November 15, 2010
VANCOUVER: Avcorp (AVP on the Toronto Stock Exchange) today announced its financial results for the quarter ended September 30, 2010.
During the quarter ended September 30, 2010, the Company recorded income from operations of $77,000 on $21,808,000 revenue, as compared to a $2,128,000 loss from operations on $14,302,000 revenue for the same quarter of the preceding year; and a net loss for the current quarter of $269,000 as compared to a net loss of $2,585,000 for the quarter ended September 30, 2009.
The significant revenue growth for the current quarter combined with continued cost control and improved operating efficiencies have caused gross margins to improve by $3,430,000 over the same quarter in 2009.
The Company has realized revenue growth in 2010 from full rate production of the Boeing Defense Space & Security CH47 helicopter and the Cessna Citation CJ4 business jet; both programs were in start-up phase for the Company in 2009. Additionally, the Company has experienced in excess of 52% revenue growth during the third quarter of 2010 relative to the same quarter in 2009, as a result of program re-starts and production rate increases.
It should be noted that the current quarter loss includes a $104,000 foreign exchange loss, while income for the quarter ended September 30, 2009 included a $1,384,000 foreign exchange gain which occurred as a result of holding foreign-currency-denominated receivables, payables and debt.
Cash flows from operating activities during the current quarter provided $203,000 of cash, as compared to utilizing $1,375,000 of cash during the quarter ended September 30, 2009. The Company has a working capital surplus of $2,354,000 as at September 30, 2010 (December 31, 2009: $820,000 surplus) and an accumulated deficit of $70,841,000 at September 30, 2010 (December 31, 2009: $65,379,000).
As at September 30, 2010, the Company was not in compliance with financial covenants associated with its operating lines of credit. The lender has agreed to forbear from demanding payment of the indebtedness and from taking steps to enforce the security, subject to the Company complying with terms and conditions of a Forbearance Agreement which ended on October 15, 2010. The Company is currently in the process of renewing the Forbearance Agreement with the bank.
Also, as at September 30, 2010, the Company was not in compliance with a financial covenant associated with the convertible debenture held by Export Development Canada. The Company has obtained a waiver from the debenture holder for this non-compliance.
About Avcorp
Avcorp designs and builds major airframe structures for some of the world fs leading aircraft companies, including Boeing, Bombardier, and Cessna. With more than 50 years of experience, 585 skilled employees and 354,000 square feet of facilities in Delta BC and Burlington ON, Avcorp 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. Avcorp is a Canadian public company traded on the Toronto Stock Exchange (TSX:AVP).
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