On May 7, 2020, Magellan announced an agreement with an undisclosed customer for the supply of complex machined rotating engine components for military aircraft platforms. The contract, valued at approximately $46.4 million, will be carried out at Magellan's facility in Mississauga, Ontario over a five-year period commencing in 2020.
Magellan announced on May 25, 2020 that the Toronto Stock Exchange had approved its notice of intention to make a normal course issuer bid ("the Bid") to purchase for cancellation, from time to time, as it considers advisable, up to 2,910,450 of the Corporation's issued and outstanding common shares (the "Shares"), being 5% of the 58,209,001 Shares outstanding as of May 25, 2020. The Bid commenced on May 27, 2020 and will terminate on the earlier of May 26, 2021 or the date on which the Corporation has acquired all of the Shares sought pursuant to the Bid.
During the second quarter of 2020, Magellan improved its overall liquidity position despite the challenges posed by COVID-19. The Corporation ended the quarter with a cash balance of $61.7 million and $70.4 million of available borrowing capacity under Magellan's operating credit facility, providing the Corporation with $132.1 million of total liquidity as compared with $103.3 million at March 31, 2020. The credit facility agreement also includes a $75 million uncommitted accordion provision that provides the Corporation with the option to increase the size of the operating credit facility to $150 million. Magellan expects that cash provided by operations, cash on hand and its sources of financing will be sufficient to meet the Corporation's debt obligations and fund committed and future capital expenditures.
Gross profit of $25.3 million for the second quarter of 2020 was $19.7 million lower than the second quarter of 2019 gross profit of $45.1 million, and gross profit as a percentage of revenues of 15.6% for the second quarter of 2020 was lower than the second quarter of 2019 of 17.1%. The lower gross profit in the current quarter when compared to the same quarter in 2019 was primarily driven by decreased volumes in a number of commercial programs, offset in part by production efficiencies realized on certain programs and the recognition of $7.9 million in subsidies from the Canada Emergency Wage Subsidy ("CEWS") program.
Dividends
During the first and second quarter of 2020, the Corporation declared and paid quarterly cash dividends of $0.105 per common shares representing an aggregating dividend payment of $12.2 million.
Subsequent to June 30, 2020, the Corporation announced that its Board of Directors had declared a quarterly cash dividend on its common shares of $0.105 per common share. The dividend will be payable on September 30, 2020 to shareholders of record at the close of business on September 16, 2020.
Normal Course Issuer Bid
On May 25, 2020, the Toronto Stock Exchange ("TSX") accepted the Corporation's intention to commence a normal course issuer bid ("NCIB") which allows the Corporation to repurchase up to 2,910,450 of the Corporation's issued and outstanding common shares in the open market or otherwise permitted by the TSX. Common shares purchased by the Corporation are cancelled. The program commenced on May 27, 2020 and will terminate on May 26, 2021, or on such earlier date as the Corporation completes its purchase pursuant to the NCIB. During the three-month period ended June 30, 2020, 78,160 common shares were purchased for cancellation for $0.5 million at a volume weighted average price paid of $6.21 per share.
Outstanding Share Information
The authorized capital of the Corporation consists of an unlimited number of Preference Shares, issuable in series, and an unlimited number of common shares. As at August 7, 2020, 58,130,841 common shares were outstanding and no preference shares were outstanding.