News

Montreal, Quebec 

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, 2023. 

Highlights:  

• Order backlog remains strong at $490.5 million, an increase of $26.2 million or 5.6% since the beginning of the year driven by strong net new orders (“bookings”) and the lower sales volume reported for the quarter. The portion of the current backlog deliverable in the next twelve months is $335.8 million.  
• Bookings of $91.8 million for the quarter, representing a book-to-bill ratio of 1.36. The bookings remained relatively stable compared to the previous year.  
• Sales for the quarter amounted to $67.7 million, a decrease of $7.3 million or 9.8% compared to the same quarter of the previous fiscal year. The decrease for the quarter is primarily attributable to accelerated shipments in the fourth quarter of the prior fiscal year as a result of customer demand and the Company’s increased production ramp-up, delays on certain shipments in the current quarter caused by customer readiness issues, and finally a shortage of deliverable orders in the Company’s Italian operations.  
• Gross profit for the quarter amounted to $15.1 million or 22.2%, a decrease compared to last year’s $20.1 million or 26.8%. The 460 basis points decrease in gross profit percentage is mainly due to the lower sales volume which impacted the absorption of fixed production overhear costs.  
• Net loss of $8.3 million and negative EBITDA of $3.8 million for the quarter compared to a net loss of $7.4 million and a negative EBITDA of $2.9 million last year. The decrease in EBITDA is primarily attributable to the decrease in gross profit, partially offset by a decrease in administration costs.  
• The Company’s net cash amounted to a solid $58.6 million at the end of the quarter, an increase of $8.4 million since the beginning of the fiscal year driven by continued improvements in operating cash flow generation.