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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. (TSX:VLN) (the "Company"), a world-leading manufacturer of industrial valves, announced today its financial results for its second quarter ended August 31, 2013. Highlights -- Record sales of US$120.7 million for the quarter -- Net earnings(1) of US$4.9 million for the quarter -- Order backlog of US$477.3 million at the end of the quarter -- Order bookings of US$92.7 million for the quarter -- Net cash(2) of US$28.5 million at the end of the quarter Three-month periods ended Six-month periods ended August 31 August 31 ---------------------------------------------------- (millions of U.S. dollars, excluding per share amounts) 2013 2012 2013 2012 ---------------------------------------------------- Sales $120.7 $108.4 $252.9 $224.3 Gross profit 30.1 26.0 60.8 50.1 Gross margin % 24.9% 24.0% 24.0% 22.3% Net income (loss) attributable to Subordinate and Multiple Voting Shares 4.9 3.3 10.7 4.0 Net income (loss) per share - Basic 0.23 0.15 0.49 0.18 - Diluted 0.23 0.15 0.49 0.18 Second Quarter Fiscal 2014 (unless otherwise noted, all amounts are in U.S. dollars and all comparisons are to the second quarter of fiscal 2013): -- Net earnings(1) amounted to $4.9 million or $0.23 per share compared to $3.3 million or $0.15 per share last year. The $1.6 million increase in net earnings(1) is primarily attributable to higher sales volume and improved gross profit margins. -- Sales amounted to $120.7 million, an increase of $12.3 million or 11.3%. The amount of sales for the current quarter is the highest amount ever recorded for an August quarter end in the Company's history. -- Net new orders received ("bookings") amounted to $92.7 million, an increase of $0.3 million or 0.3% compared to last year. -- Gross margin increased by 0.9 percentage points from 24.0% to 24.9%. This increase is mainly attributable to the higher sales volume. -- Administration costs remained relatively even at $21.4 million, increasing $0.4 million or 1.9% from the prior year. First Half Year Fiscal 2014 (unless otherwise noted, all comparisons are to the first half year of fiscal 2013): -- Net earnings(1) amounted to $10.7 million or $0.49 per share compared to $4.0 million or $0.18 per share last year. The $6.7 million increase in net earnings(1) is primarily attributable to higher sales volume, improved gross profit margins and lower administration costs. -- Sales amounted to $252.9 million, an increase of $28.6 million or 12.8%. The increase in sales is primarily attributable to increased shipments of certain large export project orders and higher spare parts sales. -- Bookings amounted to $199.4 million, an increase of $9.3 million or 4.9% compared to last year. -- The Company ended the period with a backlog of $477.3 million, a decrease of $53.7 million or 10.1% since the beginning of the current fiscal year. This decrease is mainly attributable to the higher sales output outpacing the higher bookings in the period. -- Gross margin increased by 1.7 percentage points from 22.3% to 24.0%. This increase is mainly attributable to higher sales volume and improved efficiencies as a result of a higher margin product mix. -- Administration costs amounted to $43.1 million, a decrease of $1.8 million or 4.0%. The decrease is primarily attributable to a decrease in sales commissions and a decrease in costs recognized in connection with the Company's ongoing asbestos litigation. The fluctuation in asbestos costs is due more to the timing of settlement payments in the two periods rather than to changes in long-term trends. -- The Company generated net cash(2) from operations of $23.4 million in the period. This source of net cash(2) was primarily attributable to improved net earnings(1) and a decrease in inventory. The Company ended the period with net cash(2) of $28.5 million, an increase of $8.7 million or 43.9% since the beginning of the current fiscal year. -- Foreign currency impacts: -- Based on average exchange rates, the euro strengthened 2.9% against the U.S. dollar when compared to the same period last year. This strengthening resulted in the Company's net profits from its European subsidiaries being reported as higher U.S. dollar amounts in the current period. -- Based on average exchange rates, the Canadian dollar weakened 2.4% against the U.S. dollar when compared to the same period last year. This weakening resulted in the Company's Canadian dollar expenses being reported as lower U.S. dollar amounts in the current period. -- The Indian rupee weakened 17.3% against the U.S. dollar when comparing the spot rate at the beginning of the period to the period end rate. This weakening resulted in the Company recording significant unrealized foreign exchange losses in the current period upon conversion of the U.S. dollar denominated loans payable by its Indian subsidiary to various related parties. -- The net impact of these three currency swings was generally favourable to the Company's results since the positive impacts of both a stronger euro and a weaker Canadian dollar outweighed the negative impact of a weaker Indian rupee. The Company is continuing with the business integration process at its Italian subsidiary, Velan ABV S.p.A. ("ABV"). As part of this process, the Company effectively increased its ownership percentage to 100% through a recapitalization of ABV's corporate structure during the current quarter. "We are pleased by the continued strong sales and margin results in our second quarter, due in part to the shipment of some large projects from prior years," said John Ball, CFO of Velan Inc. "We are watching the rate of new order bookings which has not kept pace with our sales this year, and are focused on developing our backlog so as to maintain momentum for next year." Tom Velan, President and CEO of Velan Inc. said, "We continued the positive trend from our first quarter. We had record sales for this quarter and net earnings(1) were up 47.3% from the same quarter last year. Our sales continued to outpace our bookings so our backlog is down under $500 million. We are intensifying our efforts to improve our bookings, especially on international projects." Dividend The Board declared an eligible quarterly dividend of Canadian dollar $0.08 per share, payable on December 31, 2013, to all shareholders of record as at December 16, 2013. Conference call Financial analysts, shareholders, and other interested individuals are invited to attend the second quarter conference call to be held on October 9, 2013, at 4:30 PM (EDT). The toll free call-in number is 1-877-256-6025, access code 21675768. A recording of this conference call will be available for seven days at 1-416-626-4100 or 1-800-558-5253, access code 21675768. About Velan Velan Inc. (www.velan.com) is a world-leading manufacturer of industrial valves with sales of over $500 million in its last reported fiscal year. The Company employs over 2,000 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-IFRS measures In this press release, the Company presented measures of performance and financial condition that are not defined under International Financial Reporting Standards ("non-IFRS 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. In addition, they provide readers of the Company's consolidated financial statements with enhanced understanding of its results and financial condition, and increase transparency and clarity into the operating results of its core business. The term "net cash" is defined as cash and cash equivalents plus short-term investments less bank indebtedness, short-term bank loans, and current portion of long-term bank borrowings. Refer to the "Reconciliations of Non- IFRS Measures" section in the Company's MD&A for a detailed calculation of this measure. (1) Net earnings or loss refer to net income or loss attributable to Subordinate and Multiple Voting Shares. (2) Non-IFRS measures - see explanation above. Velan Inc. Condensed Interim Consolidated Statements of Financial Position (Unaudited) (in thousands of U.S. dollars) ---------------------------------------------------------------------------- As At August 31, February 28, 2013 2013 $ $ Assets Current assets Cash and cash equivalents 74,892 77,172 Short-term investments 2,631 398 Accounts receivable 136,988 134,374 Income taxes recoverable 7,231 7,672 Inventories 224,965 246,983 Deposits and prepaid expenses 6,418 6,048 Derivative assets 191 340 -------------------------------- 453,316 472,987 Non-current assets Property, plant and equipment 91,804 90,630 Intangible assets and goodwill 42,629 43,194 Deferred income taxes 11,104 11,226 Other assets 1,665 1,737 -------------------------------- 147,202 146,787 -------------------------------- Total assets 600,518 619,774 -------------------------------- -------------------------------- Liabilities Current liabilities Bank indebtedness 40,939 48,580 Short-term bank loans 1,283 2,284 Accounts payable and accrued liabilities 67,309 78,431 Income tax payable 5,411 2,831 Dividend payable 1,666 1,701 Customer deposits 65,980 76,682 Provisions 6,992 6,345 Accrual for performance guarantees 31,562 28,525 Derivative liabilities 1,450 1,380 Current portion of long-term debt 10,487 10,463 Current portion of other liabilities - 1,951 -------------------------------- 233,079 259,173 Non-current liabilities Long-term debt 14,407 16,387 Deferred income taxes 7,824 8,035 Other liabilities 8,234 8,006 -------------------------------- 30,465 32,428 -------------------------------- Total liabilities 263,544 291,601 -------------------------------- Equity Equity attributable to the Subordinate and Multiple Voting shareholders Share capital 76,314 76,314 Contributed surplus 6,092 1,746 Retained earnings 257,431 250,129 Accumulated other comprehensive income (loss) (9,055) (8,676) -------------------------------- 330,782 319,513 Non-controlling interest 6,192 8,660 -------------------------------- Total equity 336,974 328,173 -------------------------------- Total liabilities and equity 600,518 619,774 -------------------------------- -------------------------------- Velan Inc. Condensed Interim Consolidated Statements of Income (Loss) (Unaudited) (in thousands of U.S. dollars, excluding number of shares and per share amounts) ---------------------------------------------------------------------------- Three-month periods ended Six-month periods ended August 31 August 31 2013 2012 2013 2012 $ $ $ $ Sales 120,762 108,449 252,930 224,301 Cost of sales 90,685 82,433 192,174 174,173 ---------------------------------------------------- Gross profit 30,077 26,016 60,756 50,128 Administration costs 21,349 21,023 43,097 44,948 Other expense (income) 976 98 1,014 (830) ---------------------------------------------------- Operating profit (loss) 7,752 4,895 16,645 6,010 Finance income 179 160 359 358 Finance costs 610 698 1,156 1,347 ---------------------------------------------------- Finance income (costs) - net (431) (538) (797) (989) ---------------------------------------------------- Income (Loss) before income tax 7,321 4,357 15,848 5,021 Provision for (Recovery of) income tax 2,093 941 4,338 896 ---------------------------------------------------- Net income (loss) for the period 5,228 3,416 11,510 4,125 ---------------------------------------------------- ---------------------------------------------------- Net income (loss) attributable to: Subordinate Voting Shares and Multiple Voting Shares 4,889 3,318 10,689 4,012 Non-controlling interest 339 98 821 113 5,228 3,416 11,510 4,125 ---------------------------------------------------- ---------------------------------------------------- Net income (loss) per Subordinate and Multiple Voting Share Basic 0.23 0.15 0.49 0.18 Diluted 0.23 0.15 0.49 0.18 ---------------------------------------------------- ---------------------------------------------------- Dividends declared per Subordinate and Multiple Voting Share 0.08 0.08 0.16 0.16 (CDN$0.08) (CDN$0.08) (CDN$0.16) (CDN$0.16) ---------------------------------------------------- ---------------------------------------------------- Total weighted average number of Subordinate and Multiple Voting Shares Basic 21,923,768 22,033,577 21,923,768 22,033,577 Diluted 21,935,818 22,038,797 21,935,754 22,043,135 ---------------------------------------------------- ---------------------------------------------------- Velan Inc. Condensed Interim Consolidated Statements of Comprehensive Income (Loss) (Unaudited) (in thousands of U.S. dollars) ---------------------------------------------------------------------------- Three-month periods ended Six-month periods ended August 31 August 31 2013 2012 2013 2012 $ $ $ $ Comprehensive income (loss) Net income (loss) for the period 5,228 3,416 11,510 4,125 Other comprehensive income (loss Foreign currency translation adjustment on foreign operations whose functional currency is other than the U.S. dollar 1,884 1,455 662 (9,004) ---------------------------------------------------- Comprehensive income (loss) 7,112 4,871 12,172 (4,879) ---------------------------------------------------- ---------------------------------------------------- Comprehensive income (loss) attributable to: Subordinate Voting Shares and Multiple Voting Shares 6,701 4,611 11,447 (4,501) Non-controlling interest 411 260 725 (378) ---------------------------------------------------- 7,112 4,871 12,172 (4,879) ---------------------------------------------------- ---------------------------------------------------- Velan Inc. Condensed Interim Consolidated Statements of Changes in Equity (Unaudited) (in thousands of U.S. dollars, excluding number of shares) ---------------------------------------------------------------------------- Equity attributable to the Subordinate and Multiple Voting shareholders -------------------------------------------------------- Accu- mulated other compre- Number Contri- hensive of Share buted income Retained shares capital surplus (loss) earnings Total -------------------------------------------------------- Balance - March 1, 2013 21,923,768 76,314 1,746 (8,676) 250,129 319,513 Net income (loss) for the period - - - - 10,689 10,689 Other comprehensive income (loss) - - - 758 - 758 -------------------------------------------------------- 21,923,768 76,314 1,746 (7,918) 260,818 330,960 Effect of share- based compensation - - 16 - - 16 Dividends Multiple Voting Shares - - - - (2,420) (2,420) Subordinate Voting Shares - - - - (967) (967) Acquisition of non- controlling interest - - 4,330 (1,137) - 3,193 -------------------------------------------------------- Balance - August 31, 2013 21,923,768 76,314 6,092 (9,055) 257,431 330,782 -------------------------------------------------------- -------------------------------------------------------- Balance - March 1, 2012 22,148,968 78,764 1,871 (4,217) 250,951 327,369 Net income (loss) for the period - - - - 4,012 4,012 Other comprehensive income (loss) - - - (8,513) - (8,513) -------------------------------------------------------- 22,148,968 78,764 1,871 (12,730) 254,963 322,868 Effect of share- based compensation - - 29 - - 29 Dividends Multiple Voting Shares - - - - (2,478) (2,478) Subordinate Voting Shares - - - - (1,014) (1,014) Share repurchase (177,200) (1,928) (142) - - (2,070) -------------------------------------------------------- Balance - August 31, 2012 21,971,768 76,836 1,758 (12,730) 251,471 317,335 -------------------------------------------------------- -------------------------------------------------------- Non- controlling Total interest equity -------------------------- Balance - March 1, 2013 8,660 328,173 Net income (loss) for the period 821 11,510 Other comprehensive income (loss) (96) 662 -------------------------- 9,385 340,345 Effect of share- based compensation - 16 Dividends Multiple Voting Shares - (2,420) Subordinate Voting Shares - (967) Acquisition of non- controlling interest (3,193) - -------------------------- Balance - August 31, 2013 6,192 336,974 -------------------------- -------------------------- Balance - March 1, 2012 8,208 335,577 Net income (loss) for the period 113 4,125 Other comprehensive income (loss) (491) (9,004) -------------------------- 7,830 330,698 Effect of share- based compensation - 29 Dividends Multiple Voting Shares - (2,478) Subordinate Voting Shares - (1,014) Share repurchase - (2,070) -------------------------- Balance - August 31, 2012 7,830 325,165 -------------------------- -------------------------- Velan Inc. Condensed Interim Consolidated Statements of Cash Flow (Unaudited) (in thousands of U.S. dollars) ---------------------------------------------------------------------------- Three-month periods ended Six-month periods ended August 31 August 31 2013 2012 2013 2012 $ $ $ $ Cash flows from Operating activities Net income for the period 5,228 3,416 11,510 4,125 Adjustments to reconcile net income to cash provided by operating activities 4,931 1,121 8,251 2,978 Changes in non-cash working capital items (11,421) (9,233) 3,684 (31,002) ---------------------------------------------------- Cash provided (used) by operating activities (1,262) (4,696) 23,445 (23,899) ---------------------------------------------------- Investing activities Short-term investments (1,080) 1,561 (2,233) 2,297 Additions to property, plant and equipment (3,975) (6,830) (8,198) (11,082) Additions to intangible assets (152) (208) (205) (266) Proceeds on disposal of property, plant and equipment, and - 67 87 459 Net change in other assets 87 (10) 72 (144) ---------------------------------------------------- Cash provided (used) by investing activities (5,120) (5,420) (10,477) (8,736) ---------------------------------------------------- Financing activities Dividends paid to Subordinate and Multiple Voting shareholders (1,721) (1,723) (3,422) (3,500) Repurchase of shares - (1,944) - (2,070) Payment of proceeds payable - (2,905) (1,960) (2,905) Short-term bank loans 177 (94) (1,001) 1,103 Increase in long-term debt 1,263 623 2,654 20,715 Repayment of long-term debt (3,124) (292) (4,843) (957) ---------------------------------------------------- Cash provided (used) by financing activities (3,405) (6,335) (8,572) 12,386 ---------------------------------------------------- Effect of exchange rate differences on cash 1,097 (485) 965 (1,269) ---------------------------------------------------- Net change in cash during the period (8,690) (16,936) 5,361 (21,518) Net cash - Beginning of the period 42,643 28,394 28,592 32,976 ---------------------------------------------------- Net cash - End of the period 33,953 11,458 33,953 11,458 ---------------------------------------------------- ---------------------------------------------------- Net cash is composed of: Cash and cash equivalents 74,892 52,155 74,892 52,155 Bank indebtedness (40,939) (40,697) (40,939) (40,697) ---------------------------------------------------- 33,953 11,458 33,953 11,458 ---------------------------------------------------- ---------------------------------------------------- Supplementary information Interest received (paid) (227) (511) (586) (860) Income taxes reimbursed (paid) (1,301) (1,636) (797) (2,975) FOR FURTHER INFORMATION PLEASE CONTACT: Tom Velan President and Chief Executive Officer (514) 748-7743 (514) 748-8635 (FAX) www.velan.com John D. Ball Chief Financial Officer (514) 748-7743 (514) 748-8635 (FAX)
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