MONTREAL, Jan. 09, 2020 (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, 2019.
Highlights
- Sales of US$88.7 million for the quarter
- Gross profit percentage of 25.0% for the quarter
- Net loss1 of US$0.8 million for the quarter
- Operating profit before restructuring and transformation costs2 of US$1.0 million for the quarter
- Adjusted EBITDA2 of US$4.3 million for the quarter
- Net new orders (“Bookings”) of US$97.2 million for the quarter
- Order backlog of US$432.1 million at the end of the quarter, of which US$145.1 million is scheduled for delivery beyond the next 12 months
- Net cash of US$39.0 million at the end of the quarter
| (millions of U.S. dollars, excluding per share amounts) | Three-month periods ended November 30 | Nine-month periods ended November 30 | |||||||||||
| 2019 | 2018 | 2019 | 2018 | ||||||||||
Sales | $ | 88.7 | $ | 92.3 | $ | 258.0 | $ | 261.5 | |||||
Gross Profit | 22.2 | 22.6 | 60.2 | 59.7 | |||||||||
| Gross profit % | 25.0% | 24.5% | 23.3% | % | 22.8% | % | |||||||
| Operating profit (loss) before restructuring and transformation costs2 | 1.0 | 0.2 | (3.3 | ) | (6.3 | ) | |||||||
| Net loss1 | (0.8 | ) | (0.2 | ) | (5.3 | ) | (6.4 | ) | |||||
| Net loss1 per share – basic and diluted | (0.04 | ) | (0.01 | ) | (0.24 | ) | (0.30 | ) | |||||
| Adjusted EBITDA2 | 4.3 | 3.4 | 6.2 | 3.3 | |||||||||
| Adjusted EBITDA2 per share – basic and diluted | 0.20 | 0.16 | 0.29 | 0.15 | |||||||||
Third Quarter Fiscal 2020 (unless otherwise noted, all amounts are in U.S. dollars and all comparisons are to the third quarter of fiscal 2019):
- Sales amounted to $88.7 million, a decrease of $3.6 million or 3.9% from the prior year. The decrease for the quarter was primarily attributable to the shipment by the North American operations of a large complex Chinese order in the third quarter of the prior fiscal year, partially offset by an increase in shipments of large project orders in the Company’s Italian operations due to a record backlog at the beginning of the year.
- Gross profit percentage increased by 50 basis points from 24.5% to 25.0%. The increase in the gross profit percentage is mainly attributable to a stronger proportion of higher margin product sales and an increased sales volume in the Company’s Italian operations, which allowed the subsidiary to cover its fixed costs more efficiently. This increase was partially offset by temporary factors such as a less efficient product mix in the Company’s North American operations, including a lower volume of higher margin spare parts sales. The Company has realized an improvement in the gross profit percentage of its North American operations in comparison to the first and second quarters of the current fiscal year, thanks to improved margins in its project manufacturing business.
- Net loss1 amounted to $0.8 million or $0.04 per share compared to $0.2 million or $0.01 per share last year. Net loss1 for the current quarter was significantly impacted by the $1.4 million spent on the Company’s restructuring and transformative initiative, V20, which aims to improve its operational efficiency and optimize its manufacturing footprint in North America. The Company’s current production is being reorganized from four North American plants to three more specialized plants that will be structured to better support the new business units’ market strategies. The production of certain non-project valves produced in North America, as well as the less complex project valves are also being transferred to India. Restructuring and transformation costs include temporary project resources and their travel and lodging costs as well as the moving costs related to dismantling and transportation of machinery and equipment to reflect the optimized manufacturing footprint plan. Excluding this $1.4 million amount, as well as the after-tax impact of these restructuring and transformation costs incurred during the quarter, the Company would have presented net earnings1 of $0.2 million compared to a net loss1 of $0.2 million last year, representing an improvement of $0.4 million in net loss1 which is primarily attributable to lower administration costs partially offset by higher finance costs.
- Operating profit before restructuring and administration costs2 amounted to $1.0 million compared to $0.2 million last year. Operating profit presents the profitability of a business before taking into account interest and taxes. Adjusted EBITDA2 amounted to $4.3 million or $0.20 per share compared to $3.4 million or $0.16 per share last year. The increase in operating profit before restructuring and administration costs2 and adjusted EBITDA2 is mainly attributable to lower administration costs and an improved gross profit percentage, partially offset by a lower sales volume.
- Bookings amounted to $97.2 million, a decrease of $3.6 million or 3.6% compared to last year. This decrease is primarily attributable to lower order bookings by the Company’s Italian operations, which booked a record of large project orders in the prior year. This decrease was partially offset by higher order bookings in the Company’s Indian operations.
- The Company ended the period with net cash of $39.0 million, an increase of $4.1 million or 11.7% since the beginning of the quarter. This increase is primarily attributable to cash provided by operating activities partially offset by investments in property, plant and equipment. Net cash was also negatively impacted by V20 related disbursements as well as the weakening of the euro spot rate against the U.S. dollar over the course of the current quarter.
First Nine Months Fiscal 2020 (unless otherwise noted, all amounts are in U.S. dollars and all comparisons are to the first nine months of fiscal 2019):
- Sales amounted to $258.0 million, a decrease of $3.5 million or 1.3% from the prior year. Sales were negatively impacted by decreased shipments of certain large project orders in the Company’s North American and French operations due to various customer-related issues and the timing of the delivery schedule for such orders, partially offset by increased shipments from the Company’s Italian operations which continued to deliver the record backlog at the beginning of the year. The decrease of sales in the Company’s French operations is due to the timing of the deliveries of certain of its large project orders which have been delivered in part in this quarter and are expected to ship in the last quarter of this fiscal year.
- Gross profit percentage increased by 50 basis points from 22.8% to 23.3%. This improvement is due to a higher sales volume and a stronger proportion of higher margin product sales in the Company’s Italian operations, partially offset by a lower sales volume and a less efficient product mix in the Company’s North American operations. Overall, the Company is still delivering its backlog built during the last fiscal year which means that the margins do not yet reflect the impact of the margin improvement measures launched in the last quarters under the Company’s V20 transformation plan. The combined effect of these measures is expected to gradually take effect in the last quarter of this fiscal year and next year but the greater impact of the Company’s restructuring and transformative V20 initiatives is only expected late in fiscal year 2021, when the task of reorganizing and reducing the Company’s North American footprint is planned to be completed.
- Net loss1 amounted to $5.3 million or $0.24 per share compared to $6.4 million or $0.30 per share last year. Net loss1 for the current nine-month period was significantly impacted by the $2.5 million spent on the Company’s restructuring and transformative initiative, V20. Restructuring and transformation costs include temporary project resources and their travel and lodging costs as well as the moving costs related to dismantling and transportation of machinery and equipment to reflect the optimized manufacturing footprint plan. Excluding this $2.5 million amount, as well as the after-tax impact of these restructuring and transformation costs incurred during the nine-month period, the Company’s net loss1 would have been $3.5 million compared to $6.4 million last year, representing an improvement of $2.9 million net loss1 which is primarily attributable to lower administration costs and an improved gross margin despite the lower sales volume.
- Operating loss before restructuring and transformation costs2 amounted to $3.3 million compared to $6.3 million last year. Adjusted EBITDA2 amounted to $6.2 million or $0.29 per share compared to $3.3 million or $0.15 per share last year. The improvement in operating loss before restructuring and transformation costs2 and adjusted EBITDA2 is primarily attributable to lowered administration and an increase in gross profit percentage.
- Bookings amounted to $252.1 million, a decrease of $38.3 million or 13.2% compared to last year. This decrease is due primarily to lower order bookings by the Company’s North American operations which had seen an unusually high surge of non-project valve re-stocking orders from its distributors in the first quarter of the prior fiscal year. MRO distributor orders this fiscal year are expected to reflect a more normalized stock replenishment cycle. The decrease is also due to lower large project orders booked by the Company’s Italian operations which booked a record of large project orders in the prior year. The Company’s project quotation activity has notably increased this year in sectors where margins are healthy, and concurrently decreased in other sectors where the Company experiences the most aggressive competition and where margins are much tighter. The shift is the result of deliberate screening that is expected to take effect gradually as the Company replaces its existing backlog with higher margin orders. The net decrease in bookings experienced in the last nine months, which the Company’s plan aims to reverse, must be understood in this context.
- The Company ended the period with a backlog of $432.1 million, a decrease of $17.6 million or 3.9% since the beginning of the current fiscal year. The decrease in backlog is primarily attributable to a lower book‑to‑bill ratio of 0.98 and the weakening of the euro spot rate against the U.S. dollar over the course of the current fiscal year.
- Administration costs amounted to $63.7 million, a decrease of $2.5 million or 3.8% compared to last year. The decrease in administration costs was achieved despite the recording of a $0.9 million provision regarding the settlement of a product claim that was filed against the Company in a prior fiscal year as well as an increase in the costs recognized in connection with the Company’s ongoing asbestos litigation. The fluctuation in asbestos costs for the period is due more to the timing of settlements in these two periods rather than to changes in long-term trends. The reduction in administration costs is mainly attributable to lower sales commissions as well as the higher freight charges that were incurred in the prior fiscal year in order to air freight a large delayed order.
- The Company ended the period with net cash of $39.0 million, a decrease of $1.9 million or 4.6% since the beginning of the year. This decrease, which occurred mainly in the first half of the fiscal year, is primarily attributable to investments in property, plant and equipment, land restoration costs related to a property, long‑term debt and lease liabilities repayments, as well as distributions to shareholders via dividends, partially offset by cash provided by operating activities and an increase in long-term debt. Net cash was also negatively impacted by V20 related disbursements as well as the weakening of the euro spot rate against the U.S. dollar over the course of the current year.
- Foreign currency impacts:
- Based on average exchange rates, the euro weakened 5.1% against the U.S. dollar when compared to the same period last year. This resulted in the Company’s net profits and bookings from its European subsidiaries being reported as lower U.S. dollar amounts in the current period.
- Based on average exchange rates, the Canadian dollar weakened 2.1% against the U.S. dollar when compared to the same period last year. This resulted in the Company’s Canadian dollar expenses being reported as lower U.S. dollar amounts in the current period.
- The net impact of the above currency swings was generally unfavourable on the Company’s results.
“During the third quarter, we continued to see the gradual improvement of various operational ratios such as gross margin and SG&A as a percent of sales. Our V20 transformation initiative costs are well underway and we are now disclosing these separately,” said John Ball, CFO of Velan Inc. “In spite of these costs we managed, as a group, to conserve cash during the quarter. We also note that, following the approval of our Normal Course Issuer Bid in October, we recommenced the repurchase of our subordinate voting shares on the open market at market prices significantly below their net book value”.
Yves Leduc, CEO of Velan Inc., said, “We have made good progress this quarter in carrying out our V20 strategy, solidly on track with our planned schedule. We were able to extend three labour agreements in Montreal, Granby and Williston following tough and prolonged negotiations. As a result, we are accelerating the consolidation and specialization of our North American plants with the cooperation of all employees. Bruno Carbonaro, our new president, has quickly assumed leadership of the business units’ market plans and operations, adding tremendous competence and guidance to our transformation effort. Our European subsidiaries, particularly Italy, are having a very strong year, while our Indian plant is gradually expanding its production of non-project valves currently being transferred from Canada. Meanwhile, our margins are improving in our North American operations, thanks to a greater focus on costs and profitable project manufacturing opportunities. Our investments in ERP and processes are bearing fruits; for example, through our new Velan Project Management system, now fully deployed, our customers are benefitting from notable and sustained improvements in our delivery performance. There is progress on many fronts, but we need to bring all the key elements together to accelerate the Company’s return to profitable growth, remembering that the most significant impact of the Company’s restructuring and transformative V20 initiatives is only expected late next fiscal year, when the task of reorganizing and reducing the Company’s North American footprint will be completed.”
Dividend
The Board declared an eligible quarterly dividend of CDN$0.03 per share, payable on March 27, 2020, to all shareholders of record as at March 12, 2020.
Conference call
Financial analysts, shareholders, and other interested individuals are invited to attend the third quarter conference call to be held on Friday, January 10, 2020, at 11:00 a.m. (EDT). The toll free call-in number is 1‑800‑909‑4164, access code 21939084. A recording of this conference call will be available for seven days at 1‑416‑626‑4100 or 1‑800‑558‑5253, access code 21939084.
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$366.9 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. Reconciliations of these amounts can be found on the following page.
Operating profit (loss) before restructuring and transformation costs and Adjusted net earnings (loss) before interest, taxes, depreciation and amortization ("EBITDA")
| Three-month period ended November 30, | Three-month period ended November 30, | Nine-month period ended November 30, | Nine-month period ended November 30, | |
| 2019 | 2018 | 2019 | 2018 | |
| Operating profit (loss) | (0.4) | 0.2 | (5.7) | (6.3) |
| Adjustment for: | ||||
| Restructuring and transformation costs | 1.4 | - | 2.5 | - |
| Operating profit (loss) before restructuring and transformation costs | 1.0 | 0.2 | (3.2) | (6.3) |
| Net loss1 | (0.8) | (0.2) | (5.3) | (6.4) |
| Adjustments for: | ||||
| Depreciation of property, plant and equipment | 2.9 | 2.6 | 8.1 | 8.1 |
| Amortization of intangible assets | 0.5 | 0.4 | 1.5 | 1.3 |
| Finance costs – net | 0.7 | 0.1 | 0.8 | 0.7 |
| Income taxes | (0.4) | 0.5 | (1.4) | (0.4) |
| EBITDA | 2.9 | 3.4 | 3.7 | 3.3 |
| Adjustment for: | ||||
| Restructuring and transformation costs | 1.4 | - | 2.5 | - |
| Adjusted EBITDA | 4.3 | 3.4 | 6.2 | 3.3 |
The term “operating profit or loss before restructuring and transformation costs” is defined as operating profit or loss plus restructuring and transformation costs. The Company opted to not adjust the prior year figures due to the different nature of the expenses, which were more related to the assessment of the required restructuring and transformation plan rather than the execution of the plan itself. The forward-looking statements contained in this news release are expressly qualified by this cautionary statement.
The term “adjusted EBITDA” is defined as net income or loss attributable to Subordinate and Multiple Voting Shares plus restructuring and transformation costs, depreciation of property, plant & equipment, plus amortization of intangible assets, plus net finance costs plus income tax provision. The Company opted to not adjust the prior year figures due to the different nature of the expenses, which were more related to the assessment of the required restructuring and transformation plan rather than the execution of the plan itself. 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.
| Velan Inc. | ||||
| Condensed Interim Consolidated Statements of Financial Position | ||||
| (Unaudited) | ||||
| (in thousands of U.S. dollars) | ||||
| As At | November 30, | February 28, | ||
| 2019 | 2019 | |||
| $ | $ | |||
| Assets | ||||
| Current assets | ||||
| Cash and cash equivalents | 77,143 | 70,673 | ||
| Short-term investments | 89 | 658 | ||
| Accounts receivable | 125,006 | 137,520 | ||
| Income taxes recoverable | 17,606 | 16,863 | ||
| Inventories | 180,923 | 165,583 | ||
| Deposits and prepaid expenses | 4,422 | 4,612 | ||
| Derivative assets | - | 189 | ||
| 405,189 | 396,098 | |||
| Non-current assets | ||||
| Property, plant and equipment | 98,843 | 83,537 | ||
| Intangible assets and goodwill | 16,357 | 18,146 | ||
| Deferred income taxes | 24,667 | 25,947 | ||
| Other assets | 528 | 629 | ||
| 140,395 | 128,259 | |||
| Total assets | 545,584 | 524,357 | ||
| Liabilities | ||||
| Current liabilities | ||||
| Bank indebtedness | 38,115 | 29,807 | ||
| Short-term bank loans | 1,534 | 2,172 | ||
| Accounts payable and accrued liabilities | 76,450 | 74,910 | ||
| Income taxes payable | 828 | 495 | ||
| Dividend payable | 501 | 497 | ||
| Customer deposits | 52,634 | 40,240 | ||
| Provisions | 7,215 | 8,494 | ||
| Accrual for performance guarantees | 21,510 | 23,014 | ||
| Derivative liabilities | 30 | 83 | ||
| Current portion of long-term debt | 7,967 | 8,609 | ||
| Current portion of long-term lease liabilities | 1,640 | - | ||
| 208,424 | 188,321 | |||
| Non-current liabilities | ||||
| Long-term debt | 11,922 | 13,242 | ||
| Long-term lease liabilities | 14,380 | - | ||
| Income taxes payable | 1,576 | 1,742 | ||
| Deferred income taxes | 3,310 | 3,738 | ||
| Other liabilities | 8,592 | 8,481 | ||
| 39,780 | 27,203 | |||
| Total liabilities | 248,204 | 215,524 | ||
| Equity | ||||
| Equity attributable to the Subordinate and Multiple Voting shareholders | ||||
| Share capital | 72,906 | 73,090 | ||
| Contributed surplus | 6,170 | 6,074 | ||
| Retained earnings | 247,871 | 254,606 | ||
| Accumulated other comprehensive loss | (33,571 | ) | (28,990 | ) |
| 293,376 | 304,780 | |||
| Non-controlling interest | 4,004 | 4,053 | ||
| Total equity | 297,380 | 308,833 | ||
| Total liabilities and equity | 545,584 | 524,357 | ||
| Velan Inc. | |||||||||
| Condensed Interim Consolidated Statements of 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 | ||||||||
| 2019 | 2018 | 2019 | 2018 | ||||||
| $ | $ | $ | $ | ||||||
| Sales | 88,701 | 92,271 | 257,984 | 261,520 | |||||
| Cost of sales | 66,548 | 69,622 | 197,755 | 201,791 | |||||
| Gross profit | 22,153 | 22,649 | 60,229 | 59,729 | |||||
| Administration costs | 21,275 | 22,467 | 63,659 | 66,151 | |||||
| Restructuring and transformation costs | 1,406 | - | 2,480 | - | |||||
| Other income | (118 | ) | (63 | ) | (171 | ) | (87 | ) | |
| Operating profit (loss) | (410 | ) | 245 | (5,739 | ) | (6,335 | ) | ||
| Finance income | 135 | 131 | 870 | 493 | |||||
| Finance costs | 833 | 221 | 1,709 | 1,165 | |||||
| Finance costs – net | (698 | ) | (90 | ) | (839 | ) | (672 | ) | |
| Income (Loss) before income taxes | (1,108 | ) | 155 | (6,578 | ) | (7,007 | ) | ||
| Provision for (Recovery of) income taxes | (400 | ) | 497 | (1,368 | ) | (436 | ) | ||
| Net loss for the period | (708 | ) | (342 | ) | (5,210 | ) | (6,571 | ) | |
| Net income (loss) attributable to: | |||||||||
| Subordinate Voting Shares and Multiple Voting Shares | (819 | ) | (236 | ) | (5,274 | ) | (6,401 | ) | |
| Non-controlling interest | 111 | (106 | ) | 64 | (170 | ) | |||
| (708 | ) | (342 | ) | (5,210 | ) | (6,571 | ) | ||
| Net loss per Subordinate and Multiple Voting Share | |||||||||
| Basic | (0.04 | ) | (0.01 | ) | (0.24 | ) | (0.30 | ) | |
| Diluted | (0.04 | ) | (0.01 | ) | (0.24 | ) | (0.30 | ) | |
| Dividends declared per Subordinate and Multiple | 0.02 | 0.02 | 0.07 | 0.07 | |||||
| Voting Share | (CA$0.03) | (CA$0.03) | (CA$0.09) | (CA$0.09) | |||||
| Total weighted average number of Subordinate and | |||||||||
| Multiple Voting Shares | |||||||||
| Basic | 21,617,207 | 21,621,935 | 21,616,543 | 21,621,935 | |||||
| Diluted | 21,617,207 | 21,621,935 | 21,616,543 | 21,621,935 | |||||
| Velan Inc. | |||||||||
| Condensed Interim Consolidated Statements of Comprehensive Loss | |||||||||
| (Unaudited) | |||||||||
| (in thousands of U.S. dollars) | |||||||||
| Three-month periods ended November 30 | Nine-month periods ended November 30 | ||||||||
| 2019 | 2018 | 2019 | 2018 | ||||||
| $ | $ | $ | $ | ||||||
| Comprehensive loss | |||||||||
| Net loss for the period | (708 | ) | (342 | ) | (5,210 | ) | (6,571 | ) | |
| Other comprehensive loss | |||||||||
| Foreign currency translation adjustment on foreign operations | |||||||||
| whose functional currency is other than the reporting | |||||||||
| currency (U.S. dollar) | (124 | ) | (2,454 | ) | (4,694 | ) | (9,276 | ) | |
| Comprehensive loss | (832 | ) | (2,796 | ) | (9,904 | ) | (15,847 | ) | |
| Comprehensive income (loss) attributable to: | |||||||||
| Subordinate Voting Shares and Multiple Voting Shares | (1,002 | ) | (2,682 | ) | (9,855 | ) | (15,582 | ) | |
| Non-controlling interest | 170 | (114 | ) | (49 | ) | (265 | ) | ||
| (832 | ) | (2,796 | ) | (9,904 | ) | (15,847 | ) | ||
| Other comprehensive income (loss) is composed solely of items that may be reclassified subsequently to the consolidated statement of income (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 loss | Retained earnings | Total | Non- controlling interest | Total equity | ||||||||
| Balance - February 28, 2019 | 21,621,935 | 73,090 | 6,074 | (28,990 | ) | 254,606 | 304,780 | 4,053 | 308,833 | ||||||
| Net income (loss) for the period | - | - | - | - | (5,274 | ) | (5,274 | ) | 64 | (5,210 | ) | ||||
| Other comprehensive loss | - | - | - | (4,581 | ) | - | (4,581 | ) | (113 | ) | (4,694 | ) | |||
| 21,621,935 | 73,090 | 6,074 | (33,571 | ) | 249,332 | 294,925 | 4,004 | 298,929 | |||||||
| Effect of share-based compensation | - | - | 2 | - | - | 2 | - | 2 | |||||||
| Share repurchase | (16,900 | ) | (184 | ) | 94 | - | - | (90 | ) | - | (90 | ) | |||
| Dividends | |||||||||||||||
| Multiple Voting Shares | - | - | - | - | (1,048 | ) | (1,048 | ) | - | (1,048 | ) | ||||
| Subordinate Voting Shares | - | - | - | - | (413 | ) | (413 | ) | - | (413 | ) | ||||
| Balance - November 30, 2019 | 21,605,035 | 72,906 | 6,170 | (33,571 | ) | 247,871 | 293,376 | 4,004 | 297,380 | ||||||
| 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 income | - | - | - | (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 | ||||||
| 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 | ||||||||
| 2019 | 2018 | 2019 | 2018 | ||||||
| $ | $ | $ | $ | ||||||
| Cash flows from | |||||||||
| Operating activities | |||||||||
| Net loss for the period | (708 | ) | (342 | ) | (5,210 | ) | (6,571 | ) | |
| Adjustments to reconcile net loss to cash provided (used) by | |||||||||
| operating activities | 3,590 | 2,676 | 10,503 | 9,679 | |||||
| Changes in non-cash working capital items | 7,536 | (4,519 | ) | 8,080 | (8,499 | ) | |||
| Cash provided (used) by operating activities | 10,418 | (2,185 | ) | 13,373 | (5,391 | ) | |||
| Investing activities | |||||||||
| Short-term investments | 2,207 | 11 | 569 | 500 | |||||
| Additions to property, plant and equipment | (5,711 | ) | (1,111 | ) | (7,425 | ) | (6,401 | ) | |
| Additions to intangible assets | (175 | ) | (13 | ) | (308 | ) | (112 | ) | |
| Proceeds on disposal of property, plant and equipment, and | |||||||||
| intangible assets | 109 | 19 | 148 | 144 | |||||
| Net change in other assets | (156 | ) | 18 | (1,484 | ) | 596 | |||
| Cash used by investing activities | (3,726 | ) | (1,076 | ) | (8,500 | ) | (5,273 | ) | |
| Financing activities | |||||||||
| Dividends paid to Subordinate and Multiple Voting shareholders | (495 | ) | (484 | ) | (1,457 | ) | (2,614 | ) | |
| Dividends paid to non-controlling interest | - | - | - | (927 | ) | ||||
| Repurchase of shares | (90 | ) | - | (90 | ) | - | |||
| Short-term bank loans | (146 | ) | 426 | (638 | ) | 1,411 | |||
| Increase in long-term debt | - | 3,509 | 1,122 | 4,116 | |||||
| Repayment of long-term debt | (579 | ) | (857 | ) | (2,438 | ) | (2,787 | ) | |
| Repayment of long-term lease liabilities | (485 | ) | - | (1,143 | ) | - | |||
| Cash provided (used) by financing activities | (1,795 | ) | 2,594 | (4,644 | ) | (801 | ) | ||
| Effect of exchange rate differences on cash | (779 | ) | (711 | ) | (2,067 | ) | (3,122 | ) | |
| Net change in cash during the period | 4,118 | (1,378 | ) | (1,838 | ) | (14,587 | ) | ||
| Net cash – Beginning of the period | 34,910 | 51,334 | 40,866 | 64,543 | |||||
| Net cash – End of the period | 39,028 | 49,956 | 39,028 | 49,956 | |||||
| Net cash is composed of: | |||||||||
| Cash and cash equivalents | 77,143 | 68,450 | 77,143 | 68,450 | |||||
| Bank indebtedness | (38,115 | ) | (18,494 | ) | (38,115 | ) | (18,494 | ) | |
| 39,028 | 49,956 | 39,028 | 49,956 | ||||||
| Supplementary information | |||||||||
| Interest received (paid) | (480 | ) | 52 | (938 | ) | (116 | ) | ||
| Income taxes paid | (1,025 | ) | (4,422 | ) | (4,532 | ) | (8,776 | ) | |
For further information please contact:
Yves Leduc, Chief Executive Officer
or
John D. Ball, Chief Financial Officer
Tel: (514) 748-7743
Fax: (514) 748-8635
Web: www.velan.com