Highlights
- Sales increased to $140.7
million, up from $114.1
million a year ago, or 23.3% year-over-year
- Operating income of $7.5 million,
compared to $2.6 million a year
ago,
- Adjusted EBITDA1 increased 43.2% to $16.4 million, compared to $11.4 million a year ago
- Earning per share increased to $0.12, compared to $0.03 last year
- Cash flows related to operating activities reflect higher
working capital to support operations and growth
LONGUEUIL,
QC, Aug. 8, 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 first quarter ended June 30, 2023. Unless otherwise indicated, all
amounts are in Canadian dollars.
"We are proud of our performance this quarter, as
we delivered sales totaling $141
million, bringing our trailing twelve-month total to
$570 million. Fulfilling orders at a steady pace remains a
challenge in this environment and this quarter's success is the
direct result of the improvements we put in place over the past
year. Our teams have managed a substantial surge in demand,
positioning us to further improve our results and expand our market
share. I would like to thank every employee for their
professionalism and dedication," said Martin Brassard, President and CEO of
Héroux-Devtek.
"We are well positioned for upcoming
opportunities in both the civil and defence market segments. While
our order book is already healthy, our customers have many
projects, and we will continue to support them as they pursue their
growth," added Mr. Brassard.
FINANCIAL
HIGHLIGHTS
|
Three months
ended June 30,
|
(in thousands, except per share
data)
|
|
2023
|
|
2022
|
Sales
|
|
$
140,697
|
|
$
114,089
|
Operating
income
|
|
7,496
|
|
2,646
|
Adjusted
EBITDA1
|
|
16,357
|
|
11,426
|
Net income
|
|
3,970
|
|
965
|
Cash flows related to
operating activities
|
|
(12,198)
|
|
12,041
|
Free cash flow
(usage)1
|
|
(20,543)
|
|
4,530
|
In dollars per
share
|
|
|
|
EPS – basic and
diluted
|
|
$
0.12
|
|
$
0.03
|
_________________________________
|
1This is a
non-IFRS measure. Please refer to the "Non-IFRS Financial Measures"
section at the end of this press release.
|
FIRST QUARTER RESULTS
Consolidated
sales increased 23.3% to $140.7 million, from $114.1 million in the same period last year,
reflecting growth in both the civil and defence market segments as
well as the 5.5% positive impact of foreign exchange.
Civil sales were up 41.8% to $50.2 million, mainly driven by increased
deliveries for the Boeing 777 and Embraer Praetor programs. Defence
sales were also up 15.1% at $90.5
million due to the alignment of operations to better deliver
while facing the challenges of the current environment as well as
the ramp-up of deliveries for the Sikorsky CH-53K.
Gross profit increased to $20.1 million from $12.5
million, or from 11.0% last year to 14.3% as a percentage of
sales. This is mainly due to higher volume and was partly offset by
the year-over-year effects of inflation on labour and general
production supplies, as well as a 0.3% negative impact of foreign
exchange.
Operating income increased to $7.5 million from $2.6
million last year, reflecting higher volume partly offset by
an increase in selling and administrative expenses driven by higher
employee-related costs, as well as the $1.0
million year-over-year negative impact of foreign exchange.
Adjusted EBITDA, for the same reasons, rose 43.2% to $16.4 million, or 11.6% of sales, from
$11.4 million or 10.0% last year.
Net income for the first quarter of fiscal 2024
stood at 4.0 million, or $0.12 per
diluted share, up from 1.0 million, or $0.03 per diluted share, in the corresponding
period last year.
LIQUIDITY AND FINANCIAL POSITION
Cash
flows related to operating activities represented a usage of
$12.2 million in the first quarter,
compared to $12.0 million generated
during the corresponding period last year. This decrease resulted
from last year's proceeds of $11.3
million from the unwinding of cross-currency interest rate
swaps, an unfavourable seasonal variation in accounts receivable
and accounts payable compared to last year and from the strategic
investment in inventory levels made to stabilize the production
system and sustain future sales growth.
As at June 30,
2023, net debt stood at $187.5
million, an increase as compared to $165.0 million as at March
31, 2023, mainly as a result of the cash flow usage
described above. The improved profitability this quarter compared
to last partly offset the effect of increased net debt on the net
debt to adjusted EBITDA ratio, which therefore increased slightly
to 2.8x compared to 2.7x at March 31,
2023.
CONFERENCE CALL
Héroux-Devtek Inc. will
hold a conference call to discuss these results on Tuesday, August 8, 2023, at 11:00 AM Eastern Time. Interested parties can
join the call by dialing 1-888-390-0549 (North America) or 1-416-764-8682 (overseas).
The conference call and accompanying presentation can also be
accessed via live webcast at Héroux-Devtek's website,
https://investors.herouxdevtek.com/events-webcasts or at
https://app.webinar.net/GyOvbwp8MkL.
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 886811 on your phone.
Local dial-in number is 1-416-764-8677. This recording will be
available from Tuesday, August 8,
2023, as of 2:00 PM, until
23:59 PM on Tuesday, August 15,
2023.
ANNUAL MEETING OF
SHAREHOLDERS
Héroux-Devtek will hold its Annual Meeting of
Shareholders today, Tuesday, August 8,
2023, at 10:00 a.m. local time
in virtual format. Participants who wish to attend the Annual
Meeting will be able to join the webcast at
https://web.lumiagm.com/413565050. All the details to access the
Annual Meeting are also available on the Corporation's website.
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 Risk
Management section under Additional Information in the
Corporation's MD&A for the first quarter ended June 30, 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.
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 sectors. Approximately
94% of the Corporation's sales are outside of Canada, including about 61% 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.