MONTREAL, QUEBEC--(Marketwire - Oct. 12, 2011) - Velan Inc. (TSX:VLN), a world-leading manufacturer of industrial valves, announced today its financial results for its second quarter ended August 31, 2011.
| Three months | Six months | ||||||||
| ended | ended | ||||||||
| August 31 | August 31 | ||||||||
| (millions of U.S. dollars, excluding per share amounts) | 2011 | 2010 | 2011 | 2010 | |||||
| Sales | $95.4 | $78.4 | $200.4 | $168.0 | |||||
| Gross Profit | 15.7 | 14.1 | 37.0 | 38.4 | |||||
| Gross margin | 16.5 | % | 18.0 | % | 18.4 | % | 22.8 | % | |
| Net income (loss) attributable to Multiple | |||||||||
| and Subordinate Voting Shares | (2.1 | ) | (2.5 | ) | (2.0 | ) | 2.2 | ||
| Net income (loss) per share – basic and fully diluted | (0.10 | ) | (0.11 | ) | (0.09 | ) | 0.10 | ||
Highlights
Second Quarter Fiscal 2012 (unless otherwise noted, all comparisons are to the second quarter of fiscal 2011):
- Net loss(1) amounted to $2.1 million or $0.10 per share compared to a net loss(1)of $2.5 million or $0.11 per
share last year. Excluding the results of our first quarter acquisition, Velan ABV ("ABV"), the related effects of purchase price accounting and currency impacts, the Company would have reported a net loss(1)of $0.5 million or $0.02 per share in the current quarter compared to a net loss(1) of $2.6 million or $0.12 per share last year.
- Net new orders received ("bookings") amounted to $172.1 million, an increase of $74.3 million or 76.0% compared to last year. Excluding ABV and currency impacts, the increase was $47.6 million or 48.7%. The Company booked a significant amount of project orders which it believes may be indicative of a strengthening in its key end user markets. The Company ended the second quarter with a record backlog of $676.9 million; $638.1 million excluding ABV.
- Sales amounted to $95.4 million, an increase of $17.0 million or 21.7%. Excluding ABV and currency impacts, sales increased $8.5 million or 10.8%.
- Gross margin decreased by 1.5% from 18.0% to 16.5%. Excluding ABV, the effects of purchase price accounting and currency impacts, gross margin would have decreased by 0.2% over last year.
(1) Net earnings or loss refers to net income or loss attributable to Subordinate and Multiple Voting Shares.
- The Company used net cash(1) from operations of $12.8 million. This use of net cash(1) is primarily attributable to increased inventory purchases required to service the growing backlog. The Company's backlog increased by 33.9% and 16.4% when compared to August 2010 and February 2011, respectively. The Company ended the second quarter with net cash(1) of $49.6 million.
- Based on average exchange rates, the U.S. dollar weakened 6.6% against the Canadian dollar when compared to the same period last year. This weakening resulted in the Company`s Canadian dollar expenses being reported as higher U.S. dollar amounts in the current quarter.
Half year fiscal 2012 (unless otherwise noted, all comparisons are to the second quarter of fiscal 2011):
- Net loss(2) amounted to $2.0 million or $0.09 per share compared to net earnings(2) of $2.2 million or $0.10
per share last year. Excluding ABV, the effects of purchase price accounting and currency impacts, the Company would have reported net earnings(2) of $1.0 million or $0.04 per share this year compared to a net loss(2) of $0.7 million or $0.03 per share last year.
- Bookings amounted to $308.9 million, an increase of $143.1 million or 86.3% compared to last year. Excluding ABV and currency impacts, the increase would have been $94.6 million or 57.1%.
- Sales amounted to $200.4 million, an increase of $32.4 million or 19.3%. Excluding ABV and currency impacts, sales increased $17.7 million or 10.5%.
- Gross margin decreased by 4.4% from 22.8% to 18.4%. Excluding ABV, the effects of purchase price accounting and currency impacts, gross margin would have decreased by 0.6%.
- The Company used net cash(1) from operations of $14.3 million. This use of net cash(1)is primarily attributable to increased inventory purchases required to service the growing backlog.
- Based on average exchange rates, the U.S. dollar weakened 6.0% against the Canadian dollar when compared to the same period last year. This weakening resulted in the Company`s Canadian dollar expenses being reported as higher U.S. dollar amounts in the current year.
"Despite improving second quarter sales revenues, bookings and backlog, we had a net loss(2)of US$2.1 million," said Tom Velan, President and CEO of Velan Inc. "however, adjusting for ABV, the effects of purchase price accounting for the acquisition and currency impacts, we would have reported a net loss(2)of US$0.5 million compared to an adjusted loss of $2.6 million last year."
"Faced with significant material cost increases, we have been raising our selling prices. For some of our product lines we still face lower margins due to higher material costs. We aim to improve the margin by increasing volume as well as continuing to make selective price increases to cover cost increases."
"Administration costs increased significantly this quarter as our legal and other costs associated with our on-going asbestos legal proceedings increased from $2.2 million to $2.7 million. Similar to some other U.S. valve manufacturers, two of our U.S. subsidiaries have been named as defendants in a number of pending lawsuits brought on behalf of individuals seeking to recover damages for their alleged asbestos exposure. These lawsuits are related to products manufactured and sold many years ago. We strongly believe that our products, which were supplied with encapsulated asbestos packing and gaskets in accordance with valve industry practice and customer mandated specifications, did not contribute to any asbestos-related sicknesses. We will continue to vigorously defend against these claims but, given the ongoing course of asbestos litigation in the U.S. and the unpredictability of jury trials, it is not possible to make an estimate of our legal and other costs related to these claims."
(1)Non-GAAP measures – see explanation below.
(2) Net earnings or loss refers to net income or loss attributable to Subordinate and Multiple Voting Shares.
"ABV had a soft quarter due to the impact of resources devoted to opening a new plant and the acquisition and subsequent integration work. We expect improving results going forward and continue to view this acquisition as a great opportunity to help grow our sales and earnings over the coming years."
"We had strong order bookings of $172.1 million, an increase of 76% compared to last year. Adjusting for ABV and currency impacts, the increase would be 48.7%. We have had a large increase in project order bookings and we continue to see strength in our key markets both in quotation activity and bookings."
"Excluding ABV, our backlog increased by $90.1 million or 16.4% since the beginning of the fiscal year," said John Ball, CFO of Velan Inc. "We needed to increase our inventory purchases in order to service our backlog which is now the highest in the history of Velan at $676.9 million. The increased purchases resulted in net cash(1) of $12.8 million being used this quarter in operating activities. Despite the increased purchases, we ended the quarter with net cash(1) of $49.6 million."
"While our key end-user markets are showing signs of strengthening, we continue to monitor the risk of another sharp downturn in the economy. Persistent stagnation in Europe, renewed weakness in the U.S. and concerns about the stability of the Euro caused by the economic problems in Greece and elsewhere are some of the factors we are closely monitoring. With a record order backlog of $676.9 million, virtually no debt, $190.2 million in unused credit lines and net cash(1) of $49.6 million, we feel we have maintained a balance sheet solid enough to weather another economic downturn should one occur."
Tom Velan concluded, "We are encouraged by the positive trend in bookings, backlog and sales. We are continuing to take measures to broaden our product offering, to improve our cost competitiveness, and to strengthen our presence in international markets in order to improve our long-term performance and increase the value of our company. In the shorter term, we are focused on improved execution of our large project order backlog to increase sales and improve earnings."
Dividend
The Board declared an eligible quarterly dividend of Canadian dollar $0.08 per share, payable on December 30, 2011, to all shareholders of record as at December 15, 2011.
Conference Call
Financial analysts, shareholders, and other interested individuals are invited to attend the second quarter conference call to be held on October 12, 2011, at 4:30 PM (EST). The toll free call-in number is 1-800-268-2160, access code 21541915. A recording of this conference call will be available for seven days at 1-416-626-4100 or 1-800-558-5253, access code 21541915
About Velan
Velan Inc. (www.velan.com) is a world-leading manufacturer of industrial valves with sales of $381 million in its last reported fiscal year. The company employs over 1,800 people and has manufacturing plants in 10 countries. Velan Inc. is a public company with its shares listed on the Toronto Stock Exchange under the symbol VLN.
(1)Non-GAAP measures – see explanation below.
Safe Harbour Statement
Except for historical information provided herein, this press release may contain information and statements of a forward-looking nature concerning the future performance of the Company. These statements are based on suppositions and uncertainties as well as on management's best possible evaluation of future events. Such factors may include, without excluding other considerations, fluctuations in quarterly results, evolution in customer demand for the Company's products and services, the impact of price pressures exerted by competitors, and general market trends or economic changes. As a result, readers are advised that actual results may differ from expected results.
Non-GAAP measures
In this press release, the Company presented measures of performance and financial condition which are not defined under Canadian GAAP ("non-GAAP 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.
Net cash is defined as cash and cash equivalents plus short-term investments less bank indebtedness and short- term bank loans.
| SELECTED FINANCIAL INFORMATION | ||||||
| Reconciliation of Net Income (Loss) from Canadian GAAP to IFRS: | ||||||
| Fiscal Year | Three Months | Six Months | ||||
| Ended | Ended | Ended | ||||
| (In thousands of indicated currency) | February 28 | August 31 | August 31 | |||
| 2011 | 2010 | 2010 | ||||
| $ | $ | $ | ||||
| Net Income (Loss) – GAAP in Canadian dollars | 5,810 | (882 | ) | 192 | ||
| Net Income (Loss) – GAAP in U.S. dollars | 5,665 | (837 | ) | 220 | ||
| IFRS Adjustments to net income (loss) in U.S. dollars: | ||||||
| Change of functional currency to U.S. dollar | 14,819 | (617 | ) | 3,405 | ||
| Reclassification of Non-controlling Interest | 775 | 346 | 668 | |||
| Income taxes – tax effect of above differences | 740 | (1,019 | ) | (1,400 | ) | |
| Net Income (Loss) – IFRS in U.S. dollars | 21,999 | (2,127 | ) | 2,893 | ||
Reconciliation of Comprehensive Income (Loss) from Canadian GAAP to IFRS:
| Fiscal Year | Three Months | Six Months | |||||
| Ended | Ended | Ended | |||||
| (In thousands of indicated currency) | February 28 | August 31 | August 31 | ||||
| 2011 | 2010 | 2010 | |||||
| $ | $ | $ | |||||
| Comprehensive Income (Loss) – GAAP in Canadian | |||||||
| dollars | 1,976 | 3,076 | (2,874 | ) | |||
| Comprehensive Income (Loss) – GAAP in U.S. dollars | 1,907 | 3,059 | (2,752 | ) | |||
| IFRS Adjustments to comprehensive income (loss) in U.S. dollars: | |||||||
| Change of functional currency to U.S. dollar | 21,091 | (1,727 | ) | 1,647 | |||
| Realized translation adjustment on reduction of net investment in self-sustaining operations |
|||||||
| (239 | ) | - | - | ||||
| Reclassification of Non-controlling Interest | 845 | 347 | 555 | ||||
| Income taxes – tax effect of above differences | 740 | (1,019 | ) | (1,400 | ) | ||
| Comprehensive Income (Loss) – IFRS in U.S. dollars | 24,344 | 660 | (1,950 | ) | |||
| Reconciliation of Equity from Canadian GAAP to IFRS: | |||||||
| February 28 | August 31, | March 1, | |||||
| (In thousands of indicated currency) | 2011 | 2010 | 2010 | ||||
| $ | $ | $ | |||||
| Equity – GAAP in Canadian dollars | 340,627 | 339,549 | 346,184 | ||||
| Equity – GAAP in U.S. dollars | 350,265 | 318,259 | 328,682 | ||||
| IFRS Adjustments to Equity in U.S. dollars: | |||||||
| Change of functional currency to U.S. dollar | (19,794 | ) | (5,913 | ) | (13,469 | ) | |
| Reclassification of non-controlling interest | 4,025 | 5,472 | 4,954 | ||||
| Income taxes – tax effect of above differences | 3,227 | (845 | ) | 2,439 | |||
| Equity – IFRS in U.S. dollars | 337,723 | 316,973 | 322,606 | ||||
| Velan Inc. |
| 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 | Six-month periods ended | |||||||
| August 31 | August 31 | |||||||
| 2011 | 2010 | 2011 | 2010 | |||||
| $ | $ | $ | $ | |||||
| Sales | 95,389 | 78,355 | 200,412 | 168,025 | ||||
| Cost of sales | 79,681 | 64,286 | 163,442 | 129,663 | ||||
| Gross profit | 15,708 | 14,069 | 36,970 | 38,362 | ||||
| Administration cost | 19,931 | 15,896 | 40,580 | 33,573 | ||||
| Other expense (income) | (340 | ) | (455 | ) | (216 | ) | (346 | ) |
| Operating profit (loss) | (3,883 | ) | (1,372 | ) | (3,394 | ) | 5,135 | |
| Finance income | 42 | 210 | 161 | 229 | ||||
| Finance costs | 506 | 250 | 823 | 437 | ||||
| Finance income (costs) – net | (464 | ) | (40 | ) | (662 | ) | (208 | ) |
| Income (Loss) before income tax | (4,347 | ) | (1,412 | ) | (4,056 | ) | 4,927 | |
| Income tax expense (recovery) | (1,525 | ) | 715 | (1,575 | ) | 2,034 | ||
| Net income (loss) for the period | (2,822 | ) | (2,127 | ) | (2,481 | ) | 2,893 | |
| Net income (loss) attributable to: | ||||||||
| Subordinate Voting Shares and Multiple Voting Shares | (2,111 | ) | (2,473 | ) | (1,964 | ) | 2,225 | |
| Non-controlling interest | (711 | ) | 346 | (517 | ) | 668 | ||
| (2,822 | ) | (2,127 | ) | (2,481 | ) | 2,893 | ||
| Net income (loss) per Subordinate and Multiple Voting Share |
||||||||
| Basic | (0.10 | ) | (0.11 | ) | (0.09 | ) | 0.10 | |
| Diluted | (0.10 | ) | (0.11 | ) | (0.09 | ) | 0.10 | |
| Dividends declared per Subordinate and | 0.09 | 0.08 | 0.17 | 0.16 | ||||
| Multiple Voting Share | (CDN$0.08 | ) | (CDN$0.08 | ) | (CDN$0.16 | ) | (CDN$0.16 | ) |
| Total weighted average Subordinate and Multiple Voting Shares | ||||||||
| Basic | 22,183,375 | 22,220,030 | 22,183,375 | 22,220,030 | ||||
| Diluted | 22,225,091 | 22,254,340 | 22,230,509 | 22,262,513 | ||||
| Velan Inc. |
| Interim Consolidated Statements of Comprehensive Income (Loss) |
| (Unaudited) |
| (in thousands of U.S. dollars) |
| Three-month periods ended | Six-month periods ended | |||||||
| August 31 | August 31 | |||||||
| 2011 | 2010 | 2011 | 2010 | |||||
| $ | $ | $ | $ | |||||
| Comprehensive income (loss) | ||||||||
| Net income (loss) for the period | (2,822 | ) | (2,127 | ) | (2,481 | ) | 2,893 | |
| Other comprehensive income (loss), net of tax | ||||||||
| Foreign currency translation adjustment on foreign operations whose functional currency is other than the U.S. dollar | 1,031 |
2,787 |
3,845 |
(4,843 |
) | |||
| Comprehensive income (loss) | (1,791 | ) | 660 | 1,364 | (1,950 | ) | ||
| Comprehensive income (loss) attributable to: | ||||||||
| Subordinate Voting Shares and Multiple Voting Shares | (1,258 | ) | 313 | 2,027 | (2,505 | ) | ||
| Non-controlling interest | (533 | ) | 347 | (663 | ) | 555 | ||
| (1,791 | ) | 660 | 1,364 | (1,950 | ) | |||
| Velan Inc. |
| Interim Consolidated Statements of Financial Position |
| (Unaudited) |
| (in thousands of U.S. dollars) |
| As At | August 31, | February 28, | March 1, |
| 2011 | 2011 | 2010 | |
| $ | $ | $ | |
| Assets | |||
| Current assets | |||
| Cash and cash equivalents | 58,210 | 119,996 | 101,691 |
| Short-term investments | 738 | 87 | 295 |
| Accounts receivable | 107,710 | 94,495 | 86,756 |
| Income taxes recoverable | 9,695 | 5,007 | 3,301 |
| Inventories | 247,924 | 205,334 | 190,031 |
| Deposits and prepaid expenses | 4,796 | 3,875 | 5,672 |
| Derivative assets | 602 | 3,329 | 4,042 |
| 429,675 | 432,123 | 391,788 | |
| Non-current assets | |||
| Property, plant and equipment | 73,802 | 64,622 | 63,931 |
| Other assets | 1,375 | 1,391 | 1,388 |
| Intangible assets and goodwill | 64,014 | 11,657 | 11,382 |
| Deferred income taxes | 8,200 | 6,244 | 5,545 |
| 147,392 | 83,914 | 82,246 | |
| Total assets | 577,067 | 516,037 | 474,034 |
| Liabilities | |||
| Current liabilities | |||
| Bank indebtedness | 8,495 | 5,634 | 2,500 |
| Short-term bank loans | 847 | 822 | 791 |
| Accounts payable and accrued liabilities | 77,869 | 65,329 | 63,897 |
| Income tax payable | 1,566 | 1,832 | 4,505 |
| Dividend payable | 1,811 | 1,830 | 1,689 |
| Customer deposits | 80,344 | 73,054 | 55,403 |
| Provisions | 4,238 | 4,288 | 2,973 |
| Accrual for performance guarantees | 19,239 | 13,354 | 7,955 |
| Derivative liabilities | 1,412 | 447 | 1,077 |
| Current portion of long-term debt | 3,356 | 603 | 44 |
| Current portion of other long-term liabilities | 4,120 | - | - |
| 203,297 | 167,193 | 140,834 | |
| Non-current liabilities | |||
| Long-term debt | 8,556 | 4,408 | 3,768 |
| Other long-term liabilities | 12,989 | 6,656 | 6,702 |
| Deferred income taxes | 8,773 | 57 | 124 |
| 30,318 | 11,121 | 10,594 | |
| Total liabilities | 233,615 | 178,314 | 151,428 |
| Equity | |||
| Equity attributable to the Subordinate and Multiple Voting shareholders | |||
| Share capital | 79,070 | 79,271 | 79,651 |
| Contributed surplus | 1,837 | 1,898 | 1,936 |
| Retained earnings | 244,629 | 250,254 | 236,065 |
| Accumulated other comprehensive income | 6,266 | 2,275 | - |
| 331,802 | 333,698 | 317,652 | |
| Non-controlling interest | 11,650 | 4,025 | 4,954 |
| Total equity | 343,452 | 337,723 | 322,606 |
| Total liabilities and equity | 577,067 | 516,037 | 474,034 |
| Velan Inc. |
| Interim Statements of Changes in Equity |
| (Unaudited) |
| (in thousands of U.S. dollars) |
| Equity attributable to the Subordinate and Multiple Voting shareholders | ||||||||||||||||
| |
Number of shares |
|
Share capital |
|
Contributed surplus |
|
Accumulated other comprehensive income |
Retained earnings |
|
Total |
|
Non- controlling interest |
|
Total equity |
||
| Balance - | ||||||||||||||||
| Beginning of period | 22,195,568 | 79,271 | 1,898 | 2,275 | 250,254 | 333,698 | 4,025 | 337,723 | ||||||||
| Net income (loss) for the period | - | - | - | - | (1,964 | ) | (1,964 | ) | (517 | ) | (2,481 | ) | ||||
| Other comprehensive | ||||||||||||||||
| income (loss) | - | - | - | 3,991 | - | 3,991 | (146 | ) | 3,845 | |||||||
| 22,195,568 | 79,271 | 1,898 | 6,266 | 248,290 | 335,725 | 3,362 | 339,087 | |||||||||
| Effect of share-based | ||||||||||||||||
| compensation | - | - | 17 | - | - | 17 | - | 17 | ||||||||
| Dividends | ||||||||||||||||
| Multiple Voting Shares | - | - | - | - | (2,568 | ) | (2,568 | ) | - | (2,568 | ) | |||||
| Subordinate Voting Shares | - | - | - | - | (1,093 | ) | (1,093 | ) | - | (1,093 | ) | |||||
| Non-controlling interest | - | - | - | - | - | - | (84 | ) | (84 | ) | ||||||
| Share repurchase | (19,200 | ) | (201 | ) | (78 | ) | - | - | (279 | ) | - | (279 | ) | |||
| Non-controlling interest arising on acquisition | - | - | - | - | - | - | 8,372 | 8,372 | ||||||||
| As at August 31, 2011 | 22,176,368 | 79,070 | 1,837 | 6,266 | 244,629 | 331,802 | 11,650 | 343,452 | ||||||||
| Equity attributable to the Subordinate and Multiple Voting shareholders | |||||||||||||||||
| |
Number of shares |
Share capital |
Contributed surplus |
Accumulated other comprehensive income |
Retained earnings |
Total |
Non- controlling interest |
Total equity |
|||||||||
| Balance - | |||||||||||||||||
| Beginning of period | 22,230,468 | 79,651 | 1,936 | - | 236,065 | 317,652 | 4,954 | 322,606 | |||||||||
| Net income (loss) for the period | - | - | - | - | 2,225 | 2,225 | 668 | 2,893 | |||||||||
| Other comprehensive income (loss) |
- |
- |
- |
(4,730 |
) | - |
(4,730 |
) | (113 |
) | (4,843 |
) | |||||
| 22,230,468 | 79,651 | 1,936 | (4,730 | ) | 238,290 | 315,147 | 5,509 | 320,656 | |||||||||
| Effect of share-based compensation |
- |
- |
37 |
- |
- |
37 |
- |
37 |
|||||||||
| Dividends | |||||||||||||||||
| Multiple Voting Shares | - | - | - | - | (2,413 | ) | (2,413 | ) | - | (2,413 | ) | ||||||
| Subordinate Voting Shares | - | - | - | - | (1,032 | ) | (1,032 | ) | - | (1,032 | ) | ||||||
| Non-controlling interest | - | - | - | - | - | - | (37 | ) | (37 | ) | |||||||
| Share repurchase | (17,000 | ) | (185 | ) | (53 | ) | - | - | (238 | ) | - | (238 | ) | ||||
| As at August 31, 2010 | 22,213,468 | 79,466 | 1,920 | (4,730 | ) | 234,845 | 311,501 | 5,472 | 316,973 | ||||||||
| Interim Statements of Cash Flows |
| (Unaudited) |
| Three-month periods | Six-month periods | ||||||||
| ended August 31 | ended August 31 | ||||||||
| 2011 | 2010 | 2011 | 2010 | ||||||
| Cash flows from | $ | $ | $ | $ | |||||
| Operating activities | |||||||||
| Net income (loss ) for the period | (2,822 | ) | (2,127 | ) | (2,481 | ) | 2,893 | ||
| Adjustments to reconcile net profit to cash provided operating activities | |||||||||
| Amortization of property, plant and equipment | 2,204 | 1,989 | 4,224 | 4,161 | |||||
| Amortization of intangible assets | 1,667 | 177 | 2,358 | 339 | |||||
| Deferred income taxes | (882 | ) | 1,121 | (942 | ) | 1,894 | |||
| Share-based compensation expense | 8 | 22 | 17 | 37 | |||||
| Loss (Gain) on disposal of property, plant and equipment | 31 | (77 | ) | 50 | (81 | ) | |||
| Amortization of present value discount on other long-term liabilities | 305 | - | 411 | - | |||||
| Net change in other long-term liabilities | 514 | 221 | 628 | (325 | ) | ||||
| 1,025 | 1,326 | 4,265 | 8,918 | ||||||
| Changes in non-cash working capital items | |||||||||
| Accounts receivable | (2,828 | ) | 11,756 | (3,965 | ) | 25,387 | |||
| Inventories | (12,244 | ) | (10,690 | ) | (24,911 | ) | (8,599 | ) | |
| Income taxes recoverable | (2,243 | ) | (2,980 | ) | (4,404 | ) | (2,693 | ) | |
| Deposits and prepaid expenses | (1,302 | ) | (1,521 | ) | (429 | ) | (1,238 | ) | |
| Derivative assets | 1,212 | 1,579 | 2,892 | 2,829 | |||||
| Accounts payable and accrued liabilities | (5,632 | ) | (4,770 | ) | 644 | (8,224 | ) | ||
| Income taxes payable | (296 | ) | (1,330 | ) | (752 | ) | (2,599 | ) | |
| Customer deposits | 6,995 | 10,455 | 5,451 | 6,489 | |||||
| Provisions | (91 | ) | 68 | (47 | ) | (213 | ) | ||
| Accrual for performance guarantees | 2,178 | 2,004 | 5,902 | 1,380 | |||||
| Derivative liabilities | 422 | 398 | 1,023 | 155 | |||||
| (13,829 | ) | 4,969 | (18,596 | ) | 12,674 | ||||
| Cash provided (used) by operating activities | (12,804 | ) | 6,295 | (14,331 | ) | 21,592 | |||
| Investing activities | |||||||||
| Short-term investments | (614 | ) | (32 | ) | (651 | ) | (47 | ) | |
| Additions to property, plant and equipment | (2,932 | ) | (1,718 | ) | (7,377 | ) | (3,407 | ) | |
| Proceeds on disposal of property, plant and equipment | 19 | 62 | 27 | 204 | |||||
| Additions to intangible assets | (610 | ) | (100 | ) | (645 | ) | (358 | ) | |
| Net change in other assets | (9 | ) | 8 | 17 | (34 | ) | |||
| Business acquisition – net of cash acquired | - | - | (37,281 | ) | - | ||||
| Cash provided (used) by investing activities | (4,146 | ) | (1,780 | ) | (45,910 | ) | (3,642 | ) | |
| Financing activities | |||||||||
| Dividends paid to Subordinate and Multiple Voting shareholders | (1,850 | ) | (1,737 | ) | (3,680 | ) | (3,461 | ) | |
| Dividends paid to non-controlling interest | (84 | ) | (37 | ) | (84 | ) | (37 | ) | |
| Repurchase of shares | (250 | ) | (231 | ) | (279 | ) | (238 | ) | |
| Short-term bank loans | (1,306 | ) | 5 | (4,842 | ) | 2 | |||
| Increase in long-term debt | 4,224 | - | 4,224 | - | |||||
| Repayment of long-term debt | (5 | ) | - | (57 | ) | (19 | ) | ||
| Cash provided (used) by investing activities | 729 | (2,000 | ) | (4,718 | ) | (3,753 | ) | ||
| Effect of exchange rate differences on cash | 133 | 802 | 312 | (2,242 | ) | ||||
| Net change in cash during the period | (16,088 | ) | 3,317 | (64,647 | ) | 11,955 | |||
| Net cash – Beginning of period | 65,803 | 107,829 | 114,362 | 99,191 | |||||
| Net cash – End of period | 49,715 | 111,146 | 49,715 | 111,146 | |||||
| Net cash is composed of: | |||||||||
| Cash and cash equivalents | 58,210 | 112,980 | 58,210 | 112,980 | |||||
| Bank indebtedness | (8,495 | ) | (1,834 | ) | (8,495 | ) | (1,834 | ) | |
| 49,715 | 111,146 | 49,715 | 111,146 | ||||||
| Supplementary information | |||||||||
| Interest received (paid) | (54 | ) | (38 | ) | (105 | ) | (97 | ) | |
| Income taxes received (paid) | (1,568 | ) | (3,080 | ) | (4,019 | ) | (4,039 | ) | |
Contact Information:
Tom Velan
President
(514) 748-7743
(514) 748-8635 (FAX)
VELAN Inc.
John D. Ball
Chief Financial Officer
(514) 748-7743
(514) 748-8635 (FAX)