FTG Announces Q2 2011 Financial Results
FTG Announces Q2 2011 Financial Results
Toronto, July 6, 2010 – Firan Technology Group Corporation (TSX:FTG) today announced financial results for the second quarter 2011.
– Grew sales by 20% over Q2, 2010 and by 14% over Q1, 2011
– Gross margin above 29% in Q2, 2011 and over 27% year-to-date
– Improved net earnings by $0.8M in Q2, 2011 compared to Q2, 2010
– R&D spending remained above 6% of revenues
“We are pleased with the performance of all operating units of FTG. Our strong growth reflects the strength of the global aerospace industry. While the strength of the Canadian dollar and high commodity prices continue to provide a headwind for us, we have proven we can compete at the current exchange rates and cost levels. As we have previously stated, we believe our investments in technology are critical to our future so we have continued to aggressively invest in R&D and capital equipment”, stated Brad Bourne, President and Chief Executive Officer.
Second Quarter Results: (three months ended May 27, 2011 compared with three months ended May 28, 2010)
Q2 2011:
Sales: $13,874,000
Operating Earnings (1): $1,262,000
– Net R&D Investment: $840,000
– Severance: $0.00
Net Earnings/(Loss): $422,000
Earnings/(Loss) per share
– basic & diluted: $0.02
Q2 2010:
Sales: $11,604,000
Operating Earnings (1): $470,000
– Net R&D Investment: $835,000
– Severance: ($1,000)
Net Earnings/(Loss): ($364,000)
Earnings/(Loss) per share
– basic & diluted: ($0.02)
Year-To-Date 2011 Results: (six months ended May 27, 2011 compared with six months ended May 28, 2010)
Year-To-Date 2011:
Sales: $26,087,000
Operating Earnings(1): $1,738,000
– Net R&D Investment: $1,507,000
– Severance: $0.00
– Tax: $2,000
Net Earnings/(Loss): $229,000
Earnings/(Loss) per share
– basic & diluted: $0.01
Year-To-Date 2010:
Sales: $21,954,000
Operating Earnings (1): $346,000
– Net R&D Investment: $1,161,000
– Severance: $143,000
– Tax: $2,000
Net Earnings/(Loss): ($960,000)
Earnings/(Loss) per share
– basic & diluted: ($0.05)
(1) Operating Earnings (Loss) 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 (Loss) 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 2011 that continue to improve the Corporation and position it for the future, including:
– 40% sales growth in USD at Circuits-Chatsworth in Q2 2011 compared to Q2 2010
– 16% sales growth at Circuits-Toronto in Q2 2011 compared to Q2 2010
– 15% sales growth at Aerospace-Toronto in Q2 2011 compared to Q2 2010
– Commissioned a Laser Direct Imaging System (LDI) in FTG Circuits-Chatsworth
– Ordered post-etch-punch for FTG Circuits-Toronto
– Installed advanced switch testing unit in FTG Aerospace-Toronto
– Successfully completed AS9100 audit for FTG Aerospace-Toronto to the new revision level C
– Successfully expanded the NADCAP certification for FTG Circuits-Toronto to include the new high density accreditation – becoming the second company worldwide to accomplish this
For FTG overall sales increased by $2.3M (20%), from $11.6M in Q2 20010 to $13.9M in Q2 2011, and increased by $1.7M (14%) over Q1, 2011. Excluding the impact of the decline in the value of the USD year-over year sales increased by 25%. Sales in Canada were up 120% year-over year as legacy customers ramped up production levels across a series of aircraft platforms. Sales to Europe and Asia were up 31%, due in part to increased activity at existing customers and also due to capturing new customers.
The Circuits Segment sales were up $1.9M or 21% in Q2 2011 versus Q2 2010. Compared to Q1 2011, sales increased 20% with both sites showing increases.
For the Aerospace segment, sales in Q2 2011 were up $0.4M or 14% compared to Q2 2010. This business saw an increase in activity in Canada with the rebound in activity at some legacy customers
Net earnings at FTG in Q2 2011 were $0.4M compared to a net loss of $0.4M in Q2 2010. Gross margin increased by $1.0M or 34% due to higher revenue levels and strong operational performance across the company. Selling, General and Administrative costs increased by $0.4M due to the return to full pay across the company, additions to the sales team and higher performance compensation costs.
The Circuits segment net earnings before corporate and interest costs was $1M in Q2 2011 compared to a loss of $0.05M in Q2 2010. Both facilities were profitable in the quarter. On a year-to-date basis, the Circuits business net earnings before corporate and interest costs was $1.2M compared to $0.02M for the same period last year.
At FTG Circuits-Toronto, the collective agreement for the hourly employees expired on May 29, 2011. Negotiations are ongoing. The results of these negotiations could impact the performance of this site in the short and long term.
The Aerospace net earnings before corporate and interest costs was $0.12M in Q2 2011 versus $0.34M in Q2, 2010. On a year-to-date basis the net earnings before corporate and interests costs was $0.37M compared to $0.29M for the same period last year. For FTG Aerospace-Tianjin, the investment in the quarter totaled $0.04M as activity ramped up towards becoming operational by the end of this year.
As at May 27, 2011, the Corporation’s primary source of liquidity included accounts receivable of $10.7M and inventory of $8.6M. While activity across the company has increased, inventories are down $0.1M from year end, due to a continued focus on lean manufacturing and cash management. Net working capital at May 27, 2011 was $9.5M.
The Corporation will host a live conference call on Thursday, July 7, 2011 at 11:00 am (EDT) to discuss the results of Q2 2011.
Anyone wishing to participate in the call should dial 416-695-6616 or 1-800-952-6845 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 21, 2011 and will be available on the FTG website at www.ftgcorp.com. The number to call for a rebroadcast is 905-694-9451 or 1-800-408-3053, pass code 2477584.
ABOUT FIRAN TECHNOLOGY GROUP CORPORATION
FTG is an aerospace and defense electronics product and subsystem supplier to customers around the globe. 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 aerospace and defense equipment. FTG Aerospace has operations in Toronto, Ontario and is opening a facility in Tianjin, China in 2011.
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
