TORONTO, ONTARIO -- (Marketwire) -- 04/12/12 -- Firan Technology Group Corporation (TSX: FTG) today announced financial results for the first quarter 2012.
-- Grew sales by $1.3M or 10% over first quarter 2011 -- Grew gross margin by $0.4M over first quarter 2011 -- Fourth consecutive profitable quarter -- Book-to-bill ratio at 1.13:1 in the quarter
"FTG continues to build momentum across the company. Sales are growing at all sites and continued new order growth bodes well for the coming quarters. With the FTG Aerospace - Tianjin facility ready for production, and the strong interest in this facility from customers in Asia and North America, this is a very exciting new addition to the FTG portfolio of businesses," stated Brad Bourne, President and Chief Executive Officer. He added, "FTG continues to invest in equipment and R&D to move FTG up the value chain and capture content on key new aircraft platforms being developed worldwide."
First Quarter Results: (three months ended March 2, 2012 compared with three months ended February 25, 2011)
Q1 2012 Q1 2011
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Sales $ 13,474,000 $ 12,213,000
---------------------------------
Operating Earnings (1): 615,000 478,000
- Net R&D Investment 575,000 667,000
- Taxes 2,000 2,000
---------------------------------
Net Earnings / (Loss) $ 38,000 $ (191,000)
---------------------------------
Earnings / (Loss) per share
- basic & diluted $ 0.00 $ (0.01)
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(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 our first quarter 2012 that continue to improve the Corporation and position it for the future, including:
-- Achieved 10% year-over-year sales growth despite softness in the North
American printed circuit board industry
-- Won significant new customers outside of North America to continue to
diversify the customer base
-- Received next increment of Ontario Government AMIS loan of $1.2M in
support of investments in our Circuits - Toronto facility
-- Successfully completed AS9100C certification for FTG Circuits -
Chatsworth
-- Commissioned equipment at FTG Aerospace - Tianjin in preparation for the
start of production testing
-- Continued implementation of new ERP system for FTG Aerospace locations
-- Transitioned to IFRS accounting standard as required for all Canadian
companies
For FTG overall sales increased by $1.3M (10%), from $12.3M in Q1 2011 to $13.5M in Q1 2012. All sites participated in the growth.
The Circuits Segment sales were up $0.9M or 10% in Q1 2012 versus Q1 2011. FTG Circuits - Chatsworth saw particularly strong growth in the quarter.
For the Aerospace segment, sales in Q1 2012 were up $0.3M or 10% to $3.4M compared to $3.1M in Q1 2011. This growth resulted from strong demand for commercial aerospace products offset by a drop in military products compared to same quarter last year.
Net earnings at FTG in Q1 2012 were $38,000 compared to net loss of $191,000 in Q1 2011.
Gross margin increased by $0.4M due to higher activity with a relatively stable US to Canadian dollar exchange rate. R&D costs were lower in the quarter, primarily in Circuits-Toronto.
The Circuits segment net earnings before corporate, interest and tax costs was $0.4M in Q1 2012 compared to $0.1M in Q1 2011. The improvement was due to higher activity and strong operational performance.
The Aerospace net earnings before corporate and interest costs was $0.3M in Q1 2012 versus $0.2M in Q1 2011. The improved results are the result of higher activity, offset by lower one time incentive income in Q1 2011 results and $0.1M expenses incurred in FTG Aerospace - Tianjin in Q1 2012.
As at March 2, 2012, the Corporation's primary source of liquidity included accounts receivable of $9.8M and inventory of $8.3M. Inventories increased in the quarter due to higher activity and investment in one large aerospace program where shipments are expected to begin in Q2 2012. Net working capital at November 30, 2011 was $ 10.6M.
The Corporation will host a live conference call on April 13, 2012 at 11:00 am (EST) to discuss the results of the first quarter 2012.
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 April 27, 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 5332299.
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, 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.
Additional information can be found at the Corporation's website www.ftgcorp.com.
FIRAN TECHNOLOGY GROUP CORPORATION
Unaudited Interim Consolidated Balance Sheets
----------------------------------------------------------------------------
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March 2, November December 1,
2012 30, 2011 2010
(in thousands of dollars)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
ASSETS
CURRENT
Cash $ 1,005 $ 1,944 $ 305
Accounts receivables 9,780 9,592 9,332
Taxes receivable 408 378 448
Inventories 8,299 7,973 8,726
Prepaid expenses 528 349 669
----------------------------------------------------------------------------
20,020 20,236 19,480
PLANT AND EQUIPMENT 4,389 4,474 4,024
GOODWILL 1,039 1,039 1,039
DEFERRED INCOME TAXES 1,375 1,375 667
INTANGIBLE ASSETS 281 293 336
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$ 27,104 $ 27,417 $ 25,546
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LIABILITIES
CURRENT
Bank indebtedness $ - $ - $ 109
Accounts payable and accrued
liabilities 7,050 8,123 7,420
Provisions 509 485 544
Unearned revenue 666 714 152
Current portion of long-term bank
debt 1,165 1,458 3,059
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9,390 10,780 11,284
LONG-TERM LIABILITIES
Subordinated loan 3,302 2,444 1,746
Government assistance 1,355 1,065 914
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14,047 14,289 13,944
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CONTINGENCIES AND COMMITMENTS
SHAREHOLDERS' EQUITY
Accumulated deficit $ (9,994) $(10,032) $(11,506)
Accumulated other comprehensive
income (loss) (106) 12 -
----------------------------------------------------------------------------
(10,100) (10,020) (11,506)
Share capital
Common shares 12,681 12,681 12,681
Preferred shares 2,218 2,218 2,218
Contributed surplus 8,258 8,249 8,209
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13,057 13,128 11,602
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$ 27,104 $ 27,417 $ 25,546
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FIRAN TECHNOLOGY GROUP CORPORATION
Unaudited Interim Consolidated Statements of Earnings (Loss)
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Three months ended
----------------------------------------------------------------------------
March 2, February 25,
2012 2011
(in thousands of dollars except per share amounts)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
SALES $ 13,474 $12,213
COST OF SALES
Cost of sales 10,052 9,096
Depreciation of plant and equipment 394 478
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10,446 9,574
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3,028 2,639
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EXPENSES
Selling, general and administrative 2,148 1,966
Research and development costs 605 701
Recovery of research and development costs (30) (34)
Depreciation/amortization of office equipment and
intangible assets 29 27
Interest expense on short-term debt 21 39
Interest expense on long-term debt 61 44
Foreign exchange loss 154 85
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2,988 2,828
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EARNINGS (LOSS) BEFORE INCOME TAXES 40 (189)
INCOME TAXES EXPENSE 2 2
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NET EARNINGS (LOSS) $ 38 $ (191)
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NET EARNINGS (LOSS) PER SHARE
Basic $ - $ (0.01)
Diluted $ - $ (0.01)
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FIRAN TECHNOLOGY GROUP CORPORATION
Unaudited Interim Consolidated Statements of Comprehensive Income (Loss)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three months ended
----------------------------------------------------------------------------
February 25,
March 2, 2012 2011
(in thousands of dollars)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
NET EARNINGS (LOSS) $ 38 $(191)
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OTHER COMPREHENSIVE LOSS
Foreign currency translation adjustments (118) (154)
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(118) (154)
TOTAL COMPREHENSIVE LOSS $ (80) $(345)
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FIRAN TECHNOLOGY GROUP CORPORATION
Unaudited Interim Consolidated Statements of changes in Shareholder's Equity
Three months ended March 2, 2012 and February 25, 2011
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Common Preferred
(in thousands of dollars) Shares Shares Deficit
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Balance, December 1, 2010 $ 12,681 $2,218 $(11,506)
Net loss - - (191)
Stock based compensation - - -
Foreign currency translation
adjustments - - -
----------------------------------------------------------------------------
Balance, February 25, 2011 $ 12,681 $2,218 $(11,697)
Net earnings - - 1,665
Stock based compensation - - -
Foreign currency translation
adjustments - - -
----------------------------------------------------------------------------
Balance, November 30, 2011 $ 12,681 $2,218 $(10,032)
Net earnings - - 38
Stock based compensation - - -
Foreign currency translation
adjustments - - -
----------------------------------------------------------------------------
Balance, March 2, 2012 $ 12,681 $2,218 $ (9,994)
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Accumulated
Other Total
Contributed Comprehensive Shareholders'
(in thousands of dollars) Surplus Income (Loss) Equity
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Balance, December 1, 2010 $ 8,209 $ - $ 11,602
Net loss - - (191)
Stock based compensation 8 - 8
Foreign currency translation
adjustments - (154) (154)
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Balance, February 25, 2011 $ 8,217 $ (154) $ 11,265
Net earnings - - 1,665
Stock based compensation 32 - 32
Foreign currency translation
adjustments - 166 166
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Balance, November 30, 2011 $ 8,249 $ 12 $ 13,128
Net earnings - - 38
Stock based compensation 9 - 9
Foreign currency translation
adjustments - (118) (118)
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Balance, March 2, 2012 $ 8,258 $ (106) $ 13,057
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FIRAN TECHNOLOGY GROUP CORPORATION
Unaudited Interim Consolidated Statements of Cash Flows
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Three months ended
----------------------------------------------------------------------------
March 2, February 25,
2012 2011
(in thousands of dollars)
----------------------------------------------------------------------------
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NET INFLOW (OUTFLOW) OF CASH RELATED TO THE
FOLLOWING ACTIVITIES:
OPERATING
Net earnings (loss) $ 38 $ (191)
Items not affecting cash:
Stock based compensation expense 9 8
(Profit) loss from disposal of plant and
equipment (2) 2
Effect of exchange rates on U.S. dollar
Canadian debt (55) (78)
Depreciation of plant and equipment 411 493
Amortization of intangible assets 12 12
Amortization of deferred financing costs 24 14
AMIS interest accretion 47 16
Amortization of government assistance (71) (48)
Changes in non-cash operating working capital (1,860) (439)
----------------------------------------------------------------------------
(1,447) (211)
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INVESTING
Additions to plant and equipment (363) (1,162)
Proceeds from sales of plant and equipment 3 20
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(360) (1,142)
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FINANCING
Increase in bank indebtedness - 843
Proceeds from subordinated loan and government
assistance 1,172 960
Repayments of long-term debt (217) (900)
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955 903
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Effects of foreign exchange rate changes on cash
flow (87) 254
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NET CASH FLOW (939) (196)
CASH, BEGINNING OF PERIOD 1,944 196
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CASH, END OF PERIOD $ 1,005 $ -
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DISCLOSURE OF CASH PAYMENTS
Payments for interest $ 40 $ 67
Payments for income taxes $ 2 $ 2
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Contacts:
Firan Technology Group Corporation
Bradley C. Bourne
President and CEO
(416) 299-4000 x314
bradbourne@ftgcorp.com
Firan Technology Group Corporation
Joseph R. Ricci
Vice President and CFO
(416) 299-4000 x309
joericci@ftgcorp.com
www.ftgcorp.com
