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Press release from CNW Group

Exco Technologies Limited - Third Quarter ended June 30, 2010

Wednesday, July 28, 2010

Exco Technologies Limited - Third Quarter ended June 30, 201016:30 EDT Wednesday, July 28, 2010Exco Reports Fourth Consecutive Quarter of Improved Revenue and EarningsQuarterly Dividend DeclaredTORONTO, July 28 /CNW/ - Exco Technologies Limited (TSX-XTC) today announced results for its third quarter ended June 30, 2010. In addition, the Company announced a $0.02 dividend per share which will be paid on September 30, 2010 to shareholders of record on September 15, 2010. The dividend is an "eligible dividend" in accordance with the Income Tax Act of Canada. << ------------------------------------------------------------------------- 9 Months ended 3 Months ended June 30 June 30 ------------------------------------------------------------------------- ($000s, except per share amounts) ------------------------------------------------- 2010 2009 2010 2009 ---- ---- ---- ---- ------------------------------------------------------------------------- Sales $119,583 $106,022 $42,681 $28,345 Net income (loss) $7,628 ($18,030) $3,502 ($998) Basic and diluted earnings (loss) per share $0.19 ($0.44) $0.09 ($0.02) Common shares outstanding 40,911,000 40,666,000 40,911,000 40,666,000 ------------------------------------------------------------------------- ------------------------------------------------------------------------- >> Consolidated sales for the quarter ended June 30, 2010 were $42.7 million compared to $28.3 million last year - an increase of $14.3 million or 51%. Year-to-date sales were $119.6 million - an increase of $13.6 million or 13% compared to last year. Sales in the quarter continued the climbing trend begun several quarters ago as the business climate continues to improve over last year. The large mould group and Castool experiencing the strongest improvement in the Casting and Extrusion segment as automotive customers are feeling increasingly comfortable proceeding with capital investments and long delayed powertrain projects. The extrusion group sales were slightly higher in the quarter reflecting its limited exposure to the automotive industry and anaemic recovery in its main industrial markets. In the Automotive Solutions segment the sales increase was led by North American operations where Neocon more than doubled its prior year quarterly sales level followed by Polytech which increased sales by more than 50%. Even at Polydesign, which services the challenged European automotive market with interior trim products, sales grew by more than 50%.Net income for the third quarter was $3.5 million or $0.09 per share compared to a net loss of $998 thousand or $0.02 per share last year. Year-to-date, Exco reported net income of $7.6 million or $0.19 per share compared to a net loss of $18.0 million or $0.44 per share in the prior year. Overall stronger sales this quarter and year-to-date have significantly improved the absorption of fixed overheads and positively impacted overall profitability. The retention of a downsized cost structure has also played a significant part in improving profitability. This has caused gross margin to continue climbing. For the third quarter it was 27.6% compared to 20.0% in the prior year. Year-to-date, gross margin was 27.1% compared to 19.2% last year.Operating cash flow in the current quarter increased to $4 million from $2.6 million in the prior year primarily due to improved earnings. This demonstrates that earnings are generating more than sufficient cash flow to cover the working capital requirements of our growing sales volume. The Company's cash position at quarter end totalled $18.1 million compared to $11.4 million at the beginning of the fiscal year and $16.3 million at the end of the second quarter.As 2010 continues to unfold our opinion that the business climate is improving remains intact. We have seen automotive production in North America continue firming up after persistent and, at times, dramatic decline during 2009. We expect the growth to continue at a gradual yet steady pace through the next several quarters. This should continue to positively impact Exco sales and earnings in both business segments. In the Casting and Extrusion segment Castool and the large mould group in particular are benefiting from the resurgence in automotive production as are all businesses in the Automotive Solutions segment where growth is fuelled by a combination of improved volumes on existing programs and the launch of numerous new programs for a wide range of customers. Polydesign in particular is posed to launch approximately (euro)7 million in annualized sales in the next several quarters.Exco continues to have a low overall cost structure and a very strong balance sheet with no bank debt and $18.1 million or 44 cents per share of cash on hand. This tangibly demonstrates that Exco has successfully adjusted to the strong Canadian dollar while putting in place the resources necessary to pursue growth opportunities without requiring debt or dilution.(For further information please refer to the Company's Third Quarter Interim Financial Statements in the Investor Relations section posted at www.excocorp.com. Alternatively, please refer to www.sedar.com after July 28, 2010.)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 1,580 people and service a diverse and broad customer base.Management will hold a conference call to discuss the second quarter results on Thursday July 29, 2010 at 10:00 am (EST). The local dial in number for the call is (647) 427-7450 for local (Toronto) calls or toll free 1-888-231-8191. 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 July 29, 2010, an archived version will be available on the Exco website.This Press Release contains forward-looking information and forward-looking statements within the meaning of applicable securities laws with respect to: 1) business unit sales and earnings and 2) improvement in economic conditions. We use words such as "anticipate", "plan", "may", "will", "should", "expect", "believe", "estimate", "approximately", "confident", "modestly" and similar expressions to identify forward-looking information and statements. Such forward-looking information and statements are based on assumptions and analyses made by management in light of our field experiences and our interpretation of recent and current automotive and industrial sales trends which are expected to continue into the near future, as well as economic conditions and other factors we believe to be relevant. 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 2009 Annual Report, in our 2009 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 unless such factor is in and of itself material.%SEDAR: 00003420EFor further information: Exco Technologies Limited (TSX-XTC), Paul Riganelli, Vice-President, Finance and Chief Financial Officer, (905) 477-3065 Ext 7228, http://www.excocorp.com