Héroux-Devtek Inc. Press Release
Q3 Financial and Operational Highlights
- Sales of $157.3 million, up 8.8% from $ 144.5 million last year
- Operating income of $13.5 million, up 13.1% from $11.9 million last year
- Adjusted EBITDA1 of $24.6 million, up 7.3% from $22.9 million last year
- Corporation announces increase to Fiscal 2020 sales guidance to $600-610 million range
- Funded backlog2 increased to a record-level of $839 million, up 9.1% from $769 million in Q2
- Successful completion by Boeing, subsequent to quarter-end, of the first flight for the new Boeing 777X commercial aircraft for which Héroux-Devtek provides complete landing gear systems
LONGUEUIL, QC, Feb. 6, 2020 /CNW Telbec/ – 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, 2019. Unless otherwise indicated, all amounts are in Canadian dollars.
“I am pleased with our Q3 results and by the continued growth of our commercial and defence sales, especially on the heels of what had been a particularly strong third quarter last year. Accordingly, we have reviewed our sales guidance for Fiscal 2020 upwards, which we now expect to reach $600-610 million as a reflection of stronger than expected growth,” said Martin Brassard, President and CEO of Héroux-Devtek.
“We are committed to continue to deliver on all our programs, especially as several of them will be reaching important development milestones over the course of the next twelve months, including the very promising Boeing 777X program that successfully completed its first flight on January 25, 2020. Our short-term focus is to execute on our backlog,” concluded Mr. Brassard.
THIRD QUARTER RESULTS
Consolidated sales grew 8.8% to $157.3 million, up from $144.5 million last year, including a 1.4% organic growth and a contribution of $10.8 million by the Corporation’s recent acquisitions. Commercial sales grew 11.8% from $65.5 million to $73.2 million, while defence sales were up 6.3%, from $79.0 million to $84.1 million.
Strong performances by Beaver and CESA, offset by the temporarily dilutive effect of the margin of more recently acquired businesses, led to relatively stable gross profit as a percentage of sales for the third quarter as compared to the corresponding period last year.
Operating income increased to $13.5 million, or 8.6% of sales, up from $11.9 million, or 8.2% of sales last year. Adjusted EBITDA, which excludes non-recurring items, stood at $24.6 million, or 15.6% of sales, compared with $22.9 million, or 15.8% of sales, a year ago. Foreign exchange fluctuations had an unfavorable net impact of $1.1 million year-over-year, or 0.7% of sales.
EPS grew from $0.20 last year to $0.24 as last year’s EPS included non-recurring acquisition costs of $2.0 million net of taxes or $0.06 per share. Adjusted EPS decreased from $0.26 last year to $0.24 mainly due to the foreign exchange fluctuations representing $0.02 per share.
The Corporation’s funded backlog increased to $839 million as at December 31, 2019, compared to $769 million as at September 30, 2019, mainly due to increased demand for defence products under long-term contracts.
NINE-MONTH RESULTS
Consolidated sales grew 36.9% to $446.2 million, up from $326.0 million for the corresponding period last year. Organic growth accounted for 8.8% of this increase, while the Corporation’s recent acquisitions contributed $91.5 million. Commercial sales grew 33.8% in the first nine months of the year, from $158.3 million to $211.8 million, while defence sales were up 39.8% for the same period last year, from $167.7 million to $234.4 million.
Gross profit as a percentage of sales for the first nine months of the year was also negatively impacted by higher manufacturing costs at our Longueuil facility compared to last year.
In the first nine months of the year, operating income increased to $34.4 million, or 7.7% of sales, up from $22.1 million, or 6.8% of sales last year. Adjusted EBITDA, which excludes non-recurring items, stood at $67.6 million, or 15.1% of sales, compared with $48.3 million, or 14.8% of sales last year.
For the same period, EPS grew from $0.39 last year to $0.60, while adjusted EPS grew to $0.61, up from the $0.48 recorded in the same period last year. Last year, adjusted EPS excluded non-recurring acquisition costs representing $3.3 million net of taxes or $0.09 per share.