Velan Inc. Reports its 3rd Quarter and Nine Month Results
22 April 1999
Velan Inc. Reports its 3rd Quarter and Nine Month Results for the Period Ending February 28, 1999
MONTREAL--April 22, 1999--VELAN (ME:VLN) (TSE:VLN) We are pleased to announce our financial results for the third quarter and nine month period ended February 28, 1999.Revenue during the third quarter of $75.5 million was 9 percent higher than the same quarter last year. The net earnings of $8.6 million (11.4 percent of sales) or $0.38 per share, compares to earnings of $8.3 million (11.9 percent of sales) or $0.37 per share for the third quarter last year. The results were achieved despite a strengthening Canadian dollar which impacts our results negatively.
For the nine months, revenues of $232.7 million were at record levels and 19 percent higher than for the same period last year.
The net earnings of $33 million (14.2 percent of sales) or $1.46 per share, was an all around record, 32 percent greater than the profit of $24.9 million (12.7 percent of sales) or $1.10 per share last year. These record profits have been attained due to a combination of the low Canadian dollar as well as higher productivity and decrease in procurement cost of imported material.
Incoming business remained strong in spite of the continuing Asian and Latin American crises and fierce price competition. Bookings were $220 million against a record of $240 million during the first nine months last year, or a decrease of 8.5 percent. Our backlog remains healthy at $158.4 million, being a 10 percent decrease from the $176 million recorded in 1998. Increased production levels and a lower backlog will allow us to reduce lead times.
The Company is making excellent progress in the introduction of the BaaN computer system in all departments.
We have shipped the first order for our new high performance triple eccentric butterfly valve line, after nearly three years in research and development. The construction of our new head office and plant is scheduled to commence this month.
Overall performance of the Company in this nine month period has surpassed our budgeted expectations and we are looking with optimism to the future.
Velan Inc. is a world leader in the design, manufacture and marketing of one of the most comprehensive industrial valve lines. We seek to enhance our worldwide market position while maintaining profitability at above-industry levels.
Velan Inc.
Consolidated Statements of Earnings
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(in thousands of dollars)
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
3 months 3 months 9 months 9 months
ended ended ended ended
Feb 28,99 Feb 28,98 Feb 28,99 Feb 28,98
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Sales $75,527 $69,382 $232,715 $195,902
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Gross profit 25,037 22,428 82,203 66,155
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Expenses
Engineering, research,
selling, general and
administrative 10,236 9,229 30,786 27,460
Depreciation &
Amortization 2,244 1,658 6,724 4,267
Other (income) 1,136 (567) (2,140) (2,517)
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13,616 10,320 35,370 29,210
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Earnings before
income taxes 11,421 12,108 46,833 36,945
Provision for
income taxes 2,832 3,822 13,810 12,003
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Net earnings for
the period $8,589 $8,286 $33,023 $24,942
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Earnings per
Share $0.38 $0.37 $1.46 $1.10
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Velan Inc.
Consolidated Balance Sheets
_______________________________________________________________
(in thousands of dollars)
(Unaudited) (Audited)
Feb 28 1999 May 31 1998
________________________________________________________________
Assets
Current $233,923 $207,750
Capital 48,364 46,732
Other 3,223 2,475
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$285,510 $256,957
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Liabilities
Current $72,858 $70,656
Long-term debt 5,450 15,889
Other 2,946 2,904
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81,254 89,449
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Shareholders' Equity
Capital Stock 114,953 114,953
Retained Earnings 84,377 51,354
Other 4,926 1,201
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204,256 167,508
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$285,510 $256,957
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Consolidated Statements of Retained Earnings
_______________________________________________________________
(Unaudited) (Audited)
9 months 12 months
Ended Feb 28, 99 Ended May 31, 98
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Balance - Beginning of period $51,354 $17,198
Net earnings for the period 33,023 34,156
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Balance - End of the period $84,377 $51,354
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Velan Inc.
Consolidated Statements of Changes in Financial Position
_______________________________________________________________
(Unaudited) (Unaudited)
(in thousands of dollars) 9 months 9 months
Ended Feb 28, 99 Ended Feb 28, 98
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Cash provided from
(required for):
Operations
Cash provided from
operations $39,763 $29,074
Net changes in non-cash
working capital items 4,642 (22,662)
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44,405 6,412
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Investment
Net Additions to capital assets (8,281) (13,288)
Increase in other assets (823) (321)
_______________________________________________________________
(9,104) (13,609)
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Financing
Increase in Long-term debt 458 2,757
Repayment of long-term debt (10,897) (10,542)
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(10,439) (7,785)
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Net increase (decrease) in cash 24,862 (14,982)
Cash - Beginning period 24,615 34,065
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Cash - End of period $49,477 $19,083
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