Exco Technologies Limited - Third Quarter Ended June 30, 2011 Results
July 27 2011 - 4:25PM
PR Newswire (Canada)
TORONTO, July 27, 2011 /CNW/ -- -- Sales increased 14% -- Profits
increased 10% -- Cash on hand $11.3 million -- No bank debt
TORONTO, July 27, 2011 /CNW/ - Exco Technologies Limited (TSX-XTC)
today announced results for its third quarter ended June 30, 2011.
Three Months ended Nine Months ended June 30 June 30 ($000s, except
per share amounts) 2011 2010 2011 2010 Sales 48,784 42,681 147,261
119,583 Net income 3,865 3,502 12,537 7,628 Basic earnings $0.10
$0.09 $0.31 $0.19 per share Diluted earnings $0.10 $0.09 $0.31
$0.19 per share Common shares 40,961,823 40,911,323 40,961,823
40,911,323 outstanding Consolidated sales for the third quarter
ended June 30, 2011 were $48.8 million - an increase of $6.1
million or over 14% compared to last year. Year-to-date sales were
$147.3 million - an increase of $27.7 million or over 23% compared
to last year. Strong underlying demand for our products
continues to fuel sales growth and mitigate the adverse impact of a
climbing Canadian dollar. The Casting and Extrusion segment
reported sales of $31.4 million - an increase of $4.8 million or
over 18% compared to the same quarter last year.
Year-to-date, the segment reported sales of $92.6 million - an
increase of $17.7 million or almost 24%. Within this segment,
sales in the large mould group increased by 55% in the current
quarter and 61% year-to-date compared to last year reflecting
strong shipments of powertrain tooling moulds. Sales at Castool
increased both in the current quarter and year-to-date by 26% and
31% reflecting strong demand for that division's die cast and
extrusion consumable components and the inclusion this year of
Allper's sales. In the extrusion tooling businesses, sales
were down from last year by 7% in the current quarter and 1%
year-to-date. Die production volumes, while growing, are impacted
by soft economic conditions in North America and currency
fluctuations, the latter of which reduced sales. Sales in the
Automotive Solutions segment in the third quarter were $17.4
million - an increase of $1.3 million or almost 8% from the same
quarter last year. Year-to-date, the segment reported sales of
$54.6 - an increase of $10 million or over 22% compared to last
year. Sales volumes at Polytech and Polydesign have improved
significantly both in the current quarter (25% and 32%
respectively) and year-to-date (22% and 52% respectively). This
reflects the recovering of light vehicle production levels in both
North America and, to a lesser extent, in Europe and in the case of
Polydesign the launch of significant new interior trim and
instrument panel programs. Sales at Neocon decreased in the
current quarter by 19% compared to last year as the impact of the
Tsunami was felt and the sales backlog last year which temporarily
increased sales was cleared. Year-to-date sales at this division
also decreased by 7% compared to last year for the same reasons.
Consolidated net income for the third quarter was $3.9 million or
$0.10 per share compared to consolidated net income of $3.5 million
or $0.09 per share in the same quarter last year. Year-to-date,
consolidated net income was $12.5 million or $0.31 per share
compared to consolidated net income of $7.6 million or $0.19 per
share last year. Consolidated net income in the third quarter last
year benefited from an unusually low tax provision of 7.4%
reflecting non-recurring US federal tax recoveries for prior
years. The tax provision in the quarter this year at 28.7% is
more reflective of Exco's typical rate. The improvement in the
current year's earnings was led by the Automotive Solutions segment
with segment pretax income in the third quarter of $2.7 million
compared to segment pretax income of $1 million in the same quarter
last year. Year-to-date, the segment also reported higher
pretax income of $8.9 million compared to $3.3 million last year.
The Casting and Extrusion segment reported higher segment pretax
income in the third quarter of $3.7 million compared to segment
pretax income of $3.4 million in the same quarter last year.
Year-to-date, the segment also reported higher pretax income of
$11.7 million compared to $8.9 million last year. Consolidated
gross margin in the third quarter remained relatively constant at
26.7% compared to 27.6% in the same quarter last year.
Year-to-date gross margin also remained constant at 27.4% compared
to 27.1% last year. The Company continues to have a strong
cash position at quarter end of $11.3 million (which is expected to
increase by approximately $3 million before fiscal year-end from
the sale of the AluDie production facility) 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 has not materially changed from last quarter. The
two major trends of strong light vehicle production volumes and
steady introduction of new or refreshed vehicles and powertrain
systems by virtually all OEMs remain intact. These trends
continue to benefit our components businesses, Castool and our
large mould businesses. Our large mould business in
particular is experiencing strong demand from its die cast
customers who are both rolling out next generation powertrain
architecture and experiencing high production requirements in the
aftermath of the Tsunami disruption. With mould demand in
many cases recovering faster than capacity the emphasis is
increasingly on managing WIP inventory and meeting tight delivery
dates. The business impacts of the Tsunami are largely over
and any further production and supply disruptions in the vehicle
production chain are not expected to materially affect Exco in the
coming quarters. Stubbornly high oil prices and the Canadian
dollar's new plateau beyond US dollar parity continue to keep
pressure on our raw material costs, in the former case, and
revenue, in the latter case. Exco earnings have adjusted to
this reality, although continuous efforts to mitigate the impact of
these factors will continue. Developing lower cost petroleum
based raw material, raising prices where necessary to recover
costs, moving production to low cost countries and generally
improving operating efficiencies in all of our production
facilities are but a few of the measures constantly under
consideration. (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) 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 1,994 people and service a
diverse and broad customer base. Management will hold a conference
call to discuss the third quarter results on Thursday July 28, 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=3595020 a
few minutes before the event. Real Player is required for
access. For those unable to participate on July 28, 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
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table valign="top" border="0" tr td bSource:/b /td td Exco
Technologies Limited (TSX-XTC) /td /tr tr td bContact:/b /td td
Paul Riganelli, Vice-President, Finance and Chief Financial Officer
/td /tr tr td bTelephone:/bb /bb /bb /bb /b /td
td (905) 477-3065 ext. 7228 /td /tr tr td bWebsite:/b /td td a
href="http://www.excocorp.com"http://www.excocorp.com/a /td /tr
/table
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