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Firan Technology Group Reports Full Year and 4th Quarter 2013 Financial Results

February 5, 2014

Firan Technology Group Corp. announced financial results for the full year and fourth quarter 2013. In a release on January 31 , the Company noted highlights: -Grew Q4 2013 sales by 12 percent over Q4 2012 -Grew full year sales by 1 percent over full year 2012 - Grew Aerospace segment sales by 18 percent 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 percent 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." Business Highlights FTG accomplished many goals throughout 2013 that continue to improve the Corp. 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 percent in 2013 compared to 2012 - Grew Aerospace sales to 33 percent of FTG's total business in 2013 -Achieved sales outside of North America of $7.5M or 13 percent 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 Corp. For FTG, overall sales increased by $0.4M (0.6 percent), 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 percent versus the same period last year. The Circuits Segment sales were down $2.5M or 6.2 percent in FY2013 versus FY2012. In the fourth quarter, Circuits Segment sales were up $1.3M or 13.4 percent compared to the same quarter last year. For the Aerospace segment, sales in FY2013 were up $2.9M or 18.5 percent 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 percent 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 Corp.'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 . FTG is an aerospace and defense electronics product and subsystem supplier to customers around the globe. Report Information: http://www.ftgcorp.com ((Comments on this story may be sent to newsdesk@closeupmedia.com ))


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