- Sales up 38%
- Earnings up 34%
- ALC acquisition completed
- $33.7 million cash on hand
- $5.4 million cash, net of bank indebtedness
TORONTO, April 23, 2014 /CNW/ - Exco Technologies Limited (TSX-XTC) today announced results for its second quarter ended March 31, 2014. In
addition, the Company announced the quarterly dividend of $0.05 per
common share which will be paid on June 27, 2014 to shareholders of
record on June 13, 2014. 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
|
| | | | ($000s, except per share amounts) |
| | | | 2014 |
2013
| 2014 |
2013
|
Sales
| | | | 82,437 |
59,581
| 146,382 |
118,267
|
Net income
| | | | 7,453 |
5,545
| 14,193 |
11,332
|
Basic earnings per share
| | | | $0.18 |
$0.14
| $0.34 |
$0.28
|
Diluted earnings per share
| | | | $0.18 |
$0.14
| $0.34 |
$0.28
|
Net income excluding non-recurring ALC
due-diligent and closing costs
| | | | 7,844 |
5,545
| 14,584 |
11,332
|
Basic earnings per share excluding non-recurring
ALC due-diligent and closing costs
| | | | $0.19 |
$0.14
| $0.35 |
$0.28
|
Diluted earnings per share excluding non-recurring
ALC due-diligent and closing costs
| | | | $0.19 |
$0.14
| $0.35 |
$0.28
|
Common shares outstanding
| | | | 41,938,756 |
40,695,195
| 41,938,756 |
40,695,195
|
Consolidated sales for the second quarter ended March 31, 2014 were
$82.4 million - an increase of $22.9 million or 38% compared to last
year. Year-to-date consolidated sales were $146.4 million - an increase
of $28.1 million or 24% over last year. The Automotive Solutions
segment is primarily responsible for this significant increase with
sales of $42.6 million in the second quarter and $67.6 million
year-to-date - increases of $20.1 million or 89% for the quarter and
$22.7 million or 50% year-to-date. March sales from Automotive Leather
Company Group (Pty) Limited ('ALC'), which was acquired by Exco on
March 1, 2014 accounted for $14.4 million of this increase. The other
businesses in this segment (Polytech, Polydesign and Neocon) also
experienced strong growth in both the quarter (25%) and year-to-date
(18%) as North American sales were sustained by strong vehicle unit
production as well as new product launches and Polydesign's European
sales increased substantially over prior year as the smooth launch of
new products continued to exceed the impact of relatively anemic
European vehicle unit sales.
The Casting and Extrusion segment reported strong sales of $39.9 million
for the second quarter and $78.8 million year-to-date - increases of
$2.8 million or 8% for the quarter and $5.4 million or 7% year-to-date.
The Extrusion group increased sales in the current quarter and
year-to-date by 22% and 18% respectively with overall market conditions
improving in North America and both Exco Colombia and Texas now growing
market share in their respective regional markets after having achieved
key quality and delivery benchmarks.
Consolidated net income for the second quarter was $7.4 million or $0.18
per share compared to $5.5 million or $0.14 per share last year - an
increase of 34%. Year-to-date consolidated net income was $14.2 million
or $0.34 per share compared to $11.3 million or $0.28 per share last
year. Included in the current quarter and year-to-date were $526
thousand of non-recurring ALC due-diligence and closing cost expenses.
Excluding these non-recurring costs consolidated net income would have
been $0.01 per share higher - yielding $0.19 per share in the quarter
and $0.35 per share year-to-date.
The Automotive Solutions segment reported higher pretax profit of $6.1
million in the second quarter - an increase of $2.1 million or 51% over
last year. Year-to-date the segment also reported higher pretax profit
of $10.6 million - an increase of $2.7 million or 34% from the prior
year. All businesses in this segment reported increased earnings and
the ALC business performed well within management's expectations during
the first month under Exco's ownership. The Casting and Extrusion
segment also reported strong pretax profit of $5.9 million in the
second quarter compared to $4.8 million last year - an increase of $1.1
million or 22%. Year-to-date the segment reported pretax profit of
$11.8 million - an increase of $1.3 million or 13% from last year.
These improvements took place in spite of operational disruptions and
extra costs caused by the launch of our extrusion greenfield facility
in Brazil, which is beginning production this month, and the Castool
greenfield facility in Thailand, which is expected to begin production
in June.
Earnings were also favorably impacted by climbing earnings at Polydesign
in Morocco where the income tax rate is 9% and in Bulgaria where ALC
earnings are subject to 10% tax rate. This trend is expected to
continue and become more prevalent as earnings increase from Thailand
(which are exempt from income tax for the next 7 years) and other low
tax countries where Exco manufactures, such as Colombia (15%).
Operating cash flow before net change in non-cash working capital
increased to $10.0 million in the second quarter and $19.3 million
year-to-date compared to $8.0 million and $15.9 million in the same
periods last year. These increases were primarily the result of
improved operating earnings and, even after the net change in non-cash
working capital is taken into account, cash provided by operating
activities was still dramatically higher than last year both in the
quarter and year-to-date
The ALC acquisition has, after an absence of many years, introduced
material bank debt onto Exco's balance sheet; however, the Company
remained net bank debt-free throughout the quarter with a net cash
position of $5.4 million at quarter-end despite acquisition financing
of $17.3 million and greenfield capital investments of $4.8 million
during the quarter. Management is comfortable that the future
performance of ALC and the strong cash provided by operating
activities, which far exceeded last year both in the quarter and
year-to-date ($16.3 million vs $7.1million in the quarter, $21.6
million vs. $10.5 million year-to-date), will continue to meet and
likely exceed our expectations.
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 driving higher
sales. European automotive sales - especially at BMW and the other
German OEMs - are also firming up and giving some reason for optimism
for growth in this long suffering market.
(For further information and prior year comparison please refer to the
Company's Second 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 18 strategic locations, we employ 4,610 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/1335949/1476661 a few minutes before 10:00 AM on April 24, 2014. Microsoft Media
Player is required for access. For those unable to listen on April 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 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 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
<p> Exco Technologies Limited (TSX-XTC)<br/> Paul Riganelli, Senior Vice President and Chief Operating Officer<br/> (905) 477-3065 Ext. 7228<br/> <a href="http://www.excocorp.com">http://www.excocorp.com</a> </p>