- Sales of $93.4 million, up 8.8% from $85.8 million last year
- 15.1% increase in EBITDA to $16.9 million, compared with $14.7 million a year ago
- Net income of $6.9 million, or $0.23 per diluted share, up 33.8% from $5.2 million, or $0.17 per diluted share last year
- Healthy financial position with cash and cash equivalents of $49.4 million
LONGUEUIL, QC, Feb. 3, 2012 /CNW Telbec/ - Héroux-Devtek Inc. (TSX: HRX), a leading Canadian manufacturer of aerospace and industrial products, today reported its results for the third quarter of fiscal 2012 ended December 31, 2011. These results reflect the adoption for reporting purposes, on April 1, 2011, of International Financial Reporting Standards ("IFRS"). Results for the prior year have been restated. Unless otherwise indicated, all amounts are in Canadian dollars.
Consolidated sales for the third quarter were $93.4 million, an increase of 8.8% from $85.8 million for the same period last year. Sales rose in all product lines, including strong growth for Industrial products. Reflecting a more favourable product mix, greater efficiency and a better absorption of manufacturing overhead costs from higher sales, earnings before interest, taxes, depreciation and amortization ("EBITDA") were $16.9 million, or 18.1% of sales, compared with $14.7 million, or 17.1% of sales last year. Operating income stood at $10.8 million, or 11.5% of sales, up from $8.7 million, or 10.1% of sales last year. Net income increased 33.8% to $6.9 million, or $0.23 per share, fully diluted, from $5.2 million, or $0.17 per share, fully diluted, a year ago. Results for the third quarter of fiscal 2012 include expenses of $315,000 net of income tax, or $0.01 per share, related to the start-up of the new facility in Mexico. Finally, cash flow from operations reached $13.9 million this year, up from $13.1 million last year.
Fluctuations in the value of the Canadian dollar versus the US currency decreased third quarter sales by $0.5 million, or 0.5%, compared with last year, and reduced gross profit by $0.3 million, or 0.2% of sales. The impact of currency movements on the Corporation's gross profit is mitigated by the use of forward foreign exchange sales contracts and the natural hedging from the purchase of materials made in U.S. dollars.
|FINANCIAL HIGHLIGHTS||Quarters ended December 31,||Nine months ended December 31,|
|(in thousands of dollars, except per share data)||2011||2010||2011||2010|
|Per share - diluted ($)||0.23||0.17||0.57||0.37|
|Cash flows from operations||13,885||13,099||37,323||32,997|
|Weighted-average shares outstanding (basic, in '000s)||30,403||30,071||30,335||30,105|
"Héroux-Devtek posted another solid performance in the third quarter, as sales rose for all product lines, profitability further increased and our financial position strengthened," said President and CEO Gilles Labbé. "During the quarter, we inaugurated our new manufacturing facility in Querétaro, Mexico. This strategic expansion further enhances our flexibility, value proposition to OEMs and overall competitiveness. It also makes Héroux-Devtek a stronger organization, fully capable of meeting growing demand in its core markets and of providing its customers with value-added products and services at the most optimal cost."
As at December 31, 2011, Héroux-Devtek's balance sheet remained healthy with cash and cash equivalents of $49.4 million and long-term debt, including the current portion, of $116.5 million. As a result, the net debt-to-equity ratio stood at 0.28:1 at the end of the third quarter, compared with 0.30:1 three months earlier. The net-debt-to-equity ratio is defined as the total long-term debt, including the current portion, less cash and cash equivalents over shareholders' equity.
Aerospace sales were $83.6 million in the third quarter of fiscal 2012, up 5.3% from $79.5 million last year. Landing Gear product sales rose 6.6% to $59.0 million, as increased activity for certain large commercial aircraft programs, mainly the B-777, and higher military aftermarket customer requirements more than offset lower customer demand in the regional aircraft and certain commercial helicopter markets as well as unfavourable currency fluctuations. Aerostructure product sales grew 2.6% to $24.5 million due to higher sales for business jet programs and the JSF program, which more than offset lower sales to certain military programs, as well as lower customer requirements for regional aircraft programs.
Industrial sales totalled $9.8 million in the third quarter of fiscal 2012, compared with $6.4 million a year earlier. This solid 53.1% increase reflects greater demand for heavy equipment in the mining industry and higher sales to the power generation sector.
NINE MONTHS RESULTS
For the first nine months of fiscal 2012, consolidated sales amounted to $271.3 million, up 7.8% from $251.6 million a year earlier. Excluding the additional contribution of Landing Gear USA in the first quarter and the unfavourable currency impact, year-to-date sales increased 9.0%. Aerospace sales rose 5.8% to $245.9 million, while Industrial sales grew 32.7% to reach $25.4 million. EBITDA totalled $45.4 million, or 16.7% of sales, versus $38.0 million, or 15.1% of sales, a year earlier, while operating income stood at $27.5 million, or 10.1% of sales, compared with $19.8 million, or 7.9% of sales, last year. Net income totalled $17.5 million or $0.57 per share, fully diluted, versus $11.1 million or $0.37 per share, fully diluted, in the prior year. Results for the first nine months of fiscal 2012 include start-up costs of $653,000 net of income taxes, or $0.02 per share, related to the new facility in Mexico, while restructuring charges, related to the closure of the Rivière-des-Prairies facility, reduced net income by $0.02 per share, net of income taxes, in the first nine months of fiscal 2011. Finally, cash flow from operations was $37.3 million, up from $33.0 million in the corresponding period a year earlier.
Conditions remain favourable in the commercial aerospace market. Large commercial aircraft manufacturers should implement several production rate increases on leading programs up to calendar 2014, new orders rose significantly in calendar 2011 and Boeing and Airbus are both forecasting increased deliveries for calendar 2012. The business jet market continues to see positive signs and shipments are expected to increase modestly in calendar 2012, followed by subsequent growth acceleration. The military aerospace market has stabilized as governments address their deficits. As to the JSF program, Héroux-Devtek still anticipates to produce a higher number of shipsets in fiscal 2012, compared to fiscal 2011 due to the ramp-up of two variants and a higher share of the total production. Finally, the Corporation's main industrial markets continue to have solid momentum, as new orders and backlogs for its main customers continue to increase.
As at December 31, 2011, Héroux-Devtek's funded (firm orders) backlog stood at $515 million, versus $526 million three months earlier and $502 million at the beginning of the fiscal year, and remains well diversified.
"Going forward, Héroux-Devtek will benefit from the ramp-up of several important commercial aerospace programs for which it has significant content, while its military portfolio is diversified and balanced between new component manufacturing and the aftermarket, which should lessen the impact of potential defense budget cutbacks. In parallel, our healthy balance sheet allows us to look for strategic acquisitions that would enhance our product portfolio and technologies, as well as create sustainable value for our shareholders. In the short-term, and considering the strong fourth-quarter results achieved last year, we continue to anticipate an internal sales growth of approximately 5% for the current fiscal year ending March 31, 2012, assuming the Canadian dollar remains at parity versus the U.S. currency," concluded Mr. Labbé.
Héroux-Devtek Inc. will hold a conference call to discuss these results on Friday, February 3, 2012 at 10:00 AM Eastern Time. Interested parties can join the call by dialling (514) 807-8791 (Montreal or overseas) or 1-800-731-5319 (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 1-877-289-8525 and entering the passcode 4505948# on your phone. This tape recording will be available on Friday, February 3, 2012 as of 1:00 PM Eastern Time until 11:59 PM Eastern Time on Friday, February 10, 2012.
Héroux-Devtek Inc. (TSX: HRX), a Canadian company, serves two main market segments: Aerospace and Industrial Products, specializing in the design, development, manufacture and repair and overhaul of related systems and components. Héroux-Devtek Inc. supplies both the commercial and military sectors of the Aerospace segment with landing gear systems (including spare parts, repair and overhaul services) and airframe structural components. The Corporation also supplies the industrial segment with large components for power generation equipment and precision components for other industrial applications. 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, Dorval, Laval and St-Hubert); Kitchener and Toronto, Ontario; Arlington, Texas; Springfield, Cleveland and Cincinnati, Ohio, as well as Querétaro, Mexico.
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 unaudited interim condensed consolidated financial statements and Management's Discussion & Analysis are available on Héroux-Devtek's website at www.herouxdevtek.com.|
For further information:
|| Héroux-Devtek Inc.
President and Chief Executive Officer
Tel.: (450) 679-3330
|| Héroux-Devtek Inc.
Executive Vice-President and Chief Financial Officer
Tel.: (450) 679-3330
Martin Goulet, CFA
Tel.: (514) 731-0000