Exco Technologies Limited - Second Quarter ended March 31, 2011 and Quarterly Dividend Declared
May 04 2011 - 4:49PM
PR Newswire (Canada)
TORONTO, May 4 /CNW/ -- -- Sales increased 35% -- Profits increased
149% -- Cash on hand $12.7 million -- No bank debt TORONTO, May 4
/CNW/ - 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 Six Months ended March 31
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 $0.14 $0.05 $0.21 $0.10 per share
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. To view this
news release in HTML formatting, please use the following URL:
http://www.newswire.ca/en/releases/archive/May2011/04/c9433.html
table border="0" tr td bSource: /bbr/ bContact:/bbr/
bT/bbelephone: /bbr/ bW/bbebsite:/b /td td Exco Technologies
Limited (TSX-XTC)br/ Paul Riganelli, Vice-President, Finance and
Chief Financial Officerbr/ (905) 477-3065 ext. 7228br/ a
href="http://www.excocorp.com"http://www.excocorp.com/a /td /tr
/table p /p
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