WHO WE ARE WHAT WE DO INVESTORS SUPPLIERS CAREERS NEWS CONTACT Avcorp announces 2021 Third Quarter Financial Results 2021 Q3 Report November 10, 2021 VANCOUVER: Avcorp Industries Inc. (TSX: AVP) (the “Company”, “Avcorp” or the “Avcorp Group”) today announced its financial results for the quarter ended September 30, 2021. All amounts are in Canadian currency unless otherwise stated. 2021 Third Quarter Highlights Third quarter 2021 revenue was $25,905,000 compared to $33,769,000 in 2020. 2021 revenue decreased by $7,864,000, in comparison to 2020. Revenue was affected by lower customer requirements due to the COVID-19 virus and fulfilling the remaining customer requirements of a contract at the Gardena facility, offset by the continued growth in the F35 Program in the Delta facility. Third quarter 2021 net loss was $3,172,000 compared to net loss of $1,263,000 in 2020. Loss increased in comparison to 2020 mainly due to lower gross profit, and a foreign exchange loss of $385,000 in current quarter compared to a gain of $712,000 in 2020, partially offset by lower administrative and general expenses. The US dollar strengthened against the Canadian dollar resulting in a loss predominately from the translation of the Company’s US dollar denominated Bank indebtedness and Term debt. Third quarter 2021 cash flows from operating activities before changes in non-cash working capital were $695,000 compared to an inflow of $2,021,000 in 2020. 2020 cashflow was partially supported by the Canada Emergency Wage Subsidies of $1,232,000. In August 2021, the Company signed a contract extension with Boeing to provide the Wheel Well Fairing assemblies for the Boeing 737 MAX. The Company has improved the shareholders’ deficiency to $34,810,000 as at September 30, 2021 (December 31, 2020: deficiency of $49,140,000). This was the result of the Company entering into a multiparty amended and restated Accommodation Agreement with a customer and Panta Canada B.V on March 12, 2021. This eliminated the unamortized cash advance, provided a mutual release and forgiveness of certain historic and future guarantee fees payable to the customer, and a legal claim. Review of 2021 Third Quarter Results For the quarter ended September 30, 2021, the Avcorp Group recorded an operating loss of $1,590,000 from $25,905,000 of revenue, as compared to an operating loss of $326,000 from $33,769,000 of revenue from the same quarter in the previous year. The third quarter of 2021 operating loss increased in comparison to 2020 by $1,264,000 mainly due to lower revenue, lower gross profit of $1,053,000 and lower other income of $479,000, partially offset by lower administrative and general expenses of $249,000. During the quarter ended September 30, 2021, cash flows from operating activities before changes in non-cash working capital were $695,000 compared to an inflow of $2,021,000 in 2020. 2020 cashflow was partially supported by the Canada Emergency Wage Subsidies of $1,232,000. As at September 30, 2021, the Company had $6,442,000 cash on hand (December 31, 2020: $7,044,000) and had utilized $74,435,000 of its operating line of credit (December 31, 2020: $76,439,000). The bank indebtedness balance of the modification gain and related adjustments as a result of the execution of an amending agreement in 2021 was $1,076,000 as at September 30, 2021, (December 31, 2020 loss of $269,000 from the 2019 amendment). The Company has a working capital surplus of $26,327,000 as at September 30, 2021, compared with $77,780,000 deficit as at December 31, 2020. Working capital is defined as the difference between current assets and current liabilities. The increase compared to 2020 was mainly due to the bank indebtedness re-classified as non-current upon extension of maturity to June 30, 2023 with a loan amendment entered into in June 2021. On September 30, 2021, the ratio of the Company's current assets to current liabilities was 1.64:1 (December 31, 2020: 0.47:1). About Avcorp The Avcorp Group designs and builds major airframe structures for some of the world’s leading aircraft companies, including BAE Systems, Boeing, Bombardier, Lockheed Martin and Subaru Corporation. The Avcorp Group has more than 65 years of experience, over 450 skilled employees and 560,000 square feet of facilities.Avcorp Structures & Integration located in Delta British Columbia, Canada is dedicated to metallic and composite aerostructures assembly and integration; Avcorp Engineered Composites located in Burlington Ontario, Canada is dedicated to design and manufacture of composite aerostructures, and Avcorp Composite Fabrication located in Gardena California, USA has advanced composite aerostructures fabrication capabilities for composite aerostructures. The Avcorp Group offers integrated composite and metallic aircraft structures to aircraft manufacturers, a distinct advantage in the pursuit of contracts for new aircraft designs, which require lowercost, light-weight, strong, reliable structures. Comtek Advanced Structures Ltd., at our Burlington, Ontario, Canada location also provides aircraft operators with aircraft structural component repair services for commercial aircraft.. Avcorp Composite Fabrication Inc. is wholly owned by Avcorp US Holdings Inc. Both companies are incorporated in the State of Delaware, USA, and are wholly owned subsidiaries of Avcorp Industries Inc. Comtek Advanced Structures Ltd., incorporated in the Province of Ontario, Canada, is a wholly owned subsidiary of Avcorp Industries Inc. Avcorp Industries Inc. is a federally incorporated reporting company in Canada and traded on the Toronto Stock Exchange (TSX:AVP). AMANDEEP KALER CHIEF EXECUTIVE OFFICER AVCORP GROUP Contact: Ruth MacDonald, 604-587-4938 Forward-Looking Statements This release should be read in conjunction with the Company’s audited 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) changes in worldwide economic and political conditions that impact interest and foreign exchange rates; (b) the occurrence of work stoppages and strikes at key facilities of the Corporation or the Corporation’s customers or suppliers; (c) government funding and program approvals affecting products being developed or sold under government programs; (d) cost and delivery performance under various program and development contracts; (e) the adequacy of cost estimates for various customer care programs including servicing warranties; (f) the ability to control costs and successful implementation of various cost reduction programs; (g) the timing of certifications of new aircraft products; (h) the occurrence of downturns in customer markets to which the Corporation products are sold or supplied or where the Corporation offers financing; (i) changes in aircraft delivery schedules or cancellation of orders; (j) the Corporation’s ability to offset, through cost reductions, raw material price increases and pricing pressure brought by original equipment manufacturer customers; (k) the availability and cost of insurance; (l) the Corporation’s ability to maintain portfolio credit quality; (m) the Corporation’s access to debt financing at competitive rates; (n) uncertainty in estimating contingent liabilities and establishing reserves tailored to address such contingencies; and (o) integration of newly acquired operations and associated expenses may adversely affect profitability. 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