Exco Technologies Limited - Third Quarter Ended June 30, 2011 Results
- Sales increased 14%
- Profits increased 10%
- Cash on hand $11.3 million
- No bank debt
TORONTO, July 27, 2011 /PRNewswire/ - Exco Technologies Limited (TSX-XTC) today announced results for its third quarter ended June 30, 2011.
Three Months ended
Nine Months ended
|($000s, except per share amounts)|
|Basic earnings per share||$0.10||$0.09||$0.31||$0.19|
|Diluted earnings per share||$0.10||$0.09||$0.31||$0.19|
|Common shares outstanding||40,961,823||40,911,323||40,961,823||40,911,323|
Consolidated sales for the third quarter ended June 30, 2011 were $48.8 million - an increase of $6.1 million or over 14% compared to last year. Year-to-date sales were $147.3 million - an increase of $27.7 million or over 23% compared to last year. Strong underlying demand for our products continues to fuel sales growth and mitigate the adverse impact of a climbing Canadian dollar.
The Casting and Extrusion segment reported sales of $31.4 million - an increase of $4.8 million or over 18% compared to the same quarter last year. Year-to-date, the segment reported sales of $92.6 million - an increase of $17.7 million or almost 24%. Within this segment, sales in the large mould group increased by 55% in the current quarter and 61% year-to-date compared to last year reflecting strong shipments of powertrain tooling moulds. Sales at Castool increased both in the current quarter and year-to-date by 26% and 31% reflecting strong demand for that division's die cast and extrusion consumable components and the inclusion this year of Allper's sales. In the extrusion tooling businesses, sales were down from last year by 7% in the current quarter and 1% year-to-date. Die production volumes, while growing, are impacted by soft economic conditions in North America and currency fluctuations, the latter of which reduced sales.
Sales in the Automotive Solutions segment in the third quarter were $17.4 million - an increase of $1.3 million or almost 8% from the same quarter last year. Year-to-date, the segment reported sales of $54.6 - an increase of $10 million or over 22% compared to last year. Sales volumes at Polytech and Polydesign have improved significantly both in the current quarter (25% and 32% respectively) and year-to-date (22% and 52% respectively). This reflects the recovering of light vehicle production levels in both North America and, to a lesser extent, in Europe and in the case of Polydesign the launch of significant new interior trim and instrument panel programs. Sales at Neocon decreased in the current quarter by 19% compared to last year as the impact of the Tsunami was felt and the sales backlog last year which temporarily increased sales was cleared. Year-to-date sales at this division also decreased by 7% compared to last year for the same reasons.
Consolidated net income for the third quarter was $3.9 million or $0.10 per share compared to consolidated net income of $3.5 million or $0.09 per share in the same quarter last year. Year-to-date, consolidated net income was $12.5 million or $0.31 per share compared to consolidated net income of $7.6 million or $0.19 per share last year. Consolidated net income in the third quarter last year benefited from an unusually low tax provision of 7.4% reflecting non-recurring US federal tax recoveries for prior years. The tax provision in the quarter this year at 28.7% is more reflective of Exco's typical rate.
The improvement in the current year's earnings was led by the Automotive Solutions segment with segment pretax income in the third quarter of $2.7 million compared to segment pretax income of $1 million in the same quarter last year. Year-to-date, the segment also reported higher pretax income of $8.9 million compared to $3.3 million last year. The Casting and Extrusion segment reported higher segment pretax income in the third quarter of $3.7 million compared to segment pretax income of $3.4 million in the same quarter last year. Year-to-date, the segment also reported higher pretax income of $11.7 million compared to $8.9 million last year.
Consolidated gross margin in the third quarter remained relatively constant at 26.7% compared to 27.6% in the same quarter last year. Year-to-date gross margin also remained constant at 27.4% compared to 27.1% last year. The Company continues to have a strong cash position at quarter end of $11.3 million (which is expected to increase by approximately $3 million before fiscal year-end from the sale of the AluDie production facility) and no bank debt despite having funded significantly higher working capital necessary to support the strong sales growth over the last several quarters.
The overall outlook for Exco over the next several quarters has not materially changed from last quarter. The two major trends of strong light vehicle production volumes and steady introduction of new or refreshed vehicles and powertrain systems by virtually all OEMs remain intact. These trends continue to benefit our components businesses, Castool and our large mould businesses. Our large mould business in particular is experiencing strong demand from its die cast customers who are both rolling out next generation powertrain architecture and experiencing high production requirements in the aftermath of the Tsunami disruption. With mould demand in many cases recovering faster than capacity the emphasis is increasingly on managing WIP inventory and meeting tight delivery dates. The business impacts of the Tsunami are largely over and any further production and supply disruptions in the vehicle production chain are not expected to materially affect Exco in the coming quarters.
Stubbornly high oil prices and the Canadian dollar's new plateau beyond US dollar parity continue to keep pressure on our raw material costs, in the former case, and revenue, in the latter case. Exco earnings have adjusted to this reality, although continuous efforts to mitigate the impact of these factors will continue. Developing lower cost petroleum based raw material, raising prices where necessary to recover costs, moving production to low cost countries and generally improving operating efficiencies in all of our production facilities are but a few of the measures constantly under consideration.
(For further information please refer to the Company's Third 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 10 strategic locations, we employ 1,994 people and service a diverse and broad customer base.
Management will hold a conference call to discuss the third quarter results on Thursday July 28, 2011 at 10:00 am (Toronto Time). The local dial in number for the call is (647) 427-7450 for local (Toronto) calls or toll free 1-888-231-8191. To access the live audio webcast, please log on to www.excocorp.com or directly to the webcast at http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=3595020 a few minutes before the event. Real Player is required for access. For those unable to participate on July 28, 2011, 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 consolidated and operational sales levels and earnings and the future cash flow of the Company. 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. 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 2010 Annual Report, in our 2010 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 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