Avcorp announces 2022 First Quarter Financial Results

VANCOUVER, BC, May 12, 2022 /CNW/ – Avcorp Industries Inc. (TSX: AVP) (the “Company”, “Avcorp” or the “Avcorp Group”) today announced its financial results for the quarter ended March 31, 2022. All amounts are in Canadian currency unless otherwise stated.

2022 First Quarter Highlights

  • First quarter 2022 revenue was $27,858,000 compared to $23,933,000 in 2021. 2022 revenue increased by $3,925,000 in comparison to 2021, mainly contributed by the continued growth in the F35 program in the Delta Facility.
  • First quarter 2022 net loss was $1,198,000 compared to net income of $17,390,000 in 2021. The net income in 2021 was supported by the accommodation agreement settlement of $21,391,000.
  • First quarter 2022 cash inflows from operating activities were $3,172,000 compared to inflows of $1,603,000 in 2021. The first quarter of 2021 cash flows from operating activities were supported by the receipt of Canada Emergency Wage Subsidies of $3,127,000.

Highlights Subsequent to Quarter-End

  • On April 1, 2022, the Company signed a contract with BLR Aerospace to produce King Air 200 Wingtips with estimated first delivery by the second quarter of 2022.
  • On April 12, 2022, the Company signed a contract extension to 2027 with Boeing to provide the detail parts, bench top assemblies  and metal bonded assemblies for the Boeing 737 and 777 aircrafts.
  • On May 4, 2022, the Company entered into a definitive arrangement agreement with Latécoère S.A. (the “Purchaser”) to purchase all the issued and outstanding common shares of Avcorp for cash consideration of $0.11 per share and repay or assume Avcorp’s net debt and other lease liabilities. The Arrangement implies a total transaction value of approximately $139 million for the Company.

Review of 2022 First Quarter Financial Results

For the quarter ended March 31, 2022, the Avcorp Group recorded an operating loss of $276,000 from $27,858,000 of revenue, as compared to an operating income of $18,274,000 from $23,933,000 of revenue from the same quarter in previous year. The first quarter of 2022 operating income decreased in comparison to 2021 by $18,550,000 mainly due to the inclusion of the Accommodation Agreement settlement of $21,391,000 recognized in the first quarter of 2021, partially offset by the decrease in administrative and general expenses due to the recognition of stock-based compensation expense of $1,376,000 on the 17,350,000 incentive stock options granted in the first quarter of 2021.

During the quarter ended March 31, 2022, cash inflows from operating activities were $3,172,000 compared to an inflow of $1,603,000 in 2021. The increase was attributable to the stronger operational performance in the current quarter.

As at March 31, 2022, the Company had $4,946,000 cash on hand (December 31, 2021: $4,060,000) and had utilized $74,253,000 of its operating line of credit (December 31, 2021: $75,335,000). The bank indebtedness balance of the modification gain and related adjustments as a result of the execution of an amending agreement in 2021 was $768,000 as at March 31, 2022, (December 31, 2021 gain of $923,000). The Company has a working capital surplus of $6,748,000 as at March 31, 2022, compared with $7,613,000 surplus as at December 31, 2021. Working capital is defined as the difference between current assets and current liabilities. On March 31, 2022, the ratio of the Company’s current assets to current liabilities was 1.17:1 (December 31, 2021: 1.18:1).

About Avcorp

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 490 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).