Firan Technology Group (FTG) Returns To Growth In Second Quarter, 2010

Toronto, July 7, 2010 – Firan Technology Group Corporation (TSX:FTG) today announced financial results for the second quarter 2010.

– Achieved book-to-bill ratio above 1.10:1 in the quarter
– Grew revenue by 12% over Q1, 2010
– Net debt decreased by $1.5M in the quarter
-Subsequent to the end of the quarter, secured $5.1M in Ontario
government funding in support of technology investments in FTG
Circuits-Toronto business

“We are pleased with the increasing activity across FTG. Overall our results are improving and while we did have some challenges in our Chatsworth facility, we are taking steps to address this. The strength of the Canadian dollar continues to provide a headwind for us but we have proven we can compete at the current exchange rates. As we have continuously stated, we believe investments in technology are critical to our future so the Ontario Government support is a huge benefit to us”, stated Brad Bourne, President and Chief Executive Officer.

Second Quarter Results: (three months ended May 28, 2010 compared with three months ended May 29, 2009)

Q2 2010:

Sales: $11,604,000

Operating Earnings before (1): $470,000
-Net R&D,
-Severance
-Tax

Net R&D Investment: $835,000
Severance: ($1,000)
Tax: $0.00
Net Loss: ($364,000)
Loss per share
-basic & diluted: ($0.02)

Q2 2009:

Sales: $14,634,000

Operating Earnings before (1): $429,000
-Net R&D,
-Severance
-Tax

Net R&D Investment: $736,000
Severance: $231,000
Tax: $2,000
Net Loss: ($540,000)
Loss per share
-basic & diluted: ($0.03)

Year-To-Date 2009 Results: (six months ended May 28, 2010 compared with six months ended May 29, 2009)

Year-To-Date 2010:

Sales: $21,964,000

Operating Earnings before (1): $346,000
-Net R&D,
-Severance
-Tax

Net R&D Investment: $1,161,000
Severance: $143,000
Tax: $2,000
Net Loss: ($960,000)
Loss per share
-basic & diluted: ($0.05)

Year-To-Date 2009:

Sales: $29,328,000

Operating Earnings before (1): $1,438,000
-Net R&D,
-Severance
-Tax

Net R&D Investment: $1,810,000
Severance: $231,000
Tax: $4,000
Net Loss: ($607,000)
Loss per share
-basic & diluted: ($0.03)

(1) Operating Earnings is not a measure recognized under Canadian generally accepted accounting principles (“GAAP”). 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.

Business Highlights

FTG accomplished many goals in the second quarter of 2010 that continue to improve the Corporation and position it for the future, including:

-Completed design and development of first military ground based
display bezel
-Achieved book-to-bill ratio of 1.10:1 in the quarter
-Extended collective agreement for one year with the represented staff
at FTG Circuits-Toronto
-Successfully completed AS9100 surveillance audit for FTG Aerospace
-Reduced net debt by $1.5M in the quarter
-Subsequent to the end of the quarter, secured $5.1M in Ontario
government funding in support of technology investments in FTG
Circuits-Toronto business

For FTG, overall sales decreased by 21% from $14.6M in Q2 2009 to $11.6 in Q2 2010, but increased by 12% over Q1, 2010. Year-over-year the decline in the value of the USD was 19%, which has a direct impact on reported sales. Sales in Canada were down 43% year-over year but up 35% from Q1 2010 to Q2 2010. Sales in USD were down 15% including the exchange rate decrease but would show a small increase at constant exchange rates.

The Circuits Segment sales were down $2.7M or 23% in Q2 2010 versus Q2 2009. The Chatsworth facility sales decreased 45% due to some operational and yield issues and the impact of the lower exchange rate. The Toronto facility sales decreased 9%, as activity picked up but the drop in exchange rate more than offset this increase. Compared to Q1 2010, sales increased 8% with both sites showing increases.

For the Aerospace segment, sales in Q2 2010 were down $0.3M or 11% compared to Q2 2009. This business was particularly affected by a drop in activity in Canada. With some key new program wins, this site is expected to continue to show growth going forward. Again, the declining value of the USD negatively impacted the sales in the quarter compared to the same period last year. Compared to Q1 2010, sales increased 26%.

Net loss at FTG in Q2 2010 was $0.4M compared to $0.5M in Q2 2009. Year-over-year operating costs were reduced, severance costs were down $0.2M, while R&D spending was up $0.2M and the exchange rate negatively impacted results.
The Circuits segment net loss before corporate and interest costs was $54,000 in Q2 2010 compared to $13,000 in Q2 2009. In 2010, the Chatsworth facility reported a loss while the Toronto facility was profitable. Operational and yield issues impacted the Chatsworth results.

The Aerospace net income before corporate and interest costs was $343,000 in Q2 2010 versus $160,000 in Q2, 2009. The increase in income was primarily due to higher volume, offset by negative impact of the USD exchange rate.

As at May 28, 2010, the Corporation’s primary source of liquidity included accounts receivable of $8.1M and inventory of $8.1M. Net working capital at May 28, 2010 was $7.7M.

The Corporation will host a live conference call on Thursday, July 8, 2010 at 11:00am (EDT) to discuss the results of Q2 2010.

Anyone wishing to participate in the call should dial 416-695-7848 or 1-800-952-4972 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 July 22, 2010 and will be available on the FTG website at www.ftgcorp.com. The number to call for a rebroadcast is 416-695-5800 or 1-800-408-3053, pass code 4378104.

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 located in Toronto, Ontario.

The Corporation’s shares are traded on the Toronto Stock Exchange under the symbol FTG.

FORWARD-LOOKING STATEMENTS

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
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 Corporation’s website www.ftgcorp.com