MONTREAL, QUEBEC -- (Marketwired) -- 07/10/13 -- 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, 2013.
-- Sales of US$132.2 million for the quarter-- Net earnings(1) of US$5.8 million for the quarter-- Order backlog of US$505.5 million at the end of the quarter-- Order bookings of US$106.7 million for the quarter-- Net cash(2) of US$36.3 million at the end of the quarter Three-month periods ended May 31, May 31,(millions of U.S. dollars, excluding per share amounts) 2013 2012 ------------------------------Sales $132.2 $115.9Gross Profit 30.7 24.1Gross margin % 23.2% 20.8%Net income (loss) attributable to Multiple and Subordinate Voting Shares 5.8 0.7Net income (loss) per share - Basic 0.26 0.03 Diluted 0.26 0.03
First Quarter Fiscal 2014 (unless otherwise noted, all amounts are in U.S. dollars and all comparisons are to the first quarter of fiscal 2013):
-- Net earnings(1) amounted to $5.8 million or $0.26 per share compared to $0.7 million or $0.03 per share last year. The $5.1 million increase in net earnings(1) is primarily attributable to higher sales volume, improved gross profit margins and lower administration costs.-- Sales amounted to $132.2 million, an increase of $16.3 million or 14.1%. The increase in sales is primarily attributable to increased shipments of certain large export project orders and higher spare parts sales.-- Net new orders received ("bookings") amounted to $106.7 million, an increase of $9.0 million or 9.2% compared to last year.-- The Company ended the quarter with a backlog of $505.5 million, a decrease of $25.5 million or 4.8% since the beginning of the current fiscal year. This decrease is mainly attributable to the higher sales output outpacing the higher net new orders in the quarter.-- Gross margin increased by 2.4 percentage points from 20.8% to 23.2%. This increase is mainly attributable to higher sales volume and improved efficiencies as a result of a more optimal product mix.-- Administration costs amounted to $21.7 million, a decrease of $2.2 million or 9.2%. The decrease is primarily attributable to a decrease in sales commissions and a decrease in costs recognized in connection with the Company's ongoing asbestos litigation. The fluctuation in asbestos costs is due more to the timing of settlement payments in the two quarters rather than to changes in long-term trends.-- The Company generated net cash(2) from operations of $24.7 million in the quarter. This source of net cash(2) was primarily attributable to improved net earnings(1) and a decrease in inventory. The Company ended the quarter with net cash(2) of $36.3 million, an increase of $16.5 million or 83.3% since the beginning of the current fiscal year.-- Foreign currency impacts: -- Based on average exchange rates, the euro weakened 0.5% against the U.S. dollar when compared to the same period last year. This weakening resulted in the Company's net profits from its European subsidiaries being reported as lower U.S. dollar amounts in the current quarter. -- Based on average exchange rates, the Canadian dollar weakened 2.0% against the U.S. dollar when compared to the same period last year. This weakening resulted in the Company's Canadian dollar expenses being reported as lower U.S. dollar amounts in the current quarter. -- The Korean won weakened 4.0% against the U.S. dollar when comparing the spot rate at the beginning of the period to the period end rate. This weakening resulted in the Company recording foreign exchange losses in the current quarter upon conversion of the balance sheet of its Korean subsidiary whose functional currency is the U.S. dollar. -- The net impact of these three currency swings was generally favourable to the Company's quarterly results since the positive impact of the weaker Canadian dollar outweighed the negative impacts of both a weaker euro and a weaker Korean won.