Magellan Aerospace Corporation (“Magellan” or the “Corporation”) released its financial results for the fourth quarter of 2014. All amounts are expressed in Canadian dollars unless otherwise indicated. The results are summarized as follows:
Overview
A summary of Magellan’s business and significant updates
Magellan is a diversified supplier of components to the aerospace industry and in certain circumstances for power generation projects. Through its wholly owned subsidiaries, Magellan engineers and manufactures aeroengine and aerostructure components for aerospace markets, advanced products for defence and space markets and complementary specialty products. The Corporation also supports the aftermarket through supply of spare parts as well as performing repair and overhaul services and supplies in certain circumstances parts and equipment for power generation projects.
The Corporation’s strategy has been to focus on several core competencies within the aerospace industry. These include precision machining of a wide variety of aerospace material, composites, complex high technology magnesium and aluminum alloy castings, repair and overhaul technologies and design of structures. The Corporation is now seeking to leverage these core competencies by achieving growth in applications where these abilities are critical in meeting customer needs.
Business Update
The Corporation announced on October 3, 2014 the first anniversary of its MAC-200 Bus on the Cascade SmallSat and IOnospheric Polar Explorer (CASSIOPE) mission in space. The mission was developed and implemented by Canadian industry led by MacDonald Dettwiler and Associates Ltd., as prime contractor, with important contributions from the Canadian industry team, which includes Magellan. The mission launched on September 29, 2013, carrying eight science instruments, collectively named e-Pop as well as a second payload for advanced telecommunications technology demonstration (termed Cascade). The two payloads were assembled into Magellan’s MAC-200 satellite bus and have been operating in space for more than one year.
On January 6, 2015 Magellan announced the signing of a 10-year agreement with Pratt & Whitney Canada (“P&WC”), a United Technologies Company, for the supply of complex magnesium and aluminum castings. The castings will be produced primarily by Magellan’s facility in Haley, Ontario, with several being produced at its Glendale, Arizona plant. The agreement is expected to represent approximately $250 million in revenue for Magellan from 2014 through 2023. P&WC has been a key customer of Magellan’s Haley facility for more than 50 years. This new long-term agreement recognizes Magellan’s position as a leader in the industry and provides the framework for a new level of strategic alignment with P&WC.
For additional information, please refer to the 2014 Management’s Discussion and Analysis available on www.sedar.com.
Results of Operations
A discussion of Magellan’s operating results for fourth quarter ended December 31, 2014
The Corporation reported higher revenue in its Aerospace segment in the fourth quarter of 2014 when compared to the fourth quarter of 2013. Gross profit and net income for the fourth quarter of 2014 were $38.2 million and $17.9 million, respectively, an increase from the fourth quarter of 2013 gross profit and net income of $32.7 million and $16.8 million, respectively.
