FTG Announces Record Revenue In Second Quarter 2008
FTG Announces Record Revenue In Second Quarter 2008
Toronto, July 09, 2008 – Firan Technology Group Corporation (TSX:FTG) today announced the second quarter 2008 results for the period ending May 30, 2008.
-Record revenue for the Corporation, despite strong Canadian dollar
-Return to profitability, despite strong Canadian dollar
-Completed integration and transition of Filtran Microcircuits acquisition
Second Quarter Results: (three months ended May 30, 2008 compared with three months ended June 1, 2007)
Q2 2008:
Sales – $16,458,000
Gross Margin – $4,388,000
Earnings Before Undernoted Items (1) – $659,000
SR&ED Tax Recovery – $0.00
Filtran R&D – $374,000
Filtran Operating Losses – $190,000
Tax – ($111,000)
Net Earnings After Tax – $206,000
Earnings per share – basic & diluted – $0.01
Q2 2007:
Sales – $15,263,000
Gross Margin – $3,889,000
Earnings Before Undernoted Items (1) – $195,000
SR&ED Tax Recovery – ($564,000)
Filtran R&D – $0.00
Filtran Operating Losses – $0.00
Tax – $417,000
Net Earnings After Tax – $342,000
Earnings per share – basic & diluted – $0.02
Year to Date Results (six months ended May 30, 2008 compared with six months ended June 1, 2007)
YTD 2008:
Sales $30,056,000
Gross Margin – $7,285,000
Earnings Before Undernoted Items (1) – $79,000
SR&ED Tax Recovery – $0.00
Filtran Restructuring and R&D – $582,000
Filtran Operating Losses – $472,000
Tax – ($134,00)
Net (Loss)/Earnings After Tax – ($841,000)
(Loss)/Earnings per share – basic – ($0.05)
(Loss)/Earnings per share – diluted – ($0.05)
YTD 2007:
Sales – $29,174,000
Gross Margin – $7,200,000
Earnings Before Undernoted Items (1) – $324,000
SR&ED Tax Recovery – ($963,000)
Filtran Restructuring and R&D – $0.00
Filtran Operating Losses – $0.00
Tax – $463,000
Net (Loss)/Earnings After Tax – $824,000
(Loss/Earnings per share – basic – $0.05
(Loss)/Earnings per share – diluted – $0.04
(1) Earnings Before Undernoted Items is not a measure recognized under Canadian generally accepted accounting principles (“GAAP”). Management believes that this measure is important to many of the Company’s shareholders, creditors and other stakeholders.
Net sales increased by $1,195,000 or 8%, from $15,263,000 in the second quarter of 2007 to $16,458,000 in the second quarter of 2008. Excluding the impact of the strengthening Canadian dollar versus the US dollar, revenue would have been up approximately $3M or 20% over the same period last year. The Canadian dollar has strengthened over 13% between May 2007 and May 2008 and 83% of FTG’s sales are in US dollars. Sales increased $2,860,000 or 21% sequentially in Q2 over Q1, 2008.
The Circuits Segment revenue was up $801,000 or 7% over the same period last year. Excluding the impact of the exchange rate, revenue was up $2.3M or 19%. The acquisition of Filtran increased revenues during the quarter by $1M. The transition continues to progress well and FTG is currently bidding or negotiating over $3M in additional opportunities as a result of the acquisition. All of the Filtran equipment has been moved to FTG’s facilities and all critical items are operational.
For the Aerospace segment, sales in the second quarter, 2008 were $3,711,000 compared to $3,317,000 in Q2, 2007, an increase of $394,000 or 12%. The growth is due to the investments made in 2007 to increase capacity, including the move to a new larger facility, their outstanding quality and delivery metrics with their customers through 2008, as well as strong demand from existing and new customers.
For the year-to-date, the Corporation’s revenues are up $882,000 or 3% versus the same period last year. Excluding the impact of the exchange rate, revenues would have been up $4.5M or 15% year over year.
FTG experienced solid bookings across the Corporation in Q2, 2008, although the normal slowdown was seen as the summer months approached. Total bookings in the quarter were over $15M and the book-to-bill for the Corporation was 0.93:1. The book-to-bill was 0.95:1 for FTG Circuits and 0.84:1 for FTG Aerospace. Total backlog of orders at the end of Q2 were $15M. FTG continues to add customers and reduce its dependence on any one customer.
Gross margin increased by $499,000 to $4,388,000 or 27% of sales for the second quarter of 2008 as compared with $3,889,000 or 25% of sales in the second quarter of 2007 and $2,897,000 or 21% of sales in Q1, 2008. The increase in gross margin is directly attributable to the higher revenue and the ongoing focus on higher technology products offset by the impact of the exchange rate and material cost increases.
Net earnings for the second quarter of 2008 were $206,000 or $0.01 per share ($0.01 per diluted share) as compared with $342,000 or $0.02 per share ($0.02 per diluted share) in the second quarter of 2007. FTG continues to invest in R&D to expand its product offerings and capture new customers and programs. R&D investments in Q2 2008 were $960,000 versus $800,000 in Q2, 2007. Included in the second quarter 2008 was $374,000 of R&D costs related to the Filtran acquisition. Included in Q2, 2007 was a recovery of $564,000 for research and development costs. Sequentially, net earnings were up $1,253,000 in Q2 versus Q1, 2008. Year to date, net loss is $841,000 versus a profit of $823,000 for the same period last year.
FTG had many accomplishments in Q2, 2008 that continue to improve the company and position it for the future, including:
-The integration and transition of the equipment and customers of Filtran Microcircuits, Inc. to existing FTG facilities
-The awards from Rockwell Collins recognizing supplier excellence and best-in-class lean manufacturing processes for FTG Aerospace
-The completion of a new 3 year agreement with Honeywell for FTG Circuits – Chatsworth
FTG reduced the total debt by $644,000 in the quarter. This reduction was achieved while incurring over $560,000 of Filtran related costs for customer qualifications, product learning, facility closure, and integration.
“We are extremely pleased with the continued revenue growth for the Corporation and are excited to exceed $16 million in revenue in a quarter for the first time. Our focus on the aerospace and defence market is proving to be very beneficial as this market continues to be robust,” commented Brad Bourne, President and CEO, FTG Corporation. He added, “Our recent acquisition of Filtran Microcircuits has accelerated FTG’s penetration of high speed, radio frequency circuit boards and brought many new customers yielding immediate benefits to FTG.”
“To continue to improve our financial performance, FTG remains focused on achieving Operational Excellence. Our customers demand high quality products, on time delivery and outstanding customer service. With the recent performance awards from Rockwell, FTG has now won three such awards so far this year”added Mr. Brad Bourne, President and CEO.
“Both FTG facilities in Canada have overcome the strength of the Canadian dollar through significant top line growth and were profitable in our second quarter,” stated Joe Ricci, Vice President and CFO, FTG Corporation. He added, “FTG Circuits – Chatsworth had a strong top line but saw some significant yield issues, primarily around the Filtran transition that impacted their bottom line, although they were profitable before these costs in the quarter. Approximately 11% of their revenue in the quarter was derived from former Filtran customers that have transitioned production to FTG.”
The Company will host a live conference call on July 10, 2008 at 8:30am (EDT) to discuss the results of the second quarter of 2008.
Anyone wishing to participate in the call should dial 416-641-6140 or 1-866-542-4265 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 July 24, 2008. The number to call for a rebroadcast is 416-695-5800 or 1-800-408-3053, pass code 3265563. The replay will also be available on the FTG website at www.firantechnology.com
ABOUT FIRAN TECHNOLOGY GROUP CORPORATION
FTG is a North American supplier of aerospace and defense electronics products and subsystems. FTG has two operating units, FTG Circuits and FTG Aerospace.
FTG Circuits is a manufacturer of high technology/high reliability printed circuit boards. Its 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. FTG Aerospace has operations in Toronto, Ontario.
The Company’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 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. 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 Company’s website www.ftgcorp.com
