Exco Technologies Limited – Results for Third Quarter Ended June 30, 2016

  • Record Sales and Earnings in the quarter
  • EPS of $0.30 up 25% adjusted for non-recurring gain
  • AFX acquisition performing strongly
  • Financial position and liquidity remain solid

TORONTO, July 27, 2016 /CNW/ – Exco Technologies Limited (TSX-XTC) today announced results for its third quarter ended June 30, 2016. In addition, the Company announced a quarterly dividend of $0.07 per common share which will be paid on September 30, 2016 to shareholders of record on September 15, 2016.   The dividend is an “eligible dividend” in accordance with the Income Tax Act of Canada. 

(in $ thousands except per share amounts)Three Months Ended
June 30
Nine Months Ended
June 30
Net income$16,226$9,956$37,043$30,466
Basic earnings per share$0.38$0.24$0.87$0.72
Diluted earnings per share$0.38$0.23$0.87$0.72
Weighted Basic Common shares o/s42,42642,34942,49742,284

Consolidated sales for the third fiscal quarter ended June 30, 2016 were a record $161.7 million – an increase of $39.7 million or 33% over last year. The acquisition of AFX Industries LLC (‘AFX’) closed April 4, 2016 and performed strongly, contributing $31.0 million to sales.

Net income was $16.2 million or $0.38 per share including $3.4 million from the settlement of a commercial arbitration. Excluding the gain, EPS was $0.30, up 28% from the third quarter of fiscal 2015.

“During the third quarter, Exco achieved record sales profitability while also completing the AFX acquisition”, said Brian Robbins, President and CEO. “As well, the company’s financial position remains very strong given net debt to annualized EBITDA of about 0.6x and solid free cash flow generation.” 

The Automotive Solutions segment reported sales of $115.1 million in the quarter – an increase of $39.5 million or 52% over last year. The Casting and Extrusion segment reported sales of $46.6 million in the quarter – essentially flat compared to last year.

The Automotive Solutions segment reported pretax profit of $13.4 million – an increase of $3.4 million or 34% over last year. The increase in the quarter was driven primarily by the inclusion of AFX and strong results from Polytech. These improvements occurred despite the amortization of AFX intangible assets ($0.6 million in the quarter). Losses at ALC South Africa/Lesotho improved in the third quarter following the closure of the plants in South Africa in the second quarter of 2016. 

The Casting and Extrusion segment reported pretax profit of $5.7 million – a decrease of 10% compared to last year. Most of this reduction occurred in the large mould business which continued to have lower absorption rates associated with the transition to new programs and remains impacted by operational disruption due to the installation of new machinery. Modestly lower earnings within the Extrusion business were more than offset by much stronger results generated by the Castool group. Exco’s greenfield operations inColombia, Texas, Brazil and Thailand, experienced strong sales growth and improving contribution when taken together.

The Company’s EBITDA (excluding $3.4 million in non-operating income) totaled $23.3 million in the third quarter – an increase of 27.5% over last year ($18.2 million).

Cash flow from operations totaled $12.0 million in the quarter after $8.4 million of investments in working capital. Capital investments totaled $1.9 million resulting in free cash flow of $10.1 million. Exco ended the quarter with cash of $29.5 million and $35 million of availability under its revolving credit facility.

(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 6,515 people and service a diverse and broad customer base.

A conference call to discuss those results will be held on Thursday, July 28, 2016 at 10:00 a.m. (Toronto time) which can be accessed by dialling (647) 427-7450 for local (Toronto) calls or toll free at (888) 231-8191.

To access the live audio webcast, please log on to www.excocorp.com , or http://event.on24.com/r.htm?e=1224332&s=1&k=C9C9523195970919B12E47DE1D364439 a few minutes before the event.  The conference call can be accessed by dialling (647) 427-7450 for local (Toronto) calls or toll free at (888) 231-8191. 

For those unable to participate on July 28, 2016, 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 greenfield business units, financial performance of acquisitions, operating efficiencies and order backlogs 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, timing of order releases 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”), our quarterly filings 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:Darren Kirk, Executive Vice-President
Telephone:(905) 477-3065, Ext 7233