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Press release from CNW Group

Héroux-Devtek achieves record financial results in fiscal 2012

Friday, May 25, 2012

Héroux-Devtek achieves record financial results in fiscal 201207:00 EDT Friday, May 25, 2012Solid Q4 results with sales of $109.0 million, versus $106.0 million last year, and diluted EPS of $0.29, up from $0.26 a year agoFiscal 2012 sales of $380.3 million, up 6.4% from $357.6 million last yearEBITDA of $64.7 million in fiscal 2012, compared with $57.1 million in fiscal 2011Fiscal 2012 net income of $26.5 million, or $0.86 per diluted share, up 38.4% from $19.1 million, or $0.63 per diluted share in fiscal 2011 Healthy balance sheet with cash and cash equivalents of $62.0 million and a net debt-to-equity ratio of 0.23:1LONGUEUIL, QC, May 25, 2012 /CNW Telbec/ - Héroux-Devtek Inc. (TSX: HRX), a leading Canadian manufacturer of aerospace and industrial products, today reported its results for the fourth quarter and fiscal year ended March 31, 2012. These results reflect the adoption for reporting purposes, on April 1, 2011, of International Financial Reporting Standards ("IFRS"). Results for the prior year have been restated. Unless otherwise indicated, all amounts are in Canadian dollars."Fiscal 2012 was a very successful year for Héroux-Devtek. While the overall economy remained hesitant, the majority of our strategic markets, both in the Aerospace and Industrial segments, gained momentum. As a result, we generated record sales and net income. More importantly, strategic initiatives put forward, such as our new manufacturing facility in Querétaro, Mexico, and sustained investment in equipment and technology, have firmly positioned Héroux-Devtek to benefit from the pending ramp up of several important programs and to capture new business opportunities," said President and CEO Gilles Labbé.      FINANCIAL HIGHLIGHTSQuarters ended March 31, Fiscal years ended March 31,(in thousands of dollars, except per share data)           20122011 20122011Sales109,049105,994 380,336357,572EBITDA 19,29119,145 64,72257,095Operating income13,16612,682 40,66932,449Net income8,9627,992 26,48119,129 Per share - diluted ($)0.290.26 0.860.63Cash flows from operations18,58217,395 55,90550,392Weighted-average shares outstanding (basic, in '000s)30,42030,135 30,35730,112Weighted-average shares outstanding (diluted, in '000s)30,77430,378 30,68230,220RECORD FINANCIAL RESULTS IN FISCAL 2012Consolidated sales reached $380.3 million, up 6.4% from $357.6 million a year earlier. Excluding the additional $4.4 million contribution of Landing Gear USA in the first quarter and an unfavourable currency impact of $8.0 million, fiscal 2012 sales increased 7.4%. Earnings before interest, taxes, depreciation and amortization ("EBITDA") totalled $64.7 million, or 17.0% of sales, versus $57.1 million, or 16.0% of sales, a year earlier. This improvement reflects higher sales, a better product mix for Landing Gear operations, combined with manufacturing cost improvements in both business segments of the Corporation. Operating income stood at $40.7 million, or 10.7% of sales, compared with $32.4 million, or 9.1% of sales, last year.Net income totalled $26.5 million or $0.86 per share, fully diluted, up 38.4% from $19.1 million or $0.63 per share, fully diluted, in the prior year.Fiscal 2012 results include start-up costs of $1.0 million net of income taxes, or $0.03 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 fiscal 2011. Cash flow from operations was $55.9 million, up from $50.4 million a year earlier.As at March 31, 2012, Héroux-Devtek's balance sheet remained solid with cash and cash equivalents of $62.0 million and long-term debt, including the current portion, of $119.1 million. As a result, the net debt-to-equity ratio stood at 0.23:1 at the end of fiscal 2012, compared with 0.32:1 at the end of the previous year. 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.SEGMENT RESULTSAerospace sales were $345.4 million in fiscal 2012, up 4.0% from $332.0 million in fiscal 2011. Sales of Landing Gear products rose 6.3% to $242.3 million, including the additional contribution from Landing Gear USA. Increased activity for business jet and large commercial aircraft programs, mainly the B-777 and the A-320, as well as higher customer requirements for military products more than offset lower customer demand in the regional aircraft and certain commercial helicopter markets as well as unfavourable currency fluctuations. Aerostructure product sales declined 1.2% to $102.2 million due to lower customer requirements for certain military programs and regional aircraft programs as well as unfavourable currency fluctuations. These factors were partially offset by higher sales to the business jet market as well as production ramp-up for the Joint Strike Fighter F-35 program and the B-429 helicopter program.Industrial sales rose 36.7% to $35.0 million in fiscal 2012, compared with $25.6 million in fiscal 2011. This solid increase reflects greater demand for heavy equipment in the mining industry and higher sales to the power generation sector.SOLID FOURTH QUARTER RESULTSFor the fourth quarter of fiscal 2012, consolidated sales amounted to $109.0 million, up 2.9% from $106.0 million in the same period last year. The increase is essentially due to the increase in Industrial sales, while Aerospace sales were stable. Fluctuations in the value of the Canadian dollar versus the US currency decreased fourth quarter sales by $0.6 million compared with last year. EBITDA reached $19.3 million, or 17.7% of sales, compared with $19.1 million, or 18.1% of sales last year. Operating income stood at $13.2 million, or 12.1% of sales, up from $12.7 million, or 12.0% of sales last year. Net income increased 12.1% to $9.0 million, or $0.29 per share, fully diluted, from $8.0 million, or $0.26 per share, fully diluted, a year ago.Results for the fourth quarter of fiscal 2012 include expenses of $0.4 million net of income tax, or $0.01 per share, related to the start-up of the new facility in Mexico. Cash flow from operations reached $18.6 million this year, up from $17.4 million last year.OUTLOOKConditions are mostly favourable in the commercial aerospace market. Large commercial aircraft manufacturers are forecasting higher deliveries in calendar 2012 driven by production rate increases on leading programs. New orders remain solid and backlogs represent approximately seven years of production at current rates. The business jet market continues to see positive signs and shipments should increase modestly in calendar 2012, followed by sustained growth in subsequent years. The military aerospace market should remain stable, as governments address their deficits. As to the JSF program, Héroux-Devtek anticipates producing a similar number of shipsets in fiscal 2013, compared to fiscal 2012, given the revised program schedule. Finally, conditions remain favourable in the Corporation's main industrial markets, as orders and backlogs for its main customers continue to grow.On March 31, 2012, Héroux-Devtek's funded (firm orders) backlog stood at $493 million, versus $502 million at the end of the previous fiscal year. This backlog remains well diversified."Héroux-Devtek looks to the future with assurance, as we are in a stronger competitive position than ever before. Internal development will focus on leveraging the capabilities of our world-class network by increasing the proportion of our business stemming from value-added products and services. Externally, our healthy financial position allows us to consider strategic acquisitions that would add to our product portfolio and provide new technology. Assuming the Canadian dollar remains at parity versus the US currency and considering forward foreign exchange contracts, we anticipate an internal sales growth of approximately 5% for the fiscal year ending March 31, 2013, compared to the year ended March 31, 2012," concluded Mr. Labbé.CONFERENCE CALLHéroux-Devtek Inc. will hold a conference call to discuss these results on Friday, May 25, 2012 at 10:00 AM Eastern Time.Interested parties can join the call by dialling (514) 807-9895 (Montreal or overseas) or 1-888-231-8191 (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 1-855-859-2056 and entering the passcode 69885735# on your phone. This tape recording will be available on Friday, May 25, 2012 as of 1:00 PM Eastern Time until 11:59 PM Eastern Time on Friday, June 1, 2012.PROFILEHéroux-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.FORWARD-LOOKING STATEMENTSExcept 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.NON-IFRS MEASURESEarnings 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 audited consolidated financial statements and Management's Discussion & Analysis are available on Héroux-Devtek's website at www.herouxdevtek.com. For further information: From:Héroux-Devtek Inc. Gilles Labbé President and Chief Executive Officer Tel.: (450) 679-3330 Contact:Héroux-Devtek Inc. Réal Bélanger Executive Vice-President and Chief Financial Officer  Tel.: (450) 679-3330 MaisonBrison Martin Goulet, CFA Tel.: (514) 731-0000