Avcorp announces 2013 First Quarter Financial Results

VANCOUVER, May 9, 2013 /CNW/ - 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 (000's)	255,898	204,890

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 reclassification to revenue	(4,463)	(3,256)
		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)

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

 

 

 

SOURCE: Avcorp Industries Inc.

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