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Velan Inc. Reports its Third Quarter 2020/21 Financial Results

/EIN News/ -- MONTREAL, Jan. 13, 2021 (GLOBE NEWSWIRE) -- Velan Inc. (TSX: VLN) (the “Company”), a world-leading manufacturer of industrial valves, announced today its financial results for its third quarter ended November 30, 2020.

Highlights: Backlog and profitability improving while sales slowed by pandemic-related factors and the shift towards a new manufacturing model in North America

  • Order backlog of US$ 561.8 million, highest since November 30, 2012
  • Solid book-to bill ratio of 2.34 for the quarter
  • Maintaining strong protective measures to ensure employees health and safety during the novel coronavirus (“COVID-19”) pandemic
  • Strong balance sheet highlighted by a net cash balance US$ 73.0 million at the end of the quarter
  • Sales of US$71.6 million for the quarter, hindered by pandemic-related factors and inefficiencies experienced in reconfiguring the Canadian plants under the V20 program
  • Gross profit of US$ 22.0 million (or 30.7%, almost five points higher than last year) and net earnings1 of US$ 9.5 million for the quarter (including a net gain on the sale of a Montreal plant)
  • Operating profit before restructuring and transformation costs2 of US$2.2 million and adjusted EBITDA2 of US$ 5.6 million for the quarter, both improvements over last year despite lower sales

Yves Leduc, CEO of Velan Inc., said, “It’s been a year like no other, where our employees celebrated Velan’s 70th anniversary by rising to extraordinary challenges. We had to learn how to drive bookings, run manufacturing operations, and carry out our transformation plan while coping with a devastating global pandemic: no book was ever written on this, but the speedy and decisive deployment of safety protocols across all our global sites was nothing short of exemplary. The fiscal year is not over yet, but all things considered, there are many reasons to be impressed by the Company’s achievements to date. It is true that MRO bookings and sales, heavily dependent on a healthy downstream oil and gas sector, were deeply affected by the recession, and COVID-related disruptions in our Asian supply chain hindered our production and shipments. Then again, our four other strategic businesses are thriving, having grown our backlog by 40% to its highest level in over eight years, with many breakthrough orders won thanks to our strong market position in Europe, the Middle East, India, South East Asia and China, in the nuclear, petrochemical and oil production sectors. Business health sprang forward this year as we are reaping the benefits of our V20 plan, evidenced by a substantial reduction in production overhead, and even more encouraging, in the impressive increase in project manufacturing margins. Thanks to the acceleration of our V20 implementation, the results in the quarter were helped by the sale of Plant 2-7 in Montreal, six months earlier than originally planned. And finally, at the beginning of the fourth quarter, based on our strong bookings performance, and our success in eliminating structural costs and improving margins under our V20 plan, we decided to end the temporary salary reduction program that had been deployed earlier in the year.

To conclude, the next few months will bring their share of challenges, as the uncertainty caused by an indefinite global economic crisis persists. Also the turbulence brought about by the acceleration of the Montreal plant closure is one of the factors affecting our production sites in North America who are still adapting to a new manufacturing lay-out. But armed with a near-record backlog and growing margins, we have gained much headroom and are now turning a lot more attention on growing the business. As I keep reminding our employees: we should aim to get out of the storm stronger than before it hit the world economy, and thanks to their unrelenting efforts, that goal is certainly within range. To all of them, I say “Hats off!”. They all contributed to elevating an otherwise memorable 70th anniversary to an outstanding year on many fronts.”

Réjean Ostiguy, CFO of Velan Inc., said,  “In spite of the soft quarter in terms of sales, caused primarily by the various challenges created by the COVID-19 pandemic, the continued weakness in the MRO component of the oil and gas sector and the temporary inefficiencies experienced during the reconfiguration of the remaining Canadian plants under the V20 program, we were pleased to present improved results for the quarter and the ninemonth period including margin improvements driven by our V20 investment. We believe we have managed our balance sheet well and our net cash continues to be at a healthy level. We were also pleased to achieve a book-to-bill ratio of 2.34, which has resulted in our backlog closing the quarter at an impressive level.”

Financial Highlights

(millions of U.S. dollars, excluding per share amounts)
Three-month periods ended
November 30
  Nine-month periods ended
November 30
  2020     2019       2020     2019  
                         
Sales $ 71.6   $ 88.7     $ 216.6   $ 258.0  
                           
Gross Profit   22.0     22.2       57.5     60.2  
Gross profit %   30.7 %   25.0 %     26.5 %   23.3 %
                           
Net earnings (loss)1   9.5     (0.8 )     2.5     (5.3 )
Net earnings (loss)1 per share – basic and diluted   0.44     (0.04 )     0.12     (0.24 )
                           
Operating profit (loss) before restructuring and transformation costs2   2.2     1.0       (1.1 )   (3.2 )
                           
Adjusted EBITDA2   5.6     4.3       8.6     6.2  
Adjusted EBITDA2 per share – basic and diluted   0.26     0.20       0.40     0.29  
                           

Third Quarter Fiscal 2021 (unless otherwise noted, all amounts are in U.S. dollars and all comparisons are to the third quarter of fiscal 2020):

  • The Company ended the quarter with a backlog of $561.8 million, an increase of $155.0 million or 38.1% since the beginning of the current fiscal year. The backlog was positively impacted by the higher book-tobill ratio and the strengthening of the euro spot rate against the U.S. dollar over the course of the nine-month period. The backlog also increased for the period due to the delays in shipments created by the COVID19 pandemic and the reconfiguration of the Canadian plants under the V20 program.

  • Bookings amounted to $167.6 million, an increase of $70.4 million or 72.4% compared to last year. This increase is primarily attributable to strong booking performances by the Company’s Italian and French operations. The Company’s Italian operations achieved a record high for the subsidiary of $48.9 million net new orders destined to the downstream oil and gas market while the Company’s French operations recorded $48.6 million of bookings for the quarter, primarily destined to the nuclear market. The increase for the quarter was also attributable to large project orders recorded by the Company’s North American operation.

  • This strong quarter in terms of bookings has been one of the main drivers that has allowed the Company to present a solid 2.34 book-tobill ratio, despite another soft quarter in terms of non-project orders booked in the Company’s North American operations.

  • Sales amounted to $71.6 million, a decrease of $17.1 million or 19.3% from the prior year. Sales were again negatively impacted by the reduction of non-project orders recorded by the Company’s North American operations due to the unfavorable market conditions triggered by the COVID-19 pandemic, as well as the drop in the oil price, which have significantly affected the Company’s distribution channel. The Company’s reduced quarterly shipments are also attributable to continued supply chain issues created by the COVID19 pandemic as well as inefficiencies experienced in reconfiguring the Canadian plants under the V20 program that caused production delays. This decrease in sales was partially offset by increased shipments in the Company’s Italian operations thanks to the delivery of previously delayed orders.

  • Gross profit percentage increased by 570 basis points from 25.0% to 30.7%. The increase in the gross profit percentage, which made up for the lower sales volume, was primarily attributable to the delivery of a product mix with a greater proportion of higher margin product sales, and from margin improvements resulting from the labour and overhead savings brought by the Company’s restructuring and transformation initiatives. The increase is also attributable to the reversal of a $1.6 million warranty provision due to a customer’s withdrawal of his claim and the recording of $1.5 million of wage subsidies. The subsidies were put in place by government authorities to prevent further staff lay-offs in the context of the COVID-19 pandemic by offering wage relief to companies negatively impacted by the virus.

  • Operating profit before restructuring and transformation costs2 amounted to $2.2 million compared to $1.0 million last year. Adjusted EBITDA2 amounted to $5.6 million or $0.26 per share compared to $4.3 million or $0.20 per share last year. The increase in operating profit before restructuring and transformation costs2 and adjusted EBITDA2 is primarily attributable to an improved gross profit percentage partially offset by a lower sales volume. The Company’s results were improved by the cost reductions related to the V20 program, as well as the recording of wage subsidies which in turn permitted the Company to avoid potentially significant lay-offs that otherwise would have been necessary to blunt the financial impact of the pandemic.

  • Net earnings1 amounted to $9.5 million or $0.44 per share compared to a net loss1 of $0.8 million or $0.04 per share last year. The increase in net earnings1 is primarily attributable to a $9.6 million gain recognized on the disposal of one of the Company’s Montreal plants, a vital part of the North American manufacturing footprint optimization plan which was planned in the scope of V20. The disposed plant’s production has been transferred within the remaining North American plants and the Company’s Indian operations. The Company’s results were improved by the recording of $2.9 million of wage subsidies which were allocated between cost of sales, administration expenses and restructuring and transformation costs. This increase was partially offset by a $1.3 million unfavorable movement in income taxes.

First Nine Months Fiscal 2021 (unless otherwise noted, all amounts are in U.S. dollars and all comparisons are to the first nine months of fiscal 2020):

  • The Company ended the period with net cash of $73.0 million, an increase of $42.0 million or 135.5% since the beginning of the year. The available net cash and unused credit facilities, along with future cash flows generated from operations, is sufficient for the Company to meet its financial obligations, increase its capacity of liquidity, satisfy its working capital requirements, and execute its business strategy. The increase in net cash is primarily attributable to proceeds on the disposal of a manufacturing plant, increase in longterm debt and short term bank loans and positive non-cash working capital movements, partially offset by investments in property, plant and equipment, long-term debt repayments and V20 related disbursements. Net cash was positively impacted by the strengthening of the euro spot rate against the U.S. dollar over the course of the period. In light of the ongoing pandemic and receipt of government subsidies, the Company has suspended the payment of all dividends as well as share buybacks this fiscal year.

  • Bookings amounted to $345.7 million, an increase of $93.6 million or 37.1% compared to last year. This increase is primarily attributable to large project orders booked in the Company’s French, Italian and North American operations, notably in the nuclear, downstream oil and gas and process markets. This increase was partially offset by a decrease in non-project orders booked in the Company’s North American operations.

  • Sales amounted to $216.6 million, a decrease of $41.4 million or 16.0% from the prior year. The decreased sales volume for the period is attributable to the negative impact the COVID-19 pandemic had on the global economy, especially on the Company’s distribution channel. The reduction in sales is also attributable to production delays caused by the inefficiencies experienced while reconfiguring the Canadian plants under the V20 program.

  • Gross profit percentage increased by 320 basis points from 23.3% to 26.5%. Despite the lower sales volume, the increase in gross profit percentage is primarily attributable to the delivery of a product mix with a greater proportion of higher margin product sales, and from margin improvements resulting from labour and overhead savings brought by the Company’s restructuring and transformation initiatives. The gross profit percentage was also improved by the Company’s recording of $5.7 million of wage subsidies. The subsidies were put in place by government authorities to prevent further staff lay-offs in the context of the COVID-19 pandemic by offering wage relief to companies negatively impacted by the virus. This increase was partially offset by unrealized foreign exchange losses primarily attributable to the weakening of the U.S. dollar against the euro incurred over the course of the period.

  • Administration costs amounted to $55.9 million, a decrease of $7.8 million or 12.2% compared to last year. The decrease is primarily attributable to a $4.7 million reduction of administration salary costs provided by wage subsidies combined with the on-going effort to reduce administration overhead expenses including travel expenses and office maintenance costs, caused principally by the downturn of the market conditions as well as the travel restrictions and social distancing measures that were enforced in a majority of countries over the course of the period. The Company also instituted select temporary salary reductions during the period. The decrease in administration costs was partially offset by a $1.2 million increase in the costs recognized in connection with the Company’s ongoing asbestos litigation. The fluctuation in asbestos costs for the period is due more to the timing of settlements in these two periods rather than to changes in longterm trends.

  • Operating loss before restructuring and transformation costs2 amounted to $1.1 million compared to $3.2 million last year. Adjusted EBITDA2 amounted to $8.6 million or $0.40 per share compared to $6.2 million or $0.29 per share last year. The improvement in operating loss before restructuring and transformation costs2 and adjusted EBITDA2 is primarily attributable to lowered administration costs and the Company’s recording of wage subsidies which in turn permitted the Company to avoid lay-offs that otherwise would have been necessary to blunt the financial impact of the pandemic, partially offset by an increase in unrealized foreign exchange losses, a lower gross profit and higher other expenses.

  • Net earnings1 amounted to $2.5 million or $0.12 per share compared to a net loss1 of $5.3 million or $0.24 per share last year. The increase in net earnings1 is primarily attributable to a $9.6 million gain recognized on the disposition of one of the Company’s Montreal plants and a reduction in administration costs. This increase was partially offset by a lower gross profit, an increase in other expenses and restructuration and transformation costs combined with a $2.9 million unfavorable movement in income taxes. The Company’s results were improved by the recording of $10.7 million of wage subsidies which were allocated between cost of sales, administration expenses and restructuring and transformation costs but were reduced by $2.1 million of unrealized foreign exchange losses incurred over the course of the period.

  • The net impact of currency swings for the period was generally unfavourable on the Company’s net earnings1, although it was generally favourable on the Company’s equity.

Dividend

At the end of the fiscal year ended February 29, 2020, the Board of Directors deemed appropriate to suspend the quarterly dividend. The decision remains unchanged and will be reviewed on a quarterly basis.

Conference call

Financial analysts, shareholders, and other interested individuals are invited to attend the second quarter conference call to be held on Thursday, January 14, 2021, at 11:00 a.m. (EDT). The toll free call-in number is 18009450427, access code 21989207. A recording of this conference call will be available for seven days at 14166264100 or 18005585253, access code 21989207.

About Velan

Founded in Montreal in 1950, Velan Inc. (www.velan.com) is one of the world’s leading manufacturers of industrial valves, with sales of US$371.6 million in its last reported fiscal year. The Company employs close to 1,700 people and has manufacturing plants in 9 countries. Velan Inc. is a public company with its shares listed on the Toronto Stock Exchange under the symbol VLN.

Safe harbour statement

This news release may include forward-looking statements, which generally contain words like “should”, “believe”, “anticipate”, “plan”, “may”, “will”, “expect”, “intend”, “continue” or “estimate” or the negatives of these terms or variations of them or similar expressions, all of which are subject to risks and uncertainties, which are disclosed in the Company’s filings with the appropriate securities commissions. While these statements are based on management’s assumptions regarding historical trends, current conditions and expected future developments, as well as other factors that it believes are reasonable and appropriate in the circumstances, no forward-looking statement can be guaranteed and actual future results may differ materially from those expressed herein. The Company disclaims any intention or obligation to update or revise any forward-looking statements contained herein whether as a result of new information, future events or otherwise, except as required by the applicable securities laws. The forward-looking statements contained in this news release are expressly qualified by this cautionary statement.

Non-IFRS measures

In this press release, the Company presented measures of performance and financial condition that are not defined under International Financial Reporting Standards (“non-IFRS measures”) and are therefore unlikely to be comparable to similar measures presented by other companies. These measures are used by management in assessing the operating results and financial condition of the Company. In addition, they provide readers of the Company’s consolidated financial statements with enhanced understanding of its results and financial condition, and increase transparency and clarity into the operating results of its core business. Reconciliations of these amounts can be found on the following page.

Operating profit (loss) before restructuring and transformation costs and Adjusted net earnings (loss) before interest, taxes, depreciation and amortization ("EBITDA")

    Three-month period ended November 30, Three-month period ended November 30, Nine-month period ended November 30, Nine-month period ended November 30,
    2020  2019  2020  2019 
           
Operating profit (loss)   10.4   (0.4 ) 4.2   (5.7 )
           
Adjustments for:          
Restructuring and transformation costs   1.4   1.4   4.3   2.5  
Gain on disposal of Montreal plant   (9.6 ) -   (9.6 ) -  
Operating profit (loss) before restructuring and transformation costs   2.2   1.0   (1.1 ) (3.2 )
           
Net earnings (loss)1   9.5   0.8   2.5   (5.3 )
           
Adjustments for:          
Depreciation of property, plant and equipment   2.5   2.9   7.5   8.1  
Amortization of intangible assets   0.7   0.5   1.9   1.5  
Finance costs – net   0.2   0.7   0.5   0.8  
Provision for (Recovery of) income taxes   0.9   (0.4 ) 1.5   (1.4 )
EBITDA   13.8   2.9   13.9   3.7  
           
Adjustments for:          
Restructuring and transformation costs   1.4   1.4   4.3   2.5  
Gain on disposal of Montreal plant   (9.6 ) -   (9.6 ) -  
           
Adjusted EBITDA   5.6   4.3   8.6   6.2  
                   

The term “operating profit or loss before restructuring and transformation costs” is defined as operating profit or loss plus restructuring and transformation costs less the gain on the disposal of a manufacturing plant. The forwardlooking statements contained in this news release are expressly qualified by this cautionary statement.

The term “adjusted EBITDA” is defined as net income or loss attributable to Subordinate and Multiple Voting Shares plus restructuring and transformation costs, plus depreciation of property, plant & equipment, plus amortization of intangible assets, plus net finance costs, plus income tax provision less the gain on the disposal of a manufacturing plant,. The forward-looking statements contained in this news release are expressly qualified by this cautionary statement.

________________________________
1 Net earnings or loss refers to net income or loss attributable to Subordinate and Multiple Voting Shares.
2 Non-IFRS measures – see explanation above.

           
Velan Inc.          
Condensed Interim Consolidated Statements of Financial Position        
(Unaudited)          
(in thousands of U.S. dollars)          
           
As At   November 30,   February 29,  
    2020   2020  
    $   $  
Assets          
           
Current assets          
Cash and cash equivalents   79,961   75,327  
Short-term investments   827   627  
Accounts receivable   119,859   135,242  
Income taxes recoverable   9,794   8,747  
Inventories   191,894   170,265  
Deposits and prepaid expenses   8,174   5,191  
Derivative assets   1   555  
    410,510   395,954  
           
Non-current assets          
Property, plant and equipment   97,821   98,179  
Intangible assets and goodwill   17,626   17,148  
Deferred income taxes   28,157   26,702  
Other assets   948   513  
           
    144,552   142,542  
           
Total assets   555,062   538,496  
           
           
Liabilities          
           
Current liabilities          
Bank indebtedness   6,941   44,317  
Short-term bank loans   5,915   1,379  
Accounts payable and accrued liabilities   79,676   74,271  
Income taxes payable   612   1,493  
Customer deposits   57,594   47,208  
Provisions   11,950   14,963  
Provision for performance guarantees   21,056   21,127  
Derivative liabilities   336   1,169  
Current portion of long-term lease liabilities   1,609   1,621  
Current portion of long-term debt   7,796   8,311  
    193,485   215,859  
           
Non-current liabilities          
Long-term lease liabilities   13,828   13,722  
Long-term debt   35,945   10,986  
Income taxes payable   1,411   1,576  
Deferred income taxes   2,774   2,869  
Other liabilities   9,230   8,623  
           
    63,188   37,776  
           
Total liabilities   256,673   253,635  
           
Total equity   298,389   284,861  
           
Total liabilities and equity   555,062   538,496  
           

 

Velan Inc.          
Condensed Interim Consolidated Statements of Income (Loss)      
(Unaudited)          
(in thousands of U.S. dollars, excluding number of shares and per share amounts)      
           
  Three-month periods ended November 30   Nine-month periods ended November 30
  2020   2019     2020   2019  
  $   $     $   $  
           
Sales 71,560   88,701     216,553   257,984  
           
Cost of sales 49,538   66,548     159,086   197,755  
           
Gross profit 22,022   22,153     57,467   60,229  
           
Administration costs 19,288   21,275     55,911   63,659  
Restructuring and transformation costs (income) (8,119 ) 1,406     (5,220 ) 2,480  
Other expense (income) 411   (118 )   2,535   (171 )
           
Operating profit (loss) 10,442   (410 )   4,241   (5,739 )
           
Finance income 161   135     575   870  
Finance costs 322   833     1,098   1,709  
           
Finance costs – net 161   698     523   839  
           
Income (Loss) before income taxes 10,281   (1,108 )   3,718   (6,578 )
           
Provision for (Recovery of) income taxes 881   (400 )   1,489   (1,368 )
           
Net income (loss) for the period 9,400   (708 )   2,229   (5,210 )
           
Net income (loss) attributable to:          
Subordinate Voting Shares and Multiple Voting Shares              9,527                 (819 )                2,529              (5,274 )
Non-controlling interest (127 ) 111     (300 ) 64  
  9,400   (708 )   2,229   (5,210 )
           
Net income (loss) per Subordinate and Multiple Voting Share        
Basic 0.44   (0.04 )   0.12   (0.24 )
Diluted 0.44   (0.04 )   0.12   (0.24 )
           
Dividends declared per Subordinate and Multiple -   0.02   -   0.07
     Voting Share (CA$ - ) (CA$0.03)   (CA$-) (CA$0.09)
           
Total weighted average number of Subordinate and          
     Multiple Voting Shares           
Basic 21,585,635   21,617,207     21,585,635   21,616,543  
Diluted 21,585,635   21,617,207     21,585,635   21,616,543  
           

 

Velan Inc.            
Condensed Interim Consolidated Statements of Comprehensive Income (Loss)  
(Unaudited)            
(in thousands of U.S. dollars)            
             
  Three-month periods ended
November 30
  Nine-month periods ended
November 30
                   
  2020   2019     2020   2019  
  $   $   $ $
Comprehensive income (loss)            
             
Net income (loss) for the period 9,400   (708 )   2,229   (5,210 )
             
Other comprehensive income (loss)            
Foreign currency translation adjustment on foreign operations            
whose functional currency is other than the reporting            
currency (U.S. dollar) 490   (124 )   11,299   (4,694 )
             
Comprehensive income (loss) 9,890   (832 )   13,528   (9,904 )
             
Comprehensive income (loss) attributable to:            
Subordinate Voting Shares and Multiple Voting Shares 9,886   (1,002 )   13,663   (9,855 )
Non-controlling interest 4   170     (135 ) (49 )
             
  9,890   (832 )   13,528   (9,904 )
             
Other comprehensive income (loss) is composed solely of items that may be reclassified subsequently to the  
consolidated statement of income (loss).            
             

 

Velan Inc.                
Condensed Interim Consolidated Statements of Changes in Equity      
(Unaudited)                
(in thousands of U.S. dollars, excluding number of shares)            
                 
                 
                 
  Equity attributable to the Subordinate and Multiple Voting shareholders    
  Number of
shares
Share capital Contributed
surplus
Accumulated
other
comprehensive
income (loss)
Retained
earnings
Total Non-
controlling
interest
Total equity
                 
Balance - February 28, 2019 21,621,935   73,090   6,074 (28,990 ) 254,606   304,780   4,053   308,833  
                 
Net income (loss) for the period -   -   - -   (5,274 ) (5,274 ) 64   (5,210 )
Other comprehensive loss -   -   - (4,581 ) -   (4,581 ) (113 ) (4,694 )
                 
Effect of share-based compensation -   -   2 -   -   2   -   2  
Share repurchase (16,900 ) (184 ) 94 -   -   (90 ) -   (90 )
Dividends                
Multiple Voting Shares -   -   - -   (1,048 ) (1,048 ) -   (1,048 )
Subordinate Voting Shares -   -   - -   (413 ) (413 ) -   (413 )
                 
Balance - November 30, 2019 21,605,035   72,906   6,170 (33,571 ) 247,871   293,376   4,004   297,380  
                 
Balance - February 29, 2020 21,585,635   72,695   6,260 (34,047 ) 236,269   281,177   3,684   284,861  
                 
Net income (loss) for the period -   -   - -   2,529   2,529   (300 ) 2,229  
Other comprehensive income -   -   - 11,134   -   11,134   165   11,299  
                 
Balance - November 30, 2020 21,585,635   72,695   6,260 (22,913 ) 238,798   294,840   3,549   298,389  
                 

 

Velan Inc.          
Condensed Interim Consolidated Statements of Cash Flow      
(Unaudited)          
(in thousands of U.S. dollars)          
           
  Three-month periods ended
November 30
  Nine-month periods ended
November 30
  2020   2019     2020   2019  
  $   $     $   $  
           
Cash flows from          
           
Operating activities          
Net income (loss) for the period 9,400   (708 )   2,229   (5,210 )
Adjustments to reconcile net income (loss) to cash provided (used) by operating activities (6,096 ) 3,590     (837 ) 10,503  
Changes in non-cash working capital items (14,657 ) 7,536     6,358   8,080  
Cash provided (used) by operating activities (11,353 ) 10,418     7,750   13,373  
           
Investing activities          
Short-term investments 327   2,207     (200 ) 569  
Additions to property, plant and equipment (3,575 ) (5,711 )   (7,511 ) (7,425 )
Additions to intangible assets (470 ) (175 )   (993 ) (308 )
Proceeds on disposal of property, plant and equipment, and          
intangible assets 12,683   109     13,712   148  
Net change in other assets 63   (156 )   (426 ) (1,484 )
Cash provided (used) by investing activities 9,028   (3,726 )   4,582   (8,500 )
           
Financing activities          
Dividends paid to Subordinate and Multiple Voting shareholders -   (495 )   (482 ) (1,457 )
Repurchase of shares -   (90 )   -   (90 )
Short-term bank loans 5,913   (146 )   4,536   (638 )
Net change in revolving credit facility (9,537 ) -     10,798   -  
Increase in long-term debt -   -     14,305   1,122  
Repayment of long-term debt (873 ) (579 )   (2,931 ) (2,438 )
Repayment of long-term lease liabilities (428 ) (485 )   (1,284 ) (1,143 )
Cash provided (used) by financing activities (4,925 ) (1,795 )   24,942   (4,644 )
           
Effect of exchange rate differences on cash  (430 ) (779 )   4,736   (2,067 )
           
Net change in cash during the period (7,680 ) 4,118     42,010   (1,838 )
           
Net cash – Beginning of the period 80,700   34,910     31,010   40,866  
           
Net cash – End of the period 73,020   39,028     73,020   39,028  
           
Net cash is composed of:          
Cash and cash equivalents 79,961   77,143     79,961   77,143  
Bank indebtedness (6,941 ) (38,115 )   (6,941 ) (38,115 )
           
  73,020   39,028     73,020   39,028  
           
Supplementary information          
Interest paid (482 ) (480 )   (945 ) (938 )
Income taxes paid (3,039 ) (1,025 )   (5,548 ) (4,532 )
           

For further information please contact:
Yves Leduc, Chief Executive Officer
or
Réjean Ostiguy, Chief Financial Officer
Tel: (514) 748-7743
Fax: (514) 748-8635
Web:  www.velan.com

A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/d349c652-ff1a-483d-8b99-9b662dd59a85


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Company's backlog

Order backlog of US$ 561.8 million, highest since November 30, 2012
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