Vector Aerospace Corporation

Vector Aerospace Corporation

March 05, 2008 16:00 ET

Vector Aerospace Announces Fourth Quarter 2007 Results

TORONTO, ONTARIO--(Marketwire - March 5, 2008) - Vector Aerospace Corporation (Vector) (TSX:RNO) today announces results for the quarter ended December 31, 2007.

Operations (in millions of Fourth Quarter Twelve Months
Canadian dollars):
2007 2006 2007 2006

Revenue from operations $ 83.2 $ 83.2 $ 339.1 $ 332.2
Net earnings from operations before
interest, income taxes and unusual
items $ 6.0 $ 6.3 $ 24.9 $ 27.0
Net earnings $ 3.1 $ 4.2 $ 12.1 $ 16.4

Per Share:
Weighted average number of common
shares outstanding (millions)
Basic 37.5 37.2 37.5 37.1
Diluted 37.9 37.8 38.0 37.7
Net earnings before interest, income
taxes and unusual items
Basic $ 0.16 $ 0.17 $ 0.66 $ 0.73
Diluted $ 0.16 $ 0.17 $ 0.66 $ 0.72
Net earnings
Basic $ 0.08 $ 0.11 $ 0.32 $ 0.44
Diluted $ 0.08 $ 0.11 $ 0.32 $ 0.44

The interim consolidated financial statements and MD&A for the quarter ended December 31, 2007 are available on the Company's website, and on SEDAR,

The Company generated consolidated revenue from continuing operations of $83.2 million for the fourth quarter of 2007, equal to that of the same period last year. Earnings from operations, before interest, tax, and unusual items, were $6.0 million for the fourth quarter of 2007, a decrease of $0.3 million from the same period last year. The earnings decrease in the fourth quarter of 2007 was primarily a result of the continued strength of the Canadian dollar against the US dollar and the British pound, and structures projects completed in the prior year not repeated in the current year. In the fourth quarter of 2007 the Company recorded unusual expenses of $3.9 million comprising reorganization costs of $900,000 and an increase to the provision for inventory obsolescence of $3 million. Net earnings for the fourth quarter of 2007 were $3.1 million ($0.08 per share) compared to $4.2 million ($0.11 per share) for the same period last year.

In commenting on the quarter's results, Chairman, President and CEO Donald Jackson stated: "The fourth quarter operating earnings before unusual items were relatively consistent with prior quarters. This, despite adverse effects of the strong Canadian dollar compared to previous year results, and delays encountered in a major contract.

We were pleased to have the Ministry of Defense in the United Kingdom announce the signing of the definitive purchase and sale agreement whereby Vector has agreed to acquire the rotary and component repair business of DARA. This acquisition is a significant move for Vector and will represent revenue and profitability opportunities in 2008 and beyond. We currently expect to close this transaction at the end of the first quarter.

I am also pleased to report that the activity levels under the Royal Saudi Air Force contract have increased significantly towards the end of 2007 and revenues will commence in 2008.

All operating divisions are experiencing strengthening demand for services in 2008. Our challenge in 2008 will be successfully integrating our 1300 new associates that we welcome with the closing of the DARA transaction, and building from our new and expanded base in the U.K."

Analyst Conference Call

Vector Aerospace Corporation will hold a Q4 2007 conference call at 4:00 p.m. ET on Wednesday, March 5, 2008. The conference call will review Vector's results for the quarter ended December 31, 2007. The scheduled speakers for the Company on the conference call are: Donald Jackson, Chairman, President and Chief Executive Officer, Randal Levine, Senior Vice President and Chief Financial Officer and George Lawton, Vice President Finance.

Interested parties can access the conference call in the North American by dialing 1-888-300-0053 and entering passcode 36430990. The international dial-in number is (647) 427-3420. Please dial in approximately 5-10 minutes prior to the 4:00 p.m. Eastern start time.

A replay service will be available two hours following the conference call until midnight on March 19, 2007. To access this recording, dial 1-800-766-3394 or 1-402-220-7734 and enter passcode 36430990.

Vector Aerospace Corporation is an independent provider of aviation repair and overhaul services. Through facilities in Canada, the United States and the United Kingdom, Vector provides services to commercial and military customers for various types of gas turbine engines, components and helicopter airframes. It also provides information technology solutions to an international customer base. Principal operations include Atlantic Turbines, Sigma Aerospace, ACROHELIPRO Global Services and Pathix ASP. The Company has approximately 1,100 employees.

Special Note Regarding Forward-Looking Statements

Certain statements in this news release, which includes the attached management's discussion and analysis of financial condition and results of operations, are forward-looking statements or information, collectively "forward-looking statements". The Company is hereby providing cautionary statements identifying important factors that could cause the Company's actual results to differ materially from those projected in forward-looking statements made in this news release. Any statements that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, through the use of words or phrases such as "will likely result," "are expected to", "will continue", "is anticipated", "estimated", "intend", "plan", "projection", "could", "may", "believes", "feel", "targeting", "look forward", "goals", "objective", "outlook" and similar expressions) are not historical facts and may be forward-looking and may involve estimates, assumptions and uncertainties which could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements. Without limitation, information regarding the expected revenue from the contract signed with the Royal Saudi Air Force, the impacts on the aviation industry of the tensions and conflicts in the Middle East, the impacts of possible acts of terrorism on the aviation industry, timing of product delivery, availability of parts from original equipment manufacturers ("OEMs") and others used in providing the Company's services, U.S. and foreign government activities, volatility of the market for the Company's services, worldwide political stability, factors that could result in significant or prolonged disruption to commercial air travel worldwide, domestic and international economic conditions, other political and economic situations and uncertainties, changes in foreign currency exchange rates, the impacts of changes in government priorities and spending on military aviation activities related to the Company's services, the ability of the Company to replace lost revenue of a customer significant to an operating division, the ability of the Company to successfully implement production efficiency changes, cost reductions and restructuring initiatives at various locations throughout the Company and the possibility that such efforts will not have as great an impact on the operating results of the Company as is currently anticipated, is forward-looking information. Readers should also refer to the Company's continuous disclosure materials filed with Canadian Securities Regulatory Authorities for additional information with respect to certainly of these risk factors, including the 2006 Annual Report and Management's Discussion and Analysis (2006).

Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to have been correct. Important factors that could cause actual results to differ materially from the Company's expectations ("Cautionary Statements"), including changes in general economic, market and business conditions, fluctuations in the cost of borrowing, political and economic development, the Company's ability to receive timely regulatory approvals, competitive actions of other companies, including increased competition from OEMs with their own in-house service providers, the occurrence of unexpected events such as fires, equipment failures and other similar events affecting the Company or other parties whose operation or assets directly or indirectly affect the Company, and those risks set forth under the heading "Risk Factors" below.

All subsequent written and oral forward-looking statements attributable to the Company or persons acting on behalf of the Company are expressly qualified in their entirety by the Cautionary Statements. The forward-looking information contained herein is current only as of the date of this document. New factors emerge from time to time, and it is not possible for management to predict all of such factors and to assess in advance the impact of each such factor on the Company's business or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements. The Company disclaims any intentions or obligation to update or revise any forward-looking statements or comments as a result of any new information, future event or otherwise unless such disclosure is required by law.

Annual 2006 Consolidated Financial Statements and MD&A

The Company's complete annual consolidated financial statements for the year ended December 31, 2006 and notes thereto, together with management's discussion and analysis of financial condition and results of operations ("MD&A") included in the Company's Annual Report for the year ended December 31, 2006 (the "2006 Annual Report") were released on March 30, 2007. The overview of financial condition and results of operations included in this news release should be read in conjunction with the 2006 Annual Report which is available on the Company's website and on SEDAR,

Contact Information

  • Vector Aerospace Corporation
    Donald K. Jackson
    Chairman, President & CEO
    (416) 925-1143
    Vector Aerospace Corporation
    Randal L. Levine
    Senior Vice-President and Chief Financial Officer
    (416) 925-1143