FTG Announces Full Year and Fourth Quarter 2011 Financial Results
FTG Announces Full Year and Fourth Quarter 2011 Financial Results
Toronto, February 1, 2012 – Firan Technology Group Corporation (TSX:FTG) today announced financial results for the full year and fourth quarter 2011.
-Grew sales by 9% over full year 2010
-Improved bottom line by $4.4M over 2010 and returned to profitability
for the full year 2011
-Invested over $5.0M in Capital Equipment and R&D (net) in 2011
compared to $3.3M in 2010
-Reduced net debt by $2.5M in 2011 to lowest level in a decade.
“FTG closed 2011 with another strong quarter making the full year very successful for the company. We achieved our objectives for the year including growing the company, returning to profitability and strengthening the balance sheet. All of this was done while continuing to invest in technology across the company and investing in a new facility in Tianjin China for our cockpit product business. We are demonstrating that our focus on the aerospace and defence market has positioned us to succeed now and in the future”, stated Brad Bourne, President and Chief Executive Officer.
Full Year 2011 Results: (twelve months ended November 30, 2011 compared with twelve months ended November 30, 2010)
2011
Sales: $53,730,000
Operating Earnings(1): $3,382,000
– Net R&D Investment: $2,567,000
– Severance: $43,000
– Goodwill Impairment: $0.00
– Income Tax (Recovery): ($706,000)
Net Earnings/(Loss): $1,478,000
Earnings/(Loss) per share – basic & diluted: $0.08
2010
Sales: $49,260,000
Operating Earnings (1): $2,932,000
– Net R&D Investment: $2,950,000
– Severance: $386,000
– Goodwill Impairment: $2,941,000
– Income Tax (Recovery): ($436,000)
Net Earnings/(Loss): ($2,909,000)
Earnings/(Loss) per share – basic & diluted: ($0.16)
(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.
Fourth Quarter Results: (three months ended November 30, 2011 compared with three months ended November 30, 2010)
Q4 2011
Sales: $13,981,000
Operating Earnings (1): $608,000
– Net R&D Investment: $358,000
– Severance: $43,000
– Goodwill impairment – $2,941,000
– Taxes (Recovery): ($708,000)
Net Earnings / (Loss): $915,000
Earnings / (Loss) per share – basic & diluted: $0.05
Q4 2010
Sales: $14,052,000
Operating Earnings (1): $1,287,000
– Net R&D Investment: $871,000
– Severance: $0.00
– Goodwill impairment: $2,941,000
– Taxes (Recovery): ($438,000)
Net Earnings/(Loss): ($2,087,000)
Earnings / (Loss) per share – basic & diluted: ($0.11)
Business Highlights
FTG accomplished many goals in 2011 that continue to improve the Corporation and position it for the future, including:
-Achieved 9% year-over-year sales growth, despite further
deterioration in the value of the US dollar relative to the Canadian
dollar.
-Received next increment of Ontario Government AMIS loan of $1M
-Reduced inventories through the year by $0.8M while growing revenues
-Commissioned equipment valued at over $2M across FTG. The equipment
included:
– Laser Direct Imaging Systems in FTG Circuits-Chatsworth and FTG
Circuits-Toronto
– Post-Etch-Punch (PEP) for FTG Circuits-Toronto
– Improved test equipment in FTG Aerospace-Toronto
– Leasehold improvements in FTG Aerospace-Tianjin
-Began implementation of new ERP system for FTG Aerospace locations
-Successfully completed AS9100C audit for FTG Circuits – Toronto and
FTG Aerospace-Toronto
-Renewed NADCAP certifications at both Circuits facilities including
high density accreditation
-Negotiated a 3 year contract with our represented staff in FTG
Circuits – Toronto on terms that give the company more flexibility to
react to the marketplace.
-Achieved Grand opening for our FTG Aerospace-Tianjin facility in
China.
For FTG overall sales increased by $4.5M (9%), from $49.3M in 2010 to $53.7M in 2011. Excluding the impact of the decline in the value of the U.S. dollar, year-over year sales increased by $6.6M (13%).
The Circuits Segment sales were up $3.4M or 9% in 2011 versus 2010.
For the Aerospace segment, sales in 2011 were up $1.1M or 10% to $12.1M compared to 2010.
Net earnings at FTG in 2011 were $1.5M compared to net loss of $2.9M in 2010. Gross margin increased by $0.6M or 4% due to higher activity, improved yields, offset by unfavourable U.S. to Canadian exchange rates and higher input costs. For the year net R&D costs were marginally lower, primarily in Circuits-Toronto.
The Circuits segment net earnings before corporate, interest and tax costs was $2.3M in 2011 compared to a loss of $1.5M in 2010. Both facilities improved over 2010. The improvement was due to higher activity, improved operational performance, and no goodwill impairment in 2011, offset by higher commodity prices, higher labour costs and a weaker US dollar.
The Aerospace net earnings before corporate and interest costs was $1.1M in 2011 versus $1.0M in 2010. The improved results are the result of higher activity, offset by higher labour costs and a weaker US dollar.
For FTG Aerospace-Tianjin, the investment expensed in 2011 totaled $0.2M as activity ramped up towards becoming operational. A total of $0.6M has been invested in China for the project since its inception, the majority of which is in fixed assets or cash.
As at November 30, 2011, the Corporation’s primary source of liquidity included accounts receivable of $9.6M and inventory of $8.0M. While activity across the company has increased, inventories are down $0.8M from last year end, due to a continued focus on lean manufacturing and cash management. Net working capital at November 30, 2011 was $ 9.9M.
The Corporation will host a live conference call on February 2, 2012 at 8:30 am (EST) to discuss the results of FY 2011.
Anyone wishing to participate in the call should dial 416-340-2216 or 1-866-226-1792 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 February 16, 2012 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 3105714.
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 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
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
