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Avcorp Industries Inc. (the “Company” or “Avcorp”) has announced its financial results for the quarter ended March 31, 2014.
Revenue for the quarter ended March 31, 2014 was $17,551,000 as compared to $19,946,000 for the quarter ended March 31, 2013. Current quarter revenues have decreased relative to same quarter in the previous year primarily as a result of reductions in customer demand due to concerted efforts in inventory reduction and a slowdown in production rates.
Comtek Advanced Structures Ltd. (“Comtek”), a wholly owned subsidiary of Avcorp, generated an 89 per cent increase in the delivered quantity of aircraft composite floor boards to original equipment manufacturers (“OEM”). Additionally, Comtek’s repositioning and introduction of new products has produced a 41 per cent increase in composite floor board sales to airlines.
Aircraft component repairs serviced by Comtek have increased revenues by 9 per cent, as customer loyalty programs commence having a positive impact on sales.
During the quarter ended March 31, 2014, the Company recorded a loss from operations of $1,397,000 on $17,551,000 revenue, as compared to $440,000 operating income on $19,946,000 revenue for the same quarter in the preceding year; and a net loss for the current quarter of $1,242,000 as compared to net income of $108,000 for the quarter ended March 31, 2013. A $376,000 restructuring provision, as well as $1,191,000 expensed as unutilized plant capacity have significantly impacted income for the current quarter.
Cash flows from operating activities during the quarter ended March 31, 2014 utilized $2,304,000 of cash as compared to utilizing $1,416,000 of cash during the quarter ended March 31, 2013. The primary source of cash from operations during the current quarter is from accounts receivable while the utilization of cash from operating activities is primarily attributable to recognition of revenues which were funded in previous quarters. As at March 31, 2014 the Company had $4,058,000 cash on hand (December 31, 2013: $7,012,000).
The Company has a working capital surplus of $12,828,000 as at March 31, 2014 which has decreased from the Dec. 31, 2013 $14,213,000 surplus, as a result of cash utilized in operating activities. The Company’s accumulated deficit as at March 31, 2014 is $58,965,000 (Dec. 31, 2013: $57,723,000).
On April 23, 2014, the Company announced that it has received a Strategic Aerospace and Defence Initiative (“SADI”) Contribution Agreement from the Government of Canada for up to $4.4 million to support development of advanced metal bond manufacturing processes and capabilities. In particular, this SADI supported project will assist Avcorp to undertake specific capability development for large, complex metal bonded structural components, for our customers, including The Boeing Company and Cascade Aerospace.
This project will also support implementation of Lean Manufacturing process improvements and advancements along our Metal Bond Technology Roadmap. This funding support from the Government of Canada will be instrumental in enabling Avcorp to achieve these capability and competitiveness enhancements in a timeframe that meets both the Company’s customers’ requirements and the demands of the market.
