FTG Announces Q1 2011 Financial Results
Toronto, April 5, 2011 – Firan Technology Group Corporation (TSX:FTG) today announced financial results for the first quarter 2011.
• Book-to-bill ratio above 1.09:1 in the quarter
• 18% sales growth compared to the first quarter 2010
• 87% increase in sales in Canada compared to the first quarter 2010
• Gross Margin above 25% in the quarter
“2011 began on a positive note for FTG. Sales are up 18% compared to last year and this translated into improvements in our bottom line. These improvements are very impressive as we have again seen a headwind from the ongoing devaluation of the U.S. dollar which has fallen over 5 cents from the same period last year. We have expanded our sales team and this too is translating into improved results as can be seen from our strong book-to-bill ratio in the quarter and further diversification of our customer base. Our continued investments in technologies and Operational Excellence provide us with the tools to grow market share and exceed customer expectations going forward”, stated Brad Bourne, President and Chief Executive Officer.
First Quarter Results: (three months ended February 25, 2011 compared with three months ended February 26, 2010)
Operating Earnings / (Loss) before (1): $476,000
• Net R&D,
Net R&D Investment: $667,000
Net (Loss): ($193,000)
(Loss) per share:
- basic & diluted: ($0.01)
Operating Earnings / (Loss) before (1): ($124,000)
- Net R&D
Net R&D Investment: $326,000
Net (Loss): ($596,000)
(Loss) per share:
- basic & diluted: ($0.03)
(1) Operating Earnings (Loss) is not a measure recognized under Canadian generally accepted accounting principles (“GAAP”). Management believes that this measure is important to many of the Corporation’s shareholders, creditors and other stakeholders. The Corporation’s method of calculating Operating Earnings (Loss) may differ from other corporations and accordingly may not be comparable to measures used by other corporations.
FTG accomplished many goals in the first quarter of 2011 that continue to improve the Corporation and position it for the future, including:
• Order bookings growth of 24% compared to same quarter last year
• 51% sales growth at FTG Aerospace compared to same quarter last year
• Gross margin expanded to 25.5% compared to 21.7% for the same quarter
• Received second increment of Ontario Government AMIS loan of $1M
• Reduced inventories by $0.5M from year end
• Installed a Laser Direct Imaging System (LDI) in Toronto
For FTG, overall sales increased by 18%, from $10.4M in Q1 2010 to $12.2M in Q1 2011. Over this same period, the decline in the value of the U.S. dollar was 5%. Sales in all regions were up with Canada up 87%, Europe up 72%, Asia up 56% and the U.S. up 4%.
The Circuits Segment sales were up $0.8M or 10% in Q1 2011 versus Q1 2010. The Chatsworth facility sales increased 25% and the Toronto facility sales increased 3%, or 8% excluding the impact of the lower U.S. dollar exchange rate.
For the Aerospace segment, sales in Q1 2011 were up $1.1M or 51% compared to Q1 2010. Almost all the sales growth came from Canada. The growth in Canada has come from the increase in business in higher level assemblies and a rebound in the commercial panel sales.
Net loss at FTG in Q1 2011 was $0.2M compared to $0.6M in Q1 2010. The improvement in the results come from the increase in activity and lower severance costs, partially offset by the declining value of U.S. denominated sales and lower R&D recoveries.
The Circuits segment net income before corporate costs was $0.1M in Q1 2011 compared to a loss of $0.1M in Q1 2010. Higher volume and improved yields were the primary reasons for the improvement.
The Aerospace net income before corporate costs was $0.2M in Q1 2011 versus $0.0M in Q1 2010. The improvement was primarily due to higher volume.
As at February 25, 2011, the Corporation’s primary source of liquidity included accounts receivable of $9.3M, inventory of $8.2M, $1.4M of availability on its AMIS term loan and U.S. $5.1M of availability remaining on its revolving line of credit. Net working capital at the quarter end was $8.9M. Net debt increased by $1.0M to $6.5M in the quarter, of which $3.6M is interest free debt under the Ontario Government AMIS program.
The Corporation will host a live conference call on April 8, 2011 at 11:00am (EDT) to discuss the results of Q1 2011.
Anyone wishing to participate in the call should dial 416-340-8018 or 1-866-223-7781 and identify that you are calling to participate in the FTG conference call. The Chairperson is Mr. Brad Bourne. A replay of the call will be available until April 21, 2011 and will be available on the FTG website at www.ftgcorp.com. The number to call for a rebroadcast is 905-694-9451 or 1-800-408-3053, pass code 7774268.
ABOUT FIRAN TECHNOLOGY GROUP CORPORATION
FTG is an aerospace and defense electronics product and subsystem supplier to customers around the globe. FTG has two operating units:
FTG Circuits is a manufacturer of high technology, high reliability printed circuit boards. Our customers are leaders in the aviation, defense, and high technology industries. FTG Circuits has operations in Toronto, Ontario and Chatsworth, California.
FTG Aerospace manufactures illuminated cockpit panels, keyboards and sub-assemblies for original equipment manufacturers of aerospace and defense equipment. FTG Aerospace has operations in Toronto, Ontario and is opening a facility in Tianjin, China in 2011.
The Corporation's shares are traded on the Toronto Stock Exchange under the symbol FTG.
This news release contains certain forward-looking statements. These forward-looking statements are related to, but not limited to, FTG’s operations, anticipated financial performance, business prospects and strategies. Forward-looking information typically contains words such as “anticipate”, “believe”, “expect”, “plan” or similar words suggesting future outcomes. Such statements are based on the current expectations of management of the Corporation and inherently involve numerous risks and uncertainties, known and unknown, including economic factors and the Corporation’s industry, generally. The preceding list is not exhaustive of all possible factors. Such forward-looking statements are not guarantees of future performance and actual events and results could differ materially from those expressed or implied by forward-looking statements made by the Corporation. The reader is cautioned to consider these and other factors carefully when making decisions with respect to the Corporation and not place undue reliance on forward-looking statements. Other than as may be required by law, FTG disclaims any intention or obligation to update or revise any such forward-looking statements, whether as a result of new information, future events or otherwise.
For further information please contact:
Bradley C. Bourne, President and CEO
Tel: (416) 299-4000 x314
Firan Technology Group Corporation
Joseph R. Ricci, Vice President and CFO
Tel:(416) 299-4000 x309
Firan Technology Group Corporation
Additional information can be found at the Corporation’s website www.ftgcorp.com