Company returns to profitability on strong revenue performance
OTTAWA, April 25 /CNW Telbec/ - Allen-Vanguard Corporation (TSX:VRS)
today announced preliminary financial highlights for the second quarter ended
March 31st, 2006, which demonstrate strong revenue growth and a return to
profitability.
"We made a commitment to our shareholders to continue to report on our
progress on the earliest possible timing," said David E. Luxton, Chairman and
interim CEO. "We know that our shareholders have been waiting to see evidence
of our improving operational and financial results since our last update on
February 21st, and we also know that many of them may not be able to be
present for the progress report planned at the Company's Annual and Special
Meeting of Shareholders on April 27th. Therefore we're providing this summary
update in advance for all stakeholders. We plan to release full second quarter
financial results and the accompanying MD&A by May 11th, 2006."
The Company said it expects second quarter revenue to be approximately
$13.5 million, up more than 50% from $8.9 million reported in the previous
quarter. Earnings before interest, taxes, amortization, stock-based
compensation and foreign exchange ("EBITDA"), were approximately $1.1 million
and net profit was in the range of $0.2 - $0.3 million, subject to final tax
treatment.
"The second quarter results reflected the initial benefit of the cost-
savings measures introduced in January, 2006. With a strong backlog in our
electronic counter measures ("ECM") business and a lower operating cost
structure, we now have enough visibility to project an even stronger third
quarter as well as a net profit for the fiscal year overall," said Mr. Luxton.
The Company also reported that its cash position strengthened since
December 31st, 2005, and that normal course discussions are underway with its
lead lender, the Bank of Scotland, on the scheduled renewal of the Company's
pnds stlg 2M working capital facility. The bank adjusted the Company's
interest cover covenant at March 31st and the Company was in full compliance
with all covenants.
Allen-Vanguard said that it continues to sustain a solid order rate,
particularly overseas orders for its ECM product line. "This was certainly a
big driver in the second quarter," said Mr. Luxton. In addition, the Company
stated that the second quarter was a period of concentrated business
development activity with Lockheed Martin on ECM programs in the U.S. where
important military trials are underway.
Also in the second quarter the Company began to see the first signs of
recovery in its traditional Explosive Ordnance Disposal ("EOD") and search
equipment business in the U.S. following reorganization of its marketing
efforts there.
"The rapid improvement in the Company's financial position and prospects
broadens the range of strategic choices for maximizing shareholder value,
which the board will be deliberating following the annual meeting," said
Mr. Luxton. "This is in conjunction with a comprehensive planning effort
underway to be completed in time to provide a strategic update to investors
with our third quarter results."
The Company noted that the external landscape has changed as threats have
evolved. Remotely controlled improvised explosive devices (RCIEDs) have
clearly become the number one hazard in theatres of conflict, attracting
billions of dollars in planned expenditures on improved counter measures. As
well, major defence and homeland security programs have been largely
outsourced to big defence contractors and integrators who now seek partners
and suppliers with the relevant fulfillment capabilities. "These developments
present fresh opportunities for how to best grow and focus our business,"
concluded Mr. Luxton.
The Company reminds shareholders that its Annual and Special Meeting of
Shareholders will be held at 10:00 a.m. on April 27th, 2006, at the Radisson
Hotel in Ottawa.
About Allen-Vanguard
Allen-Vanguard Corporation and its subsidiaries worldwide operate under
the brand "Allen-Vanguard". The Company develops and markets technologies,
tools and training for defeating and minimizing the effects of hazardous
devices and materials, whether Chemical, Biological, Radiological, Nuclear or
Explosive (CBRNE). The Company's equipment is in service with leading security
and military forces in more than 120 countries. This includes a complete range
of remote intervention robots for hazardous applications, vehicle barrier
systems, suspect package containers and Electronic Counter-Measures (ECM)
equipment. The Company is a world leader in the development, manufacturer and
sale of specialty security equipment for Explosive Ordnance Disposal (EOD),
and is the sole, worldwide licensee and/or developer of patented technologies
such as the Universal Containment System and CASCAD Foam for blast mitigation,
decontamination of bio-chemical warfare agents, and personal protective gear.
Head office operations are located in Ottawa, Ontario, Canada, with
manufacturing operations in Ottawa and Stoney Creek, Ontario; Tewkesbury,
U.K.; and Cork, Ireland, and sales offices in Canada, the U.S., the U.K. and
Asia. The Company's shares are listed on The Toronto Stock Exchange
(TSX: VRS). The web site is www.allen-vanguard.com.
This press release may contain forward-looking statements relating to,
among other things, the Company's expectations concerning future product
demand and growth opportunities and customer acceptance of Company's products.
These forward-looking statements are neither promises nor guarantees, but
involve risks and uncertainties that may cause actual results to differ
materially from those in the forward-looking statements. The Company disclaims
any obligation to publicly update or revise any such statements. The Toronto
Stock Exchange has neither approved nor disapproved the contents of this press
release.
To find out more about Allen-Vanguard Corporation (TSX: VRS), visit our
website at www.allen-vanguard.com.
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