Good afternoon, ladies and gentlemen, and welcome to the 2025 Annual Meeting of Shareholders of Velan Inc. [Foreign language] . The proceedings are translated simultaneously, and you may select the preferred language at the top right of your screen. My name is James Mannebach. I am Chair of the Board of Directors and CEO of Velan , and I will preside as Chair of this annual meeting. I would like to introduce Mr. Liam Turner, who I appoint as Secretary of the Meeting. I now formally call the meeting to order in accordance with the bylaws of the corporation. We intend that the meeting be conducted effectively and efficiently, and I would like to ask your cooperation in this regard. Instructions on how to ask questions and the voting procedures will appear on your screen.
As with any technology, unexpected glitches may occur, but our service providers for this platform at Lumi are very experienced at running this type of meeting and will help us out. As we move through our agenda to consider each item of business, I will give registered shareholders and appointed proxy holders an opportunity to ask questions. If you have a question, you may type it in the message section identified by the message icon on the top portion of your screen that will be present throughout the meeting. When entering your questions, we ask that you state your questions as clearly as possible and specify the item of business that your question relates to so that we can ensure it is considered and addressed properly. Your question should be limited to the specific motion or item of business before the meeting at that time.
All proper questions that are relevant to the item of business being discussed will be read out loud and responded to while that item of business is before the meeting. Today's votes will be conducted by a poll. Every multiple voting shareholder entitled to vote on the matter has five votes in respect of each share held by that shareholder. Every subordinate voting shareholder entitled to vote on the matter has one vote in respect of each share held by that shareholder. Shareholders who voted in advance of the meeting do not need to complete the ballot or take any further steps to cast their votes unless they wish to change their vote. If you do vote by ballot at today's meeting, then that will automatically revoke your prior vote or any prior proxy granted.
On behalf of the Board, I wish to express thanks to those shareholders who have submitted their proxies in advance. Please note that only registered shareholders who held shares on May 27, 2025, the record date for this meeting, or validly appointed proxy holders are entitled to vote at this meeting. If you are not a registered shareholder or a duly appointed proxy holder, you are attending this meeting as a guest. Guests will be able to listen to the meeting but cannot ask questions or vote during the meeting. The poll for the election of directors, the appointment of the auditor, and any remaining items of business will be open until the end of the formal portion of this meeting. I will provide results of voting at the end of the meeting based on information provided by our scrutineers.
The final voting result will be released after the meeting in accordance with our usual practices, applicable laws, and stock exchange requirements, and will be available under our profile at SEDAR+. We will now proceed with the business of the meeting. With the consent of the meeting, I appoint TSX Trust Company acting through its representatives, Francine Beauséjour and Isabelle Vachon, to act as scrutineer of the meeting. The scrutineer has reported in its preliminary report on attendance that at least 59 shareholders are present at the meeting or represented by proxy, and that the aggregate number of shares represented by the shareholders or by proxy at this meeting is 18,773,020 shares, representing 96.65% of the votes issued and outstanding shares of the corporation. A final scrutineer's report on attendance and voting will be filed with the records of the meeting.
I note that the minutes of the annual meeting of shareholders held on July 11, 2024, have been tabled and will be kept with the records of the meeting. There are a number of items of business to be presented to the meeting. These matters were set out in the notice of meeting and the management information circular made accessible to all shareholders. You will be asked today to first receive the consolidated financial statements of the corporation for the financial year ended February 28, 2025, together with the auditor's report. Second, to elect the directors. Third, to appoint the external auditor and authorize the directors to set the external auditor's compensation. Fourth, transact such other business, if any, as may properly come before the meeting or an adjournment or postponement of the meeting.
The Secretary has provided me with proof that the notice calling this meeting, in accordance with the notice and access procedure, was mailed to all shareholders as of the record date. I direct that the proof of service be annexed to the minutes of the meeting. Unless there's an objection, I will dispense with the reading of the notice of the meeting. Seeing none, I now declare this meeting to be properly constituted for the transaction of business. The next item of business is the presentation of our 2025 audited consolidated financial statements, together with the auditor's report thereon, a copy of which has been mailed to each registered or beneficial shareholder who requested so. The Board of Directors has approved these financial statements, and the Secretary will now table them. The next item of business is the election of directors.
The Board has decided that eight directors will be elected at this meeting and has proposed eight nominees. Each proposed nominee's biography is included in the circular. I now declare the meeting open for nominations. May I have a nomination for the nominees proposed to be nominated by the Board and by Velan Inc.?
Mr. Chairman, I propose the following eight persons to act as directors of the corporation: Tom Velan, Robert Velan, Ivan Velan, Peter Velan, James A. Mannebach, Suzanne Blanchet, Edward Kernaghan , and Daniel Desjardins . I move that they be elected directors to hold office until the next annual meeting of shareholders and until their successors are duly elected or appointed.
Thank you. May I have a seconder?
Mr. Chairman, I second the motion.
Thank you. Are there any other shareholders wishing to make nominations for election as directors? I declare the nominations closed. Is there any discussion on the matter? As a reminder, if you have a question relating to the motion nominating each of the directors, please type it in now. If there is no discussion, I now call for a vote on the motion. Please submit your vote on the Lumi Platform. Thank you for voting. The next item on the agenda is the reappointment of the auditor for the ensuing year and the determination of the auditor's remuneration. May I have a motion with respect to the appointment of the auditor?
Mr. Chairman, I move that PricewaterhouseCoopers Partnership of Chartered Professional Accountants be reappointed as auditor of the corporation until the next annual meeting of shareholders, and that the directors be authorized to fix their compensation.
Thank you. May I have a seconder?
Mr. Chairman, I second the motion.
Thank you. Is there any discussion on the matter? If you have questions, please submit them now. If there is no discussion, I now call for a vote on the motion. Please submit your vote now. Thank you for voting. This concludes the business of the meeting. Polls for all the items of business will now close. The scrutineer has presented its report and advises that all resolutions have been approved by at least the majority of votes cast at the meeting by the shareholders or by proxy as required. Accordingly, I declare that all resolutions have been carried. The final voting results will be released after the meeting in the usual format and will be available under our profile on SEDAR+. Ladies and gentlemen, this concludes the agenda of items for the formal portion of the meeting. Following the conclusion thereof, there will be a CEO's presentation.
May I now have a motion to conclude the formal portion of the meeting?
Mr. Chairman, I move that the formal portion of the meeting be concluded.
Thank you. May I have a seconder?
Mr. Chairman, I second the motion.
Thank you. Absent any objection, I declare the motion carried and the formal portion of the meeting terminated. Now that the formal portion of the meeting is over, we will move on to our management presentation. The slides for this presentation have been posted in the investor relations section of our website. Before I begin, I will direct you to our customary disclaimer regarding forward-looking statements on slide two. The first section mentions that the presentation provides an analysis of our consolidated results for fiscal 2025. The Board of Directors has approved these results. The second paragraph refers to non-IFRS and supplemental financial measures, which are defined and reconciled at the end of the presentation. The last paragraph addresses forward-looking information, which is subject to risk and uncertainties that are not guaranteed to occur. Forward-looking statements contained in this presentation are expressly qualified by this cautionary statement.
Finally, all amounts are expressed in US dollars unless indicated otherwise. With that being said, please turn to slide four for an overview of fiscal 2025. By now, most people are familiar with Velan's financial and operational highlights for the fiscal year ended February 28, 2025. I will cover them summarily and move on to the most compelling part of my presentation, our presentation for fiscal 2026 and beyond. Fiscal 2025 was a highly productive year for Velan, marked by strong profitable growth and key strategic initiatives that unlocked significant shareholder value. From a financial standpoint, we closed the year with sales from continuing operations of $295.2 million, up 14.1% from 2024, while our gross profit margin improved by 770 basis points to 28.8%.
We also generated Adjusted EBITDA from continuing operations of $27.5 million, up sharply from a year ago, and we more than doubled our cash flow from operating activities to $26.5 million. Finally, we concluded the fiscal year with a solid backlog of nearly $275 million. From an operations perspective, the sale of our French subsidiaries and divestiture of asbestos-related liabilities represented major achievements. The strategic initiatives, which closed after the fiscal year end, strengthened our financial position and substantially reduced our risk profile. First, we sold our French subsidiaries, Velan France and Sobo, for a total consideration of $208 million, including $184 million of cash. The transaction simplified our business structure and increased our flexibility for further investment and growth. Second, we closed an agreement for the divestiture of our asbestos-related liabilities for $143 million.
This transaction permanently removed all asbestos-related liabilities and obligations from our books and indemnifies us for all asbestos charges. Net proceeds from these two transactions raised our cash position to approximately $55 million on a pro forma basis. Given the solid financial position and mindful of returning funds to shareholders, the Board of Directors approved last May the payment of a special dividend of CAD 0.30 per share on top of the regular dividend of CAD 0.03 per share. The Board will continue to assess our capital allocation strategy so that we can achieve our interwoven goals of maximizing profitable growth while optimizing return to shareholders. Now let's turn to the heart of my presentation. Velan is poised to reach new heights in key growth markets by leveraging its core strengths. We are particularly excited about opportunities in the nuclear market, which is undergoing a multi-year growth cycle.
Nuclear technology is making a remarkable comeback, driven by massive power requirements and rising demand for clean energy sources. The proliferation of data centers worldwide, along with ambitious net zero emission objectives, has been a dynamic force behind this accelerated growth. Case in point, a recently published report by the International Telecom Union and World Benchmarking Alliance indicated that greenhouse gas emissions from the top four digital giants, Amazon, Microsoft, Alphabet, and Meta, increased an average of 150% between 2020 and 2023. We can all connect the dots for the reasons behind this surge due to advances in artificial intelligence and the related growth of data center infrastructure. The report also highlighted a forecast by the International Energy Agency projecting that global data center electricity use will more than double to 945 terawatt hours by 2030. To put this figure into some perspective, it exceeds Japan's current total electricity consumption.
Clearly, this is welcome news for the nuclear industry and for Velan in particular. Nuclear energy is increasingly being relied upon as a viable alternative to fossil fuels, and electrification goals simply cannot be met without a prominent role for nuclear technology. At Velan , we have more than 55 years of experience in supplying valves to nuclear power customers with longstanding experience in most reactor technologies. Increased market acceptance of small modular reactors or SMRs with important characteristics such as reduced footprint, lower cost, and greater safety has also triggered growth in demand for our proprietary valve technology. To ensure that we are fully exposed to nuclear deployments on a global basis, we currently and recently partner with leading players like Bruce Power, GE Hitachi, Westinghouse, Ontario Power Generation, and AtkinsRéalis, steward of the CANDU technology.
Our large installed base of valves at existing reactors will also provide recurring revenue streams via life extension projects as well as maintenance, repair, and overhaul activities, which we refer to as MRO. Consequently, we expect an acceleration in nuclear orders over the next few years. Since these are long-term projects, this may in fact alter our backlog profile as a larger proportion of orders may be delivered over an extended period. This said, the magnitude of these deals and margin profiles that reflect greater complexity benefits our overall business. Although nuclear is making headlines, it's important to keep in mind that Velan is very well positioned in many other markets as customers value our ability to develop customized solutions for critical applications. On the defense side, we expect to gain from heightened spending worldwide as governments address national security concerns.
Our deep knowledge of nuclear marine and aircraft carrier propulsion technologies, as well as the longstanding relationships we've developed with key market participants, remain unmatched and provide us with a significant competitive advantage. We also offer the most complete and technically advanced product line for application in extreme temperatures. This includes valve designs for extremely low temperatures in liquefied natural gas, the cleanest of fossil fuels, as well as for hydrogen processes operating at very high temperatures. These are growth sectors for Velan driven by efforts to safeguard the environment. In oil and gas, we boast very high market penetration at refineries in North America and an expanding presence overseas. Supplying the most reliable engineered valves and steam traps represents a key differentiator for Velan as customers worldwide seek lower emissions and better safety.
In addition, our vast installed base provides significant opportunities for MRO activities and spare parts. As mentioned in prior conference calls, we've established a joint venture in the Kingdom of Saudi Arabia to further strengthen our presence in the Middle East, the largest market for oil field valves. A growing order quotation activity, early wins, and advancing backlog confirm the significant potential of this investment. Finally, in the mining industry, we built a strong presence in regions experiencing robust activities such as Southeast Asia, Australia, and South America. We notably see tremendous potential for our titanium valves that can withstand highly corrosive environments. Despite our strong position, ongoing trade disputes have increased the level of economic uncertainty. More specifically, the effect of tariffs and retaliatory measures loom over companies with a global presence like Velan .
Supply chain disruptions may also affect us as the market adopts and adapts to new realities. Although a part of our business is exposed to tariffs, particularly with some products imported into the U.S., we are executing plans to further optimize global production capabilities and are evaluating alternative sources for raw materials and components to ensure we maintain a strong competitive position. We will continue to monitor the situation and respond with actions to best position the company for the long term. I now turn the call over to Rishi Sharma, Velan 's Chief Financial Officer and Administrative Officer, to review our 2025 results.
Merci, Jim. Bonjour, Mesdames et Messieurs. Je vais maintenant passer en revue la performance financière de Velan.
I'm now going to go over the information for 2025. Before beginning, please note that because of all the activities, the disposal of asbestos-related liabilities and the sale of our French subsidiaries, all activities related to these businesses were recorded as discontinued operations in our financial statement. The results and also the way I specified my review will focus on Velan 's continued operations. We are very happy to have closed these two transactions. As Jim mentioned, they enabled Velan Inc. to significantly reduce its business risk and to strengthen its financial position. In addition to net proceeds of approximately $25 million, the disposal of asbestos-related liabilities implies that we no longer have to make disbursements to settle cases and to pay legal fees. Over the past few years, these amounts had reached approximately $15 million per year, which restricted our financial flexibility.
Now, without these constraints, we can redeploy these funds into growth initiatives or into capital investments to improve our productivity. In keeping with accounting rules, we had to record restructuring expenses of $100 million in fiscal 2025. These expenses were mainly non-cash and included asbestos-related expenses and transaction-related expenses. In addition, a gain of approximately $96 million was recorded in the first quarter of fiscal 2026 related to the French transaction. The results, the quarterly results, will be published later today and further discussed on a conference call tomorrow morning. I'm very proud of all the members of our team because they allowed us to simultaneously conclude these two complex transactions. I extend my most sincere gratitude. Let's move on now to the financial review of fiscal year on slide 10. Sales amount to $295.2 million, up 14.1% over the previous year.
This improvement reflects higher shipments from Italian operations for the oil and gas industry and a higher business volume at German operations. These factors were partially offset by slightly lower sales in North America and in other international markets. Currency movements had a $2.2 million negative effect on sales, mainly due to the weakening of the euro versus the U.S. dollar during the year. [Foreign language] profit reached $84.9 million, up significantly from $54.6 million a year ago. The increase is attributable to higher sales and a more favorable product mix. As a percentage of sales, gross profit was 28.8% versus 21.1% last year. [Foreign language] on slide 12, Adjusted EBITDA, which excludes transaction-related and asbestos-related costs, totaled $27.5 million compared to $2.1 million in the previous year. This strong increase reflects higher gross profits partially offset by higher administration costs.
[ Foreign language] adjusted net income amounted to $6.6 million, with $0.31 per share versus an adjusted net loss of $15.7 million a year earlier. Velan is present Velan is present around the world and its activities are spread among many industrial sectors, in energy production, nuclear, oil, and gas, chemical products, as well as defense, just to name a few. [Foreign language] our order backlog is therefore well diversified and as shown on slide 13, it amounted to $274.9 million at the end of fiscal 2025 versus $283.6 million a year earlier. Note that currency movements reduced the value of the backlog by $12.7 million. Excluding currency movements, the backlog increased slightly as a higher North American backlog reflecting orders from the nuclear sector was offset by a decrease in the Italian backlog due to strong shipments.
At fiscal year end, orders totaling more than $225 million were deliverable in the ensuing 12 months. Bookings recorded in fiscal 2025 amounted to $292.5 million, up 1.3% compared to the previous year. The increase is attributable to higher North American bookings in the nuclear sector and for MRO activities and higher bookings in Germany for oil refinery products and projects. These factors were partially offset by lower bookings in Italy following a strong order flow in the prior year. En addition, currency movements had a $3.3 million negative effect on the value of bookings for the year. [Foreign language] . Let's carry on to slide 14. Higher EBITDA and a better working capital management resulted in a solid increase in cash flows from operating activities, which amounted to $26.5 million in fiscal 2025 compared to $12.5 million in fiscal 2024. Our financial position remains very strong.
As of February 28, 2025, cash and cash equivalents net of bank indebtedness totaled $32.4 million, while long-term debt stood at only $16.2 million. Disbursals have not taken into consideration the fact that the asbestos and French transactions were completed after the end of the fiscal year. Net proceeds from these transactions increased liquidity by approximately $25 million, so that on a pro forma basis, our cash position is approximately $55 million. Finally, subsequent to fiscal year end, we entered into an agreement for new credit facilities totaling $35 million available over a three-year period. These facilities, combined with our significant cash position and our reduced business risk, allow us to reassess our capital allocation strategy to support our growth objectives and maximize value creation for our shareholders. I now turn the floor back over to Jim for some concluding words. Jim, over to you.
As Velan delivered strong financial results in fiscal 2025 and driven by improved execution, we made steady progress towards achieving operational excellence. As this year marks our 75th anniversary, we're looking to the future with a sharper focus driven by our ever-present innovation and entrepreneurial spirit. We are well positioned to benefit from momentum in the key markets that we serve. As Rishi mentioned, our strong financial position allows us to invest in our future, including strategic acquisitions that will increase our market reach. By leveraging our strengths, we are confident about achieving our objectives of maximizing profitable growth and rewarding shareholders with increased value. I'm truly humbled by the hard work and dedication demonstrated by our employees during the past year. Please accept my heartfelt thanks on behalf of the Board of Directors and Management Team.
On behalf of the entire Velan team, thank you for joining us today and for your ongoing support. We look forward to sharing with you our progress at next year's annual meeting.