Avcorp announces 2012 Annual Financial Results
During the year ended December 31, 2012, the Company recorded income from operations of $24,002,000 on $89,337,000 revenue, as compared to a $362,000 operating loss on $86,018,000 revenue for the preceding year; and net income for the current year of $20,641,000 as compared to a net loss of $2,452,000 for the year ended December 31, 2011.
On November 16, 2012, Avcorp received the determination of an appointed arbitration panel constituted to adjudicate outstanding issues relating to cost reimbursements and compensation payable to Avcorp in connection with the transition of Cessna Aircraft Company (“Cessna”) production work back to Cessna and other suppliers. A binding arbitration award was delivered to the Company on November 16, 2012.
The quantum of damages was assessed by an arbitration panel at $27,391,000. The arbitration award, net of associated costs, amounted to $21,548,000.
On November 26, 2012 Cessna filed a complaint in the United States District Court For The District Of Kansas seeking to vacate the award as a manifest disregard for the law and in violation of public policy.
On December 21, 2012 Avcorp filed a memorandum in support of a motion to confirm final arbitration award, and dismiss the complaint in the United States District Court For The District Of Kansas.
Current year revenues have increased from the preceding year primarily as a result of significant increases in sales to The Boeing Company (Boeing) and BAE Systems (Operations) Limited (BAE), offset by the wind-down of Cessna programs. During the third quarter 2012, the Company renewed its long-term agreement with the Boeing Commercial Airplane Group (Boeing CA) which is forecasted to provide in excess of $83 million revenue over the next five years. Start-up and commencement of production deliveries for BAE Systems (Operations) Limited (BAE) F35 program has also contributed to an overall $146 million increase in order backlog during the current year.
Cash flows from operating activities during the year ended December 31, 2012 utilized $3,603,000 of cash as compared to utilizing $924,000 of cash during the year ended December 31, 2011. The Company has a working capital surplus of $34,819,000 as at December 31, 2012 which has significantly increased from the December 31, 2011 $14,663,000 surplus, as a result of the binding arbitration award. The Company’s accumulated deficit as at December 31, 2012 was $55,375,000 (December 31, 2011: $76,016,000).
