[Foreign language]. The presentation and participants will be in a listen-only mode. Afterwards, we'll conduct a question and answer session. At that time, if you have a question, just press the one followed by four on your telephone. [Foreign language] . If you need during the conference to reach an operator, press star followed by zero.
[Foreign language] . As a reminder, this conference is being recorded Friday, October 6, 2023. [Foreign language] . I will now like to turn the conference over now to Rishi Sharma, Chief Financial Officer. La parole est à vous. Please go right ahead.
Thank you. [Foreign language] . Hello, everyone. Thank you for joining our conference call. Let's start by discussing the disclaimer from our investor relations presentation, which is now available on our website in the Investor Relations section. As always, the first section mentions that the presentation provides an analysis of our consolidated results for the quarter ended August 31st, 2023. The board of directors approved these results yesterday, October 5th, 2023. The second paragraph refers to non-IFRS and supplementary financial measures, which are defined and reconciled at the end of this presentation. Finally, the last paragraph refers to forward-looking information, which are subject to risks and uncertainty and are not guaranteed. The forward-looking statements contained in this presentation are expressly qualified by this cautionary statement. I will now pass it over to Bruno Carbonaro, CEO of Velan.
Thanks, Rishi, and hello, everyone. Now we report our key highlights for the second quarter of August 2024. First of all, we report sales of $82.3 million, which is an improvement of about 20% versus the Q1 of the year, and a mild decrease of $4.7 million or 5.6% versus the second quarter of last year. It translated to a $3 million EBITDA, which is $1.6 million higher than the EBITDA reported on the second quarter of last fiscal year. Most of the explanation is due to the change where we account for our interest liability .
We need to notice that with $5 million less revenue than one year before, we can report the same EBITDA when normalized for the interest cost, which means that we are still maintaining our margin at high level. This translates into a $2.1 million net loss for the quarter. We were able also to maintain our backlog at a higher level at $485.7 million. It's an increase since the beginning of the year of $21.3 million, partially explained by the revision of the foreign exchange between euro and the dollar during the period. We enjoy a very nice cash position on our balance sheet. We have a very strong balance sheet.
We have a net cash position of $39.4 million at the end of the quarter, despite a decrease of $19.3 million during the quarter, due to the preparation for the projected ramp-up of our operations in Q3 and Q4 of the year. Last but not least, I wanted to share with you the fact that as a result of Flowserve not obtaining the required regulatory approvals for France related to the acquisition of Velan, they have informed the company that they intend to terminate the arrangement agreement on October 7th this year. I now pass on back the mic to Rishi to navigate you on some specifics of the quarter.
Thank you, Bruno. [Foreign language] . Thank you, Bruno, and hello again, everyone. I'll quickly start by saying indeed, a disappointing outcome to the intended transaction, and as we all very well know, these things are never closed until they are. We are very thankful to our teams who worked tirelessly on the transaction, as well as managing our day-to-day business, ensuring quality and timely deliveries to our customers. We will now only look forward and not back. Our focus going forward remains fully on executing our strong backlog of $485.7 million, of which $339 million is shippable in the next twelve months, giving us comfort on our projected revenue streams. The total backlog increased by $21.3 million or 4.6% since the beginning of the fiscal year.
The increase in backlog is primarily attributable to changes in the profile of scheduled backlog shipment dates. Our book-to-bill ratio of 1.1 for the half year was driven in part by changes to the profile of the backlog delivery dates, as well as the securing of $71.5 million in new orders in the second quarter or $163 million year to date. We continue to see stability in the euro to USD spot rate, which resulted in a positive revaluation of our strong euro-denominated backlog by $6.5 million. Now we will look at our sales. Sales amounted to $80.3 million for the quarter, decreasing by $4.7 million or 5.6% compared to the same quarter last year.
However, an increase of approximately $13 million or 18.6% from the first quarter in the current fiscal year. If we compare the year-over-year decrease in sales, it is primarily attributable to lower shipments of large orders by our Italian operations due to a reduction of these orders booked in the previous fiscal year. The decrease in sales for the quarter was also caused by delays on certain shipments caused by customer readiness issues. Otherwise, the decrease was partially offset by the positive impact and the strengthening of the euro average rate against the US dollar on sales, which amounted to $2.1 million for the quarter compared to the last fiscal year. Finally, sales for the quarter were also positively impacted by favorable revaluations of our provisions for performance guarantees, which are no longer payable and volume rebate accruals. We will now look at profitability.
EBITDA amounts to $3 million or $0.14 per share, compared to $1.4 million or $0.06 per share last year, and also an increase of approximately $6.8 million compared to the first quarter of the current fiscal year. The favorable movement in EBITDA for the quarter is primarily attributable to a decrease in administration costs, partially offset by an increase in other expenses. If we look at administration costs, they amounted to $22.6 million for the quarter, a decrease of $2.1 million or 8.5%. The decrease in costs for the quarter is primarily attributable to the recording in the last quarter of the previous fiscal year of an asbestos provision related to potential settlement values of future unknown claims. The settlement expense amounted to $3.1 million in the second quarter of fiscal 2023.
A decrease in administration costs for the quarter is also lower due to outbound freight costs, which have now stabilized, and sales commissions in relations to the lower sales volume. Finally, the increase for the quarter was partly offset by a general increase in costs. The increase in other expenses is mainly due to an adjustment of a provision related to logistic costs. Gross profit for the year was relatively stable at $23.5 million versus $23.4 million, but the gross profit percentage improved by 150 basis points from 27.6% to 29.1%, which highlights our continued focus on strong execution of our backlog and the efficiency initiatives related to cost control.
On the absolute values of gross profit, the slight decrease in gross profit for the quarter is primarily due to the lower sales volume, which impacted the absorption of fixed production overhead costs, as well as the unfavorable unrealized foreign exchange translations related to the fluctuation of the US dollar against the Euro and the Canadian dollar when compared to similar movements from the previous year. The decrease in gross profit for the quarter was offset by an improved product mix, as well as favorable revaluations of our provisions for performance guarantees and volume rebates. We will now move to cash and liquidity. To start, our net cash and overall liquidity position remains strong at $39.4 million and $122 million, respectively.
Our net cash did decrease by $19.3 million since the beginning of the quarter, driven mostly by a free cash flow usage of $22.8 million. The unfavorable movement in cash used by operating activities for the quarter is primarily attributable to unfavorable movements in non-cash working capital items, partially offset by an increase in EBITDA. The negative non-cash working capital item movements for the quarter ended August 31, 2023, consisted primarily of an increase in accounts receivable, primarily due to the higher proportion of sales that occurred later in the quarter. An increase in inventories in reaction to the delivery schedule of certain large orders and a decrease in AP and accrued liability due to the timing of payments, primarily relates to previously purchased inventories for ongoing and future projects.
With the current working capital profile, the company is now preparing for its projected ramp-up in Q3 and Q4. I will now pass it back to Bruno for his closing comments before we move to the Q&A session. Thank you.
Thanks, Rishi. A couple of comments before opening the floor for questions. We showed at the second quarter of 2024 an improvement versus not only the Q1 of the year, but also in terms of results of the Q2 of last year. We are now fully focused on the growth that is projected for the second half of the year. We will continue to manage our business prudently as a listed public company. So our main focus are on executing the backlog of $486 million, at the same time as we are working on a strong pipeline of commercial opportunities. We'll also be very disciplined in the way we are managing our working cap, with an increased collection of cash on our account receivables and reducing inventory due to the increase in shipments.
We see a lot of new opportunities in new markets for North American commercial operations, at the same time as there is a confirmed growth at least up to this time. Finally, I should say that we are extremely disappointed by the outcome of the intermediate generation exposures, and it's time for us now to revisit our corporate strategy to ensure that we can maximize the value creation for the shareholders. I now open the floor to questions.
[Foreign language] . Thank you. If you'd like to register a question, please press the one followed by the four on your telephone. You'll hear a three-tone prompt to acknowledge your request. If the question has been answered, but you go ahead with your registration, please the one followed by the three. One moment, please, for our first question. Once again, it is the one four to register any questions or comments.
[Foreign language] . As a reminder, if you'd like to ask a question, please do so now by pressing the one followed by the four on your telephone keypad to ask your question. [Foreign language] , the first question comes from the line of Stephen Takacs, Lester Asset Management . Go right ahead.
Hi, Bruno and Rishi. Very disappointing outcome. I know partly beyond your control. So, you know, I gather that there'll be other alternatives to look at to maximize shareholder value. Can you sort of give us an idea of why the transaction was blocked by the French government? And what sort of strategy going forward the company might pursue to maximize shareholder value? And if in the meantime a share buyback wouldn't be a smart thing to do.
Hi, Stephen. On the first question, for full clarity, Flowserve obviously was the lead for obtaining all regulatory approvals, so it was their filing with the French government with our support. As communicated by the representative of the French ministry today and yesterday, there were certain risks that the French government understood would come with the transaction of Flowserve taking over, and their response was that those risks were not fully addressed. That's the most I could say about the feedback that we've seen from the French Minister of Economy's office. Two, absolutely. I mean, we are reviewing. We're going to look at what other strategies we have. I think we need to focus on the business fundamentals.
Close to $500 million backlog is still very solid and stable for us. We have a lot of opportunities in the pipeline for bids. So our strategy is going to focus around refocusing our attention on the business, the execution and some of the opportunities we have there. Three, share buyback, subject to board approvals and looking at the different options, I think everything will and could be considered at this time. However, we have nothing to confirm or to communicate that that is the immediate plan, bearing in mind that the announcement of the transaction being refused was just yesterday.
Could you just give us some color on how big the French operations are? Segault, I know Velan owns 75%, and correct me if I'm wrong, and the family or the employees own the other 25%, or the founder. So was it strictly that operation that was the objection? And how big of a division or subsidiary?
Yeah.
Is that in the scheme of the whole company?
First, on the Segault minority interest, as part of our subsequent event notes in the financial statements, you'll see that we repurchased the 25% minority stake. That transaction was closed post Q2 closing. Velan is now 100% equity owner of the Segault business. Two, if you look on the presentation of our, on the investor presentation, you'll see that the French business, in total, represents a quarter to 30% of the overall business of Velan Inc. That fluctuates from quarter to quarter, depending on the timing of delivery. It's about 25% to 30% when you look at the total.
Of the top line?
Top line, yeah.
Okay. What was the purchase price of the 25%? What sort of multiple was paid on that?
If you recall, it was not multiple based. It was based on an agreement in place on the acquisition of Segault by Velan, and it was equity movement, book value movement, that gave a total purchase price of the 25% to about $4.6 million a year, I believe. The valuation on Segault, based on that approach, book value approach, valuations.
It wasn't based really on results?
The equity value that moved through historical results, yes, but future multiples and all that were part of the formula.
Okay. And when was that buyout complete exactly?
I believe it was September 10th, or 18th. The co- we had announced it in Q1 as a subsequent event that the option was exercised, the put option was exercised, for us to buy back the stake, and it was closed basically 15 days ago, so on the 18th of September.
Right. Okay. So was that option exercised in the context of trying to get a deal done?
No, I think it's unrelated.
Sorry?
Unrelated.
Unrelated. Okay. Did you disclose the price or the amount for the 25%?
Yeah, it's in the notes. With the subsequent event notes to our financials, I can, I think it's all the way at the end, so note 20 or something like that.
Right. Okay. All right. So, but I gather the French government has no objection to the Velan still controlling it. It was more an American thing, if I understood correctly.
Again, we control SAS, we control Segault. The closer application was what was rejected, so I only know-
There were rumors at one point that private equity was looking at buying Segault. Is there an attempt to sell it on a separate basis to the highest bidder? Obviously, would have to be a French company.
I don't think we're there yet. I mean, like we discussed just earlier, you know, when we look at the strategy for growth and maximizing value, so anything could come back on the table, or present itself on the table. I won't comment.
Right. Right. So I gather, so the emphasis is obviously a focus on continuing, continuing to improve the operations and the margins, et cetera, et cetera. And also, you know, possibly look at other ways of maximizing the shareholder value should they present themselves.
Yeah, and, you know, one thing I'll add is when you go through a due diligence as comprehensive as we did, you know, as we disclosed in the circular, you learn also a lot about the company and where its opportunities to improve and become more efficient. The direction and the objective obviously was to close a transaction that didn't work, so now we can take a lot of what we learned about the company and try to put actions in place to be better.
Right. Right. Okay. All right, thank you very much.
Thank you.
Thank you. We have another reminder that to ask any questions or have any comments, you may do so now by pressing one or by the four on your telephone keypad. We have no more questions on the line, so thank you very much. That is conclude the conference call for today. We thank you for your participation. We ask that you please disconnect your lines and have a great day, everyone.