TORONTO, Feb. 2 /CNW/ - Exco Technologies Limited (TSX-XTC) today announced results for its first quarter ended December 31, 2010.
In addition, the Company announced a $0.025 dividend per share which
will be paid on March 31, 2011 to shareholders of record on March 15,
2011. The dividend is an "eligible dividend" in accordance with the
Income Tax Act of Canada.
3 Months ended
($000s, except per share amounts)
Income before income
Net income for the period
Basic and Diluted earnings per share
Common shares outstanding
Consolidated sales for the first quarter ended December 31, 2010
increased by $8.0 million or 21% from last year to $45.6 million
continuing the upward sales trend experienced throughout 2010. During
the quarter, the Casting and Extrusion segment reported sales of $27.8
million - an increase of $3.8 million or 16% from the same quarter last
year. Sales in the Automotive Solutions segment in the quarter were
$17.8 million - an increase of $4.2 million or 31% from the same
quarter last year.
Consolidated net income for the first quarter was $3.1 million or $0.08
per share compared to consolidated net income of $1.9 million or $0.05
per share in the same quarter last year. This improvement was led by
the Automotive Solutions segment which increased pretax income by 145%
reporting segment pretax income of $2.7 million in the first quarter
compared to $1.1 million last year. The Casting and Extrusion segment
improved sales by 8% reporting higher pretax income in the first
quarter of $2.6 million compared to $2.4 million in the same quarter
last year. This improvement in this segment was impacted by
disruptions at the extrusion group, which was burdened with production
inefficiencies and other nonrecurring costs associated with the
consolidation of the AluDie facility in the amount of approximately
$0.02 per share.
Gross margin in the first quarter increased by 1.6 percentage points to
26.3% from 24.7% in the same quarter last year despite operating
inefficiencies from the consolidation of the AluDie facility and
negative margin at Edco and Excoeng Mexico.
Operating cash flow before net changes in non cash working capital in
the first quarter increased to $5.2 million from $3.3 million in the
same quarter last year. This increase is primarily the result of
improved earnings; however, the net change in non cash working capital
eroded cash in the quarter by $5.6 million mainly as a result of higher
receivables and inventory caused by generally increasing business
activity throughout the Company.
The Company's cash position at the first quarter ended December 31, 2010
decreased by 38% to $12.5 million from $20.2 million at the beginning
of the quarter. This erosion stems in large part from higher capital
spending on machinery in the extrusion group, the expenditure of
approximately $1.5 million for the purchase of Allper, the payment of
2010 income tax in the amount of $3.2 million and payments for 2010
accrued incentive plans.
Steady automotive production in North America combined with a stream of
new model introductions by virtually all OEMs is making for a dynamic
environment for component and tooling suppliers such as Exco. Our
established reputation in these markets combined with our solid
financial position should ensure that we continue to prosper while
providing our customers with high quality, affordable and timely
delivered products. Meanwhile, our consolidation of the extrusion die
business, once substantially complete next quarter, should allow for
better overhead absorption and more rapid reaction to our customers'
requirements. The classification of the AluDie building and certain
machinery and equipment as held for sale will reduce depreciation costs
in Q2 and beyond and improve Exco's cash position at the time of sale.
In Europe, Polydesign's focus on launching of new programs for a
differing array of products to diverse customers has increased sales
and returned the business to profitability. This development combined
with Castool's recent acquisition of a distributor in Switzerland
should see an increase in Exco's overall European business activity and
profitability in the coming quarters.
Exco Technologies Limited is a global supplier of innovative
technologies servicing the die-cast, extrusion and automotive
industries. Through our 9 strategic locations, we employ 2,013 people
and service a diverse and broad customer base.
The Annual Meeting of Shareholders of Exco Technologies Limited will be
held at 4:30 pm (EST) on February 2, 2011 and will be simultaneously
webcast. Management will discuss year-end and first quarter results. 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=3360500 a few minutes before the event. Microsoft Media Player is required for
access. For those unable to participate on February 2, 2011, an
archived version will be available from 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
SOURCE Exco Technologies Limited
For further information:
| || ||Exco Technologies Limited (TSX-XTC)|
Paul Riganelli, Vice-President, Finance and Chief Financial Officer
(905) 477-3065 Ext. 7228