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Exco Results for Third Quarter Ended June 30, 2022

July 28, 2022 17:01 ET | Source: Exco Technologies Ltd.

  • Consolidated third quarter Sales of $129.2 million compared to $115.0 million in the prior year
  • Net Income of $5.6 million and EPS of $0.14
  • EBITDA of $14.6 million compared to $15.2 million in the prior year
  • Halex Extrusion acquisition closed on May 2, 2022
  • Growth capital expenditure strategy on track with $29.3 million in year-to-date spending
  • Quarterly dividend of $0.105 per common share to be paid September, 30 2022

TORONTO, July 28, 2022 (GLOBE NEWSWIRE) — Exco Technologies Limited (TSX-XTC, OTCQX-EXCOF) today announced results for its third quarter of fiscal 2022 ended June 30, 2022. In addition, Exco announced a quarterly dividend of $0.105 per common share which will be paid on September 30, 2022 to shareholders of record on September 16, 2022. The dividend is an “eligible dividend” in accordance with the Income Tax Act of Canada.

“We continued to advance our aggressive growth agenda this quarter, completing the acquisition of Halex Extrusion Dies and making solid progress with our various capital projects”, said Darren Kirk, Exco’s President and CEO. “Our results demonstrate Exco’s ability to navigate through very challenging market conditions while benefiting from the electric vehicle revolution and worldwide movement towards reducing emissions”

Consolidated sales for the third quarter ended June 30, 2022 were $129.3 million compared to $115.0 million in the same quarter last year – an increase of $14.3 million, or 12%. Excluding foreign exchange rate movements, consolidated sales in the quarter were higher by 10% compared to the prior year and higher by 1% year-to-date.

The Automotive Solutions segment reported sales of $64.6 million in the third quarter – an increase of $3.6 million, or 6% from the prior year quarter. Excluding foreign exchange rate movements, segment revenues were higher by $2.6 million, or 4% for the quarter. Segment sales in the quarter were primarily influenced by vehicle production volumes in North American and Europe. IHS Markit estimates volumes increased 12% in North America and declined 5% in Europe compared to the prior year quarter. Segment sales were also negatively influenced by unfavorable vehicle mix, partially offset by ongoing key program launches for new and existing products as well as certain pricing actions taken to protect margins. While industry vehicle production volumes have shown some signs of improvement, they remain below the level of consumer demand due to supply chain disruptions (including the global semiconductor shortage), broad labour availability challenges, logistical constraints and ongoing COVID lockdown measures in China. European volumes are incrementally affected by localized supply chain challenges on that continent due to the Russian invasion of Ukraine. Nonetheless, HIS Markit expects North American and European production to grow through the second half of calendar 2022, which is expected to benefit segment results. Quoting opportunities have strengthened across the segment’s various businesses, which, together with new and ongoing product launches, are expected to support continued gains in Exco’s content per vehicle.

The Casting and Extrusion segment reported sales of $64.7 million for the third quarter – an increase of $10.7 million or 20%, from the same period last year. Foreign exchange rate changes increased sales $1.5 million in the quarter. The Company’s new European facilities (Halex) contributed $9.0 million of sales in the quarter, reflecting two months of activities. Demand for our extrusion tooling (ie dies, dummy blocks, stems, etc) and associated capital equipment (die ovens, containers, etc) remained strong due to both industry growth and ongoing market share gains. Demand for extrusion tools covers many industrial sectors including building and construction, large truck, electric vehicles, and many green energy sectors, all of which are focused on reducing energy intensity and reducing emissions. In anticipation of these trends intensifying, Exco has been increasing its manufacturing footprint in local markets in recent years including the acquisition of Halex in Europe. Management also remains focused on standardizing manufacturing processes, enhancing engineering depth and centralizing support functions across its various plants. These initiatives have reduced lead times, enhanced product quality, expanded product breadth and increased capacity, all of which has supported market share gains.

In the die-cast market, which primarily serves the automotive industry, demand has remained suppressed due to lower vehicle production volumes, which in turn, is due mainly to broader supply chain constraints. These constraints have been amplified by customer inventory destocking activity in recent quarters, particularly in the large mould segment, which has faced significantly lower rebuild work than typical. Demand and order flow for new moulds, associated tooling (shot sleeves, rods, rings, tips, etc) and even rebuild work however has recently picked up as industry vehicle production recovers and new electric vehicles and more efficient internal combustion engine/ transmission platforms are launched. In addition, demand for Exco’s industry leading additive (3D printed) tooling has continued to gain significant traction as customers focus on greater efficiency as the size and complexity of die cast tooling continues to increase. Sales in the quarter were also aided by price increases, which were implemented in order to protect margins from higher input costs. With respect to quoting activity, longer lead time items continue to see elevated demand for future activity (particularly large moulds) and inventories and backlog continue to grow which is expected to bode well for sales through the remainder of fiscal 2022 and into fiscal 2023.

Consolidated net income for the third quarter was $5.6 million or basic and diluted earnings of $0.14 per share compared to $8.7 million or $0.22 per share in the same quarter last year – a decrease of net income of $3.1 million. The consolidated effective income tax rate of 24% in the current quarter increased from 12% from the prior year. The change in income tax rate in the quarter was impacted by fiscal 2021 SRED tax credits booked in the third quarter last year, nondeductible losses from our Castool Morocco facility in fiscal 2022, geographic distribution, and foreign tax rate differentials

The Automotive Solutions segment reported pretax profit of $4.8 million in the third quarter a decrease of $0.3 million from the prior year quarter. The segment’s lower pretax profit was due to unfavorable market driven product mix changes, higher raw material, logistics and labour costs, the reversal of certain bad debt accruals last year, partially offset by certain pricing actions taken. Reduced industry vehicle production continued to cause inefficiencies within our operations. While customer orders and releases stabilized compared to prior quarters, sporadic and unreliable customer releases continued to impact production, increasing overhead and direct labour costs. These factors were intensified as we retained slack labour in anticipation of higher demand in the quarters ahead. Inflationary pressure continues to be a challenge in this segment particularly on petroleum-based products (resins, plastics, rubber), energy, freight and labour. Management remains focused on improving the efficiency of its operations and reducing its overall cost structure. Pricing discipline remains a focus and actions are being taken on current programs where possible, though there is typically a lag of a few quarters before the impact is realized. As well, new program awards are priced to reflect management’s expectations for higher future costs.

The Casting and Extrusion segment reported $4.8 million of pretax profit in the third quarter – a decrease of $3.0 million from the same quarter last year. The lower pretax profit was primarily driven by reduced activity for rebuild work in the Large Mould group coupled with shipments of new moulds. New mould programs can often have low to negative margins at the onset due to front-end inefficiencies that are improved as subsequent moulds are delivered. As well, profitability was negatively impacted by raw material and labour cost inflation, unfavorable market driven product mix shifts, reduced labour availability and higher overtime costs across the three business units. Start-up losses of Castool’s plant in Morocco (which opened in November 2021), and new heat treatment operations in Newmarket also negatively impacted profitability, mainly due to non-cash depreciation of plant and equipment. Segment pre-tax profitability however benefited from contributions from the acquisition of Halex and was higher sequentially for the second consecutive quarter. New business awards across the quarter remained very strong, particularly for structural die-cast components and those for electric vehicle platforms. The segment ended the quarter with backlogs approaching historic high levels. Management remains focused on taking pricing action where possible to preserve margins, reducing its overall cost structure and improving manufacturing efficiencies. Such activities together with sales efforts are expected to improve segment profitability in future quarters.  

Consolidated EBITDA for the third quarter totaled $14.6 million compared to $15.2 million in the same quarter last year – a decrease of $0.6 million. For the quarter, EBITDA as a percentage of sales decreased to 11.3% in the current period compared to 13.2% the prior year driven by a reduction in segment margins in both the Casting & Extrusion segment (15% compared to 21%) and the Automotive Solutions segment (10% compared to 11%).

Exco generated cash from operating activities of $14.1 million during the quarter and $9.9 million of Free Cash Flow after $3.5 million in Maintenance Fixed Asset Additions. This cash flow, together with cash on hand was more than sufficient to fund fixed assets for growth initiatives of $12.0 million and $4.1 million of dividends. Exco utilized $60 million of its credit facility to fund its investment in Halex. The growth capital expenditure initiatives include: a) new Castool production facilities in Morocco and Mexico. The Moroccan facility opened in November 2021 and the Mexican facility which began construction in the second quarter. b) Investment in new heat treatment equipment in the tooling group to increase capacity, reduce emissions and enable us to in-source most of our requirements. c) Investments in the Large Mould group to upgrade its capabilities to handle moulds of extreme sizes which we expect will be increasingly demanded by most traditional and new OEMs. d) Investment in additional 3D printing machinery in our tooling group to meet strong customer demands. e) Expansion of two of our production facilities in the Automotive Solutions group to provide added capacity for awarded programs.   Exco ended the quarter with $65 million in net indebtedness. The company has $33.9 million in available liquidity under its credit facility and $26.6 million of balance sheet cash, continuing its practice of maintaining a very strong balance sheet and liquidity position.

Outlook

Despite current macro-economic challenges, including tightening monetary conditions, the overall outlook is very favorable across Exco’s segments into the medium term. Consumer demand for automotive vehicles is currently outstripping supply in most markets, which are constrained by a shortage of semiconductor chips and, to a lesser extent, other raw materials, components and availability of labour. Dealer inventory levels are near record lows, while average transaction prices for both new and used vehicles are at record highs and the average age of the broader fleet has continued to increase to an all-time high. This bodes well for higher levels of future vehicle production and the sales opportunity of Exco’s various automotive components and accessories once supply chains normalize. In addition, OEM’s are increasingly looking to the sale of higher margin accessory products as a means to enhance their own levels of profitability. Exco’s Automotive Solutions segment derives a significant amount of activity from such products and is a leader in the prototyping, development and marketing of the same. Moreover, the rapid movement towards an electrified fleet for both passenger and commercial vehicles is enticing new market entrants into the automotive market while causing traditional OEM incumbents to further differentiate their product offerings, all of which is driving above average opportunities for Exco.

With respect to Exco’s Casting and Extrusion segment, the intensifying global focus on environmental sustainability is creating significant growth drivers that are expected to persist through at least the next decade. Automotive OEMs are looking to light-weight metals such as aluminum to reduce vehicle weight and reduce carbon dioxide emissions. This trend is evident regardless of powertrain design – whether internal combustion engines, electric vehicles or hybrids. As well, a renewed focus on the efficiency of OEMs in their own manufacturing process is creating higher demand for advanced tooling that can contribute towards their profitability and sustainability goals. Certain new EV manufacturers have adopted the approach of utilizing much larger die cast machines to cast entire sub-frames of vehicles out of an aluminum based alloy rather than assemble numerous pieces of separately stamped and welded pieces of ferrous metal. Exco expects traditional OEMs will ultimately follow this trend and is positioning its operations to capitalize accordingly. Beyond the automotive industry, Exco’s extrusion tooling supports diverse end markets which are also seeing increased demand for aluminum driven by environmental trends, including energy efficient buildings, solar panels, etc.

On the cost side, inflationary pressures have intensified in recent quarters while prompt availability of various input materials, components and labour has become more challenging. We are offsetting these dynamics through various efficiency initiatives and taking pricing action where possible although there is typically several quarters of lag before the counter measures are evident.

The Russian invasion of Ukraine has added additional uncertainty to the global economy in recent months. And while Exco has essentially no direct exposure to either of these countries, Ukraine does feed into the European automotive markets and Europe has significant dependence on Russia for its energy needs.

Exco itself is also looking inwards with respect to ESG and sustainability trends to ensure its own operations are sustainable. We are investing significant capital to improve the efficiency and capacity of our own operations while lowering our own carbon footprint. In the first quarter we released our first Sustainability Report on our corporate website which is available at: www.excocorp.com/leadership/sustainability/.

Exco is currently targeting a compounded average annual growth rate (excluding acquisitions) of approximately 10% for revenues and slightly higher levels for EBITDA and Net Income through fiscal 2026, which is expected to produce an annual EPS of roughly $1.90 by the end of this timeframe. This target is expected to be achieved through the launch of new programs, general market growth, and also market share gains consistent with the Company’s operating history. Capital investments will remain elevated in the balance of the fiscal year in order to position the Company for the significant growth opportunities we see. Capital expenditures are expected to exceed $55 million for fiscal 2022.

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

Non-IFRS Measures:  In this News Release, reference may be made to EBITDA, EBITDA Margin, Pretax Profit, Free Cash Flow and Maintenance Fixed Asset Additions which are not measures of financial performance under International Financial Reporting Standards (“IFRS”). Exco calculates EBITDA as earnings before interest, taxes, depreciation, amortization and other expenses and EBITDA Margin as EBITDA divided by sales. Exco calculates Pretax Profit as segmented earnings before other income/expense, interest and taxes.  Free Cash is calculated as cash provided by operating activities less interest paid and Maintenance Fixed Asset Additions. Maintenance Fixed Asset Additions represents investment in fixed assets that are required to continue current capacity levels. EBITDA, EBITDA Margin, Pretax Profit and Free Cash Flow are used by management, from time to time, to facilitate period-to-period operating comparisons and we believe some investors and analysts use these measures as well when evaluating Exco’s financial performance. These measures, as calculated by Exco, do not have any standardized meaning prescribed by IFRS and are not necessarily comparable to similar measures presented by other issuers. 

Quarterly Conference Call – July 29, 2022 at 10:30 a.m. (Toronto time):

To access the listen only live audio webcast, please log on to www.excocorp.com, or https://edge.media-server.com/mmc/p/x9fpqsmi a few minutes before the event. Those interested in participating in the question-and-answer conference call may register at https://register.vevent.com/register/BI3526160340204f7ea2ca7e205c624f44 to receive the dial-in numbers and unique PIN to access the call. It is recommended that you join 10 minutes prior to the event start (although you may register and dial in at any time during the call). For those unable to participate on July 29, 2022, an archived version will be available on the Exco website until August 13, 2022.

  
Source:Exco Technologies Limited (TSX-XTC)
Contact:Darren Kirk, President and CEO
Telephone:(905) 477-3065 Ext. 7233
Website:https://www.excocorp.com
  

About Exco Technologies Limited:

Exco Technologies Limited is a global supplier of innovative technologies servicing the die-cast, extrusion and automotive industries.  Through our 20 strategic locations in 9 countries, we employ approximately 5,000 people and service a diverse and broad customer base.

Notice To Reader: Forward Looking Statements

This press release contains forward-looking information and forward-looking statements within the meaning of applicable securities laws. We may use words such as “anticipate”, “may”, “will”, “should”, “expect”, “believe”, “estimate”, “5-year target” and similar expressions to identify forward-looking information and statements especially with respect to growth, outlook 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, liquidity, operating efficiencies, improvements in, expansion of and/or guidance or outlook as to future revenue, sales, production sales, margin, earnings, earnings per share, including the outlook for 2026, are forward-looking statements. 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. These forward-looking statements are based on our plans, intentions or expectations which are based on, among other things, the current improving global economic recovery from the COVID-19 pandemic and containment of any future or similar outbreak of epidemic, pandemic, or contagious diseases that may emerge in the human population, which may have a material effect on how we and our customers operate our businesses and the duration and extent to which this will impact our future operating results, the impact of the Russian invasion of Ukraine on the global financial and automotive markets, including increased supply chain risks, assumptions about the number of automobiles produced in North America and Europe, production mix between passenger cars and trucks, 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 in response to rising climate risks, raw material prices, supply disruptions, economic conditions, inflation, currency fluctuations, trade restrictions, our ability to integrate acquisitions, our ability to continue increasing market share, or launch of new programs and the rate at which our current and future greenfield operations in Mexico and Morocco achieve sustained profitability. Readers are cautioned not to place undue reliance on forward-looking statements throughout this document and are also cautioned that the foregoing list of important factors is not exhaustive. 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. For a more extensive discussion of Exco’s risks and uncertainties see the ‘Risks and Uncertainties’ section in our latest Annual Report, Annual Information Form (“AIF”) and other reports and securities filings made by the Company. This information is available at www.sedar.com or www.excocorp.com.

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Exco Technologies Announces Results for Fourth Quarter and Year Ended September 30, 2021

  • Sales of $106.4 million for the quarter and $461.2 million for the year
  • EPS of $0.18 for the quarter and $0.98 for the year
  • EBITDA of $15.3 million and EBITDA margin 14.4% in the quarter
  • Free Cash Flow of $37.3 million or $0.95 per share in Fiscal 2021
  • Balance sheet in a $18.6 million net cash position

TORONTO, Dec. 01, 2021 (GLOBE NEWSWIRE) — Exco Technologies Limited (TSX-XTC, OTCQX-EXCOF) today announced results for its fourth quarter and year ended September 30, 2021. In addition, the Company announced the quarterly dividend of $0.10 per common share which will be paid on December 31, 2021 to shareholders of record on December 17, 2021. The dividend is an “eligible dividend” in accordance with the Income Tax Act of Canada.


“Exco completed the final quarter of fiscal 2021 with relatively strong results despite a very challenging environment,” said Darren Kirk, Exco’s President and CEO. “We expect to build on this momentum in the year ahead as industry conditions normalize and recent program launches are fully ramped up. Longer term, our businesses will experience a continuing tailwind from the electric vehicle revolution and worldwide movement towards reducing emissions.”

Fourth quarter consolidated sales were $106.4 million – an increase of $5.7 million or 6% from the prior year. During the quarter, exchange rate movements decreased sales by $5.0 million.

The Automotive Solutions segment experienced a 7% decrease in sales, or a reduction of $4.4 million, to $56.8 million from $61.2 million in the fourth quarter of 2020. Excluding the impact of foreign exchange, segment sales decreased $1.4 million or 2%. The sales decline was driven by materially lower vehicle production volumes in both North America and Europe due to supply chain disruptions including semiconductor chip shortages and logistical constraints. North American vehicle production was down 25% during the quarter compared to a year ago and European vehicle production was down about 30%. The segment’s very modest top line decline in the context of this environment reflects the benefits of sizeable new program launches and favorable product mix, particularly at the segment’s Polytech and Neocon operations. Looking forward, OEM vehicle production volumes are expected to increase as the semiconductor chip availability improves. Exco will benefit from this development as well as the restocking of certain accessory products and higher volumes arising from new/ recent program launches. Quoting activity remains encouraging and we see ample opportunity to maintain our longer-term trend of increasing our content per vehicle across our portfolio of businesses.

The Casting and Extrusion segment recorded sales of $49.6 million in the fourth quarter compared to $39.5 million last year – an increase of $10.1 million or 26%. Excluding the negative impact of foreign exchange movements, the segment’s sales were up 31% for the quarter. The Extrusion group experienced higher sales at all locations, reflecting pricing action, increased demand for extrusion tools across all industry segments and operational improvements that have continued to reduce lead times contributing to market share gains. The Castool group’s revenues were higher for the quarter as demand for die-cast consumable tooling and extrusion products was solid, with a slightly stronger demand for the die-cast consumable tooling solutions leading the quarter. Castool growth was driven by increasing electric vehicle production which compensated for lower overall industry vehicle production. Castool continues to invest in new equipment and advance its proprietary tooling solutions which are increasingly required by customers as their manufactured components increase in size and complexity and as they focus on improving their own productivity and efficiency. The Large Mould group sales were up 34% from the prior year quarter with a mixture of new tools, die rebuilds and solid additive sales representing key drivers of the results. New business from current and new customers was awarded in the quarter; as a result, inventories and backlog continue to grow. Looking forward, quoting activity within all groups in this segment is strong and will benefit as automotive production rebounds.

The Company’s fourth quarter consolidated net income decreased to $7.1 million or earnings of $0.18 per share compared to $10.7 million or earnings of $0.27 per share in the same quarter last year – an EPS decrease of 33%. The effective income tax rate was 27% in the current quarter compared to negative 3% in the same quarter last year. The effective tax rate in the current period reflects the impact of non-taxable expenses in foreign jurisdictions and the payment of franchise and state taxes. The tax rate in the prior year quarter reflects the reversal of $2.3 million of deferred tax liabilities from resolved tax exposures and $0.3 million of R&D tax credits net of certain foreign tax adjustments. Excluding these items, the effective tax rate was 22% in the prior year quarter.

Fourth quarter pre-tax earnings in the Automotive Solutions segment totalled $4.5 million, a decrease of $2.8 million or 38% over the same quarter last year. Included in the prior year quarter was COVID-19 wage subsidies of $1.3 million. Current period profitability was negatively impacted by lower sales volumes and higher costs associated with the semiconductor shortage, which negatively impacted our ability to manage operations efficiently. In particular, order flow across most products was erratic as OEMs constantly reshuffled their own production schedules while our labour other overhead items were geared to a higher level of sales. As well, logistical challenges created increased expedite charges in some cases, we faced raw material cost inflation and also incurred severance costs. Management is optimistic that its overall cost structure will return to relatively normal levels in future quarters as scheduling and predictability improves with strengthening volumes.

Pre-tax earnings in the Casting and Extrusion segment improved by $1.7 million or 40% over the same quarter last year to $5.9 million. Excluding $2.7 million in COVID-19 subsidies received last year, segment profitability improved by $4.4 million. The earnings improvement was mainly driven by increased contributions from the Extrusion group. This group benefited from higher volumes and prices. Direct labour as a function of sales improved and fixed overheads were better absorbed. While higher sales at the Castool and Large Mould groups also positively impacted segment profitability, this benefit was countered by rising raw material prices, cost overruns with certain programs near completion and initial expenses for Castool’s new plant in Morocco.

The Corporate segment in the fourth quarter recorded expenses of $0.7 million compared to $1.1 million last year mainly due to foreign exchange gains in the current quarter compared to losses in the prior year period, partially offset by higher compensation expenses incurred in the current quarter. As a result of the foregoing, consolidated EBITDA in the quarter was $15.3 million (14.4% of sales) compared to $15.8 million (15.7% of sales) last year.

Exco generated cash from operating activities of $7.3 million during the quarter and $3.2 million of Free Cash Flow after $4.0 million in Maintenance Fixed Asset Additions. This cash flow, together with cash on hand was more than sufficient to fund fixed assets for growth initiatives of $7.7 million and $3.8 million of dividends. For the year, Exco generated Free Cash Flow of $37.3 million and returned $15.5 million to shareholders through dividend payments. Exco ended the year with $18.6 million in net cash and $68.6 million in available liquidity, including $24.1 million of balance sheet cash, continuing its practice of maintaining a very strong balance sheet and liquidity position.

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.

Non-IFRS Measures: In this News Release, reference may be made to EBITDA, EBITDA Margin, Pretax Profit, Free Cash Flow and Maintenance Fixed Asset Additions which are not measures of financial performance under International Financial Reporting Standards (“IFRS”). Exco calculates EBITDA as earnings before interest, taxes, depreciation, amortization and other expenses and EBITDA Margin as EBITDA divided by sales. Exco calculates Pretax Profit as segmented earnings before other income/expense, interest and taxes. Free Cash is calculated as cash provided by operating activities less interest paid and Maintenance Fixed Asset Additions. Maintenance Fixed Asset Additions represents investment in fixed assets that are required to continue current capacity levels. EBITDA, EBITDA Margin, Pretax Profit and Free Cash Flow are used by management, from time to time, to facilitate period-to-period operating comparisons and we believe some investors and analysts use these measures as well when evaluating Exco’s financial performance. These measures, as calculated by Exco, do not have any standardized meaning prescribed by IFRS and are not necessarily comparable to similar measures presented by other issuers. Given the Company’s elevated planned capital spending on fixed assets for growth initiatives (including additional Greenfield locations, energy efficient heat treatment equipment and increased capacity) through the near term, the Company has modified its calculation of Free Cash Flow. This change is meant to enable investors to better gauge the amount of generated cash flow that is available for these investments as well as acquisitions and/or returns to shareholders in the form of dividends or share buyback programs.

Quarterly Conference Call: December 2, 2021 10:00 a.m.(Toronto time)

To access the live audio webcast, please log on to www.excocorp.com, or https://edge.media-server.com/mmc/p/n8go7q8w a few minutes before the event. The conference call can be accessed by dialing toll free at (866) 572-8261 or internationally at (703) 736-7448. The conference ID is 5082034.

For those unable to participate on December 2, 2021, 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 16 strategic locations in 7 countries, we employ about 4,900 people and service a diverse and broad customer base.

Notice To Reader: Forward Looking Statements

This press release contains forward-looking information and forward-looking statements within the meaning of applicable securities laws. We may use words such as “anticipate”, “may”, “will”, “should”, “expect”, “believe”, “estimate”, “5-year target” and similar expressions to identify forward-looking information and statements especially with respect to growth, outlook 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, liquidity, operating efficiencies, improvements in, expansion of and/or guidance or outlook as to future revenue, sales, production sales, margin, earnings, earnings per share, including the outlook for 2026, are forward-looking statements. 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. These forward-looking statements are based on our plans, intentions or expectations which are based on, among other things, the current improving global economic recovery from the COVID-19 pandemic and containment of any future or similar outbreak of epidemic, pandemic, or contagious diseases that may emerge in the human population, which may have a material effect on how we and our customers operate our businesses and the duration and extent to which this will impact our future operating results, assumptions about the number of automobiles produced in North America and Europe, production mix between passenger cars and trucks, 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 in response to rising climate risks, raw material prices, supply disruptions, economic conditions, inflation, currency fluctuations, trade restrictions, our ability to integrate acquisitions, our ability to continue increasing market share, or launch of new programs and the rate at which our current and future greenfield operations in Mexico and Morocco achieve sustained profitability. Readers are cautioned not to place undue reliance on forward-looking statements throughout this document and are also cautioned that the foregoing list of important factors is not exhaustive. 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. For a more extensive discussion of Exco’s risks and uncertainties see the ‘Risks and Uncertainties’ section in our latest Annual Report, Annual Information Form (“AIF”) and other reports and securities filings made by the Company. This information is available at www.sedar.com or www.excocorp.com.

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Exco Technologies Limited Announces Opening of Latest Production Facility in Morocco

TORONTO, Nov. 16, 2021 (GLOBE NEWSWIRE) — Exco Technologies Limited (TSX – XTC, OTCQX – EXCOF) today announced the opening of its latest production facility by its Castool division in Kenitra, Morocco. This 40,000 sq. ft. building represents the third Castool division facility complementing our existing operations in Uxbridge, Canada and Chon Buri, Thailand.

“We started Castool in Canada in 1986 to support our existing die casting and extrusion customers, to make our customers’ castings and profiles better and faster,” said Paul Robbins, Castool’s Vice President and General Manager. “Since then, Castool has gained acceptance globally as a preferred supplier to many of the global automotive companies, extrusion press/die cast machine manufacturers, extruders and die casters.”

This new facility will enable Castool to better serve its customers in Europe, the Middle East, and Africa. It will also provide increased capacity to meet the growing global demand for larger and more complex tooling driven by the electric vehicle revolution the worldwide movement towards reducing emissions.

“I congratulate Castool on the opening of their facility in Morocco, where I know they will have tremendous success,” said Darren Kirk, President and CEO of Exco. “This represents Exco’s 16th strategic manufacturing facility and it is also an important driver towards achieving our growth targets and advancing our ESG strategic priorities.”

Exco Technologies Limited is a global supplier of innovative technologies servicing the die-cast, extrusion and automotive industries. Through our 16 strategic locations in 7 countries, we employ approximately 4,900 people and service a diverse and broad customer base.

Source:Exco Technologies Limited (TSX-XTC)
Contact: Darren Kirk, President & Chief Executive Officer
Telephone:(905) 477-3065, Ext 7233
Website:https://www.excocorp.com 
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Exco Technologies Limited Announces Fourth Quarter Results on December 1, 2021

TORONTO, Nov. 05, 2021 (GLOBE NEWSWIRE) — Exco Technologies Limited (TSX – XTC) today announced that it will report its financial results for the fourth quarter ended September 30, 2021 after the close of business on Wednesday December 1, 2021.

A conference call to discuss those results will be held on Thursday December 2, 2021 at 10:00 a.m. (Eastern time) which can be accessed by dialling toll free at (866) 572-8261 or internationally at (703) 736-7448. The conference ID is 5082034.

To access the live audio webcast, please log on to www.excocorp.com, or https://edge.media-server.com/mmc/p/n8go7q8w a few minutes before the event.  

For those unable to participate on December 2, 2021, an archived version will be available on the Exco website. Also, a replay will be available until December 10, 2021 by dialling toll free at (855) 859-2056 or internationally at (404) 537-3406.

Exco Technologies Limited is a global supplier of innovative technologies servicing the die-cast, extrusion and automotive industries.  Through our 16 strategic locations in 7 countries, we employ approximately 4,800 people and service a diverse and broad customer base.

Source:Exco Technologies Limited (TSX-XTC)
Contact: Darren Kirk, President & Chief Executive Officer
Telephone:(905) 477-3065, Ext 7233
Website:https://www.excocorp.com 
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Quarterly Reports

3rd Quarter 2020

Unaudited Condensed Interim Report to the shareholders
for the nine months ended June 30, 2020

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news

Exco Results for Third Quarter Ended June 30, 2020

  • Sales of $71.0 million and EPS of ($0.02)
  • Adjusted EBITDA of $4.7 million and Free cash flow of $16.2 million
  • Maintained quarterly dividend of $0.095 per common share
  • Balance sheet strengthens to $23.7 million net cash position
  • Enhanced COVID-19 operational safety measures continue

TORONTO, July 29, 2020 (GLOBE NEWSWIRE) — Exco Technologies Limited (TSX-XTC) today announced results for its third quarter of fiscal 2020 ended June 30, 2020. In addition, Exco announced a quarterly dividend of $0.095 per common share which will be paid on September 30, 2020 to shareholders of record on September 16, 2020. The dividend is an “eligible dividend” in accordance with the Income Tax Act of Canada.

3rd quarter

“Exco’s diversity of operations, strong market positions of our various businesses and commitment from our dedicated employees to work safely enabled us to outperform the industry through very difficult conditions this quarter”, said Darren Kirk, Exco’s President and CEO. “We continued to generate very strong free cash flow and have furthered bolstered our net cash position, which positions us well for the recovery”, added Kirk.

In response to the global COVID-19 pandemic, Exco continues to take the necessary actions to protect the health and safety of our employees, meet the ongoing needs of our customers, minimize the adverse impact on our finances, while making the necessary investments to further strengthen our various businesses for the recovery as it takes hold.

Consolidated sales for the third quarter ended June 30, 2020 were $71.0 million compared to $119.9 million in the same quarter last year – a decrease of $49.0 million, or 41%. Year-to-date sales were $311.6 million compared to $385.5 million the prior year – a decrease of $73.9 million or 19%.

The Automotive Solutions segment reported sales of $28.2 million in the third quarter – a decrease of $42.9 million, or 60% compared to last year. Reductions in sales during the quarter were primarily driven by the virtual standstill of automotive production levels in Exco’s key markets as a result of COVID-19 response measures through much of April and May 2020. Economic activity picked up as the quarter progressed, with June segment sales showing a marked improvement over May, although at a level still well below the prior year. Year-to-date results were additionally affected by $19.8 million of revenues generated by ALC in the first quarter of fiscal 2019 before that entity was deconsolidated from Exco’s results. Excluding foreign exchange rate movements and the impact of ALC on Exco’s results in Q1 F19, segment revenues were lower by $43.6 million, or 61% during the quarter and $44.8 million, or 21% year-to-date. This compares favorably to combined overall industry vehicle production volumes in North America and Europe, which were lower by roughly 68% during the quarter and 30% year-to-date. The segment’s outperformance compared to the industry during the quarter was primarily attributable to the sale of accessory product sales to OEM’s in North America, which are more closely aligned to vehicle sales levels than production volumes. To that end, US light vehicle sales levels held up significantly better than overall production levels during the quarter, falling by approximately 33% year over year. Segment sales outperformance compared to the industry in both the quarter and year-to-date periods were also helped by a number of program launches for both new and existing products that commenced earlier in the fiscal year. Looking forward, combined OEM production levels in Europe and North America are expected to normalize at around 90% of prior year levels through the remaining two calendar quarters of 2020. However there remains significant uncertainty around these expectations due to the unknown impact of COVID-19. In the interim, Exco remains focused on its product development, sales and marketing efforts to gain market share, and ensuring it is able meet future demand, while complying with any stay-at-home orders in the regions where it operates.

The Casting and Extrusion segment reported sales of $42.8 million for the third quarter – a decrease of $6.1 million, or 13%, from the same period last year. Segment sales held up better during the quarter than general economic conditions would otherwise suggest given the long cycle and/or essential nature of much of the segment’s products, which feed into many critical industries. Within the group, sales were higher in the Large Mould group for the quarter. The programs of this group tend to be relatively long cycle and continued to advance despite the vehicle production stoppage at all OEM’s ultimately served by the group through much of April and May 2020. In addition, quoting activity remains decent with discussions ongoing with both current and new potential customers, holding promise for future demand. Extrusion group sales were lower during the quarter due to much softer overall market conditions, including in the building and construction sector, which is the largest driver of demand for extrusion tooling. Exco however believes it outperformed the industry, helped by the benefits of our multi-plant footprint and harmonized manufacturing methods at our various locations. Year-to-date group sales were affected by modestly softer industry conditions that existed prior to the emergence of COVID-19 but tempered by sales from our new Extrusion facility in Mexico, which commenced commercial production April 1, 2019. At Castool, the group’s revenues were lower as market conditions softened for both consumable and capital equipment goods in the quarter. This was evident in both the extrusion – and particularly die-cast – end markets. However, with the start-up of automotive OEM production in the months of May and June, trends within the group improved in the latter half of the quarter. Also within the segment, steel price surcharges and steel tariffs continued to reduce during the quarter. As Exco generally aims to pass such amounts on to its customers, they positively impact on revenues when higher, but have the opposite impact when lower.

Consolidated net loss for the third quarter was $0.8 million or basic and diluted loss of $0.02 per share compared to an income of $7.5 million or $0.18 earnings per share in the same quarter last year. Year-to-date, consolidated net income was $16.7 million or $0.42 per basic share compared to $19.9 million or $0.48 per basic share last year – a decrease in net income of 16%. Excluding a net expense of $6.4 million in the prior year-to-date period related to the deconsolidation of ALC, Adjusted Net Income was lower by 36%. The consolidated effective income tax rate for the current quarter was 10% compared to 20% the prior year period with the difference primarily attributable to the impact of operating losses in certain jurisdictions partially offset by gains elsewhere. Year-to-date, the consolidated effective income tax rate was 21% compared to 29% last year. The income tax rate in the prior year-to-date period was unfavorably impacted by the non-deductibility of Other Expense related to the writedown of ALC in the amount of $6.4 million and $2.1 million of operating losses at ALC. Excluding these items, the effective income tax rate for the prior year-to-date period was 22%.

The Automotive Solutions segment reported pretax losses of $3.8 million in the third quarter compared to pretax profits of $7.9 million in the same quarter last year. Year-to-date, the segment reported pretax profit of $13.7 million – a decrease of $13.2 million or 49% compared to the prior year period. For the quarter, segment profitability was negatively impacted by lost absorption of overheads and other fixed costs arising from sharply lower sales together with the continuance of labor costs for certain production workers in Mexico where there is limited ability to temporarily lay-off employees onto government support programs. Management took significant action during the quarter to minimize the negative impact on its results, including implementing work share arrangements, restraining expenses, temporarily laying off workers where possible and availing itself of certain government support programs. In addition to the above, year-to-date results were hampered by the impact of the strike at General Motors, unfavorable product mix shifts in the first quarter of fiscal 2020 and an increase in accounts receivable and other provisions in the second quarter of fiscal 2020. Year-to-date profitability however benefited from reduced bonus payments to production workers in Mexico as well as the elimination of ALC’s operations, which contributed operating losses of $2.1 million in the first quarter of fiscal 2019. To counter ongoing pricing pressures and rising input costs, management remains focused on improving the efficiency of its operations and reducing its overall cost structure. Pricing discipline also remains a focus, although there is typically limited, if any, ability to attain increased pricing for the duration of current programs, which typically range from three to five years. Pricing for new programs however embed management’s expectations for higher future costs.

The Casting and Extrusion segment reported $4.9 million of pretax profit in the third quarter – an increase of $1.1 million or 28% from the same quarter last year. Year-to-date, the segment reported pretax profit of $13.8 million – a decrease of $0.2 million, or effectively unchanged compared to the prior year period. Higher profitability during the quarter was supported by continued progress with various efficiency initiatives, a favorable mix shift towards higher margin programs in the Large Mould group, lower steel prices and receipt of R&D credits. As well, Management undertook significant action to minimize the negative impact of lower sales volumes during the quarter, including implementing work-share arrangements, restraining expenditures generally and availing government support programs, where possible.

Operating cash flow before net change in non-cash working capital totaled $5.0 million in the third quarter while lower working capital requirements due to reduced sales levels provided an additional $15.6 million of cash. Consequently, net cash provided by operating activities amounted to $20.6 million in the quarter. This cash flow was more than sufficient to fund $0.2 million of interest expense, $4.3 million of net capital expenditures and $3.8 million of common dividend payments.

As at June 30, 2020, Exco’s consolidated balance sheet was in a $23.7 million net cash position compared to $8.7 million as at September 30, 2019. Principal sources of liquidity include generated Free Cash Flow, $47.4 million of balance sheet cash and $27.0 million of unused availability under its $50 million committed credit facility, which matures February 2023. Subsequent to quarter end, the Company repaid $20 million of its credit facility from its cash on hand. Pursuant to the terms of the credit facility, Exco is required to maintain compliance with certain financial covenants, which the Company was in compliance with as at June 30, 2020.

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

1 Non-IFRS Measures: In this News Release, reference may be made to Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted EPS, Adjusted Net Income, Adjusted Pretax Profit and Free Cash Flow which are not measures of financial performance under International Financial Reporting Standards (“IFRS”). Exco calculates Adjusted EBITDA as earnings before other income/expense, interest, taxes, depreciation and amortization and Adjusted EBITDA Margin as Adjusted EBITDA divided by sales. Exco calculates adjusted EPS as earnings before other income/expense divided by the weighted average number of shares. Adjusted Net Income is calculated as net income before other income/expense, and Adjusted Pretax Profit as segmented earnings before other income/expense, interest and taxes. Free Cash Flow is calculated as cash provided by operating activities less interest paid less investment in fixed assets net of proceeds of disposal. Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted EPS, pretax profit and Free Cash Flow are used by management, from time to time, to facilitate period-to-period operating comparisons and we believe some investors and analysts use these measures as well when evaluating Exco’s financial performance. These measures, as calculated by Exco, do not have any standardized meaning prescribed by IFRS and are not necessarily comparable to similar measures presented by other issuers. Refer to the table in the Management Discussion and Analysis for a reconciliation of these non-IFRS Measures.

Quarterly Conference Call – July 30, 2020 at 10:00 a.m. (Toronto time):

To access the live audio webcast, please log on to www.excocorp.com, or https://edge.media-server.com/mmc/p/e3s8amz8 a few minutes before the event. The conference call can be accessed by dialing toll free at (855) 859-2056 or internationally at (703) 736-7448. The conference ID is 9182891. 

For those unable to participate on July 30, 2020, an archived version will be available on the Exco website.

Source:Exco Technologies Limited (TSX-XTC)
Contact:Darren Kirk, President & Chief Executive Officer
Telephone:(905) 477-3065, Ext 7233
Website:https://www.excocorp.com

About Exco Technologies Limited:

Exco Technologies Limited is a global supplier of innovative technologies servicing the die-cast, extrusion and automotive industries. Through our 15 strategic locations in 7 countries, we employ about 5,000 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. This press release may contain 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 start-up business units, contribution of awarded programs yet to be launched, margin performance, financial performance of acquisitions, liquidity and operating efficiencies are forward-looking statements. Readers are cautioned not to place undue reliance on forward-looking statements throughout this document and are also cautioned that the foregoing list of important factors is not exhaustive. These forward-looking statements are based on our plans, intentions or expectations which are based on, among other things, the current uncertain global economic impact of the COVID-19 pandemic or similar outbreak of epidemic, pandemic, or contagious diseases that may emerge in the human population, which may have a material effect on how we and our customers operate our businesses and the duration and extent to which this will impact our future operating results, assumptions about the number of automobiles produced in North America and Europe, production mix between passenger cars and trucks, 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 in response to rising climate risks, raw material prices, economic conditions, currency fluctuations, trade restrictions, our ability to close or otherwise dispose of unprofitable operations in a timely manner, our ability to integrate acquisitions and the rate at which our operations in Brazil, and Mexico achieve sustained 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. 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. For a more extensive discussion of Exco’s risks and uncertainties see the ‘Risks and Uncertainties’ section in our latest Annual Report, Annual Information Form (“AIF”) and other reports and securities filings made by the Company. This information is available at www.sedar.com or www.excocorp.com

Categories
news

Exco Technologies Limited Announces Third Quarter Results on July 29, 2020

TORONTO, July 06, 2020 (GLOBE NEWSWIRE) — Exco Technologies Limited (TSX – XTC) today announced that it will report its financial results for the third quarter ended June 30, 2020 after the close of business on Wednesday July 29, 2020.

A conference call to discuss those results will be held on Thursday, July 30, 2020 at 10:00 a.m. (Eastern time) which can be accessed by dialling toll free at (866) 572-8261 or internationally at (703) 736-7448. The conference ID is 9182891.

To access the live audio webcast, please log on to www.excocorp.com, or https://edge.media-server.com/mmc/p/e3s8amz8 a few minutes before the event.

For those unable to participate on July 30, 2020, an archived version will be available until August 7, 2020 on the Exco website or by dialling toll free at (855) 859-2056 or internationally at (404) 537-3406. The conference ID is 9182891.

Exco Technologies Limited is a global supplier of innovative technologies servicing the die-cast, extrusion and automotive industries. Through our 15 strategic locations in 7 countries, we employ approximately 5,400 people and service a diverse and broad customer base.

Source:Exco Technologies Limited (TSX-XTC)
Contact:Darren Kirk, President & Chief Executive Officer
Telephone:(905) 477-3065, Ext 7233
Website:https://www.excocorp.com