Avcorp announces 2014 Second Quarter Financial Results

VANCOUVER, Aug. 14, 2014 /PRNewswire/ - Avcorp Industries Inc. (TSX: AVP) (the "Company" or "Avcorp") today announced its financial results for the quarter ended June 30, 2014.

Revenue for the quarter ended June 30, 2014 was $21,134,000 as compared to $20,492,000 for the quarter ended June 30, 2013. Current quarter revenues have increased relative to the same quarter in the previous year primarily as a result of an increase in quantities delivered for one defence program, strong aircraft component repairs revenue, as well as an increase in composite aircraft floor board sales and in‑house developed composite parts sales.

Comtek Advanced Structures Ltd. ("Comtek"), a wholly owned subsidiary of Avcorp, generated a 131% increase in aircraft component repairs revenue primarily as a result of targeted customer campaigns.  Comtek's sales of composite parts to airline operators increased as investments made in developing aftermarket replacement parts have commenced to generate revenues.

During the quarter ended June 30, 2014, the Company recorded a loss from operations of $472,000 on $21,134,000 revenue, as compared to $393,000 operating income on $20,492,000 revenue for the same quarter in the preceding year; and a net loss for the current quarter of $589,000 as compared to net income of $1,596,000 for the quarter ended June 30, 2013.  2013 second quarter earnings benefited from a $1,129,000 one-time other operating income as well as a $1,494,000 foreign exchange gain.

Cash flows from operating activities during the quarter ended June 30, 2014 provided $180,000 of cash as compared to utilizing $2,776,000 of cash during the quarter ended June 30, 2013.  The primary source of cash from operations during the current quarter is from changes in the amount of inventories and accounts payable, while the utilization of cash from operating activities is primarily attributable to recognition of revenues which were funded in previous quarters.  As at June 30, 2014 the Company had $3,027,000 cash on hand (December 31, 2013: $7,012,000). 

The Company has a working capital surplus of $11,331,000 as at June 30, 2014 which has decreased from the December 31, 2013 $14,213,000 surplus, as a result of cash utilized in operating activities.  The Company's accumulated deficit as at June 30, 2014 is $59,554,000 (December 31, 2013: $57,723,000).

About Avcorp

Avcorp designs and builds major airframe structures for some of the world's leading aircraft companies, including BAE Systems, Boeing and Bombardier.  With more than 50 years of experience, over 380 skilled employees and 340,000 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.  Our Burlington location also offers composite repairs for commercial aircraft.  Avcorp is a Canadian public company traded on the Toronto Stock Exchange (TSX:AVP).

(signed)

MARK VAN ROOIJ
PRESIDENT and CHIEF EXECUTIVE OFFICER

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) the extent to which the Company is able to achieve savings from its restructuring plans; (b) uncertainty in estimating the amount and timing of restructuring charges and related costs; (c) changes in worldwide economic and political conditions that impact interest and foreign exchange rates; (d) the occurrence of work stoppages and strikes at key facilities of the Company or the Company's customers or suppliers; (e) government funding and program approvals affecting products being developed or sold under government programs; (f) cost and delivery performance under various program and development contracts; (g) the adequacy of cost estimates for various customer care programs including servicing warranties; (h) the ability to control costs and successful implementation of various cost reduction programs; (i) the timing of certifications of new aircraft products; (j) the occurrence of further downturns in customer markets to which the Company products are sold or supplied or where the Company offers financing; (k) changes in aircraft delivery schedules or cancellation of orders; (l) the Company's ability to offset, through cost reductions, raw material price increases and pricing pressure brought by original equipment manufacturer customers; (m) the availability and cost of insurance; (n) the Company's ability to maintain portfolio credit quality; (o) the Company's access to debt financing at competitive rates; and (p) uncertainty in estimating contingent liabilities and establishing reserves tailored to address such contingencies.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(unaudited, prepared in accordance with IFRS, expressed in thousands of Canadian dollars)

CONSOLIDATED STATEMENTS OF (LOSS) INCOME AND COMPREHENSIVE (LOSS) INCOME
(unaudited, prepared in accordance with IFRS, expressed in thousands of Canadian dollars, except number of shares and per share amounts)

CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, prepared in accordance with IFRS, expressed in thousands of Canadian dollars)

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(unaudited, prepared in accordance with IFRS, expressed in thousands of Canadian dollars, except number of shares)

SOURCE Avcorp Industries Inc.