ExelTech announces third quarter results

    Results impacted by strong Canadian dollar, new clients and start-up

    MONTREAL, Feb. 20 /CNW Telbec/ - ExelTech Aerospace Inc. ("ExelTech" or
the "Company") (TSX Venture: XLT), a leading aircraft maintenance, repair and
overhaul ("MRO") provider with operations in Montreal and Quebec City, today
announced its financial results for the third fiscal quarter, which ended
December 31, 2007. All amounts are in Canadian dollars unless otherwise
    Revenues for the quarter ended December 31, 2007 totalled $14.6 million
compared to $14.0 million for the quarter ended December 31, 2006, an increase
of 4%. This increase was driven by continued growth in the Company's
Bombardier CRJ regional jet maintenance, sustained demand from ATR and Dash 8
regional turboprop operators and greater penetration of the Montreal line
maintenance market.
    During the quarter, the Company incurred substantial costs associated
with the start-up of its contracts to perform CRJ regional jet heavy
maintenance for Air Wisconsin and CL215P heavy maintenance for the Quebec
government. These contracts are expected to generate $37 million in
incremental revenues over the next five years. The Company also incurred
start-up costs to add the capability to perform Embraer ERJ145 regional jet
maintenance, at its facility in Quebec City, positioning ExelTech to enter
this promising new market.
    In addition, the results of the third quarter were also impacted by the
following factors:

    - The value of the Canadian dollar increased by 13% relative to the
      US dollar compared to the same quarter of the prior year, which in
      effect represents a decrease in gross margin of approximately
      $1.3 million;
    - The mix of services provided to heavy maintenance customers changed
      relative to the comparable period a year earlier, with an increase in
      the relative proportion of revenue earned from the sale of lower-margin
      aircraft parts and a decrease in the relative proportion of revenue
      earned from the sale of higher-margin labour services; and
    - A foreign exchange loss of $429,000 and a one-time non-cash charge of
      $ 337,000 to adjust future income tax assets for changes in income tax

    "We are very disappointed to announce this loss," stated Derek Nice,
ExelTech President and CEO. "It masks the very strong progress we have made in
growing new business streams, increasing productivity and building more
capacity. We expect to see a strong return on these investments in our
    During the third quarter, ExelTech began supporting CRJ operator Air
Wisconsin under an exclusive five-year contract, which is the largest the
company has ever signed. It also began a new exclusive maintenance outsourcing
contract for the Quebec government and began its first Embraer ERJ145 regional
jet maintenance work. The company also continued to invest in a new dedicated
heavy maintenance facility, which is under construction at Montreal's Pierre
Elliott Trudeau International Airport.

    About ExelTech Aerospace

    One of the ten largest commercial airframe MRO vendors in North America,
ExelTech Aerospace is listed on the TSX Venture Exchange and trades under the
symbol XLT. The company holds Transport Canada, US Federal Aviation
Administration (FAA) and European Aviation Safety Agency (EASA) approvals to
repair a wide range of aircraft, structures, components and electrical and
electronic systems. Aircraft models serviced by ExelTech Aerospace include
Bombardier CRJ and Embraer ERJ regional jets; ATR 42 and 72; Bombardier Dash 8
and Saab 340 regional turboprops; and Boeing 737 narrow-body airliners.
    With 230,000 square feet of hangar, shop and office space in three
facilities at Montreal and Quebec City, and with marketing offices in the US
and Europe, ExelTech Aerospace provides maintenance repair and overhaul
services to airlines in Canada, the US and 24 other countries around the
    To find out more about ExelTech Aerospace Inc. (TSX Venture: XLT), visit
our website at www.exeltech-aerospace.com.

    The TSX Venture Exchange Inc. has not reviewed and does not accept
    responsibility for the adequacy of this release.


    Consolidated statements
    of operations and                        For the                 For the
    comprehensive (loss)         three-month periods      nine-month periods
    income                         ended December 31       ended December 31

                                    2007        2006        2007        2006
                                       $           $           $           $
    Revenue                   14,637,242  14,021,713  40,557,426  35,496,170
    Cost of sales             12,179,988   9,929,049  32,440,737  25,124,151
                               2,457,254   4,092,664   8,116,689  10,372,019
    Operating expenses         2,933,820   2,512,754   7,118,484   6,631,585
    (Loss) earnings before
     the following              (476,566)  1,579,910     998,205   3,740,434
    Amortization                 294,366     295,850     900,399     907,876
    Financial (income)
     expenses                    667,478     253,526     903,984     922,888
    (Loss) earnings before
     income taxes             (1,438,410)  1,030,534    (806,178)  1,909,670
    Income taxes                 (91,753)    354,328     164,989     878,241
    Net (loss) earnings
     and comprehensive
     (loss) income            (1,346,657)    676,206    (971,167)  1,031,429
    Net (loss) earnings
     per share - basic
     and diluted                   (0.01)       0.01       (0.01)       0.01

                                                           As at       As at
                                                     December 31    March 31
    Consolidated balance sheets                             2007        2007
                                                               $           $
    Current assets                                    26,292,051  18,436,119
    Capital assets                                    12,286,702   6,280,457
    Intangible assets                                    333,586     449,836
    Future income taxes                                3,703,321   3,778,298
    Goodwill                                          13,241,506  13,241,506
    TOTAL ASSETS                                      55,857,166  42,186,216

    Current liabilities                               14,390,580  12,872,881
    Long-term debt including liability portion
     of debentures                                     7,759,298   8,876,019
    Other                                                544,073     444,944
    SHAREHOLDERS' EQUITY                              33,163,215  19,992,372

    TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY        55,857,166  42,186,216
    %SEDAR: 00020968EF

For further information:

For further information: Roland Blais, CFO, (514) 631-8999 x 2400,
rblais@exeltech-aerospace.com; Derek Nice, President and CEO, (514) 631-3884,

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