Exco Technologies Limited - Third Quarter ended June 30, 2010
July 28 2010 - 4:30PM
PR Newswire (Canada)
TORONTO, July 28 /CNW/ -- Exco Reports Fourth Consecutive Quarter
of Improved Revenue and Earnings Quarterly Dividend Declared
TORONTO, July 28 /CNW/ - Exco Technologies Limited (TSX-XTC) today
announced results for its third quarter ended June 30, 2010. In
addition, the Company announced a $0.02 dividend per share which
will be paid on September 30, 2010 to shareholders of record on
September 15, 2010. The dividend is an "eligible dividend" in
accordance with the Income Tax Act of Canada.
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9 Months ended 3 Months ended June 30 June 30
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($000s, except per share amounts)
------------------------------------------------- 2010 2009 2010
2009 ---- ---- ---- ----
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Sales $119,583 $106,022 $42,681 $28,345 Net income (loss) $7,628
($18,030) $3,502 ($998) Basic and diluted earnings (loss) per share
$0.19 ($0.44) $0.09 ($0.02) Common shares outstanding 40,911,000
40,666,000 40,911,000 40,666,000
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Consolidated sales for the quarter ended June 30, 2010 were $42.7
million compared to $28.3 million last year - an increase of $14.3
million or 51%. Year-to-date sales were $119.6 million - an
increase of $13.6 million or 13% compared to last year. Sales in
the quarter continued the climbing trend begun several quarters ago
as the business climate continues to improve over last year. The
large mould group and Castool experiencing the strongest
improvement in the Casting and Extrusion segment as automotive
customers are feeling increasingly comfortable proceeding with
capital investments and long delayed powertrain projects. The
extrusion group sales were slightly higher in the quarter
reflecting its limited exposure to the automotive industry and
anaemic recovery in its main industrial markets. In the Automotive
Solutions segment the sales increase was led by North American
operations where Neocon more than doubled its prior year quarterly
sales level followed by Polytech which increased sales by more than
50%. Even at Polydesign, which services the challenged European
automotive market with interior trim products, sales grew by more
than 50%. Net income for the third quarter was $3.5 million or
$0.09 per share compared to a net loss of $998 thousand or $0.02
per share last year. Year-to-date, Exco reported net income of $7.6
million or $0.19 per share compared to a net loss of $18.0 million
or $0.44 per share in the prior year. Overall stronger sales this
quarter and year-to-date have significantly improved the absorption
of fixed overheads and positively impacted overall profitability.
The retention of a downsized cost structure has also played a
significant part in improving profitability. This has caused gross
margin to continue climbing. For the third quarter it was 27.6%
compared to 20.0% in the prior year. Year-to-date, gross margin was
27.1% compared to 19.2% last year. Operating cash flow in the
current quarter increased to $4 million from $2.6 million in the
prior year primarily due to improved earnings. This demonstrates
that earnings are generating more than sufficient cash flow to
cover the working capital requirements of our growing sales volume.
The Company's cash position at quarter end totalled $18.1 million
compared to $11.4 million at the beginning of the fiscal year and
$16.3 million at the end of the second quarter. As 2010 continues
to unfold our opinion that the business climate is improving
remains intact. We have seen automotive production in North America
continue firming up after persistent and, at times, dramatic
decline during 2009. We expect the growth to continue at a gradual
yet steady pace through the next several quarters. This should
continue to positively impact Exco sales and earnings in both
business segments. In the Casting and Extrusion segment Castool and
the large mould group in particular are benefiting from the
resurgence in automotive production as are all businesses in the
Automotive Solutions segment where growth is fuelled by a
combination of improved volumes on existing programs and the launch
of numerous new programs for a wide range of customers. Polydesign
in particular is posed to launch approximately (euro)7 million in
annualized sales in the next several quarters. Exco continues to
have a low overall cost structure and a very strong balance sheet
with no bank debt and $18.1 million or 44 cents per share of cash
on hand. This tangibly demonstrates that Exco has successfully
adjusted to the strong Canadian dollar while putting in place the
resources necessary to pursue growth opportunities without
requiring debt or dilution. (For further information please refer
to the Company's Third Quarter Interim Financial Statements in the
Investor Relations section posted at www.excocorp.com.
Alternatively, please refer to www.sedar.com after July 28, 2010.)
Exco Technologies Limited is a global supplier of innovative
technologies servicing the die-cast, extrusion and automotive
industries. Through our 10 strategic locations, we employ 1,580
people and service a diverse and broad customer base. Management
will hold a conference call to discuss the second quarter results
on Thursday July 29, 2010 at 10:00 am (EST). The local dial in
number for the call is (647) 427-7450 for local (Toronto) calls or
toll free 1-888-231-8191. To access the live audio webcast, please
log on to www.excocorp.com or www.q1234.com a few minutes before
the event. Real Player is required for access. For those unable to
participate on July 29, 2010, an archived version will be available
on the Exco website. This Press Release contains forward-looking
information and forward-looking statements within the meaning of
applicable securities laws with respect to: 1) business unit sales
and earnings and 2) improvement in economic conditions. We use
words such as "anticipate", "plan", "may", "will", "should",
"expect", "believe", "estimate", "approximately", "confident",
"modestly" and similar expressions to identify forward-looking
information and statements. Such forward-looking information and
statements are based on assumptions and analyses made by management
in light of our field experiences and our interpretation of recent
and current automotive and industrial sales trends which are
expected to continue into the near future, as well as economic
conditions and other factors we believe to be relevant. Readers are
cautioned not to place undue reliance on forward-looking
information and statements, as there can be no assurance that the
assumptions, plans, intentions or expectations upon which such
statements are based will occur. Forward-looking information and
statements are subject to known and unknown risks, uncertainties,
assumptions and other factors which may cause actual results,
performance or achievements to be materially different from any
future results, performance or achievements expressed, implied or
anticipated by such information and statements. These risks,
uncertainties and assumptions are described in the Company's
Management's Discussion and Analysis included in our 2009 Annual
Report, in our 2009 Annual Information Form and, from time to time,
in other reports and filings made by the Company with securities
regulatory authorities. While the Company believes that the
expectations expressed by such forward-looking information and
statements are reasonable, there can be no assurance that such
expectations and assumptions will prove to be correct. In
evaluating forward-looking information and statements, readers
should carefully consider the various factors which could cause
actual results or events to differ materially from those indicated
in the forward-looking information and statements. Readers are
cautioned that the foregoing list of important factors is not
exhaustive. Furthermore, the Company disclaims any obligations to
update publicly or otherwise revise any such factors or any of the
forward-looking information or statements contained herein to
reflect subsequent information, events or developments, changes in
risk factors or otherwise unless such factor is in and of itself
material. %SEDAR: 00003420E Exco Technologies Limited (TSX-XTC),
Paul Riganelli, Vice-President, Finance and Chief Financial
Officer, (905) 477-3065 Ext 7228, http://www.excocorp.com
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