Avcorp Announces Delay in Filing Annual Financial Statements

  • By Avcorp Industries
  • 30 Mar, 2016
March 30, 2016
DELTA, British Columbia: Avcorp Industries Inc. (TSX: AVP) (“Avcorp” or the “Company”) wishes to announce that its annual financial statements for the year ended December 31, 2015, including the related management discussion and analysis, and CEO and CFO certifications (collectively, the “Annual Financial Filings”) will not be filed by the required filing date of March 30, 2016.

Effective December 18, 2015, the Company completed the acquisition (the “Acquisition”) of the US-based composite aerostructures division of Hitco Carbon Composites Inc. (“Hitco”). At the closing of the Acquisition, the Company’s subsidiary, Avcorp Composite Fabrication Inc., purchased the assets of the division of Hitco which produces composite structural parts for commercial and military aerostructures (the “Business”).

The Company recently filed a business acquisition report (the “BAR”) on March 1, 2016 in connection with the Acquisition, and the BAR contained carve-out financial statements for the interim period ended September 30, 2015 and audited financial statements for the year ended December 31, 2014 for the Business. Prior to the filing of the BAR, audited financial statements of the Business had not previously been prepared.

As the Annual Financial Filings will be the first consolidated audited financial statements of the Company which include financial results of the Business, the Company requires additional time to complete certain audit and fair market value procedures in order to include the financial results of the Business in its consolidated Annual Financial Filings.

The Company is working on the audit procedures required to complete the 2015 Annual Financial Filings and expects to be able to file the Annual Financial Filings within the next three weeks. The Company will provide updates as further information relating to the Annual Financial Filings becomes available.

The Company has applied to the applicable securities regulatory authorities and received a management cease trade order related to the Company’s securities to be imposed against the Chief Executive Officer of the Company and the Vice President, Finance of the Company to trade securities of the Company. The management cease trade order will be in effect until the Annual Financial Filings are filed, and requires that the Annual Financial Filings be filed on or before May 30, 2016.

Until the Annual Financial Filings are filed, the Company intends to provide information in accordance with National Policy 12-203 Cease Trade Orders for Continuous Disclosure Defaults.
By Avcorp Industries 14 Nov, 2016
November 14, 2016
VANCOUVER: Avcorp Industries Inc. (TSX: AVP) (the “Company”, “Avcorp” or the “Avcorp Group”) today announced its financial results for the three and nine month periods ended September 30, 2016. All amounts are in Canadian currency unless otherwise stated. 
By Avcorp Industries 10 Nov, 2016
November 10, 2016
VANCOUVER: Avcorp Industries Inc. (TSX: AVP) (the “Company”, “Avcorp” or the “Avcorp Group”) is pleased to announce that it has been awarded a long-term production contract with the Aerospace Company of Fuji Heavy Industries Ltd. (“FHI”), a tier-one supplier to major original equipment manufacturers (“OEM”) of commercial and defence aircraft around the world.

Avcorp will produce complex composite structural components for FHI that will be assembled for the Boeing 787 center wing box. Avcorp, which will produce the components from its Composite Fabrication facility located in Gardena, California, expects that production volumes will grow by as much as 50% over historical supply rates.

“The contract award with FHI is significant on a number of levels,” said Mr. Peter George, CEO of Avcorp Industries. “First, it transitions our role with FHI from being a supplier with short-term purchase orders to one with a long-term contract for complex composite components for the Boeing 787 platform. Second, it extends our reach within the Boeing supply chain by complementing our longstanding relationship with the OEM. Both developments are due to our growing reputation as a quality supplier and to the recent investments we have made towards developing expertise in the manufacture of complex composite materials.”

As a result of the contract award, Avcorp’s order backlog is currently estimated at $901 million. The new total reflects the cumulative net effect of recent production deliveries as well as the addition of production contract with FHI.
By Avcorp Industries 07 Nov, 2016
November 7, 2016
VANCOUVER: 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.”
By Avcorp Industries 28 Sep, 2016
September 28, 2016
VANCOUVER: Avcorp Industries Inc. (TSX: AVP) (the “Company”, “Avcorp” or the “Avcorp Group”) announced today that it has closed a $5 Million USD unsecured loan facility. The loan facility bears interest at a rate of 8% per annum and matures on April 7, 2017. In connection with the loan facility, the lender was issued share purchase warrants totalling 30,714,118 warrants to purchase common shares exercisable at a price of $0.07 per common share for a period of 24 months from issuance. The lender is a non-arm’s length party to the Corporation. The proceeds of the loan will be for working capital at the Corporation’s Delta, B.C. and Gardena, California facilities. 
By Avcorp Industries 15 Aug, 2016
September 22, 2016
VANCOUVER: Avcorp Industries Inc. (TSX: AVP) (the “Company”, “Avcorp” or the “Avcorp Group”) today announced that it has been awarded multiple production contracts from Boeing.

These production contracts consist of complex metal bond and multi-material structural assemblies that complement Avcorp’s capability as a strategic integrated supplier within the aerospace industry. The new contracts include:

  • Production of Spoilers for the Boeing 737 MAX program. This will be one of the most significant contracts in Avcorp’s order backlog. The addition of the Spoiler production will result in considerable increases to Avcorp’s existing plant and equipment utilization for the coming years. The 737 MAX is Boeing’s new, more fuel-efficient single-aisle airplane, with first delivery anticipated next year. 
  • Production of Metal Bond Panels for the Boeing 777X. This award is the first contract for Avcorp with Boeing’s new 777X program. The 777X will be the world’s largest and most fuelefficient twin-engine commercial airplane, with first delivery anticipated in 2020. 
  • Production and supply of Doors for the Boeing Next-Generation 737 and 737 MAX. This contract creates beneficial production synergies that complement Avcorp’s current 737 Wheel Well Fairing high-rate production program, having daily just-in-time deliveries to 737 assembly lines. 
  • Avcorp previously announced a contract to produce Tanker Fairings for the KC-46 Program; the Boeing Tanker built on a 767 platform. This assembly leverages Avcorp’s integration capabilities utilizing composite and metallic materials. 
Avcorp’s order backlog is currently estimated at $579 million, in consideration of attaining full award values, after reduction for sales made during the first two months of the current quarter. “These latest awards expand Avcorp’s manufacturing relationship with Boeing with a timeline that goes well into the future,” said Peter George, Avcorp Industries Inc. CEO. “We are very proud to support Boeing on new programs such as the 737 MAX and 777X, and look forward to continued growth providing better solutions to all our customers.”

“We appreciate Avcorp’s continued focus on quality, reliability and affordability to support our position in a competitive marketplace,” said John Byrne, Vice President, Boeing Commercial Airplanes Supplier Management for Aircraft Materials & Structures. “Avcorp is a positive example of the strong ties between Canada’s aviation industry and Boeing.”

Avcorp has been manufacturing and supplying Boeing with various aircraft components supporting the 737, 757, 767, 777, 787, CH-47 programs for more than 20 years.
By Avcorp Industries 14 Aug, 2016
August 14, 2016
VANCOUVER: Avcorp Industries Inc. (TSX: AVP) (the “Company”, “Avcorp” or the “Avcorp Group”) today announced its second quarter financial results for the quarter ended June 30, 2016. During the quarter ended June 30, 2016. Avcorp Group revenues totaled $44,246,000 as compared to $20,369,000 revenue for the same quarter in the previous year. The December 18, 2015 acquisition of the US based composite Aerostructures division of Hitco, a subsidiary of Frankfurt-listed SGL has added $22,595,000 to current quarter revenues. During the quarter ended June 30, 2016, the Avcorp Group recorded a loss from operations of $12,781,000, which includes costs incurred and yet to be recovered under the Hitco acquisition agreement, on $44,246,000 revenue; as compared to a $1,125,000 operating loss on $20,369,000 revenue for the same quarter in the previous year; and net loss for the current quarter of $12,951,000 which include costs incurred yet to be recovered under the Hitco acquisition agreement as compared to net loss of $1,135,000 for the quarter ended June 30, 2015. Pre-Hitco acquisition operational events although indemnified and on which Avcorp was required to assist, adversely impacted operations and caused excessive personnel costs, administrative and legal expenditures at ACF Avcorp’s Gardena facility. These costs have yet to be recovered are included in all the costs for 2016. In addition to indemnified losses, a portion of the losses and one-time costs were anticipated. These costs are part of the 2016 business improvement plan for ACF Gardena. During the quarter ended June 30, 2016, cash flows from operating activities, excluding the impact of changes in non-cash working capital, utilized $12,762,000 of cash as compared to utilizing $523,000 of cash during the quarter ended June 30, 2015. Cash flows from operating activities were most significantly impacted as a result of operating losses incurred from the integration and productionization costs expended for the newly acquired Hitco operations, losses arising from unfavourable customer contracts assumed, and operational, administrative, and legal expenditures, incurred at Avcorp’s Gardena facility as a direct result of pre-Hitco acquisition operational events. Avcorp’s Burlington operations increased revenue in the second quarter 2016 relative to the second quarter 2015 by $1,521,000 (35.2%). Avcorp’s Delta location continues to actively pursue production contracts on aerospace programs throughout North America, Asia, and Europe both in the commercial and defence aerospace sectors. These efforts are driving increased value as evidenced by recent contract awards; in addition to 2015 awards for the expanded scope of production on the Lockheed Martin F-35 Carrier Variant Outboard Wing, as well as production and supply of 767-2C Panoramic Camera Fairings, as part of The Boeing Company’s KC-46 Tanker program. Further contract awards are expected. The Gardena facility defence programs have been successful and are meeting delivery to customers as planned and have not experienced the extraordinary unanticipated issues relative to process performance and operational disruptions of the commercial programs. The planned improvement initiatives for the defence programs, including the F-35 program for Lockheed Martin, continue and are performing as forecasted; this has resulted in an award of a follow-on contract from Lockheed Martin that was previously announced. The commercial programs at the Gardena facility have achieved significant improvements in customer deliveries and are progressing to customer agreed plans and targeted schedule position, during the second quarter.
By Avcorp Industries 12 Jul, 2016
July 12, 2016
Avcorp Industries and the University of British Columbia have agreed to explore the establishment of a Learning Factory for Advanced Composites at UBC’s Okanagan campus.

The two parties, represented by Avcorp CEO Peter George and UBC Deputy Vice-Chancellor and Principal Deborah Buszard, signed an MOU today at the Farnborough International Airshow.

“Avcorp Industries is committed to exploring the establishment of an aerospace industryfirst Learning Factory in a way which will push the boundaries of advanced composite manufacturing as well as provide a platform for a new level of research and training in British Columbia,” says Peter George, CEO of the Avcorp Industries Group. “We are looking forward to working with the UBC-based Composites Research Network in an initial focus on aerospace applications of composite materials and optimized manufacturing processes.”

Avcorp Industries is a leading supplier of integrated composite and metallic aerostructures and is based in Delta, BC.

“BC’s economic success is due in part to our diversified economy — and this MOU will lead to the exploration of innovative opportunities for Kelowna and area,” says Norm Letnick, MLA for Kelowna-Lake Country. “Congratulations to Avcorp Industries and UBC on this important partnership, which will provide great training opportunities for students as well.”

“Composite manufacturing is a growth industry,” says Stephen Fuhr, MP for Kelowna-Lake Country. “This learning factory concept provides a solid opportunity for employment, education and innovation. It would also further solidify Kelowna-Lake Country as one of Canada’s premier aerospace clusters.”

The Learning Factory will integrate industrial production with learning and research and provide UBC students and faculty with new opportunities for research, knowledge translation, and hands-on experiential learning. The Learning Factory will also provide technical and skills training opportunities for students from partner institutions, such as Okanagan College.

Through the development of a composites research and production facility at the UBC Okanagan Innovation Precinct, as well as an integrated digital simulation facility at UBC’s Vancouver campus, the Learning Factory will provide Avcorp Industries enhanced ability to evaluate and improve manufacturing efficiency.

“UBC is committed to bold new types of partnerships that create unique research, learning, and job creation opportunities,” says Dr. Deborah Buszard, UBC Deputy Vice-Chancellor and Principal. “We are excited to take our discussions with Avcorp to the next level. We see this project as key to our ambition to help transform and diversify the regional resource economy to one driven by innovation.”
By Avcorp Industries 30 Jun, 2016
June 30, 2016
VANCOUVER: Avcorp Composite Fabrication Inc. (ACF), located in Gardena, California (Avcorp Industries Inc. most recent acquisition) is pleased to announce that it has reached a Collective Bargaining Agreement with the Glass Molders and Plastics Union (GMP) Local 19 for a six (6) year labor contract.

The new agreement calls for wage increases of 1%, 2.25%, 2.25% and 2.75% in the first four years of the contract. Wage adjustments in year five and six will be reviewed by the Company and the Union at a future date. Through the course of collective bargaining, the Company and Union have agreed to mutually explore and ultimately implement High Performance Work Teams in selected areas of the operation. In addition, in order to accomplish best in class levels of performance, the agreement includes incentive compensation that arises from meeting Team performance targets.

Peter George, CEO of the Avcorp Group, commented, “This agreement is evidence of how committed ACF and the GMP Local 19 are to both our customers and our own success. We look forward to working together in our long standing positive relationship to achieve our performance targets, and to meet the expectations of all of the company’s stakeholders.”
By Avcorp Industries 31 May, 2016
May 31, 2016
VANCOUVER: Avcorp Industries Inc. (TSX: AVP) (the “Company”, “Avcorp” or the “Avcorp Group”) is pleased to announce it has been awarded a contract extension with Lockheed Martin. The agreement extends into 2020 the current composite fabrication work scope, at Avcorp’s Gardena California facility, for F-35 wing skin panels, nacelle panels and body access panels.

This follow-on contract complements Avcorp’s assembly of the F-35 Carrier Variant (“CV”) Outboard Wing (“OBW”) structure which has been under a long-term contract with BAE Systems since 2011 in the Delta, British Columbia plant; as well as the recently awarded Lockheed Martin contract for the integration of paint preparation and complex installation of control surfaces and systems such as outboard leading edge flaps, ailerons, fairings and sub-systems for the CV OBW.

“We are very pleased with the schedule and quality improvement progress being made by the Gardena team and we believe this contract extension by Lockheed Martin reflects their confidence in Avcorp. We hope that in demonstrating our full capabilities with the combined resources of our plant sites that we will create additional collaboration opportunities with Lockheed Martin and help progress their Affordability Initiative for the F-35 program.” states Peter George, CEO of the Avcorp Group.
By Avcorp Industries 27 May, 2016
May 27, 2016
VANCOUVER: Avcorp Industries Inc. (TSX: AVP) (the “Company”, “Avcorp” or the “Avcorp Group”) today announced that at its annual meeting of shareholders held on May 19, 2016 (the “Meeting”), all directors nominated as listed in the management proxy circular dated April 21, 2016 were elected. The details are as follows:
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