-- Grew sales by 3.6% over full year 2011-- Grew Aerospace segment sales by 27% over full year 2011-- Improved Operating Earnings(1) by over $1M over full year 2011-- Invested $1.1M in start-up losses for new Aerospace facilities in Tianjin, China and Chatsworth, California compared to less than $0.2M in 2011-- Invested $1M in capital assets for two new Aerospace facilities in Tianjin, China and Chatsworth, California-- Generated revenues over $900,000 from the two new Aerospace facilities in 2012-- R&D spending remained above 5% of sales
"FTG continued to improve key aspects of the business in 2012 while making key strategic investments in new facilities for our Aerospace business for the future", stated Brad Bourne, President and Chief Executive Officer. He added, "The addition of facilities in China and the US, the two largest aerospace markets, are already resulting in new revenue streams for FTG."
Full Year 2012 Results: (Full year ended November 30, 2012 compared with full year ended November 30, 2011)
Full Year Full Year 2012 2011 ---------------------------Sales $ 55,646,000 $ 53,730,000 --------------------------- Operating Earnings(1): 4,554,000 3,511,000 - Net R&D Investment 2,533,000 2,567,000 - Aerospace Tianjin and Chatsworth Start-up Losses 1,062,000 176,000 - Taxes 31,000 (706,000) ---------------------------Net Earnings $ 928,000 $ 1,474,000 ---------------------------Earnings per share - basic 0.05 0.08 $ $ - diluted $ 0.05 $ 0.08
Fourth Quarter Results: (three months ended November 30, 2012 compared with three months ended November 30, 2011)
Q4 2012 Q4 2011 ---------------------------Sales $ 13,719,000 $ 13,981,000 --------------------------- Operating Earnings (1): 1,135,000 638,000 - Net R&D Investment 589,000 358,000 - Aerospace Tianjin and Chatsworth Start-up Losses 419,000 73,000 - Taxes 23,000 (708,000) ---------------------------Net Earnings $ 104,000 $ 915,000 ---------------------------Earnings per share - basic $ 0.01 $ 0.05 - diluted $ 0.01 $ 0.05(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.
FTG accomplished many goals throughout 2012 that continue to improve the Corporation and position it for the future, including:
-- Continued year-over-year sales growth.-- Achieved earnings of $1,990,000 in the year before start-up costs at the two new Aerospace facilities.-- Strengthened management team with key new additions across all functional areas.-- Expanded sales outside of North America.-- Signed Letter of Intent for first significant program in China on the C919 single aisle aircraft being developed.-- Shipped first products from both FTG Aerospace Tianjin and FTG Aerospace Chatsworth.-- Completed implementation of a new Enterprise Resource Planning (ERP) system in the existing Aerospace facility in Toronto and the new facility in Chatsworth, CA.-- Began implementation of a new ERP system in the new Aerospace facility in Tianjin, China.-- Transitioned to IFRS accounting standard as required for all Canadian companies.-- Received final increment of Ontario Government AMIS loan bringing total loan to $5.1M in support of investments in FTG Circuits-Toronto facility.-- Invested $2.9M in capital assets across FTG in the year including $1M for the two new facilities.-- Installed third Laser Direct Imaging (LDI) system in FTG Circuits- Toronto.-- Successfully completed AS9100 audits for all FTG's operational sites.-- Completed 3-year MIL-P-55110 and MIL-P-50884 validation audit at FTG Circuits-Chatsworth.
For FTG, overall sales increased by $1.9M (3.6%), from $53.7M in FY2011 to $55.6M in FY2012. FTG Aerospace drove the growth in the year. For the fourth quarter, sales were $13.7M, a decrease of $0.3M or 1.9% versus the same period last year, due to fewer production days in Q4 2012.
The Circuits Segment sales were down $1.4M or 3.4% in FY2012 versus FY2011. The lower sales are the result of lower demand from US based customers.
For the Aerospace segment, sales in FY2012 were up $3.3M or 27% compared to FY2011. Sales from the two new sites totaled $0.9M in 2012. Sales from FTG Aerospace Toronto were up $2.4M or 20% in FY2012. The growth was primarily due to increased demand from existing customers.
Gross margins were up in FY 2012 by $0.3M. Increased gross margins of $0.7M at the three established plants, due to improved operating metrics, were partially offset by start-up production costs of $0.4M at the two new Aerospace facilities.
Net earnings at FTG in FY2012 were $0.9M compared to net earnings of $1.5M in FY2011. SG&A costs were flat, foreign exchange losses increased $0.2M in FY 2012 and FY2011 included a deferred tax recovery of $0.7M. On a pre-tax basis, excluding the start-up costs for the two new facilities, net earnings in FY2012 were up $1.0M compared to FY2011.
The Circuits segment net earnings before corporate and interest costs increased to $3.4M in FY2012 compared to $2.3M in FY2011, on lower sales. The improvement is due to improved manufacturing efficiencies, reduced scrap and stable SG&A costs.
The Aerospace net earnings before corporate and interest costs dropped to $0.4M in FY2012 versus $1.1M in FY2011. The net earnings this year were reduced by the $1.1M start-up expenses for the two new facilities. Also in FY2012 were costs related to implementing a new ERP system in all Aerospace sites. Costs related to development for the C919 cockpit assemblies of $0.5M were treated as deferred development and not expensed in FY2012.
As at November 30, 2012, the Corporation's primary source of liquidity included accounts receivable of $10.5M and inventory of $7.9M. Inventories are flat in FY2012 on increased sales. Net working capital at November 30, 2012 was $ 10.9M.
The Corporation will host a live conference call on Friday, February 1, 2013 at 8:30 am (EDT) to discuss the results of FY2012.
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 February 14, 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 9979071.
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.
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
Bradley C. Bourne
President and CEO
(416) 299-4000 x314
Firan Technology Group Corporation
Joseph R. Ricci
Vice President and CFO
(416) 299-4000 x309