IR presentation
 
 

 


Exco Technologies Limited - Results for Second Quarter Ended March 31, 2015


  • Sales up over 50% in the quarter
  • Earnings up 46% in the quarter
  • $25.3 million cash on hand
  • $6.8 million cash, net of bank indebtedness
  • EBITDA up 60% to record high of $19.9 million in the quarter

TORONTO, April 22, 2015 /CNW/ - Exco Technologies Limited (TSX-XTC) today announced results for its second quarter ended March 31, 2015. In addition, the Company announced the quarterly dividend of $0.06 per common share which will be paid on June 26, 2015 to shareholders of record on June 12, 2015. 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
(in $ thousands except per share amounts)
2015 2014 2015 2014
Sales $125,484 $82,437 $245,381 $146,382
Net income $10,872 $7,453 $20,510 $14,193
Basic earnings per share $0.26 $0.18 $0.49 $0.34
Diluted earnings per share $0.26 $0.18 $0.48 $0.34
Common shares outstanding 42,337,862 41,938,756 42,337,862 41,938,756

Overall, Exco's sales for the second quarter at $125.5 million continued its growth trend with an increase of $43.1 million or 52%. Year-to-date sales were $245.4 million - an increase over last year of $99.0 million or 68%. ALC sales are fully included in both the quarter and year-to-date compared to only one month inclusion for both periods last year. This has been a major contributor to the overall sales growth. However, combined sales of our other businesses in both segments also grew dramatically.

The Automotive Solutions segment reported significantly higher sales of $76.6 million in the second quarter – an increase of $34.0 million or 80% over last year. Year-to-date, the segment more than doubled its sales to $149.1 million - an increase of $81.5 million or 121% over last year. As previously indicated ALC was fully included in both the current quarter and year-to-date compared to inclusion of only one month of sales last year. This accounts for the majority of the growth in this segment, however, the other businesses – particularly Polytech and Neocon in North America where there are strong vehicle unit sales and many new product launches - have also increased sales by over 35% in both the quarter and year-to-date.

The Casting and Extrusion segment reported sales of $48.9 million in the quarter – an increase of $9.0 million or 23% over last year. Year-to-date, the segment also reported higher sales of $96.3 million - an increase over last year of $17.4 million or 22%. All businesses in the segment contributed to this sales increase with the large mould business leading the segment. This business group is experiencing strong demand on existing programs combined with surging demand for both 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 and our greenfield operation in Brazil which started commercial production in June 2014. Sales at Castool reflected continuing strong market conditions in North America and Asia in the quarter as well as strong sales momentum by our greenfield operation in Thailand which also started commercial production in June 2014.

Net income for the second quarter was $10.9 million or diluted earnings of $0.26 per share compared to $7.5 million or $0.18 per share last year – an increase of 46%. Year-to-date net income was $20.5 million or diluted earnings of $0.48 per share compared to $14.2 million or $0.34 per share last year – an increase of 45%.

The Automotive Solutions segment reported higher pretax profit of $8.7 million in the second quarter – an increase of $2.6 million or 42% over last year. Year-to-date, the segment also reported higher pretax profit of $16.5 million – an increase of $5.9 million or 56% over last year. The Casting and Extrusion segment also reported higher pretax profit of $9.1 million in the second quarter – an increase of $3.2 million or 54% over last year. Year-to-date, the segment also reported higher pretax profit of $16.5 million – an increase of $4.7 million or 40% over last year.

EBITDA for the second quarter was $19.9 million compared to $12.4 million in the same quarter last year – an increase of 60%. Year-to-date EBITDA was $36.8 million compared to $23.5 million – an increase of 57% 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.

Operating cash flow is strong and the Company remains net bank debt-free despite $7.8 million in capital expenditures and $22.5 million invested in non-cash working capital year-to-date which was required to support our growing businesses. The net cash position at the close of the second quarter was $6.8 million compared to $3.3 million at the end of the first quarter and $10.0 million at the end of last fiscal year (September 30, 2014).

The prospects for the rest of the year continue to remain good. The economic recovery in North America – both in the automotive sector and the greater economy – appears to be intact and is expected to continue at its current level. The European automotive market seems to be improving, although at a gradual pace. Unit sales of light vehicles should continue to benefit from low borrowing costs and significantly improved mileage of new vehicles should also drive stronger demand. The announcement by most OEMs in both North America and Europe of aggressive plans to refresh/redesign and/or launch entire new models over the next several years should sustain strong long-term demand as well. This should directly benefit our automotive component businesses which should continue to experience strong sales and earnings driven by efficient overhead absorption, as well as, 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 are experiencing growing sales and our tool shops in Colombia and Texas are capturing market share in their regional markets. Extrusion Brazil and Castool Thailand should also improve as sales continue to ramp up. All these factors, taken together, should sustain sales.

Input prices of products such as steel and plastics continue to moderate however; the strengthening US dollar is increasing the cost of these inputs at our Canadian and other non-US foreign operations. While the weak Canadian dollar is expected to continue to benefit Exco's sales the weakening Euro may erode Exco's competitive position in North America as European competitors become increasingly competitive with the weakening of the Euro.

(For further information and prior year comparison please refer to the Company's First 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 5,202 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/1510837/1684285 a few minutes before 10:00 AM on April 23, 2015. Microsoft Media Player is required for access. For those unable to listen on April 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 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 this Annual Report, our 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

For further information:

Source: Exco Technologies Limited (TSX-XTC)
Contact: Paul Riganelli, Senior Vice President and Chief Operating Officer
Telephone: (905) 477-3065 Ext 7228
Website: http://www.excocorp.com

 

 
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