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VANCOUVER, BC , Aug. 11, 2022 /PRNewswire/ - Avcorp Industries Inc. (TSX: AVP) (the "Company", "Avcorp" or the "Avcorp Group") today announced its financial results for the quarter ended June 30, 2022 . All amounts are in Canadian currency unless otherwise stated.
Review of 2022 Second Quarter Financial Results
For the quarter ended June 30, 2022 , the Avcorp Group recorded loss from operations of $3,786,000 (June 30, 2021 : $1,978,000 ). Operating loss in the second quarter of 2022 increased in comparison to 2021 by $1,808,000 mainly due to higher administrative and general expenses as a result of transaction related costs and an impairment of assets write-off of $583,000 incurred during the current quarter. The lower loss in 2021 was also supported by the government loan forgiven of $2,195,000 and CEWS of $1,548,000 recognized as other income in the second quarter of 2021. The higher loss in current quarter was partially offset by the higher gross profit of $2,843,000 compared to a gross loss of $706,000 in 2021.
Cash flows from operating activities, before consideration of changes in non-cash working capital, utilized $2,072,000 during the quarter ended June 30, 2022 as compared to utilizing $780,000 cash during the quarter ended June 30, 2021 .
The Company ended the quarter with bank operating line utilization of $77,537,000 (USD $60,171,000 ) offset by $2,013,000 cash compared to utilization of $75,335,000 (USD $59,421,000 ) with $4,060,000 cash on hand as of December 31, 2021 . The bank indebtedness balance of the modification gain and related adjustments as a result of executing the amending agreement in 2021 was $615,000 as at June 30, 2022 (December 31, 2021 , gain of $923,000 ).
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 65 years of experience, over 500 skilled employees and 560,000 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).
AMANDEEP KALER CHIEF EXECUTIVE OFFICER AVCORP GROUP
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (unaudited, expressed in thousands of Canadian dollars)
Accounts payable and accrued liabilities
Accounts payable and accrued liabilities
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF (LOSS) INCOME AND COMPREHENSIVE (LOSS) INCOME (unaudited, expressed in thousands of Canadian dollars, except number of shares and per share amounts)
FOR THE PERIOD ENDED JUNE 30
Net loss on sale of equipment
(Loss) income before income tax
(Loss) income for the period
Total comprehensive (loss) income for the period
Basic (loss) income per common share
Diluted (loss) income per common share
Basic weighted average number of shares outstanding (000's)
Diluted weighted average number of shares outstanding (000's)
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited, expressed in thousands of Canadian dollars)
FOR THE PERIOD ENDED JUNE 30
Cash flows (used in) from operating activities
Net (loss) income for the period
Adjustment for items not affecting cash:
Loss on disposal of equipment
Cash flows used in operating activities before changes in non-cash working capital
Changes in non-cash working capital
Accounts payable and accrued liabilities
Net cash (used in) from operating activities
Cash flows (used in) from investing activities
Proceeds from sale of equipment
Payments relating to development costs and tooling
Net cash used in investing activities
Cash flows (used in) from financing activities
Net cash used in financing activities
Cash - Beginning of the period
Cash - End of the period
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' DEFICIENCY (unaudited, expressed in thousands of Canadian dollars, except number of shares)
Unrealized currency gain on translation for the period
Net income for the period
Unrealized currency loss on translation for the period
Net loss for the period
This press release includes forward-looking statements, which may involve, but are not limited to: statements with respect to our business objectives, prospects, and guidance in respect of various financial and industry metrics, including, goals, strategies, capabilities, market position, competitive strengths, prospects, plans, expectations, anticipations, estimates and intentions; business and economic, industry trends; customer demand for products; order backlog mix; the regulatory environment and legal proceedings; strength of our balance sheet, creditworthiness, capital resources, anticipated financial requirements, productivity enhancements, operational efficiencies, cost reduction and the intended benefits and timing thereof; availability of government assistance programs, compliance with debt covenants; and the impact of the COVID-19 pandemic on the foregoing; expectations regarding gradual market and economic recovery in the aftermath of the COVID-19 pandemic.
Forward-looking statements can generally be identified by the use of forward-looking terminology such as "may", "will", "shall", "can", "expect", "estimate", "intend", "anticipate", "plan", "forecast", "foresee", "believe", "continue", "maintain" or "align", the negative of these terms, variations of them or similar terminology.
Forward-looking statements are presented for the purpose of assisting investors and others in understanding certain key elements of our current objectives, strategic priorities, expectations, outlook, and plans, and to obtain an understanding of our business and anticipated operating environment. Readers are cautioned that such information may not be appropriate for other purposes.
Forward-looking statements require management and the Board to make assumptions and are subject to and unknown risks and uncertainties, which may cause our actual results in future periods to differ materially from forecast results set forth in forward-looking statements and in this press release. While management and the Board consider these assumptions to be reasonable and appropriate based on information currently available, there is risk that they may not be accurate. The assumptions underlying the forward-looking statements made in this press release in relation to the five-year forecast include the following material assumptions: the award and fulfilment of customer contracts that the Company does not currently have in its backlog, the continuation of existing customer programs and anticipated labour costs associated with our operations for the periods covered in the forecast. Additional information, including with respect to other assumptions and risk factors underlying the forward-looking statements made in this press release, refer to the risk factors in both our MD&A, Annual Report and our Annual Information Form for the fiscal year ended December 31, 2021 , and our MD&A and unaudited condensed interim financial statements for the quarter ended June 30, 2022 . Given the impact of the changing circumstances surrounding the COVID-19 pandemic, there is inherently more uncertainty associated with the Corporation's assumptions as compared to prior years.
Certain factors that could cause actual results to differ materially from those anticipated in the forward-looking statements include, but are not limited to, risks associated with overall global and domestic economic conditions, risks associated with our business environment (such as risks associated with the financial condition of our customers; increased competition from international and domestic suppliers; force majeure events), operational risks such as the award of new business; order backlog; the execution of customer orders; cash flows and capital expenditures based on cyclicality; productivity enhancements, operational efficiencies, cost reduction initiatives; product warranty; regulatory and legal proceedings; environmental, health and safety risks; dependence on certain customers, contracts and suppliers; supply chain risks; human resources; reliance on information systems; reliance on and protection of intellectual property rights; adequacy of insurance coverage), financing risks (such as risks related to liquidity and access to capital markets; substantial debt and interest payment requirements; debt covenants), market risks (such as foreign currency fluctuations; changing interest rates; increases in commodity prices; and inflation rate fluctuations). For more details, see the Risks outlined in our MD&A. The foregoing factors may be exacerbated by the ongoing COVID-19 outbreak and may have a significantly more severe impact on the Corporation's business, results of operations and financial condition than in the absence of such outbreak. As a result of the current COVID-19 pandemic, additional factors that could cause actual results to differ materially from those anticipated in the forward-looking statements include, but are not limited to: risks related to the impact and effects of the COVID-19 pandemic on economic conditions and financial markets and the resulting impact on our business, operations, capital resources, liquidity, financial condition, margins, prospects and results; uncertainty regarding the magnitude and length of economic disruption as a result of the COVID-19 outbreak and the resulting effects on the demand for our products and services; emergency measures and restrictions imposed by public health authorities or governments, fiscal and monetary policy responses by governments and financial institutions; disruptions to global supply chain, customers, workforce, counterparties and third-party service providers; further disruptions to operations, orders and deliveries; technology, privacy, cyber security and reputational risks; and other unforeseen adverse events.
The forward-looking statements present certain non-IFRS financial measures to assist readers in understanding the Company's forecasted performance. Non-IFRS financial measures are measures that either exclude or include amounts that are not excluded or included in the most directly comparable measures calculated and presented in accordance with Generally Accepted Accounting Principles ("GAAP").
The foregoing list of factors that may affect future results and performance is not exhaustive and undue reliance should not be placed on forward-looking statements. The forward-looking statements set forth herein reflect management's expectations as at the date of this press release and are subject to change after such date. Unless otherwise required by applicable securities laws, we expressly disclaim any intention, and assume no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement.
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