VANCOUVER, Aug. 9, 2018 /CNW/ – Avcorp Industries Inc. (TSX: AVP) (the “Company”, “Corporation”, “Avcorp” or the “Avcorp Group”) today announced its financial results for the quarter ended June 30, 2018. All amounts are in Canadian currency unless otherwise stated.
2018 Highlights
Key financial results include:
- Second quarter 2018 operating loss was reduced by $8,595,000, in comparison to the same quarter in 2017, primarily as a result of increased revenues, consolidation of costs and improved operating effectiveness; after the benefit of amortization to income of unfavourable contracts liability and onerous contracts provisions have been removed.
- On a year-to-date basis, 2018 cash flows used in operating activities were reduced by $10,737,000, over the same period in 2017.
- On March 28, 2018, the Company signed a loan agreement to expand the current agreement with a Canadian Chartered Bank, supported by a major and material customer, to access an additional USD$10 million operating line of credit.
- On April 19, 2018 Avcorp’s Board appointed Amandeep Kaler, formerly the General Manager of Avcorp’s Delta operations, as the new CEO of Avcorp Group.
- Avcorp is a member of Canada’s Digital Technology Supercluster (“CDTS”) which was awarded funding under the Federal Government’s Innovation Supercluster Initiative (“ISI”).
- In Comtek’s continuing effort to reduce airline operator’s key metric of turnaround time for repaired aircraft components, while still providing premium quality, Comtek has embarked on deploying a forward base of operations located in the United Kingdom. Doors open in the third quarter and will initially provide much needed support for the growing Q400 fleet in Europe.
Review of 2018 First Quarter Financial Results
For the quarter ending June 30, 2018, the Avcorp Group recorded income from operations totaling $286,000 from $43,292,000 revenue, as compared to $11,170,000 operating losses from $36,686,000 revenue for the same quarter in the previous year. Increased sales and continued consolidation of operating costs have resulted in reduced current quarter operating losses, in comparison to the same quarter in 2017. It should be noted that second quarter 2018 operating losses benefited by $4,660,000 income from amortization of an unfavourable contract liability and onerous contracts provision into income (June 30, 2017: $1,799,000).
During the quarter ended June 30, 2018, cash flows from operating activities, excluding the impact of changes in non-cash working capital, utilized $1,095,000 of cash as compared with utilization of $12,085,000 of cash during the quarter ended June 30, 2017; a significant improvement, primarily attributable to a reduction in operating losses during 2018 in comparison to 2017. Changes in non-cash working capital during the current year provided $1,994,000 as compared to the previous quarter during which non-cash working capital utilized $10,097,000; primarily as a result of prepayments made by a customer on future program deliveries.
As at June 30, 2018, the Company had $6,869,000 cash on hand (December 31, 2017: $5,212,000) and had utilized $82,858,000 of its operating line of credit (December 31, 2017: $61,283,000). The Company has a working capital deficit of $83,921,000 as at June 30, 2018 which has increased from the December 31, 2017 $63,613,000 deficit. Working capital surplus/deficit is defined as the difference between current assets and current liabilities. The Company’s accounts receivable and inventories net of accounts payable, amount to a $27,415,000 surplus as at June 30, 2018 (December 31, 2017: $37,889,000 surplus). The Company’s accumulated deficit as at June 30, 2018 is $165,904,000 (December 31, 2017: $157,185,000).
The Company’s complete financial statements and management’s discussion and analysis for the year ended December 31, 2017 and quarter ended June 30, 2018 can be found at www.avcorp.com or at www.sedar.com.