FTG Reports Strong Sequential Growth And A Return To Prifitability In Q3 2010
FTG Reports Strong Sequential Growth And A Return To Prifitability In Q3 2010
Toronto, October 6, 2010 – Firan Technology Group Corporation (TSX:FTG) today announced financial results for the third quarter 2010.
-Grew revenue by 14% over Q2 2010 and by 28% over Q1 2010
-Achieved gross margin of 30% in Q3 2010, up 6% from Q3 2009
-Achieved book-to-bill ratio above 1.02:1 in the quarter
-Recorded $138,000 net income or almost $500,000 before one time costs
related to severance, legal and corporate development activities
-Received first advance of Ontario Government Advanced Manufacturing
Investment Strategy Loan in the amount of $2.66M
“We are pleased with the increasing activity across FTG and our return to profitability. Our results remained strong in our Circuits – Toronto business, Aerospace improved and Circuits – Chatsworth improved dramatically. 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.
Third Quarter Results: (three months ended August 27, 2010 compared with three months ended August 28, 2009)
Q3 2010
Sales: $13,244,000
Operating Earnings before (1): $1,299,000
– Net R&D,
– Severance
– Tax
Net R&D Investment: $918,000
Severance: $243,000
Tax: $0.00
Net Income (Loss): $138,000
Earnings (Loss) per share
-basic & diluted: $0.00
Q3 2009
Sales: $12,930,000
Operating Earnings before (1): $587,000
– Net R&D,
– Severance
– Tax
Net R&D Investment: $852,000
Severance: $0.00
Tax: $0.00
Net Income (Loss): ($265,000)
Earnings (Loss) per share
-basic & diluted: ($0.01)
Year-To-Date 2010 Results: (nine months ended August 27, 2010 compared with nine months ended August 28, 2009)
Year-To-Date 2010
Sales: $35,208,000
Operating Earnings before (1): $1,645,000
– Net R&D,
– Severance
– Tax
Net R&D Investment: $2,079,000
Severance: $386,000
Tax: $2,000
Net Loss: ($822,000)
Loss per share
-basic & diluted: ($0.05)
Year-To-Date 2009
Sales: $42,258,000
Operating Earnings before (1): $2,025,000
– Net R&D,
– Severance
– Tax
Net R&D Investment: $2,662,000
Severance: $231,000
Tax: $4,000
Net Loss: ($872,000)
Loss per share
-basic & diluted: ($0.05)
(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 third quarter of 2010 that continue to improve the Corporation and position it for the future, including:
-Shipped first assemblies for $1.5M military cockpit simulator design
and development program ahead of schedule
-Achieved book-to-bill ratio of 1.02:1 in the quarter
-Successfully completed AS9100 recertification for FTG Circuits –
Toronto
-Strengthened FTG’s team in Quality and Program Management at FTG
Aerospace, Production Control at FTG Circuits Toronto, Operations at
FTG Circuits Chatsworth and IT at the Corporate office
-Received first advance of Ontario Government Advanced Manufacturing
Investment Strategy Loan in the amount of $2.66M
For FTG, overall sales increased by 2% from $12.9M in Q3 2009 to $13.2M in Q3 2010, but increased by 14% sequentially over Q2 2010. Year-over-year the decline in the value of the USD was 7%, which has a direct impact on reported sales. In Q3 sales in Canada were down 33% year-over-year but up 33% from Q2 2010. Sales in USD were up 3% compared to the same quarter last year while activity was up by another 7% taking into account the impact of the weaker US dollar.
The Circuits Segment sales were down $0.1M or 1% in Q3 2010 versus Q3 2009 but up 17% compared to Q2 2010. Year-to-date, Circuits Segment sales were down 18% due to lower demand earlier in the year and the impact of a significantly weaker US dollar in 2010.
For the Aerospace segment, sales in Q3 2010 were up $0.4M or 19% compared to Q3 2009. New program wins, particularly in higher level assembly products more than offset weak demand in the traditional products with legacy customers. Year-to-date, Aerospace segment sales were down 12%, due to weaker demand from traditional customers, a weaker US dollar, offset by increased activity in new higher level assembly business.
Net profit at FTG in Q3 2010 was $0.1M compared to a net loss of $0.3M in Q3 2009. Operating earnings were up $0.7M offset by increased R&D spending and severance costs. Year-to-date, the net loss was $0.8M compared to $0.9M for the same period last year. Year-over-year operating costs were reduced to offset the lower revenue levels experienced in 2010.
The Circuits segment income before corporate and interest costs was $0.7M in Q3 2010 compared to $0.3M in Q3 2009. For the first nine months of 2010, the Circuits segment income was $0.5M compared to $0.1M for the same period last year. In 2010, the Chatsworth facility reported a loss while the Toronto facility was profitable. Operational and yield issues impacted the Chatsworth results, particularly in the first six months of the year.
The Aerospace net income before corporate costs was $0.1M in Q3 2010 versus $0.0M in Q3 2009. Year-to-date net income before corporate costs was $0.4M compared to $0.7M for the same period last year.
As at August 27, 2010, the Corporation’s primary source of liquidity included accounts receivable of $9.9M and inventory of $8.4M. Net working capital at August 27, 2010 was $7.5M.
During the quarter, Aquilini Capital Inc. acquired 100% of the Preferred Shares of FTG Corporation. For further information, please go to www.sedar.com.
The Corporation will host a live conference call on Thursday, October 7, 2010 at 11:00am (EDT) to discuss the results of Q3 2010.
Anyone wishing to participate in the call should dial 416-340-8527 or 1-877-240-9772 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 October 21, 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 2726517.
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.
Link To Spreadsheets:
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
