Velan Inc. reports its first quarter 2022/23 financial results with sales and gross margins comparable to the prior year
Velan Inc. (TSX: VLN) (the “Company”), a world-leading manufacturer of industrial valves, announced today its financial results for its first quarter ended May 31, 2022.
- Sales for the quarter amounted to $75.0 million, an increase of $0.5 million or 0.6% compared to the same quarter of the previous fiscal year. Although comparable to prior year’s first quarter performance, the Company continues to navigate through a volatile market where certain shipments for the quarter were delayed and are planned to be shipped later in the year.
- Gross profit for the quarter amounted to $20.1 million or 26.8%, stable compared to last year’s $20.0 million of 26.8%. Gross profit improved for the quarter when considering the absence of Canada Emergency Wage Subsidies («CEWS») compared to $0.6 million last year. Prior year’s gross profit percentage without the subsidies would have been 26.1% compared to 26.8% for the current quarter.
- Net loss of $7.4 million and negative EBITDA of $2.9 million for the quarter compared to a net loss of $5.1 million and a negative EBITDA of $0.9 million last year. The decrease in results is primarily attributable to an increase in administration costs, namely freight out costs and the absence of CEWS in the current quarter.
- Order backlog remains strong at $506.0 million, an increase of $4.7 million or 0.9% since the beginning of the year. The portion of the current backlog deliverable in the next twelve months is $339.2 million.
- Net new orders (“bookings”) of $93.4 million for the quarter, representing a book-to-bill ratio of 1.25. The decrease in bookings of $22.9 million or 19.7% compared to last year resulted mainly from the current geo-political uncertainties which created slower project awards. The Company nonetheless continues to observe a strong amount of activity ongoing.
- The Company’s net cash amounted to a solid $47.7 million at the end of the quarter, a decrease of $5.8 million since the beginning of the fiscal year. The decrease in net cash for the quarter is primarily attributable to the lower EBITDA for the quarter. The shifting of revenues and related gross profits, as mentioned in the notes above have resulted in higher work in process and finished goods inventories by $16.3 million.
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