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Héroux-Devtek Reports Second Quarter Fiscal 2022 Financial Results

Q2 Financial Highlights

  • Sales of $131.3 million, compared to $137.1 million last year; stable considering foreign exchange
  • Operating income of $12.0 million, compared to $7.1 million last year
  • Adjusted EBITDA1 of $21.2 million, or 16.1% of sales, compared to $21.2 million, or 15.5% last year
  • Earnings reached $0.21 per share, compared to $0.11 or adjusted EPS1 of $0.17 last year
  • Strong cash flows from operating activities of $17.5 million, compared to $15.4 million last year

Q2 Operational Highlights

  • Six year extension to 2030 of landing gear contract with Boeing for the 777 and 777X aircraft programs
  • Awarded a contract by Lockheed Martin for the development of landing gears for its next generation of defence aircraft

LONGUEUIL, QC, Nov. 12, 2021 /CNW Telbec/ - Héroux-Devtek Inc. (TSX: HRX) ("Héroux-Devtek" or the "Corporation"), a leading international manufacturer of aerospace products and the world's third-largest landing gear manufacturer, today reported its financial results for the second quarter ended September 30, 2021. Unless otherwise indicated, all amounts are in Canadian dollars.

"In Q2 as in every quarter for the past 18 months, Héroux-Devtek has continued to mitigate the pandemic's impact on civil production rates by consistently delivering strong growth in the defence sector. I am particularly proud of Héroux-Devtek's financial performance, which demonstrates our agility to adapt to unforeseen events," said Martin Brassard, President and CEO of Héroux-Devtek.

"For the second half of the fiscal year, we will remain focused on executing our plan and continue pursuing new business and growth opportunities; these may be either via acquisitions or by furthering our already strong relationships with OEMs. In that regard, we are pleased to have extended our contract with Boeing for the 777 and 777X until 2030 and to have been chosen by Lockheed Martin for its next generation of defence aircraft," added Mr. Brassard.


Three months ended
September 30,

Six months ended 
September 30,

(in thousands, except per share data)






$ 131,293

$ 137,063

$ 257,481

$ 265,398

Operating income





Adjusted operating income1





Adjusted EBITDA1





Net income





Adjusted net income1





Cash flows related to operating activities





Free cash flow1





In dollars per share

EPS – basic and diluted

$        0.21

$        0.11

$         0.40

$         0.07

Adjusted EPS1






These are non-IFRS measures. Please refer to the "Non-IFRS Measures" section at the end of this press release.


Consolidated sales decreased to $131.3 million, from $137.1 million last year, due to the $5.8 million negative impact of foreign exchange fluctuations year-over-year.

Excluding foreign exchange, defence sales were up 9.1% to $94.0 million, fuelled by a ramp-up of deliveries under the Sikorsky CH-53K, Boeing F-18 and MQ-25 programs, partially offset by lower aftermarket sales. Civil sales decreased 17.4% to $37.3 million, as OEM demand in the large civil sector was lower than in the corresponding quarter last year when the full impact of the COVID-19 pandemic had not fully materialized. The decrease also resulted from the repatriation by customers of certain Tier-2 contracts for large commercial programs, but was partly offset by higher deliveries for business jet programs.

Gross profit as a percentage of sales increased from 15.4% last year to 16.9%, due to the positive effect of restructuring initiatives, including lower depreciation.

Operating income increased to $12.0 million, or 9.1% of sales, from $7.1 million, or 5.2% of sales last year. Adjusted EBITDA, which excludes non-recurring items, remained stable at $21.2 million, growing as a percentage of sales, from 15.5% a year ago to 16.1% this year.

Earnings per share increased from $0.11 last year to $0.21 this year, due to the factors stated above. Adjusted EPS also grew to $0.21, over $0.17 last year.


Consolidated sales decreased 3.0% to $257.5 million, from $265.4 million for the corresponding period last year. Defence sales were up 14.9%, while civil sales decreased 18.2%. Sales for the six-month period were impacted by the same factors as for the second quarter.

Gross profit as a percentage of sales increased to 17.0% from 15.7% last year, as a result of the same factors as for the second quarter.

Operating income grew to $22.8 million, or 8.8% of sales, from $8.5 million, or 3.2% of sales last year, which reflected $8.7 million of restructuring charges. Adjusted EBITDA, which excludes non-recurring items, stood at

$41.2 million, or 16.0% of sales, compared with $39.6 million, or 14.9% of sales last year.

EPS incresased from $0.07 last year to $0.40, while adjusted EPS increased to $0.40 from the $0.26 recorded in the same period last year.


Cash flows related to operating activities reached $17.5 million in the second quarter and $35.7 million in the first six months of the year, up from $15.4 million and $30.9 million in the corresponding periods last year, mainly as a result of last year's cash charges related to the restructuring.

As at September 30, 2021, net debt stood at $145.4 million, down from $157.5 million as at March 31, 2021, mainly as a result of cash flow generation, net of share repurchases under the NCIB. The net debt to adjusted EBITDA ratio stood at 1.6x versus 1.8x six months earlier.


In May 2021, the Corporation announced the approval by the Toronto Stock Exchange of its Normal Course Issuer Bid (NCIB), under which Héroux-Devtek has the right to purchase for cancellation, from May 25, 2021, to May 24, 2022, a maximum of 2,412,279 common shares, representing, as of May 12, 2021, 10% of the public float of 24,122,794 common shares.

As of November 11, 2021, Héroux-Devtek has purchased and cancelled a cumulative 1,096,761 common shares for a cash consideration of $19.5 million, representing a weighted average price of $17.75 per share.


Héroux-Devtek Inc. will hold a conference call to discuss these results on Friday, November 12, 2021 at 8:30 AM Eastern Time. Interested parties can join the call by dialing 1-888-390-0549 (North America) or 1-416-764-8682 (overseas). The conference call can also be accessed via live webcast on Héroux-Devtek's website, or at An accompanying presentation is also available on Héroux-Devtek's website at

If you are unable to call in at this time, you may access a recording of the meeting by calling 1-888-390-0541 and entering the passcode 840891 on your phone. This recording will be available from Friday, November 12, 2021 as of 11:30 AM Eastern Time until 11:59 PM Eastern Time on Friday, November 19, 2021.


Except for historical information provided herein, this press release contains information and statements of a forward-looking nature concerning the future performance of the Corporation.

Forward-looking statements are based on assumptions and uncertainties as well as on management's best possible evaluation of future events. Such factors include, but are not limited to: the effect of the ongoing COVID- 19 pandemic on Héroux-Devtek's operations, customers, supply chain, the aerospace industry and the economy in general; the impact of other worldwide general economic conditions; industry conditions including changes in laws and regulations; increased competition; the lack of availability of qualified personnel or management; availability of commodities and fluctuations in commodity prices; financial and operational performance of suppliers and customers; foreign exchange or interest rate fluctuations; and the impact of accounting policies issued by international standard setters. Readers are cautioned that the foregoing list of factors that may affect future growth, results and performance is not exhaustive and undue reliance should not be placed on forward- looking statements.

As a result, readers are advised that actual results may differ from expected results. Please see the Risks and Uncertainties section under Additional Information in the Corporation's MD&A for the second quarter ended September 30, 2021, for further details regarding the material assumptions underlying the forecasts and guidance. Such forecasts and guidance are provided for the purpose of assisting the reader in understanding the Corporation's financial performance and prospects and to present management's assessment of future plans and operations, and the reader is cautioned that such statements may not be appropriate for other purposes.


Earnings before interest, taxes, depreciation and amortization ("EBITDA"), adjusted EBITDA, adjusted net income, adjusted earnings per share and free cash flow are financial measures not prescribed by International Financial Reporting Standards ("IFRS") and are not likely to be comparable to similar measures presented by other issuers. Management considers these to be useful information to assist investors in evaluating the Corporation's profitability, liquidity and ability to generate funds to finance its operations. Refer to Non-IFRS Financial Measures section under Operating Results in the Corporation's MD&A for definitions of these measures and reconciliations to the most comparable IFRS measures.


Héroux-Devtek Inc. (TSX: HRX) is an international company specializing in the design, development, manufacture, repair and overhaul of aircraft landing gear, hydraulic and electromechanical actuators, custom ball screws and fracture-critical components for the Aerospace market. The Corporation is the third-largest landing gear company worldwide, supplying both the defence and commercial sectors. Approximately 90% of the Corporation's sales are outside of Canada, including about 53% in the United States. The Corporation's head office is located in Longueuil, Québec with facilities in Canada, the United States, the United Kingdom and Spain.

SOURCE Héroux-Devtek Inc.

For further information: Héroux-Devtek Inc., Stéphane Arsenault, Vice President and Chief Financial Officer, Tel.: 450-679-3330,; Investor Relations: Hugo Delorme, Tel.: 514-700-5550, ext. 555,