Exco Technologies Limited (XTC) 2024年年度報告「TSX」.pdf

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1、(1)Earnings before interest,taxes,depreciation and amortization.(2)Before net change in non-cash working capital.2420212223461.2489.9619.3412.3Casting&Extrusion Technologies Automotive SolutionsPRODUCTION FACILITIESDartmouth,NSUxbridge,ONNewmarket,ONMarkham,ONChesterfield,MIToledo,OHQueretaro,MX(3)M

2、atamoros,MX(2)Wylie,TXMedellin,ColombiaSorocaba,BrazilTangier,MoroccoAldenhoven,GermanyWeissenburg,GermanyBrescia,Italy(2)Kenitra,MoroccoChonburi,ThailandDILUTED EARNINGSPER SHAREEBITDA(1)SALESCASH FLOWFROM OPERATINGACTIVITIES(2)($millions)($millions)($millions)637.8242021222362.849.770.249.52420212

3、22370.153.074.553.52420212223$0.98$0.49$0.68$0.6982.2$0.7671.6EXCO TOOLING SOLUTIONS1LETTER TO STAKEHOLDERS F2024EXCO TECHNOLOGIES LIMITEDANNUAL REPORT 2024Precision in MotionDear Stakeholders,In F2024,Exco delivered on our growth objectives amid an evolving industry landscape.We achieved record rev

4、enue of$638 million,generated EBITDA of$82 million,and produced earnings per share of$0.76.Free Cash Flow also grew substantially to$54 million,which we allocated to drive future growth and strengthen our fnancial position.We invested$14 million in growth capital expenditures,returned$19 million to

5、sharehold-ers,and reduced our net debt to$73 million.Our theme,“Precision in Motion,”has shaped our oper-ational and strategic eforts this past year.By enhancing the precision of our products and processes,we are building a robust foundation to address market challenges and seize opportunities for s

6、ustainable growth.Adapting to Industry ChangeThe automotive industry,our primary market,is under-going signifcant transformation.While recent years have seen strong demand for light vehicles,the near-term outlook refects softer conditions driven by economic pressures with production adjustments taki

7、ng efect.At the same time,the pace of electric vehicle(EV)adoption has moderated,the lifespan of internal combustion engines(ICE)is extending,and the use of hybrid powertrains is gaining momentum.How-ever,the longer-term outlook for the automotive indus-try remains very positive,with easing interest

8、 rates expected to improve vehicle afordability and the need to replace an aging feet driving renewed growth in consumer demand.Additionally,improving safety and technology features are creating new opportunities,as advancements such as advanced driver-assistance systems(ADAS)and enhanced connectivi

9、ty are increas-ingly infuencing consumer preferences and fostering greater demand.Exco is uniquely positioned to thrive in this evolving landscape.Our operations are designed to serve all powertrain typesEVs,ICE,and hybridswithout reliance on infrastructure dedicated to any single technology.While E

10、Vs remain a critical component of our growth strategy,and we are confdent in their long-term potential,our adaptability ensures we can meet the diverse needs of the market,regardless which direction it takes.Over time,we expect the transition towards EVs will drive the increasing adoption of transfo

11、rmative technol-ogies like giga-presses,which enable the production of entire vehicle subframes in a single aluminum casting.This technology signifcantly improves OEM manufac-turing efciency,reduces complexity,and enhances sustainability.As giga-press technology gains traction,Exco is well-equipped

12、to deliver the advanced tooling solutions required for their implementation.Beyond the die-cast market,the extrusion market is also expected to experience long-term growth fueled by global sustainability initiatives.Lightweight,recyclable materials like aluminum are increasingly favored as industrie

13、s prioritize reducing their environmental footprint.Simultaneously,extruders are focused on improving productivity and workplace safety,and Excos products are specifcally designed to support these goals with innovative features that enhance operational efciency and safety.As extrusion tooling become

14、s LETTER TO STAKEHOLDERS F20242EXCO TECHNOLOGIES LIMITEDANNUAL REPORT 2024larger and more complex,Excos advanced capabilities and expertise position us as a trusted leader in deliver-ing innovative solutions tailored to these evolving demands.Casting and Extrusion:Signifcant Investments Yielding Res

15、ultsIn recent years,Exco has strategically invested in expanding our Casting and Extrusion segment.These investments include geographic expansions through acquisitions and greenfeld projects,advanced equip-ment acquisitions,and technological enhancements,including highly efcient heat treatment furna

16、ces.These initiatives have solidifed our leadership in alumi-num tooling and enable us to address growing global demand for larger,more sophisticated die-cast and extrusion components.While the full returns on these investments will take time to materialize,the progress is evident.The segment has de

17、monstrated strong top-line growth complemented by meaningful margin expansion,driven by operational efciencies and economies of scale from our expanded footprint.Moving forward,we anticipate additional productivity gains and scale bene-fts from these investments,which will increasingly contribute to

18、 Excos fnancial objectives.Interior Trim and OEM Accessories:Growing Content,Value,and MarginsOur Automotive Solutions group remains a cornerstone of Excos long-term growth strategy,focused in the areas of interior trim products and OEM accessories.By leveraging our low-cost operations and a relentl

19、ess drive for operational excellence,we continue to meet the evolving demands of OEMs while increasing our content per vehicle.Among our oferings,accessory products stand out as high-growth and high-margin.These value-added products provide OEMs with opportunities to diferenti-ate their vehicles and

20、 enhance proftability,a trend that continues to gain momentum.Excos innovative design and manufacturing capabilities position us as a clear leader in this space,delivering solutions as a tier I suppli-er to the OEMs that elevate vehicle appeal while meet-ing customer needs.We are also addressing inf

21、ationary challenges tied to legacy programs,which have afected margins.As these older programs mature,they are being replaced by newer programs with more favorable economics.This transition is expected to drive margin improvements across the segment,reinforcing its proftability and contribution to E

22、xcos long-term success.Innovation and Sustainability:Precision in ActionInnovation is at the core of Excos strategy,driving our ability to deliver precision and sustainability.Our leader-ship in 3D printing of tool steel allows us to produce highly complex,customized tooling components with unmatche

23、d precision.This reduces waste while enhanc-ing the performance and durability of our customers tooling,which is increasingly critical as the industry transitions to larger,more complex components.In addition to 3D printing,Exco continues to embrace advanced technologies such as artifcial intelligen

24、ce(AI)and machine learning.These tools optimize production processes,improve decision-making,and enhance LETTER TO STAKEHOLDERS F20243EXCO TECHNOLOGIES LIMITEDANNUAL REPORT 2024operational responsiveness,ensuring efciency and precision throughout our facilities.Our commitment to innovation also exte

25、nds to materi-als science.By incorporating sustainable raw materials that enhance performance and minimize environmen-tal impact,we align with industry priorities while strengthening our leadership in eco-friendly manufac-turing.Examples of these initiatives are highlighted across our divisions and

26、detailed in our Sustainability Report.Path Forward and Financial OutlookLooking ahead,Excos strong foundation,innovative spirit,and talented team position us as a leader in the evolving automotive and extrusion industries.We are confdent that our strategic investments in people,facilities,and equipm

27、ent will unlock growth opportuni-ties and enable us to deliver sustained value to our shareholders and customers alike.With the benefts of recent capital expenditures,Exco is targeting annual revenue of$750 million,EBITDA of$120 million,and EPS of approximately$1.50 by the end of F2026.While challen

28、ges remain,we are ready to navigate uncertainties and seize opportunities as we continue moving forward with“Precision in Motion.”Sincerely,Darren M.Kirk,MBA,CFAPresident and CEO CONTENTS 5 Managements Discussion and Analysis 24 Independent Auditors Report 28 Consolidated Financial Statements 32 Not

29、es to Consolidated Financial Statements This Managements Discussion and Analysis of Financial Condition and Results of Operations(“MD&A”)should be read in conjunction with the consolidated financial statements and related notes of Exco Technologies Limited(“Exco”,or“Company”)for the year ended Septe

30、mber 30,2024.This MD&A has been prepared as of November 27,2024.This MD&A has been prepared by reference to the MD&A disclosure requirements established under National Instrument 51-102“Continuous Disclosure Obligations”(“NI 51-102”)of the Canadian Securities Administrators.Additional information re

31、garding Exco,including copies of its continuous disclosure materials such as its Annual Information Form,is available on its website at or through the SEDAR website at www.sedarplus.ca.In this MD&A,reference may be made to EBITDA,EBITDA Margin,Pretax Profit,Net Debt,Free Cash Flow and Maintenance Fi

32、xed Asset Additions which are not defined measures of financial performance under International Financial Reporting Standards(“IFRS”).A reconciliation to these non-GAAP measures is provided within this MD&A.Exco calculates EBITDA as earnings before interest,taxes,depreciation and amortization and EB

33、ITDA Margin as EBITDA divided by sales.Exco calculates Pretax Profit as segmented earnings before other income/expense,interest and taxes.Net Debt represents the Companys consolidated net indebtedness position offsetting cash from bank indebtedness,current and long-term debt.It is calculated as Long

34、-term debt plus Current portion of Long-term debt plus Bank indebtedness less Cash and cash equivalents.Free Cash Flow is calculated as cash provided by operating activities less interest paid and Maintenance Fixed Asset Additions.Maintenance Fixed Asset Additions represent managements estimate of t

35、he investment in fixed assets that is required for the Company to continue operating at current capacity levels.Given the Companys elevated planned capital spending on fixed assets for growth initiatives(including additional Greenfield locations,energy efficient heat treatment equipment and increase

36、d capacity)in recent years,the Company has modified its calculation of Free Cash Flow to include Maintenance Fixed Asset Additions and not total fixed asset purchases.This change is meant to enable investors to better gauge the amount of generated cash flow that is available for these investments as

37、 well as acquisitions and/or returns to shareholders in the form of dividends or share buyback programs.EBITDA,EBITDA Margin,Pretax Profit and Free Cash Flow are used by management,from time to time,to facilitate period-to-period operating comparisons and we believe some investors and analysts use t

38、hese measures as well when evaluating Excos financial performance.These measures,as calculated by Exco,do not have any standardized meaning prescribed by IFRS and are not necessarily comparable to similar measures presented by other issuers.CAUTIONARY STATEMENT Information in this document relating

39、to:projected light vehicle sales and production,original equipment manufacturers(OEM)capital investment levels,the rate and intensity of OEM development of all-electric or hybrid 4EXCO TECHNOLOGIES LIMITEDANNUAL REPORT 2024powertrain systems,the level of order backlog of the Companys business units,

40、contribution of our start-up business units,contribution of awarded programs yet to be launched,margin performance,financial performance of acquisitions and operating efficiencies are forward-looking statements.We use words such as anticipate,may,will,should,expect,believe,estimate,“5-year target”an

41、d similar expressions to identify forward-looking information and statements especially with respect to growth,outlook and financial performance of the Companys business units,contribution of our start-up business units,contribution of awarded programs yet to be launched,margin performance,financial

42、 performance of acquisitions,liquidity,operating efficiencies,improvements in,expansion of and/or guidance or outlook as to future revenue,sales,production sales,margin,earnings,earnings per share,including the outlook for the year ending fiscal 2026.Readers are cautioned not to place undue reliance

43、 on forward-looking statements found mainly in the MD&A section but also elsewhere throughout this document.These forward-looking statements are based on our plans,intentions or expectations which are based on,among other things,the global economic recovery from any future outbreak of epidemic,pande

44、mic,or contagious diseases that may emerge in the human population,which may have a material effect on how we and our customers operate our businesses and the duration and extent to which this will impact our future operating results,the impacts of international conflicts on the global financial,ene

45、rgy and automotive markets,including increased supply chain risks,assumptions about the number of automobiles produced in North America and Europe,the potential for overseas automotive OEMs to make inroads in North America and Europe,including the implementation of tariffs that Governments may use t

46、o protect domestic OEMs,production mix between passenger cars and trucks,the number of extrusion dies required in North America,South America,and Europe,the rate of economic growth in North America,Europe and emerging market countries,investment by OEMs in drivetrain architecture and other initiativ

47、es intended to reduce fuel consumption and/or the weight of automobiles in response to rising climate risks,raw material prices,supply disruptions,economic conditions,inflation,currency fluctuations,trade restrictions,energy rationing in Europe and elsewhere,our ability to integrate acquisitions,our

48、 ability to continue increasing market share,or launch of new programs and the rate at which our current greenfield operations in Mexico and Morocco achieve sustained profitability,recoverability of capital assets,goodwill and intangibles(based on numerous assumptions inherently uncertain),and cyber

49、 security and its impact on Excos operations.These forward-looking statements include known and unknown risks,uncertainties,assumptions and other factors which may cause actual results or achievements to be materially different from those expressed or implied.For a more extensive discussion of Excos

50、 risks and uncertainties see the Risks and Uncertainties section in this Annual Report and other reports and securities filings made by the Company.This information is available at www.sedarplus.ca.While Exco believes that the expectations expressed by such forward-looking statements are reasonable,

51、we cannot assure that they will be correct.In evaluating forward-looking information and statements,readers should carefully consider the various factors which could cause actual results or events to differ materially from those indicated in the forward-looking information and statements.Readers are

52、 cautioned that the foregoing list of important factors is not exhaustive.Furthermore,the Company will update its disclosure upon publication of each fiscal quarters financial results and otherwise disclaims any obligations to update publicly or otherwise revise any such factors or any of the forwar

53、d-looking information or statements contained herein to reflect subsequent information,events or developments,changes in risk factors or otherwise.MANAGEMENTS DISCUSSION AND ANALYSIS CORE BUSINESSES Exco is a global designer,developer and manufacturer of dies,moulds,components and assemblies,and con

54、sumable equipment for the die-cast,extrusion and automotive industries.The Company reports in two operating segments.5EXCO TECHNOLOGIES LIMITEDANNUAL REPORT 2024The Casting and Extrusion segment designs,develops and manufactures tooling and consumable parts for both aluminum die-casting and aluminum

55、 extrusion machines.Operations are based in North America,South America,Europe,Thailand and Morocco and serve automotive and industrial markets around the world.Exco is a leader in most of its markets which principally consist of North America for die-cast tooling,Europe,North,Central and South Amer

56、ica for extrusion tooling and globally for consumable tooling parts and related equipment.Across its markets,Exco is focused on further entrenching itself by reducing lead times and manufacturing costs through design and process enhancements.Major capital projects have been implemented in recent yea

57、rs to increase capacity,reduce lead times,further improve quality and reduce costs while pushing the envelope on innovation.Excos expansion into 3D printing tooling components in recent years is a good example of this.The Company is now a clear industry leader in the design,engineering and manufactu

58、ring of 3D printed tooling components globally.In the machine consumables market,Exco is leveraging its long tradition as a reliable,high-quality supplier of consumable components for the injection system of die-cast machines and aluminum extrusion presses by evaluating,coordinating and ultimately m

59、aximizing customers overall equipment performance and longevity.The Automotive Solutions segment designs,develops and manufactures automotive interior trim components and assemblies primarily for passenger and light truck vehicles.The Polytech and Polydesign businesses manufacture synthetic net and

60、other cargo restraint products,injection-moulded components,shift/brake boots,related interior trim components and assemblies.Polydesign is also a manufacturer and/or finisher of injection moulded interior trim and instrument panel components,sun visors,seat covers,head rests and other cut and sew p

61、roducts.Neocon is a supplier of soft plastic trunk trays,rigid plastic trunk organizer systems,floor mats and bumper covers.AFX Industries is a tier 2 supplier of leather and leather-like interior trim components to the North American automotive market.AFX also supplies die cut leather sets for seat

62、ing and many other interior trim applications as well as injection-molded,hand-sewn,machine-sewn and hand-wrapped interior trim components of all sorts.Automotive Solutions manufacturing facilities are located in Canada,the United States,Mexico,and Morocco supplying the automotive markets in North A

63、merica,Europe and to a lesser extent,Asia.VISION AND STRATEGY The Companys vision is“to be the benchmark for innovation,efficiency and quality in the industries we serve.”The Companys mission is to“enhance the look and functionality of passenger vehicles and tool up light metal industries for superi

64、or performance.”Exco has pursued several key strategies to achieve sustainable revenue and earnings growth.These include:(1)strengthening our leadership and competitive position in our chosen markets through automation and technology,(2)minimizing our cost structure,(3)maintaining the bulk of our pr

65、oductive capacity in lower-cost jurisdictions and/or in close proximity to our customers operations,(4)diversifying our revenue base with new products and services that leverage our competitive strengths,and(5)capitalizing on organic and inorganic growth opportunities in both our existing and select

66、 developing markets see“Marketplace opportunities and efficiency initiatives”,below.Exco was founded on a commitment to excellence and a culture of entrepreneurship and dedication to ethical business practices.We encourage continuance of these traits by providing incentives for our managers to grow

67、their business and giving our employees the latitude to push the envelope on innovation while adhering to our Code of Conduct.MARKETPLACE OPPORTUNITIES AND EFFICIENCY INITIATIVES In the automotive sector,Original Equipment Manufacturers(OEMs)continue to move towards electric or hybrid vehicles and t

68、o reduce vehicle weight in all passenger vehicles to improve fuel efficiency.Excos products form an integral part of this industry transformation.6EXCO TECHNOLOGIES LIMITEDANNUAL REPORT 2024Lightweight metals such as aluminum are increasingly displacing steel in order to make conventional(internal c

69、ombustion engine)vehicles more environmentally friendly.As well,electric and hybrid vehicles make extensive use of aluminum components to reduce weight and therefore maximize battery range and performance.Excos Casting and Extrusion segment,which comprises 48%of total revenues,is especially well pos

70、itioned to benefit from this ongoing transition.More recently,die-cast aluminum components and associated tooling have been increasing significantly in both size and complexity.Tesla has pushed the envelope in this regard,using die-casting machines that are much larger than those used previously.Thi

71、s enables Tesla to cast entire subframes of the vehicle rather than assembling numerous stamped metal components in the body shop,creating significant manufacturing efficiency gains.Other traditional OEMs and tier foundries are following Teslas lead in using these larger die-cast machines(giga press

72、es),and Exco expects there will be significant growth in this part of the market over the next several years.Accordingly,we are making sizeable additional investments in our people,equipment and processes to remain a leading supplier in this market.Our customers are also increasingly focused on impr

73、oving their own productivity and our products are actively helping in this regard.For example,we design and incorporate 3D printed components into our moulds which greatly enhances the overall quality and performance of the die-cast process while reducing the use of steel,energy and transportation c

74、osts.Similarly,Castool has evolved their products and systems to provide less expensive,longer lasting,more energy efficient and safer products.The group focuses on making components and accessories that will increase the customers tooling life while ensuring less scrap and energy consumption.In doi

75、ng so,we promote a higher energy and material efficiency in the value chain of production,while better service is being delivered to the end-consumer.Our Automotive Solutions group,which manufactures various products for the interior passenger compartments and trunks of vehicles,is also a contributo

76、r to vehicle lightweighting trends.Excos Automotive Solutions segment typically makes products that are lighter in weight than competing products.For example,Neocon offers lightweight material options that are an ideal fit for vehicles regardless of powertrain.By incorporating a foaming additive dur

77、ing the extrusion process and creating air voids in the base layer,Neocon created a thermoplastic rubber(TPR)product that is 45%lighter than a traditional thermoplastic elastomer(TPE)injection molded alternative.Exco is committed to running its facilities as efficiently as possible,delivering the sa

78、me innovative,high-quality products to our customers with less energy,fewer materials and lower waste.In this regard,several of our businesses have achieved ISO 14001 certification,the international standard that specifies requirements for an effective environmental management system.More broadly,we

79、 remain focused on employing lean manufacturing principles to reduce and eliminate waste while also making substantial investments in new,energy efficient equipment.As well,our multi-plant footprint with standardized manufacturing processes provides superior capacity utilization and gives proximity

80、to market which reduces carbon emissions through reduced transportation requirements.Several other innovative technological advancements and initiatives are being employed throughout the organization to help achieve our goals.FISCAL 2024 OVERVIEW Sales,Earnings and Strategic Investments Fiscal 2024

81、consolidated sales were up 3%compared to the prior year driven by a 5%increase in the Casting and Extrusion segment and a 1%increase in the Automotive Solutions segment.Casting and Extrusion segment sales increased on higher demand for die-cast moulds(new dies and rebuilds)and relatively stable dema

82、nd for extrusion dies and related products(in both the Americas and Europe).These factors were partially offset by lower steel prices,7EXCO TECHNOLOGIES LIMITEDANNUAL REPORT 2024which are a pass-through for certain tooling products.Automotive Solutions segment sales reflect relative stability in Nor

83、th American and European automotive production levels,higher demand for accessory products,and new program launches.These factors were partially offset by the United Autoworkers Union(UAW)strike in the first quarter,softening conditions in Europe due to global unrest,increased competition from China

84、,and manufacturers adjusting production to meet European Corporate Average Fuel Economy(CAFE)standards.Resilient demand for Excos products reflect the impact of the Companys various strategic growth initiatives.These initiatives are primarily driven by the increased adoption of electric and hybrid v

85、ehicles,the lightweighting of all passenger motor vehicles generally,the broader global environmental sustainability movement and the adoption of advanced die-cast and extrusion tooling to meet these global changes to manufacturing.Earnings per share were$0.76 in fiscal 2024 compared to$0.68 in fisc

86、al 2023 a 12%increase.Pre-tax profits were higher in the Casting and Extrusion segment and lower in the Automotive Solutions segment.Higher sales,more predictable volumes,and improved labour and production efficiencies contributed to the profitability improvement in the Casting and Extrusion segment

87、,which more than offset much higher levels of depreciation associated with recent capital spending activity.Pre-tax profits in the Automotive Solutions segment were negatively impacted by the first quarter UAW strike,higher labour costs,adverse currency movements,customer driven launch delays,and em

88、ployee severance costs associated with efficiency initiatives.Overall pre-tax profits were also impacted by ongoing start-up losses at new operations,disruption to existing operations associated with installing new equipment and upgrading capabilities,and inflationary pressure on wages and materials

89、 generally.During the year,the Company invested$33.9 million in capital assets and focused considerable management time and attention on our newer facilities and acquisitions.Overall capital spending in F2024 was well below expectations at the beginning of the year as management prioritized profitab

90、le investment opportunities and experienced a delay in receiving certain equipment.The impact of these investments continues to suppress near-term margins and overall profitability.But Exco expects these investments will provide meaningful profits over a multi-year horizon as the operations season a

91、nd increased scale is achieved.Our recent and current key projects are summarized as follows:Castool Morocco Greenfield Facility Opened in November 2021 and positions Castool to better penetrate theEuropean die cast and extrusion tooling markets for consumable and capital items.The plant is anticipa

92、ted todemonstrate steady growth in both top and bottom-line performance as operations mature;Castool Mexico Greenfield Facility Opening ceremonies for this facility occurred in October 2023 and operations commenced concurrently.This facility has increased manufacturing capacity and positions Castool

93、 to betterpenetrate markets in Latin America and the Southern United States.Depreciation expenses and start-up cash costsincreased in F2024,but financial results are expected to quickly improve in F2025 and beyond;Castool Heat Treatment Operations Fully operational and handling all of Castool Uxbrid

94、ge and Large MouldNewmarket heat treatment requirements.Large Mould Group Capital Additions All equipment to support Giga-sized moulds installed and operational.Additional investments to support continued growth in our leading additive manufacturing(3D printing)are beingpursued;Halex operations New

95、equipment continues to be installed at the various locations while work continues tofurther integrate Halex into the broader Extrusion Group and realize synergies from the sharing of best practices;Extrusion Group Heat Treatment Installation of new vacuum heat treatment equipment in Mexico,Texas and

96、Markham are all fully operational.New,similar equipment has been ordered for our Michigan location forinstallation in early F2025;Automotive Solutions Group New equipment continues to be installed within the previously expanded footprintto support a growing book of business.8EXCO TECHNOLOGIES LIMITE

97、DANNUAL REPORT 2024Outlook By the end of fiscal 2026,Exco is targeting to produce approximately$750 million annual revenue,$120 million annual EBITDA and annual EPS of roughly$1.50.Exco has made significant progress towards achieving these targets since they were announced in Fiscal 2021 and continu

98、es to believe its targets remain obtainable.These targets are expected to be achieved through returns on greenfield and strategic initiatives,the launch of new programs,general market growth,and also market share gains consistent with the Companys operating history.Despite current macro-economic cha

99、llenges,including slightly increasing levels of unemployment,relatively high interest rates,persistent inflation,policy shifts which may occur related to the US election,the overall outlook is favorable across Excos segments into the medium term.Consumer demand for automotive vehicles remains stable

100、 in most markets.And while dealer inventory levels have been increasing,average transaction prices for both new and used vehicles remain firm,incentives are increasing and the average age of the broader fleet has continued to increase.This bodes well for strong levels of future vehicle production an

101、d the sales opportunity of Excos various automotive components and accessories.In addition,OEMs are increasingly looking to the sale of higher margin accessory products as a means to enhance their own levels of profitability.Excos Automotive Solutions segment derives a significant amount of activity

102、 from such products and is a leader in the prototyping,development and marketing of the same.Moreover,the movement towards an electrified and hybrid fleet for both passenger and commercial vehicles is enticing new market entrants into the automotive market while causing traditional OEM incumbents to

103、 further differentiate their product offerings,all of which is driving above average opportunities for Exco.With respect to Excos Casting and Extrusion segment,the intensifying global focus on environmental sustainability has created significant growth drivers that are expected to persist through at

104、 least the next decade.Automotive OEMs are utilizing light-weight metals such as aluminum to reduce vehicle weight and reduce carbon dioxide emissions.This trend is evident regardless of powertrain design-whether internal combustion engines,electric vehicles or hybrids.As well,a renewed focus on the

105、 efficiency of OEMs in their own manufacturing process is creating higher demand for advanced tooling that can enhance their profitability and sustainability goals.Certain OEM manufacturers have begun utilizing much larger die cast machines(giga-presses)to cast entire vehicle sub-frames using alumin

106、um-based alloy rather than stamping,welding,and assembling separate pieces of ferrous metal.Exco is in discussions with several traditional OEMs and their tier providers who appear likely to follow this trend.While the growth of EVs in North America and Europe has been delayed from prior expectation

107、s,contributing to a slower adoption of giga-presses,Exco nonetheless continues to expect these trends will occur and has positioned its operations to capitalize accordingly.Beyond the automotive industry,Excos extrusion tooling supports diverse industrial end markets which are also seeing increased

108、demand for aluminum driven by environmental trends,including energy efficient buildings,solar panels,etc.On the cost side,inflationary pressures have intensified post COVID while prompt availability of various input materials,components and labour has become more challenging.The intensity of these d

109、ynamics have generally moderated in recent quarters with the exception of labour costs in Mexico,which continue to see significant increases.We are offsetting these dynamics through various efficiency initiatives and taking pricing action where possible although there is typically several quarters o

110、f lag before the counter measures yield results.The Russian invasion of Ukraine and the Middle East conflict have added additional uncertainty to the global economy.And while Exco has essentially no direct exposure to these countries,Ukraine does feed into the European automotive market and Europe h

111、as traditionally depended on Russia for its energy needs.Similarly,the conflict in the Middle East creates the potential for a renewed rise in the price of oil and other commodities as well as logistics costs and could weigh on consumer sentiment.9EXCO TECHNOLOGIES LIMITEDANNUAL REPORT 2024Exco itse

112、lf is also looking inwards with respect to sustainability trends to ensure its operations meet expectations.We are investing significant capital to improve the efficiency and capacity of our operations while lowering our carbon footprint.Our Sustainability Report is available on our corporate websit

113、e at: Consolidated Results-Sales Annual sales totalled$637.8 million compared to$619.3 million last year an increase of$18.5 million or 3%.The Company continued to experience resilient demand within our Casting and Extrusion segment and sales in the Automotive Solutions segment increased slightly as

114、 the impact of the UAW strike action and program launch delays partially offset the Companys higher content per vehicle while overall automotive production volumes in North America and Europe were mostly stable.The US dollar strengthened slightly year over year($1.36 versus$1.35)against the Canadian

115、 dollar increasing sales by$3.3 million.The Euro averaged 3%higher($1.48 versus$1.44)against the Canadian dollar over the year increasing sales by$3.4 million.Excluding the impact of foreign exchange gains,consolidated sales increased$11.8 million or 2%.Selected Annual Information The following tabl

116、e sets out selected financial data relating to the Companys years ended September 30,2024 and 2023.This financial data should be read in conjunction with the Companys audited consolidated financial statements for these years:(in$millions except per share amounts)2024 2023 Sales$637.8$619.3 Net incom

117、e for the year$29.6$26.3 Earnings per share from net income Basic and diluted$0.76$0.68 Purchase Capital Assets$33.9$39.0 Total assets$607.0$612.1 Cash dividend paid per share$0.42$0.42 EBITDA 1$82.2$74.5 1 Refer to reconciliation of this non-GAAP measure in the Non-IFRS measures table below.Segment

118、 Sales Automotive Solutions SegmentSales in this segment were$330.9 million an increase of$3.8 million or 1%from the prior year.The net effect ofexchange rate changes(Euro,US,and Canadian dollar)increased sales$3.5 million compared to the prior year.Themodest sales increase was driven by customer dr

119、iven delays in certain program launches,unfavorable vehicle mix,the UAW strike in the first quarter,traditional summer shut-downs at OEM production facilities in North Americaand Europe,and relatively stable vehicle production volumes in North America and Europe compared to the prioryear.10EXCO TECH

120、NOLOGIES LIMITEDANNUAL REPORT 2024Looking forward,industry growth may be tempered near term by relatively elevated interest rates reducing consumer confidence,relatively high vehicle average transaction prices,rising dealer inventory levels,and softening global economic conditions.Notwithstanding th

121、ese expected impacts,interest rates have started declining,vehicle sales remain encouraging,the vehicle fleet continues to age,and OEM incentives are rising.Excos sales volumes will nonetheless benefit from awarded program launches that are expected to provide ongoing growth in our content per vehic

122、le.Quoting activity also remains encouraging and we believe there is ample opportunity to achieve our targeted growth objectives.The segments four businesses continue to focus their efforts on launching new programs,quoting significant new opportunities on all vehicle types(EV,hybrid and ICE)from bo

123、th tradition OEMs and new market entrants,further broadening customer diversification and targeting higher margin activity.Management sees significant opportunity for future growth supported by strong quoting activity for new programs in both North America and Europe and as always continues to focus

124、 on pricing to protect margins.Casting and Extrusion SegmentSales in this segment were$306.9 million an increase of$14.7 million or 5%from the prior year.Excluding theimpact of foreign exchange,segment sales increased$11.6 million or 4%compared to fiscal 2023.Demand for ourextrusion tooling remains

125、firm in both North America and Europe.Extrusion sales when compared to the prior yearwere negatively influenced by the elimination of steel surcharges due to lower raw material costs.High interest ratesnegatively influenced the building,construction and recreational vehicle extrusion end-markets thr

126、oughout the year,but the construction end-market improved in the latter half of the year while demand within the automotive markethas continued to gain momentum and sustainable energy end markets remain strong.We remain focused onstandardizing manufacturing processes,enhancing engineering depth and

127、centralizing critical support functions acrossour various plants.These initiatives have reduced lead times,enhanced product quality,expanded product breadth andincreased capacity,contributing to share gains in our core markets.Management is also developing its Castoolgreenfield locations in Morocco

128、and Mexico which provide the opportunity to gain market share in Europe and LatinAmerica through better proximity to local customers.In the die-cast tooling market,which primarily serves the automotive industry,demand and order flow for new moulds,associated consumable tooling and rebuild work remai

129、ned relatively strong throughout the year.Industry vehicle production volumes remain healthy and new,more efficient internal combustion engine/transmission platforms are being launched,including an increase in hybrid powertrain platforms.Battery electric platforms continue to be developed,albeit at

130、a slower pace compared to prior expectations.Demand for associated giga-sized tooling has similarly pulled back,although management continues to expect this market segment will see significant growth in the coming years.We have reworked our plants and equipment to accommodate this larger tooling and

131、 believe we have the most advanced capabilities among our competitors globally.We also continue to invest heavily to bolster our leading market position in 3D printing our department currently consists of six additive printers.As well,our pace of innovation within this market is clearly gaining mome

132、ntum,yielding more applications for our additively printed tooling components.Consequently,demand for Excos 3D printed tooling continues to grow strongly as customers focus on greater efficiency in all large mould size segments ie for both giga and non-giga sized die-cast machines.Sales in the quart

133、er were also aided by price increases,which were implemented to protect margins from higher input costs.Quoting remains very active and our backlog for die-cast moulds remains elevated relative to historical norms.Cost of Sales On a consolidated basis,cost of sales totalled$502.7 million an increase

134、 of$14.0 million or 3%from the prior year.Cost of sales as a percentage of sales was 79%was consistent with the prior year.Raw material costs in the Casting and Extrusion segment(primarily tool grade steel)was generally down across all divisions.Lower steel prices resulted 11EXCO TECHNOLOGIES LIMITE

135、DANNUAL REPORT 2024in the reduction of steel surcharges within the extrusion operations which lowered sales,but resulted in higher margins.Raw material costs for the Automotive Solutions segment(primarily petroleum/natural gas-based resins,leather goods,plastic products)varied considerably depending

136、 on the product mix and demand as a result,material costs in this segment were relatively flat.Labour costs across both segments were up which included direct,indirect,supervisory salaries and employee benefit costs.Management worked to improve productivity to offset these higher costs through workf

137、orce reductions and other manufacturing efficiencies.The severance costs associated with workforce reductions were expensed within Selling,General and Administrative expenses.Finally,in connection with the ramp up of new plants,product launches,and developing new processes,tool,shop supplies,and ass

138、ociated costs were elevated.Selling,General and Administrative Expenses Selling,general and administrative expense in the current year decreased 6%to$52.9 million from$56.3 million last year.As a percentage of sales,selling,general and administrative costs decreased from 9%to 8%year over year.Curren

139、t year selling,general and administrative expenses decreased due to favorable foreign exchange rate movements,lower incentive compensation and stock-based compensation expense,and the fiscal 2023 cyber incident costs which are not expected to reoccur,these improvements were partially offset by incre

140、mental severance costs,as well as higher sales commissions,tradeshows and related travel costs.Depreciation and Amortization Consolidated depreciation expense was$30.2 million compared to$27.2 million the prior year.Depreciation expense within the Casting and Extrusion segment totalled$25.8 million

141、in fiscal 2024 versus$23.1 million in fiscal 2023 and depreciation expense within the Automotive Solutions segment totalled$4.3 million versus$4.0 million last year.Amortization expense of$4.1 million in fiscal 2024 decreased from$4.7 million from 2023.The carrying value of total intangible assets a

142、mounted to$27.8 million as at September 30,2024 down from$30.6 million a year ago.There were essentially no additions to intangible assets in fiscal 2024.The Company expects the annual amortization and depreciation expense will total approximately$4.8 million and$30.7 million respectively in fiscal

143、2025.Although there remain some key capital asset purchases in fiscal 2025,it is anticipated that depreciation expense has largely plateaued and these costs will decrease in the years beyond fiscal 2025.Interest Net interest expense in the current year totalled$8.3 million compared to$8.1 million in

144、 fiscal 2023.The increase is due to higher interest rates in the first three quarters of fiscal 2024.Lower interest rates combined with changes to the Companys net debt during the year contributed to lower interest costs in the fourth quarter.With continued lower interest rates expected during fisca

145、l 2025 and a further anticipated reduction to net debt,the Company anticipates lower interest costs in fiscal 2025.Income Taxes Excos effective income tax rate was 25.1%in fiscal 2024 compared to an effective income tax rate of 23.8%in fiscal 2023.The change in income tax rate is due to geographic d

146、istribution,foreign tax rate differentials,a shift in the proportion of earnings from jurisdictions with higher tax rates,and losses that cannot be tax affected for accounting purposes.12EXCO TECHNOLOGIES LIMITEDANNUAL REPORT 2024Net Income ConsolidatedThe Company reported consolidated net income of

147、$29.6 million or basic and diluted earnings of$0.76 per share infiscal 2024,compared to consolidated net income of$26.3 million or basic and diluted earnings of$0.68 per share theprior year.Automotive Solutions Segment-Pretax profitThe Automotive Solutions segment recorded Pretax profit of$32.5 mill

148、ion for the year compared to$34.9 million lastyear a decrease of$2.3 million or 7%.The decrease in pretax profit is attributable to the impact of the UAW strikein the first quarter,higher labour costs,product mix shifts,prolonged OEM production shutdowns during holidayseasons,slower than expected ra

149、mp up of certain programs due to customer driven launch delays,and higher severancecosts.Industry vehicle production volumes remained relatively flat year-over-year and below pre-pandemic levels.Management is optimistic that its overall cost structure will return to targeted levels in the future as

150、scheduling andpredictability improves with strengthening volumes,new product launches continue,and the impact of efficiencyefforts take hold.Pricing discipline remains a focus and action is being taken on current programs where possible,though there is typically a lag of a few quarters before the be

151、nefit is realized.As well,new program awards are pricedto reflect managements expectations for higher future costs.Casting and Extrusion Segment-Pretax profitCasting and Extrusion Pretax profit was$22.5 million for the year compared to$15.1 million last year an increaseof$7.4 million or 48%.Pretax p

152、rofits increased due to higher sales within the extrusion and die-cast market(primarily new moulds,rebuilds,mould inserts and additive printed tooling).Profit margins improved due to lower raw materialcosts,increased overhead absorption and production efficiencies.These positive contributions were p

153、artially offsetby slower than expected ramp up of Castools newer facilities in Morocco and Mexico,a$2.7 million increase indepreciation,and higher labour costs.Management expects to temper many of these costs over the coming quartersthrough efficiency improvements and pricing action,where possible.M

154、argins will also benefit as newer operationsmature and achieve greater scale and as utilization of new equipment that facilitates the manufacturing of large-scaledie-cast tooling improves.The higher depreciation relates to the Companys investment in new assets that willimprove operations and provide

155、 access to new geographies to increase our market share.Castools new Mexicanoperation opened in October 2023.This operation experienced typical start up costs and challenges but it is expectedto start contributing from increased market share gains in both the die-cast and extrusion tooling markets i

156、n Mexico,Latin America and the Southern US.Management remains focused on reducing its overall cost structure andimproving manufacturing efficiencies and expects such activities together with its sales efforts to continue improvingsegment profitability over time.Corporate Segment Pretax lossCorporate

157、 expense in the current year amounted to$7.2 million compared to$7.4 million in the prior year.The yearover year decrease was primarily driven by favorable foreign exchange rate movements in the current year,$1.0million cyber incident costs incurred in fiscal 2023,partially offset by higher stock ba

158、sed compensation expenses andincreased travel and marketing costs in the current year.EBITDA EBITDA in the current year amounted to$82.2 million compared to$74.5 million the prior year an increase of$7.7 million or 10%.EBITDA margin increased to 12.9%compared to 12.0%from the prior year.EBITDA in th

159、e Casting and Extrusion segment was$49.6 million,which was$10.0 million or 25.0%higher than fiscal 2023.Casting and Extrusion segment EBITDA margin increased to 16.2%from 13.5%in the prior year.The Automotive Solution 13EXCO TECHNOLOGIES LIMITEDANNUAL REPORT 2024segment EBITDA was$39.6 million,which

160、 was lower by$2.6 million,or 6.2%compared to fiscal 2023.The Automotive Solution segment EBITDA margin decreased from 12.9%to 12.0%in fiscal 2024.Quarterly Results The following table sets out financial information for each of the eight fiscal quarters through to the fiscal year ended September 30,2

161、024:($thousands except per share amounts)September 30,2024 June 30,2024 March 31,2024 December 31,2023 Sales$155,447$161,809$163,825$156,710 Net income$7,734$8,176$8,066$5,642 Earnings per share Basic$0.20$0.21$0.21$0.15 Diluted$0.20$0.21$0.21$0.15($thousands except per share amounts)September 30,20

162、23 June 30,2023 March 31,2023 December 31,2022 Sales$160,152$164,551$155,507$139,093 Net income$9,210$6,263$6,228$4,523 Earnings per share Basic$0.24$0.16$0.16$0.12 Diluted$0.24$0.16$0.16$0.12 Exco typically experiences softer sales and profits in the first fiscal quarter,which coincides with our cu

163、stomers plant shutdown during the Christmas season.Exco also experiences a slowdown in the fourth fiscal quarter as customers typically schedule summer plant shutdowns and European customers typically curtail releases during the month of August to accommodate vacations.Fiscal 2024 and 2023 reflect t

164、he full 12 months of Halex operations in the sales and net income(Halex was purchased in May 2022)and the impact of the Companys new Castool Mexico and Moroccan facilities are expected to impact sales and net income more significantly in future years.Fourth Quarter In the fourth quarter,consolidated

165、 sales were$155.4 million a decrease of$4.7 million or 3%from the prior year.Foreign exchange rate movements increased sales by$2.6 million in the quarter.Fourth quarter sales in the Automotive Solutions segment of$79.2 million were down 10%from the prior year quarter.Excluding the impact of foreign

166、 exchange,segment sales decreased$9.8 million,or 11%.The sales decrease was driven by lower automotive production volumes in North America and Europe,customer driven delays in certain program launches,and unfavorable vehicle mix.Looking forward,industry growth may be tempered near term by increasing

167、 OEM inventory levels,elevated interest rates,relatively high vehicle average transaction prices,and softening global economic conditions.Countering these headwinds,central banks are lowering interest rates,vehicle sales have remained resilient,dealer inventory levels remain below pre-COVID-19 level

168、s,vehicle fleets continue to age,and OEM incentives are rising.As well,Excos sales volumes are expected to benefit from awarded program launches that should provide ongoing growth in our content per vehicle.Quoting activity also remains encouraging and we believe there is ample opportunity to achiev

169、e our targeted growth objectives.14EXCO TECHNOLOGIES LIMITEDANNUAL REPORT 2024The Casting and Extrusion segment recorded sales of$76.3 million in the fourth quarter compared to$72.6 million last year an increase of$3.7 million or 5%.Excluding the impact of foreign exchange movements,the segments sal

170、es were up 3%for the quarter.Demand for our extrusion tooling remained relatively resilient in both North America and Europe,though activity slowed through the quarter with key end markets such as building and construction as well as automotive showing signs of softer conditions.Other end markets su

171、ch as sustainable energy however remain firm.We remain focused on standardizing manufacturing processes,enhancing engineering depth and centralizing critical support functions across our various plants.These initiatives have reduced lead times,enhanced product quality,expanded product breadth and in

172、creased capacity,contributing to share gains in our core markets.Management continues to develop its Castool Morocco and Mexico locations which provide the opportunity to gain market share in Europe and Latin America through better proximity to local customers.In the die-cast tooling market,which pr

173、imarily serves the automotive industry,demand and order flow for new moulds,associated consumable tooling and rebuild work remained firm during the quarter,though slowed slightly from recent activity.Industry vehicle production volumes remain relatively healthy and new,more efficient internal combus

174、tion engine/transmission platforms are being launched,including an increase in hybrid powertrain platforms.Battery electric platforms continue to be developed,albeit at a slower pace compared to prior expectations.Demand for associated giga-sized tooling has similarly pulled back,although management

175、 continues to expect this market segment will see significant growth in the coming years.We have reworked our plants and equipment to accommodate this larger tooling and believe we have the most advanced capabilities among our competitors globally.Our leading market 3D printing group continued stron

176、g sales activity supported by six additive printers.As well,our pace of innovation within this market is clearly gaining momentum,yielding more and more applications for our additively printed tooling components.Consequently,demand for Excos 3D printed tooling continues to grow strongly as customers

177、 focus on greater efficiency in all large mould size segments ie for both giga and non-giga sized die-cast machines.Sales in the quarter were also aided by price increases,which were implemented to protect margins from higher input costs.Quoting remains very active and our backlog for die-cast mould

178、s remains elevated relative to historical norms.The Companys fourth quarter consolidated net income decreased to$7.7 million or earnings of$0.20 per share compared to$9.2 million or earnings of$0.24 per share in the same quarter last year.The effective income tax rate was 26%in the current quarter c

179、ompared 25%in the same quarter last year.The change in income tax rate in the quarter was impacted by geographic distribution,foreign tax rate differentials and losses that cannot be tax affected for accounting purposes.Fourth quarter pre-tax earnings in the Automotive Solutions segment totalled$7.8

180、 million,a decrease of$2.1 million or 22%over the same quarter last year.Variances in period profitability were due to lower sales,product mix shifts,rising labour costs in all jurisdictions and foreign exchange movements.Labour costs in Mexico have been particularly challenging in recent years and

181、are seeing added pressure given the significant rise in wages.Vehicle production volumes and product releases however remain relatively stable,which has led to improvements in labour scheduling and reduced expedited shipping costs.As well,pricing action and efficiency initiatives continued to temper

182、 inflationary pressures.Although production volumes have largely stabilized from a macroeconomic and global perspective from recent years,volumes in the segments first quarter are expected to follow typical seasonality trends due to OEM December holidays.Apart from these specific impacts,management

183、is cautiously optimistic that its overall cost structure should improve margins in coming quarters.Pricing discipline remains a focus and actions are being taken on current programs where possible,though there is typically a lag of a few quarters before the impact is realized.As well,new program awa

184、rds are priced to reflect managements expectations for higher future costs.Fourth quarter pre-tax earnings in the Casting and Extrusion segment totalled$6.3 million,an increase of$1.0 million or 18%over the same quarter last year.The Pretax Profit improvement is due to higher sales volumes within th

185、e die-cast and extrusion end markets,program pricing improvements,favorable product mix,and efficiency initiatives 15EXCO TECHNOLOGIES LIMITEDANNUAL REPORT 2024across the segment(including the ongoing use of lean manufacturing and automation to improve productivity through standardization and waste

186、elimination).In addition,volumes at Castools heat treatment operation continue to increase providing savings and improved production quality while efficiency initiatives at Halex are progressing.Offsetting these cost improvements were ongoing start-up losses at Castools greenfield operations and an

187、increase in segment depreciation($0.5 million for the quarter)associated with recent capital expenditures.Management remains focused on reducing its overall cost structure and improving manufacturing efficiencies and expects such activities together with its sales efforts should lead to improved seg

188、ment profitability over time.The Corporate segment in the fourth quarter recorded expenses of$2.0 million compared to$0.8 million last year was primarily due mainly to higher foreign exchange gains in fiscal 2023.As a result of the foregoing,consolidated EBITDA in the quarter was$20.6 million(13.3%o

189、f sales)compared to$22.9 million(14.3%of sales)last year.FINANCIAL RESOURCES,LIQUIDITY AND CAPITAL RESOURCES Cash Flows from Operating Activities Operating cash flow before net changes in non-cash working capital was$71.6 million in fiscal 2024 compared to$70.2 million in the prior year.The$1.4 mill

190、ion year-over-year increase was driven by higher net income,depreciation and amortization,and interest expense partially offset by a change in deferred income tax in fiscal 2024.Net change in non-cash working capital provided$10.1 million cash in fiscal 2024 compared to$12.1 million cash used last y

191、ear.Improvements to working capital were driven primarily by lower accounts receivable due managements focus on collections throughout the year,slightly lower fourth quarter sales,and due to customer payment delays in 2023 due to the UAW strike.This improvement was partially offset by lower accounts

192、 payable reflecting significant payables in the prior year associated with obligations for our capital asset purchases.After adjusting for non-cash working capital,cash provided by operating activities increased to$81.7 million in fiscal 2024 compared to$58.2 million in the prior year.Cash Flows fro

193、m Financing Activities Cash used in financing activities amounted to$32.2 million compared to cash provided by$21.8 million in fiscal 2023.The Company paid$8.3 million in interest,$16.3 million in dividends,repurchased shares through the normal course issuer bid of$2.7 million and decreased borrowin

194、gs$5.0 million.The prior year$21.8 million cash provided reflected a net increase in borrowing of$2.6 million and no additional shares purchased through the buyback.Exco enters into lease arrangements from time to time.Exco owns 20 of its 21 manufacturing facilities and materially all of its product

195、ion equipment.The Company also leases sales and support centers in Chesterfield,Michigan,a warehouse in Brownsville,Texas,and the operating facility in Weissenburg Germany.The following table summarizes the Companys significant short-term and long-term commitments on an undiscounted basis:(000s)Tota

196、l 1 year 1-3 yearsOver 3 years Bank indebtedness$-Trade accounts payable 46,803 46,803-Long-term debt 105,000-105,000-Lease commitments 9,411 1,007 1,8736,531 Purchase commitments 39,131 39,131-Capital expenditures 7,973 7,973-$207,998$94,594$106,873$6,531 16EXCO TECHNOLOGIES LIMITEDANNUAL REPORT 20

197、24 Exco leases facilities,automotive,material handling vehicles and other miscellaneous office equipment.It is not Excos policy to purchase these assets at the expiry of their terms but occasionally it may purchase the assets at the end of the lease terms when the purchase options are favorable.Exco

198、 does not expect any material liquidity or capital resource impacts from these possible purchases.Cash Flows from Investing Activities-Capital Expenditures Cash used in investing activities in the current year totalled$33.7 million compared to$37.8 million last year.The decrease in capital asset pur

199、chases reflect managements focus on managing overall capital spending and the timing of cash outflows in addition to the completion of our Castool Mexico facility,the heat treatment facility in Newmarket,and various other capital improvement projects across the Company to support growth initiatives.

200、Many of these initiatives began in fiscal 2022 and continued into fiscal 2023.Maintenance Fixed Asset Additions in the current year were$19.7 million compared to$14.7 million in the prior year.In fiscal 2025,Exco plans to invest approximately$40.0 million in capital expenditures of which roughly$21.

201、1 million is for growth capital expenditures and$18.9 million is for Maintenance Fixed Asset Additions.Major initiatives in fiscal 2025 include replacing existing heat treatment furnaces with high efficiency vacuum equipment in our Michigan facility,new larger and faster additive machines within our

202、 Large Mould business,additional multi-axis milling equipment in several locations and new equipment in our Automotive Solutions segment to support anticipated sales growth.Financial Position and Cash Balance The Companys conservative financial policies have served it well throughout the years and h

203、ave allowed it to take advantage of acquisition opportunities and make strategic organic growth investments proactively to meet market changes.Excos net debt was$73.4 million on September 30,2024 compared to$94.2 million the prior year.In fiscal 2024,the Company generated Free Cash Flow of$53.8 mill

204、ion,paid dividends of$16.3 million and made growth capital expenditures of$14.0 million resulting in a reduction in net debt of$20.8 million.As at September 30,2024,Exco retained access to$46.5 million of its$153 million committed banking facility and had cash of$31.6 million.Pursuant to the terms o

205、f the credit facility,Exco is required to maintain compliance with certain financial covenants.The Company was in compliance with these covenants as of September 30,2024.Non-IFRS Measures The following tables reconcile EBITDA,EBITDA margin and Free Cash Flow for the periods to the Companys IRFS meas

206、ures,cash provided by operating activities to free cash flow,and segment EBITDA disclosures:17EXCO TECHNOLOGIES LIMITEDANNUAL REPORT 2024Yearly Segment EBITDA disclosure Casting and Extrusion Automotive Solutions(in$thousands)Twelve Months ended September 30 Twelve Months ended September 30 2024 202

207、3 2024 2023 Pretax Profit$22,470$15,142$32,503$34,851 Depreciation 25,809 23,141 4,344 4,006 Amortization 1,370 1,305 2,743 3,381 EBITDA$49,649$39,588$39,590$42,238 Sales$306,906$292,193$330,885$327,110 EBITDA Margin 16.2%13.5%12.0%12.9%Quarterly Segment EBITDA disclosure Casting and Extrusion Autom

208、otive Solutions(in$thousands)Three Months ended September 30 Three Months ended September 30 2024 2023 2024 2023 Pretax Profit$6,312$5,331$7,836$9,985 Depreciation 6,645 6,137 1,181 1064 Amortization 357 334 223 838 EBITDA$13,314$11,802$9,240$11,887 Sales$76,285$72,567$79,162$87,585 EBITDA Margin 17

209、.5%16.3%11.7%13.6%Outstanding Share Capital As of September 30,2024,the Company had 38,551,762 common shares issued and outstanding and stock options outstanding to purchase up to 961,500 common shares at exercise prices ranging from$7.97 to$9.87 per share.Three Months ended September 30 Twelve Mont

210、hs ended September 30(in$thousands)2024 2023 2024 2023 Net income$7,734$9,210$29,618$26,284 Provision for income tax 2,686 3,023 9,915 8,221 Income before income taxes 10,420 12,233 39,533 34,505 Depreciation 7,848 7,221 30,237 27,231 Amortization 580 1,172 4,113 4,686 Net interest expense 1,772 2,2

211、75 8278 8,068 EBITDA$20,620$22,901$82,161$74,490 Sales$155,447$160,152$637,791$619,303 EBITDA margin 13.3%14.3%12.9%12.0%Cash provided by operating activities$28,937$17,575$81,744$58,169 Interest expense,net(1,772)(2,275)(8,278)(8,068)Maintenance fixed asset additions(5,431)(3,487)(19,673)(14,681)Fr

212、ee Cash Flow$21,734$11,813$53,793$35,420 18EXCO TECHNOLOGIES LIMITEDANNUAL REPORT 2024CRITICAL ACCOUNTING POLICIES Our significant accounting policies are more fully described in Note 2,“Summary of Significant Accounting Policies”,to the consolidated financial statements included in this Report.The

213、preparation of Excos Consolidated financial statements in conformity with International Financial Reporting Standards requires management to make estimates and assumptions.These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and li

214、abilities at the date of the financial statements,as well as the reported amount of revenue and expenses during the reporting period.We evaluate property,plant and equipment and other long-lived assets for impairment whenever indicators of impairment exist.Indicators of impairment include reductions

215、 in profitability,budget shortfalls,prolonged operating losses or a decision to dispose of,or otherwise change the use of,an existing fixed or other long-lived asset.We believe that accounting estimates related to goodwill,property,plant and equipment and other long-lived asset impairment assessment

216、s are“critical accounting estimates”because:(i)they are subject to a significant measurement uncertainty and are susceptible to changes as management is required to make forward-looking assumptions regarding the impact of improvement plans on current operations,in-sourcing and other new business opp

217、ortunities,program price and cost assumptions on current and future business,the timing of new program launches and future forecasted production volumes;and(ii)any resulting impairment loss could have a material impact on our consolidated net income and on the amount of assets reported on our consol

218、idated statements of financial position.RECENT ACCOUNTING CHANGES AND EFFECTIVE DATES There were no accounting policy changes during the year ended September 30,2024 that have a material impact to the Companys reporting.IFRS 18,Presentation and Disclosure in Financial Statements The IASB has issued

219、IFRS 18 which is the new standard on presentation and disclosure in financial statements,with a focus on updates to the statement of profit or loss.The key new concepts introduced in IFRS 18 relate to the structure of the statement of profit or loss;disclosures in the financial statements for manage

220、ment-defined performance measures);and enhanced principles on aggregation and disaggregation which apply to the primary financial statements and notes in general.IFRS 18 will replace IAS 1.IFRS 18 will not impact the recognition or measurement of items in the financial statements,but it might change

221、 what an entity reports as its“operating profit or loss”.IFRS 18 will apply for reporting periods beginning on or after January 1,2027 and also applies to comparative information.Management is currently assessing the impact of this standard.DISCLOSURE CONTROLS AND PROCEDURES The Chief Executive Offi

222、cer and Chief Financial Officer,together with other members of management,after evaluating the effectiveness of the Companys disclosure controls and procedures,have concluded that the Companys disclosure controls and procedures are adequate and effective as of September 30,2024 in ensuring that mate

223、rial information relating to the Company and its consolidated subsidiaries would have been known to them.19EXCO TECHNOLOGIES LIMITEDANNUAL REPORT 2024CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING During the most recent period,there have been no changes in the Companys existing policies and p

224、rocedures and other processes that comprise its internal control over financial reporting,that have materially affected,or are reasonably likely to materially affect,the Companys internal control over financial reporting.INTERNAL CONTROLS OVER FINANCIAL REPORTING The Chief Executive Officer and Chie

225、f Financial Officer,together with other members of management,have designed internal controls over financial reporting to provide reasonable assurance regarding the reliability of the Companys financial reporting and its compliance with the integrated framework issued by the Committee of Sponsoring

226、Organization of the Treadway Commission.The CEO and the CFO have supervised management in the evaluation of the design and effectiveness of the Companys internal controls over financial reporting as at September 30,2024 and believe the design and effectiveness of the internal controls to be effectiv

227、e.RISKS AND UNCERTAINTIES As automotive production has become more reliant on global suppliers for components,shortages of critical components can disrupt worldwide vehicle production.In recent years the semiconductor chip shortage disrupted every OEM and automotive supplier to various degrees.Altho

228、ugh the global semiconductor supply chain has improved since fiscal 2023,the industry remains vulnerable that shortages of other materials or parts can negatively impact global vehicle production.The impact to the industry may include:unplanned shutdowns of production lines and/or plants;reductions

229、in their vehicle production plans;and changes to their product mix.These responses can result in a number of consequences at Exco such as:lower sales;production inefficiencies due to production lines being stopped/restarted unexpectedly based on OEMs production priorities;premium freight costs to ex

230、pedite shipments;and/or other unrecoverable costs.Furthermore,Tier 1 and 2 suppliers such as Exco may face price increases from suppliers.It remains unclear what the next critical component may be that will disrupt global vehicle production,and it is difficult to predict the full impact.Geopolitical

231、 risk and international conflict(such as the conflicts between Russia and Ukraine or Israeli and Palestine)have the potential to exacerbate a number of risks described elsewhere in these Risk Factors,including:disruption of vehicle production and supply chains;worsening the availability of current c

232、ritical supply chain components(like semiconductor chips since Russia and Ukraine are global suppliers of neon gas and palladium used in chip production);exacerbating energy shortages and driving energy prices higher(particularly oil and natural gas);constraining the supply of aluminum,palladium or

233、other commodity metals required in automotive production;and increased cybersecurity threats.In response to these conflicts,a number of countries,including the U.S.and European Union member states,have taken actions such as:imposition of sanctions on regions,their leaders and certain other individua

234、ls and entities;restrictions on banking and international trade;and other measures,with further restrictions likely as these conflicts continue.Exco does not have manufacturing operations in these regions.However,Excos global footprint creates the potential that our operations may be impacted by the

235、se sanctions or face other side effects from these conflicts.There is a greater risk of inflationary price increases as economic activity rebounds in our primary production markets and supply chains.In recent years,we witnessed increasing commodity costs for steel,aluminum and resin.Tight labour mar

236、kets,low unemployment rates,and increasing collective bargaining pressures may drive wage pressures up which increases the risk for inflationary pressure in certain markets.Inflationary pressure has eased in the last 12 months,but it is difficult to forecast and inflationary pressures could originat

237、e from new sources like tariffs or international trade conflicts.In some cases,alternative inputs may not be available in a timely manner.The inability 20EXCO TECHNOLOGIES LIMITEDANNUAL REPORT 2024to offset inflationary price increases through continuous improvement actions,price increases or adjust

238、ments on our own products or otherwise,could have an adverse effect on our earnings.Global pandemics caused by viruses or other diseases(such as COVID-19)create continued risk of further disruptions to the automotive and manufacturing industry,including additional mandatory stay-at-home orders or ot

239、her restrictions.These orders may:restrict consumers ability to purchase vehicles;restrict production;cause elevated employee absenteeism;and lead to supply chain disruptions.Over the medium-to long-term,the pandemic may result in societal changes that impact the automotive industry,positively or ne

240、gatively,including as a result of expanded work-from-home practices that reduce consumers reliance on vehicles;and/or increased reluctance by people to utilize modes of public transit and/or shared mobility.Excos Automotive Solutions segment services automotive component suppliers(and Tier 1 supplie

241、rs)around the world.The results of this segment depend on demand for automobiles,the level of automotive production and the type of automobiles produced(ie SUV/CUVs versus passenger cars,and to a lessor extent,internal combustion engine vs hybrids vs electric),the rate at which the electric vehicle

242、is more widely adopted and the level of automobile production.These factors can fluctuate significantly with consumer confidence,general economic conditions,the cost and/or availability of consumer credit and gasoline,and the market share of individual OEM customers.Contraction and slowing GDP growt

243、h in emerging economies,North America and Europe may also have a dampening effect on consumer demand for automobiles in these regions.A significant portion of Excos receivables are from automotive customers.These customers have varying degrees of financial strength which could ultimately impact the

244、collectability of the respective receivable.The majority of these receivables are with U.S.entities that can avail themselves of Chapter 11 protection from creditors in certain circumstances and avoid payment of the Companys receivables that are over 20 days from the date of the Chapter 11 filing.Ex

245、cos receivables may also be with highly leveraged customers that may have recently merged or chosen to leverage their balance sheet for tax purposes or otherwise increase their investment yield.Doing business with such customers typically increases the risk of default and filing for bankruptcy prote

246、ction.The Company uses its best efforts to collect accounts receivable under 60 days but in some cases the terms may be notably longer and often in other currencies thereby requiring Exco to bear exchange rate risk.The Company often has the benefit of statutory or common law liens on its products,ho

247、wever,it is not uncommon for significant receivables to be outstanding for considerable periods,particularly in the large mould business.In some cases,OEMs can decide to design the Companys products out of the automobile(“de-contented”)or reduce the trim level on which the Companys products are inst

248、alled for either aesthetic,cost or product redesign reasons.While Exco believes its focus on evolving from a component supplier to a designer and integrator of small assemblies and sub-assemblies used in automotive and trunk interiors reduces the risk of de-contenting and trimming down decisions,som

249、e of Automotive Solutions products are not critical components and may still be de-contented or see lower levels of penetration.OEMs or their suppliers may have excess production capacity or collective agreements which preclude efficient capacity reduction during times of declining sales.In these ca

250、ses,OEMs and/or their suppliers may choose to fill their excess capacity by taking production from their suppliers and manufacturing the parts themselves.This process of in-sourcing may have the impact of reducing the amount of business available to suppliers such as Exco.Exco has a significant numb

251、er of employees worldwide and,accordingly,the availability of labour is critical and wages are a major manufacturing input cost.In Mexico particularly,where Exco has approximately 40%its employees at five production facilities,all of which are represented by national labor unions,real wage increases

252、 may materially impact the Companys financial performance.21EXCO TECHNOLOGIES LIMITEDANNUAL REPORT 2024Exco sells to its automotive customers pursuant to purchase orders which typically sets out price per unit but not volumes or fixed terms.These purchase orders may be terminated at any time with li

253、mited recourse for compensation or damages and pricing is typically adjusted downward from time to time in the form of cost downs.Termination of purchase orders and cost downs may impact Excos margin and overall earnings if not contemporaneously offset by new business at better margin or cost reduct

254、ions.Furthermore,in any given year,any number of programs will be expiring.While Exco is constantly quoting on replacement programs or new programs,there is no assurance that these new programs will be awarded or that if awarded,the pricing and margin will be comparable to those of programs ending.T

255、he Casting and Extrusion segment is a capital goods business.Interest rates,exchange rates,corporate capital spending,the general economic climate,business confidence and the financial strength of our customers affect the demand for Excos dies,moulds and consumable parts for die-cast and extrusion m

256、achines.Abrupt changes in these factors often bring about dramatic changes in demand and pricing.Exco believes that its broad product line,geographic and customer diversification and leadership position in its niche markets mitigate this risk.Exco is a global manufacturer which has organized its glo

257、bal production and logistics footprint based on,among other things,the extent of duties/levies imposed on the import/export of our products and raw material inputs.In recent years governments have postured with more protectionist tones with respect to international trade thereby restricting access t

258、o their markets by increasing or creating new tariffs.New tariffs and importing restrictions may have a negative or positive impact on Excos operations depending on how these tariffs are implemented,the geographic focus,and which countries add tariffs.If governments continue to pursue protectionist

259、trade practises with respect to automotive components or their raw materials or subassemblies,Exco may be prejudiced.Exco has made six acquisitions in the last 13 years(Allper AG,Exco Colombia,Extrusion Texas,Automotive Leather Company,AFX Industries and Halex)and may make others in the future.Acqui

260、sitions inherently involve risk.While Exco has concluded many acquisitions that have been very successful,there have also been disappointing acquisitions which have adversely impacted earnings.Integration of acquired companies may not be effective or timely especially with respect to operations in c

261、ountries where Exco has not previously done business.Excos Canadian operations negotiate sales contracts with customers in both Canadian and U.S.dollars as well as Euro.We also purchase,where we can,raw material in these currencies.U.S.dollar and Euro purchases provide a natural partial hedge agains

262、t U.S.dollar and Euro sales of Excos Canadian operations.As for the remaining foreign exchange exposure in these currencies not naturally hedged,Exco does not typically enter into forward contracts but prefers to incur U.S.dollar or Euro debt,from time to time as appropriate.Despite these measures,E

263、xco is structurally a net seller of U.S.dollars and,to a lesser extent Euro,with increasing adverse financial impact as the U.S.dollar and Euro decline in value against the Canadian dollar.While Exco has made considerable progress in reducing its reliance on U.S.dollar sales,markets which Exco curre

264、ntly services may experience rising competition from imports which have become more competitive as a result of foreign exchange movements.Excos U.S.operations earn profits in U.S.dollars while our Canadian operations are exposed to fluctuations in the value of the Canadian dollar relative to the U.S

265、.dollar on U.S.dollar sales less purchases.For fiscal 2025,if the Canadian dollar were to strengthen or weaken by$0.01 in fiscal 2025 from a baseline level of$1.35 USD/CAD,it is estimated that pre-tax profit would change by about$829 thousand or about$647 thousand after tax.These estimates are based

266、 on historical norms and may be materially different if customers deviate from their past practices.Excos has five manufacturing operations in Mexico and accordingly incurs a portion of its labour and other expenses in Mexican pesos.In turn,these Mexican pesos expenses are incurred to mainly support

267、 US dollar denominated sales.22EXCO TECHNOLOGIES LIMITEDANNUAL REPORT 2024Consequently,any strengthening of the Mexican pesos against the US dollar reduces our profitability,all other things equal.In recognition of this risk,Exco hedges a portion of its Mexican pesos/US dollar exposure with various

268、foreign exchange contacts and options.For fiscal 2025,if the Mexican pesos were to strengthen or weaken by 1%versus the US dollar from a baseline USD/MEX rate of 16.9:1,and further assuming the Canadian dollar strengthens or weakens against the US dollar also by 1%from a baseline USD/CAD rate of 1.3

269、5,we estimate pre-tax profit would change by$572 thousand or about$372 thousand after tax.These estimates are based on historical norms and may be materially different if customers deviate from their past practices.Exco also has manufacturing facilities in Colombia,Brazil,Thailand,Morocco and Europe

270、 and Excos presence in jurisdictions such as these has generally been increasing in recent years.Some of these operations incur labor costs and often other operating expenses in local currency.In several of these countries,sales contracts and major purchases such as material and equipment are negoti

271、ated in U.S.dollars or Euro.In other countries,sales contracts and major purchases are negotiated in local functional currencies as well.Major long-term fluctuations in the value of the local currencies against the U.S.dollar and Euro have the potential to affect Excos operating results,retained ear

272、nings and value of its investment in these countries.Exco may enter into forward contracts or collar contracts from time to time in order to protect itself from currency fluctuations.These contracts are derivative instruments which,depending on their structure,may not qualify for hedge accounting tr

273、eatment and accordingly may be marked to market each quarter and expensed if necessary.It is difficult to anticipate fluctuations in these local currencies in the event of major economic,fiscal or political instability in these countries.The cost of manufacturing our products is a critical factor in

274、 determining our success over the long term.Manufacturing has generally expanded to developing countries where competing technologies and lower labor-cost structures exist.Exco must compete against companies doing business in these developing countries.Exco has met this challenge by manufacturing so

275、me labour-intensive products in Mexico,Thailand and Morocco;however,many of our operations based in Canada,U.S.and Europe must compete with products manufactured in lower-cost environments.The rapid adoption of Artificial Intelligence“AI”and technological change introduces several operational risks.

276、As Exco and the broader automotive industry increasingly rely on AI-driven systems for manufacturing,supply chain management,and customer engagement,they become more vulnerable to cybersecurity threats,data privacy issues,and operational disruptions from system failures or technological obsolescence

277、.Unanticipated errors in AI algorithms or software bugs could disrupt production or lead to flawed decision-making processes,affecting quality and efficiency.Furthermore,the industry-wide shift toward automation may reduce workforce requirements,potentially impacting employee morale,requiring costly

278、 retraining programs for affected workers.Additionally,as AI technology evolves,the need for continual software and hardware updates poses financial and operational challenges.Managing these risks is crucial to ensuring that AI and technology remain assets to operations rather than liabilities Altho

279、ugh we have established and continue to enhance security controls intended to protect our IT systems and infrastructure,there is no guarantee that such security measures will be effective in preventing unauthorized physical access or cyber attacks.A significant breach of our IT systems could:result

280、in theft of funds;cause disruptions in our manufacturing operations;lead to the loss,destruction or inappropriate use of sensitive data;or result in theft of our,our customers or our suppliers intellectual property or confidential information.The occurrence of any of the foregoing could adversely af

281、fect our operations and/or reputation and could lead to claims against us that could have a material adverse effect on our profitability.23EXCO TECHNOLOGIES LIMITEDANNUAL REPORT 2024Independent auditors report To the Shareholders of Exco Technologies Limited Opinion We have audited the consolidated

282、financial statements of Exco Technologies Limited and its subsidiaries the“Group”,which comprise the consolidated statements of financial position as at September 30,2024 and 2023,and the consolidated statements of income and comprehensive income,consolidated statements of changes in shareholders eq

283、uity and consolidated statements of cash flows for the years then ended,and notes to the consolidated financial statements,including a summary of material accounting policy information.In our opinion,the accompanying consolidated financial statements present fairly,in all material respects,the conso

284、lidated financial position of the Group as at September 30,2024 and 2023,and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with International Financial Reporting Standards“IFRS”.Basis for opinion We conducted our audit in accordance wit

285、h Canadian generally accepted auditing standards.Our responsibilities under those standards are further described in the Auditors responsibilities for the audit of the consolidated financial statements section of our report.We are independent of the Group in accordance with the ethical requirements

286、that are relevant to our audit of the consolidated financial statements in Canada,and we have fulfilled our other ethical responsibilities in accordance with these requirements.We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.Key au

287、dit matters Key audit matters are those matters that,in our professional judgment,were of most significance in our audit of the consolidated financial statements of the current period.These matters were addressed in the context of our audit of the consolidated financial statements as a whole,and in

288、forming our opinion thereon,and we do not provide a separate opinion on these matters.For the matter below,our description of how our audit addressed the matter is provided in that context.We have fulfilled the responsibilities described in the Auditors responsibilities for the audit of the consolid

289、ated financial statements section of our report,including in relation to this matter.Accordingly,our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the consolidated financial statements.The results of our audit procedures,i

290、ncluding the procedures performed to address the matter below,provide the basis for our audit opinion on the accompanying consolidated financial statements.24EXCO TECHNOLOGIES LIMITEDANNUAL REPORT 2024Key audit matter How our audit addressed the key audit matter Goodwill impairment As described in n

291、ote 6 to the consolidated financial statements,the Group has a goodwill balance of$93.9 million as at September 30,2024,of which$64.6 million was allocated to the group of cash generating units“CGUs”comprising the Automotive Solutions operating segment and$29.3 million to the Extrusion group of CGUs

292、.The Group assesses at least annually,or more frequently if an indicator of impairment exists,whether there has been an impairment in the carrying value of goodwill.An impairment is recognized if the recoverable amount is less than the carrying amount of the group of CGUs to which goodwill is alloca

293、ted.The Group also disclosed in note 6 that no impairment was recorded.For all impairment tests,the Group determines the recoverable amount using a value in use approach.Auditing the Groups impairment tests was complex,given the degree of subjectivity in evaluating the Groups estimates and assumptio

294、ns in determining the various recoverable amounts.Significant assumptions included forecasted revenues and profit margins,terminal growth rate,and the discount rate,all of which are affected by expectations about future market and economic conditions.To test the estimated recoverable amounts in the

295、impairment tests,we performed the following procedures,among others:We assessed the reasonableness of forecastedrevenues and profit margins by comparing tosupporting documentation such as customercontracts where available,approved budgets andhistorical performance.We assessed the historical accuracy

296、 of estimatesof forecasted revenue and profit margins to actualperformance.We evaluated the terminal growth rate bycomparing to long term inflation expectations withthe assistance of our valuation specialists.We involved our valuation specialists to assessthe appropriateness of the Groups model andv

297、aluation methodology applied.They alsoassessed the various inputs utilized indetermining the discount rate by referencingcurrent industry,economic,and comparablecompany capital structures,as well as Group andcash-flow specific risk premiums.We assessed the adequacy of the disclosuresincluded in note

298、 6 of the consolidated financialstatements in relation to this matter.Other information Management is responsible for the other information.The other information comprises:Managements Discussion and AnalysisThe information,other than the consolidated financial statements and our auditors report ther

299、eon,in theAnnual ReportOur opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.In connection with our audit of the consolidated financial statements,our responsibility is to read the other information,an

300、d in doing so,consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.We obtained Managements Discussion and Analysis and Annual Report prior to the date of thi

301、s auditors report.If based on the work we have performed,we conclude that there is a misstatement of this other information,we are required to report that fact in this auditors report.We have nothing to report in this regard.25EXCO TECHNOLOGIES LIMITEDANNUAL REPORT 2024Responsibilities of management

302、 and those charged with governance for the consolidated financial statements Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRS,and for such internal control as management determines is necessary to enable the preparat

303、ion of consolidated financial statements that are free from material misstatement,whether due to fraud or error.In preparing the consolidated financial statements,management is responsible for assessing the Groups ability to continue as a going concern,disclosing,as applicable,matters related to goi

304、ng concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations,or has no realistic alternative but to do so.Those charged with governance are responsible for overseeing the Groups financial reporting process.Auditors responsi

305、bilities for the audit of the consolidated financial statements Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement,whether due to fraud or error,and to issue an auditors report that includes our opinion

306、.Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if,ind

307、ividually or in the aggregate,they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.As part of an audit in accordance with Canadian generally accepted auditing standards,we exercise professional judgment and maint

308、ain professional skepticism throughout the audit.We also:Identify and assess the risks of material misstatement of the consolidated financial statements,whether dueto fraud or error,design and perform audit procedures responsive to those risks,and obtain audit evidencethat is sufficient and appropri

309、ate to provide a basis for our opinion.The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error,as fraud may involve collusion,forgery,intentional omissions,misrepresentations,or the override of internal control.Obtain an understanding of inte

310、rnal control relevant to the audit in order to design audit procedures that areappropriate in the circumstances,but not for the purpose of expressing an opinion on the effectiveness of theGroups internal control.Evaluate the appropriateness of accounting policies used and the reasonableness of accou

311、nting estimatesand related disclosures made by management.Conclude on the appropriateness of managements use of the going concern basis of accounting and,basedon the audit evidence obtained,whether a material uncertainty exists related to events or conditions that maycast significant doubt on the Gr

312、oups ability to continue as a going concern.If we conclude that a materialuncertainty exists,we are required to draw attention in our auditors report to the related disclosures in theconsolidated financial statements or,if such disclosures are inadequate,to modify our opinion.Ourconclusions are base

313、d on the audit evidence obtained up to the date of our auditors report.However,futureevents or conditions may cause the Group to cease to continue as a going concern.Evaluate the overall presentation,structure and content of the consolidated financial statements,includingthe disclosures,and whether

314、the consolidated financial statements represent the underlying transactions andevents in a manner that achieves fair presentation.26EXCO TECHNOLOGIES LIMITEDANNUAL REPORT 2024Obtain sufficient appropriate audit evidence regarding the financial information of the entities or businessactivities within

315、 the Group to express an opinion on the consolidated financial statements.We are responsiblefor the direction,supervision and performance of the group audit.We remain solely responsible for our auditopinion.We communicate with those charged with governance regarding,among other matters,the planned s

316、cope and timing of the audit and significant audit findings,including any significant deficiencies in internal control that we identify during our audit.We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence,and

317、to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence,and where applicable,related safeguards.From the matters communicated with those charged with governance,we determine those matters that were of most significance in the audit of t

318、he consolidated financial statements of the current period and are therefore the key audit matters.We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when,in extremely rare circumstances,we determine that a matter should not be c

319、ommunicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.The engagement partner on the audit resulting in this independent auditors report is Mark Vrooman.Toronto,Canada November 27,2024 27EXCO

320、TECHNOLOGIES LIMITEDANNUAL REPORT 2024EXCO TECHNOLOGIES LIMITEDCONSOLIDATED STATEMENTS OF FINANCIAL POSITION$(000)s As atAs atSeptember 30,2024September 30,2023ASSETSCurrent Cash and cash equivalents$31,637$15,796Accounts receivable(note 8)111,428128,449Inventories(note 9)110,231111,166Prepaid expen

321、ses and deposits5,3954,660Derivative instruments(note 8)-5,401 Income taxes recoverable(note 13)-711Total current assets258,691266,183Property,plant and equipment,net(note 5)225,433222,429Intangible assets,net(note 6)27,82930,601Goodwill(note 6)93,96191,330Deferred tax assets(note 13)1,0871,528Total

322、 assets$607,001$612,071LIABILITIES AND SHAREHOLDERS EQUITYCurrent Bank indebtedness(notes 4 and 8)$-$4,964Trade accounts payable(note 8)46,48354,043Accrued payroll liabilities(note 8)17,68417,823Other accrued liabilities(notes 3 and 8)12,58718,061Derivative instruments(note 8)858-Provisions(note 7)8

323、,6337,191Income taxes payable 3,716-Customer advance payments(note 8)4,7525,152 Total current liabilities94,713107,234 Lease liabilities long-term portion(note 8)7,2516,396 Long-term debt(notes 4 and 8)105,000 105,000 Deferred tax liabilities(note 13)18,76522,421Total liabilities225,729241,051Shareh

324、olders equityShare capital(note 3)48,31548,767Contributed surplus(note 3)6,0105,791Accumulated other comprehensive income(note 3)16,24816,829Retained earnings 310,699299,633Total shareholders equity381,272371,020Total liabilities and shareholders equity$607,001$612,071The accompanying notes are an i

325、ntegral part of these consolidated financial statements.On behalf of the Board:Darren M.KirkBrian A.RobbinsPresident and Director,Chief Executive OfficerExecutive Chairman28EXCO TECHNOLOGIES LIMITEDANNUAL REPORT 2024EXCO TECHNOLOGIES LIMITEDCONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME$

326、(000)s except for income per common share20242023Sales(note 11(A)$637,791$619,303Cost of sales 502,679488,709Selling,general and administrative expenses(note 3)52,90156,271Depreciation(note 5)30,23727,231Amortization(note 6)4,1134,686Loss(gain)on disposal of property,plant and equipment 50(167)Inter

327、est expense,net(note 16)8,2788,068598,258584,798Income before income taxes39,53334,505Provision for(recovery of)income taxes(note 13)Current11,9755,127Deferred(2,060)3,0949,9158,221Net income for the year$29,618$26,284Other comprehensive income(loss)Items that may be reclassified to net income in su

328、bsequent periods:Net unrealized gain(loss)on derivatives designated as cash flow hedges(notes 3 and 8)(4,612)2,458 Unrealized gain on foreign currency translation(note 3)4,0319,753(581)12,211Comprehensive income$29,037$38,495Income per common share Basic$0.76$0.68Diluted$0.76$0.68Basic 38,75038,912D

329、iluted38,75038,912The accompanying notes are an integral part of these consolidated financial statements.Years ended September 30Weighted average number of common shares outstanding(note 12)29EXCO TECHNOLOGIES LIMITEDANNUAL REPORT 2024EXCO TECHNOLOGIES LIMITEDCONSOLIDATED STATEMENTS OF CHANGES IN SH

330、AREHOLDERS EQUITY$(000)sShare capitalContributed surplusRetained earningsNet unrealized gain(loss)on derivatives designated as cash flow hedgesUnrealized gain on foreign currency translation Total accumulated other comprehensive income Total shareholders equityBalance,September 30,2022$48,767$5,431$

331、289,693$1,520$3,098$4,618$348,509Net income for the year-26,284-$26,284Dividends paid(note 3)-(16,344)-($16,344)Stock option expense(note 3)-360-$360Other comprehensive income(note 3)-2,4589,75312,211$12,211Balance,September 30,202348,7675,791299,6333,97812,85116,829371,020Net income for the year-29

332、,618-29,618Dividends paid(note 3)-(16,259)-(16,259)Stock option expense(note 3)-219-219 Repurchase of share capital(note 3)(452)-(2,293)-(2,745)Other comprehensive income loss(note 3)-(4,612)4,031 (581)(581)Balance,September 30,2024$48,315$6,010$310,699($634)$16,882$16,248$381,272The accompanying no

333、tes are an integral part of these consolidated financial statements.Accumulated other comprehensive income 30EXCO TECHNOLOGIES LIMITEDANNUAL REPORT 2024EXCO TECHNOLOGIES LIMITEDCONSOLIDATED STATEMENTS OF CASH FLOWS$(000)s20242023OPERATING ACTIVITIES:Net income for the year$29,618$26,284Add(deduct)items not involving a current outlay of cashDepreciation(note 5)30,23727,231Amortization(note 6)4,1134