Q4 Highlights
- Sales of $156.0 million, compared
to $147.5 million last year
- Operating income of $9.9 million
compared to $11.5 million last
year
- Adjusted EBITDA1 of $19.6
million, or 12.6% of sales, compared to $22.1 million, or 15.0% last year
- Earnings per share of $0.18 from
$0.33 last year, or $0.18 from $0.38 on
an adjusted1 basis
- Funded backlog of $864 million,
stable compared to last quarter and 27% higher than last year
LONGUEUIL, QC, May 18, 2023
/CNW/ - Héroux-Devtek Inc. (TSX: HRX) ("Héroux-Devtek" or the
"Corporation"), a leading international manufacturer of aerospace
products and the world's third-largest landing gear manufacturer,
today reported its financial results for the fourth quarter and
fiscal year ended March 31, 2023. Unless otherwise indicated,
all amounts are in Canadian dollars.
"During the fourth quarter, we continued to improve our
financial performance, generating $156
million of sales for a total of $297
million during the last six months of the fiscal year. We
continue to have strong relationships with our customers, as
evidenced by our funded backlog of $864
million in orders. Our main challenge is to deliver on those
orders steadily and efficiently while the operating environment
remains complex", said Martin
Brassard, President and CEO of Héroux-Devtek.
"Fiscal 2023 was a year of adjustment for the aerospace
industry, as demand for civil products rebounded from a severe drop
over the last two years. At Héroux-Devtek, our priority
remains stabilizing our production system through a reliable supply
chain and increased automation in our plants. We will also continue
to improve our processes and our pricing structure with our
customers and suppliers. We are confident that these measures will
return our profitability to higher levels," added Mr. Brassard.
________________________________
|
1 This is a
non-IFRS measures. Please refer to the "Non-IFRS Measures" section
at the end of this press release.
|
FINANCIAL
HIGHLIGHTS
|
Three months
ended
March 31,
|
Twelve months
ended
March
31,
|
(in thousands, except
per share data)
|
2023
|
2022
|
2023
|
2022
|
Sales
|
$
155,978
|
$
147,459
|
$
543,622
|
$
536,087
|
Operating
income
|
9,879
|
11,463
|
26,198
|
44,758
|
Adjusted
EBITDA1
|
19,595
|
22,149
|
61,366
|
83,049
|
Net income
|
6,288
|
11,459
|
13,825
|
32,140
|
Adjusted net
income1
|
6,288
|
13,158
|
12,606
|
33,839
|
Cash flows related to
operating activities
|
4,518
|
10,016
|
30,060
|
63,166
|
Free cash flow
(usage)1
|
(8,740)
|
6,843
|
(1,718)
|
45,894
|
in dollars per
share
|
|
|
|
|
Diluted earnings per
share
|
$ 0.18
|
$ 0.33
|
$ 0.40
|
$ 0.90
|
Adjusted
EPS1
|
0.18
|
0.38
|
0.37
|
0.95
|
As at
|
|
|
March 31,
2023
|
March 31,
2022
|
Funded
backlog2
|
|
|
$
864,000
|
$
682,000
|
1.Non-IFRS financial
measure. Refer to the Non-IFRS financial measures section for
definitions and reconciliations to the most comparable IFRS
measures.
|
2. Represents firm
orders.
|
FOURTH QUARTER RESULTS
Throughput improved for a third consecutive quarter, reaching
$156.0 million, up from
$140.9 million last quarter and
$147.5 million last year. Civil sales
were up 28.9%, mainly driven by increased deliveries for the Boeing
777, Embraer Praetor and Falcon 6X programs, while defence sales
were relatively stable at $107.1
million. Foreign exchange had a $6.0
million positive impact on sales compared to last fiscal
year.
Gross profit as a percentage of sales decreased from 17.6% last
year to 14.6%, mainly due to inefficiencies resulting from
production system disruptions and inflation, while government
relief measures partly compensated for last year's COVID-19
disruptions, bearing a 0.7% positive impact on gross profit (none
this year).
Operating income decreased to $9.9 million, or 6.3% of sales, from
$11.5 million, or 7.8% of sales
last year, reflecting lower gross profit, partly offset by the
positive effect of foreign exchange fluctuations representing 1.0%
of sales.
Earnings per share decreased to $0.18 compared to $0.33 last year.
FISCAL 2023 RESULTS
Consolidated sales reached $543.6 million, up from $536.1 last fiscal year, including a $9.2 million positive impact of foreign exchange.
Defence sales totaled $372.9 million, down 3.6% compared to last
year, while civil sales were up 14.3% to $170.7 million, mainly driven by increased
deliveries for the Boeing 777, Embraer Praetor and Falcon 6X
programs.
Gross profit totaled $73.5 million
or 13.5% compared to $91.1 million or
17.0% of sales last year. The decrease was caused by the same
unfavourable factors listed for the three-month period, while
government relief measures partly compensated for last year's
COVID-19 disruptions, bearing a 1.4% positive impact on gross
profit (none this year).
Operating income fell to $26.2
million, or 4.8% of sales, from $44.8 million, or 8.3% of sales last year,
reflecting lower gross profit.
Earnings per share decreased to $0.40, or $0.37
when adjusted for the gain on achievement of commercial objectives
related to the sale of Bolton,
compared to $0.90 on a diluted basis
or $0.95 when adjusted for a legal
ruling last year.
FINANCIAL POSITION
As at March 31, 2023, net debt
stood at $165.0 million, an increase
from $152.1 million a year prior. Net
debt to adjusted EBITDA1 ratio rose to 2.7:1 from 1.8:1
a year ago. The higher net debt to EBITDA1 ratio
reflects our investment in inventory made to stabilize our
production system as well as lower profitability year-on-year.
CONFERENCE CALL
Héroux-Devtek Inc. will hold a conference call to discuss these
results on Thursday, May 18, 2023, at
8:30 AM Eastern Time. Interested
parties can join the call by dialling 1-888-390-0549 (North America) or 1-416-764-8682 (overseas).
The conference call can also be accessed via live webcast on
Héroux-Devtek's website
at https://investors.herouxdevtek.com/events-webcast. The
Company's consolidated financial statements and Management's
Discussion & Analysis will be available in the Investors
section of the Corporation's
website: https://investors.herouxdevtek.com/annual-reports.
If you are unable to call in at this time, you may access a
tape-recording of the meeting by calling toll-free 1–888–390-0541
and entering the passcode 879912 on your phone. Local dial-in
number is 416-764-8677. This recording will be available from
Thursday, May 18, 2023, as of
11:30 AM, until 23:59 PM on
Thursday, May 25, 2023.
FORWARD-LOOKING STATEMENTS
Except for historical information provided herein, this press
release contains information and statements of a forward-looking
nature concerning the future performance of the Corporation.
Forward-looking statements are based on assumptions and
uncertainties as well as on management's best possible evaluation
of future events. Such factors include, but are not limited to
customers, supply chain, the aerospace industry and the economy in
general; the impact of other worldwide general economic conditions;
industry conditions including changes in laws and regulations;
increased competition; the lack of availability of qualified
personnel or management; availability of commodities and
fluctuations in commodity prices; financial and operational
performance of suppliers and customers; foreign exchange or
interest rate fluctuations; and the impact of accounting policies
issued by international standard setters. Readers are cautioned
that the foregoing list of factors that may affect future growth,
results and performance is not exhaustive and undue reliance should
not be placed on forward-looking statements.
As a result, readers are advised that actual results may differ
from expected results. Please see the Economic Outlook
section under Overview of the Business, as well as the
Risk Management section under Additional Information
in the Corporation's MD&A for the fourth quarter and fiscal
year ended March 31, 2023, for
further details regarding the material assumptions underlying the
forecasts and guidance. Such forecasts and guidance are provided
for the purpose of assisting the reader in understanding the
Corporation's financial performance and prospects and to present
management's assessment of future plans and operations, and the
reader is cautioned that such statements may not be appropriate for
other purposes.
_________________________________
|
1 This is a
non-IFRS measures. Please refer to the "Non-IFRS Measures" section
at the end of this press release.
|
NON-IFRS FINANCIAL MEASURES
Earnings before interest, taxes, depreciation and amortization
("EBITDA"), adjusted EBITDA, adjusted net income, adjusted earnings
per share and free cash flow are financial measures not prescribed
by International Financial Reporting Standards ("IFRS") and are not
likely to be comparable to similar measures presented by other
issuers. Management considers these to be useful information to
assist investors in evaluating the Corporation's profitability,
liquidity and ability to generate funds to finance its operations.
Refer to Non-IFRS financial measures section under Operating
Results in the Corporation's MD&A for definitions of these
measures and reconciliations to the most comparable IFRS
measures.
ABOUT HÉROUX-DEVTEK
Héroux-Devtek Inc. (TSX: HRX) is an international company
specializing in the design, development, manufacture, repair and
overhaul of aircraft landing gear, hydraulic and electromechanical
actuators, custom ball screws and fracture-critical components for
the Aerospace market. The Corporation is the third-largest landing
gear company worldwide, supplying both the defence and commercial
market segments. Approximately 94% of the Corporation's sales are
outside of Canada, including about
58% in the United States. The
Corporation's head office is located in Longueuil, Québec with facilities in
Canada, the United States, the United Kingdom and Spain.
SOURCE Héroux-Devtek Inc.