TORONTO, Aug. 13, 2012 /CNW/ - Magellan Aerospace Corporation ("Magellan" or the "Corporation") released its financial results for the second quarter of 2012. All amounts are expressed in Canadian Dollars unless otherwise indicated. The results are summarized as follows:

The Corporation has included certain measures in this news release, including EBITDA, the terms for which are not defined under International Financial Reporting Standards. The Corporation defines EBITDA as earnings before interest, dividends on preference shares, taxes, depreciation and amortization and non-cash charges. The Corporation has included these measures, including EBITDA, because it believes this information is used by certain investors to assess financial performance and EBITDA is a useful supplemental measure as it provides an indication of the results generated by the Corporation's principal business activities prior to consideration of how these activities are financed and how the results are taxed in various jurisdictions. Although the Corporation believes these measures are used by certain investors (and the Corporation has included them for this reason), these measures may not be comparable to similarly titled measures used by other companies.

OVERVIEW

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 designs, engineers, and manufactures aeroengine and aerostructure components for aerospace markets, advanced products for military 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

Results for the second quarter of 2012 improved over those reported in the second quarter of 2011. Revenues reflected a decrease primarily as a result of the timing of revenues in the power generation project segment.

Business development activity increased during the quarter as the Corporation continues to leverage its core expertise to develop integrated solutions for its customers. This was demonstrated by recent contract awards that seamlessly utilize the capabilities of two or more Magellan operating units to offer a higher value-added product to the customer.

At the recent Farnborough International Air Show, Magellan met with major customers and received favourable reaction to its re-branding campaign and to the strategic direction of the Corporation. The Corporation also announced at the show, a contract extension agreement worth 370 million with Airbus, covering aluminum and titanium wing structure components for use on A320, A330, and A380 aircraft. This significant contract complements the new A350 XWB contracts that Magellan has been awarded and secures Magellan as a supplier on every Airbus commercial program. Additionally, in the second quarter of 2012, the Corporation announced a significant ten year contract extension with Boeing. Based on current market forecasts it is expected that this contract in support of the full family of Boeing airliners will support annual revenues exceeding $80 million.

Magellan is an industry partner in the global F-35 Lightning II aircraft program. At a recent production readiness review for the Horizontal Tail Program with BAE, Lockheed Martin, and the US Government, Magellan was recognized for successfully transitioning the program production and assembly activities into a new Advanced Composite Manufacturing Centre as well as for the quality of production. As of June 30, 2012 the multi-role fighter had conducted 595 test flights in 2012 versus a plan of 445 and for the 18th consecutive month, the test program remained ahead of plan. Concerns with the development of the F-35 Program are in decline and the production readiness of the supply chain is increasing due to the steady progression in achieving key program milestones.

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Magellan Aerospace Corporation Announces Financial Results