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Firan Technology Group Corporation (FTG) today announced financial results for the full year and fourth quarter 2018.
- Achieved record full year sales in 2018 of $109.4M compared to $94.7M in 2017
- Grew Aerospace segment by 27% over last year and grew Circuits segment by 8% over last year
- Achieved record EBITDA of $10.5M, an increase of $2.9M or 38% over last year
- Achieved net income of $2.9M and diluted earnings per share of $0.12, a 127% increase over 2017
- Generated $8.9M in cash flow from operations, after investments in capital equipment and all development programs, compared to cash usage of $0.9M in 2017
“FTG made great progress in 2018 in demonstrating the strength of the company and our earning potential”, stated Brad Bourne, president and chief executive officer. He added, “Our sales growth was exceptional and as each quarter passed the operating results improved.”
FTG accomplished many goals in 2018 that continue to improve the Corporation and position it for the future, including:
Growing the revenue from the simulator market dramatically in 2018 to over 10% of total revenue as a result of:
- A new multimillion dollar contract with FlightSafety for KC-46 simulator cockpit assemblies
- Ongoing simulator work with CAE for C-130 simulators
- New simulator work with CAE on a new military program for FTG Toronto and a new commercial program for FTG Tianjin
- New simulator work with Rockwell’s simulation subsidiary in Tianjin
Strengthened our cockpit product assembly business by:
- Signing a contract amendment with Shanghai Avionics for C919 cockpit product assemblies valued at $4M USD and shipping first redesigned hardware for the flight test program
- Won three new cursor control device assemblies for use on air transport, business jet and rotary wing aircraft
- Completed qualification testing of a cursor control device for a helicopter program and a power supply for the LE-700 training aircraft in China
- Won a contract to develop cockpit panels for the Orion manned spacecraft being developed for NASA
- Received our first ever patent for high temperature rigid-flex circuit board technology in the UK
- Completed our first robotic automation project including Industry 4.0 technology at our Circuits Toronto facility
For FTG, overall sales increased by $14.7M or 15.5% from $94.7M in 2017 to $109.4M in 2018. Both the circuits and aerospace segments contributed to the growth. For the full year the average exchange rate between the Canadian and US dollar was 1.2 cents stronger in 2018 versus 2017. For the fourth quarter, sales were $28.0M compared to $22.9M in Q4 last year, an increase of 22.5%.
The Circuits segment sales in 2018 were $64.1M, up $5.0M or 8.4% versus 2017. In the fourth quarter, Circuits sales were up by $3.7M or 27% to $17.4M.
For the Aerospace segment, sales in 2018 were $45.3M compared to $35.6M last year resulting in a 27.4% growth rate. In the fourth quarter sales were up $1.5M or 15.8%.
Gross margins in 2018 were up $2.1M compared to 2017 to $25.3M. In 2018 the gross margin was 23.1% compared to 24.4% in 2017. The margin in 2018 was impacted by extra costs incurred in Chatsworth to support the transition of revenue from the acquisitions in 2016 and inventory provisions also taken in Chatsworth to adjust the acquired inventory to the FTG standard inventory valuation methodology. In Q4 2018 the gross margins were $7.3M or 25.9% compared to $5.3M or 23.1% in Q4 2017.
Earnings before interest, tax, depreciation and amortization (EBITDA) for FTG for Q4 2018 was $3.0M compared to $1.8M in Q4 2017. EBITDA was $10.5M for the full year 2018.
Net profit after tax at FTG in 2018 was $2.9M compared to a net profit of $1.3M in 2017. Higher margin and lower R&D spending was offset by higher SG&A costs and $0.5M of restructuring costs in 2018. Q4 2018 had net income after tax of $1.2M compared to $0.2M in Q4 2017.
The Circuits segment net earnings before corporate and interest and other costs was $9.4M in 2018 compared to $8.5M in 2017.
The Aerospace net earnings before corporate and interest and other costs in 2018 was ($0.4M) versus ($2.5M) in 2017. 2018 had higher sales and lower R&D costs offset by $1.7M inventory provision increases and $0.3M in restructuring costs.
As at November 30, 2018, the Corporation’s net working capital was $28.7M, an increase of $4.3M over year end 2017. Higher cash and accounts receivables were offset by lower inventories and higher accounts payable and accrued liabilities and provisions.
Net debt to EBITDA, was 0.23:1 for the trailing 12 month period.
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, Fort Worth, Texas and Tianjin, China.