Firan Technology Group (FTG) Announces Fourth Consecutive Year of Revenue Growth
Firan Technology Group (FTG) Announces Fourth Consecutive Year of Revenue Growth
Firan Technology Group Corporation (TSX:FTG) today announced the fourth quarter and the fiscal year ended November 30, 2006.
Fiscal Year 2006 Results (twelve months ended November 30, 2006 compared with twelve months ended November 30, 2005)
Fiscal Year 2006
Sales: $55,400,000
Operating Earnings / (Loss) Before Tax: $2,068,000
Net earnings / (Loss): $1,797,000
Earnings / (Loss) per share
– basic: $0.10
– diluted: $0.09
Fiscal Year 2005
Sales: $52,801,000
Operating Earnings / (Loss) Before Tax: ($348,000)
Net earnings / (Loss): ($893,000)
Earnings / (Loss) per share
– basic: ($0.05)
– diluted: ($0.05)
The Corporation”s revenue grew in fiscal year 2006 to $55,400,000, an increase of $2,599,000 or 5% over 2005 and 114% growth over the past four years. This growth is the result of the corporate development activities including the merger of FTG and Circuit World in 2003 and the acquisition of Young Electronics in December 2004 as well as organic growth through the re-structured, enhanced sales organization. Excluding the impact of the strengthening Canadian dollar, the current year increase was $6,100,000 or 11.6%.
Fiscal year 2006 sales for the Circuits” segment were $44,759,000, an increase of $1,465,000 or 3% over the comparable period in 2005. The revenue increase was approximately $4,500,000 or 10%, excluding the impact of the US/Canada exchange rate.
Fiscal year 2006 sales for the Aerospace segment were $10,641,000 compared to $9,507,000 for the comparable period in 2005, an increase of 12%. The increase was over 17% excluding the impact of the strengthening Canada dollar.
FTG had net earning s of $1,797,000 in fiscal year 2006, a $2,690,000 improvement over fiscal year 2005. The improvement is due to the higher activity, a strong turnaround in operating performance in Circuits – Toronto, continued strong performance in FTG Aerospace partially offset by operational challenges in Circuits – Chatsworth through most of 2006 and the strength of the Canadian dollar. In additional, in the fourth quarter there was the recognition of Scientific Research and Experimental Development (“SRED”) tax credits providing a net $509,000 improvement in net income. As the year ended, the operating performance in Chatsworth had improved significantly and the Canadian dollar was weakening.
Earnings before interest, taxes, depreciation and amortization (EBITDA) for the full year were $5,802,000, an increase of $2,054,000, or 35% over 2005.
Fourth Quarter Results (three months ended November 30, 2006 compared with three months ended November 30, 2005)
Q4 2006
Sales: $13,603,000
Operating Earnings Before Tax: $1,241,000
Net Earnings: $911,000
Earnings per share
– basic: $0.05
– diluted: $0.04
Q4 2005
Sales: 13,390,000
Operating Earnings Before Tax: $124,000
Net Earnings: $152,000
Earnings per share
– basic: $0.01
– diluted: $0.01
Sales for the fourth quarter of 2006 were $13,603,000, an increase of 2% compared with $13,390,000 for the fourth quarter of 2005. Excluding the impact of the strengthening Canadian dollar, sales increased 5.9% versus the prior year.
The combined Circuits businesses” sales for the quarter were $10,522,000, a decrease of $112,000 or 1% over the prior year. The reduction was due partly to the strength of the Canadian dollar compared to the prior year that reduced sales by more than $461,000 and partly due to lower shipments at Chatsworth of $882,000 versus the prior year due to timing on various projects.
The Aerospace segment sales for the current quarter ended at $3,081,000 which increased 12% and were $325,000 higher than the same quarter last year and were 16% higher than the third quarter of 2006.
The Corporation had operating earnings before tax in the quarter of $1,241,000, an improvement of $1,117,000 from the pre-tax operating earnings of $124,000 in the fourth quarter of 2005.
Net income for the fourth quarter was $911,000 or earnings of $0.05 per share ($0.04 per diluted share) as compared with net income of $152,000 or $0.01 per share ($0.01 earnings per diluted share) in the same period in 2005. The performance for the quarter resulted from improved sales and margin in FTG Circuits – Toronto and the recognition of SR&ED tax credits for FTG Circuits – Toronto, offset by lower shipments in FTG Circuits – Chatsworth compared to earlier in the year. FTG Aerospace continues to achieve positive performance.
As at November 30, 2006, the Corporation”s primary source of liquidity included, accounts receivable of $10,432,000 and inventory of $7,622,000. Net working capital at November 30, 2006 was $11,428,000, an increase of $7,145,000 as compared to November 30, 2005. In addition, the Corporation had a strong cash position at the end of the quarter with cash on hand of $2,348,000 and was undrawn on its” US and Canadian operating lines.
“In 2006, FTG has begun to see the fruits from our efforts over the past few years. We have consistently focused on building a company that is a leader in its selected market areas and provides the best possible service to our customers through our focus on Operational Excellence. As 2006 ended, our quality and delivery performance to our customers is at its highest levels ever.” stated Mr. Brad Bourne, President and Chief Executive Officer.
Mr. Bourne added, “The Corporation”s external focus will continue to be in the aerospace and defense markets and on strengthening our leadership positions in the market segments in which we participate. Our customer base is forecasting continued growth. With a solid business foundation, strong financial health and a great management team, we are now proactively taking steps to further improve the company. We look to advance our technology levels in both businesses, continue our never-ending focus on operational excellence and more proactively investigate acquisitions. We will continue to drive towards creating shareholder value everyday.”
Reconciliation of EBITDA (1):
Full Year 2006
Net earnings / (loss): $1,797,000
Add:
Income taxes: $271,000
Interest expense: $483,000
Amortization of machinery and equipment: $3,099,000
Amortization of other assets: $152,000
EBITDA: $5,802,000
Full Year 2005
Net earnings / (loss): ($893,000)
Add:
Income taxes: $545,000
Interest expense: $509,000
Amortization of machinery and equipment: $3,546,000
Amortization of other assets: $41,000
EBITDA: $3,748,000
(1) EBITDA is not a measure recognized under Canadian generally accepted accounting principles (“GAAP”). EBITDA is calculated as earnings before provision for income taxes, interest expense, amortization of machinery and equipment and amortization of other assets. Management believes that many of the Company”s shareholders, creditors, other stakeholders and analysts prefer to assess the Company”s performance using EBITDA in addition to the GAAP measures. The Company”s method of calculating EBITDA may differ from other companies and accordingly may not be comparable to measures used by other companies.
The Company will host a live conference call on Wednesday January 24, 2007 at 8:30am (EDT) to discuss the results of 2006.
Anyone wishing to participate in the call should dial 416-695-5261 or 1-800-769-8320 and identify that you are calling to participate in the FTG conference call. The Chairperson is Mr. Bradley Bourne. A replay of the call will be available until January 31, 2007 and will be available on the FTG website at www.ftgcorp.com. The number to call for a rebroadcast is 416-695-5275 or 1-888-509-0081, pass code 638205.
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 contains 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.
For further information please contact:
Bradley C. Bourne,
President and CEO
Tel: (416) 299-4000 x 314
Firan Technology Group Corporation
bradbourne@ftgcorp.com
Joseph R. Ricci,
Vice President and CFO
Tel:(416) 299-4000 x 309
Firan Technology Group Corporation
joericci@ftgcorp.com
Additional information can be found at the Company”s web site www.ftgcorp.com
