Firan Technology Grup Announces Fourth Quarter and Year End Results
Firan Technology Group Corporation (TSX:FTG) today announced the fourth quarter and year-end results for the period ending November 30, 2004.
Fourth Quarter Results (three months ended November 30, 2004
compared with three months ended November 30, 2003)
Net (Loss): ($27,000)
EPS - basic & fully diluted: $0.00
Net (Loss): ($125,000)
EPS - basic & fully diluted: ($0.01)
Year End Results (twelve months ended November 30, 2004,
compared with twelve months ended November 30, 2003)
Operating earnings after tax*: $696,000
Net (Loss): ($191,000)
EPS - basic & fully diluted: ($.01)
Operating earnings after tax*: $540,000
Net (Loss): ($2,027,000)
EPS - basic & fully diluted: ($0.19)
* Operating earnings after tax has been presented to show the financial results before one time restructuring costs
Sales in the fourth quarter decreased 9% from the previous year. The lower than expected sales are a result of a reduction in bookings from several key customers in our Circuits business. In addition, revenues were adversely affected as the Canadian dollar strengthened against the U.S dollar during the fourth quarter. The Canadian dollar strengthened 7% in the fourth quarter as compared to the same quarter last year. Consequently, sales were down $640,000 in the fourth quarter of 2004 on exchange alone. The Company manages the exposure to these currency risks by entering into foreign exchange contracts on a regular basis.
In addition, the acquisition of Young Electronics in December 2004 is expected to reduce currency risks and reduce the Company’s exposure to the strengthening Canadian dollar as all of Young’s revenues and costs are denominated in a single currency.
Despite the reduction in quarterly sales, the Company had better bottom line performance in 2004 than 2003. The primary reason is that the Company benefited from overall cost savings as a result of the merger of approximately $5,000,000 in 2004. Unfortunately, the majority of these savings were lost to a strengthening Canadian dollar.
Sales for 2004 were $46,644,000 an increase of 42% as compared with sales of $32,807,000 in 2003. The increase in sales is primarily attributable to the merger in 2003. In fiscal 2003, the two companies were merged for a period of three months as compared to 2004 when the two companies were merged for the entire year.
The Circuits division generated $37,659,000 in revenue in 2004, which was 49% higher than 2003. While sales increased year over year, primarily as a result of the merger, they were below expectations. It was primarily the result of the challenging first quarter during which the Company closed the former FTG Circuit production facility and the impact of a 6-week delay in the integration, the strengthening Canadian dollar and the reduced bookings from key customers in the fourth quarter.
Sales from the Aerospace division were $8,985,000 for fiscal 2004, a 20% increase over fiscal 2003 sales. The Aerospace division performed extremely well in 2004 as a result of new customer program wins along with an increase in manufacturing capacity. The Aerospace division was less affected by the weakening of the US dollar as 60% of the division’s sales were denominated in US dollars.
“While 2004 was challenging, the Company made significant progress during the year. Firstly, were able to grow the Aerospace division by 20% in the year and position it for further profitable growth in 2005. The Company also completed the integration of the Circuits businesses in 2004 and achieved the post merger benefits originally contemplated. Lastly, the Company completed the acquisition of Young Electronics in December 2004. The purchase of Young Electronics has significant strategic benefit to FTG. We are very pleased as the acquisition reinforces our market focus in aerospace and defense applications”, stated Mr. Bradley Bourne, President and Chief Executive Officer.
“For 2005, FTG intends to leverage the synergies of the merger and recent acquisition to grow revenues and to improve operating efficiencies”, added Mr. Bourne.
ABOUT FIRAN TECHNOLOGY GROUP CORPORATION
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 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 contains certain forward-looking statements that reflect the current views and/or expectations of FTG with respect to its performance, business and future events. Such statements are subject to a number of risks, uncertainties and assumptions. Actual results and events may vary significantly.
For further information please contact:
Bradley C. Bourne, President and CEO
Firan Technology Group Corporation
Tel: (416) 299-4000 x314
John Bartkiw, CFO
Firan Technology Group Corporation
Tel: (416) 299-4000 x390