Firan Technology Group ("FTG") Announces First Quarter 2013 Financial Results

Firan Technology Group ("FTG") Announces First Quarter 2013 Financial Results 
TORONTO, ONTARIO -- (Marketwired) -- 04/09/13 -- Firan Technology
Group Corporation (TSX:FTG) today announced financial results for the
first quarter 2013. 


 
--  Bookings grew sequentially from Q4 2012 by $3.6M (30%) to over $15M in
    Q1 2013 
--  Book-to-bill ratio at 1.18:1 in the quarter 
--  Grew Aerospace sales by 11% over Q1 2012

 
"FTG experienced volatility in demand across its businesses in the
first quarter, and this combined with the startup expenses for our
two new aerospace facilities, resulted in lower than anticipated
financial performance," stated Brad Bourne, President and Chief
Executive Officer. He added, "We are still comfortable with the
direction of the Corporation and with the strong bookings in Q1, we
expect to see improved performance going forward. We will continue to
invest in equipment and R&D to move FTG up the value chain and
capture content on key new aircraft platforms being developed
worldwide." 
First Quarter Results: (three months ended March 1, 2013 compared
with three months ended March 2, 2012) 


 
                                                       Q1 2013       Q1 2012
                                                 ---------------------------
                                                                            
Sales                                             $ 13,015,000  $ 13,474,000
                                                                            
                                                 ---------------------------
Operating Earnings (1):                                429,000       840,000
                                                                            
  - Net R&D Investment                                 597,000       575,000
  - Aerospace Start-up losses                          501,000       225,000
  - Taxes                                               22,000         2,000
                                                 ---------------------------
Net (Loss)/ Earnings                              $   (691,000) $     38,000
                                                 ---------------------------
(Loss)/ Earnings per share                                                  
  - basic & diluted                               $      (0.04) $       0.00
                                                 ---------------------------
                                                                            
(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 Corporation's            
     shareholders, creditors and other stakeholders. The Corporation's      
     method of calculating Operating Earnings (Loss) may differ from other  
     corporations and accordingly may not be comparable to measures used by 
     other corporations.                                                    

 
Business Highlights 
FTG accomplished many goals in our first quarter 2013 that continue
to improve the Corporation and position it for the future, including: 


 
--  Signed $30M+ contract with Rockwell Collins for cockpit products 
--  Held Grand Opening of FTG Aerospace - Chatsworth facility 
--  Completed AS9100C certification for FTG Aerospace - Chatsworth 
--  Shipped 2,000th cockpit panel from FTG Aerospace - Tianjin 
--  Invested $700,000 in capital equipment across the Corporation to improve
    engineering tools, and test equipment. 
--  Invested over $600,000 in R&D and deferred development to advance the
    Corporation's technology and develop products for new aircraft
    platforms.

 
For FTG, overall sales decreased by $0.5M (3.4%), from $13.5M in Q1
2012 to $13.0M in Q1 2013.  
The Circuits Segment sales were down $0.9M or 9% in Q1 2013 versus Q1
2012. FTG Circuits - Chatsworth sales were down 25% due to reduced
demand from some key military customers. FTG Circuits - Toronto sales
were up 7% due to increased demand on some programs including the
Boeing 787. 
For the Aerospace segment, sales in Q1 2013 were up $0.4M or 11% to
$4.1M compared to $3.7M in Q1 2012. This growth resulted from strong
demand for commercial aerospace products and increased shipments of
military simulator products compared to same quarter last year. 
Net loss at FTG in Q1 2013 was $691,000 compared to net income of
$38,000 in Q1 2012. Weak sales at FTG Circuits - Chatsworth
negatively impacted Q1 2013 profitability. Startup losses at FTG
Aerospace - Tianjin and FTG Aerospace - Chatsworth also negatively
impacted profitability by $0.5M. 
The Circuits segment net earnings before corporate, interest and tax
costs was $0.1M in Q1 2013 compared to $0.5M in Q1 2012. The
reduction was due to lower activity in FTG Circuits - Chatsworth. 
The Aerospace net loss before corporate and interest costs was $0.04M
in Q1 2013 versus net income of $0.2M in Q1 2012. The reduction was
due to higher startup expenses for the two new facilities this year
partially offset by higher profitability in FTG Aerospace - Toronto. 
As at March 1, 2013, the Corporation's primary source of liquidity
included accounts receivable of $9.4M and inventory of $8.2M. Net
working capital at March 1, 2013 was $ 10.4M.  
The Corporation will host a live conference call on April 10, 2013 at
11:30 am (EST) to discuss the results of the first 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 April 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
8967960. 
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 and Chatsworth, California. 
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.  
Additional information can be found at the Corporation's website
www.ftgcorp.com. 
FIRAN TECHNOLOGY GROUP CORPORATION 
Interim Consolidated Balance Sheets 


 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(unaudited)                                          March 1,  November 30, 
(in thousands of dollars)                                2013          2012 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
ASSETS                                                                      
Current assets                                                              
Cash                                             $        700  $      1,446 
Accounts receivable                                     9,416        10,276 
Taxes receivable                                          320           250 
Inventories                                             8,242         7,927 
Prepaid expenses                                          406           432 
----------------------------------------------------------------------------
                                                       19,084        20,331 
Non-current assets                                                          
Plant and equipment, net                                5,954         5,608 
Goodwill                                                1,039         1,039 
Deferred income taxes                                   1,375         1,375 
Intangible and other assets                               258           244 
----------------------------------------------------------------------------
Total assets                                     $     27,710  $     28,597 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
LIABILITIES AND SHAREHOLDERS' EQUITY                                        
Current liabilities                                                         
Bank indebtedness                                $        221  $        994 
Accounts payable and accrued liabilities                7,842         7,184 
Provisions                                                347           309 
Customer deposits, net of deferred development            125           843 
Current portion of long-term bank debt                    146            44 
----------------------------------------------------------------------------
                                                        8,681         9,374 
Non-current liabilities                                                     
Long-term bank debt                                       983           361 
Subordinated loan                                       3,686         3,613 
Government assistance                                   1,122         1,234 
----------------------------------------------------------------------------
Total liabilities                                      14,472        14,582 
----------------------------------------------------------------------------
                                                                            
Shareholders' equity                                                        
Deficit                                          $     (9,795) $     (9,104)
Accumulated other comprehensive loss                     (180)          (85)
----------------------------------------------------------------------------
                                                       (9,975)       (9,189)
Share capital                                                               
  Common shares                                        12,681        12,681 
  Preferred shares                                      2,218         2,218 
Contributed surplus                                     8,314         8,305 
----------------------------------------------------------------------------
Total shareholders' equity                             13,238        14,015 
----------------------------------------------------------------------------
Total liabilities and shareholders' equity       $     27,710  $     28,597 
----------------------------------------------------------------------------
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FIRAN TECHNOLOGY GROUP CORPORATION 
Interim Consolidated Statements of (Loss) Earnings 


 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                       Three months ended   
----------------------------------------------------------------------------
(unaudited)                                            March 1,    March 2, 
(in thousands of dollars, except per share amounts)        2013        2012 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Sales                                                $   13,015  $   13,474 
----------------------------------------------------------------------------
                                                                            
Cost of sales                                                               
  Cost of sales                                          10,523      10,052 
  Depreciation of plant and equipment                       410         394 
----------------------------------------------------------------------------
Total cost of sales                                      10,933      10,446 
----------------------------------------------------------------------------
Gross margin                                              2,082       3,028 
----------------------------------------------------------------------------
                                                                            
Expenses                                                                    
  Selling, general and administrative                     2,074       2,148 
  Research and development costs                            667         605 
  Recovery of research and development costs                (70)        (30)
  Depreciation/amortization of plant and equipment                          
   and intangible assets                                     38          29 
  Interest expense on short-term debt                        14          21 
  Interest expense on long-term debt                         78          61 
  Foreign exchange (gain) loss                              (50)        154 
----------------------------------------------------------------------------
Total expenses                                            2,751       2,988 
----------------------------------------------------------------------------
                                                                            
(Loss) earnings before income taxes                        (669)         40 
                                                                            
Income tax expense                                           22           2 
----------------------------------------------------------------------------
                                                                            
Net (loss) earnings                                  $     (691) $       38 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Loss per share                                                              
  Basic                                              $    (0.04) $        - 
  Diluted                                            $    (0.04) $        - 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
FIRAN TECHNOLOGY GROUP CORPORATION 
Interim Consolidated Statements of Comprehensive loss 


 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                       Three months ended   
----------------------------------------------------------------------------
(unaudited)                                            March 1,    March 2, 
(in thousands of dollars)                                  2013        2012 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Net (loss) earnings                                  $     (691) $       38 
----------------------------------------------------------------------------
                                                                            
Other comprehensive income (loss)                                           
                                                                            
  Foreign currency translation adjustments                  142        (118)
  Net unrealized loss on derivative financial                               
   instruments designated as cash flow hedges              (237)          - 
----------------------------------------------------------------------------
                                                            (95)       (118)
----------------------------------------------------------------------------
                                                                            
Total comprehensive loss                             $     (786) $      (80)
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
FIRAN TECHNOLOGY GROUP CORPORATION 
Interim Consolidated Statements of Changes in Shareholders' Equity 


 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three months ended March                                                    
 1, 2013                                                                    
                                                                            
(unaudited)                         Common       Preferred                  
(in thousands of dollars)           Shares          Shares          Deficit 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Balance, November 30, 2012 $        12,681 $         2,218  $        (9,104)
Net loss                                 -               -             (691)
Stock-based compensation                 -               -                - 
Foreign currency                                                            
 translation adjustments                 -               -                - 
Net unrealized loss on                                                      
 derivative financial                                                       
 instruments designated as                                                  
 cash flow hedges                                                           
----------------------------------------------------------------------------
Balance, March 1, 2013     $        12,681 $         2,218  $        (9,795)
----------------------------------------------------------------------------
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----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three months ended March                                                    
 1, 2013                                       Accumulated                  
                                                     Other            Total 
(unaudited)                    Contributed   Comprehensive    Shareholders' 
(in thousands of dollars)          Surplus   Income (Loss)           Equity 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Balance, November 30, 2012 $         8,305 $           (85) $        14,015 
Net loss                                 -               -             (691)
Stock-based compensation                 9               -                9 
Foreign currency                                                            
 translation adjustments                 -             142              142 
Net unrealized loss on                                                      
 derivative financial                                                       
 instruments designated as                                                  
 cash flow hedges                                     (237)            (237)
----------------------------------------------------------------------------
Balance, March 1, 2013     $         8,314 $          (180) $        13,238 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
                                                                            
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three months ended March                                                    
2, 2012                                                                     
                                                                            
(unaudited)                         Common       Preferred                  
(in thousands of dollars)           Shares          Shares          Deficit 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Balance, November 30, 2011 $        12,681 $         2,218  $       (10,032)
Net earnings                             -               -               38 
Stock-based compensation                 -               -                - 
Foreign currency                                                            
 translation adjustments                 -               -                - 
----------------------------------------------------------------------------
Balance, March 2, 2012     $        12,681 $         2,218  $        (9,994)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
 
                                                                            
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three months ended March                                                    
2, 2012                                        Accumulated                  
                                                     Other            Total 
(unaudited)                    Contributed   Comprehensive    Shareholders' 
(in thousands of dollars)          Surplus   Income (Loss)           Equity 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Balance, November 30, 2011 $         8,249 $            12  $        13,128 
Net earnings                             -               -               38 
Stock-based compensation                 9               -                9 
Foreign currency                                                            
 translation adjustments                 -            (118)            (118)
----------------------------------------------------------------------------
Balance, March 2, 2012     $         8,258 $          (106) $        13,057 
----------------------------------------------------------------------------
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FIRAN TECHNOLOGY GROUP CORPORATION 
Interim Consolidated Statements of Cash Flows 


 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                       Three months ended   
----------------------------------------------------------------------------
(unaudited)                                            March 1,    March 2, 
(in thousands of dollars)                                  2013        2012 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net inflow (outflow) of cash related to the                                 
 following:                                                                 
                                                                            
Operating activities                                                        
Net (loss) earnings                                  $     (691) $       38 
Items not affecting cash:                                                   
  Stock-based compensation                                    9           9 
  Gain on disposal of plant and equipment                   (25)         (2)
  Effect of exchange rates on U.S. dollar Canadian                          
   debt                                                      50         (55)
  Depreciation of plant and equipment                       436         411 
  Amortization of intangible assets                          12          12 
  Amortization of deferred financing costs                    7          24 
  AMIS interest accretion                                    73          47 
  Amortization of government assistance                    (112)        (71)
Changes in non-cash operating working capital               466      (1,860)
----------------------------------------------------------------------------
                                                            225      (1,447)
----------------------------------------------------------------------------
                                                                            
Investing activities                                                        
  Additions to plant and equipment                         (717)       (363)
  Proceeds from disposal of plant and equipment              25           3 
----------------------------------------------------------------------------
                                                           (692)       (360)
----------------------------------------------------------------------------
                                                                            
Financing activities                                                        
  Decrease in bank indebtedness                            (823)          - 
  Proceeds from subordinated loan and government                            
   assistance                                                 -       1,172 
  Proceeds from long-term bank debt                         717           - 
  Repayments of long-term bank debt                         (18)       (217)
----------------------------------------------------------------------------
                                                           (124)        955 
----------------------------------------------------------------------------
                                                                            
Effects of foreign exchange rate changes on cash                            
 flow                                                      (155)        (87)
----------------------------------------------------------------------------
                                                                            
Net cash flow                                              (746)       (939)
                                                                            
Cash, beginning of period                                 1,446       1,944 
----------------------------------------------------------------------------
                                                                            
Cash, end of period                                  $      700  $    1,005 
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Disclosure of cash payments                                                 
  Payment for interest                               $       19  $       40 
  Payments for income taxes                          $       22  $        2 
----------------------------------------------------------------------------
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Contacts:
Firan Technology Group Corporation
Bradley C. Bourne
President and CEO
(416) 299-4000 x314
bradbourne@ftgcorp.com 
Firan Technology Group Corporation
Joseph R. Ricci
Vice President and CFO
(416) 299-4000 x309
joericci@ftgcorp.com
www.ftgcorp.com
 
 
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