- Sales up 10% in the quarter
- Earnings up 19% in the quarter
- $25.5 million cash on
hand
- $10.8 million cash, net of
bank indebtedness
- EBITDA up 22% to $18.2 million
in the quarter
TORONTO, July 22, 2015 /CNW/ - Exco Technologies
Limited (TSX-XTC) today announced results for its third quarter
ended June 30, 2015. In addition, the
Company announced the quarterly dividend of $0.06 per common share which will be paid on
September 27, 2015 to shareholders of
record on September 16,
2015. The dividend is an "eligible dividend" in accordance
with the Income Tax Act of Canada.
|
Three Months
Ended
June 30
|
Nine Months Ended
June 30
|
(in $ thousands
except per share amounts)
|
|
|
|
|
|
2015
|
2014
|
2015
|
2014
|
Sales
|
$121,930
|
$110,938
|
$367,311
|
$257,320
|
Net income
|
$9,956
|
$8,340
|
$30,466
|
$22,533
|
Basic earnings per
share
|
$0.24
|
$0.20
|
$0.72
|
$0.54
|
Diluted earnings per
share
|
$0.23
|
$0.20
|
$0.72
|
$0.54
|
Common shares
outstanding
|
42,364
|
41,986
|
42,364
|
41,986
|
Overall, Exco's sales for the third quarter at $121.9 million continued its growth trend with an
increase of $11.0 million or 10%.
Year-to-date sales were $367.3
million - an increase over last year of $110.0 million or 43%. The ALC acquisition
closed March 1, 2014.
Accordingly, ALC sales are fully included in the current quarter,
the prior year quarter and the current year-to-date.
Whereas, last year-to-date has only four month's
inclusion. This has been a major contributor to the dramatic
year-to-date sales growth over last year. However, in the
third quarter where ALC was fully included in the prior year
quarter, it was our other businesses which accounted for most of
the growth.
The Automotive Solutions segment reported significantly higher
sales of $75.5 million in the third
quarter – an increase of $9.2 million
or 14% over last year. In the quarter ALC sales levelled off as the
Mini launches are nearing completion and launch of the new Audi
business does not begin until 2016. ALC sales were also
impacted in the quarter as the X1 program came to an end and BMW's
take-rate in May was only three weeks rather than four. The
other businesses in this segment – particularly in North America by Polytech and Neocon - are
primarily responsible for the significant growth in the third
quarter due to strong vehicle unit sales and many new product
launches. Year-to-date, the segment also reported higher
sales of $224.6 million - an increase
of $90.8 million or 68% over last
year. As previously indicated, ALC was fully included in the
current year-to-date results compared to inclusion of only four
months of sales last year. This accounts for the majority of
the year-to-date growth in this segment although our other
businesses grew by 47% as well.
The Casting and Extrusion segment reported sales of $46.4 million for the third quarter – an increase
of $1.8 million or 4% over last year.
Year-to-date, the segment also reported higher sales of
$142.6 million - an increase of
$19.2 million or 16% over last year.
All businesses in the segment contributed to this sales
increase. The large mould business group is experiencing
strong rebuild demand on existing programs combined with surging
demand for development and production of moulds on new
programs. Sales at the Extrusion group were supported by
strong market conditions in North
America but also by climbing sales at our recently acquired
Texas operation (2013) and our
greenfield operation in Brazil
which started commercial production in June 2014. While sales
at Castool were higher overall, strong sales momentum by our
greenfield operation in Thailand
which also started commercial production in June 2014 more than compensated for the modestly
lower sales experienced at Castool Canada.
Net income for the third quarter was $10.0 million or basic earnings of $0.24 cents per share and diluted earnings of
$0.23 per share compared to net
income of $8.3 million or basic and
diluted earnings of $0.20 per share
in the same quarter last year – an increase of 19%.
Year-to-date net income was $30.5
million or diluted earnings of $0.72 per share compared to net income of
$22.5 million or diluted earnings of
$0.54 per share last year – an
increase of 35%. Net income was impacted by 1 cent per share in the quarter and 2 cents per share year-to-date by withholding tax
for repatriation of foreign earnings. Net income was also
impacted by stock-based compensation costs of 1.5 cents per share year-to-date. The third
quarter impact was negligible.
The Automotive Solutions segment reported higher pretax profit
of $10.0 million in the third quarter
– an increase of $2.9 million or 42%
over last year. Year-to-date, the segment also reported higher
pretax profit of $26.5 million – an
increase of $8.9 million or 51% over
last year. The Casting and Extrusion segment reported pretax profit
of $6.4 million in the third
quarter. This is consistent with last year's pretax profit of
$6.5 million as sales were not
materially higher than last year. Year-to-date, the segment
reported higher pretax profit of $22.9
million – an increase of $4.6
million or 25% over last year.
EBITDA for the third quarter was $18.2
million compared to $14.9
million in the same quarter last year – an increase of 22%.
Year-to-date EBITDA was $55.1 million
compared to $38.4 million – an
increase of 43% over last year. EBITDA is a non-IFRS measure.
Exco calculates EBITDA as earnings before interest, taxes,
depreciation and amortization. Management believes EBITDA is a
useful measure that facilitates period-to-period operating
comparisons and we believe some investors and analysts use it as
well. This measure, as calculated by Exco, does not have any
standardized meaning prescribed by IFRS and is not necessarily
comparable to similar measure presented by other issuers. EBITDA
should not be considered in isolation or as a substitute for net
income prepared in accordance with IFRS as issued by International
Accounting Standards Board.
Overall cash provided by operating activities increased to
$13.6 million in the current quarter
and $18.6 million year-to-date
compared to $3.8 million and
$25.4 million in the same periods
last year. The Company remains net bank debt-free despite
$13.2 million in capital expenditures
and $22.8 million invested in
non-cash working capital in the nine months of the current fiscal
year which was required to support our growing businesses.
The net cash position at the close of the third quarter was
$10.8 million compared to
$6.8 million at the end of the second
quarter and $10.0 million at the end
of last fiscal year (September 30,
2014).
The outlook for Exco over the balance of the year continues to
be consistent with the last several quarters. Economic
conditions in North America –
especially in the automotive sector – continue to be
favorable. The European automotive market seems to be
improving at a gradual pace. Unit sales of light vehicles
should continue to benefit from low borrowing costs and
significantly improved fuel mileage of new vehicles should also
drive stronger demand. Modest short term interest rate
increases, if implemented at all in the
United States, are not expected to fundamentally change this
demand picture. OEM plans to refresh and redesign vehicle
models and the numerous announcements by Japanese, South Korean and
German OEMs to build assembly plants and otherwise expand
production in North America over
the next several years should support near to midterm
demand.
This is expected to directly benefit our automotive component
businesses in North America which
should continue to experience strong sales and earnings
complemented by efficient overhead absorption. Furthermore,
this should also indirectly benefit our large mould businesses and
Castool which sell moulds and consumable components/tooling to OEMs
and their tiers.
Our North American extrusion tooling businesses and our tool
shops in Colombia and Texas are experiencing growing sales in their
respective markets. Extrusion Brazil and Castool Thailand
sales are growing as these two businesses approach their first year
of commercial production. Castool Thailand has achieved
positive cash flow in two of the last three quarters and
Brazil's performance continues to
improve despite poor local economic conditions.
We expect to continue generating cash from our operations and
growing our net cash position despite investing heavily in new
equipment and a new plant in Texas
this year. We also continue to be vigilant regarding
potential 'tuck-under' acquisitions which bolster or complement our
core capabilities.
(For further information and prior year comparison please refer
to the Company's Third Quarter Condensed 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 in 10
countries, we employ 5,146 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://event.on24.com/r.htm?e=1021676&s=1&k=732853CB3F45F8C29208ACC602F460D1
a few minutes before 10:00 AM on
July 23, 2015. Microsoft Media
Player is required for access. For those unable to listen on
July 23, 2015, an archived version
will be available on the Exco website.
Information in this document relating to projected
growth and financial performance of the Company's
business units, contribution of our start-up business units,
contribution of awarded programs yet to be launched, margin
performance, financial performance of acquisitions, timing of plant
shutdowns and operating efficiencies are forward-looking
statements.
Readers are cautioned not to place undue reliance on
forward-looking statements found mainly in this news
release. These forward-looking statements are based on our
plans, intentions or expectations which are based on, among other
things, assumptions about the number of automobiles produced in
North America and Europe, the number of extrusion dies required
in North America and South America, the rate of economic growth in
North America, Europe and emerging market countries,
investment by OEMs in drivetrain architecture and other initiatives
intended to reduce fuel consumption and/or the weight of
automobiles, weakening raw material prices, continuing economic
recovery, currency fluctuations which may in fact not occur and the
rate at which our new operations in Brazil, Thailand and South
Africa/Lesotho achieve
profitability. These forward-looking statements include known and
unknown risks, uncertainties, assumptions and other factors which
may cause actual results or achievements to be materially different
from those expressed or implied. For a more extensive
discussion of Exco's risks and uncertainties see the 'Risks and
Uncertainties' section in the 2014 Annual Report, our 2014 Annual
Information Form ("AIF") and other reports and securities filings
made by the Company. This information is available at
www.sedar.com.
While Exco believes that the expectations expressed by such
forward-looking statements are reasonable, we cannot assure that
they will 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