FTG Announces Full Year and Fourth Quarter 2013 Financial Results


FTG Announces Full Year and Fourth Quarter 2013 Financial Results

Toronto, January 30, 2014 – Firan Technology Group Corporation (TSX:FTG) today announced financial results for the full year and fourth quarter 2013.

-Grew Q4 2013 sales by 12% over Q4 2012
-Grew full year sales by 1% over full year 2012
-Grew Aerospace segment sales by 18% over full year 2012
-Invested over $1.5M in start-up expenses for new Aerospace facilities in Tianjin, China and Chatsworth, California compared to $1.1M in 2012
-Generated sales of more than $2.2M from the two new Aerospace facilities in 2013
-R&D spending remained above 5% of sales

“As 2013 ended, FTG had achieved its strategic objective for both its Circuits and Aerospace businesses of establishing manufacturing footprints in Canada, our home base, the United States, the largest aerospace and defense market, and Asia, the fastest growing aerospace market”, stated Brad Bourne, President and Chief Executive Officer. He added, “Significant costs have been incurred to achieve this objective but it has positioned FTG favourably for the future. Our strong growth in our fourth quarter is an indication of the benefit of these investments.”

Full Year 2013 Results: (twelve months ended November 30, 2013 compared with twelve months ended November 30, 2012)

Full Year 2013

Sales: $55,998,000

Operating Earnings(1): $3,726,000

-Net R&D Investment: $2,766,000
-Aerospace Tianjin and Chatsworth
Start-up Losses: $1,561,000
-Goodwill: $1,039,000
-Severance: $299,000
-Income Tax: ($941,000)
Net (Loss) Earnings: ($998,000)
(Loss) Earnings per share
-basic: ($0.06)
-diluted: ($0.06)

Full Year 2012

Sales: $55,646,000

Operating Earnings(1): $4,608,000

-Net R&D Investment: $2,533,000
-Aerospace Tianjin and Chatsworth
Start-up Losses: $1,062,000
-Goodwill: $0.00
-Severance: $54,000
-Income Tax: $31,000
Net (Loss) Earnings: $928,000
(Loss) Earnings per share
-basic: $0.05
-diluted: $0.05

Fourth Quarter Results: (three months ended November 30, 2013 compared with three months ended November 30, 2012)

Q4 2013

Sales: $15,426,000

Operating Earnings (1): $1,883,000

-Net R&D Investment: $1,032,000
-Aerospace Tianjin and Chatsworth Start-up Losses: $293,000
-Goodwill: $1,039,000
-Severance: $299,000
-Income Tax: ($977,000)

Net Earnings: $197,000
Earnings per share
-basic: $0.01
-diluted: $0.01

Q4 2012

Sales: $13,719,000

Operating Earnings (1): $1,135,000

-Net R&D Investment: $589,000
-Aerospace Tianjin and Chatsworth Start-up Losses: $419,000
-Goodwill: $0.00
-Severance: $0.00
-Income Tax: $23,000

Net Earnings: $104,000
Earnings per share
-basic: $0.01
-diluted: $0.01

(1) Operating Earnings is not a measure recognized under 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.

Business Highlights

FTG accomplished many goals throughout 2013 that continue to improve the Corporation and position it for the future, including:

-Held Grand Opening of FTG Aerospace – Chatsworth facility
-Completed AS9100C certification for FTG Aerospace – Chatsworth
-Shipped over 6,000 cockpit panels from FTG Aerospace – Tianjin
-Shipped four sets of cockpit control panel assemblies to SAVIC for C919 single aisle aircraft program for use in their ground test program
-Grew Aerospace business by 18% in 2013 compared to 2012
-Grew Aerospace sales to 33% of FTG’s total business in 2013
-Achieved sales outside of North America of $7.5M or 13% of total sales
-Established joint venture with Tianjin Printronics Circuits Ltd (“TPC”) to provide superior quality circuit boards to Aerospace customers from an Asian source
-Invested $1.7M in capital assets across FTG to complete the build out of new Aerospace facilities in Tianjin and Chatsworth, to increase test capabilities in Aerospace Toronto and to improve engineering tools across the Corporation

For FTG, overall sales increased by $0.4M (0.6%), from $55.6M in FY2012 to $56.0M in FY2013. FTG Aerospace drove the growth in the year. For the fourth quarter, FTG sales were $15.4M, an increase of $1.7M or 12.4% versus the same period last year.

The Circuits Segment sales were down $2.5M or 6.2% in FY2013 versus FY2012. In the fourth quarter, Circuits Segment sales were up $1.3M or 13.4% compared to the same quarter last year.

For the Aerospace segment, sales in FY2013 were up $2.9M or 18.5% compared to FY2012. Sales from the two new sites totaled $2.2M in FY 2013 compared to $0.9M in 2012. In Q4, Aerospace Segment sales were up $0.4M, or 10.1% compared to the same quarter last year.

Gross margins were down in FY2013 by $1.2M compared to FY2012 due to higher start-up costs at the new facilities and lower sales in the Circuits business. Gross margins in Q4 2013 were up $1.0M compared to the same period in 2012 as start-up costs diminished and sales increased.

Net losses at FTG in FY2013 were $1.0M compared to net earnings of $0.9M in FY2012. As noted above, gross margins were lower in FY2013. In addition, SG&A costs were higher in FY 2013, as were R&D costs and restructuring costs. Goodwill of $1.0M was also written off. These higher costs were partially offset by lower foreign exchange losses and a $1.0M increase in deferred income taxes in 2013. In Q4 2013, net profit was $0.2M compared to $0.1M in Q4 2012. The increase was due to higher margins offset by higher SG&A costs, higher R&D costs, higher restructuring costs and the goodwill write down, offset by an increase in deferred income taxes.

The Circuits segment net earnings before corporate and interest and other costs decreased to $0.2M in FY2013 compared to $3.4M in FY2012, on $2.5M lower sales. Operational issues at Circuits Toronto as well as the write down of Goodwill, negatively impacted results.

The Aerospace net earnings before corporate and interest and other costs increased to $1.0M in FY2013 versus $0.4M in FY2012. The net earnings this year increased due to $2.9M higher sales offset by $1.6M start-up expenses for the two new facilities. Costs related to development for the C919 cockpit assemblies of $0.7M in FY2013 and $0.5M in FY2012 were treated as deferred development and not expensed in either year.

As at November 30, 2013, the Corporation’s primary source of liquidity included accounts receivable of $12.3M and inventory of $8.1M. Net working capital at November 30, 2013 was $10.7M compared to $11.0M at November 30, 2012.

The Corporation will host a live conference call on Friday, January 31, 2014 at 8:30 am (EDT) to discuss the results of FY2013.

Anyone wishing to participate in the call should dial 416-340-8527 or 1-800-565-0813 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 February 14, 2014 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 3311213.


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.


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.

Link To Spreadsheet

For further information please contact:

Bradley C. Bourne, President and CEO
Firan Technology Group Corporation
Tel: (416) 299-4000 x314

Joseph R. Ricci, Vice President and CFO
Firan Technology Group Corporation
Tel:(416) 299-4000 x309

Additional information can be found at the Corporation’s website www.ftgcorp.com