Firan Technology Group Corporation (FTG) Announces First Quarter 2007 Earnings
Firan Technology Group Corporation (FTG) Announces First Quarter 2007 Earnings
Firan Technology Group Corporation (TSX: FTG) today announced the first quarter 2007 results for the period ending March 2, 2007.
Net earnings after tax for the first quarter of 2007 rose 171% to $482,000 versus a first quarter profit of $178,000 in 2006.
First Quarter Results: (three months ended March 2, 2007 compared with three months ended March 3, 2006)
Q1 2007
Sales: $13,911,000
Gross margin: $3,121,000
Net earnings after tax: $482,000
Earnings per share
– basic $0.03
– diluted $0.02
Q1 2006
Sales: $13,363,000
Gross margin: $2,847,000
Net earnings after tax: $178,000
Earnings per share
– basic $0.01
– diluted $0.01
Sales increased by $548,000 or 4.1%, from $13,363,000 in the first quarter of 2006 to $13,911,000 in the first quarter of 2007. FTG Aerospace grew over the same quarter last year by $801,000 or 36% due to high demand from across the customer base and increased capacity within the business. FTG Circuits was down $253,000 or 2.3% over the same period last year due to slightly lower demand from our customer base early in the quarter offset by stronger demand towards the end of the quarter and increased panel pricing from higher technology products.
Sales in Q1 2007 were up $308,000 or 2.3% sequentially over Q4 2006 even though the first quarter has one less week of available production days due to the Christmas period when all of FTG”s plants shut down. FTG Aerospace sales were down $52,000 while FTG Circuits sales were up $360,000 in the first quarter versus Q4 2006.
Gross margin increased by $274,000 to $3,121,000 or 22.4% of sales for the first quarter of 2007 as compared with $2,847,000 or 21.3% of sales in the first quarter of 2006. The increase in gross margins is attributable to the higher throughput in FTG Aerospace, a $395,000 recovery of a Scientific Research and Experimental Development (“SR&ED”) tax credit recorded in cost of sales, offset by lower throughput and margins in FTG Circuits. FTG Aerospace margins have improved by 1.8% due to increased throughput and improved efficiency from the ongoing lean manufacturing initiatives. The margins in FTG Circuits decreased due to the lower throughput and higher materials costs, offset by increased panel pricing for higher technology products and the SR&ED tax credit noted above.
Net earnings for the first quarter of 2007 were $482,000, an increase of 171%, or earnings per share of $0.03 (earnings of $0.02 per diluted share) as compared with a profit of $178,000 or $0.01 per share (profit of $0.01 per diluted share) in the first quarter of 2006.
Earnings before interest, taxes, depreciation and amortization (“EBITDA”) for the first quarter were $1,520,000, an increase of $290,000 over Q1 2006. (1)
“The aerospace and defence market remains robust. This bodes well for both of FTG”s businesses as we are well positioned in this market and our operational performance is strong. To continue to grow with the market, FTG remains focused on achieving Operational Excellence. In addition, we have made great strides in increasing the level of technology in all of our businesses and this too positions us well for the future.” stated Mr. Bradley Bourne, President and CEO.
“To continue to improve our financial results we look to grow our sales and to control our costs. With a strong, integrated sales force we are seeing increased opportunities from existing and new customers. To support the increased sales we are continuing to expand our Aerospace operation and invest in relieving key bottleneck areas in Chatsworth, CA. To control costs, our primary focus is on improving production yields and implementing lean manufacturing techniques across the Company.” added Mr. Joe Ricci, Vice President and CFO.
The Company will host a live conference call on April 5, 2007 at 8:30am (EDT) to discuss the results of the first quarter of 2007.
Anyone wishing to participate in the call should dial 416-695-5261 or 1-877-461-2814 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 April 12, 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 642536.
Reconciliation of EBITDA (1):
Q1 2007
Net earnings / (loss): $482,000
Q1 2006
Net earnings / (loss): $178,000
Add:
Q1 2007
Income taxes $46,000
Interest expense $138,000
Amortization of machinery and equipment $790,000
Other amortization $64,000
EBITDA $1,520,000
Q1 2006
Income taxes $33,000
Interest expense $105,000
Amortization of machinery and equipment $800,000
Other amortization $114,000
EBITDA $1,230,000
(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.
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
Tel: (416) 299-4000 x314
Firan Technology Group Corporation
bradbourne@ftgcorp.com
Joseph R. Ricci,
Vice President and CFO
Tel: (416) 299-4000 x309
Firan Technology Group Corporation
joericci@ftgcorp.com
Additional information can be found at the Company”s website; www.ftgcorp.com
