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VELAN PRESS RELEASE FOR IMMEDIATE RELEASE Velan Inc. 7007 Côte de Liesse , Montreal , QC H4T 1G2 Canada Tel : ( 514 ) 748-7743 Fax : ( 514 ) 748-8635 www.velan.com For further information please contact : Yves Leduc , Chief Executive Officer Réjean Ostiguy , Chief Financial Officer Tel : ( 514 ) 748-7743 Fax : ( 514 ) 748-8635 Web : www.velan.com or January 13 , 2021 VELAN INC . REPORTS ITS THIRD QUARTER 2020/21 FINANCIAL RESULTS MONTREAL , QUEBEC Velan Inc. ( TSX : VLN ) ( the " Company " ) , a world - leading manufacturer of industrial valves , announced today its financial results for its third quarter ended November 30 , 2020 . Highlights : Backlog and profitability improving while sales slowed by pandemic - related factors and the shift towards a new manufacturing model in North America • • Order backlog of US $ 561.8 million , highest since November 30 , 2012 Solid book - to bill ratio of 2.34 for the quarter • • • • • Maintaining strong protective measures to ensure employees health and safety during the novel coronavirus ( " COVID - 19 " ) pandemic Strong balance sheet highlighted by a net cash balance US $ 73.0 million at the end of the quarter Sales of US $ 71.6 million for the quarter , hindered by pandemic - related factors and inefficiencies experienced in reconfiguring the Canadian plants under the V20 program Gross profit of US $ 22.0 million ( or 30.7 % , almost five points higher than last year ) and net earnings of US $ 9.5 million for the quarter ( including a net gain on the sale of a Montreal plant ) Operating profit before restructuring and transformation costs² of US $ 2.2 million and adjusted EBITDA² of US $ 5.6 million for the quarter , both improvements over last year despite lower sales Yves Leduc , CEO of Velan Inc. , said , " It's been a year like no other , where our employees celebrated Velan's 70th anniversary by rising to extraordinary challenges . We had to learn how to drive bookings , run manufacturing operations , and carry out our transformation plan while coping with a devastating global pandemic : no book was ever written on this , but the speedy and decisive deployment of safety protocols across all our global sites was nothing short of exemplary . The fiscal year is not over yet , but all things considered , there are many reasons to be impressed by the Company's achievements to date . It is true that MRO bookings and sales , heavily dependent on a healthy downstream oil and gas sector , were deeply affected by the recession , and COVID - related disruptions in our Asian supply chain hindered our production and shipments . Then again , our four other strategic businesses are thriving , having grown our backlog by 40 % to its highest level in over eight years , with many breakthrough orders won thanks to our strong market position in Europe , the Middle East , India , South East Asia and China , in the nuclear , petrochemical and oil production sectors . Business health sprang forward this year as we are reaping the benefits of our V20 plan , evidenced by a substantial reduction in production overhead , and even more encouraging , in the impressive increase in project manufacturing margins . Thanks to the acceleration of our V20 implementation , the results in the quarter were helped by the sale of Plant 2-7 in Montreal , six months earlier than originally planned . Velan . Quality that lasts .