Delta-based Avcorp Industries is reporting a decline in revenue following the loss of major client Cessna Aircraft.
Avcorp reported $440,000 income from operations in 2013's first quarter, compared with $860,000 in 2012’s first quarter.
“Current quarter revenues have decreased from the same quarter in the preceding year primarily as a result of the wind‐down of Cessna Aircraft Company programs,” Avcorp stated.
The aircraft components manufacturer had been embroiled in a lawsuit with Cessna over a long-term supplier agreement signed in 2001. In 2003, Cessna began sourcing components from another company. In 2010, when the Cessna contract made up 40% of Avcorp’s revenue, Cessna told Avcorp it would move to other suppliers and in-house production.
In the suit, Cessna alleged that the contract had not been exclusive and that Avcorp had regularly shipped defective products. But an arbitration panel ruled in favour of Avcorp.
Earlier this month, on May 3, a U.S. district judge upheld a $27.4 million award to Avcorp, which Cessna had disputed.
Avcorp designs and builds airframe structures for companies such as BAE Systems, Boeing and Bombardier. It employs approximately 400 people in 354,000 square feet of facilities in Delta and Burlington, Ontario.
