Exco Technologies (XTC) Q2 2026 earnings summary

Executive summary

• Q2 2026 consolidated sales were CAD 157.6 million, down 5% year-over-year, with foreign exchange reducing sales by CAD 6.9 million; underlying business momentum is building as large mold order activity and backlogs increase.

• Net income was CAD 5.8 million (CAD 0.15/share), including CAD 2.4 million after-tax restructuring charges; EBITDA was CAD 18.0 million (11.4% margin), down from CAD 19.7 million (11.8%) last year.

• Free cash flow improved to CAD 5.9 million, up from CAD 2.8 million last year, with cash from operating activities at CAD 11.1 million.

• Closure of the Large Mould Mexico facility resulted in a CAD 1 million restructuring accrual and is expected to support improved profitability.

• Dividend payments of CAD 4 million and share repurchases of CAD 2.5 million were made in the quarter.

Financial highlights

• Automotive Solutions Q2 sales were CAD 82.4 million, down 1% year-over-year; up 5% excluding FX impact, with new program launches and favorable vehicle mix.

• Casting and Extrusion Q2 sales were CAD 75.1 million, down 10% year-over-year; extrusion tooling demand remained solid, but die-cast tooling revenues declined.

• Segment EBITDA margins: Automotive Solutions at 10.9% (down from 11.8%), Casting and Extrusion at 14.0% (up from 13.5%).

• Effective income tax rate was 26.4%, down from 33.7% last year.

• Ended the quarter with CAD 22.5 million in cash and CAD 60 million available under credit facility.

Outlook and guidance

• Management expects sequential and year-over-year revenue improvement in the second half of 2026 as large mold programs ramp up and restructuring activity subsides.

• Restructuring actions and greenfield investments are positioning for improved profitability and a leaner cost structure.

• Macro uncertainties persist, including global trade policy, USMCA review, and inflationary pressures, but compliance with rules of origin and reshoring trends provide flexibility and growth opportunities.

• Fiscal 2026 capital spending forecast is CAD 25 million, focused on maintenance, productivity, and select growth initiatives.