MONTREAL, Jan. 10, 2019 (GLOBE NEWSWIRE) -- Velan Inc. (TSX: VLN) (the "Company"), a world-leading manufacturer of industrial valves, announced today its financial results for its third quarter ended November 30, 2018.
Highlights
(millions of U.S. dollars, excluding per share amounts) | Three-month periods ended November 30 | Nine-month periods ended November 30 | |||
2018 | 2017 | 2018 | 2017 | ||
Sales | $92.3 | $87.7 | $261.5 | $235.4 | |
Gross Profit3 | 22.6 | 23.2 | 59.7 | 52.8 | |
Gross profit3 % | 24.5% | 26.5% | 22.8% | 22.4% | |
EBITDA2 | 3.4 | 3.4 | 3.3 | (3.3) | |
EBITDA2 per share ? basic and diluted | 0.16 | 0.16 | 0.15 | (0.15) | |
Net earnings (loss)1 | (0.2) | 0.3 | (6.4) | (9.6) | |
Net earnings (loss)1 per share ? basic and diluted | (0.01) | 0.02 | (0.30) | (0.44) |
Third Quarter Fiscal 2019 (unless otherwise noted, all amounts are in U.S. dollars and all comparisons are to the third quarter of fiscal 2018):
First Nine Months Fiscal 2019 (unless otherwise noted, all amounts are in U.S. dollars and all comparisons are to the first nine months of fiscal 2018):
"Although our third quarter was essentially break-even, we noted that the trend of higher order bookings and sales continued. Our SG&A costs decreased for the quarter both in absolute terms and as a percentage of sales, in spite of some heavy freight charges for a large export order as well as continued investment in our transformation initiative," said John Ball, CFO of Velan Inc. "Our balance sheet remains solid, and we reduced our investment in receivables and inventory even with an increase in sales and backlog. The backlog increase was achieved despite being negatively impacted by the weakening of the euro spot rate against the U.S. dollar since the beginning of the year. Our quarter end net book value per share was US$14.25 per share, which includes cash of US$2.31 per share."
Yves Leduc, President and CEO of Velan Inc., said, "Once again, we noted improvements on several fronts this quarter. Our sales and bookings were significantly higher than last year, and our backlog has also improved since the beginning of the fiscal year. We recently reorganized into strategic business units to better serve our customers. We are also undertaking several transformative initiatives to return to profitability, including the very important decision to consolidate the Company's valve manufacturing facilities in Quebec (Canada) from three plants into two as disclosed in a separate press release issued today"
Dividend
The Board declared an eligible quarterly dividend of CDN$0.03 per share, payable on March 29, 2019, to all shareholders of record as at March 15, 2019.
Conference call
Financial analysts, shareholders, and other interested individuals are invited to attend the third quarter conference call to be held on Friday, January 12, 2019, at 10:00 a.m. (EDT). The toll free call-in number is 1?800?785?6380, access code 21913385. A recording of this conference call will be available for seven days at 1?416?626?4100 or 1?800?558?5253, access code 21913385.
About Velan
Founded in Montreal in 1950, Velan Inc. (www.velan.com) is one of the world's leading manufacturers of industrial valves, with sales of US$338 million in its last reported fiscal year. The Company employs over 1,800 people and has manufacturing plants in 9 countries. Velan Inc. is a public company with its shares listed on the Toronto Stock Exchange under the symbol VLN.
Safe harbour statement
This news release may include forward-looking statements, which generally contain words like "should", "believe", "anticipate", "plan", "may", "will", "expect", "intend", "continue" or "estimate" or the negatives of these terms or variations of them or similar expressions, all of which are subject to risks and uncertainties, which are disclosed in the Company's filings with the appropriate securities commissions. While these statements are based on management's assumptions regarding historical trends, current conditions and expected future developments, as well as other factors that it believes are reasonable and appropriate in the circumstances, no forward-looking statement can be guaranteed and actual future results may differ materially from those expressed herein. The Company disclaims any intention or obligation to update or revise any forward-looking statements contained herein whether as a result of new information, future events or otherwise, except as required by the applicable securities laws. The forward-looking statements contained in this news release are expressly qualified by this cautionary statement.
Non-IFRS measures
In this press release, the Company presented measures of performance and financial condition that are not defined under International Financial Reporting Standards ("non-IFRS measures") and are therefore unlikely to be comparable to similar measures presented by other companies. These measures are used by management in assessing the operating results and financial condition of the Company. In addition, they provide readers of the Company's consolidated financial statements with enhanced understanding of its results and financial condition, and increase transparency and clarity into the operating results of its core business.
The term "EBITDA" is defined as net income or loss attributable to Subordinate and Multiple Voting Shares plus depreciation of property, plant & equipment, plus amortization of intangible assets, plus net finance costs plus income tax provision. Refer to the "Reconciliations of Non-IFRS Measures" section in the Company's Management Discussion and Analysis included in its Interim Report for the quarter ended November 30, 2018 for a detailed calculation of this measure. The forward-looking statements contained in this news release are expressly qualified by this cautionary statement.
________________________________
1 Net earnings or loss refers to net income or loss attributable to Subordinate and Multiple Voting Shares.
2 Non-IFRS measures ? see explanation above.
3 In accordance with the current fiscal year's presentation, the comparative figures were adjusted to reflect a more accurate allocation of cost of sales and administration costs.
Velan Inc. | ||||
Condensed Interim Consolidated Statements of Financial Position | ||||
(Unaudited) | ||||
(in thousands of U.S. dollars) | ||||
As At | November 30, | February 28, | ||
2018 | 2018 | |||
$ | $ | |||
Assets | ||||
Current assets | ||||
Cash and cash equivalents | 68,450 | 85,391 | ||
Short-term investments | 147 | 647 | ||
Accounts receivable | 125,611 | 137,382 | ||
Income taxes recoverable | 15,876 | 8,012 | ||
Inventories | 170,262 | 170,790 | ||
Deposits and prepaid expenses | 3,284 | 4,222 | ||
Derivative assets | 110 | 604 | ||
383,740 | 407,048 | |||
Non-current assets | ||||
Property, plant and equipment | 86,062 | 89,864 | ||
Intangible assets and goodwill | 17,602 | 20,210 | ||
Deferred income taxes | 18,708 | 22,034 | ||
Other assets | 398 | 1,037 | ||
122,770 | 133,145 | |||
Total assets | 506,510 | 540,193 | ||
Liabilities | ||||
Current liabilities | ||||
Bank indebtedness | 18,494 | 20,848 | ||
Short-term bank loans | 2,485 | 1,074 | ||
Accounts payable and accrued liabilities | 69,871 | 63,441 | ||
Income taxes payable | 475 | 2,186 | ||
Dividend payable | 497 | 1,678 | ||
Customer deposits | 38,208 | 48,963 | ||
Provisions | 8,768 | 10,798 | ||
Accrual for performance guarantees | 23,124 | 32,655 | ||
Derivative liabilities | 869 | 1,615 | ||
Current portion of long-term debt | 7,696 | 8,151 | ||
170,487 | 191,409 | |||
Non-current liabilities | ||||
Long-term debt | 14,858 | 13,978 | ||
Income taxes payable | 2,033 | 2,078 | ||
Deferred income taxes | 2,433 | 2,889 | ||
Other liabilities | 8,535 | 8,222 | ||
27,859 | 27,167 | |||
Total liabilities | 198,346 | 218,576 | ||
Equity | ||||
Equity attributable to the Subordinate and Multiple Voting shareholders | ||||
Share capital | 73,090 | 73,090 | ||
Contributed surplus | 6,070 | 6,057 | ||
Retained earnings | 253,575 | 256,668 | ||
Accumulated other comprehensive loss | (28,971 | ) | (19,790 | ) |
303,764 | 316,025 | |||
Non-controlling interest | 4,400 | 5,592 | ||
Total equity | 308,164 | 321,617 | ||
Total liabilities and equity | 506,510 | 540,193 | ||
Velan Inc. | |||||||||
Condensed Interim Consolidated Statements of Income (Loss) | |||||||||
(Unaudited) | |||||||||
(in thousands of U.S. dollars, excluding number of shares and per share amounts) | |||||||||
Three-month periods ended November 30 | Nine-month periods ended November 30 | ||||||||
2018 | 2017 | 2018 | 2017 | ||||||
$ | $ | $ | $ | ||||||
Sales | 92,271 | 87,738 | 261,520 | 235,356 | |||||
Cost of sales | 69,622 | 64,530 | 201,791 | 182,508 | |||||
Gross profit | 22,649 | 23,208 | 59,729 | 52,848 | |||||
Administration costs | 22,467 | 23,121 | 66,151 | 64,347 | |||||
Other expense (income) | (63 | ) | 28 | (87 | ) | 1,547 | |||
Operating profit (loss) | 245 | 59 | (6,335 | ) | (13,046 | ) | |||
Finance income | 131 | 193 | 493 | 561 | |||||
Finance costs | 221 | 328 | 1,165 | 694 | |||||
Finance costs ? net | (90 | ) | (135 | ) | (672 | ) | (133 | ) | |
Income (Loss) before income taxes | 155 | (76 | ) | (7,007 | ) | (13,179 | ) | ||
Provision for (Recovery of) income taxes | 497 | (248 | ) | (436 | ) | (3,324 | ) | ||
Net income (loss) for the period | (342 | ) | 172 | (6,571 | ) | (9,855 | ) | ||
Net income (loss) attributable to: | |||||||||
Subordinate Voting Shares and Multiple Voting Shares | (236 | ) | 305 | (6,401 | ) | (9,590 | ) | ||
Non-controlling interest | (106 | ) | (133 | ) | (170 | ) | (265 | ) | |
(342 | ) | 172 | (6,571 | ) | (9,855 | ) | |||
Net income (loss) per Subordinate and Multiple Voting Share | |||||||||
Basic | (0.01 | ) | 0.02 | (0.30 | ) | (0.44 | ) | ||
Diluted | (0.01 | ) | 0.02 | (0.30 | ) | (0.44 | ) | ||
Dividends declared per Subordinate and Multiple | 0.02 | 0.08 | 0.07 | 0.23 | |||||
Voting Share | (CA$0.03) | (CA$0.10) | (CA$0.09) | (CA$0.30) | |||||
Total weighted average number of Subordinate and | |||||||||
Multiple Voting Shares | |||||||||
Basic | 21,621,935 | 21,626,678 | 21,621,935 | 21,640,632 | |||||
Diluted | 21,621,935 | 21,632,731 | 21,621,935 | 21,640,632 |
Velan Inc. | ||||||||
Condensed Interim Consolidated Statements of Comprehensive Income (Loss) | ||||||||
(Unaudited) | ||||||||
(in thousands of U.S. dollars) | ||||||||
Three-month periods ended November 30 | Nine-month periods ended November 30 | |||||||
2018 | 2017 | 2018 | 2017 | |||||
$ | $ | $ | $ | |||||
Comprehensive income (loss) | ||||||||
Net income (loss) for the period | (342 | ) | 172 | (6,571 | ) | (9,855 | ) | |
Other comprehensive income (loss) | ||||||||
Foreign currency translation adjustment on foreign operations | ||||||||
whose functional currency is other than the reporting | ||||||||
currency (U.S. dollar) | (2,454 | ) | 678 | (9,276 | ) | 12,489 | ||
Comprehensive income (loss) | (2,796 | ) | 850 | (15,847 | ) | 2,634 | ||
Comprehensive income (loss) attributable to: | ||||||||
Subordinate Voting Shares and Multiple Voting Shares | (2,682 | ) | 825 | (15,582 | ) | 2,721 | ||
Non-controlling interest | (114 | ) | 25 | (265 | ) | (87 | ) | |
(2,796 | ) | 850 | (15,847 | ) | 2,634 | |||
Other comprehensive income (loss) is composed solely of items that may be reclassified subsequently to the | ||||||||
consolidated statement of loss. | ||||||||
Velan Inc. | |||||||||||||||
Condensed Interim Consolidated Statements of Changes in Equity | |||||||||||||||
(Unaudited) | |||||||||||||||
(in thousands of U.S. dollars, excluding number of shares) | |||||||||||||||
Equity attributable to the Subordinate and Multiple Voting shareholders | |||||||||||||||
Number of shares | Share capital | Contributed surplus | Accumulated other comprehensive income (loss) | Retained earnings | Total | Non-controlling interest | Total equity | ||||||||
Balance - February 28, 2018 | 21,621,935 | 73,090 | 6,057 | (19,790 | ) | 256,668 | 316,025 | 5,592 | 321,617 | ||||||
Adjustment related to the transition to IFRS 15 | - | - | - | - | 4,741 | 4,741 | - | 4,741 | |||||||
Adjusted balance - March 1, 2018 | 21,621,935 | 73,090 | 6,057 | (19,790 | ) | 261,409 | 320,766 | 5,592 | 326,358 | ||||||
Net loss for the period | - | - | - | - | (6,401 | ) | (6,401 | ) | (170 | ) | (6,571 | ) | |||
Other comprehensive loss | - | - | - | (9,181 | ) | - | (9,181 | ) | (95 | ) | (9,276 | ) | |||
21,621,935 | 73,090 | 6,057 | (28,971 | ) | 255,008 | 305,184 | 5,327 | 310,511 | |||||||
Effect of share-based compensation | - | - | 13 | - | - | 13 | - | 13 | |||||||
Dividends | |||||||||||||||
Multiple Voting Shares | - | - | - | - | (1,044 | ) | (1,044 | ) | - | (1,044 | ) | ||||
Subordinate Voting Shares | - | - | - | - | (389 | ) | (389 | ) | - | (389 | ) | ||||
Non-controlling interest | - | - | - | - | - | - | (927 | ) | (927 | ) | |||||
Balance - November 30, 2018 | 21,621,935 | 73,090 | 6,070 | (28,971 | ) | 253,575 | 303,764 | 4,400 | 308,164 | ||||||
Balance - February 28, 2017 | 21,667,235 | 73,584 | 6,017 | (35,550 | ) | 281,343 | 325,394 | 6,517 | 331,911 | ||||||
Net loss for the period | - | - | - | - | (9,590 | ) | (9,590 | ) | (265 | ) | (9,855 | ) | |||
Other comprehensive income | - | - | - | 12,311 | - | 12,311 | 178 | 12,489 | |||||||
21,667,235 | 73,584 | 6,017 | (23,239 | ) | 271,753 | 328,115 | 6,430 | 334,545 | |||||||
Effect of share-based compensation | - | - | 30 | - | - | 30 | - | 30 | |||||||
Share repurchase | (45,300 | ) | (494 | ) | - | - | (136 | ) | (630 | ) | - | (630 | ) | ||
Dividends | |||||||||||||||
Multiple Voting Shares | - | - | - | - | (3,603 | ) | (3,603 | ) | - | (3,603 | ) | ||||
Subordinate Voting Shares | - | - | - | - | (1,433 | ) | (1,433 | ) | - | (1,433 | ) | ||||
Non-controlling interest | - | - | - | - | - | - | (41 | ) | (41 | ) | |||||
Balance - November 30, 2017 | 21,621,935 | 73,090 | 6,047 | (23,239 | ) | 266,581 | 322,479 | 6,389 | 328,868 |
Velan Inc. | |||||||||
Condensed Interim Consolidated Statements of Cash Flow | |||||||||
(Unaudited) | |||||||||
(in thousands of U.S. dollars) | |||||||||
Three-month periods ended November 30 | Nine-month periods ended November 30 | ||||||||
2018 | 2017 | 2018 | 2017 | ||||||
$ | $ | $ | $ | ||||||
Cash flows from | |||||||||
Operating activities | |||||||||
Net income (loss) for the period | (342 | ) | 172 | (6,571 | ) | (9,855 | ) | ||
Adjustments to reconcile net income to cash provided by operating activities | 2,676 | 2,420 | 9,679 | 10,885 | |||||
Changes in non-cash working capital items | (4,519 | ) | 5,727 | (8,499 | ) | 5,990 | |||
Cash provided (used) by operating activities | (2,185 | ) | 8,319 | (5,391 | ) | 7,020 | |||
Investing activities | |||||||||
Short-term investments | 11 | (24 | ) | 500 | (487 | ) | |||
Additions to property, plant and equipment | (1,111 | ) | (1,457 | ) | (6,401 | ) | (4,372 | ) | |
Additions to intangible assets | (13 | ) | - | (112 | ) | (405 | ) | ||
Proceeds on disposal of property, plant and equipment, and intangible assets intangible assets | 19 | 14 | 144 | 75 | |||||
Net change in other assets | 18 | (8 | ) | 596 | 44 | ||||
Cash used by investing activities | (1,076 | ) | (1,475 | ) | (5,273 | ) | (5,145 | ) | |
Financing activities | |||||||||
Dividends paid to Subordinate and Multiple Voting shareholders | (484 | ) | (1,720 | ) | (2,614 | ) | (4,989 | ) | |
Dividends paid to non-controlling interest | - | (41 | ) | (927 | ) | (41 | ) | ||
Repurchase of shares | - | (94 | ) | - | (630 | ) | |||
Short-term bank loans | 426 | (791 | ) | 1,411 | (564 | ) | |||
Increase in long-term debt | 3,509 | - | 4,116 | - | |||||
Repayment of long-term debt | (857 | ) | (793 | ) | (2,787 | ) | (2,352 | ) | |
Cash provided (used) by financing activities | 2,594 | (3,439 | ) | (801 | ) | (8,576 | ) | ||
Effect of exchange rate differences on cash | (711 | ) | 568 | (3,122 | ) | 6,495 | |||
Net change in cash during the period | (1,378 | ) | 3,973 | (14,587 | ) | (206 | ) | ||
Net cash ? Beginning of the period | 51,334 | 72,048 | 64,543 | 76,227 | |||||
Net cash ? End of the period | 49,956 | 76,021 | 49,956 | 76,021 | |||||
Net cash is composed of: | |||||||||
Cash and cash equivalents | 68,450 | 88,241 | 68,450 | 88,241 | |||||
Bank indebtedness | (18,494 | ) | (12,220 | ) | (18,494 | ) | (12,220 | ) | |
49,956 | 76,021 | 49,956 | 76,021 | ||||||
Supplementary information | |||||||||
Interest received (paid) | 52 | (32 | ) | (116 | ) | 89 | |||
Income taxes reimbursed (paid) | (4,422 | ) | (1,363 | ) | (8,776 | ) | (4,122 | ) | |
For further information please contact:
Yves Leduc, President & Chief Executive Officer
or
John D. Ball, Chief Financial Officer
Tel: (514) 748-7743
Fax: (514) 748-8635
Web: www.velan.com
These press releases may also interest you
|