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Business Highlights
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.
