Avcorp announces 2012 Second Quarter Results

VANCOUVER: Avcorp Industries Inc. (TSX: AVP) (the “Company” or “Avcorp”) today announced its financial results for the quarter ended June 30, 2012.

During the quarter ended June 30, 2012, the Company recorded income from operations of $411,000 on $25,192,000 revenue, as compared to a $752,000 operating loss on $20,492,000 revenue for the same quarter in the preceding year; and net income for the current quarter of $13,000 as compared to a net loss of $1,337,000 for the quarter ended June 30, 2011.

A combination of continued sales growth, improvements in both operating efficiencies and production quality levels, as well as continued stringent cost controls have netted a $1,350,000 profitability improvement for the second quarter 2012 relative to the same quarter in 2011.

Earnings before interest, taxes, depreciation and amortization (EBITDA) was positive $1,656,000 for the quarter ended June 30, 2012 compared to a positive EBITDA of $259,000 for the quarter ended June 30, 2011. A $1,397,000 improvement largely contributed to by gross margin growth.

Cash flows from operating activities during the quarter ended June 30, 2012 utilized $1,421,000 of cash as compared to utilizing $149,000 of cash during the quarter ended June 30, 2011 primarily as a result of deferred revenue amortization for which customer cash receipts had been received in prior periods; while working capital changes remained neutral. The Company has a working capital surplus of $16,149,000 as at June 30, 2012 which has increased from the December 31, 2011 $14,663,000 surplus, as a result of growth in cash and a reduction in accounts payable. The Company’s accumulated deficit as at June 30, 2012 was $75,852,000 (December 31, 2011: $76,016,000).