Exco Technologies Limited - Third Quarter ended June 30, 2012
July 25 2012 - 4:30PM
PR Newswire (Canada)
-- Year over year Quarterly Sales increased 20% -- Year over year
Quarterly Profits increased 50% -- Quarter-end Cash on hand
increased 49% to $22.9 million -- No bank debt TORONTO, July 25,
2012 /CNW/ - Exco Technologies Limited (TSX-XTC) today announced
results for its third quarter ended June 30, 2012. In
addition, the Company announced the quarterly dividend of $0.0375
per common share which will be paid on September 28, 2012 to
shareholders of record on September 14, 2012. The
dividend is an "eligible dividend" in accordance with the Income
Tax Act of Canada. Three Months ended Nine Months ended June 30
June 30 ($000s, except per share amounts) 2012 2011 2012 2011 Sales
59,213 49,183 180,849 148,605 Net income 5,516 3,688 17,302 10,603
Basic earnings per $0.14 $0.09 $0.42 $0.26 share Diluted earnings
$0.14 $0.09 $0.42 $0.26 per share Common shares 40,663,811
40,961,823 40,663,811 40,961,823 outstanding Consolidated sales for
the third quarter ended June 30, 2012 were $59.2 million - an
increase of $10.0 million or 20% compared to last year. The
Company experienced strong demand for its products and this quarter
marks the continuing trend of growing sales started over three
years ago. Year-to-date sales were $180.8 million - an increase of
$32.2 million or 22% compared to last year. During the third
quarter, the Casting and Extrusion segment reported sales of $36.0
million - an increase of $4.2 million or 13% compared to the same
quarter last year. Year-to-date, the segment reported sales
of $112.5 - an increase of $18.6 or 20% compared to last year.
Sales in the Automotive Solutions segment in the third quarter were
$23.2 million - an increase of $5.8 million or 33% from the same
quarter last year. Year-to-date, the segment reported sales of
$68.3 million - an increase of $13.7 million or 25% from last year.
Sales increased at all business units in both business
segments. Growth in extrusion tooling sales continues to
point towards a recovery in industrial activity in North
America. Castool and Exco's large mould businesses also
continue to benefit from the surge in demand for die cast tooling
and consumable components. At Polytech and Neocon, strong
light vehicle production levels in North America, favorable OEM
content positioning and better absorption of tightly controlled
manufacturing overhead costs fuelled growth at these divisions.
Sales at Polydesign have also increased in the quarter and
year-to-date as volumes have held up well, despite difficult
European market conditions. Consolidated net income for the third
quarter was $5.5 million or $0.14 per share compared to
consolidated net income of $3.7 million or $0.09 per share last
year. Year-to-date consolidated net income was $17.3 million or
$0.42 per share compared to consolidated net income of $10.6
million or $0.26 per share last year. Pretax income for the Casting
and Extrusion segment in the third quarter was $5.2 million
compared to segment pretax income of $3.5 million last year.
Year-to-date, the segment reported pretax income of $16.2 million
compared to $9.0 million last year. These improvements were led by
the large mould group which continued to benefit from very strong
demand for its powertrain tooling. Edco reported a
profit in the current quarter and losses at Excoeng Mexico, our
large mould maintenance facility in Queretaro Mexico, decreased
significantly in the current quarter mainly due to growing sales.
Year-to-date, losses at Edco and Excoeng Mexico were approximately
1 cent per share. Earnings at Castool were also significantly
stronger on higher sales in both current quarter and year-to-date.
Extrusion earnings in the current quarter and year-to-date
increased significantly over last year as efficiencies from
operating within the two-plant footprint were realized. The
start-up plant in Colombia, which started shipping in January 2012,
incurred losses of approximately 1 cent per share in the current
quarter and 2 cents year-to-date; however, as a group, the
extrusion businesses outperformed prior year results. The
Automotive Solutions segment reported segment pretax income in the
third quarter of $3.9 million compared to segment pretax income of
$2.7 million in the same quarter last year. Year-to-date, the
segment reported pretax income of $11.5 million compared to $8.7
million last year. Program refreshing and renewal activity has
enabled this segment to better recover raw material cost increases
experienced over the last several years. Strong light vehicle
production volume has also improved overhead absorption.
Polydesign continued improving its earnings as new product launches
have provided not only the necessary throughput but also higher
added value product mix than its traditional seat cover program
which comes to an end next quarter. The volume reduction on
existing European programs has not materialized to the extent that
was expected. However, erosion is still expected given current
trends in European automotive sales. Consolidated gross margin in
the third quarter increased to 28.8% from 27.1% in the same quarter
last year. Year-to-date gross margin also increase to 28.5% from
26.5% last year. The improvement in the current quarter and
year-date was mainly from; 1) declining losses at Edco and Excoeng
Mexico, 2) operating within a two-plant extrusion footprint and 3)
generally stable yet softening raw material cost environment.
Cash provided by operating activities increased to $4.6 million in
the third quarter from $2.5 million last year and $19.4 million
this year-to-date compared to $3.3 million last year. These
increases are primarily the result of improved earnings and stable
working capital requirements. This has caused the Company's
cash position at June 30, 2012 to increase to $22.9 million from
$15.4 million at the beginning of the year. The outlook for Exco
for the balance of the year continues to be promising. North
American automotive production is strong despite the overall
lackluster performance of the US economy. We believe the high
average age of North American vehicles, materially better mileage
of new automobiles and the return of low cost automobile financing
and leasing are the major factors driving this trend. This
bodes well for our automotive components and tooling businesses
which are expected to continue experiencing strong demand for their
products. Recent improvement in US industrial markets, seems
to be levelling off, however, improved demand for our extrusion
tooling products over the last year has been sustained. In Europe
the economy is in recession with automotive production contracting
precipitously. Exco's Polydesign operations are expected to
offset any declining volume on existing programs with the launch of
new programs throughout this year and next. In this way we
hope to position ourselves to take advantage of the recovery which
we expect to occur thereafter. Management also observes a
nascent trend in softening raw material costs. It would
appear that global trends toward more moderate growth particularly
among BRIC countries may cause Exco to obtain relief in the form of
better supply and more stable cost for polymers, steel and other
commodity inputs. The comparative amounts in the above analysis
have been adjusted to reflect the impact of the Company's
transition to IFRS effective October 1, 2010. Refer to Note 13 to
the interim consolidated financial statements for the second
quarter for a full reconciliation of the comparative period's
interim consolidated financial statements under GAAP to IFRS. (For
further information and prior year comparison 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 2,196 people and service a
diverse and broad customer base. To access the live audio webcast,
please log on to www.excocorp.com, or
http://www.newswire.ca/en/webcast/detail/1007495/1088509 a few
minutes before the event. Real Player is required for
access. For those unable to participate on July 26, 2012, 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 growth and financial performance of the Company's business
units, contribution of our businesses (particularly our start-up
business units in Mexico and Colombia), input costs and our
operating efficiencies. 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. These assumptions include, among other things, the
number of automobile vehicles produced in North America and Europe,
the rate of economic growth in North America and Europe and BRIC
countries, investment by OEMs in drivetrain architecture and
structural parts and currency fluctuations (particularly with
respect to the US dollar, Euro and Mexican Peso). 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
2011 Annual Report, in our 2011 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 will update its
disclosure upon publication of each fiscal quarter's financial
results and otherwise 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. Exco Technologies Limited CONTACT: Source: Exco
Technologies Limited (TSX-XTC)Contact: Paul Riganelli,
Vice-President, Finance and Chief FinancialOfficerTelephone: (905)
477-3065 Ext. 7228Website: http://www.excocorp.com
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