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MARKHAM, ON, Jan. 28 /CNW/ - Exco Technologies Limited (TSX-XTC) today announced results for its first quarter ended December 31, 2008. In addition, the Company announced a $0.0175 dividend per share which will be paid March 31, 2009 to shareholders of record on March 16, 2009. The dividend is an "eligible dividend" in accordance with the Income Tax Act of Canada.
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3 Months ended
December 31
($000s, except
per share amounts)
2008 2007
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Sales $44,444 $47,974
Net (loss) income from continuing operations ($2,425) $1,364
Net loss from discontinued operations - ($49)
Net (loss) income ($2,425)(x) $1,315
Basic and diluted (loss) earnings per share from
continuing operations ($0.06) $0.03
Basic and diluted earnings per share from
discontinued operations $0.00 $0.00
Basic and diluted (loss) earnings per share ($0.06) $0.03
Common shares outstanding 40,674,000 41,216,000
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(x)Includes $2,848 foreign exchange valuation loss
Consolidated sales from continuing operations for the quarter ended December 31, 2008 were $44.4 million compared to $48.0 million last year - a decrease of $3.6 million or 7.5%. The Casting and Extrusion segment reported a 2% increase in sales over last year to $26.8 million. Our Extrusion Die and Castool sales increased in the quarter and stronger sales in our large mould business in Canada from accelerating shipments of new moulds for the Phoenix engine block program were partially offset by weakness at our US large mould operation. Sales in the Automotive Solutions segment decreased 18.5% to $17.6 million in the quarter as all North American car manufacturers have reduced production of automobiles in response to a severe lack of consumer confidence and tighter credit requirements. Sales to our European customers were also lower in the quarter reflecting weaker releases on our major seat cover programs for Honda.
Net loss from continuing operations for the quarter was $2.4 million or $0.06 per share compared to net income of $1.4 million or $0.03 per share last year. Included in the current quarter was a foreign exchange loss of $2.8 million from a fair market valuation of the Mexican Peso collars. Excluding this fair market valuation loss which did not affect cash, net income from continuing operations for the quarter was $423 thousand. The Casting and Extrusion segment reported earnings for the quarter of $1.9 million - more than triple last year's quarterly earnings. The Automotive Solutions segment reported significantly weaker earnings of $171 thousand compared to $2.7 million last year. Heavy reductions in North American and European vehicle production have significantly impacted the performance of this segment, particularly in the month of December with plant shutdowns for Christmas taking place earlier than usual. This made it difficult to efficiently absorb overhead at several facilities.
Gross margin for the quarter remained relatively stable at 19.6% compared to 21.6% in the prior year. The full benefit of raw material price reductions were not experienced in the quarter as existing raw material inventory was cleared. Reduced variable costs are anticipated as current commodity price reductions work their way through the production cycle.
Operating cash flow in the current quarter increased to $5.9 million from $447 thousand in the prior year. Primarily contributing to this improvement was a $2.9 million positive change from non-cash working capital in the current quarter compared to a negative change of $3.1 million last year. This improvement is mostly from the collection of $7.5 million accounts receivable in the quarter. The Company's bank balances at quarter end totalled $10.3 million compared to $8.1 million at the beginning of the fiscal year. Exco's net cash position also increased to $4.4 million from $3.5 million over the same period. This improvement stems in large part from the foreign exchange impact of a strengthening US dollar on our US cash on hand (approximately US$15 million).
(for further information please refer to the Company's First Quarter Interim Financial Statements in the Investor Relations section posted at www.excocorp.com after January 28, 2009. Alternatively, please refer to www.sedar.com after January 28, 2009.)
Exco Technologies Limited is a global supplier of innovative technologies servicing the die-cast, extrusion and automotive industries. Through our 10 strategic locations, we employ 1,825 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 January 28, 2009 and will be simultaneously webcast. 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 on January 28, 2009, an archived version will be available on the Exco website.
Management will then hold a conference call to discuss the first quarter results on Thursday January 29, 2009 at 10:00 am (EST). The local dial in number for the call is (416) 644-3417 or toll free 1-800-731-6941. 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 on January 29, 2009, 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 are described in the Company's Management's Discussion and Analysis included in our 2008 Annual Report, in our 2008 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.
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