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Firan Technology Group Corporation (TSX:FTG) today announced financial results for the full year and fourth quarter 2015.
- Achieved record annual sales of $72.0M, an increase of 18.7% over full year 2014
- Grew Circuits segment 2015 sales by 20.6% over full year 2014
- Grew Aerospace segment sales by 13.3% over full year 2014
- Grew sales outside of North America to $15.2M or 21.1% of total sales, from $10.9M or 17.9% in 2014
- Improved profitability by $7.3M compared to the previous year, including one time deferred tax/ITC recovery and AMIS repayment expense
- Cash flow from operations in the year was $3.6M compared to $1.4M in 2014 after investing $2.1M in capital equipment and deferred development while maintaining R&D spending above 7% of sales
- Recovered $6.7M of Investment Tax Credits due to ongoing strong operating performance of the Canadian sites and an expectation this will continue in future years
“The year 2015 saw consistent strong performance for FTG as a result of past investments in technology, positive impacts from past key new program wins as well as the strengthening of the US dollar,” stated Brad Bourne, President and Chief Executive Officer. He added, “These record results are enabling us to report strong earnings while still investing in our future. As we look forward into 2016, we remain confident of our market position and our ability to continue to grow and perform. With a strong financial foundation, we are looking for ways to accelerate growth through investments in new development programs or acquisitions. We will also continue to invest in R&D across the Corporation to improve our products, our processes and our ability to meet the future demands of our customers.”
FTG accomplished many goals in 2015 that continue to improve the Corporation and position it for the future, including:
- Renewed and expanded credit facility with existing lender, and subsequent to year end, extended the term to a 5 year period
- Repaid AMIS loan in full to the Ontario Government at the end of the interest free period
- Signed Master Contract for cockpit control assemblies for C919 Heads Down Display system in China
- Shipped 9 sets of ground test hardware for Chinese C919 program
- Received airworthiness tags from Civil Aviation Authority of China (CAAC) for control panel assemblies for the C919 aircraft under development by COMAC
- Shipped over $3.9M in sales from China manufacturing facilities in 2015
- Signed new enterprise sourcing agreement with Rockwell Collins for Circuits business with an estimated 15% increase in activity
- Completed certification of Aerospace Toronto facility in accordance with US Department of Defense MIL-DTL-7788
- Completed additional certification of Circuits Toronto facility to include rigid flex technology under US Department of Defense MIL-PRF-31032 certification
- Renewed NADCAP certification at Circuits Chatsworth
- Began work on new development program for a control panel assembly for a helicopter program
- Completed preliminary and detailed design reviews
- Shipped engineering breadboard units
For FTG, overall sales increased by $11.3M or 18.7%, from $60.7M in FY2014 to $72.0M in FY2015. Both businesses and every FTG facility participated in the growth in 2015. For the fourth quarter, sales were $18.7M, an increase of $2.3M or 13.7% versus the same period last year.
Revenues benefited from the weakening of the Canadian dollar versus the US dollar which was down 16 cents in 2015 versus last year. Over 80% of FTG’s revenues are denominated in US dollars. The weakening of the Canadian dollar over the year increased sales by $7.2M in 2015 but US dollar currency hedges in place in the year reduced reported sales and earnings by $2.3M, resulting in a net sales increase due to exchange rate changes of $4.9M or 8.0%. As a result, approximately 8% of the growth was due to the weakening of the Canadian dollar and 10.7% was increased activity.
The Circuits Segment sales were up $9.3M or 20.6% in 2015 versus 2014. All facilities reported increased revenues. In Q4 2015, sales were up $1.8M or 15.1% compared to Q4 2014.
For the Aerospace segment, sales in 2015 were $17.7M compared to $15.6M last year resulting in a 13.3% growth rate. In Q4 2015, sales were up $0.4M or 9.6% compared to Q4 2014.
Gross margins in 2015 were up $2.8M compared to 2014, primarily as a result of increased sales. Again, the currency hedges that matured in the year reduced revenue and therefore margins and earnings by $2.3M.
Earnings before interest, tax, depreciation and amortization (EBITDA) for 2015 was $7.0M, an increase from $4.7M in 2014.
Net profit at FTG in 2015 was $9.5M compared to a net profit of $2.2M in 2014. This improvement is the result of higher gross margins, foreign exchange gains, a one-time write up of tax losses/investment tax credits, offset by higher SG&A, R&D spending and a one-time charge associated with the repayment of the AMIS loan.
The Circuits segment net earnings before corporate and interest and other costs was $5.9M in 2015 compared to $5.3M in 2014. The Circuits joint venture in China did not have a material impact on profitability.
The Aerospace net earnings before corporate and interest and other costs was $0.6M in 2015 versus $0.1M in 2014. Costs in 2015 related to the development of the C919 cockpit assemblies and one new program of $1.2M which were treated as deferred development and not expensed.
Cash flow from operations after investments in capital equipment and deferred development in 2015 was $3.6M compared to a cash flow of $1.4M in 2014.
As at November 30, 2015, the Corporation’s net working capital was $15.0M, an increase of $2.1M over November 30, 2014, primarily due to higher cash and inventories offset by higher accounts payable and the current portion of long term debt.
The Corporation will host a live conference call on Tuesday February 2, 2016 at 11:30 am (EDT) to discuss the results of FY2015.
Anyone wishing to participate in the call should dial 416-340-8527 or 1-800-355-4959 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 16, 2016 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 7827341.
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, 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.