Fourth Quarter Fiscal 2013 (unless otherwise noted, all amounts are in U.S. dollars and all comparisons are to the fourth quarter of fiscal 2012):
-- Net loss(2)amounted to $3.6 million or $0.16 per share compared to net earnings(2)of $5.9 million or $0.27 per share last year. Adjusted net earnings(1)amounted to $5.9 million or $0.27 per share compared to $3.6 illion or $0.16 per share last year. Further adjusting for foreign currency fluctuations, the Company's adjusted net operating results(1)for the quarter would have been $6.3 million or $0.28 per share this year compared to $2.5 million or $0.11 per share last year.-- Net new orders received ("bookings") amounted to $96.7 million, a decrease of $29.2 million or 23.2% compared to last year. Excluding currency impacts, the decrease would have been 24.7%. The Company ended the quarter with a backlog of $531 million, a decrease of $130.8 million from the end of the prior year. Excluding currency impacts, the backlog would have decreased by $124 million over the same period to $537.8 million.-- Sales amounted to $142.1 million, an increase of $24.3 million or 20.6%. Excluding currency impacts, sales would have increased by $22 million or 18.7%.-- Gross profit percentage increased by 1.9 percentage points from 19.5% to 21.4%. Excluding currency impacts, the gross profit percentage would have increased by 2.4 percentage points in the quarter. This favourable variance was principally due to higher sales volume to cover production overhead expenses, especially in the Company's North American operations, coupled with improved production efficiencies in its Italian operations.-- The Company generated net cash(1)from operations of $23.1 million in the quarter, an increase of $7.5 million from the prior year. This increase was principally related to non-cash working capital movements, specifically a decrease in inventory.
"We were generally pleased about the progress for the year, notwithstanding the challenges to our earnings posed by the integration of the Italian company acquired in 2011 and the continued depreciation of the Euro against the U.S. dollar," said John Ball, CFO of Velan Inc. "Our investments in our manufacturing capacity both in Canada and Asia have been extensive and should start to pay dividends. Our balance sheet remains healthy and well financed and our backlog is now at a manageable level."
Tom Velan, President and CEO of Velan Inc. said, "We are pleased to have reached the $500 million sales milestone and we are starting this year with a good order backlog of $531 million. Our challenge will be to continue the high level of production of our complex project order backlog while using our shorter lead-times to increase our order bookings from last year's level."
"We have expanded our local manufacturing presence in Korea, China and India with an objective to lower production costs and increase our local sales in Asia. During the last year, we invested $28.5 million in our global manufacturing infrastructure. In our North American operations, we invested in large test fixtures, robotic welding, and computer numeric control ("CNC") machines. We also modified some of our production cells for improved production flow in accordance with Lean principles. We completed construction of a new greenfield plant in southern India and started to manufacture small forged valves; the plant will expand into other products in the future and will supply valves to the Indian and global markets. In China, we invested in test fixtures, CNC machines, and robotic welding to produce pressure seal valves for the Chinese power market. In Korea, we are establishing a new production line for larger valves to better service Korean engineering, procurement, and construction customers."