Allen-Vanguard stock hit after $34.2M quarterly loss, weak near-term outlook
May 15, 2008OTTAWA - Allen-Vanguard Corp, has cut expectations for its current financial year, citing delays in U.S. military programs. The maker of protective gear and devices to disable roadside bombs also said Thursday its outlook "strengthens considerably" through 2011.
Allen-Vanguard shares were shot down 10 per cent on the news, trading Thursday morning at $3.03, down 33 cents on the TSX, after earlier hitting a 52-week low of $2.85 - down from a high last September of $11.95.
The company booked a net loss of $34.2 million or 32 cents per share in its second quarter ended March 31, including expenses related to acquisitions which helped boost revenue to $91.3 million from $23.5 million.
The year-ago net loss was $200,000 or two cents per share, before the takeovers of Med-Eng Systems and Hazard Management Solutions.
"Our financial results in the quarter were negatively impacted by the delay of several large U.S. defence orders for jammers," stated CEO David Luxton.
"However, at the same time as the U.S. Department of Defence was redefining requirements and deferring orders in the very short term, our visibility on these programs with our strategic partners, Lockheed Martin and General Dynamics, actually strengthened in this period. This is very positive for our outlook for fiscal 2009 through fiscal 2011."
The company said at least $70 million of revenue that had been expected in the second half of the current year will be deferred into the 2009 financial year which begins Oct. 1.
Management also noted a drop in sales at the U.S. personal protection systems
division, while there were "no significant international sales" of electronic systems and several training contracts were delayed.
Cash flow for the quarter was $61.2 million, all applied to long-term debt, which stood at $185.1 million on March 31.
The order backlog was $45 million, down from $92 million at Dec. 31, but the company "expects a refresh to its order backlog in Q3 and Q4 from contracts now in progress."
