FTG Announces 2nd Quarter 2013 Financial Results
FTG Announces 2nd Quarter 2013 Financial Results
Toronto, July 9, 2013 – Firan Technology Group Corporation (TSX:FTG) today announced financial results for the second quarter 2013.
– Grew Aerospace sales by more than 30% in Q2 2013, compared to Q2 2012
– Invested $0.7M in R&D, and $0.3M in start-up losses in the quarter and returned to profitability
– Shipped four sets of cockpit control panel assemblies to SAVIC for C919 single aisle aircraft program for use in their ground test program
– Established a joint venture with Tianjin Printronics Circuits Corp (TPC) to expand and enhance its circuit offering to Aerospace customers
“The second quarter of 2013 saw a return to profitability for FTG while we continued to invest in technology and facilities across the Corporation. Obviously the Joint Venture we announced with TPC is an important strategic investment for the Corporation and will provide an exciting new solution for our customers”, stated Brad Bourne, President and Chief Executive Officer. He added, “Equally important was the shipment of our first hardware for the C919 program as this represents another long term growth initiative for FTG”.
Second Quarter Results: (three months ended May 31, 2013 compared with three months ended June 1, 2012)
Q2 2013
Sales: $14,238,000
Operating Earnings (1): $1,099,000
– Net R&D Investment: $706,000
– Aerospace Start-up Losses: $339,000
– Income Tax: $7,000
Net Earnings: $47,000
Earnings per share:
-basic: $0.00
-diluted: $0.00
Q2 2012
Sales: $14,396,000
Operating Earnings (1): $1,469,000
– Net R&D Investment: $655,000
– Aerospace Start-up Losses: $183,000
– Income Tax: $0.00
Net Earnings: $631,000
Earnings per share:
-basic: $0.04
-diluted: $0.03
(1) Operating Earnings is not a measure recognized under the International Financial Reporting Standards (“IFRS”). 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.
Year-To-Date Results: (six months ended May 31, 2013 compared with six months ended June 1, 2012)
Year-To-Date 2013
Sales: $27,253,000
Operating Earnings(1): $1,528,000
– Net R&D Investment: 1,303,000
– Aerospace Start-up losses: $840,000
– Income Tax: $29,000
Net (Loss)/Earnings: ($644,000)
(Loss)/Earnings per share
-basic: ($0.04)
-diluted: ($0.04)
Year-To-Date 2012
Sales: $27,870,000
Operating Earnings(1): $2,309,000
– Net R&D Investment: 1,230,000
– Aerospace Start-up losses: $408,000
– Income Tax: $2,000
Net (Loss)/Earnings: $669,000
(Loss)/Earnings per share
-basic: $0.04
-diluted: $0.03
Business Highlights
FTG accomplished many goals in our second quarter 2013 that continue to improve the Corporation and position it for the future, including:
– Achieved 30% growth in Aerospace business compared to same period last year
– Shipped four set of cockpit control panel assemblies to SAVIC for C919 single aisle aircraft program for use in their ground test program
– Shipped parts to another new customer from Aerospace – Tianjin facility
– Added new test equipment in all three Aerospace facilities
For FTG overall, sales decreased by $0.2M (1%), from $14.4M in Q2 2012 to $14.2M in Q2 2013. For the first six months, sales were $27.3M, a decrease of $0.6M or 2% over the same period last year.
The Circuits Segment sales were down $1.4M or 13% in Q2 2013 versus Q2 2012. The majority of the decrease in the quarter came from the Toronto facility. Compared to Q1 2013, Circuits sales were up $0.2M (3%). Year-to-date Circuits sales were down $2.5M or 12% with the decrease spread more evenly between the Toronto and Chatsworth facilities.
For the Aerospace segment, sales in Q2 2013 were up $1.2M or 31% to $5.1M compared to $3.9M in Q2 2012. This growth resulted from increased shipments on a military simulator program as well as from the two new facilities. Year-to-date sales were up $1.9M or 26%.
Net earnings at FTG in Q2 2013 were $47K compared to $631K in Q2 2012. Included in this year’s earnings are expenses of $0.3M incurred in the quarter related to the startup of FTG Aerospace – Tianjin and FTG Aerospace – Chatsworth. For the six month period, net loss was $0.6M versus $0.7M profit last year.
The Circuits segment net earnings before corporate, interest and tax costs was $0.3M in Q2 2013 compared to $1.2M in Q2 2012. On a year-to-date basis, earnings were $0.2M versus $1.6M for the same period last year. The decrease was due to lower activity and some one-time costs related to outside services.
The Aerospace net earnings before corporate and interest costs was $0.6M in Q2 2013 versus $0.0M in Q2 2012. The results are due to higher activity, offset by startup costs at the two new facilities in California and China. For the first six months 2013, earnings were $0.5M, an increase of $0.2M, again due to the above noted items.
As at May 31, 2013, the Corporation’s primary source of liquidity included cash of $0.6M, accounts receivable of $12.1M and inventory of $8.6M. Receivables increased in the quarter due to large milestone invoices on two programs in the Aerospace segment issued late in the quarter. Net working capital at November 30, 2012 was $10.8M.
The Corporation will host a live conference call on July 10, 2013 at 11:30 am (Eastern) to discuss the results of the second quarter 2013.
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 July 24, 2013 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 9638529.
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, Chatsworth, California and a joint venture in Tianjin, China.
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.
For further information please contact:
Bradley C. Bourne, President and CEO
Tel: (416) 299-4000 x 314
Firan Technology Group Corporation
bradbourne@ftgcorp.com
Joseph R. Ricci, Vice President and CFO
Tel:(416) 299-4000 x 309
Firan Technology Group Corporation
joericci@ftgcorp.com
Additional information can be found at the Corporation’s website www.ftgcorp.com
