Exco Technologies Limited - Results for Third Quarter Ended June 30, 2014
TORONTO, July 23, 2014 /CNW/ - Exco Technologies Limited (TSX-XTC) today announced results for its third quarter ended June 30, 2014. In addition, the Company announced the quarterly dividend of $0.05 per common share which will be paid on September 26, 2014 to shareholders of record on September 12, 2014. The dividend is an "eligible dividend" in accordance with the Income Tax Act of Canada.
Consolidated sales for the third quarter ended June 30, 2014 were $110.9 million - an increase of 78% compared to last year. Year-to-date consolidated sales were $257.3 million - up 42% over last year. The inclusion in the quarter of Automotive Leather Group (Pty) Company ('ALC') which was acquired by Exco on March 1, 2014 is primarily responsible for the significantly higher sales in the quarter. However, our existing businesses also grew by 21% in the current quarter and 15% year-to-date. ALC is included in the Automotive Solutions segment.
The Automotive Solutions segment reported significantly higher sales of $66.3 million in the third quarter and $133.9 million year-to-date - increases of 183% for the quarter and 96% year-to-date. ALC sales in the quarter were $35.3 million and year-to-date (four months) was $49.7 million.
The other businesses in this segment experienced strong growth in both the quarter and year-to-date by 32% and 23% respectively. Polytech and Neocon sales in North America continued at elevated levels - sustained by strong vehicle unit sales as well as new product launches for refreshed, redesigned or entirely new vehicle models. Polydesign's European sales increased substantially over prior year as the smooth launch of new programs continued at a strong pace and European vehicle unit sales improved modestly.
Consolidated net income for the third quarter was $8.3 million or diluted earnings of $0.20 per share compared to consolidated net income of $5.6 million or diluted earnings of $0.14 per share last year - an increase of 50%. Year-to-date consolidated net income was $22.5 million or diluted earnings of $0.54 per common share compared to $16.9 million or diluted earnings of $0.41 per common share last year - an increase of 33%. Included in the current year and prior year were various significant unusual items consisting of withholding taxes, start-up losses in Brazil and Thailand and ALC acquisition costs. These items are detailed in the Company's MD&A at Table A. Excluding these unusual items, net income in the current quarter and year-to-date would have been $9.2 million and $24.4 million or diluted earnings of $0.22 and $0.58 per common share compared to $7.2 million and $18.6 million or diluted earnings of $0.17 and $0.45 per common share in the same periods last year.
These earnings drove strong EBITDA. Consolidated EBITDA for the third quarter was $14.9 million compared to $11.7 million in the same quarter last year - an increase of 27%. Year-to-date consolidated EBITDA was $38.4 million compared to $31.9 million last year - an increase of 20%.
The Automotive Solutions segment reported higher pretax profit of $7.0 million in the third quarter - an increase of 52% over last year. Year-to-date the segment also reported higher pretax profit of $17.6 million - an increase of 41% above the prior year. In both Europe and North America, stronger sales provided increased earnings. This earnings improvement took place in spite of elevated inventory, logistics and production reallocation costs at ALC required to launch the new Mini program in Bulgaria, South Africa and Lesotho.
The Casting and Extrusion segment reported pretax profit of $6.5 million in the third quarter compared to $6.4 million pretax profit in the same quarter last year - an increase of 1%. Year-to-date the segment reported pretax profit of $18.2 million - an increase of $1.4 million or 8% from last year. These improvements took place in spite of start-up costs at our two greenfield facilities - Extrusion Brazil and Castool Thailand. Excluding these start-up costs, which we expect to recede over the next two quarters, pretax income in the current quarter and year-to-date for this segment would have been $7.5 million and $20.1 million compared to $6.5 million and $17.2 million in the same periods last year. This represents an increase of 15% in the quarter and 17% year-to-date. Our prospects for new business in the large mould business continue to be favorable. Recently, Exco was awarded the 10 speed transmission tooling program by General Motors. This is not one of Exco's traditional customers and we see this award as a validation of Exco's competitive position in the large mould market and a validation of our ability to generate outstanding and innovative tooling designs on state-of-the-art powertrain technology.
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 even European automotive sales are showing signs of improvement. The recent announcement by BMW, Mercedes and VW to locate further assembly plant capacity in Mexico and the southern US states is also a welcome development and dovetails with our recent purchase of ALC which has been serving these customers in Europe for many years.
(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 4,740 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/1372763/1522251 a few minutes before 10:00 AM on July 24, 2014. Microsoft Media Player is required for access. For those unable to listen on July 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 securing of new orders or renewal of existing orders, 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 and production reallocation 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
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