Firan Technology Group Announces A Return to Pre-Tax Profitability In Second Quarter 2005
Firan Technology Group Corporation (TSX:FTG) today announced the second quarter results for the period ending May 27, 2005.
The Company had operating earnings before tax of $166,000, a substantial improvement from the pre-tax operating loss of $931,000 in the first quarter of 2005. The performance for the quarter resulted from strong sales and margin performance in FTG Circuits Chatsworth and improved results for FTG Circuits Toronto compared to the first quarter of 2005. FTG Aerospace continues to achieve consistent positive performance.
Second Quarter Results (three months ended May 27, 2005
compared with three months ended May 28, 2004)
Operating Earnings Before Tax: $166,000
Net Earnings (Loss): ($183,000)
(Loss) Earnings per share - basic: ($0.01)
(Loss) Earnings per share - diluted: ($0.01)
Operating Earnings Before Tax: $1,138,000
Net Earnings (Loss): $1,138,000
(Loss) Earnings per share - basic: $0.07
(Loss) Earnings per share - diluted: $0.06
Year to Date Results (six months ended May 27, 2005
compared with six months ended May 28, 2004)
Operating Loss Before Tax: ($765,000)
Net Loss: ($1,164,000)
Loss per share - basic & diluted: ($0.07)
Operating Loss Before Tax: ($922,000)
Net Loss: ($922,000)
Loss per share - basic & diluted: ($0.06)
Net sales for the second quarter of 2005 were $14,162,000, an increase of 6% compared with $13,338,000 for the second quarter of 2004 and a 17% increase over the first quarter of 2005. The strength in the Canadian dollar versus the prior year reduced reported sales for the quarter by more than $900,000. On a year-to-date basis, net sales were $26,193,000, an increase of $3,377,000 or 15% over the comparable period in 2004.
The combined Circuits businesses’ net sales for the quarter were $11,722,000, an increase of $516,000 or 4% over the prior year. Chatsworth had another outstanding quarter, with net sales of $3,951,000. At the Toronto operation, the quality issues identified in the first quarter continued to impact on results for the early part of the quarter. These issues were gradually resolved throughout the quarter, resulting in stronger sales and margins as the quarter progressed, and resulted in the Company being profitable for the final month of the quarter. On a year-to-date basis, net sales for the Circuits segment were $21,696,000, an increase of $2,696,000 or 14% over the comparable period in 2004.
Aerospace sales for the current quarter at $2,440,000 increased 14% over last year or were $308,000 higher than sales for the same quarter last year. Aerospace continues to perform well and maintains a strong order backlog. The book to bill ratio for Aerospace was 1.16 to 1 during the second quarter of 2005. On a year to date basis, net sales for Aerospace were $4,497,000 compared to $3,816,000 for the comparable period in 2004. The business made significant progress in the second quarter towards penetrating the market for higher value-added sub assemblies. The business has also increased the operations and quality management capabilities in 2005 to support the increasing product complexity and volume of business.
Net loss for the second quarter was $183,000 or a loss of $0.01 per share ($0.01 loss per diluted share) as compared with net earnings of $1,138,000 or $0.07 per share ($0.06 earnings per diluted share) in the same period in 2004. Included in the 2004 earnings are Scientific Research and Experimental Development (“SR&ED”) claims of $386,000. We have filed but have not yet recognized the benefit of over $600,000 of SR&ED claims in the current year. Also included in 2004 results was a $313,000 recovery from the sale of redundant assets.
The balance sheet remained strong at the end of the second quarter. Net working capital at May 27, 2005 was $7,455,000 as compared to $6,026,000 at November 30, 2004. In addition, the Company had a strong cash position at the end of the quarter with cash on hand of $1,253,000, and was undrawn on all of its’ operating lines.
“I am encouraged by the improvement in results from the first quarter. Our Chatsworth operation continued to perform ahead of expectations. Our Aerospace business continues to perform well and provides many exciting growth opportunities. While we continue to see less than adequate results from the Toronto Circuits’ operation, operational issues from the first quarter have been identified and corrected”, stated Mr. Bradley Bourne, President and Chief Executive Officer.
The Company will host a live conference call on Thursday June 30, 2005 at 8:30am (EDT) to discuss the results of the second quarter of 2005.
Anyone wishing to participate in the call should dial 416-695-9722 or 1-888-333-4519 and identify that you are calling into the FTG conference call. The Chairperson is Bradley Bourne. A replay of the call will be available until July 7, 2005. The number to call for a rebroadcast is 416-695-5275 or 1-866-518-1010.
ABOUT FIRAN TECHNOLOGY GROUP CORPORATION
FTG is an aerospace and defence electronics product and subsystem supplier to the North American marketplace. 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, defence, 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 avionics products as well as airframe manufacturers.
The Company's shares are traded on the Toronto Stock Exchange under the symbol FTG.
This news release may contain certain forward-looking statements. Such statements are based on the current expectations of management of the Company and inherently involve numerous risks and uncertainties, known and unknown, including economic factors and the Company’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 Company. The reader is cautioned to consider these and other factors carefully when making decisions with respect to the Company and not place undue reliance on forward-looking statements. The Company does not undertake and has no specific intention to update any forward-looking statements, written or oral that may be made from time to time by or on its behalf whether as a result of new information, future events or otherwise.
For further information please contact:
Bradley C. Bourne, President and CEO
Firan Technology Group Corporation
Tel: (416) 299-4000 x314
Joseph R. Ricci, Vice President and CFO
Firan Technology Group Corporation
Tel: (416) 299-4000 x309