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Avcorp Industries Inc. (AVP on the TSX) today
announced that a continuing of the softening order book and rate reductions
from its major customers have caused the Company to review operations and
terminate approximately 100 management, staff and union employees,
representing 12% of its current workforce. A $350,000 charge has been taken
against last quarter numbers and a further $400,000 will be charged to this
quarter for severance provisions. No bonuses will be paid for the years 2008
and 2009 and all management and staff salaries will be frozen at current
levels for the year with all but necessary expenses being eliminated.
The Company has renewed it operating bank line with HSBC and is well
positioned to meet the current downturn in the market. Avcorp is continuing
with the introduction and investment of four major new programs which will
begin to see revenue this year and in the following years.
About Avcorp
Avcorp designs and builds major airframe structures for some of the
world's leading aircraft companies, including Boeing, Bombardier, and Cessna.
With more than 50 years of experience, 750 skilled employees and 385,000
square feet of facilities, Avcorp offers integrated composite and metallic
aircraft structures to aircraft manufacturers, a distinct advantage in the
pursuit of contracts for new aircraft designs, which require lower-cost,
light-weight, strong, reliable structures. Avcorp is a Canadian public company
traded on the Toronto Stock Exchange (TSX:AVP). More information is available
at www.avcorp.com.
Forward-Looking Statements
This release should be read in conjunction with the Company's unaudited
financial statements contained in the Company's Annual Report and with the
quarterly financial statements and accompanying notes filed with Sedar
(www.sedar.com).
Certain statements in this release and other oral and written statements
made by the Company from time to time are forward-looking statements,
including those that discuss strategies, goals, outlook or other
non-historical matters; or projected revenues, income, returns or other
financial measures. These forward-looking statements are subject to risks and
uncertainties that may cause actual results to differ materially from those
contained in the statements, including the following: (a) the extent to which
the Company is able to achieve savings from its restructuring plans; (b)
uncertainty in estimating the amount and timing of restructuring charges and
related costs; (c) changes in worldwide economic and political conditions that
impact interest and foreign exchange rates; (d) the occurrence of work
stoppages and strikes at key facilities of the Company or the Company's
customers or suppliers; (e) government funding and program approvals affecting
products being developed or sold under government programs; (f) cost and
delivery performance under various program and development contracts; (g) the
adequacy of cost estimates for various customer care programs including
servicing warranties; (h) the ability to control costs and successful
implementation of various cost reduction programs; (i) the timing of
certifications of new aircraft products; (j) the occurrence of further
downturns in customer markets to which the Company products are sold or
supplied or where the Company offers financing; (k) changes in aircraft
delivery schedules or cancellation of orders; (l) the Company's ability to
offset, through cost reductions, raw material price increases and pricing
pressure brought by original equipment manufacturer customers; (m) the
availability and cost of insurance; (n) the Company's ability to maintain
portfolio credit quality; (o) the Company's access to debt financing at
competitive rates; and (p) uncertainty in estimating contingent liabilities
and establishing reserves tailored to address such contingencies.
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