Vancouver, BC, December 30, 2010--(T-Net)--Avcorp Industries Inc. (Avcorp) announces that, following discussions with the Cessna Aircraft Company (Cessna), Avcorp and Cessna will transition current production work back to Cessna. Avcorp will continue to fulfill orders until transition and the transition timeline is not yet defined. Avcorp and Cessna are entering into discussions with respect to the timing and associated expenses in connection with the transition.
A production transition plan, as well as a remuneration agreement is subject of discussion. The transition timeline is anticipated to be over an extended period of time and is contingent on factors which will be the subject matter of the ongoing discussions with Cessna.
Avcorp will provide an update when the details of the transition plan are determined.
We believe that our current work flow and other and new business opportunities will provide a sustainable business for Avcorp. In addition the capital restructuring and financing activities undertaken during 2009 and 2010 have provided a less expensive cost of capital and debt service requirements which will assist Avcorp through this period of transition.
Avcorp designs and builds major airframe structures for some of the world's leading aircraft companies, including Boeing, Bombardier, and Cessna. With more than 50 years of experience, 500 skilled employees and 354,000 square feet of facilities in Delta BC and Burlington ON, Avcorp offers integrated composite and metallic aircraft structures to aircraft manufacturers, a distinct advantage in the pursuit of contracts for new aircraft designs, which require lower-cost, light-weight, strong, reliable structures. Avcorp is a Canadian public company traded on the Toronto Stock Exchange (Toronto:AVP.TO).
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 forecasted revenues and financing requirements. These forward-looking statements based on management's projections of customer orders and operating needs, and are subject to risks and uncertainties that may cause actual results to differ materially from those contained in the statements, including the following: (a) the extent to which the Company is able to achieve savings from its restructuring plans; (b) uncertainty in estimating the amount and timing of restructuring charges and related costs; (c) changes in worldwide economic and political conditions that impact interest and foreign exchange rates; (d) the occurrence of work stoppages and strikes at key facilities of the Company or the Company's customers or suppliers; (e) government funding and program approvals affecting products being developed or sold under government programs; (f) cost and delivery performance under various program and development contracts; (g) the adequacy of cost estimates for various customer care programs including servicing warranties; (h) the ability to control costs and successful implementation of various cost reduction programs; (i) the timing of certifications of new aircraft products; (j) the occurrence of further downturns in customer markets to which the Company products are sold or supplied or where the Company offers financing; (k) changes in aircraft delivery schedules or cancellation of orders; (l) the Company's ability to offset, through cost reductions, raw material price increases and pricing pressure brought by original equipment manufacturer customers; (m) the availability and cost of insurance; (n) the Company's ability to maintain portfolio credit quality; (o) the Company's access to debt financing at competitive rates; and (p) uncertainty in estimating contingent liabilities and establishing reserves tailored to address such contingencies.
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