Exco Results for Second Quarter Ended March 31, 2026

• Q2 FY2026 Financial Performance: Sales of $157.6 million, down 1% year-over-year (excluding foreign exchange). Net income decreased to $5.8 million ($0.15 EPS) from $6.4 million in the prior-year quarter. EBITDA declined to $18.0 million from $19.7 million.
• Segment Divergence: Automotive Solutions segment sales increased 5% excluding foreign exchange, while Casting and Extrusion segment sales declined by 10%.
• Restructuring Actions: Closed the Large Mould facility in Querétaro, Mexico. Recorded a $1.0 million accrual for termination costs and included $2.4 million in after-tax restructuring charges in the quarter.
• Cash Flow & Capital Returns: Free Cash Flow improved significantly to $5.9 million from $3.1 million in the prior-year quarter. Company invested $2.5 million in share buybacks during the quarter. Quarterly dividend maintained at $0.105 per common share.
• Guidance Status: No specific FY2026 revenue, EBITDA, or EPS targets provided; guidance was previously withdrawn due to tariff uncertainty (as noted in Q1 news).

• Revenue Decline Risk: The 1% decrease in consolidated sales excluding foreign exchange indicates a slowdown in growth momentum compared to the +4% YoY growth seen in Q1. This is primarily driven by the 10% decline in the Casting and Extrusion segment, which represents nearly half of total revenue ($75.1M).
• Profitability Pressure: EBITDA margins compressed slightly (down from prior year), and net income declined despite FCF improvement. The $2.4 million restructuring charge is a one-time hit that obscures underlying operational performance but signals management's intent to cut costs.
• Cash Flow Strength: The doubling of Free Cash Flow ($3.1M to $5.9M) is the most positive metric, suggesting improved working capital management or timing of payments/receipts following restructuring. This supports the dividend and buyback program without requiring external financing.
• Strategic Shift: Closing the Querétaro facility aligns with the strategy to scale operations in Morocco, Mexico (other sites), and Europe. While this incurs short-term costs ($1M accrual + $2.4M charges), it aims to improve future profitability by removing underperforming assets.
• Market Expectations: As guidance was already withdrawn due to tariff uncertainty, the lack of new targets is not a surprise. The results are largely in line with expectations for a company navigating macroeconomic headwinds, preventing a material negative shock but failing to generate upside momentum.

• Business Model: Exco Technologies manufactures metal components for the automotive industry, primarily through Casting & Extrusion and Automotive Solutions segments.
• Flagship Projects/Initiatives: Focus on scaling operations in Morocco, Mexico (excluding Querétaro), and Europe to leverage USMCA compliance and reshoring trends. The Large Mould facility in Querétaro was a key asset now being closed for efficiency.
• Product Demand: Driven by new program launches in Automotive Solutions and extrusion tooling demand, though Casting & Extrusion volumes are softening.