In This Article:
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Sales Growth: Sales from continuing operations increased by 18.1% to $73.4 million.
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Adjusted Net Income: Achieved $8.5 million compared to a $7 million loss last year.
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Gross Profit: Increased to $28.3 million from $8.2 million, with a gross profit margin of 38.6% compared to 13.1% last year.
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Adjusted EBITDA: Improved to $14.3 million from negative $4.1 million last year.
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Cash Flow from Operations: Generated $19.9 million after nine months, compared to a negative cash outflow of $7.6 million last year.
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Order Backlog: Reached nearly $300 million, up 5.3% since the beginning of the fiscal year.
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Long-term Debt: Stood at $19.5 million at the end of the quarter.
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Cash and Cash Equivalents: $35.1 million as of November 30, 2024.
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Dividend: Reinstated with a payment of CAD0.03 per share.
Release Date: January 15, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Velan Inc (VLNSF) reported strong third-quarter results with an 18% increase in sales from continuing operations.
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The company achieved a significant turnaround in profitability, with an adjusted net income of $8.5 million compared to a $7 million loss a year ago.
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Velan Inc (VLNSF) generated nearly $20 million in cash flow from operations over nine months, indicating improved cash flow generation.
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The order backlog reached nearly $300 million, with over 83% deliverable within the next 12 months, showcasing strong future revenue potential.
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Strategic initiatives, including the divestiture of asbestos-related liabilities and the sale of French subsidiaries, are expected to unlock significant shareholder value and reduce financial risks.
Negative Points
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The company reported a loss from continuing operations of $47.8 million for the quarter, primarily due to restructuring expenses.
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Restructuring expenses amounted to $74.5 million for the quarter, related to asbestos-related provisions and transaction costs.
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Sales in certain international markets were lower, partially offsetting growth in Italy and China.
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The sale of French subsidiaries, which accounted for approximately 25% of total revenues, may impact future revenue streams.
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The transaction timeline for the sale of French subsidiaries is subject to French law, potentially delaying the closing until the end of the fiscal year or early next year.
Q & A Highlights
Q: When do you expect the transaction involving the sale of your French subsidiaries to close? A: Under French law, there is a consultation period by our works councils in the two operations in France, which can last up to 60 days. We expect the transaction to close by the end of our fiscal year or early in the first quarter of next year. - James Mannebach, Chairman of the Board, Chief Executive Officer