Firan Technology Group Corporation (FTG) Announces Fifth Consecutive Profitable Quarter
Firan Technology Group Corporation (TSX:FTG) today announced the third quarter 2006 results for the period ending September 1, 2006.
FTG achieved $13,670,000 in sales in the third quarter, an increase of 3% over the same period in 2005. Net earnings after tax for the third quarter of 2006 rose to $300,000, an increase of 152% versus net income of $119,000 in the third quarter 2005.
Third Quarter Results: (three months ended September 1, 2006 compared with three months ended August 26, 2005)
Net Earnings After Tax: $300,000
Earnings per share � basic & diluted: $0.02
Net Earnings After Tax: $119,000
Earnings per share - basic & diluted: $0.01
Year to Date Results (nine months ended September 1, 2006 compared with nine months ended August 26, 2005)
Net Earnings (Loss) After Tax: 886,000
Earnings (Loss) per share - basic & diluted: $0.05
Net Earnings (Loss) After Tax: ($1,045,000)
Earnings (Loss) per share - basic & diluted: ($0.06)
Net sales increased by $452,000 or 3.4%, from $13,218,000 in the third quarter of 2005 to $13,670,000 in the third quarter of 2006. Included in sales for the third quarter of 2005 was a sales recovery of $360,000 for costs incurred earlier that year which did not recur in the third quarter of 2006. Excluding this, the resulting growth in sales was actually 6.3% over the same quarter in 2005. The Circuits Segment grew by $53,000 or 0.05% over the same period last year or 3.9% excluding the one time event in the third quarter of 2005. The Aerospace segment also grew over the same quarter last year by $399,000 or 18% due to strong demand and increased capacity within the business. The strength of the Canadian dollar versus the U.S. dollar, impacted our reported sales by approximately $1,100,000 versus the same quarter of 2005.
Gross margin remained relatively unchanged at $3,100,000 in the third quarter of 2006 versus $3,166,000 for the same quarter of 2005. The third quarter of 2005 included the non-recurring sales recovery item of $ 360,000 noted earlier. Excluding this, the resulting growth in gross margin was actually $294,000 and 0.9% over the same quarter in 2005. The increased activity and the resulting contribution margin was offset by material increases in the Circuits operations as well as increased costs to introduce new programs into production. The strength of the Canadian dollar negatively impacted overall gross margin by approximately $400,000 to
$500,000 for the third quarter and $900,000 to $1,200,000 on a year-over-year basis.
Net earnings for the third quarter of 2006 were $300,000 or $0.02 per share ($0.02 per diluted share) as compared with $119,000 or $0.01 per share ($0.01 per diluted share) in the third quarter of 2005.
�We are pleased with our improved performance and the consistency of our results. We realize that the Company must meet the expectations of all our stakeholders including our customers, our shareholders, our lenders, our suppliers and our employees each and every day. With five consecutive profitable quarters and consistent year-over-year improvement in our results, we believe we are meeting, or exceeding, these expectations�, stated Brad Bourne, President and CEO, FTG Corporation. He added, �With our never ending focus on Operational Excellence including on-time delivery, high quality products and outstanding customer service, we believe we are taking the necessary steps to continue to meet these expectations going forward.”
Mr. Bourne continued, �Specifically in the quarter, we saw great performance from our Aerospace business in terms of bookings, shipments, and profitability. Looking forward, their backlog is very strong. In our Circuits operations, the quarter was good but challenging. There were a significant number of new parts booked into Toronto that stretched the capabilities of the operation. This created some issues in engineering and production but also solidified some important growth opportunities by quarter end. In Chatsworth, the many investments and changes in the plant continued to hurt their throughput and yield through part of the quarter but their sales and profit for August were strong indicating that we are starting to see the benefits from our efforts. Also in the quarter, that operation shipped their first sales generating orders into the rigid-flex market showing some early benefits from our investments to penetrate this market.�
�In the third quarter, we saw significant cost increases for our Circuits businesses due to the continued high prices for commodities and utilities. The Company is taking a two-pronged approach to offset these increases. An aggressive program has been implemented with a goal to take $1,500,000 in cost out of the business and progress has been made in identifying projects with the potential for us to achieve this target. In conjunction with this, we have increased prices for new parts being quoted and are in discussions with customers to adjust pricing on parts already under contract,� commented Mr. Joe Ricci, Vice President and CFO.
The Company will host a live conference call on October 5, 2006 at 8:30am (EDT) to discuss the results of the third quarter of 2006.
Anyone wishing to participate in the call should dial 416-695-6623 or 1-888-280-8771 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 October 12, 2006. The number to call for a rebroadcast is 416-695-5275 or 1-888-509-0081 and the verbal password for the rebroadcast is 631538. The replay will also be available on the FTG website at www.firantechnology.com
ABOUT FIRAN TECHNOLOGY GROUP CORPORATION
FTG is an aerospace and defense 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, 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 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
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 Company�s website; www.firantechnology.com