Exco Technologies Limited - First Quarter ended December 31, 2011 and Quarterly Dividend Declared
TORONTO, Jan. 25, 2012 /CNW/ - Exco Technologies Limited (TSX-XTC) today announced results for its first quarter ended December 31, 2011. In addition, the Company announced that its quarterly cash dividend of $0.03 per share will be paid on March 30, 2012 to shareholders of record on March 14, 2012. The dividend is an "eligible dividend" in accordance with the Income Tax Act of Canada.
Consolidated sales for the first quarter ended December 31, 2011 were $58.5 million - an increase of $13.3 million or 29% compared to last year. This quarter's sales growth continues the strong post-recessionary recovery trend that began in 2010. The Casting and Extrusion segment reported sales of $36.8 million - an increase of $9.4 million or 34% compared to last year. This growth was fuelled by strong demand for automotive die cast moulds and die casting equipment and components as well as improving demand for extrusion dies in North America. Sales in the Automotive Solutions segment in the first quarter were $21.7 million - an increase of $3.9 million or 22% over last year. Growth here was principally driven by stronger vehicle production volume in North America.
Consolidated net income for the first quarter was $5.3 million or $0.13 per share. This represents an increase of 157% over last year's consolidated net income of $2.1 million or $0.05 per share. The improvement in the current year's earnings was led by the Casting and Extrusion segment with segment pretax income in the first quarter of $5.4 million compared to segment pretax income of $946 thousand in the same quarter last year. Within the segment, Edco and Excoeng Mexico incurred a combined loss of approximately 1 cent per share and Exco Colombia, where most start-up costs were expensed, incurred another 1 cent loss per share. The Automotive Solutions segment reported segment pretax income in the first quarter of $3.3 million compared to segment pretax income of $2.6 million in the same quarter last year.
Consolidated gross margin in the first quarter increased to 28.5% from 24.1% in the same quarter last year mainly from a significant improvement in the Casting and Extrusion segment where the disruption and inefficiency from closing an extrusion plant last year is over.
Operating cash flow before net changes in non cash working capital in the first quarter increased to $6.8 million from $4 million last year. Working capital in the current quarter has now begun to level off after a sizeable sale-driven build-up over the last year. The Company's cash position on December 31, 2011 increased to $18 million from $15.4 million at the beginning of the quarter reflecting improvement in earnings.
The overall outlook for Exco over the next several quarters has not materially changed from the last quarter. The two major trends of strong light vehicle production volumes in North America 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 themselves experiencing high production requirements. In Europe the situation is much more subdued as production volumes are expected to contract in 2012 - although to what extent is currently unclear. Management also expects to focus on the development of our new operations in Mexico and Colombia in an effort to both improve financial performance and develop these dynamic emerging markets.
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 first 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 First 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 2,112 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=394641&s=1&k=B36B5F254585B38609735F9742575B90 a few minutes before 4:30 PM on January 25, 2012. Questions can be submitted via the Q&A box on the webcast console. Microsoft Media Player is required for access. For those unable to listen on January 25, 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 two start-up business units and improvement in 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 the number of automobile vehicles produced, investment by OEMs in drivetrain architecture, the state of economic conditions and currency fluctuations. 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.
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