Delta-based Avcorp Industries Inc. (TSX:AVP) posted a 16.8% revenue increase in 2008, but asset write-downs and higher financing charges pushed the company deeper into the red.
Revenue for the year ending December 31, 2008, rose to $128.9 million from $110.3 million due to assembly and fabrication line improvements that reduced unit production hours by an average of 9%.
But the economic crisis has forced the major airframe structure builder to write down the value of parts of its business hurting the company's bottom line. It took a $759,000 write-down related to its investment in Eclipse Aviation Corp. and a $571,000 goodwill write-down from its acquisition of Comtek Advanced Structures Ltd.
As a result, the company's annual net loss rose to $2.2 million from $1.7 million.
The company also reported that because of an unprecedented drop in business from its major customer, it has cut its workforce by 26%, which involved approximately 200 employees.
The company expects the recession will result in a 30% decline in revenue this year with severe pressure being put on the company's operations and credit lines. The company doesn't expect the business jet market to recover until 2011.
The company also reported that for 2009's first quarter, the company has been out of compliance with the working capital and debt service coverage covenants in a debenture held by Export Development Canada. The company is negotiating the terms of repayment with EDC.
Avcorp's share price range during the past week: between $0.28 and $0.35; 52-week high: $1.25; 52-week low: $0.25.