Avcorp Releases 2019 Annual Financial Results

April 06 2020

Avcorp Industries Inc. released its financial results for the year ended December 31, 2019. All amounts are in Canadian currency unless otherwise stated.

2019 Highlights

Key financial results include:
2019 revenue was $164,770,000 compared to $170,710,000 in 2018. 2019 revenue decreased by $1,323,000, in comparison to 2018, after the benefit of amortization of the unfavorable contract liability is removed.

2019 operating loss was $1,124,000 compared to operating income of $26,917,000 in 2018. Operating loss improved by $2,101,000 in comparison to 2018.

2019 cash flows from operating activities was $10,911,000 compared to utilization of $16,029,000 in 2018. 2019 cash flows from operating activities improved by $12,508,000, relative to 2018, after the net cash settlement of $14,431,000 (USD$10,810,000) from the agreement with Hitco Carbon Composites Inc., SGL Carbon, SGL, and SGL Carbon SE (the “SGL Parties”) and a customer has been removed.

Review of 2019 Financial Results

For the year ended December 31, 2019, the Avcorp Group recorded losses from operations totaling $1,124,000 from $164,770,000 revenue, as compared to $26,917,000 operating income from $170,710,000 revenue for the previous year. It should be noted that 2019 operating loss benefited by $1,665,000 income from amortization of onerous contracts provision (December 31, 2018: $13,732,000 amortization of unfavorable contract liability and onerous contract liability). In addition, 2019 benefitted from the net settlement gain of $17,974,000 in comparison to 2018 which benefitted from the net contract modification for an unfavorable contract in the amount of $41,470,000 and a net claim settlement loss of $5,421,000. Continued consolidation of operating costs has resulted in reduced current year operating losses of $2,101,000 in comparison to 2018 after these benefits have been removed.
As at December 31, 2019, the Company had $4,316,000 cash on hand (December 31, 2018: $2,051,000) and had utilized $84,661,000 of its operating line of credit (December 31, 2018: $85,840,000). The Company has a working capital deficit of $71,561,000 as at December 31, 2019 which has increased slightly from the December 31, 2018 $71,503,000 deficit. Working capital surplus/deficit is defined as the difference between current assets and current liabilities. However, the Company’s accounts receivable, contract assets, and inventories net of accounts payable, amount to a $18,541,000 surplus as at December 31, 2019 (December 31, 2018: $22,000,000 surplus). The Company’s accumulated deficit as at December 31, 2019 is $142,194,000 (December 31, 2018: $132,878,000).

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