Highlights
- Sales increased to $163.5
million, up 16.1% from $140.9
million a year ago
- Operating income increased to $15.6
million, compared to $5.1
million a year ago
- Adjusted EBITDA1 increased to $24.5 million or 15.0% of sales, compared to
$14.1 million, or 10.0% of sales a
year ago
- Earnings per share and adjusted earnings per share1
increased to $0.27 compared to
$0.05 last year
- Cash flows related to operating activities increased to
$11.0 million compared to
$5.2 million last year
LONGUEUIL, QC, Feb. 7, 2024
/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 third quarter ended
December 31, 2023. Unless otherwise indicated, all amounts are
in Canadian dollars.
"We are proud to announce strong third quarter results
reflecting progress in implementing our strategic initiatives. Our
focus on stabilizing our production system is beginning to pay off
and the effects of our pricing initiatives in response to
inflationary pressures are accelerating. These factors drove solid
recovery in both throughput and profitability this quarter,
returning them to historical levels in a supply chain environment
that remains challenging," said Martin
Brassard, President and CEO of Héroux-Devtek.
"Looking ahead, the bright outlook of the aerospace market, the
business opportunities and the momentum of our strategic
initiatives over the next few years allow us to foresee a continued
upward trend in sales volume and profitability beyond the sales and
margins we have generated in the past. As we navigate the path
forward, we appreciate the continued support of our clients,
employees, and partners," added Martin
Brassard.
FINANCIAL
HIGHLIGHTS
|
Three months ended
December 31,
|
Nine months ended
December 31,
|
(in thousands, except
per share data)
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Sales
|
|
$
163,518
|
|
$
140,875
|
|
$
445,714
|
|
$
387,644
|
Operating
income
|
|
15,554
|
|
5,111
|
|
32,151
|
|
16,319
|
Adjusted
EBITDA1
|
|
24,537
|
|
14,129
|
|
59,115
|
|
41,771
|
Net income
|
|
8,980
|
|
1,773
|
|
17,578
|
|
7,537
|
Adjusted net
income1
|
|
8,980
|
|
1,773
|
|
17,578
|
|
6,318
|
Cash flows related to
operating activities
|
|
10,968
|
|
5,237
|
|
(16,810)
|
|
25,542
|
Free cash flow
(usage)1
|
|
199
|
|
1,793
|
|
(41,768)
|
|
7,022
|
In dollars per
share
|
|
|
|
|
|
|
EPS – basic and
diluted
|
|
$
0.27
|
|
$
0.05
|
|
$
0.52
|
|
$
0.22
|
Adjusted
EPS1
|
|
0.27
|
|
0.05
|
|
0.52
|
|
0.18
|
_________________________________
|
1 This is
a non-IFRS measure. Please refer to the "Non-IFRS Financial
Measures" section at the end of this press release.
|
THIRD QUARTER RESULTS
Consolidated sales increased 16.1% to $163.5 million, from $140.9 million in the same period last year,
resulting from the actions taken to stabilize the Corporation's
production system to better deliver in the challenges of the
current environment.
Civil sales were up 41.4% to $63.8
million, mainly driven by increased deliveries for the
Boeing 777 and Embraer Praetor programs. Defence sales were up 4.1%
to $99.7 million mainly due to higher
aftermarket business for legacy programs as well as higher
deliveries for the Sikorsky CH-53K and Lockheed Martin F-35
programs, partly offset by delayed deliveries for the Boeing F-18
program.
Gross profit increased to $29.1
million from $19.9 million, or
17.8% of sales from 14.1% last year. This is mainly due to positive
impact of higher volume and pricing initiatives partly offset by
the effects of inflation on costs.
Operating income increased to $15.6 million or 9.5% of sales from
$5.1 million or 3.6% of sales
last year, mainly reflecting higher volume and margin combined with
a 1% year over year positive foreign exchange impact. Adjusted
EBITDA1, for the same reasons, rose 73.7% to
$24.5 million, or 15.0% of
sales, from $14.1 million or
10.0% of sales last year.
Net income for the third quarter of fiscal 2024 increased to
$9.0 million, or $0.27 per diluted share, compared to $1.8 million or $0.05 per diluted share in the corresponding
quarter last year.
NINE-MONTH RESULTS
Consolidated sales increased 15.0% to $445.7 million, from $387.6 million in the corresponding period
last year, reflecting growth in both civil and defence market
segments as well as the 3.7% positive impact of foreign
exchange.
Civil sales were up 37.6% to $167.5 million, mainly driven by increased
deliveries for the Boeing 777 and Embraer Praetor programs. Defence
sales were up 4.6% at $278.2 million,mainly due to higher
aftermarket business for legacy programs as well as higher
deliveries for the Sikorsky CH-53K and Lockheed Martin F-35
programs. These positive elements were partly offset by delayed
deliveries for the Boeing F-18 program.
Gross profit increased to $71.7 million from $50.8 million last year, or to 16.1% from
13.1% as a percentage of sales. This is mainly due to positive
impact of higher volume and pricing initiative and was partly
offset by the effects of inflation on costs.
Operating income increased to $32.2 million from $16.3 million last year, reflecting higher
volume and margin partly offset by higher employee-related costs.
Adjusted EBITDA1, for the same reasons, rose 41.5% to
$59.1 million, or 13.3% of
sales, from $41.8 million or
10.8% last year.
Net income for the nine-month period stood at $17.6 million, or $0.52 per diluted share, up from $7.5 million, or $0.22 per diluted share, or up from $6.3 million or $0.18 on an adjusted basis in the corresponding
period last year.
LIQUIDITY AND FINANCIAL POSITION
Cash flows related to operating activities reached $11.0 million in the third quarter compared to
$5.2 million during the corresponding
period last year representing an increase of $5.7 million that reflects the impact of higher
throughput. For the nine-month period, cash flows related to
operating activities represented a usage of $16.8 million, compared to $25.5 million generated during the corresponding
period last year, mainly resulting from investments in inventory to
stabilize the production system and sustain upcoming sales
growth.
As at December 31, 2023, net debt stood at $217.9 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 over the nine-month period partially
offset the effects of increasing net debt on the net debt to
adjusted EBITDA1 ratio, which increased to 2.8x from
2.7x at March 31, 2023.
CONFERENCE CALL
Héroux-Devtek Inc. will hold a conference call to discuss these
results on , Wednesday, February 7,
2024, at 8:30 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/ZkYxMqAMrXE.
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 917459 on your phone. Local dial-in
number is 1-416-764-8677. This recording will be available from
Wednesday, February 7, 2024, as of 11:30 AM, until 23:59 PM on Wednesday, February 14, 2024.
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,
including sales volume and profitability. These statements 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.
Forward-looking statements are based on assumptions and on
management's best possible evaluation of future events and are
subject to risks, uncertainties and other important factors that
could cause the Corporation's actual performance to differ
materially from expected results expressed in or implied by such
statements. Such factors include, but are not limited to customers,
supply chain, the aerospace industry and the economy in general;
the impact of other worldwide geopolitical and 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. For further details,
please see the Risk Management section under Additional Information
in the Corporation's MD&A. 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
materially from expected results. Unless otherwise required by
applicable securities laws, the Corporation expressly disclaims any
intention, and assumes no obligation to update or revise any
forward-looking statements whether as a result of new information,
future events or otherwise.
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 57% 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.