• 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 /PRNewswire/ - 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.

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