Fiscal 2013 sales from continuing operations of $257.0 million, up from
$253.5 million last year
Net income from continuing operations of $13.8 million, or $0.44 per
diluted share in fiscal 2013, versus $15.9 million or $0.52 per diluted
share in fiscal 2012
Cash and cash equivalents of $101.3 million, equivalent to $3.21 per
share, as at March 31, 2013
Funded backlog of $361 million
LONGUEUIL, QC, May 24, 2013 /CNW Telbec/ - Héroux-Devtek Inc. (TSX:
HRX), ("Héroux-Devtek" or the "Corporation"), a leading Canadian
manufacturer of aerospace products, today reported its results for the
fourth quarter and fiscal year ended March 31, 2013. Unless otherwise
indicated, all amounts are in Canadian dollars.
These results include the sale of substantially all of the Corporation's
Aerostructure and Industrial Products operations (the "sale
transaction") on August 31, 2012 to Precision Castparts Corp. (NYSE:
PCP) for proceeds of $234.3 million, net of related taxes and
transaction costs. Héroux-Devtek retained all of its Landing Gear
product line and its Magtron operations. As a result of the sale
transaction, the Corporation recorded a gain on the disposal of
discontinued operations of $112.0 million, net of related taxes, in the
fiscal year ended March 31, 2013, including $3.7 million in the fourth
quarter, mainly resulting from final adjustments on the net gain from
the sale transaction. Net income from discontinued operations also
includes the results of the businesses sold up to the closing of the
Quarters ended March 31,
Fiscal years ended March 31,
(in thousands of dollars, except per share data)
Sales from continuing operations
EBITDA from continuing operations
Operating income from continuing operations
Net income from continuing operations
Per share - diluted ($)
Net income from discontinued operations
Per share - diluted ($)
Weighted-average shares outstanding (diluted, in '000s)
"Fiscal 2013 was a transformational year for Héroux-Devtek, as we made
the strategic decision to focus on our core competencies in the design
and manufacturing of complete landing gear and value-added assemblies.
Our strategic plan is fundamentally aimed at positioning the
Corporation as a lasting source of value creation for its stakeholders.
Further confirming its leading position in the landing gear market,
Héroux-Devtek generated slightly higher sales from continuing
operations in fiscal 2013, as a solid increase in sales to the commercial aerospace market was
partially offset by lower sales of military products, mainly due to
U.S. budgetary restrictions," said Gilles Labbé, President and CEO of Héroux-Devtek.
Consolidated sales from continuing operations for the fourth quarter of
fiscal 2013 reached $73.8 million, down slightly from $74.8 million in
the fourth quarter of fiscal 2012. Sales to the commercial aerospace
market increased 23.0% to $32.2 million driven by a higher production
rate on the B-777 program, higher aftermarket sales for certain
regional and helicopter programs as well as for the Bombardier CL-415
program. Sales to the military aerospace market declined 14.4% to $41.6
million as a result of a lower throughput due to certain manufacturing
inefficiencies, combined with lower military customer demand due to
customer push-outs on certain military programs and order cancellations
on the C-5 program, which reflects the weaker U.S. military market.
Fluctuations in the value of the Canadian currency versus the US
currency had a negligible impact on fiscal 2013 fourth-quarter sales
and gross profit compared with last year. The impact of currency
movements on the Corporation's gross profit is mitigated by the use of
forward foreign exchange sales contracts and the natural hedging from
the purchase of materials made in U.S. dollars.
Earnings before interest, taxes, depreciation and amortization
("EBITDA") from continuing operations amounted to $10.1 million, or
13.7% of sales, compared with $11.4 million, or 15.3% of sales, last
year. The decrease reflects an unfavourable military aftermarket sales
product mix and the under-absorption of certain manufacturing overhead
costs resulting from lower military production volume. Operating income
from continuing operations stood at $6.9 million, or 9.4% of sales,
compared with $8.1 million, or 10.8% of sales a year earlier.
Net income from continuing operations was $4.8 million, or $0.15 per
diluted share, in the fourth quarter of fiscal 2013, versus $5.6
million, or $0.18 per diluted share, in the fourth quarter of fiscal
2012. Net income for the fourth quarter of fiscal 2013 totalled $8.5
million, or $0.27 per diluted share, reflecting net income from
discontinued operations of $3.7 million, mainly resulting from final
adjustments to the net gain from the sale transaction, compared with
$9.0 million, or $0.29 per diluted share, including net income from
discontinued operations of $3.4 million in the fourth quarter of fiscal
FISCAL 2013 RESULTS
Consolidated sales from continuing operations for the fiscal year ended
March 31, 2013 were $257.0 million, up 1.4% from $253.5 million in
fiscal 2012. Sales to the commercial aerospace market rose 17.5% to
$111.0 million, while sales to the military aerospace market decreased
8.2% to $146.0 million. Currency variations decreased fiscal 2013 sales
by $1.4 million, or 0.6%, compared with last year, and reduced gross
profit by $0.8 million, or 0.2% of sales.
EBITDA from continuing operations reached $33.0 million, or 12.8% of
sales, versus $37.4 million, or 14.8% of sales last year. The decrease
reflects the under-absorption of manufacturing overhead costs from
lower military production volume, certain non-recurring costs
associated with the development of a new landing gear system program
and an increase in stock-based compensation expense, reflecting the
appreciation in the Corporation's stock price traded on the Toronto
Stock Exchange. Operating income from continuing operations was $20.5
million, or 8.0% of sales, compared with $23.8 million, or 9.4% of
sales in the prior year. Net income from continuing operations totalled
$13.8 million, or $0.44 per diluted share, versus $15.9 million, or
$0.52 per diluted share, a year earlier. Reflecting the net gain and
net income from discontinued operations up to the closing of the sale
transaction, net income for fiscal 2013 stood at $132.0 million, or
$4.24 per diluted share.
STRONG FINANCIAL POSITION
As at March 31, 2013, Héroux-Devtek's balance sheet remained healthy
with cash and cash equivalents of $101.3 million, or $3.21 per share.
At that same date, total debt was $64.3 million, including $22.4
million drawn against the Corporation's authorized Credit Facility of
$150.0 million, but excluding net deferred financing costs. As a
result, the Corporation's net cash position stood at $37.0 million at
the end of fiscal 2013.
Conditions remain favourable in the commercial aerospace market. Large
commercial aircraft manufacturers are increasing production rates for
certain leading programs and are forecasting higher deliveries in
calendar 2013 than a year earlier. Their backlogs remain strong,
representing approximately seven years of production at current rates.
In the business jet market, indicators point to an imminent recovery
and shipments should experience sustained growth in the next few years
driven by a better economy and the introduction of several new
aircraft, including three models for which Héroux-Devtek is currently
developing the landing gear. The military aerospace market is expected
to remain difficult, as governments address their deficits. The
Corporation may be affected by U.S. defense cutbacks beyond the fiscal
year ending March 31, 2014, despite having a diversified military
portfolio, balanced between new component manufacturing and aftermarket
products and services, that should lessen this impact.
As at March 31, 2013, Héroux-Devtek's funded (firm orders) backlog stood
at $361 million, versus $388 million from continuing operations at the
end of the previous fiscal year, and remains well diversified.
"Based on our backlog and current market trends, and assuming a stable
currency environment, Héroux-Devtek's internal sales growth for the
fiscal year ending March 31, 2014 should be similar to that achieved in
the fiscal year just ended. Driven by sustained strength in the large
commercial aircraft segment and the recovery of the business jet
market, commercial sales could grow by more than 10%, while military
sales are expected to further decline as a result of U.S. budgetary
restrictions. Given its proven reputation as a world-class integrated
supplier of value-added products and services, as well as its solid
financial situation, Héroux-Devtek is favourably positioned to capture
business opportunities that will create further value for its
shareholders," concluded Mr. Labbé.
Héroux-Devtek Inc. will hold a conference call to discuss these results
on Friday, May 24, 2013 at 10:00 AM Eastern Time. Interested parties can join the call by dialling (514) 807-9895
(Montreal or overseas) or 1-888-231-8191 (elsewhere in North America).
The conference call can also be accessed via live webcast at
Héroux-Devtek's website, www.herouxdevtek.com, www.newswire.ca or www.q1234.com.
If you are unable to call in at this time, you may access a tape
recording of the meeting by calling 1-855-859-2056 and entering the
passcode 64367570 on your phone. This tape recording will be available
on Friday, May 24, 2013 as of 1:00 PM Eastern Time until 11:59 PM
Eastern Time on Friday, May 31, 2013.
Héroux-Devtek Inc. (TSX: HRX) is a Canadian company specializing in the
design, development, manufacture and repair and overhaul of landing
gear systems and components for the Aerospace market. The Corporation
is the third largest landing gear company worldwide, supplying both the
commercial and military sectors of the Aerospace market with new
landing gear systems and components, as well as aftermarket products
and services. The Corporation also manufactures electronic enclosures,
heat exchangers and cabinets for airborne radar, electro-optic systems
and aircraft controls through its Magtron operations. Approximately 70%
of the Corporation's sales are outside Canada, mainly in the United
States. The Corporation's head office is located in Longueuil, Québec
with facilities in the Greater Montreal area (Longueuil, Laval and
St-Hubert); Kitchener and Toronto, Ontario; as well as Springfield and
Except for historical information provided herein, this press release
may contain information and statements of a forward-looking nature
concerning the future performance of the Corporation. These statements
are based on suppositions and uncertainties as well as on management's
best possible evaluation of future events. Such factors may include,
without excluding other considerations, fluctuations in quarterly
results, evolution in customer demand for the Corporation's products
and services, the impact of price pressures exerted by competitors, and
general market trends or economic changes. As a result, readers are
advised that actual results may differ from expected results.
Earnings before interest, taxes, depreciation and amortization
("EBITDA") is a financial measure not prescribed by International
Financial Reporting Standards ("IFRS") and is not likely to be
comparable to similar measures presented by other issuers. Management
considers this to be useful information to assist investors in
evaluating the Corporation's profitability, liquidity and ability to
generate funds to finance its operations.
Note to readers: Complete audited consolidated financial statements and Management's
Discussion & Analysis are available on Héroux-Devtek's website at www.herouxdevtek.com.
SOURCE: Héroux-Devtek Inc.
For further information:
From: Héroux-Devtek Inc.
President and Chief Executive Officer
Tel.: (450) 679-3330
Contact: Héroux-Devtek Inc.
Executive Vice-President and Chief Financial Officer
Tel.: (450) 679-3330
Martin Goulet, CFA
Tel.: (514) 731-0000