FTG Announces Financial Results For Q2 2009
FTG Announces Financial Results For Q2 2009
FIRAN TECHNOLOGY GROUP CORPORATION ANNOUNCES FINANCIAL RESULTS FOR THE SECOND QUARTER 2009
Toronto, July 8, 2009 – Firan Technology Group Corporation (TSX:FTG) today announced financial results for the second quarter and six months ended May 29, 2009.
-Year-to-date sales decreased by 2% as compared to industry data as
reported by IPC showing over 30% decrease in same period
-Backlog remained above $15,000,000
-Reduced net bank debt by $1,467,000
Q2 2009 Results: (three months ended May 29, 2009 compared with three months ended May 30, 2008)
Q2 2009
Sales: $14,634,000
Operating Earnings before (1): $9,000
One Time Severance Charges: $231,000
Filtran Restructuring and Losses: $0
Foreign Exchange: $304,000
Amortization of Intangible Assets: $12,000
Tax Expense (Recovery): $2,000
Net (Loss)/Earnings: ($540,000)
(Loss)/Earnings per share
– basic ($0.03)
– diluted ($0.03)
Q2 2008
Sales: $16,458,000
Operating Earnings before (1): $280,000
One Time Severance Charges: $0
Filtran Restructuring and Losses: $190,000
Foreign Exchange: ($5,000)
Amortization of Intangible Assets: $0
Tax Expense (Recovery): ($111,000)
Net (Loss)/Earnings: $206,000
(Loss)/Earnings per share
– basic $0.01
– diluted $0.01
Year-To-Date 2009 Results: (six months ended May 29, 2009 compared with six months ended May 30, 2008)
Year-To-Date 2009
Sales: $29,328,000
Operating Earnings (Loss) before (1): $185,000
One Time Severance Charges: $231,000
Filtran Restructuring and Losses: $0
Foreign Exchange: $533,000
Amortization of Intangible Assets: $24,000
Tax Expense/(Recovery): $4,000
Net Loss: ($607,000)
Loss per share
– basic ($0.03)
– diluted ($0.03)
Year-To-Date 2008
Sales: $30,056,000
Operating Earnings (Loss) before (1): ($459,000)
One Time Severance Charges: $0
Filtran Restructuring and Losses: $472,000
Foreign Exchange: $44,000
Amortization of Intangible Assets: $0
Tax Expense/(Recovery): ($134,000)
Net Loss: ($841,000)
Loss per share
– basic ($0.05)
– diluted ($0.05)
(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 Company’s shareholders, creditors and other stakeholders. The Company’s method of calculating Operating Earnings (Loss) may differ from other corporations and accordingly may not be comparable to measures used by other corporations..
“Our second quarter saw some significant challenges for FTG as a result of lower demand and the fluctuations in the U.S. dollar exchange rates. I am proud of the way everyone at FTG pulled together to overcome these obstacles and I sincerely appreciate the efforts made by everyone at the Corporation”, stated Mr. Brad Bourne, President and Chief Executive Officer. “In response to the slowdown in demand caused by global economic conditions, we have taken several actions, including staff reductions and new inventory management processes, which will improve our cost structure going forward. We remain focused on our strategy of Operational Excellence to further improve our internal performance, as well as continuing to invest in R&D to improve our technological capabilities to grow the business”, he added.
FTG had many accomplishments in Q2 2009 that continue to improve the Corporation and position it for the future, including:
-The hiring of Hardeep Heer as VP Engineering and CTO for FTG’s
Circuits businesses
-The hiring of a new QC Manager for FTG Circuits Toronto
-The continued strengthening of FTG’s technical capabilities through
key engineering additions at all three sites
-Strengthening of the sales team through the hiring of experienced
sales staff for the U.S. North West and U.S. South West
-Reduced operating costs through elimination of overtime, staff
reductions, implementation of workshare program for both Toronto
facilities and wage reductions for other staff not impacted by the
above actions
-Renewed lease for FTG Circuits-Toronto facility with an average 15%
savings over the next 5 years
-Completion of qualification testing of the Lighting Power Supply at
FTG Aerospace
-Shipment of first assemblies from FTG Aerospace incorporating higher
level hardware and software designs
-Strong improvements in production yields at the Circuits facilities
-Better inventory management and control across the Corporation to
improve the cash cycle
-Continued higher technology activity across both Circuits sites
The Corporation’s sales in Q2 2009 were $14,634,000, a decrease of $1,824,000 or 11% over Q2 2008. Sales were flat sequentially from Q1 to Q2 2009. Compared to last year, sales were positively impacted by the strength of the U.S. dollar, which offset a decline in activity across both businesses. Last years’ acquisition of Filtran increased revenues by $1,341,000 in the quarter. Notwithstanding the drop in sales year-over-year due to reduced customer demand on existing business, there were record levels of activity in new part numbers and new customers. Across FTG, the backlog in engineering has increased substantially over last year. This bodes well for future sales when the base business returns to more normal levels.
On a year-to-date basis, sales were down $728,000 or 2% to $29,328,000. Again, sales were positively affected by the strengthening U.S. dollar and were negatively affected by lower customer demand.
Q2 2009 sales for the Circuits segment were $11,715,000, a decrease of $1,032,000 or 8% compared to Q2 2008. For the Aerospace segment, sales in the second quarter were $2,919,000 compared to $3,711,000 in Q2 2008, a decrease of $792,000 or 21%.
FTG had operating earnings before severance, restructuring, foreign exchange, amortization of intangible assets and tax for Q2 of 2009 of $9,000, compared to $280,000 in Q2 2008. There were no Filtran restructuring and losses in Q2 2009 versus $190,000 in Q2 2008. In Q2 2009, FTG incurred $231,000 in severance costs related to staff reductions to align headcount to the lower level of activity. The total workforce at FTG was reduced by approximately 30 people or 8% with reductions happening at all three sites. Finally, given the significant weakening of the U.S. dollar over the second quarter of 2009, a $304,000 foreign exchange charge was made to the income statement compared to a negligible amount in Q2 2008.
Net loss for the second quarter was $540,000 compared to a net earnings of $206,000 in the comparable quarter in 2008. The Q2 2009 loss includes the items mentioned above as well as $38,000 of costs incurred in the establishment of FTG Aerospace-Tianjin.
The net loss for the first half of 2009 was $607,000 versus $841,000 for the same period last year. The improvement is due to the elimination of Filtran related restructuring and other costs in 2009, a benefit from the year-over-year impact of the stronger U.S. dollar, offset by lower activity, severance costs and costs related to revaluing certain balance sheet items to the closing exchange rate for the U.S. dollar.
Across FTG, total bookings in the quarter were $12,700,000. The book-to-bill for the Corporation was 0.87:1 and 0.92:1 for the Circuits business. Bookings were generally stable for defence customers, down slightly from large Air Transport customers and down significantly from customers in the business jet markets. The lower orders from existing programs and customers were somewhat offset by the capture of new programs and new customers. Total backlog of orders at the end of Q2 2009 were $15,000,000.
During the quarter, FTG’s total bank debt decreased $1,244,000 and cash increased $223,000. The improvements are due in part to the revaluation of U.S. dollar denominated debt and to an aggressive inventory reduction plan across the Corporation that resulted in a $1,816,000 drop in raw materials, work-in-progress, and finished goods across the Corporation.
The Corporation will host a live conference call on July 9, 2009 at 8:30am (EDT) to discuss the results of Q2 2009.
Anyone wishing to participate in the call should dial 416-340-8018 or 1-866-223-7781 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 23, 2009 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 3133576.
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 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.
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
Ali Mahdavi,
Partner
Tel: (416) 962-3300 x 225
Spinnaker Capital Markets Inc.
am@spinnakercmi.com
Additional information can be found at the Corporation’s website www.ftgcorp.com
