Heroux-Devtek Inc.
TSX : HRX

Heroux-Devtek Inc.

February 05, 2015 07:00 ET

Heroux-Devtek Provides Update on Capital Investment Plan

All major initiatives are progressing on schedule and component machining has started

LONGUEUIL, QUÉBEC--(Marketwired - Feb. 5, 2015) - Héroux-Devtek Inc. (TSX:HRX) ("Héroux-Devtek" or the "Corporation"), a leading international manufacturer of aerospace products, today provides an update on its comprehensive capital investment plan released in May 2014 (the "Plan"). This Plan will enable Héroux-Devtek to successfully carry out an important long-term contract to supply The Boeing Company ("Boeing") with complete landing gear systems for the Boeing 777 and 777X aircraft. Under the terms of the contract, deliveries are scheduled to begin in early calendar 2017.

All major initiatives of the Plan are progressing on schedule, including the construction of a new facility and the expansion of the existing facility network as well as investments in machinery and equipment for component manufacturing and system assembly. As of December 31, 2014, Héroux-Devtek has invested approximately $48 million directly related to the Boeing contract and it currently anticipates to proceed with additional investments of about $57 million before the end of the fiscal year ending on March 31, 2016.

The total investment of $105 million under the Plan is above the initial guidance of $90 million, mostly due to a higher foreign exchange conversion rate applied to machinery and equipment purchases, which are mainly carried out in US dollars. The Corporation has also committed supplementary amounts to acquire more land and to have additional finishing capacity available to support growth beyond the Plan's horizon. These investments are in addition to planned regular maintenance capital investments totalling approximately $30 million for the two-year period ending March 31, 2016.

More specifically, the construction of a new, state-of-the-art 108,000 square foot facility in Cambridge, Ontario has been completed and leading-edge automated equipment are being installed. This facility will primarily manufacture large-scale, complex landing gear components. It is currently in the pre-production phase and is expected to be fully operational in June 2015. The Corporation will officially inaugurate the Cambridge facility on Thursday, February 26, 2015 in presence of certain provincial, municipal and corporate dignitaries.

In addition, Héroux-Devtek is expanding its Cleveland, Ohio facility, nearly doubling its footprint to approximately 100,000 square feet. This expansion will provide the Cleveland site with additional capacity for component finishing and a highly modern sub-assembly centre. The building expansion should be completed by the end of fiscal 2015, while finishing capabilities are expected to be in place by the first half of fiscal 2016.

The Corporation is also proceeding with investments in machinery and equipment, as well as certain building improvements, at its Springfield, Ohio and Laval, Quebec plants. These two facilities will mainly perform the manufacturing of smaller complex and critical components. Component machining began at the Springfield facility in December 2014.

Finally, Héroux-Devtek also announces the lease of a new 21,000 square foot facility in Everett, Washington. This facility will assure final assembly of landing gear systems to be delivered to Boeing's site located in close proximity. The plant should be operational near the end of calendar 2015.

"We are pleased that this exhaustive project is proceeding according to plan, as we move increasingly closer to the production phase in the execution of the largest landing gear contract in Héroux-Devtek's history. This network expansion leverages our strategy to operate dedicated centres of excellence that offer the required flexibility and productivity to be competitive in the global aerospace industry, while providing OEMs such as Boeing with cost-effective products of superior quality," said Martin Brassard, Vice-President and Chief Operating Officer of Héroux-Devtek.

PROFILE

Héroux-Devtek Inc. (TSX:HRX) is a Canadian company specializing in the design, development, manufacture and repair and overhaul of landing gear and actuation systems and components for the Aerospace market. The Corporation is the third largest landing gear company worldwide, supplying both the commercial and military sectors of the Aerospace market with new landing gear systems and components, as well as aftermarket products and services. The Corporation also manufactures electronic enclosures, heat exchangers and cabinets for suppliers of airborne radar, electro-optic systems and aircraft controls through its Magtron operations. On a pro forma basis, approximately 75% of the Corporation's sales are outside Canada, including 50% in the United States. The Corporation's head office is located in Longueuil, Québec with facilities in the Greater Montreal area (Longueuil, Laval and St-Hubert); Kitchener and Toronto, Ontario; Springfield and Cleveland, Ohio; Wichita, Kansas; and Runcorn, Nottingham and Bolton, United Kingdom.

FORWARD-LOOKING STATEMENTS

Except for historical information provided herein, this press release may contain information and statements of a forward-looking nature concerning the future performance of the Corporation. These statements are based on suppositions and uncertainties as well as on management's best possible evaluation of future events. Such factors may include, without excluding other considerations, fluctuations in quarterly results, evolution in customer demand for the Corporation's products and services, the impact of price pressures exerted by competitors, and general market trends or economic changes. As a result, readers are advised that actual results may differ from expected results.

Contact Information

  • From: Heroux-Devtek Inc.
    Gilles Labbe
    President and Chief Executive Officer
    (450) 679-3330

    Contact: MaisonBrison
    Martin Goulet, CFA
    (514) 731-0000