• Sales up 18% in the quarter
• Earnings up 27% in the quarter
• EPS reduced by $0.05 for impact of tax asset write-off
• $24.5 million cash, net of bank indebtedness
• EBITDA up 41% to $21.9 million in the quarter

TORONTO, Dec. 2, 2015 /CNW/ – Exco Technologies Limited (TSX-XTC) today announced results for its fourth quarter and year ended September 30, 2015. In addition, the Company announced the quarterly dividend of $0.06 per common share which will be paid on December 30, 2015 to shareholders of record on December 16, 2015. The dividend is an “eligible dividend” in accordance with the Income Tax Act of Canada.

Consolidated sales for the fourth quarter were $131.0 million – an increase of 18% compared to last year. Full year, consolidated sales were $498.3 million – up 35% over last year. Sales from our seat cover business which was acquired by Exco on March 1, 2014 were fully included in both the current and prior year quarters. However, full year sales this year included twelve months of seat cover sales compared to seven months last year. While seat cover sales accounted for a considerable amount of the sales growth Exco’s other businesses also grew by 24% in the quarter and 21% in the year.

The Automotive Solutions segment reported significantly higher sales of $78.5 million in the fourth quarter and $303.1 million for the year – increases of 21% and 52% respectively. Seat cover sales in the quarter were up 6% to $36.3 million and for the year were up 77% to $148.3 million once again reflecting full year inclusion compared to seven months last year. The other businesses in this segment experienced strong growth in both the quarter and the year by 38% and 35% respectively. North American sales continued at elevated levels – sustained by strong vehicle unit sales as well as new product launches for refreshed, redesigned or entirely new vehicle models. European sales increased substantially over prior year as the smooth launch of new programs in Morocco continued at a strong pace and our Bulgarian operation completed the launch of our Mini variants as well as some other non-seat cover programs. Improving European vehicle unit sales have also helped support our sales.

The Casting and Extrusion segment reported sales of $52.5 million for the fourth quarter and $195.2 million for the year – increases of 14% and 15% respectively. All businesses in the segment contributed to these sales increases. Sales in this segment were supported by generally buoyant market conditions in North America and in the case of Castool Europe and Asia as well. Combined sales from our greenfield facilities in Brazil and Thailand contributed modestly at $1.7 million in the quarter ($721 thousand – 2014) and $5.1 million for the year ($758 thousand – 2014).

Consolidated net income for the fourth quarter was $10.3 million or diluted earnings of $0.24 per share compared to consolidated net income of $8.1 million or diluted earnings of $0.19 per share last year – an increase of 27%. Full year consolidated net income was $40.8 million or diluted earnings of $0.96 per common share compared to $30.7 million or diluted earnings of $0.73 per common share last year – an increase of 33%.

The quarter’s earnings were impacted by a 42% effective tax rate compared to 27% last year. In the quarter Exco wrote off $1.9 million in deferred tax assets related to South Africa as the planned closure of that facility renders the utilization of these tax assets unlikely in the future. Without this write-off the tax expense would have been $5.5 million or 31% and earnings would have been $0.29 per share instead of $0.24 per share as reported.

The Automotive Solutions segment reported higher pretax profit of $10.1 million in the fourth quarter – an increase of 59% over last year. For the full year, the segment also reported higher pretax profit of $36.6 million – an increase over last year of 53%. In both Europe and North America, stronger sales provided increased earnings. This earnings improvement took place in spite of continuing weakness at ALC South Africa/Lesotho which experienced higher losses in the quarter as production was moved among plants and as provisions were taken in the run up to the closure of the South Africa facility. These losses amounted to $0.05 per share in the quarter and $0.15 per share in the year.

The Casting and Extrusion segment reported pretax profit of $9.5 million in the fourth quarter compared to $6.8 million last year – an increase of 40%. For the full year, the segment reported pretax profit of $32.4 million compared to $25.0 million last year – an increase of 30%. 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 are expected to recede as production increases, pretax income in the current quarter and full year for this segment would have been $10.3 million and $35.4 million compared to $7.2 million and $26.9 million in the same periods last year. This represents an increase of 43% in the quarter and 32% full year.
Consolidated earnings before interest, taxes, depreciation and amortization (“EBITDA”) for the fourth quarter increased to $21.9 million compared to $15.6 million last year – an increase of 40%. For the full year, consolidated EBITDA also increased to $77.0 million compared to $53.9 million last year – an increase of 43%.

Cash provided by operating activities increased slightly to $41.2 million compared to $40.4 million last year – a steady level despite funding working capital required to grow sales by 35%. Exco had no net bank debt as at September 30, 2015 and closed the year with net cash deposits of $24.5 million compared to $7.8 million at the end of the 2014 fiscal year.

The outlook for Exco over the near term should continue to remain strong. We continue to see a buoyant and dynamic quoting environment with light vehicle production continuing at least at current levels despite the possibility of moderate interest rate tightening in the US. The European market also seems to be improving with unit vehicle production climbing modestly yet consistently. The Automotive Solutions group is also actively engaged in quoting on both existing programs and new content. Losses will continue at our greenfields in Brazil and Thailand in the near term with gradual improvement as manufacturing capabilities mature and higher production levels help to more efficiently absorb overheads. The expected closure of the South Africa facility in the second fiscal quarter is expected to significantly benefit earnings and enable management to focus on the remaining Lesotho operation.

All our businesses continue experiencing a favorable input cost environment with relatively abundant supply of both tool grade steel and resin sheet and other polymer-based materials. Pricing of these input costs are also stable with little upward pressure as both global sourcing by our business units and persistently low prices for key commodities such as oil and base metals commodities, although partly mitigated by the strengthening US dollar, make it difficult for upward cost momentum to take root.

(For further information and prior year comparison please refer to the Company’s Fourth Quarter Condensed Financial Statements in the Investor Relations section posted at www.excocorp.com. Alternatively, please refer to www.sedar.com)

Quarterly Conference Call:
To access the live audio webcast, please log on to www.excocorp.com or
http://event.on24.com/r.htm?e=1096759&s=1&k=2C4C114CA78D54EE4ABC2CD04651A2EC a few minutes before the event. Real Player is required for access. For those unable to participate on December 3, 2015, an archived version will be available on the Exco website.

About Exco Technologies Limited:
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 5,302 people and service a diverse and broad customer base.

Notice To Reader: Forward Looking Statements
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 the Outlook section but also elsewhere throughout this document. 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 and Thailand 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 the 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.

1 Non-IFRS Measures: In this News Release, reference is made to EBITDA, which is not a measure of financial performance under International Financial Reporting Standards (“IFRS”). Exco calculates EBITDA as earnings before interest, taxes, depreciation and amortization. EBITDA is used by management, from time to time, to facilitate period-to-period operating comparisons and we believe some investors and analysts use them as well. This measure, as calculated by Exco, may not be comparable to similarly titled measures used by other companies.

SOURCE Exco Technologies Limited

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