VANCOUVER, BC, April 22, 2021 /PRNewswire/ - Avcorp
Industries Inc. (TSX: AVP) (the "Company" or "Avcorp") is
providing today guidance with respect to its upcoming interim
financial results as well as certain financial information
pertaining to the anticipated long term business activity,
operations and anticipated results. The guidance and
forward-looking financial information contained herein is based on
the reasonable belief of management, subject to the risks and
cautionary statements outlined below under the heading "Forward
Looking Statements". The guidance provided herein has been approved
by the board of directors on April
22nd, 2021.
Industry Overview
The onset of the global pandemic has significantly impacted the
demand for travel as the various governments announced restrictions
to curb the COVID-19 virus and variant progression. The 737 MAX
grounding had also caused significant drop in revenue for the
Company's Boeing programs in the proceeding 2 years.
Looking ahead and following the US Federal Aviation
Administration and other aviation regulators around the world
rescinding the ban on 737 MAX; deliveries and productions rates
have increased and are expected to gradually increase through early
2022. As the vaccination efforts around the world gain momentum,
there is strong recovery observed in passenger volume in certain
parts of the world, particularly in the western countries. Current
forecasts from IATA and the OEM's indicate recovery, in terms of
travel demand is likely to recover by 2023-2024. Based on this
information, the Company providing this financial guidance and long
term forecasts.
Avcorp continues to focus on liquidity, debt management,
productivity improvements and opportunities within sustainable
technologies to achieve full potential as the industry recovers
from COVID 19 impact.
Q1 Financial Results
For the first quarter ended March 31,
2021, Avcorp is forecasting revenues of $24 million split 46% commercial aviation and 54%
defence. As at the quarter end, the Company order backlog was
$393 million split as to 83%
commercial and 17% defence. For the period the Company is
forecasting EBITDA of $20
million.
Long Term Forecasts
2021 figures include a one time claim settlement.
2022-2025 figures include management's best projections of new
contract awards.
The long term forecasted revenue and anticipated EBITDA are
based on management's expectations for new contracts being awarded
from existing customers together with the existing work backlog.
The actual results may differ materially from the forecast and the
Company's results are subject to inherent risks which may have an
impact on these financial results.
Forward Looking Statements
This press release includes forward-looking statements, which
may involve, but are not limited to: statements with respect to our
business objectives, prospects, and guidance in respect of
various financial and industry metrics, including, goals,
strategies, capabilities, market position, competitive
strengths, prospects, plans, expectations, anticipations, estimates
and intentions; business and economic, industry trends; customer
demand for products; order backlog mix; the regulatory
environment and legal proceedings; strength of our balance sheet,
creditworthiness, capital resources, anticipated financial
requirements, productivity enhancements, operational efficiencies,
cost reduction and the intended benefits and timing thereof;
availability of government assistance programs, compliance with
debt covenants; and the impact of the COVID-19 pandemic on the
foregoing; expectations regarding gradual market and economic
recovery in the aftermath of the COVID-19 pandemic.
Forward-looking statements can generally be identified by the
use of forward-looking terminology such as "may", "will", "shall",
"can", "expect", "estimate", "intend", "anticipate", "plan",
"foresee", "believe", "continue", "maintain" or "align", the
negative of these terms, variations of them or similar
terminology.
Forward-looking statements are presented for the purpose of
assisting investors and others in understanding certain key
elements of our current objectives, strategic priorities,
expectations, outlook, and plans, and to obtain an understanding of
our business and anticipated operating environment. Readers are
cautioned that such information may not be appropriate for other
purposes.
Forward-looking statements require management and the Board to
make assumptions and are subject to and unknown risks and
uncertainties, which may cause our actual results in future periods
to differ materially from forecast results set forth in
forward-looking statements and in this press release. While
management and the Board consider these assumptions to be
reasonable and appropriate based on information currently
available, there is risk that they may not be accurate. The
assumptions underlying the forward-looking statements made in this
press release in relation to the five-year forecast include the
following material assumptions: the award and fulfilment of
customer contracts that the Company does not currently have in its
backlog, the continuation of existing customer programs and
anticipated labour costs associated with our operations for the
periods covered in the forecast. Additional information, including
with respect to other assumptions and risk factors underlying the
forward-looking statements made in this press release, refer to the
risk factors in both our MD&A and our Annual Information Form
for the fiscal year ended December 31,
2020. Given the impact of the changing circumstances
surrounding the COVID-19 pandemic, there is inherently more
uncertainty associated with the Corporation's assumptions as
compared to prior years.
Certain factors that could cause actual results to differ
materially from those anticipated in the forward-looking statements
include, but are not limited to, risks associated with overall
global and domestic economic conditions, risks associated with our
business environment (such as risks associated with the financial
condition of our customers; increased competition from
international and domestic suppliers; force majeure events ),
operational risks such as the award of new business; order backlog;
the execution of customer orders; cash flows and capital
expenditures based on cyclicality; productivity enhancements,
operational efficiencies, cost reduction initiatives; product
warranty; regulatory and legal proceedings; environmental, health
and safety risks; dependence on certain customers, contracts and
suppliers; supply chain risks; human resources; reliance on
information systems; reliance on and protection of intellectual
property rights; adequacy of insurance coverage), financing risks
(such as risks related to liquidity and access to capital markets;
substantial debt and interest payment requirements; debt
covenants), market risks (such as foreign currency fluctuations;
changing interest rates; increases in commodity prices; and
inflation rate fluctuations). For more details, see the Risks and
uncertainties section in our MD&A for the fiscal year ended
December 31, 2020. The foregoing
factors may be exacerbated by the ongoing COVID-19 outbreak and may
have a significantly more severe impact on the Corporation's
business, results of operations and financial condition than in the
absence of such outbreak. As a result of the current COVID-19
pandemic, additional factors that could cause actual results to
differ materially from those anticipated in the forward-looking
statements include, but are not limited to: risks related to the
impact and effects of the COVID-19 pandemic on economic conditions
and financial markets and the resulting impact on our business,
operations, capital resources, liquidity, financial condition,
margins, prospects and results; uncertainty regarding the magnitude
and length of economic disruption as a result of the COVID-19
outbreak and the resulting effects on the demand for our products
and services; emergency measures and restrictions imposed by public
health authorities or governments, fiscal and monetary policy
responses by governments and financial institutions; disruptions to
global supply chain, customers, workforce, counterparties and
third-party service providers; further disruptions to operations,
orders and deliveries; technology, privacy, cyber security and
reputational risks; and other unforeseen adverse events.
The forward-looking statements present certain non-IFRS
financial measures to assist readers in understanding the Company's
forecasted performance. Non-IFRS financial measures are measures
that either exclude or include amounts that are not excluded or
included in the most directly comparable measures calculated and
presented in accordance with Generally Accepted Accounting
Principles ("GAAP"). Reference is made to EBITDA (defined as net
income before interest, income taxes, depreciation, and
amortization), which the Company considers to be an indicative
measure of operating performance and a metric to evaluate
profitability. As there is no standardized method of calculating
this measure, the Corporation's EBITDA may not be directly
comparable with similarly titled measures used by other companies.
In addition, reference is made to revenue in the long term
forecast, which assumes recognition of all revenue at the point in
time of shipment, excluding the recognition of revenue overtime.
Similarly, this is a non-IFRS financial measure the company
considers to be indicative of operating performance, and is not
directly comparable with similarly titled measures used by other
companies.
The foregoing list of factors that may affect future results and
performance is not exhaustive and undue reliance
should not be placed on forward-looking statements. The
forward-looking statements set forth herein reflect management's
expectations as at the date of this press release and are subject
to change after such date. Unless otherwise required by applicable
securities laws, we expressly disclaim any intention, and assume no
obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.
The forward-looking statements contained in this press release are
expressly qualified by this cautionary statement.
About Avcorp
The Avcorp Group designs and builds major airframe structures
for some of the world's leading aircraft companies, including BAE
Systems, Boeing, Bombardier, Lockheed Martin and Subaru
Corporation. The Avcorp Group has more than 60 years of experience,
over 500 skilled employees and 636,000 square feet of facilities.
Avcorp Structures & Integration located in Delta British Columbia, Canada is dedicated to
metallic and composite aerostructures assembly and integration;
Avcorp Engineered Composites located in Burlington Ontario, Canada is dedicated to
design and manufacture of composite aerostructures, and Avcorp
Composite Fabrication located in Gardena
California, USA has advanced composite aerostructures
fabrication capabilities for composite aerostructures. The Avcorp
Group 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. Comtek Advanced
Structures Ltd., at our Burlington,
Ontario, Canada location also provides aircraft operators
with aircraft structural component repair services for commercial
aircraft.
Avcorp Composite Fabrication Inc. is wholly owned by Avcorp US
Holdings Inc. Both companies are incorporated in the State of Delaware, USA, and are wholly owned
subsidiaries of Avcorp Industries Inc.
Comtek Advanced Structures Ltd., incorporated in the Province of
Ontario, Canada, is a wholly owned
subsidiary of Avcorp Industries Inc.
Avcorp Industries Inc. is a federally incorporated reporting
company in Canada and traded on
the Toronto Stock Exchange (TSX:AVP).
AMANDEEP KALER
CHIEF EXECUTIVE OFFICER
AVCORP GROUP
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SOURCE Avcorp Industries Inc.