Avcorp announces 2012 Annual Financial Results

Avcorp announces 2012 Annual Financial Results


Trading Symbol: AVP



VANCOUVER, March 27, 2013 /PRNewswire/ - Avcorp Industries Inc. (TSX: AVP) (the
"Company" or "Avcorp") today announced its financial results for the
year ended December 31, 2012.



During the year ended December 31, 2012, the Company recorded income
from operations of $24,002,000 on $89,337,000 revenue, as compared to a
$362,000 operating loss on $86,018,000 revenue for the preceding year;
and net income for the current year of $20,641,000 as compared to a net
loss of $2,452,000 for the year ended December 31, 2011.



On November 16, 2012, Avcorp received the determination of an appointed
arbitration panel constituted to adjudicate outstanding issues relating
to cost reimbursements and compensation payable to Avcorp in connection
with the transition of Cessna Aircraft Company ("Cessna") production
work back to Cessna and other suppliers. A binding arbitration award
was delivered to the Company on November 16, 2012. The quantum of
damages was assessed by an arbitration panel at $27,391,000. The
arbitration award, net of associated costs, amounted to $21,548,000.



On November 26, 2012 Cessna filed a complaint in the United States
District Court For The District Of Kansas seeking to vacate the award
as a manifest disregard for the law and in violation of public policy.



On December 21, 2012 Avcorp filed a memorandum in support of a motion to
confirm final arbitration award, and dismiss the complaint in the
United States District Court For The District Of Kansas.



Current year revenues have increased from the preceding year primarily
as a result of significant increases in sales to The Boeing Company
(Boeing) and BAE Systems (Operations) Limited (BAE), offset by the
wind-down of Cessna programs. During the third quarter 2012, the
Company renewed its long-term agreement with the Boeing Commercial
Airplane Group (Boeing CA) which is forecasted to provide in excess of
$83 million revenue over the next five years. Start-up and commencement
of production deliveries for BAE Systems (Operations) Limited (BAE) F35
program has also contributed to an overall $146 million increase in
order backlog during the current year.



Cash flows from operating activities during the year ended December 31,
2012 utilized $3,603,000 of cash as compared to utilizing $924,000 of
cash during the year ended December 31, 2011. The Company has a
working capital surplus of $34,819,000 as at December 31, 2012 which
has significantly increased from the December 31, 2011 $14,663,000
surplus, as a result of the binding arbitration award. The Company's
accumulated deficit as at December 31, 2012 was $55,375,000 (December
31, 2011: $76,016,000).


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 400 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. 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

(prepared in accordance with IFRS, expressed in thousands of Canadian
dollars)







AS AT DECEMBER 31 2012 2011

ASSETS

Current assets

Cash $ 2,597 $ 3,778

Accounts receivable 7,944 12,160

Inventories 16,572 19,418

Prepayments and other assets 1,634 1,396

Other receivable 27,391 -

56,138 36,752

Non-current assets

Prepaid rent 146 146

Development costs 2,718 5,540

Property, plant and equipment, net 9,633 12,523



Total assets 68,635 54,961



LIABILITIES AND EQUITY

Current liabilities

Bank indebtedness 2,122 -

Accounts payable and accrued liabilities 7,859 10,694

Current portion of long-term debt 692 1,505

Preferred shares 10,646 9,890

21,319 22,089

Non-current liabilities

Deferred gain 263 311

Lease inducement 567 666

Deferred program revenues 17,514 18,671

Long-term debt 4,300 12,027

Warranty provisions 85 85

44,048 53,849

Equity

Capital stock 76,423 73,251

Equity component of convertible loan - 453

Contributed surplus 3,539 3,424

Deficit (55,375) (76,016)

24,587 1,112

Total liabilities and equity 68,635 54,961







CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)

(prepared in accordance with IFRS, expressed in thousands of Canadian
dollars, except number of shares and per share amounts)





FOR THE YEAR ENDED DECEMBER 31 2012 2011



Revenues $ 89,337 $ 86,018



Cost of sales 77,722 74,366



Gross profit 11,615 11,652



Administrative and general expenses 14,517 11,370

Office equipment depreciation 487 644

Other operating income (27,391) -



Operating Income (loss) 24,002 (362)



Foreign exchange (gain) loss 193 (333)

Finance costs 2,116 2,423

Loss on repayment of debt 397 -



Income (loss) before income tax 21,296 (2,452)



Write-down of equipment 655 -

Income tax expense - -



Income (loss) and total comprehensive income (loss) 20,641 (2,452)
for the period



Earnings (loss) per share:

Basic earnings (loss) per common share 0.09 (0.01)

Diluted earnings (loss) per common share 0.09 (0.01)



Basic weighted average number of shares outstanding 217,775 197,959
(000's)



Diluted weighted average number of shares 218,084 197,959
outstanding (000's)







CONSOLIDATED STATEMENTS OF CASH FLOWS

(prepared in accordance with IFRS, expressed in thousands of Canadian
dollars)





FOR THE YEAR ENDED DECEMBER 31 2012 2011

Cash flows from (used in) operating activities

Profit (loss) before tax $ 20,641 $ (2,452)

Adjustment for items not affecting cash:

Accretion on convertible loan 67 85

Accrued interest and government royalties 1,161 1,583

Depreciation 3,012 3,494

Deferred tooling revenue amortization and (11,576) (2,421)
reclassification to revenue

Development cost amortization and write-off 3,893 978

Fair value of warrants amortization 132 88

Loss on repayment of debt 397 -

Preferred share dividends accrued 756 756

Provision for loss-making contracts (189) (689)

Provision for obsolete inventory (67) (226)

Stock based compensation 115 145

Write-down of equipment 655 -

Other items (122) (205)

18,875 1,136

Changes in non-cash working capital

Accounts receivable 4,908 (414)

Inventories 3,102 (3,617)

Prepayments and other assets (244) 413

Other receivable (27,391) -

Accounts payable and accrued liabilities (2,853) 1,558

Net cash from (used in) operating activities (3,603) (924)



Cash flows from (used in) investing activities

Purchase of equipment (557) (1,224)

Payments relating to development costs and
tooling (1,071) (1,337)

Net cash from (used in) investing activities (1,628) (2,561)



Cash flows from financing activities

Increase (decrease) in bank indebtedness 2,122 (8,158)

Payment of interest (1,144) (1,128)

Proceeds from issuance of common shares 973 -

Proceeds from customer funding of program
introduction 9,712 11,412

Proceeds from current and long-term debt - 6,000

Repayment of current and long-term debt (6,882) (863)

Repayment of government royalties (731) -

Net cash from financing activities 4,050 7,263



Net increase (decrease) in cash (1,181) 3,778

Cash - Beginning of year 3,778 -

Cash - End of year 2,597 3,778







CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(prepared in accordance with IFRS, expressed in thousands of Canadian
dollars, except number of shares)





Share capital Equity
component
of
convertible
loan
Contributed Total
Shares Amount surplus Deficit equity



Balance 195,505,323 $ $ 453 $ 2,662 $ $
December 31, 72,927 (73,564) 2,478
2010



Issue of 6,488,790 324 - - - 324
common
shares



Stock based - - - 145 - 145
compensation
expense



Fair value - - - 617 - 617
of warrants
issued



Loss for the - - - - (2,452) (2,452)
period



Balance 201,994,113 73,251 453 3,424 (76,016) 1,112
December 31,
2011



Balance 201,994,113 73,251 453 3,424 (76,016) 1,112
December 31,
2011



Issue of 52,903,959 2,966 - - - 2,966
common
shares



Loan - 206 (453) - - (247)
conversion



Stock-based - - - 115 - 115
compensation
expense



Income for - - - - 20,641 20,641
the period



Balance 254,898,072 76,423 - 3,539 (55,375) 24,587
December 31,
2012















SOURCE Avcorp Industries Inc.

Avcorp Industries Inc.

CONTACT: Sandi DiPrimo, Investor Relations Contact 604-587-4938


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