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.
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.
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.
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).
CHIEF EXECUTIVE OFFICER
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SOURCE Avcorp Industries Inc.