Velan Inc. Reports Solid First Quarter Results for Fiscal 2026

Core Insights - Velan Inc. reported a strong financial performance for the first quarter of fiscal 2026, with sales growth of 18.6% and improved gross profit margins [3][4][5] - The company achieved a net income of $17.8 million, a significant turnaround from a net loss of $2.2 million in the same period last year [17][5] - Velan's cash and cash equivalents reached $59.1 million, the highest level in five years, following the divestiture of asbestos-related liabilities and the sale of French assets [3][19] Financial Results - Sales from continuing operations totaled $72.2 million, an increase of $11.3 million compared to $60.9 million in the previous year [5][12] - Gross profit rose to $20.6 million, representing a gross margin of 28.6%, up from 27.6% the previous year [5][13] - The company incurred restructuring expenses of $5.4 million, which included transaction-related costs [15][5] Backlog and Bookings - The backlog as of May 31, 2025, was $286.1 million, reflecting a 4.1% increase from $274.9 million at the end of the previous quarter [9][10] - Bookings for the quarter amounted to $78.2 million, down from $83.0 million in the prior year, resulting in a book-to-bill ratio of 1.08 [10][9] Significant Transactions - Velan completed the sale of its French subsidiaries for a total consideration of $208.2 million, resulting in a gain of $95.8 million recorded in the first quarter [7][8] - The company also settled its asbestos-related litigation for $143.0 million, funded partly by the proceeds from the sale of the French assets [8][7] Dividend Policy - The Board of Directors approved a significant increase in the quarterly dividend payment from CA$0.03 to CA$0.10 per common share, reflecting confidence in future performance [21][22] Outlook - The company expects to deliver solid performance in fiscal 2026, with 84.4% of the backlog deliverable within the next 12 months [20][4]