FIRAN TECHNOLOGY GROUP CORPORATION (“FTG”) ANNOUNCES FULL YEAR AND FOURTH QUARTER 2022 FINANCIAL RESULTS

TORONTO, ONTARIO – (February 8, 2023) – Firan Technology Group Corporation (TSX: FTG) today
announced financial results for the full year and fourth quarter 2022.

Financial Highlights

• Full-year bookings were $113.3M, up 41% over 2021.
• Fourth quarter bookings of $32.2M were up 15% over Q3 2022 and up 37% over Q4 2021. This was the
  8th sequential quarter of bookings growth.
• FTG full-year revenues increased by 13% to $89.6M as the global air travel and the commercial aerospace
  market continued to recover from the pandemic.
• FTG has maintained strong liquidity with net cash on the balance sheet of $12.3M, after investments in
  the year of $3.8M for capital expenditures, $5.9M for research and development, $8.5M to the Aerospace
  Chatsworth facility and $1.1M for FTG share buybacks.
• FTG achieved Adjusted Net Earnings in Q4 2022 of $1.2M and Adjusted Net Earnings of $1.2M for fiscal
  2022.

Business Highlights

In 2022, FTG went on offense after two years of playing defense. During the year the company invested in technology in our existing sites grew the business organically, and acquired our building in Chatsworth to protect our operations but then as committed completed a sales/leaseback, announced two acquisitions and bought back stock.
Through all these actions, FTG is strategically deploying its strong cash balance in ways that will drive increased shareholder returns for the future in both the near-term and long-term. Specifically, FTG accomplished many goals in 2022 that continue to improve the Corporation and position it for the future, including:

• Achieved a 1.26:1 book-to-bill ratio for 2022 resulting in increased backlog of $65.5M compared to
  $39.7M at the end of 2021.
• Customer purchase orders included $8.8M to supply cockpit assemblies for military and commercial simulators for different aircrafts including refueling fixed wing aircraft, helicopters and business jets, with the work to be performed by FTG’s Aerospace segment facilities in Toronto, Ontario, Chatsworth, California and Tianjin, China with the majority of this work to be performed in the first half of 2023.
• FTG was awarded up to $7.0M of funding from FedDev Ontario pursuant to the Aerospace Regional Recovery Initiative (ARRI) program. This funding is in the format of a repayable contribution against qualifying investments made by FTG prior to March 31, 2024. The funding will be repayable, without interest, commencing in 2025 through to 2030. Funding received in fiscal 2022 amounted to $1.9M.
• On November 17, 2022, the Corporation entered into an agreement to acquire IMI, Inc. (“IMI”) based in Haverhill, Massachusetts, north of Boston. The closing of the acquisition is subject to approval by the Committee on Foreign Investment in the United States (CFIUS) and other customary closing conditions. FTG will acquire 100% of the common shares of IMI for cash consideration of approximately $2.0M,
  subject to typical closing adjustments.
• On December 24, 2022, the Corporation entered into an agreement to acquire Holaday Circuits, Inc based in Minnetonka, Minnesota, a suburb of Minneapolis. The closing of the acquisition is subject to approval by CFIUS and other customary closing conditions. FTG will acquire 100% of Holaday for cash consideration of approximately $24.0M and contingent consideration up to $6.0M, subject to typical closing adjustments.
• Subsequent to year-end, on January 31, 2023, FTG completed a sale-leaseback transaction for the Aerospace Chatsworth facility, resulting in net cash proceeds of $8.5M.
• Subsequent to year-end, FTG’s US sites received $3.5M ($US 2.6M) in funds pursuant to the Employment Retention Credit program within the CARES Act, which will be included in income during the first quarter of 2023.

For FTG in 2022, overall sales increased by $10.3M or 13% from $79.4M in 2021 to $89.6M in 2022. Increased revenue in 2022 is the result of the on-going recovery of global air travel following the easing of various pandemic related restrictions, which led to improved market conditions for the commercial aerospace market. The average foreign exchange rate in 2022 was 3% (4 cents) higher than in 2021, with a positive impact on sales of $2.7M.

In our fourth quarter, sales were $23.8M, an increase of $3.4M or 16.8% over Q4 2021. The increase is also attributable to improved market conditions for the commercial aerospace market. The average foreign rate was 7% (9 cents) higher than Q4 2021, with a positive impact on sales of $1.5M.

The Circuits segment sales in 2022 were up $7.4M, or 14.1% compared to last year. All sites contributed to the increase in sales, with the largest dollar increase at the Circuits Toronto plant and the largest percentage increase at the Circuits plant in China. Both of these sites are focused on the Commercial Aerospace market. In the fourth quarter, sales in the Circuits segment were up $1.3M or 8.8%.

For the Aerospace segment, sales in 2022 were up $4.4M or 14.4% compared to last year. All sites contributed to the increase in sales, with the largest dollar increase at the Aerospace Toronto plant and the largest percentage increase at the Aerospace plant in China. Both of these sites are focused on the Commercial Aerospace market. In Q4 2022, Aerospace segment sales were up $2.1M or 30.5%, which included an increase in Simulator product
shipments of $1.2M.

Gross margin in 2022 was $21.3M or 23.8% as compared to $17.1M or 21.6% in 2021. Excluding government assistance, the gross margin rate improved to 23.4% in 2022 from 17.6% in 2021. Gross margin in Q4 2022 was $5.7M or 24.2% as compared to $4.2M or 20.9% in Q4 2021. Excluding government assistance, the gross margin rate improved to 24.2% in Q4 2022 from 19.2% in Q4 2021. The increase in the gross margin rate is due to the operating leverage of increased sales volumes and operational efficiencies.

Net earnings after tax at FTG in 2022 was $0.7M or $0.03 per diluted share compared to a net profit of $0.3M or $0.01 per diluted share in 2021. Adjusted net earnings after tax was $1.2M or $0.05 per diluted share in 2022 compared to $0.3M or $0.01 in the prior year. The increase in adjusted net earnings is the result of higher sales volume, offset by reduced government subsidies. In 2022, government subsidies were $0.3M on a pretax basis, as compared to $6.5M in 2021.

Net earnings after tax at FTG in Q4 2022 was $0.7M or $0.03 per diluted share compared to a net loss of $0.1M or $0.00 per diluted share in Q4 2021. Adjusted net earnings after tax was $1.2M or $0.05 per diluted share in Q4 2022 compared to a net loss of $0.1M or $0.00 in the prior year quarter. The increase in adjusted net earnings is the result of higher sales volume, offset by reduced government subsidies. In Q4 2022, government subsidies were $nil as compared to $0.3M in the prior year quarter.

The Circuits segment net earnings before corporate, taxes and interest and other costs was $3.1M in 2022 compared to $5.2M in 2021. The positive impact of higher sales was offset by lower government subsidies, which were $0.3M in 2022 as compared to $4.4M in 2021.

The Aerospace segment net earnings before corporate, taxes and interest and other costs in the full year was $2.9M in 2022 versus $0.8M in 2021. The impact of greater sales volumes and operating performance in 2022 was partially offset by lower government subsidies, which were $nil in 2022 as compared to $2.0M in 2021.

Earnings before interest, tax, depreciation and amortization (EBITDA) for FTG in 2022 was $8.6M or 9.6% of sales compared to $9.6M or 12.2% of sales in 2021.

For Q4 2022, EBITDA was $2.4M or 10.1% of net sales as compared to $2.3M or 11.2% of net sales in the prior year quarter. Adjusted EBITDA for Q4 2022, which excludes the loss of $0.4M accrued on the sale-leaseback transaction for the Aerospace Chatsworth facility and expenses related to the two pending acquisitions, was $2.9M or 12.1% of net sales.

As at November 30, 2022, the Corporation’s net working capital was $30.8M, compared to $40.0M at year-end in 2021. The decrease is due to a lower net cash position and increase in contract liabilities, partially offset by increased inventory levels. The increases in inventory and contract liabilities is, in part, the result of higher backlog for simulator products, with the purchase of long lead components typically funded by customers.

FTG ended 2022 with $12.3M in net cash as compared to $17.9M at the end of 2021. The Corporation will host a live conference call on Thursday, February 9, 2023 at 8:30am (Eastern) to discuss the results of fiscal year 2022.

Anyone wishing to participate in the call should dial 416-764-8658 or 1-888-886-7786, Conference ID 94863452 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 March 9, 2023 and will be available on the FTG website at www.ftgcorp.com. The number to call for a rebroadcast is 416-764-8692 or 1-877-674-7070, Playback Passcode 863452#.

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, Chatsworth, California, Fredericksburg, Virginia and a joint venture in Tianjin, China.

FTG Aerospace manufactures and repairs illuminated cockpit panels, keyboards and sub-assemblies for original equipment manufacturers of aerospace and defense equipment. FTG Aerospace has operations in Toronto, Ontario, Chatsworth, California and Tianjin, China.

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
Firan Technology Group Corporation
Tel: (416) 299-4000 x314
bradbourne@ftgcorp.com

Jamie Crichton, Vice President and CFO
Firan Technology Group Corporation
Tel: (416) 299-4000 x264
jamiecrichton@ftgcorp.com

Additional information can be found at the Corporation’s website www.ftgcorp.com