World News: 12:00 GMT Friday 10th August 2018. [Heroux-Devtek Inc. via Globe Newswire via SPi World News]
LONGUEUIL, Québec, Aug. 10, 2018 (GLOBE NEWSWIRE) -- Héroux-Devtek Inc. (TSX: HRX), (“Héroux-Devtek” or the “Corporation”), a leading international manufacturer of aerospace products, today reported its results for the first quarter of fiscal 2019 ended June 30, 2018. Unless otherwise indicated, all amounts are in Canadian dollars.
“First quarter results, including sales and profitability, were stable versus last year, in line with Management’s expectations. Sales in the commercial aerospace market increased, driven by Boeing 777 and 777X deliveries, while sales in the defence aerospace market decreased, mainly as a result of the ramp-down of the United States Air Force (“USAF”) contract, which will partially be offset by the new AAR contract starting to gradually ramp-up in the second quarter. We continued to generate strong free cash flow which allowed us to improve an already healthy financial position, with cash and cash equivalents of $99.0 million and a resulting net debt of $33.4 million, said Gilles Labbé, President and CEO of Héroux-Devtek.
“In the past few months, we continued to build a sustainable future. We completed the acquisition of Beaver and signed a number of new contracts with AAR Corporation, The Boeing Company and Lockheed Martin. These accomplishments are a testament to our leadership position in the landing gear market. In particular, the contract for the F/A-18E/F Super Hornet and EA-18G Growler attests to our growing relationship with Boeing and represents a significant win for our defence activities. As for our sales guidance, with the Beaver acquisition, we now expect mid-single digit sales growth for the year when compared to the previous year. Finally, with the CESA acquisition expected to close in the coming weeks, we are well positioned for our next expansion phase,” concluded Gilles Labbé.
Commercial sales increased 5.6% to $45.8 million, versus $43.3 million last year. The increase is mainly attributable to higher large commercial programs sales, mainly related to increased Boeing 777 and 777X deliveries. It is also due to higher business jet sales, primarily related to higher deliveries for the Embraer 450/500 program. These positive factors were partly offset by lower engineering activities.
Defence sales declined 8.1% from $43.5 million to $40.0 million. This variation is essentially due to the ramp-down of repair and overhaul (“R&O”) activities for the USAF and lower manufacturing requirements for certain civil customers. However, the new AAR Corporation contract will begin to mitigate a portion of this loss starting in the second quarter. These negative factors were partly offset by higher spare requirements for the U.S. Government.
Gross profit was $13.1 million, or 15.2% of sales, versus $12.9 million, or 14.9% of sales, last year. The increase mainly reflects higher absorption of costs related to the Boeing 777 program and improved production efficiencies. These factors were partly offset by unfavourable exchange rate fluctuations representing 0.3% of sales.
Operating income stood at $4.9 million, or 5.7% of sales, compared to $5.4 million, or 6.2% of sales last year. Adjusted operating income was $5.2 million, as compared to $5.4 million last year. This quarter’s adjusted operating income excluded $0.4 million of acquisition-related costs. Consequently, adjusted EBITDA, which excludes non-recurring items, was $12.2 million, or 14.3% of sales, compared with $11.9 million, or 13.7% of sales, a year ago.
Net income reached $3.6 million, or $0.10 per diluted share, in the first quarter of fiscal 2019, versus $4.0 million, or $0.11 per diluted share, last year. Excluding non-recurring items net of taxes, adjusted net income reached $3.8 million, or $0.10 per share, versus $4.0 million, or $0.11 per share last year.
As at June 30, 2018, Héroux-Devtek’s funded (firm orders) backlog stood at $454 million, compared to $466 million three months earlier. The backlog does not include recently announced contracts.
Please see “Forward-Looking Statements” below and the Guidance section in the Corporation’s MD&A for the quarter ended June 30, 2018, for further details regarding the material assumptions underlying the foregoing guidance.
An accompanying presentation will also be available on Héroux-Devtek’s website, .
If you are unable to call in at this time, you may access a tape recording of the meeting by calling 1-800-585-8367 and entering the passcode 3274689 on your phone. This recording will be available on Friday, August 10, 2018 as of 2:30 PM Eastern Time until 11:59 PM Eastern Time on Friday, August 17, 2018.
Globe Newswire: 12:00 GMT Friday 10th August 2018
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