FTG Announces Full Year and Fourth Quarter 2014 Financial Results
Toronto, February 2, 2015 – Firan Technology Group Corporation (TSX:FTG) today announced financial results for the full year and fourth quarter 2014.
•Grew 2014 sales by 8.4% over full year 2013
•Grew Circuits segment 2014 sales by 19.4% over full year 2013
•Grew sales outside of North America to $10.9M or 18% of total sales, from 13.4% in 2013.
•Grew Aerospace Tianjin and Chatsworth activity by 62% and 88% respectively over full year 2013
•Improved profitability by $3.2M compared to the previous year
•Paid down net debt by $1.4M, after investing $1.7M in capital equipment and maintaining R&D spending above 5% of sales.
“Our globalization strategy began to bear fruit in 2014. Significant cost had been incurred in previous years to achieve this objective but it has now positioned FTG favorably in the marketplace and enabled significant growth”, stated Brad Bourne, President and Chief Executive Officer. He added, “This growth, coupled with strong operating performance and benefits from some external factors, such as the weakening of the Canadian dollar and lower commodity prices, resulted in much improved profitability in 2014.”
Full Year 2014 Results: (twelve months ended November 30, 2014 compared with twelve months ended November 30, 2013)
Operating Earnings(1): $5,805,000
•Net R&D Investment: $3,359,000
Net Earnings (Loss) before Tax: $2,446,000
•Tax Expense (Recovery): $288,000
•Non-controlling Interests: ($35,000)
Net Earnings (Loss) After Tax: $2,193,000
Earnings per share
- basic: $0.12
- diluted: $0.11
Operating Earnings(1): $787,000
•Net R&D Investment: $2,766,000
Net Earnings (Loss) before Tax: ($1,979,000)
•Tax Expense (Recovery): ($941,000)
•Non-controlling Interests: ($40,000)
Net Earnings (Loss) After Tax: ($998,000)
Earnings per share
- basic: ($0.06)
- diluted: ($0.06)
Fourth Quarter Results: (three months ended November 30, 2014 compared with three months ended November 30, 2013)
Operating Earnings (1): $2,324,000
•Net R&D Investment: $1,063,000
Net Earnings (Loss) before Tax: 1,261,000
•Tax Expense (Recovery): $70,000
•Non-controlling Interests: $2,000
Net Earnings After Tax: $1,189,000
Earnings per share
- basic: $0.06
- diluted: $0.06
Operating Earnings (1): $238,000
•Net R&D Investment: $1,032,000
Net Earnings (Loss) before Tax: ($794,000)
•Tax Expense (Recovery): ($977,000)
•Non-controlling Interests: ($14,000)
Net Earnings After Tax: $197,000
Earnings per share
- basic: $0.01
- diluted: $0.01
(1) Operating Earnings is not a measure recognized under International Financial Reporting Standards (“IFRS”). 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 may differ from other corporations and accordingly may not be comparable to measures used by other corporations.
FTG accomplished many goals throughout 2014 that continue to improve the Corporation and position it for the future, including:
•Signed Letter of Intent for cockpit control assemblies for C919 Heads Up Display system in China, completed Preliminary Design Review (PDR), Critical Design Review (CDR) and shipped first sets of ground test hardware.
•Completed Preliminary Design Review (PDR) and shipped four additional sets of ground test hardware for the Heads Down Display Control Panel Assemblies for the Chinese C919 development program.
•Produced parts for 11 different customers from Aerospace Tianjin.
•Produced parts for 27 different customer sites from Aerospace Chatsworth, including 14 for rigid flex assembly work and 13 for cockpit products.
•Shipped 15,000th cockpit product from FTG Aerospace Tianjin facility, since production started.
•Achieved sales outside of North America of 18% of total sales with growth in both Europe and Asia
•Completed AS9100C recertification in Aerospace Toronto and Tianjin, adding design to the certification for Tianjin.
•Added design to the AS9100C certification in Aerospace Chatsworth.
•Completed Nadcap AC7119 certification in Circuits Toronto, and qualified for 2 year merit recertification program.
•Achieved approval for FTG Printronics joint venture from first major North American Aerospace customer after successfully passing site audit and all testing of qualification products.
For FTG, overall sales increased by $4.7M (8.4%), from $56.0M in FY2013 to $60.7M in FY2014. FTG Circuits, and the new facilities, drove the growth in the year. For the fourth quarter, sales were $16.5M, an increase of $1.1M or 6.9% versus the same period last year.
The Circuits Segment sales were up $7.3M or 19.4% in FY2014 versus FY2013. In the fourth quarter, Circuits Segment sales were up $1.1M or 10.2% compared to the same quarter last year.
For the Aerospace segment, sales in FY2014 were down $2.6M or 14.4% compared to FY2013. Excluding one large military simulator program from 2013, activity in Aerospace was up $1.6M or 11.6%. Activity from the two new sites totaled $3.9M in FY 2014 compared to $2.3M in 2013. In Q4, Aerospace Segment sales were flat compared to the same quarter last year.
Gross margins were up in FY 2014 by $3.8M compared to FY 2013 due to higher activity across the company, cost saving initiatives, lower start-up costs in the new facilities and the weakening of the Canadian dollar. Gross margins in Q4 2014 were up $0.4M compared to the same period in 2013 as start-up costs diminished and revenues increased.
Earnings before interest, tax, depreciation and amortization (EBITDA) for FTG for FY2014 was $4.7M an increase of $3.4M from 2013.
Net profit at FTG in FY2014 was $2.2M compared to a net loss of $1.0M in FY2013. SG&A costs were higher due to higher performance compensation in FY 2014, net R&D costs were higher, and these were offset by lower restructuring costs, and foreign exchange gains. In Q4 2014, net profit was $1.2M compared to $0.2M in Q4 2013. The increase was due to higher revenues, higher margins, lower restructuring costs and foreign exchange gains.
The Circuits segment net earnings before corporate and interest costs increased to $5.3M in FY2014 compared to $0.2M in FY2013, on $7.3M higher sales.
The Aerospace net earnings before corporate and interest costs decreased to $0.1M in FY2014 versus $1.0 M in FY2013. The net earnings this year decreased due to $2.6M lower revenue offset by lower start-up expenses for the two new facilities. Costs related to development for the C919 heads down display cockpit assemblies of $1.0M in FY2014 and $0.7M in FY2013 were treated as deferred development and not expensed in either year. Total deferred development on this program is $2.2M.
As at November 30, 2014, the Corporation’s primary source of liquidity included accounts receivable of $13.2M and inventory of $10.4M. Net working capital at November 30, 2012 was $ 13.0M.
The Corporation will host a live conference call on Tuesday, February 3, 2015 at 11:00 am (EDT) to discuss the results of FY2014.
Anyone wishing to participate in the call should dial 647-788-4922 or 1-877-223-4471 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 February 12, 2015 and will be available on the FTG website at www.ftgcorp.com. The number to call for a rebroadcast is 1-800-585-8367 or 416-621-4642, pass code 64994388.
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, Chatsworth, California and a joint venture in Tianjin, China.
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, Chatsworth, California and Tianjin, China.
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