Avcorp Industries Inc. (TSX: AVP) has reported second quarter 2020 revenue was CDN 32,246,000 compared to CDN 46,799,000 in 2019, the company said.
2020 revenue decreased by CDN 14,553,000 as a result of lower deliveries caused by lower customer requirements due to the novel Coronavirus and 737 MAX grounding.
2020 financial highlights include:
-Second quarter 2020 net loss was CDN 1,594,000 compared to net loss of CDN 4,568,000 in 2019. Net loss improved in comparison to 2019 after receiving the Canada Emergency Wage Subsidies of CDN 2,404,000.
-Second quarter 2020 foreign exchange gain was CDN 1,414,000 (June 30, 2019: CDN 329,000 gain).
-Second quarter 2020 cash flows from operating activities before changes in non-cash working capital was CDN 1,694,000 (June 30, 2019: cash inflow of CDN 121,000).
-On April 28, 2020, the Company received a loan in the amount of CDN 4,123,000 to support Avcorp Composite Fabrication Inc through the Paycheck Protection Program from the US Small Business Administration. The loan has a term of 2 years and bears interest at a fixed rate of 1% per annum with the first six months of interest deferred. The loan is forgivable if certain requirements are met.
-On June 30, 2020, the Company entered into an amendment to its existing operating credit facility with a Canadian Chartered Bank whereby the maximum availability under the Loan agreement cannot exceed CDN 68,000,000 less CDN 1,000,000 until July 31, 2020 and thereafter less CDN 2,300,000 providing additional liquidity.
BAE Systems awarded the Company a contract for the assembly of the F-35 Carrier Variant Outboard Wing. The total awards are approximately CDN 87 million extending Avcorp´s current long-term contract with BAE systems into 2022.
In July 2020, the Company received an additional Canada Emergency Wage Subsidy of CDN 1,231,000.
On July 31, 2020, the Company entered into an amendment to its existing operating credit facility with a Canadian Chartered Bank whereby the maximum availability under the Loan agreement cannot exceed CDN 68,000,000 less CDN 1,000,000 until August 31, 2020 and thereafter less USD CDN 2,300,000 providing additional liquidity.
As at June 30, 2020, the Company had CDN 8,814,000 cash on hand (December 31, 2019: CDN 4,316,000) and had utilized CDN 89,514,000 of its operating line of credit (December 31, 2019: CDN 84,661,000). The Company has a working capital deficit of CDN 84,103,000 as at June 30, 2020, compared with CDN 71,561,000 deficit as at December 31, 2019. 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 CDN 22,302,000 surplus as at June 30, 2020 (December 31, 2019: CDN 18,542,000 surplus). The Company´s accumulated deficit as at June 30, 2020 is CDN 154,202,000 (December 31, 2019: CDN 142,194,000).
The Avcorp Group designs and builds major airframe structures for aircraft companies, including BAE Systems, Boeing, Bombardier, Lockheed Martin and Subaru Corporation. The Avcorp Group has more than 60 years of experience, over 600 skilled employees and 636,000 square feet of facilities.