FTG Announces 3rd Quarter 2011 Financial Results
Toronto, October 5, 2011 – Firan Technology Group Corporation (TSX:FTG) today announced financial results for the third quarter 2011.
• Grew sales by 3% over Q3, 2010 and by 13% year-to-date over the same
• Improved net earnings by over 140% in Q3, 2011 compared to Q3, 2010
• R&D spending remained above 5% of sales
“FTG continues to perform well in the face of a strong Canadian currency and uncertainty in global markets. We are demonstrating that our focus on the aerospace and defence market coupled with our investments in technology have positioned us to succeed now and in the future”, stated Brad Bourne, President and Chief Executive Officer.
Third Quarter Results: (three months ended August 26, 2011 compared with three months ended August 27, 2010)
Operating Earnings (1): $1,036,000
- Net R&D Investment: $702,000
- Severance: $0.00
Net Earnings: $334,000
Earnings per share: basic & diluted $0.02
Oeprating Earnings (1): 1,297,000
- Net R&D Investment: $918,000
- Severance: $243,000
Net Earnings: $136,000
Earnings per share: basic & diluted $0.01
Year-To-Date 2011 Results: (nine months ended August 26, 2011 compared with nine months ended August 27, 2010)
Operating Earnings(1): $2,774,000
- Net R&D Investment: $2,209,000
- Severance: $0.00
- Income Tax: $2,000
Net Earnings/(Loss): $563,000
Earnings/(Loss) per share: basic & diluted $0.03
Operating Earnings (1): $1,645,000
- Net R&D Investment: $2,079,000
- Severance: $386,000
- Income Tax: $2,000
Net Earnings / (Loss): ($822,000)
Earnings/(Loss) per share: basic & diluted ($0.05)
(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 third quarter of 2011 that continue to improve the Corporation and position it for the future, including:
• Continued year-over-year sales growth, despite of a 7% deterioration
in the value of the US dollar relative to the Canadian dollar
• Reduced inventories from year end by $0.4M as the company continues
to apply lean principles across its operations
• Commissioned equipment valued at over $500,000 in both Circuits’
facilities to improve capabilities to produce high density products
seen on most new designs. The equipment included:
- a Laser Direct Imaging System (LDI) in FTG Circuits-Chatsworth
- a Post-Etch-Punch (PEP) for FTG Circuits-Toronto
- Successfully completed AS9100 audit for FTG Circuits – Toronto
to Revision C
- Negotiated a 3 year contract with our represented staff in FTG
Circuits – Toronto on terms that give the company more
flexibility to react to the marketplace.
For FTG overall sales increased by $0.4M (3%), from $13.2M in Q3 2010 to $13.6M in Q3 2011. Excluding the impact of the decline in the value of the U.S. dollar, year-over year sales increased by $1.2M (9%).
The Circuits Segment sales were up $0.4M or 4% in Q3 2011 versus Q3 2010. Year-to-date Circuits Segment sales were up $3.1M or 11%.
For the Aerospace segment, sales in Q3 2011 were up 1% to Q3 2010. Sales were up 5% excluding the impact of the change in exchange rate. For the year-to-date Aerospace segment sales were up $1.5M or 20%.
Net earnings at FTG in Q3 2011 were $0.3M compared to net earnings of $0.1M in Q3 2010. Gross margin decreased by $0.4M or 10% due to unfavourable U.S. to Canadian exchange rates and higher input costs. Offsetting this was lower R&D and severance costs in the quarter.
The Circuits segment net earnings before corporate and interest costs was $0.7M in Q3 2011 compared to $0.8M in Q3 2010. Both facilities were profitable in the quarter. On a year-to-date basis, the Circuits business net earnings before corporate and interest costs was $1.9M compared to $0.9M for the same period last year.
The Aerospace net earnings before corporate and interest costs was $0.2M in Q3 2011 versus $0.1M in Q3, 2010. On a year-to-date basis the net earnings before corporate and interests costs was $0.6M compared to $0.4M for the same period last year. For FTG Aerospace-Tianjin, the investment in the quarter totaled $0.04M as activity ramped up towards becoming operational by the end of this year.
As at August 26, 2011, the Corporation’s primary source of liquidity included accounts receivable of $10.0M and inventory of $8.4M. While activity across the company has increased, inventories are down $0.4M from year end, due to a continued focus on lean manufacturing and cash management. Net working capital at August 26, 2011 was $ 9.7M.
The Corporation will host a live conference call on Thursday, Oct 6, 2011 at 11:00 am (EDT) to discuss the results of Q3 2011.
Anyone wishing to participate in the call should dial 416-695-6616 or 1-800-952-6845 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 October 20, 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 8778467.
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 firstname.lastname@example.org
Joseph R. Ricci, Vice President and CFO
Tel: (416) 299-4000 x309
Firan Technology Group Corporation email@example.com
Additional information can be found at the Corporation’s website www.ftgcorp.com