Highlights
- Sales of $132.7 million, stable with $131.3 million a year ago, but an increase of $18.6 million compared to the first quarter
- Operating income at $8.6 million, compared to $12.0 million last year and $2.6 million in the first quarter
- Adjusted EBITDA1 reached $16.2 million, compared to $21.2 million a year ago and $11.4 million in the first quarter
- Cash flows related to operating activities decreased to $8.3 million following investment in inventory
- Strong backlog bolstered by aftermarket and business jet orders
- New life-cycle contract with Embraer to design, develop, and manufacture the main deck cargo door actuation system for the E190F and E195F Freighter conversion program
| 1 | This is a non-IFRS measure. Please refer to the “Non-IFRS Measures” section at the end of this press release. |
LONGUEUIL, QC, Nov. 11, 2022 /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 second quarter ended September 30, 2022. Unless otherwise indicated, all amounts are in Canadian dollars.
“I am encouraged with the improvement in our throughput compared to the first quarter, with sales reaching $132.7 million this quarter compared to $114.1 million in the first quarter, despite planned shutdowns and summer vacation. As well, our profitability improved from the first to the second quarter, and this performance is the result of the relentless work of our people overcoming supply chain and production constraints,” said Martin Brassard, President and CEO of Héroux–Devtek.
“Having worked closely with our teams and strategically increased our inventory, we are in a better position today to satisfy the needs of our customers, though we expect the environment to remain challenging in the coming quarters. Customer demand for our products remains strong, and has in fact increased with aftermarket and business jet orders. Our main challenge at the moment is to satisfy that demand while navigating the volatile production environment. Our talented and dedicated teams will enable us to deliver on that demand, seize the opportunities that may arise in the market, and emerge stronger,” added Martin Brassard, President and CEO of Héroux–Devtek.
| FINANCIAL HIGHLIGHTS | Three months ended | Six months ended | |||||
| September 30, | September 30, | ||||||
| (in thousands, except per share data) | 2022 | 2021 | 2022 | 2021 | |||
| Sales | $132,680 | $131,293 | $246,769 | $257,481 | |||
| Operating income | 8,562 | 11,953 | 11,208 | 22,750 | |||
| Adjusted operating income1 | 7,343 | 11,953 | 9,989 | 22,750 | |||
| Adjusted EBITDA1 | 16,216 | 21,157 | 27,642 | 41,206 | |||
| Net income | 4,799 | 7,510 | 5,764 | 14,213 | |||
| Adjusted net income1 | 3,580 | 7,510 | 4,545 | 14,213 | |||
| Cash flows related to operating activities | 8,264 | 17,467 | 20,305 | 35,652 | |||
| Free cash flow1 | 699 | 11,212 | 5,229 | 25,595 | |||
| In dollars per share | |||||||
| EPS – basic and diluted | $0.14 | $0.21 | $0.17 | $0.40 | |||
| Adjusted EPS1 | 0.10 | 0.21 | 0.13 | 0.40 |
| 1 | This is a non-IFRS measure. Please refer to the “Non-IFRS Measures” section at the end of this press release. |
SECOND QUARTER RESULTS
Consolidated sales increased slightly to $132.7 million, from $131.3 million last year, despite the challenging operating environment.
Civil sales rose 10.7% to $41.3 million, driven by increased deliveries for the Embraer Praetor and Boeing 777 programs, while defence sales were down 2.8% to $91.4 million, partially offset by the ramp-up of deliveries for the Boeing F-18 program.
Gross profit as a percentage of sales decreased from 16.9% last year to 13.8%, mainly due to inefficiencies resulting from the production system disruptions mentioned above and a less favourable product mix, while the Canadian Emergency Wage Subsidy compensated for last year’s COVID-19 disruptions, representing 1.8% of sales.
Operating income decreased to $8.6 million, or 6.5% of sales, from $12.0 million, or 9.1% of sales last year, mainly reflecting lower gross profit.
Earnings per share decreased to $0.14, or to $0.10 when adjusted for the gain on the achievement of commercial objectives related to the sale of Bolton, from $0.21 last year.
SIX-MONTH RESULTS
Consolidated sales decreased 4.2% to $246.8 million, from $257.5 million for the corresponding period last year following lower throughput in the first quarter as a result of the complexities of the current operating environment.
Gross profit as a percentage of sales decreased to 12.5% from 17.0% last year, a result of lower throughput as well as the unfavourable factors described above.
Operating income fell to $11.2 million, or 4.5% of sales, from $22.8 million, or 8.8% of sales last year.
EPS decreased from $0.40 last year to $0.17, or $0.13 this year when adjusted for the gain on the achievement of commercial objectives related to the sale of Bolton.
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 93% of the Corporation’s sales are outside of Canada, including about 59% 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.