Move designed to optimize work flows and generate significant annual cost savings
VANCOUVER, Nov. 8, 2016 /CNW/ - Avcorp Industries Inc. (TSX:
AVP) (the "Company", "Avcorp" or the "Avcorp Group") has announced that it has issued 60 day WARN notifications on October 24, 2016, as part of a restructuring initiative at its Gardena
California facility that will result in a workforce reduction of 75 permanent employees by December
31, 2016. This reduction is in addition to exiting 180 temporary workers during the last 90 days, which were added this
year to support customers' requirements arising from legacy product issues.
The restructuring will result in significant annual cost savings for the Company, net of anticipated severance costs of
approximately $260,000.
"The team in Gardena has done a great job of meeting our customers' needs under challenging
conditions," said Mr. Peter George, CEO of the Avcorp Group. "Our customers and our people
understand the issues we face, and we are continuing to identify and act on opportunities in a focused and measured way. While
these decisions were not taken lightly, they are intended to protect our people and capabilities, stabilize our processes and
optimize our work flows so that we deliver world-class performance to our customers."
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, Fuji Heavy Industries and Lockheed Martin. The Avcorp Group has more than 50 years of
experience, over 750 skilled employees and 636,000 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 operators and MRO's
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).
(signed)
PETER GEORGE
CHIEF EXECUTIVE OFFICER
AVCORP GROUP
Forward-Looking Statements
This release should be read in conjunction with the Company's unaudited financial statements contained in the Company's Annual
Report and with the quarterly financial statements and accompanying notes filed with Sedar (www.sedar.com).
Certain statements in this release and other oral and written statements made by the Company from time to time are
forward-looking statements, including those that discuss strategies, goals, outlook or other non-historical matters; or projected
revenues, income, returns or other financial measures. These forward-looking statements are subject to risks and
uncertainties that may cause actual results to differ materially from those contained in the statements, including the
following: (a) changes in worldwide economic and political conditions that impact interest and foreign exchange rates; (b)
the occurrence of work stoppages and strikes at key facilities of the Corporation or the Corporation's customers or suppliers; (c)
government funding and program approvals affecting products being developed or sold under government programs; (d) cost and
delivery performance under various program and development contracts; (e) the adequacy of cost estimates for various customer care
programs including servicing warranties; (f) the ability to control costs and successful implementation of various cost reduction
programs; (g) the timing of certifications of new aircraft products; (h) the occurrence of downturns in customer markets to which
the Corporation products are sold or supplied or where the Corporation offers financing; (i) changes in aircraft delivery schedules
or cancellation of orders; (j) the Corporation's ability to offset, through cost reductions, raw material price increases and
pricing pressure brought by original equipment manufacturer customers; (k) the availability and cost of insurance; (l) the
Corporation's ability to maintain portfolio credit quality; (m) the Corporation's access to debt financing at competitive rates;
(n) uncertainty in estimating contingent liabilities and establishing reserves tailored to address such contingencies; and (o)
integration of newly acquired operations and associated expenses may adversely affect profitability.
SOURCE Avcorp Industries Inc.
