May 15, 2014
VANCOUVER: Avcorp Industries Inc. (TSX: AVP) (the “Company” or “Avcorp”) today announced its
financial results for the quarter ended March 31, 2014.
Revenue for the quarter ended March 31, 2014 was $17,551,000 as compared to $19,946,000 for the
quarter ended March 31, 2013. Current quarter revenues have decreased relative to same quarter in the
previous year primarily as a result of reductions in customer demand due to concerted efforts in inventory
reduction and a slowdown in production rates.
Comtek Advanced Structures Ltd. (“Comtek”), a wholly owned subsidiary of Avcorp, generated an 89%
increase in the delivered quantity of aircraft composite floor boards to original equipment manufacturers
(“OEM”). Additionally, Comtek’s repositioning and introduction of new products has produced a 41%
increase in composite floor board sales to airlines.
Aircraft component repairs serviced by Comtek have increased revenues by 9%, as customer loyalty
programs commence having a positive impact on sales.
During the quarter ended March 31, 2014, the Company recorded a loss from operations of $1,397,000
on $17,551,000 revenue, as compared to $440,000 operating income on $19,946,000 revenue for the
same quarter in the preceding year; and a net loss for the current quarter of $1,242,000 as compared to
net income of $108,000 for the quarter ended March 31, 2013. A $376,000 restructuring provision, as
well as $1,191,000 expensed as unutilized plant capacity have significantly impacted income for the
Cash flows from operating activities during the quarter ended March 31, 2014 utilized $2,304,000 of cash
as compared to utilizing $1,416,000 of cash during the quarter ended March 31, 2013. The primary
source of cash from operations during the current quarter is from accounts receivable while the utilization
of cash from operating activities is primarily attributable to recognition of revenues which were funded in
previous quarters. As at March 31, 2014 the Company had $4,058,000 cash on hand (December 31, 2013:
The Company has a working capital surplus of $12,828,000 as at March 31, 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 March 31, 2014 is $58,965,000 (December 31, 2013: $57,723,000).
On April 23, 2014, the Company announced that it has received a Strategic Aerospace and Defence
Initiative (“SADI”) Contribution Agreement from the Government of Canada for up to $4.4 million to
support development of advanced metal bond manufacturing processes and capabilities. In particular,
this SADI supported project will assist Avcorp to undertake specific capability development for large,
complex metal bonded structural components, for our customers, including The Boeing Company and
Cascade Aerospace. This project will also support implementation of Lean Manufacturing process
improvements and advancements along our Metal Bond Technology Roadmap. This funding support from
the Government of Canada will be instrumental in enabling Avcorp to achieve these capability and
competitiveness enhancements in a timeframe that meets both the Company’s customers’ requirements
and the demands of the market.
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
Comtek subsidiary also offers composite repairs for commercial aircraft out of their Burlington location.
Avcorp is a Canadian public company traded on the Toronto Stock Exchange (TSX:AVP).
Sandi DiPrimo, Investor Relations Contact | 604-587-4938