (57,405) |
Restated balance at January 1, 20181 | 337,404,502 | 82,905 | 6,979 | (153,251) | 9,896 | (53,471) |
Issue of common shares | 30,714,118 | 2,150 | - | - | - | 2,150 |
Transfer to share capital on exercise of warrants | - | 1,164 | (1,164) | - | - | - |
Stock-based compensation expense | - | - | 195 | - | - | 195 |
Forfeiture of issued stock options | - | - | (640) | - | - | (640) |
Unrealized currency loss on translation for the year | - | - | - | - | (4,751) | (4,751) |
Net income for the year | - | - | - | 20,373 | - | 20,373 |
Balance at December 31, 2018 | 368,118,620 | 86,219 | 5,370 | (132,878) | 5,145 | (36,144) |
1. | The Company has initially applied IFRS 15 using the retrospective with cumulative effect method. Under this method, the comparative information is not restated. |
View original content:http://www.prnewswire.com/news-releases/avcorp-announces-2018-annual-financial-results-300821722.html
SOURCE Avcorp Industries Inc.
Copyright 2019 Canada NewsWire
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