- Sales up 38%
- Earnings up 34%
- ALC acquisition completed
- $33.7 million cash on
hand
- $5.4 million cash, net of bank
indebtedness
TORONTO,
April 23, 2014 /PRNewswire/ - Exco
Technologies Limited (TSX-XTC) today announced results for its
second quarter ended March 31, 2014.
In addition, the Company announced the quarterly dividend of
$0.05 per common share which will be
paid on June 27, 2014 to shareholders
of record on June 13,
2014. 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) |
|
|
|
|
2014 |
2013 |
2014 |
2013 |
Sales |
|
|
|
82,437 |
59,581 |
146,382 |
118,267 |
Net income |
|
|
|
7,453 |
5,545 |
14,193 |
11,332 |
Basic earnings per share |
|
|
|
$0.18 |
$0.14 |
$0.34 |
$0.28 |
Diluted earnings per share |
|
|
|
$0.18 |
$0.14 |
$0.34 |
$0.28 |
Net income excluding non-recurring
ALC
due-diligent and closing costs |
|
|
|
7,844 |
5,545 |
14,584 |
11,332 |
Basic earnings per share excluding
non-recurring
ALC due-diligent and closing costs |
|
|
|
$0.19 |
$0.14 |
$0.35 |
$0.28 |
Diluted earnings per share
excluding non-recurring
ALC due-diligent and closing costs |
|
|
|
$0.19 |
$0.14 |
$0.35 |
$0.28 |
Common shares outstanding |
|
|
|
41,938,756 |
40,695,195 |
41,938,756 |
40,695,195 |
Consolidated sales for the second quarter ended
March 31, 2014 were $82.4 million - an increase of $22.9 million or 38% compared to last year.
Year-to-date consolidated sales were $146.4
million - an increase of $28.1
million or 24% over last year. The Automotive
Solutions segment is primarily responsible for this significant
increase with sales of $42.6 million
in the second quarter and $67.6
million year-to-date - increases of $20.1 million or 89% for the quarter and
$22.7 million or 50% year-to-date.
March sales from Automotive Leather Company Group (Pty) Limited
('ALC'), which was acquired by Exco on March
1, 2014 accounted for $14.4
million of this increase. The other businesses in this
segment (Polytech, Polydesign and Neocon) also experienced strong
growth in both the quarter (25%) and year-to-date (18%) as North
American sales were sustained by strong vehicle unit production as
well as new product launches and Polydesign's European sales
increased substantially over prior year as the smooth launch of new
products continued to exceed the impact of relatively anemic
European vehicle unit sales.
The Casting and Extrusion segment reported
strong sales of $39.9 million for the
second quarter and $78.8 million
year-to-date - increases of $2.8
million or 8% for the quarter and $5.4 million or 7% year-to-date. The Extrusion
group increased sales in the current quarter and year-to-date by
22% and 18% respectively with overall market conditions improving
in North America and both Exco
Colombia and Texas now growing
market share in their respective regional markets after having
achieved key quality and delivery benchmarks.
Consolidated net income for the second quarter
was $7.4 million or $0.18 per share compared to $5.5 million or $0.14 per share last year - an increase of 34%.
Year-to-date consolidated net income was $14.2 million or $0.34 per share compared to $11.3 million or $0.28 per share last year. Included in the
current quarter and year-to-date were $526
thousand of non-recurring ALC due-diligence and closing cost
expenses. Excluding these non-recurring costs consolidated
net income would have been $0.01 per
share higher - yielding $0.19 per
share in the quarter and $0.35 per
share year-to-date.
The Automotive Solutions segment reported higher
pretax profit of $6.1 million in the
second quarter - an increase of $2.1
million or 51% over last year. Year-to-date the segment also
reported higher pretax profit of $10.6
million - an increase of $2.7
million or 34% from the prior year. All businesses in
this segment reported increased earnings and the ALC business
performed well within management's expectations during the first
month under Exco's ownership. The Casting and Extrusion
segment also reported strong pretax profit of $5.9 million in the second quarter compared to
$4.8 million last year - an increase
of $1.1 million or 22%. Year-to-date
the segment reported pretax profit of $11.8
million - an increase of $1.3
million or 13% from last year. These
improvements took place in spite of operational disruptions and
extra costs caused by the launch of our extrusion greenfield
facility in Brazil, which is
beginning production this month, and the Castool greenfield
facility in Thailand, which is
expected to begin production in June.
Earnings were also favorably impacted by
climbing earnings at Polydesign in Morocco where the income tax rate is 9% and in
Bulgaria where ALC earnings are
subject to 10% tax rate. This trend is expected to continue
and become more prevalent as earnings increase from Thailand (which are exempt from income tax for
the next 7 years) and other low tax countries where Exco
manufactures, such as Colombia
(15%).
Operating cash flow before net change in
non-cash working capital increased to $10.0
million in the second quarter and $19.3 million year-to-date compared to
$8.0 million and $15.9 million in the same periods last year.
These increases were primarily the result of improved operating
earnings and, even after the net change in non-cash working capital
is taken into account, cash provided by operating activities was
still dramatically higher than last year both in the quarter and
year-to-date
The ALC acquisition has, after an absence of
many years, introduced material bank debt onto Exco's balance
sheet; however, the Company remained net bank debt-free throughout
the quarter with a net cash position of $5.4
million at quarter-end despite acquisition financing of
$17.3 million and greenfield capital
investments of $4.8 million during
the quarter. Management is comfortable that the future
performance of ALC and the strong cash provided by operating
activities, which far exceeded last year both in the quarter and
year-to-date ($16.3 million vs
$7.1million in the quarter,
$21.6 million vs. $10.5 million year-to-date), will continue to
meet and likely exceed our expectations.
The outlook for Exco over the near term
continues to remain strong. The economic recovery in
North America - both in the
automotive sector and the greater economy - appears to be intact
and driving higher sales. European automotive sales - especially at
BMW and the other German OEMs - are also firming up and giving some
reason for optimism for growth in this long suffering market.
(For further information and prior year
comparison 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 18 strategic
locations, we employ 4,610 people and service a diverse and broad
customer base.
To access the live audio webcast, please log on
to www.excocorp.com or directly to the web cast at
http://www.newswire.ca/en/webcast/detail/1335949/1476661 a few
minutes before 10:00 AM on
April 24, 2014. Microsoft Media
Player is required for access. For those unable to listen on
April 24, 2014, 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
Brazil, Thailand, Texas and Colombia) and Polydesign, the financial
performance of ALC which was acquired in March, 2014, managing our
order backlog in the Castool and large mould businesses, impact of
our machinery and equipment investments and greenfield
construction, input costs, operating efficiencies and overhead
absorption. 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 in Europe, the rate of economic growth in
North America, Europe and BRIC countries, investment by OEMs
in drivetrain architecture and structural parts, and currency
fluctuations (particularly with respect to the US dollar, Euro,
Mexican peso and South African rand) and the level of and timing of
integration of the ALC acquisition. 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 2013 Annual Report, in our
2013 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.
SOURCE Exco Technologies Limited