Velan Inc. Reports Second Quarter Results for Fiscal 2026

Executive Summary

• Velan reported Q2 FY2025 sales of $67.6 M, down 13% YoY, and a net loss from continuing operations of $1.7 M versus a $1.2 M loss a year earlier.
• Adjusted EBITDA fell to $3.4 M (down 49% YoY) and adjusted net loss widened to $1.2 M, reversing the prior‑year adjusted profit of $2.8 M.
• Backlog remains strong at $285.8 M (88.3% deliverable within 12 months), but bookings slipped to $65.1 M versus $88.4 M a year ago, reflecting weaker North American and German order flow.

Key Details

• Sales: $67.6 M (Q2) vs. $77.7 M YoY; $139.8 M (first six months) vs. $138.6 M YoY.
• Gross Profit: $15.7 M (23.2% margin) vs. $20.0 M (25.7%) YoY; $36.3 M (26.0% margin) for six‑month period.
• Operating Income: $0.4 M positive in Q2 versus a $0.3 M loss YoY; operating loss of $3.4 M for the first half vs. $2.0 M prior year.
• Net Loss (Continuing): $1.7 M ($0.08/share) vs. $1.2 M ($0.05/share) a year earlier. Net loss including discontinued ops: $2.4 M.
• Adjusted EBITDA: $3.4 M vs. $6.7 M YoY; six‑month adjusted EBITDA $7.1 M vs. $9.6 M prior year.
• Adjusted Net Loss: $1.2 M vs. adjusted profit of $2.8 M a year earlier.
• Backlog: $285.8 M (up 4.0% YoY); $252.4 M (88.3%) expected to be delivered within 12 months.
• Bookings: Q2 bookings $65.1 M vs. $88.4 M YoY; six‑month bookings $143.4 M vs. $171.4 M YoY.
• Liquidity: Cash & equivalents $36.1 M; total liquidity $95.9 M (cash + credit facilities).
• Dividend: Board declared CA$0.10 per common share payable 27 Nov 2025.
• Significant Transactions: Completed sale of French subsidiaries for gross consideration $208.2 M (net $183.1 M) on 31 Mar 2025; recorded $95.8 M gain in Q1 FY2026. Also settled U.S. asbestos litigation for $143.0 M (April 3 2025).
• Outlook: Management expects solid performance in FY2026 despite tariff uncertainty, with the majority of backlog slated for delivery within the next year.

Notable Quotes

“Velan generated positive operating income of $385 k in the second quarter notwithstanding rescheduling certain order deliveries totaling more than $12 M… We also delivered the first order from our new joint venture in Saudi Arabia, building on our growing momentum in the Middle East market.” – James A. Mannebach, Chairman & CEO

“Despite an increase in working capital requirements … our financial position remains very strong with cash and cash equivalents of $36.1 M and modest indebtedness… we have $95.9 M available to invest in expansion opportunities.” – Rishi Sharma, CFO & CAO