Core Insights - Velan Inc. reported financial results for the second quarter ended August 31, 2025, showing a positive operating income despite challenges from order rescheduling and tariff impacts [5][6][28]. Financial Performance - Sales for the second quarter were $67.6 million, down 13.0% from $77.7 million in the previous year, primarily due to over $12 million in rescheduled orders and tariff disruptions [6][13]. - Gross profit decreased to $15.7 million, representing a gross margin of 23.2%, compared to $20.0 million and 25.7% in the prior year [6][14]. - Operating income was $0.4 million, a recovery from an operating loss of $0.3 million a year ago [6][17]. - The net loss from continuing operations was $1.7 million, or $0.08 per share, compared to a net loss of $1.2 million, or $0.05 per share, in the previous year [6][17]. - Adjusted EBITDA from continuing operations was $3.4 million, down from $6.7 million a year ago, reflecting lower gross profit [6][16]. Backlog and Bookings - The backlog as of August 31, 2025, stood at $285.8 million, up 4.0% from $274.9 million at the beginning of the fiscal year, with 88.3% expected to be deliverable within the next 12 months [9][10][28]. - Bookings for the second quarter were $65.2 million, down from $88.4 million in the same quarter last year, attributed to lower demand in North America and Germany [11][12]. Financial Position - As of August 31, 2025, the company had a net cash position of $29.5 million, down from $32.4 million at the beginning of the fiscal year, with total liquidity of approximately $96 million available for investments [6][27]. - The company incurred restructuring expenses of $0.7 million in the second quarter, significantly lower than $4.5 million in the previous year [15][23]. Strategic Developments - The company successfully delivered its first order from a new joint venture in Saudi Arabia, enhancing its presence in the Middle East market [5]. - Following the resolution of asbestos-related liabilities and the sale of French assets, the company is exploring capital structure options to support growth and maximize shareholder value [5][30]. Dividend Declaration - On October 9, 2025, the Board of Directors declared a dividend of CA$0.10 per common share, payable on November 27, 2025 [29].
Velan Inc. Reports Second Quarter Results for Fiscal 2026