For Immediate Release: Wednesday, September
28, 2005
FTG announces a return to pre-tax
profitability
in second quarter 2005
Toronto, Sept 28 – Firan Technology Group Corporation (TSX:FTG)
today announced the third quarter results for the period ending
August 26, 2005.
The Company had operating earnings before tax
in the quarter of $293,000, an improvement from the pre-tax operating
profit of $166,000 in the second quarter of 2005. Included in operating
earnings for the quarter is a charge of $385,000 related to severances
in the FTG Circuits Toronto segment to right-size the business,
and a recovery of $360,000 from a customer for costs incurred in
prior quarters. The performance for the quarter resulted from substantially
improved yields for FTG Circuits Toronto compared to the first and
second quarter of 2005, and strong performance in FTG Circuits Chatsworth.
FTG Aerospace continues to achieve positive performance, although
sales and profit were less than the third quarter of 2004 and the
second quarter of 2005.
Third Quarter Results
(three months ended August 26, 2005
compared with three months ended August 27, 2004 )
 |
Q3 2005
|
Q3 2004
|
| Sales |
$13,218,000 |
$13,361,000 |
| Operating Earnings Before Tax |
$293,000 |
$758,000 |
Net Earnings (Loss)
(Loss) Earnings per share - basic |
($119,000)
($0.01) |
$758,000
$0.05 |
| (Loss) Earnings per share -
diluted |
($0.01) |
$0.04 |
Year to Date Results
(nine months ended August 26, 2005
compared with nine months ended August 27, 2004 )
|
YTD 2005
|
YTD 2004
|
| Sales |
$39,411,000 |
$36,177,000 |
| Operating Loss Before Tax |
($472,000) |
($164,000) |
Net Loss
Loss per share - basic & diluted |
($1,045,000)
($0.06) |
($164,000)
($0.01) |
| |
|
|
Net sales for the third quarter of 2005 were $13,218,000, a decrease
of 1% compared with $13,361,000 for the third quarter of 2004 and
a 7% decrease over the second quarter of 2005. The strength in the
Canadian dollar versus the prior year reduced reported sales for
the quarter by approximately $1,000,000 and $2,900,000 on a year
to date basis. On a year-to-date basis, net sales were $39,411,000,
an increase of $3,234,000 or 9% over the comparable period in 2004.
The combined Circuits businesses’ net sales for the quarter
were $10,964,000, an increase of $163,000 or 2% over the prior year.
The strength of the Canadian dollar compared to the prior year reduced
sales by more than $900,000. Net sales recorded from the Chatsworth
facility were $3,327,000 for the quarter. Although reported sales
at the Toronto facility were lower than the prior year and the second
quarter, yields improved substantially, resulting in substantially
improved operating results. On a year-to-date basis, net sales for
the Circuits segment were $32,659,000, an increase of $2,858,000
or 10% over the comparable period in 2004. The strength of the Canadian
dollar has reduced reported sales for the Circuits’ segment
by approximately $2,500,000 on a year to date basis.
In the quarter, FTG Circuits Toronto renewed its agreement with
a major long-term customer for a period of 3 years. This new agreement
includes scope from additional divisions as compared to the previous
agreement and is valued at $20 million to $30 million over the period.
Aerospace sales for the current quarter at $2,254,000 decreased
12% or were $306,000 lower than the same quarter last year. Shipments
for Aerospace were lower for the quarter due to a shutdown in the
month of August, change in the mix of products and a significant
effort to support a key customer work through technical challenges
on an important military product. However, Aerospace maintains a
strong order backlog, and anticipates strong sales and shipment
levels for the balance of the year. The book to bill ratio for Aerospace
was 1.10 to 1 during the third quarter of 2005. On a year to date
basis, net sales for Aerospace were $6,751,000 compared to $6,376,000
for the comparable period in 2004, an increase of 6%.
Net income for the third quarter was $119,000 or earnings of $0.01
per share ($0.01 per diluted share) as compared with net earnings
of $758,000 or $0.05 per share ($0.04 earnings per diluted share)
in the same period in 2004.
The balance sheet remained strong at the end of the third quarter.
Net working capital at August 26, 2005 was $5,564,000 as compared
to $6,026,000 at November 30, 2004. The slight decrease in working
capital results from reclassification of over $2 million of debt
to current liabilities, as it has less than 12 months to maturity,
and is in the process of being renegotiated. In addition, the Company
had a strong cash position at the end of the quarter with cash on
hand of $1,943,000 and was undrawn on its’ US and Canadian
operating lines.
“While we have come through some difficult times, I am pleased
with the positioning of our businesses for the future. We have substantially
increased yields and reduced costs for FTG Circuits Toronto, and
have dramatically improved operating results. FTG Circuits Chatsworth
continues its strong performance, as it has since we acquired the
business. The Aerospace business continues to benefit from strong
demand, and we continue to increase resources to handle the demand.
”, stated Mr. Brad Bourne, President and Chief Executive Officer.
The Company will host a live conference call on Thursday September
29, 2005 at 8:30am (EDT) to discuss the results of the third quarter
of 2005.
Anyone wishing to participate in the call should dial 416-695-9722
or 1-888-333-4519 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 October 6, 2005. The number to
call for a rebroadcast is 416-695-5275 or 1-866-518-1010.
..........................................................................................
About Firan Technology Group
FTG is an aerospace and defence 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,
defence, 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.
The Company's shares are traded on the Toronto Stock Exchange under
the symbol FTG.
This news release may contain certain forward-looking statements.
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.
The Company does not undertake and has no specific intention to
update any forward-looking statements, written or oral that may
be made from time to time by or on its behalf 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
bradbourne@ftgcorp.com
Joseph R. Ricci, Vice President and CFO
Tel: (416) 299-4000 x309
Firan Technology Group
joericci@ftgcorp.com
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