Google Finance
Filing
Year End Sept.
June. 29, 2016
2016 Q2 Data
1.Basic Information
(1) History
Exco was founded in 1952 by H.H. Robbins, as a machine shop known as Extrusion Machine Company Limited. It soon evolved into a custom manufacturer of aluminum extrusion dies for Canadian aluminum extruders. In 1976, Brian Robbins, son of the founder, became President, by which time the Company had developed a strong technological base. In 1986, it went public, and has subsequently grown both internally and through acquisitions, and has continued to expand its product line as well as its geographical locations. Now it has 18 manufacturing locations in 10 countries with operations based in North America, Mexico, Colombia, Brazil, and Thailand.
(2) Business
1) Aluminum casting and extrusion, making of aluminum auto parts. This is its traditional business which account around 1/3 of its revenue, the profit margin seems higher ( >10%).
2)Auto interior parts using leather, plastic etc. Count 2/3 of revenue net profit margin is lower ( < 10%).
(3) Management.
CEO: Brian A. Robbins, Son of the founder of the company H. H. Robbins.
(4) Debt and Credit facility.
Recently entered $70m debt mainly for AFX acquisition. Historically very little debt.
(5) Insider holding, options, Insider trading info, share buy back.
Brian A. Robbins: 9.7m shares. 22%
Edward H. Kernaghan: Director, 4.7m shares. 12%. Kernaghan & Partners Ltd, Seems an investing form.
Top 5 compensation $5m for year 2015.
(6) Employee numbers
The company's employee are mainly in offshore manufacturing. Maybe more than 5000 in total. Edward H. Kernaghan: Director, 4.7m shares. 12%. Kernaghan & Partners Ltd, Seems an investing form.
Top 5 compensation $5m for year 2015.
(6) Employee numbers
(7) Auditor
(8) Industry comparison.
Magna International Inc.( TSE:MG): Magna annual sale is about $32 billion. It has 305 manufacturing operations and 93 product development, engineering, and sales centres in 29 countries.
The auto parts supplier produces the body, chassis, exterior, seating, powertrain, electronic, vision, closure and roof systems and modules. It also does complete contract manufacturing and vehicle engineering.
Linamar Corporation(TSE:LNR): Annual sale of $2B. Linamar has 56 manufacturing locations, six research and development centres, and 15 sales offices in 17 countries in North and South America, Europe, and Asia.
The auto parts supplier consists of two operating segments–the Powertrain/Driveline segment and the Industrial segment, which are further divided into four operating groups: Machining and Assembly, Light Metal Casting, Forging, and Skyjack.
Martinrea International Inc(TSE:MRE): Annual sale close to $4B. Production of metal parts, assemblies and modules, fluid management systems and complex aluminum products.
(9) Major events
March 1, 2014, Exco acquired Automotive Leather Company Group (ALC) of South Africa for approximately $17.3 million in cash and 973,895 Exco shares. ALC manufactures and exports luxury leather interior seat covers and other trim components, primarily for BMW in Germany.
Apr. 2016, acquired of AFX Industries L.L.C. ('AFX') for US$73 million, excluding $4 million of assumed debt. AFX is a tier 2 supplier of leather and leather-like interior trim components to the North American automotive market.
2. Financial data.
Apr. 2016, acquired of AFX Industries L.L.C. ('AFX') for US$73 million, excluding $4 million of assumed debt. AFX is a tier 2 supplier of leather and leather-like interior trim components to the North American automotive market.
2. Financial data.
3. Valuation
(1) The company PE ratio is about 11 to 12 which seems pretty low given its high grows rate. However, its rivals are trading around in PE of 6 to 7. The whole sector is trading pretty cheaply. I guess the reason is that Auto business is highly cyclical and when economy is bad, it is getting hit hard.
(2)The company is growing pretty well and is the smallest among the several companies.
(3)The new AFX acquisition is yet to see. The past ALC acquisition seems to be highly successful which revenue doubled in two years.
4. Risk
(1) Auto industry is highly cyclical and subject to economy change.
5. Conclusion
6.Links
