RE:RE:RE:Building Sale??On May 8, 2017, the Company announced that it has entered into an agreement to sell and lease back the Company’s downtown Vancouver office tower and associated land (the “Building”) for expected gross proceeds of approximately $107.5 million in Canadian Dollars (“CAD”) (the “Proposed Transaction”). The Proposed Transaction is subject to certain conditions that are typical for a transaction of this nature, including, without limitation, completion of the purchaser’s due diligence, satisfaction of the Company’s obligations under its Credit Facility (as defined under “Financial Position and Liquidity” below), and finalization of the terms of the Building lease. Assuming the conditions to the Proposed Transaction are satisfied, Management expects the Proposed Transaction will complete before the conclusion of 2017. In connection with the completion of the Proposed Transaction, Avigilon will lease back the Building, thereby securing its facility needs while reducing its debt, providing cash for general working capital purposes, and enhancing shareholder value.
As to capital expenditures:
During the three and six months ended June 30, 2017, we incurred capital expenditures of $8.4 million and $20.4 million, respectively. In the second quarter of 2017 we have primarily made capital investments in research and development, and the Building. As the majority of the Company’s capital investments are now substantially complete, Management expects capital expenditures (excluding investment in the Building) in 2017 to decrease year over year as we leverage previous investments to support business growth and focus on increasing profitability. As at the date of this MD&A, the Company has outstanding commitments of approximately $1.1 million related to upgrades to the Building.
->There is no separation of R&D and building upgrades here. But in a separate section of their Sedar filing, R&D for the six months are 16,097,000. So $5.4 million capex in 2017 for the building upgrades. A pretty good return on investment!