Velan Inc. Reports its Third Quarter 2011/12 Financial Results
(firmenpresse) - MONTREAL, QUEBEC -- (Marketwire) -- 01/11/12 -- Velan Inc. (TSX: VLN), a world-leading manufacturer of industrial valves, announced today its financial results for its third quarter ended November 30, 2011.
Highlights
Third Quarter Fiscal 2012 (unless otherwise noted, all comparisons are to the third quarter of fiscal 2011):
(1) Net earnings or loss refers to net income or loss attributable to Subordinate and Multiple Voting Shares.
First nine months of fiscal 2012 (unless otherwise noted, all comparisons are to the first nine months of fiscal 2011):
"We had quarterly net earnings(2) of $4.0 million compared to $11.9 million in the same quarter last year," said Tom Velan, President and CEO of Velan Inc., "but after adjusting for ABV, the effects of purchase price accounting for the acquisition, and the currency impacts, we would have reported net earnings(2) of $6.4 million in the current quarter compared to $6.8 million last year.
"Faced with significant material cost increases over the last year, we have been selectively raising our selling prices. For some of our product lines we still face lower margins due to the higher material cost increases. We need to raise the margin by increasing volume as well as continuing to make selective price increases to cover cost increases.
"As we explained in our last annual report, 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. Our costs related to these asbestos lawsuits for the quarter were $1.4 million compared to $1.2 million last year. We strongly believe that our products, which were supplied with encapsulated packing and gaskets in accordance with valve industry practice and customer mandated specifications, did not contribute to any asbestos-related sicknesses. We have independent laboratory test results that support this conclusion. We think that any asbestos-related health problems were caused by friable, asbestos-containing products such as the spray application of asbestos insulation and the process of removing asbestos from buildings or confined spaces, which resulted in heavy concentrations of asbestos fibers in the air. Unfortunately, the responsible companies are no longer in existence so plaintiffs are pursuing pump and valve manufacturers like Velan. 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.
"The increases in bookings, backlog and sales for the year to date are good indications of an improving global market for our products. At the same time, we are concerned by weakness in the U.S. economy and persistent problems in Europe with concerns about the stability of the euro. These factors are increasing the risk of another sharp downturn in the global economy. Fortunately, we are starting our fourth quarter with a very strong backlog and the challenge we faced last year due to insufficient orders has changed to the challenge of producing our order backlog as quickly and profitably as possible.
"I think that the acquisition of ABV Energy is a great opportunity for us to help grow our sales and earnings over the coming years. In the shorter term, the accounting treatment, whereby part of the purchase price is attributed to the assets (including inventory) as a purchase price adjustment, will reduce the contribution to our results. We are working to help improve operations to increase output and profitability. Velan ABV had another soft quarter, but we expect improving results going forward as the new plant capacity goes into operation during the fourth quarter as well as increases in sales based on the higher bookings and backlog."
Tom Velan concluded, "We are continuing to take measures to broaden our product offering, to improve our operational excellence and 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 March 30, 2012, to all shareholders of record as at March 15, 2012.
Conference Call
Financial analysts, shareholders, and other interested individuals are invited to attend the third quarter conference call to be held on January 11, 2012, at 4:30 PM (EST). The toll free call-in number is 1-800-268-5851, access code 21567127. A recording of this conference call will be available for seven days at 1-416-626-4100 or 1-800- 558-5253, access code 21567127.
About Velan
Velan Inc. () 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.
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.
Contacts:
Tom Velan
President and Chief Executive Officer
(514) 748-7743
(514) 748-8635 (FAX)
John D. Ball
Chief Financial Officer
(514) 748-7743
(514) 748-8635 (FAX)
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Datum: 11.01.2012 - 17:47 Uhr
Sprache: Deutsch
News-ID 103296
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contact information:
Town:
MONTREAL, QUEBEC
Kategorie:
Machinery & Tools
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