Ottawa journal - full story
All Good, however, investors were less than impressed by the news, with Allen-Vanguard's share price falling by five per cent to $4.51 at 11:41 a.m.
News Story
UPDATE: Allen-Vanguard gives investors Q1 valentine
By Krystle Chow, Ottawa Business Journal Staff
Fri, Feb 15, 2008 8:00 AM EST
David Luxton, president and CEO of Allen Vanguard. (Darren Brown, OBJ)
Bomb detection and disposal products maker Allen-Vanguard Corp. saw first-quarter revenues soar fourteen-fold and turned a profit as it reaped the benefits of its Med-Eng acquisition, proving earlier investor jitters wrong.
The Ottawa-based company said revenues soared to $140.2 million from just $10.2 million a year earlier, while profits were $6.8 million, or six cents per share, compared to net losses of $506,000, or a penny a share.
"Q1 2008 was our first full quarter of financial results following the acquisition of Med-Eng, and the strong revenue and EBITDA (earnings before interest, tax, depreciation and amortization) performance was driven largely by the delivery of jammers in backlog in our electronic systems business," said CEO David Luxton in a statement.
The company said the U.S. Department of Defense had also announced that it would be ramping up its Symphony bomb-jammer program in each of the next three years, which would mean more orders through its partner Lockheed Martin, and pointed to continued installations of its Chameleon jammers to 2013 as a factor allowing the company to "refresh its backlog" by early in its third quarter this year.
The company's backlog was approximately $92 million at the end of the first quarter.
"From these and other developments in Q1 2008 we saw a strengthening base of recurring revenue across all our business segments," said Mr. Luxton, noting that its smaller personal protection systems and services businesses were also delivering solid growth.
Meanwhile, Allen-Vanguard said its success in its first quarter had allowed it to pay off its long-term debt under its senior debt facility by another $18.6 million, bringing its remaining debt to $226.2 million.
The company admitted that it would have been in default of its financial covenants at the time of issuing its statements, but that its debtors had agreed to a waiver and amendments to the agreements which would see Allen-Vanguard paying approximately $10.5 million in cash and common shares.
Mr. Luxton cautioned that the company would hit its expected $250-million revenue target in the first half of this year, but that the second half would "depend critically on the timing of orders for jammers from (its) U.S. partners, General Dynamics and Lockheed Martin, which should be known by early in Q3."
Allen-Vanguard was expecting full-year revenues of $500 million in fiscal 2008, with a targeted EBITDA margin of approximately 33 per cent and its jammer business representing roughly 65 per cent of total sales.
Versant Partners analyst Neil Linsdell wrote in an e-mail that the company's results were better than expected, beating his expectations of two cents in per-share earnings on revenues of $126.2 million.
Mr. Linsdell, who expects the company's stock to reach $10.50 this year, wrote, "Investors should be more comfortable that financial targets are achievable... Still need new orders to help lift the stock solidly into the $6 to $8 range though - expect contract announcements online in March/April."
However, investors were less than impressed by the news, with Allen-Vanguard's share price falling by five per cent to $4.51 at 11:41 a.m.