Fourth Quarter ended September 30, 2007 and Quarterly Dividend Declared



    TORONTO, Nov. 22 /CNW/ - Exco Technologies Limited (TSX-XTC) today
announced results for its fourth quarter ended September 30, 2007. In
addition, the Company announced that a quarterly cash dividend of $0.015 per
share will be paid December 28, 2007 to shareholders of record on December 14,
2007. The dividend is an "eligible dividend" in accordance with the Income Tax
Act of Canada. During the quarter Exco sold its Techmire division in an all
cash transaction. Accordingly, the financial results for 2007 and 2006 have
been restated to reflect Techmire as a discontinued operation.

    
    -------------------------------------------------------------------------
                                     12 Months Ended          3 Months ended
                                        September 30            September 30
                                    2007        2006        2007        2006
                              ----------- ----------- ----------- -----------
    Sales                       $201,759    $199,271     $50,485     $51,411
    Net income (loss) from
     continuing operations        $5,794      $3,311       ($752)     $4,035
    Net loss from
     discontinued operations     ($2,732)    ($3,927)    ($1,321)      ($894)
    Net income (loss)             $3,062       ($616)    ($2,073)     $3,141
    Diluted earnings (loss)
     per share from
     continuing operations         $0.14       $0.08      ($0.02)      $0.10
    Diluted loss per share
     from discontinued
     operations                   ($0.07)     ($0.09)     ($0.03)     ($0.02)
    Diluted earnings (loss)
     per share                     $0.07      ($0.01)     ($0.05)      $0.08
    Common shares
     outstanding              41,478,476  41,563,176  41,478,476  41,563,176
    -------------------------------------------------------------------------
    

    In the fourth quarter sales of $50.5 million were down over last year by
almost 2%. The Canadian dollar achieved parity with the US dollar in the
quarter, strengthening on average by 8 cents over last year. Annual sales of
$201.8 million were up by slightly more than one percent over the prior year.
This increase includes the impact of a 3 cent strengthening of the Canadian
dollar during the year, which lowered sales this year by $3.6 million or 1.8%.
About 66% of sales were denominated in US dollars.
    While the strong Canadian dollar has unquestionably hindered our top line
performance, weakness in the sale of large moulds during the fourth quarter
was a more important factor. Large mould sales were down $4.9 million compared
to last year. This offset an increase of almost $2 million in sales at the
other operations in the Casting and Extrusion segment and also offset the
increase of $1.5 million in sales in the Automotive Solutions segment. Sale of
large moulds will improve as deliveries of our order backlog announced in June
begin to take place throughout this year.
    Consolidated net income from continuing operations increased 38% to
$5.8 million or $0.14 per share fully diluted compared to $3.3 million or
$0.08 per share in fiscal 2006. Excluding the impact of last year's goodwill
impairment charge for Techmire, which reduced fiscal 2006 operating earnings
by $8.3 million, operating earnings have declined by 41%. The Company reported
a fourth quarter net loss from continuing operations of $752 thousand. This
decrease includes a non deductible goodwill charge of $1.1 million taken in
the fourth quarter to reflect impairment at our Neocon USA operation which has
been struggling with building a solid revenue base as customers delay and
change product design and production schedules. The Company also recorded a
pre tax charge of $2 million in the quarter for the estimated cost of
discontinuing the operation of an aircraft which has long serviced our large
mould and extrusion die customers. This charge accounts for the increase in
SG&A in the quarter of $1.9 million. Exco's earnings were also eroded in the
quarter by severance costs related to staff reductions in our Canadian
operations which increased Cost of Goods Sold by about $400 thousand. Further
contributing to this quarterly loss is a tax provision of $1.4 million. Two
factors account for such a high tax provision. Techmire's classification as a
discontinued operation has caused tax deductions flowing from its operating
losses to be allocated against losses from discontinued operations even though
these tax deductions are still available to the Company in future years. The
amount so classified is $685 thousand. The other factor is the non
deductibility of the $1.1 million goodwill charge which accounts for another
$375 thousand.
    Without these items the Company believes that its earnings in the fourth
quarter would have been generally in line with last year. The Company also
believes that these results show its determination to make difficult decisions
in order to adapt to the changing business environment. The sale of Techmire
will eliminate future losses, which in the past have been as high as
$5 million per year, and materially improve our foreign exchange exposure. The
decision to discontinue operation of the aircraft is expected to permanently
reduce SG&A by $1 million per year. Our core businesses continue to perform
well with an improving outlook in our Automotive Solutions segment. Our large
mould business is leading the way in the Casting and Extrusion segment with a
swelling order book which will see deliveries improving in fiscal 2008.
    On June 4 we announced orders for large mould tooling that were expected
to yield $75 million in sales over the upcoming five years. These orders are
priced competitively at current exchange rates and deliveries are expected to
commence in the 2008 fiscal year. This order book will much improve the poor
performance of the large mould businesses in fiscal 2007 as the increased
business will materially improve capacity utilization and overhead absorption.
    Our working capital and cash flow remains strong and, with no net bank
debt, our balance sheet continues to allow us to maximize independence and
flexibility as we make the difficult decisions necessary to prosper in the
future.

    Exco Technologies Limited is a global supplier of innovative technologies
servicing the die-cast, extrusion and automotive industries. Through our 11
strategic locations, we employ 2,100 people and service a diverse and broad
customer base.

    Management will hold a conference call to discuss the fourth quarter
results on Friday November 23, 2007 at 11:00 am (EST). The local dial in
number for the call is (416) 644-3414 or toll free 1-800-733-7571. To access
the live audio webcast, please log on to www.excocorp.com or www.q1234.com a
few minutes before the event. Real Player is required for access. For those
unable to participate in the conference call, 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. 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 include, among other
things: industry cyclicality; global economic conditions, causing decreases in
automobile production volumes and demand for capital goods; changing demand
for specific models or products; price reduction pressures; pressure to absorb
certain fixed costs; dependence on major customers and changes in such
customers' financial capabilities; technological changes; compliance with
various laws; obtaining necessary permits and consents; fluctuations in
currency exchange and interest rates; employee work stoppages; dependence on
key employees; the competitive nature of the automotive and capital goods
industries, including competition with suppliers operating in low cost
countries; product supply and demand; the conduct of business in foreign
countries; and other risks, uncertainties and assumptions as described in the
Company's Management's Discussion and Analysis included in our 2006 Annual
Report, in our 2006 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.

    NOTICE TO READER

    The attached consolidated financial statements have been prepared by
management of the Company. The consolidated financial statements for the
twelve-month periods ended September 30, 2007 and 2006 have not been reviewed
by the auditors of the Company.



    
    EXCO TECHNOLOGIES LIMITED
    INTERIM CONSOLIDATED BALANCE SHEETS
    (Unaudited)
    ($ in thousands)

    -------------------------------------------------------------------------
                                                        As at          As at
                                                    September      September
                                                     30, 2007       30, 2006
    -------------------------------------------------------------------------
                                                                  Restated -
                                                               Notes 1 and 7
    ASSETS
    Current
      Cash                                             $5,677         $2,470
      Accounts receivable                              30,288         39,083
      Inventories                                      29,296         29,336
      Prepaid expenses and deposits                     2,429          2,661
      Assets held for sale (note 7)                     5,568              -
      Discontinued operations (note 7)                  1,349          7,450
    -------------------------------------------------------------------------
    Total Current Assets                               74,607         81,000

      Fixed assets                                     73,380         72,636
      Discontinued operations (note 7)                      -          9,961
      Goodwill (note 5)                                33,672         34,765
      Future tax assets                                 2,407          3,031
    -------------------------------------------------------------------------
                                                     $184,066       $201,393
    -------------------------------------------------------------------------

    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current
      Bank indebtedness                                $1,112         $8,828
      Accounts payable and accrued liabilities         25,216         27,903
      Income taxes payable                                840          1,228
      Customer advance payments                         1,377          1,586
      Current portion of long-term debt                    85            325
      Discontinued operations (note 7)                    693          2,339
    -------------------------------------------------------------------------
    Total Current Liabilities                          29,323         42,209
    -------------------------------------------------------------------------

      Long-term debt                                        -             92
      Future tax liabilities                            8,475          8,436
    -------------------------------------------------------------------------
    Total Liabilities                                  37,798         50,737
    -------------------------------------------------------------------------

    Shareholders' Equity
      Share capital (note 2)                           36,142         35,921
      Contributed surplus (note 2)                      2,364          1,916
      Retained earnings                               128,000        127,529
      Accumulated other comprehensive
       loss (note 1)                                  (20,238)       (14,710)
    -------------------------------------------------------------------------
    Total shareholders' equity                        146,268        150,656
    -------------------------------------------------------------------------
                                                     $184,066       $201,393
    -------------------------------------------------------------------------

    See accompanying notes



    EXCO TECHNOLOGIES LIMITED
    INTERIM CONSOLIDATED STATEMENTS OF INCOME
    AND RETAINED EARNINGS
    (Unaudited)
    ($ in thousands except
    per share amounts)

                                      3 Months ended         12 Months ended
                                        September 30            September 30
    -------------------------------------------------------------------------
                                    2007        2006        2007        2006
    -------------------------------------------------------------------------
                                          Restated -              Restated -
                                         Notes 1 & 7             Notes 1 & 7

    Sales                        $50,485     $51,411    $201,759    $199,271
    -------------------------------------------------------------------------
    Cost of sales and
     operating expenses before
     the following (note 4)       37,430      36,710     151,997     143,111
    Selling, general and
     administrative (note 2)       9,128       7,225      28,835      28,153
    Depreciation and
     amortization                  2,283       2,326       9,801      10,057
    Goodwill impairment
     charge (note 5)               1,093           -       1,093       8,345
    Gain on sale of fixed
     assets                         (132)          -        (522)          -
    Interest expense (revenue)        (5)        174         219         740
    -------------------------------------------------------------------------
                                  49,797      46,435     191,423     190,406
    -------------------------------------------------------------------------

    Income from continuing
     operations before
     income taxes                    688       4,976      10,336       8,865
    Provision for income taxes     1,440         941       4,542       5,554
    -------------------------------------------------------------------------

    Net income (loss) from
     continuing operations          (752)      4,035       5,794       3,311
    Net income (loss) from
     discontinued operations,
     net of taxes (note 7)        (1,321)       (894)     (2,732)     (3,927)
    -------------------------------------------------------------------------
    Net income (loss)
     for the period               (2,073)      3,141       3,062        (616)
    -------------------------------------------------------------------------

    Other comprehensive loss
     (note 1)
    Unrealized loss on foreign
     currency translation of
     self-sustaining operations   (2,881)        (38)     (5,528)     (1,490)
    -------------------------------------------------------------------------
    Comprehensive income (loss)  ($4,954)     $3,103     ($2,466)    ($2,106)
    -------------------------------------------------------------------------

    Earnings (loss) per common
     share

      Basic and diluted from
       continuing operations      ($0.02)      $0.10       $0.14       $0.08
      Basic and diluted from
       discontinued operations    ($0.03)     ($0.02)     ($0.07)     ($0.09)

      Basic and diluted
       earnings (loss)            ($0.05)      $0.08       $0.07      ($0.01)

    -------------------------------------------------------------------------
    See accompanying notes



    EXCO TECHNOLOGIES LIMITED
    INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
    (Unaudited)
    ($ in thousands)

                                      3 Months ended         12 Months ended
                                        September 30            September 30
    -------------------------------------------------------------------------
                                    2007        2006        2007        2006
    -------------------------------------------------------------------------
                                          Restated -              Restated -
                                         Notes 1 & 7             Notes 1 & 7
    OPERATING ACTIVITIES:
    Net income (loss) for
     the period                    ($752)     $4,035      $5,794      $3,311
    Add (deduct) items not
     involving cash flows:
      Goodwill impairment
       charge                      1,093           -       1,093       8,345
      Depreciation and
       amortization                2,283       2,326       9,801      10,057
      Future income taxes            186         256         707         414
      Stock-based compensation
       (note 2)                      148          97         597         517
      Loss (gain) on sale
       of fixed assets              (132)         29        (522)        (63)
      Loss on financial
       instrument valuation
       (note 3)                      271           -         228           -
    -------------------------------------------------------------------------
                                   3,097       6,743      17,698      22,581
    Net change in non-cash
     working capital balances
     related to continuing
     operations                      656       4,729       1,857         707
    -------------------------------------------------------------------------
    Cash provided by operating
     activities of continuing
     operations                    3,753      11,472      19,555      23,288
    -------------------------------------------------------------------------
    FINANCING ACTIVITIES:
      Increase (decrease) in
       bank indebtedness          (2,484)     (7,312)     (6,936)     (8,618)
      Decrease in long-term
       debt                          (31)        (31)       (332)       (333)
      Dividends                     (622)       (520)     (2,486)     (2,080)
      Repurchase of share
       capital (note 2)                -           -        (613)       (705)
      Issue of share
       capital (note 2)              115         141         277         321
    -------------------------------------------------------------------------
      Cash used in financing
       activities of
       continuing operations      (3,022)     (7,722)    (10,090)    (11,415)
    -------------------------------------------------------------------------
    INVESTING ACTIVITIES:
      Investment in fixed
       assets                     (2,330)     (2,728)    (13,959)    (10,270)
      Proceeds on sale of
       fixed assets                  161         249       2,567         496
    -------------------------------------------------------------------------
      Cash used in investing
       activities of
       continuing operations      (2,169)     (2,479)    (11,392)     (9,774)
    -------------------------------------------------------------------------
    CASH FLOWS FROM
     DISCONTINUED OPERATION
    Net cash provided by
     (used in) operating
     activities (note 7)           3,189         (42)      3,007      (2,105)
    Net cash provided by
     (used in) investing
     activities (note 7)           2,317        (522)      2,317        (522)
    -------------------------------------------------------------------------
    Net cash provided by
     (used in) discontinued
     operations                    5,506        (564)      5,324      (2,627)
    -------------------------------------------------------------------------

    Effect of exchange rate
     changes on cash                (111)          -        (190)       (160)

    Net (decrease) increase
     in cash during period         3,957         707       3,207        (688)
    Cash, beginning of period      1,720       1,763       2,470       3,158
    -------------------------------------------------------------------------
    Cash, end of period           $5,677      $2,470      $5,677      $2,470
    -------------------------------------------------------------------------

    See accompanying notes



    EXCO TECHNOLOGIES LIMITED
    CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
    (Unaudited)
    ($ in thousands)

    -------------------------------------------------------------------------
                                             Accumulated
                                                   other
                                                  compre-    Total     Total
                              Contri-            hensive     share    compre-
                     Share     buted  Retained    income   holders'  hensive
                   capital   surplus  earnings     (loss)   equity    income
    -------------------------------------------------------------------------
                                               (Restated
                                                  note 1)
    Balance,
     October 1,
     2005          $35,758    $1,459  $130,772  ($13,220) $154,769   $     -
    Net loss for
     the year            -         -      (616)        -      (616)
    Dividends            -         -    (2,080)        -    (2,080)
    Stock option
     expense             -       457         -         -       457
    Repurchase of
     share capital    (158)        -      (547)        -      (705)
    Issuance of
     share capital     321         -         -         -       321
    Unrealized
     loss on
     translation
     of self-
     sustaining
     operations          -         -         -    (1,490)   (1,490)
    -------------------------------------------------------------------------
    Balance,
     September 30,
     2006           35,921     1,916   127,529    (14,710) 150,656        -
    Change in
     accounting
     policy (note 1)     -         -       373          -      373        -
    -------------------------------------------------------------------------
    Balance,
     October 1,
     2006           35,921     1,916   127,902   (14,710)  151,029
    Net income
     for the
     quarter             -         -     1,108         -     1,108     1,108
    Dividends            -         -      (622)        -      (622)        -
    Stock option
     expense             -       128         -         -       128         -
    Repurchase of
     share capital    (113)        -      (404)        -      (517)        -
    Unrealized
     gain on
     translation
     of self-
     sustaining
     operations          -         -         -     3,362     3,362     3,362
    Balance,
     December 31,
     2006           35,808     2,044   127,984   (11,348)  154,488     4,470
    -------------------------------------------------------------------------
    Net income for
     the quarter         -         -     1,859         -     1,859     1,859
    Dividends            -         -      (621)        -      (621)        -
    Stock option
     expense             -       135         -         -       135         -
    Repurchase
     of share
     capital           (22)        -       (74)        -       (96)        -
    Unrealized
     loss on
     translation
     of self-
     sustaining
     operations                                   (1,036)   (1,036)   (1,036)
    Balance,
     March 31,
     2007           35,786     2,179   129,148   (12,384)  154,729     5,293
    -------------------------------------------------------------------------
    Net income
     for the
     quarter             -         -     2,168         -     2,168     2,168
    Dividends            -         -      (621)        -      (621)        -
    Stock option
     expense             -       135         -         -       135         -
    Repurchase of
     share capital       -         -         -         -         -         -
    Issuance of
     share capital     208       (46)        -         -       162         -
    Unrealized
     loss on
     translation
     of self-
     sustaining
     operations          -         -         -    (4,973)   (4,973)   (4,973)
    Balance,
     June 30,
     2007           35,994     2,268   130,695   (17,357)  151,600     2,488
    -------------------------------------------------------------------------
    Net income for
     the quarter         -         -    (2,073)             (2,073)   (2,073)
    Dividends            -         -      (622)        -      (622)        -
    Stock option
     expense             -       129         -         -       129         -
    Repurchase of
     share capital       -         -         -         -         -         -
    Issuance of
     share capital     148       (33)        -         -       115         -
    Unrealized
     loss on
     translation
     of self-
     sustaining
     operations          -         -         -    (2,881)   (2,881)   (2,881)
    -------------------------------------------------------------------------
    Balance,
     September 30,
     2007           36,142     2,364   128,000   (20,238)  146,268    (2,466)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    See accompanying notes



    1.  ACCOUNTING POLICIES

    Basis of presentation

    These unaudited interim consolidated financial statements of
    Exco Technologies Limited (the "Company") have been prepared in
    accordance with Canadian generally accepted accounting principles, except
    that certain disclosures required for annual financial statements have
    not been included. Accordingly, the unaudited interim consolidated
    financial statements should be read in conjunction with the Company's
    annual consolidated financial statements included in the 2006 Annual
    Report. The unaudited interim consolidated financial statements have been
    prepared on a basis that is consistent with the accounting policies set
    out in the Company's annual consolidated financial statements, except for
    the accounting policy changes described below.

    Accounting policy changes

    Effective October 1, 2006, the Company implemented the new CICA
    accounting sections: 3855 (Financial Instruments - Recognition and
    Measurement), 3861 (Financial Instruments - Disclosure and Presentation),
    3865 (Hedges), and 1530 (Comprehensive Income). These new accounting
    policy changes have been implemented prospectively with no restatement of
    comparative financial statements, except as noted below.

    The purpose of the Company's foreign currency contracts is to mitigate
    its exposure to foreign exchange fluctuations on its foreign revenues and
    expenses. The Company forecasts cash flows to determine the level of
    contracts required. The Company does not hold or issue derivative
    financial instruments for trading or speculative purposes and it has
    chosen to not designate them as hedges. Therefore, as required under
    Section 3865, these contracts must be designated as "held for trading" on
    the balance sheets and fair valued each quarter. The resulting gain or
    loss on the valuation of these financial instruments is recognized in the
    statements of earnings. As a result of this change, on October, 1, 2006
    the Company recorded an other asset of $373, included in prepaid expenses
    and other assets in the accompanying balance sheets, to reflect the
    estimated fair value of its foreign exchange contracts and a
    corresponding credit to opening retained earnings.

    Comprehensive income includes net income and other comprehensive income.
    Comprehensive income is defined as the change in equity (net assets) of a
    company during the period from transactions and other events and
    circumstances from non-owner sources. It includes all changes in equity
    during the period except those resulting from investments by owners and
    distributions to owners. Due to the Company's decision to not implement
    hedge accounting for its foreign currency contracts, the only item
    included in other comprehensive income is the foreign currency
    translation of self-sustaining foreign operations. As a result, the
    previously recorded currency translation account on the consolidated
    balance sheets' shareholders' equity section has been eliminated and
    included as "accumulative other comprehensive income" in shareholders'
    equity. Furthermore, the gain (or loss) from translating the Company's
    self-sustaining foreign operations is now recorded as other comprehensive
    income. Prior years' financial statements have been restated to reflect
    this change. The Company's earnings per share presented on the
    consolidated statements of earnings is based upon its net income and not
    comprehensive income.

    2.  SHARE CAPITAL

    Authorized

    The Company's authorized share capital consists of an unlimited number of
    common shares, an unlimited number of non-voting preference shares
    issuable in one or more series and 275 special shares.

    Issued

    The Company has not issued any non-voting preference shares or special
    shares. Changes to the issued common shares are shown in the following
    table:

                                                        Common Shares
    -------------------------------------------------------------------------

                                             Number of shares   Stated value
    -------------------------------------------------------------------------
    Issued and outstanding at
     September 30, 2006                            41,563,176        $35,921
      Purchased and cancelled pursuant to
       normal course issuer bid                      (131,400)          (113)
    -------------------------------------------------------------------------
    Issued and outstanding at
     December 31, 2006                             41,431,776         35,808
      Purchased and cancelled pursuant to
       normal course issuer bid                       (25,300)           (22)
    -------------------------------------------------------------------------
    Issued and outstanding at March 31, 2007       41,406,476         35,786
      Issued for cash under Stock Option Plan          42,000            162
      Contributed surplus on stock options
       exercised                                            -             46
    -------------------------------------------------------------------------
    Issued and outstanding at June 30, 2007        41,448,476        $35,994
    -------------------------------------------------------------------------
      Issued for cash under Stock Option Plan          30,000            115
      Contributed surplus on stock options
       exercised                                            -             33
    -------------------------------------------------------------------------
    Issued and outstanding at September 30, 2007   41,478,476        $36,142
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Cash dividend

    During the period ended September 30, 2007, the Company paid cash
    dividends as outlined in the table below. The dividend rate per quarter
    was $0.015 per common share.

                                                  Fiscal 2007    Fiscal 2006
    -------------------------------------------------------------------------

    Dec-31                                               $622           $519
    Mar-31                                                621            521
    Jun-30                                                621            520
    Sep-30                                                622            520
    -------------------------------------------------------------------------
    Total dividends paid                               $2,486         $2,080
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Stock option plan

    The Company has a stock option plan under which common shares may be
    acquired by employees and officers of the Company. The following is a
    continuity schedule of options outstanding (number of options in the
    table below is expressed in whole numbers and has not been rounded to the
    nearest thousand):


                     Fiscal 2007                     Fiscal 2006
            -----------------------------------------------------------------

             Options outstanding              Options outstanding
            ---------------------            ---------------------
                        Weighted                        Weighted
                Number   average                Number   average
                    of  exercise      Options       of  exercise      Options
               options     price  exercisable  options     price  exercisable
    -------------------------------------------------------------------------

    Opening
     balance   2,302,056   $4.56   1,706,227   2,282,454   $4.46   1,597,603
    Granted      250,481   $4.00           -     201,890   $4.00           -
    Exercised          -       -           -     (10,000)  $3.00     (10,000)
    Vested             -       -           -           -       -     219,312
    Cancelled     (5,688)  $3.52      (5,688)         (2)  $3.00          (2)
    -------------------------------------------------------------------------

    Balance,
     Dec. 31   2,546,849   $4.50   1,700,539   2,474,342   $4.49   1,806,913
    Granted            -       -           -           -       -           -
    Exercised          -       -           -     (49,000)  $3.02     (49,000)
    Vested             -       -     233,848           -       -      47,400
    Cancelled          -       -           -           -       -           -
    -------------------------------------------------------------------------

    Balance,
     Mar. 31   2,546,849   $4.38   1,934,387   2,425,342   $4.52   1,805,313
    Granted            -       -           -           -       -           -
    Exercised    (42,000)  $3.85     (42,000)          -       -           -
    Vested             -       -           -           -       -       4,000
    Cancelled    (49,000)  $5.66     (30,000)          -       -           -
    -------------------------------------------------------------------------

    Balance,
     Jun. 30   2,455,849   $4.37   1,862,387   2,425,342   $4.52   1,809,313
    Granted            -       -           -           -       -           -
    Exercised    (30,000)  $3.85     (30,000)    (50,000)  $2.82     (50,000)
    Vested             -       -           -           -       -           -
    Cancelled    (15,000)  $3.85     (15,000)    (73,286)  $4.68     (53,086)
    -------------------------------------------------------------------------

    Balance,
     Sep. 30   2,410,849   $4.50   1,817,387   2,302,056   $4.56   1,706,227
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Employee stock purchase plan

    The Company has an employee stock purchase plan (ESPP). The ESPP allows
    employees to purchase shares annually through payroll deductions at a
    predetermined price. During fiscal 2007, payroll deductions will be made
    supporting the purchase of a maximum of 319,464 shares at $4.04 per
    share. The purchase and payroll deductions with respect to these shares
    will be completed in the first quarter of fiscal 2008. Employees must
    decide annually whether or not they wish to purchase their common shares.
    During the twelve months ended September 30, 2007, no shares (2006 - 281)
    were issued under the terms of the ESPP.

    Stock-based compensation

    Stock-based compensation resulting from applying the Black-Scholes
    option-pricing model on the Company's Stock Option Plan and the ESPP was
    $527 for the twelve months ended September 30, 2007 (twelve months ended
    September 30, 2006 - $457) and for the three months ended September 30,
    2007 was $129 (three months ended September 30, 2006 - $77). All
    stock-based compensation has been recorded in selling, general and
    administrative expenses. The weighted average assumptions used in the
    twelve months ended September 30, 2007, measuring the fair value of stock
    options and the weighted average fair value of options granted are as
    follows:

                                                            2007        2006
    -------------------------------------------------------------------------
    Risk-free interest rates                               4.02%       4.03%
    Expected dividend yield                                0.90%       0.72%
    Expected volatility                                   27.00%      27.00%
    Expected time until exercise                      5.58 years  5.11 years
    Weighted average fair value of options granted         $1.52       $1.56
    -------------------------------------------------------------------------

    On November 18, 2005 the Company's Board of Directors adopted a Deferred
    Share Unit Plan ("DSU Plan") for eligible directors. The deferred share
    units will be redeemed by the Company in cash payable after the eligible
    director departs from the Board. The DSU Plan will replace the past
    practice of granting eligible directors stock options under the Stock
    Option Plan.

                                                       Number of     Expense
                                                           units
    -------------------------------------------------------------------------
    31-Dec-06                                              3,933         $10
    31-Mar-07                                              3,173          14
    30-Jun-07                                              2,677          27
    30-Sep-07                                              3,686          19
    -------------------------------------------------------------------------
    Total                                                 13,469         $70
    -------------------------------------------------------------------------

    Contributed surplus

    Contributed surplus consists of accumulated stock option expense less the
    fair value of the options at the grant date that have been exercised and
    reclassified to share capital. The following is a continuity schedule of
    contributed surplus:

                                                            2007        2006
    -------------------------------------------------------------------------
    Balance, September 30                                 $1,916      $1,459
    Stock option compensation expense                        128         116
    -------------------------------------------------------------------------
    Balance, December 31                                   2,044       1,575
    Stock option compensation expense                        135         133
    -------------------------------------------------------------------------
    Balance, March 31                                      2,179       1,708
    Stock option compensation expense                        135         131
    Exercise of options                                      (46)          -
    -------------------------------------------------------------------------
    Balance, June 30                                      $2,268      $1,839
    -------------------------------------------------------------------------
    Stock option compensation expense                        129          77
    Exercise of options                                      (33)          -
    -------------------------------------------------------------------------
    Balance, September 30                                 $2,364      $1,916
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Normal course issuer bid

    The Company received approval from the Toronto Stock Exchange for a
    normal course issuer bid for a 12-month period beginning on May 8, 2007,
    replacing the normal course issuer bid which expired on May 7, 2007. The
    Company's Board of Directors authorized the purchase of up to 2,050,000
    common shares, representing approximately 5% of the Company's outstanding
    common shares. As at September 30, 2007, the Company has purchased under
    both bids 156,700 common shares (2006 - 183,400) for cancellation at a
    cost of $613 (2006 - $705). The cost to purchase the shares exceeded
    their stated value by $478 (2006 - $547). This excess has been charged
    against retained earnings.

    3.  COMMITMENTS AND CONTINGENCIES

    Financial instruments

    The Company has forward foreign exchange contracts to sell
    (euro) 900 over the next three months at the rate of 11.07 Moroccan
    Dirham for each Euro sold. The Company also entered into a series of put
    and call options over the next seven months. The total contract value is
    52.7 million Mexican pesos (2006 - 124.8 million Mexican pesos). The
    selling price ranges from 11.35 to 12.20 (2006 - 11.85 to 12.20) Mexican
    pesos to each U.S. dollar. Management estimates that a combined profit of
    $145 (2006 - $317) would be realized if both series of contracts were
    terminated on September 30, 2007.

    Contingent liabilities

    In the ordinary course of business, the Company may be contingently
    liable for litigation and claims with customers, suppliers and former
    employees. For the year ended September 30, 2006, included in accounts
    payable and accrued liabilities are accruals for contingencies amounting
    to $1,725. During the third quarter of the current year, the Company has
    settled a dispute with a sales agent which was accrued as a contingent
    liability in the year ended September 30, 2006. The difference between
    the accrual and final settlement with the sales agent was expensed in the
    selling, general and administrative expenses on the statements of
    earnings and the current remaining contingent liability is immaterial.

    4.  RESEARCH AND DEVELOPMENT

    Research and development expenditures during the 12 months ended
    September 30, 2007 were $307 (12 months ended September 30, 2006 -
    $1,233) and during the three months ended September 30, 2007 were
    $73 (three months ended September 30, 2006 - $191). These costs were
    expensed in the period as they did not meet Canadian generally accepted
    accounting principles for deferral.

    5.  GOODWILL IMPAIRMENT CHARGE

    During the fourth quarter of the fiscal year, events occurred which
    indicated that it was more likely than not that there was a significant
    decline in the fair value of the Company's Neocon USA division. These
    events included a pre-tax loss for the year of $1,334, a consistent
    inability over numerous years to be profitable or achieve its budget, and
    difficulty in securing and launching sufficient business to grow its
    sales to a size necessary to effectively cover operating overheads. As a
    result, the Company recorded a goodwill impairment charge of $1,093. The
    impairment charge was not deductible for income tax purposes; therefore
    there was no corresponding tax benefit. After this impairment charge,
    there remains no goodwill associated with the Neocon USA division.

    During the prior year's second quarter, events occurred which indicated
    that it was more likely than not that there was a significant decline in
    the fair value of the Company's Techmire division. These events included
    a persistently strong Canadian dollar which reached levels in the quarter
    not experienced since 1991, reduced demand for zinc components caused by
    the high cost of zinc, and the challenges associated with bringing to
    market in the near term larger tonnage die-cast, machinery and machinery
    capable of running lower cost and lighter weight materials. As a result,
    the Company tested the goodwill associated with the Techmire division in
    advance of the annual impairment test and the Company recorded a goodwill
    impairment charge of $8,345. This impairment charge was not deductible
    for income tax purposes; therefore, there was no corresponding tax
    benefit. After this impairment charge, there remains no goodwill
    associated with the Techmire division.

    6.  SEGMENTED INFORMATION FROM CONTINUING OPERATIONS

    The Company operates in two business segments: Casting and Extrusion
    Technology and Automotive Solutions. The accounting policies followed in
    the operating segments are consistent with those outlined in note 1 of
    the annual consolidated financial statements.

    The Casting and Extrusion Technology segment designs and engineers
    tooling and other manufacturing equipment. Its operations are
    substantially for automotive and other industrial markets in North
    America.

    The Automotive Solutions segment produces automotive interior components
    and assemblies primarily for storage and restraint for sale to automotive
    manufacturers and Tier 1 suppliers (suppliers to automakers).

    -------------------------------------------------------------------------
                                           3 Months ended September 30, 2007

                                         Casting and
                                           Extrusion  Automotive
                                          Technology   Solutions       Total
    -------------------------------------------------------------------------
    Sales                                    $30,706     $19,779     $50,485
    Depreciation and amortization              1,666         617       2,283
    Goodwill impairment charge                     -       1,093       1,093
    Segment income                             1,624        (941)        683
    Interest revenue                                                      (5)
    Income before income taxes                                           688
    Fixed asset additions                      1,455         875       2,330
    Fixed assets, net -
     continuing operations                    54,667      18,713      73,380
    Fixed assets, net -
     discontinued operations                       -           -           -
    Total fixed assets, net                   54,667      18,713      73,380
    Goodwill                                       -      33,672      33,672
    Assets - continuing operations            67,135     110,014     177,149
    Assets - discontinued operations           6,917           -       6,917
    Total assets                             $74,052    $110,014    $184,066
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
                                           3 Months ended September 30, 2006

                                         Casting and
                                           Extrusion  Automotive
                                          Technology   Solutions       Total
    -------------------------------------------------------------------------
    Sales                                    $33,465     $17,946     $51,411
    Depreciation and amortization              1,842         484       2,326
    Goodwill impairment charge                     -           -           -
    Segment income                             4,507         643       5,150
    Interest expense                                                     174
    Income before income taxes                                         4,976
    Fixed asset additions                      2,830         420       3,250
    Fixed assets, net -
     continuing operations                    55,373      17,263      72,636
    Fixed assets, net -
     discontinued operations                   9,961           -       9,961
    Total fixed assets, net                   65,334      17,263      82,597
    Goodwill                                       -      34,765      34,765
    Assets - continuing operations            73,468     110,514     183,982
    Assets - discontinued operations          17,411           -      17,411
    Total assets                             $90,879    $110,514    $201,393
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
                                          12 Months Ended September 30, 2007

                                         Casting and
                                           Extrusion  Automotive
                                          Technology   Solutions       Total
    -------------------------------------------------------------------------
    Sales                                   $120,769     $80,990    $201,759
    Depreciation and amortization              7,407       2,394       9,801
    Goodwill impairment charge                     -       1,093       1,093
    Segment income                             6,202       4,353      10,555
    Interest expense                                                     219
    Income before income taxes                                        10,336
    Fixed asset additions                      9,474       4,485      13,959
    Fixed assets, net -
     continuing operations                    54,667      18,713      73,380
    Fixed assets, net -
     discontinued operations                       -           -           -
    Total fixed assets, net                   54,667      18,713      73,380
    Goodwill                                       -      33,672      33,672
    Assets - continuing operations            67,135     110,014     177,149
    Assets - discontinued operations           6,917           -       6,917
    Total assets                             $74,052    $110,014    $184,066
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
                                          12 Months Ended September 30, 2006

                                         Casting and
                                           Extrusion  Automotive
                                          Technology   Solutions       Total
    -------------------------------------------------------------------------
    Sales                                   $124,716     $74,555    $199,271
    Depreciation and amortization              7,887       2,170      10,057
    Goodwill impairment charge                 8,345           -       8,345
    Segment income                             2,244       7,361       9,605
    Interest expense                                                     740
    Income before income taxes                                         8,865
    Fixed asset additions                      8,912       1,880      10,792
    Fixed assets, net -
     continuing operations                    55,373      17,263      72,636
    Fixed assets, net -
     discontinued operations                   9,961           -       9,961
    Total fixed assets, net                   65,334      17,263      82,597
    Goodwill                                       -      34,765      34,765
    Assets - continuing operations            73,468     110,514     183,982
    Assets - discontinued operations          17,411           -      17,411
    Total assets                             $90,879    $110,514    $201,393
    -------------------------------------------------------------------------

    7. DISCONTINUED OPERATIONS

    Included in discontinued operations is the Company's Techmire division
    which was located in Montreal. On September 28, 2007, the Company
    announced the sale of this division to Dynacast Canada Inc. ("Dynacast"),
    a global manufacturer of precision engineered, die-cast metal and small
    components. The cash sale includes all assets of the Techmire business
    excluding the production facility which will be leased to Dynacast on a
    short-term basis. The production facility is now listed for sale and is
    reflected in the accompanying consolidated balance sheets as assets held
    for sale. The sale of the production facility is not expected to be
    materially different from its carrying value.

    The results from discontinued operations have been reported separately
    within these consolidated financial statements.

    Summarized financial information for the discontinued operations is as
    follows:

                                                 3 months ended September 30
                                                            2007        2006
    -------------------------------------------------------------------------
    Sales                                                 $2,254      $2,620

    Operating losses                                        (752)    ($1,357)
    Write down of assets held for sale                      (690)          -
    Loss on disposition                                     (563)          -
    -------------------------------------------------------------------------
    Discontinued operations before income taxes           (2,005)     (1,357)
    Future income taxes                                      684         463
    -------------------------------------------------------------------------
    Net losses from discontinued operations              ($1,321)      ($894)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                                12 months ended September 30
                                                            2007        2006
    -------------------------------------------------------------------------
    Sales                                                $10,032     $11,656

    Operating losses                                      (2,894)    ($5,961)
    Write down of assets held for sale                      (690)          -
    Loss on disposition                                     (563)          -
    -------------------------------------------------------------------------
    Discontinued operations before income taxes           (4,147)     (5,961)
    Future income taxes                                    1,415       2,034
    -------------------------------------------------------------------------
    Net losses from discontinued operations              ($2,732)    ($3,927)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                                12 months ended September 30
                                                            2007        2006
    -------------------------------------------------------------------------
    Net assets (liabilities) of
     discontinued operations:
    Current Assets                                        $1,349      $7,450
    Assets held for sale                                   5,568           -
    Fixed assets                                               -       9,961
    -------------------------------------------------------------------------
    Total assets                                           6,917      17,411
    Less: Current liabilities                                693       2,339
    -------------------------------------------------------------------------
    Net assets (liabilities) of
     discontinued operations                              $6,224     $15,072
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    

    %SEDAR: 00003420E




For further information:

For further information: Source: Exco Technologies Limited (TSX-XTC),
Contact: Paul Riganelli, Vice-President, Finance and Chief Financial Officer,
Telephone: (905) 477-3065, Fax: (905) 477-2449, Website:
http://www.excocorp.com


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