Mr. Stephane Arsenault reports

HEROUX-DEVTEK REPORTS FOURTH QUARTER AND FISCAL 2023 FINANCIAL RESULTS

Heroux-Devtek Inc. has released its financial results for the fourth quarter and fiscal year ended March 31, 2023.

Q4 Highlights

• Sales of $156.0 million, compared to $147.5 million last year
• Operating income of $9.9 million compared to $11.5 million last year
• Adjusted EBITDA1 of $19.6 million, or 12.6% of sales, compared to $22.1 million, or 15.0% last year
• Earnings per share of $0.18 from $0.33 last year, or $0.18 from $0.38 on an adjusted1 basis
• Funded backlog of $864 million, stable compared to last quarter and 27% higher than last year

"During the fourth quarter, we continued to improve our financial performance, generating $156 million of sales for a total of $297 million during the last six months of the fiscal year. We continue to have strong relationships with our customers, as evidenced by our funded backlog of $864 million in orders. Our main challenge is to deliver on those orders steadily and efficiently while the operating environment remains complex", said Martin Brassard, President and CEO of Heroux-Devtek.

"Fiscal 2023 was a year of adjustment for the aerospace industry, as demand for civil products rebounded from a severe drop over the last two years. At Heroux-Devtek, our priority remains stabilizing our production system through a reliable supply chain and increased automation in our plants. We will also continue to improve our processes and our pricing structure with our customers and suppliers. We are confident that these measures will return our profitability to higher levels," added Mr. Brassard.

FOURTH QUARTER RESULTS

Throughput improved for a third consecutive quarter, reaching $156.0 million, up from $140.9 million last quarter and $147.5 million last year. Civil sales were up 28.9%, mainly driven by increased deliveries for the Boeing 777, Embraer Praetor and Falcon 6X programs, while defence sales were relatively stable at $107.1 million. Foreign exchange had a $6.0 million positive impact on sales compared to last fiscal year.

Gross profit as a percentage of sales decreased from 17.6% last year to 14.6%, mainly due to inefficiencies resulting from production system disruptions and inflation, while government relief measures partly compensated for last year's COVID-19 disruptions, bearing a 0.7% positive impact on gross profit (none this year).

Operating income decreased to $9.9 million, or 6.3% of sales, from $11.5 million, or 7.8% of sales last year, reflecting lower gross profit, partly offset by the positive effect of foreign exchange fluctuations representing 1.0% of sales.

Earnings per share decreased to $0.18 compared to $0.33 last year.

FISCAL 2023 RESULTS

Consolidated sales reached $543.6 million, up from $536.1 last fiscal year, including a $9.2 million positive impact of foreign exchange. Defence sales totaled $372.9 million, down 3.6% compared to last year, while civil sales were up 14.3% to $170.7 million, mainly driven by increased deliveries for the Boeing 777, Embraer Praetor and Falcon 6X programs.

Gross profit totaled $73.5 million or 13.5% compared to $91.1 million or 17.0% of sales last year. The decrease was caused by the same unfavourable factors listed for the three-month period, while government relief measures partly compensated for last year's COVID-19 disruptions, bearing a 1.4% positive impact on gross profit (none this year).

Operating income fell to $26.2 million, or 4.8% of sales, from $44.8 million, or 8.3% of sales last year, reflecting lower gross profit.

Earnings per share decreased to $0.40, or $0.37 when adjusted for the gain on achievement of commercial objectives related to the sale of Bolton, compared to $0.90 on a diluted basis or $0.95 when adjusted for a legal ruling last year.

FINANCIAL POSITION

As at March 31, 2023, net debt stood at $165.0 million, an increase from $152.1 million a year prior. Net debt to adjusted EBITDA1 ratio rose to 2.7:1 from 1.8:1 a year ago. The higher net debt to EBITDA1 ratio reflects our investment in inventory made to stabilize our production system as well as lower profitability year-on-year.

CONFERENCE CALL

Heroux-Devtek Inc. will hold a conference call to discuss these results on Thursday, May 18, 2023, at 8:30 AM Eastern Time. Interested parties can join the call by dialling 1-888-390-0549 (North America) or 1-416-764-8682 (overseas). The conference call can also be accessed via live webcast on Heroux-Devtek's website at https://investors.herouxdevtek.com/events-webcast. The Company's consolidated financial statements and Management's Discussion & Analysis will be available in the Investors section of the Corporation's website: https://investors.herouxdevtek.com/annual-reports.

If you are unable to call in at this time, you may access a tape-recording of the meeting by calling toll-free 1-888-390-0541 and entering the passcode 879912 on your phone. Local dial-in number is 416-764-8677. This recording will be available from Thursday, May 18, 2023, as of 11:30 AM, until 23:59 PM on Thursday, May 25, 2023.

ABOUT HEROUX-DEVTEK

Heroux-Devtek Inc. (TSX: HRX) is an international company specializing in the design, development, manufacture, repair and overhaul of aircraft landing gear, hydraulic and electromechanical actuators, custom ball screws and fracture-critical components for the Aerospace market. The Corporation is the third-largest landing gear company worldwide, supplying both the defence and commercial market segments. Approximately 94% of the Corporation's sales are outside of Canada, including about 58% in the United States. The Corporation's head office is located in Longueuil, Quebec with facilities in Canada, the United States, the United Kingdom and Spain.

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