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Share Name | Share Symbol | Market | Type |
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Algae Biosciences Corporation | TSXV:ABV | TSX Venture | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 0 | - |
Velan Inc. (TSE:VLN), a world-leading manufacturer of industrial valves, announced today its financial results for its first quarter ended May 31, 2011. Three months ended May 31 (millions of U.S. dollars, excluding per share amounts) 2011 2010 --------------------------------------------------------------------------- Sales $105.0 $89.7 Gross Profit 21.3 24.3 Gross margin 20.3% 27.1% Net income attributable to Multiple and Subordinate Voting Shares 0.1 4.7 Net income per share - basic and fully diluted 0.01 0.21 Highlights First Quarter 2012 (all comparisons versus first quarter fiscal 2011, unless otherwise noted): -- Acquisition of 70% of ABV Energy S.p.A., now Velan ABV ("ABV"), an Italian manufacturer of engineered valves, actuators and control systems supplied to energy markets. -- Net income attributable to Multiple and Subordinate Voting Shares amounted to $0.1 million. Excluding ABV, the effects of purchase price accounting and unfavourable currency impacts, net income would have been $1.7 million in the quarter. The unfavourable currency impacts in the current quarter are mainly the result of translating the Company`s Canadian dollar expenses into U.S. dollars. Net income was $4.7 million last year; excluding currency benefits, primarily attributable to gains on foreign currency derivatives, net income last year would have been $2.0 million. -- Net new orders received ("bookings) increased by $68.7 million or 101.0% to $136.8 million. Excluding the impact of ABV and currency; the increase would have been $21.2 million or 22.2%. The Company booked a significant amount of project orders during the quarter which it believes may be indicative of a strengthening in its key end user markets. The Company ended the quarter with a record backlog of $600.0 million, $575.0 million excluding ABV. -- Sales increased by $15.4 million or 17.1%. Excluding ABV, sales increased $11.3 million or 12.6%. -- Gross margin decreased by 6.8%. Excluding ABV and currency impacts, gross margin would have decreased by 0.2%. -- The Company used net cash(1)from operations of $1.5 million. This use of net cash(1)was primarily attributable to increased inventory purchases, required to service the Company's growing backlog. -- Net cash(1)at quarter end amounted to $63.8 million; a decrease of $49.8 million during the quarter primarily attributable to the $37.2 million of net cash(1)paid to acquire ABV. -- Based on average exchange rates, the U.S. dollar weakened 5.4% against the Canadian dollar when compared to the same period last year. This weakening resulted in the Company`s Canadian dollar expenses being reported as higher U.S. dollar amounts in the current year. International Financial Reporting Standards "IFRS" The Company's quarterly results are prepared in accordance with Canadian Generally Accepted Accounting Principles ("GAAP") which now reflects the adoption of IFRS. Adopting IFRS resulted in the Company changing its functional currency from Canadian dollars to U.S. dollars. Additionally, the Company elected to change its reporting currency to the U.S. dollar. This change has been consistently applied to all financial information presented in this press release, unless otherwise stated. "This was a challenging quarter. Despite increase in sales, bookings and backlog, our net earnings were down compared to last year," said Tom Velan, President and CEO of Velan Inc. "Faced with significant material cost increases, we have been raising our selling prices. For some of our product lines we still face lower margins due to a combination of material cost increases and the increase in all our Canadian costs in relation to our US dollar selling prices. The weakness of the US dollar is an important concern for us as it results in higher material costs and lower margins in all our plants that produce in a country with strengthening currency but sell mainly in US dollars. We need to raise our margin by increasing volume as well as continuing to make selective price increases to cover cost increases." "The increases in bookings, backlog and sales are good indications of an improving global market for our products. We are starting our second quarter with the highest backlog in our history and the challenge we faced last year due to not enough orders has changed to the challenge of producing our orders as quickly and profitably as possible." "The acquisition of ABV is a great opportunity to help grow our sales and earnings over the coming years. In the shorter term, purchase price accounting, whereby part of goodwill is attributed to the assets (including inventory), will reduce the contribution to our results. We are happy to see bookings of $8.1 million during the first month of our acquisition and we continue to be optimistic about the sales growth potential for Velan ABV." "We are pleased to have maintained a solid balance sheet," said John Ball, CFO of Velan Inc., "and end the quarter with net cash(1)of $63.8 million after having acquired ABV. We used cash in operating activities this quarter as we needed to increase our inventory in relation to our growing backlog." Tom Velan concluded, "We are encouraged by the positive trend in bookings and backlog. We are continuing to take measures to broaden our product offering, to improve our cost competitiveness, and to strengthen our presence in international markets in order to improve our long-term performance and increase the value of our company. In the shorter-term, we are focused on improved execution of our large project order backlog to increase sales and improve earnings." (1)Non-GAAP measure - see explanation below Dividend The Board declared an eligible quarterly dividend of Canadian dollar $0.08 per share, payable on September 30, 2011, to all shareholders of record as at September 15, 2011. Annual General Meeting Velan Inc. will be holding its Annual General Meeting at 11:00 a.m. on Wednesday, August 3, 2011, at the Delta Centre-Ville, 777 University Street, St. Jacques room, Montreal, Quebec. Conference Call Financial analysts, shareholders, and other interested individuals are invited to attend the first quarter conference call to be held on August 2, 2011, at 4:30 PM (EST). The toll free call-in number is 1-800-268-2160, access code 21532681. A recording of this conference call will be available for seven days at 1-416-626-4100 or 1-800-558- 5253, access code 21532681. About Velan Velan Inc. (www.velan.com) is a world-leading manufacturer of industrial valves with sales of $381 million in its last reported fiscal year. The company employs over 1,800 people and has manufacturing plants in 10 countries. Velan Inc. is a public company with its shares listed on the Toronto Stock Exchange under the symbol VLN. Safe Harbour Statement Except for historical information provided herein, this press release may contain information and statements of a forward-looking nature concerning the future performance of the Company. These statements are based on suppositions and uncertainties as well as on management's best possible evaluation of future events. Such factors may include, without excluding other considerations, fluctuations in quarterly results, evolution in customer demand for the Company's products and services, the impact of price pressures exerted by competitors, and general market trends or economic changes. As a result, readers are advised that actual results may differ from expected results. Non-GAAP measures In this press release, the Company presented measures of performance and financial condition which are not defined under Canadian GAAP ("non-GAAP measures") and are therefore unlikely to be comparable to similar measures presented by other companies. These measures are used by management in assessing the operating results and financial condition of the Company. Net cash is defined as cash and cash equivalents plus short-term investments less bank indebtedness and short- term bank loans. VELAN INC. SELECTED FINANCIAL INFORMATION Reconciliation of Net Income from Canadian GAAP to IFRS: ----------------------------------------------------- February 28 May 31 (In thousands of indicated currency) 2011 2010 $ $ Net Income - GAAP in Canadian dollars 5,810 1,074 ----------------------- Net Income - GAAP in U.S. dollars 5,665 1,057 IFRS Adjustments to net income in U.S. dollars: Change of functional currency to U.S. dollar 14,819 4,022 Reclassification of Non-controlling Interest 775 322 Income taxes - tax effect of above differences 740 (381) ----------------------- Net Income - IFRS in U.S. dollars 21,999 5,020 ----------------------- Reconciliation of Comprehensive Income from Canadian GAAP to IFRS: ----------------------------------------------------- February 28 May 31 (In thousands of indicated currency) 2011 2010 $ $ Comprehensive Income - GAAP in Canadian dollars 1,976 (5,950) ----------------------- Comprehensive Income - GAAP in U.S. dollars 1,907 (5,811) IFRS Adjustments to comprehensive income in U.S. dollars: Change of functional currency to U.S. dollar 21,091 3,374 Realized translation adjustment on reduction of net investment in self-sustaining operations (239) - Income taxes - tax effect of above differences 740 (381) ----------------------- Comprehensive Income - IFRS in U.S. dollars 23,499 (2,818) ---------------------- Reconciliation of Equity from Canadian GAAP to IFRS:: ---------------------------------------- February 28 May 31, March 1, (In thousands of indicated currency) 2011 2010 2010 $ $ $ Equity - GAAP in Canadian dollars 340,627 338,463 346,184 ----------------------------------- Equity - GAAP in U.S. dollars 350,265 324,374 328,682 IFRS Adjustments to Equity in U.S. dollars: Change of functional currency to U.S. dollar (19,794) (13,292) (13,469) Reclassification of non-controlling interest 4,025 5,162 4,954 Income taxes - tax effect of above differences 3,227 2,021 2,439 ----------------------------------- Equity - IFRS in U.S. dollars 337,723 318,265 322,606 ----------------------------------- Velan Inc. Interim Consolidated Statements of Income (Unaudited) (in thousands of U.S. dollars, excluding number of shares and per share amounts) --------------------------------------------------------------------------- For the three months ended May 31 2011 2010 $ $ (adjusted) Sales 105,023 89,670 Cost of sales 83,761 65,377 ------------------------ Gross profit 21,262 24,293 Administration cost 20,649 17,677 Other expense (income) 124 109 ------------------------ Operating profit 489 6,507 Finance income 119 19 Finance costs 317 187 ------------------------ Finance income (costs) - net (198) (168) ------------------------ Income before income tax 291 6,339 Income tax expense (recovery) (50) 1,319 ------------------------ Net income for the period 341 5,020 ------------------------- ------------------------- Net income attributable to: Subordinate Voting Shares and Multiple Voting Shares 147 4,698 Non-controlling interest 194 322 341 5,020 ------------------------ Net income per Subordinate and Multiple Voting Share Basic 0.01 0.21 Diluted 0.01 0.21 ========================- Dividends declared per Subordinate and Multiple Voting Share 0.08 0.08 (CDN$0.08) (CDN$0.08) ------------------------- ------------------------- Total weighted average Subordinate and Multiple Voting Shares Basic 22,194,014 22,230,086 Diluted 22,245,063 22,283,738 ------------------------- ------------------------- Velan Inc. Interim Consolidated Statements of Comprehensive Income (Unaudited) (in thousands of U.S. dollars) ---------------------------------------------------------------------------- For the three months ended May 31 2011 2010 $ $ (adjusted) Comprehensive income Net income for the period 341 5,020 Other comprehensive income (loss), net of tax Foreign currency translation adjustment on foreign operations whose functional currency is other than the U.S. dollar 2,814 (7,630) ----------------------- Comprehensive income 3,155 (2,610) ----------------------- ----------------------- Comprehensive income attributable to: Subordinate Voting Shares and Multiple Voting Shares 3,285 (2,818) Non-controlling interest (130) 208 ----------------------- 3,155 (2,610) ----------------------- Velan Inc. Interim Consolidated Statements of Financial Position (Unaudited) (in thousands of U.S. dollars) --------------------------------------------------------------------------- As At May 31, February 28, March 1, 2011 2011 2010 $ $ $ (adjusted) (adjusted) Assets Current assets Cash and cash equivalents 73,790 119,996 101,691 Short-term investments 124 87 295 Accounts receivable 104,749 94,495 86,756 Income taxes recoverable 7,403 5,007 3,301 Inventories 235,529 205,334 190,031 Deposits and prepaid expenses 3,544 3,875 5,672 Derivative assets 1,799 3,329 4,042 -------------------------------------- 426,938 432,123 391,788 Non-current assets Property, plant and equipment 73,667 65,559 64,697 Other assets 1,367 1,391 1,388 Intangible assets 63,399 10,720 10,616 Deferred income taxes 6,222 6,244 5,545 -------------------------------------- 144,655 83,914 82,246 -------------------------------------- Total assets 571,593 516,037 474,034 -------------------------------------- -------------------------------------- Liabilities Current liabilities Bank indebtedness 7,987 5,634 2,500 Short-term bank loans 2,153 822 791 Accounts payable and accrued liabilities 82,978 65,329 63,897 Income tax payable 1,861 1,832 4,505 Dividend payable 1,833 1,830 1,689 Customer deposits 73,492 73,054 55,403 Provisions 4,328 4,288 2,973 Accrual for performance guarantees 17,066 13,354 7,955 Derivative liabilities 994 447 1,077 Current portion of long-term debt 2,993 603 44 -------------------------------------- 195,685 167,193 140,834 Non-current liabilities Long-term debt 4,657 4,408 3,768 Other long-term liabilities 16,189 6,656 6,702 Deferred income taxes 7,665 57 124 -------------------------------------- 28,511 11,121 10,594 -------------------------------------- Total liabilities 224,196 178,314 151,428 -------------------------------------- Equity Equity attributable to the owners of the parent Share capital 79,251 79,271 79,651 Contributed surplus 1,898 1,898 1,936 Retained earnings 248,568 250,254 236,065 Accumulated other comprehensive loss 5,413 2,275 - -------------------------------------- 335,130 333,698 317,652 Non-controlling interest 12,267 4,025 4,954 -------------------------------------- Total shareholders' equity 347,397 337,723 322,606 -------------------------------------- Total liabilities and shareholders' equity 571,800 516,037 474,034 -------------------------------------- -------------------------------------- Velan Inc. Interim Consolidated Statements of Changes in Equity (Unaudited) (in thousands of U.S. dollars) Equity attributable to the owners of the parent --------------------------------------------------------- Accumu- lated other Contri- compre- Number of Share buted hensive Retained shares capital surplus income earnings Total --------------------------------------------------------- Balance - Beginning of period (adjusted) 22,195,568 79,271 1,898 2,275 250,254 333,698 Net income for the period - - - - 147 147 Other comprehensive income (loss) - - - 3,138 - 3,138 --------------------------------------------------------- 22,195,568 79,271 1,898 5,413 250,401 336,983 Effect of share- based compensation - - 9 - - 9 Dividends Multiple Voting Shares - - - - (1,286) (1,286) Subordinate Voting Shares - - - - (547) (547) Share repurchase (1,900) (20 ) (9) - - (29) Non-controlling interest arising on acquisition - - - - - - --------------------------------------------------------- --------------------------------------------------------- As at May 31, 2011 22,193,668 79,251 1,898 5,413 248,568 335,130 --------------------------------------------------------- --------------------------------------------------------- Equity attributable to the owners of the parent --------------------- Non- control- ling Total interest equity ---------------------- Balance - Beginning of period (adjusted) 4,025 337,723 Net income for the period 194 341 Other comprehensive income (loss) (324) 2,814 ---------------------- 3,895 340,878 Effect of share- based compensation - 9 Dividends Multiple Voting Shares - (1,286) Subordinate Voting Shares - (547) Share repurchase - (29) Non-controlling interest arising on acquisition 8,372 8,372 =====================- As at May 31, 2011 12,267 347,397 =====================- Equity attributable to the owners of the parent -------------------------------------------------------- Accumu- lated other Contri- comprehe Number of Share buted nsive Retained shares capital surplus income earnings Total -------------------------------------------------------- Balance - Beginning of period (adjusted) 22,230,468 79,651 1,936 - 236,065 317,652 Net income for the period - - - - 4,698 4,698 Other comprehensive income (loss) - - - (7,516) - (7,516) -------------------------------------------------------- 22,230,468 79,651 1,936 (7,516) 240,763 314,834 Effect of share- based compensation - - 15 - - 15 Dividends Multiple Voting Shares - - - - (1,217) (1,217) Subordinate Voting Shares - - - - (522) (522) Share repurchase (500) (5) (2) - - (7) -------------------------------------------------------- As at May 31, 2010 (adjusted) 22,229,968 79,646 1,949 (15,032) 239,024 305,587 -------------------------------------------------------- -------------------------------------------------------- Equity attributable to the owners of the parent ----------------------------------------------------- Non- Contri- control- Number of Share buted ling shares capital surplus interest Total equity ------------------------------------------------------ Balance - Beginning of period (adjusted) 22,230,468 79,651 1,936 4,954 322,606 Net income for the period - - - 322 5,020 Other comprehensive income (loss) - - - (114) (7,630) ------------------------------------------------------ 22,230,468 79,651 1,936 5,162 319,996 Effect of share- based compensation - - 15 - 15 Dividends Multiple Voting Shares - - - - (1,217) Subordinate Voting Shares - - - - (522) Share repurchase (500) (5) (2) - (7) ------------------------------------------------------ As at May 31, 2010 (adjusted) 22,229,968 79,646 1,949 5,048 310,635 ------------------------------------------------------ ------------------------------------------------------ Velan Inc. Interim Consolidated Statements of Cash Flows (Unaudited) (in thousands of U.S. dollars) --------------------------------------------------------------------------- For the three months ended May 31 2011 2010 $ $ (adjusted) Cash flows from Operating activities 341 5,020 Net income for the period Adjustments to reconcile net profit to cash provided operating activities Amortization of property, plant and equipment 2,251 2,334 Amortization of intangible assets 460 - Deferred income taxes (60) 773 Share-based compensation expense 9 15 Loss (Gain) on disposal of property, plant and equipment 19 (4) Amortization of present value discount on other long-term liabilities 106 - Net change in other long-term liabilities 115 (546) ---------------------------- 3,241 7,592 ---------------------------- Changes in non-cash working capital items Accounts receivable 299 14,881 Inventories (12,549) 2,091 Income taxes recoverable (2,141) 287 Deposits and prepaid expenses 879 283 Accounts payable and accrued liabilities 6,929 (3,696) Income taxes payable (452) (1,269) Customer deposits (1,530) (3,967) Provisions and accrual for performance guarantees 3,797 (905) ---------------------------- (4,768) 7,705 ---------------------------- Cash provided (used) by operating activities (1,527) 15,297 ---------------------------- Investing activities Short-term investments (37) (15) Additions to property, plant and equipment (4,480) (1,947) Proceeds on disposal of property, plant and equipment 8 142 Net change in other assets 27 (42) Business acquisition - net of cash acquired (37,281) - ---------------------------- Cash provided (used) by investing activities (41,763) (1,862) ---------------------------- Financing activities Dividends (1,830) (1,724) Repurchase of shares (29) (7) Short-term bank loans (3,536) (3) Repayment of long-term debt (52) (19) ---------------------------- Cash provided (used) by investing activities (5,447) (1,753) ---------------------------- Effect of exchange rate differences on cash 178 (3,044) ---------------------------- Net change in cash during the period (48,559) 8,638 Net cash - Beginning of period 114,362 99,191 ---------------------------- Net cash - End of period 65,803 107,829 ---------------------------- ---------------------------- Net cash is composed of: Cash and cash equivalents 73,790 109,659 Bank indebtedness (7,987) (1,830) ---------------------------- 65,803 107,829 ---------------------------- ---------------------------- Supplementary information Interest received (paid) (51) (59) Income taxes received (paid) (2,451) (959)
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