- Sales increased 35%
- Profits increased 149%
- Cash on hand $12.7 million
- No bank debt
TORONTO, May 4 /PRNewswire-FirstCall/ - Exco Technologies
Limited (TSX-XTC) today announced results for its second
quarter ended March 31, 2011. In addition, the Company
announced a $0.025 dividend per share which will be paid on June
30, 2011 to shareholders of record on June 15, 2011. The dividend
is an "eligible dividend" in accordance with the Income Tax Act of
Canada.
|
|
|
|
Three Months ended
March 31 |
Six Months ended
March 31 |
|
($000s, except per share
amounts) |
|
2011 |
2010 |
2011 |
2010 |
Sales |
52,885 |
39,312 |
98,477 |
76,902 |
Net income |
5,546 |
2,226 |
8,672 |
4,126 |
Basic and diluted earnings per share |
$0.14 |
$0.05 |
$0.21 |
$0.10 |
Common shares outstanding |
40,926,823 |
40,911,323 |
40,926,823 |
40,911,323 |
Consolidated sales for the second quarter ended
March 31, 2011 were $52.9 million - an increase of $13.6 million or
almost 35% over last year. Year-to-date sales were $98.5 million -
an increase of $21.6 million or over 28% compared to last
year. Strong underlying demand for our products has fuelled
sales growth and mitigated the adverse impact of a climbing
Canadian dollar. Sales growth was experienced throughout both
our segments.
The Casting and Extrusion segment reported second
quarter sales of $33.5 million - an increase of $9.1 million or
over 37% compared to the same quarter last year. Year-to-date,
it reported sales of $61.2 million compared to $48.4 million last
year - an increase of $12.8 million or almost 27%. Within
this segment the large mould group increased sales by 119% in the
second quarter and 64% year-to-date compared to last year
reflecting strong demand for powertrain tooling moulds. Sales
at Castool increased both in the current quarter and year-to-date
by 35% over last year once again reflecting strong demand for that
division's die cast and extrusion products. Castool's sales
this year also reflect the inclusion of sales from its recent
acquisition of Allper AG in Europe.
Sales in the Automotive Solutions segment in the
second quarter were $19.4 million - an increase of $4.5 million or
almost 30% from the same quarter last year. Year-to-date, the
segment reported sales of $37.2 compared to $28.5 million - an
increase of $8.7 million or almost 31% compared to last
year. Sales volumes at Polytech and Polydesign have improved
significantly both in the current quarter (45% and 68%
respectively) and year-to-date (37% and 69% respectively). This
reflects recovering light vehicle production levels in North
America and, to a lesser extent, in Europe and in the case of
Polydesign the smooth launch of significant new cut and sew and
instrument panel programs. Sales at Neocon have been
consistently strong over the last year as market acceptance of the
Neolux carpeted product continues to drive sales.
Year-to-date sales at Neocon remain consistent with prior year and
decreased slightly in the current quarter as the sales backlog
experienced last year has now been cleared.
Consolidated net income for the second quarter was
$5.5 million or $0.14 per share compared to consolidated net income
of $2.2 million or $0.05 per share in the same quarter last year.
Year-to-date, consolidated net income was $8.7 million or $0.21 per
share compared to consolidated net income of $4.1 million or $0.10
per share last year.
The improvement in the current year's earnings was
led by the Casting and Extrusion segment with segment income up 80%
in the second quarter to $5.4 million compared to segment income of
$3 million in the same quarter last year. Year-to-date, the
segment also reported 45% higher income of $8 million compared to
$5.5 million last year. This improvement was once again led by the
large mould group which continued to benefit from near capacity
demand.
The Automotive Solutions segment reported 190%
higher segment income in the second quarter of $3.5 million
compared to $1.2 million last year. Year-to-date pretax profit
was also up 170% to $6.2 million compared to $2.3 million last
year. Improving light vehicle production has significantly improved
overhead absorption and, in the case of Neocon, the clearing of
last year's order backlog has allowed it, in the current quarter,
to operate more profitably than last year. Successful cost
cutting initiatives in recent years have positioned Polytech and
Neocon for higher profitability in the current year despite
unfavorable foreign exchange rates. Polydesign has returned to
profitability in the current year with new product launches
providing not only the necessary throughput but also higher added
value than its traditional seat cover business.
Gross margin in the second quarter continued at
record high levels. Increasing slightly in the quarter to
29.1% from 28.8% last year, Exco's gross margin has not been this
high since 2005. Year-to-date gross margin also increased
slightly to 27.8% from 26.8% last year. Even so there is still
room for improvement as production inefficiencies at Extrusion
Canada arising from the consolidation of AluDie's capacity impacted
gross margin in the current year as did the negative gross margin
at Edco and Excoeng Mexico. These situations should improve
in the quarters to come with the consolidation process coming to a
close and volumes improving at both Edco and Excoeng Mexico.
The Company continues to have a strong cash
position at quarter end of $12.7 million or 31 cents per share and
no bank debt despite having funded significantly higher working
capital necessary to support the strong sales growth over the last
several quarters.
The overall outlook for Exco over the next several
quarters continues to be one of optimism and growth with the two
major trends of strong light vehicle production volumes and steady
introduction of new or refreshed vehicles by virtually all OEMs
remaining intact. These trends continue to benefit our
components businesses, as well as, Castool and our large mould
businesses. Furthermore, our large mould businesses in
particular benefit from recently rising oil prices as the
commitment by OEMs everywhere to producing more fuel efficient
powertrain systems is reinforced.
The recent rise in oil prices and the Canadian
dollar's surge beyond US dollar parity have tended to increase raw
material costs, in the former case, and lower revenue, in the
latter case. However, Exco has largely mitigated the impact of
these factors by a combination of developing alternate lower cost
petroleum based raw material, raising prices where possible, plant
closures in Canada and improving operating efficiencies in all of
our production facilities.
Brian Robbins, President and CEO of Exco says
"these results clearly show that the major structural changes to
our global footprint and our focus on operating efficiencies over
the last several years, although difficult and at times painful,
are now enabling us to mitigate the effect of an 'above par'
Canadian dollar and reap the benefit of recovering light vehicle
production volumes".
(For further information please refer to the
Company's Second Quarter Interim Financial Statements in the
Investor Relations section posted at www.excocorp.com.
Alternatively, please refer to www.sedar.com)
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 2,001 people and service a diverse and broad customer
base.
Management will hold a conference call to
discuss the second quarter results on Thursday May 5, 2011 at 10:00
am (Toronto Time). 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 directly to the webcast at
http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=3483700
a few minutes before the event. Real Player is required
for access. For those unable to participate on May 5,
2011, an archived version will be available on the Exco
website.
This news release contains forward-looking
information and forward-looking statements within the meaning of
applicable securities laws. We use words such as "anticipate",
"plan", "may", "will", "should", "expect", "believe", "estimate"
and similar expressions to identify forward-looking information and
statements especially with respect to consolidated and operational
sales levels and earnings and the future cash flow of the
Company. Such forward-looking information and statements are
based on assumptions and analyses made by us in light of our
experience and our perception of historical trends, current
conditions and expected future developments, as well as other
factors we believe to be relevant and appropriate in the
circumstances. 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 2010 Annual Report, in our
2010 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.
SOURCE Exco Technologies Limited