FTG's Circuits Segment Posts 7.6% Sales Increase in 1Q19
April 11, 2019 | Globe NewswireEstimated reading time: 4 minutes
Firan Technology Group Corporation has announced financial results for the first quarter 2019.
- Achieved sales of $25.4M, a 13% increase over Q1 2018 after excluding $5M of one-time revenue adjustment on a development contract from Q1 last year
- Achieved record sales from the FTG Aerospace Tianjin facility, up 68% over Q1 2018
- Achieved Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) of $3.2M in Q1 2019, an increase of $1.7M or 122% over last year
- Achieved trailing twelve month EBITDA of $12.3M
- Achieved net income of $1.2M and diluted earnings per share of $0.05 in Q1 2019, a $1.5M increase over Q1 2018
- Achieved bookings of $24.3M in the quarter.
- Subsequent to the end of Q1 2019, FTG announced it had entered into a definitive purchase agreement to acquire a US based printed circuit board manufacturer, subject to approval of the Committee on Foreign Investment in the United States (CFIUS) and other customary closing conditions.
“The first quarter of 2019 was the fourth quarter in a row with strong operating results. Our first quarter is typically a seasonally slower quarter with lower profitability as it includes the Christmas period and Chinese Spring Festival but this year showed improved performance across the Corporation,” stated Brad Bourne, president and chief executive officer. He added, “As announced after the quarter, we are excited about our pending acquisition which will add needed capacity for standard circuit board manufacturing freeing up capacity in existing sites for higher end product and expand our offering for the US defense market.”
Business Highlights
FTG accomplished many goals in Q1 2019 that continue to improve the Corporation and position it for the future, including:
- Achieved record sales from the FTG Aerospace Tianjin facility, up 68% over Q1 2018
- Developed new Power over Ethernet (POE) interface solution for simulator products
- Received Canadian Technical Standard Order (TSO) approval for a Cursor Control Device enabling FTG to begin production of this product under development over the past 3 years
- Subsequent to the end of Q1, FTG announced it has entered into a definitive agreement to acquire a US based circuit board manufacturer – to add capacity in the Circuits business and to enable FTG to offer standard circuit board product to US based defense contractors. The acquisition is conditional upon approval of the Committee on Foreign Investment in the United States (CFIUS) and other customary closing conditions.
For FTG, overall sales decreased by $2.1M or 7.8% from $27.5M in Q1 2018 to $25.4M in Q1 2019. Q1 2018 had a one-time $5M revenue adjustment for the development program for the C919 aircraft in China. Excluding this, the first quarter 2019 was up $2.8M or 13%. Against the adjusted baseline, both the circuits and aerospace segments contributed to the growth. The Canadian dollar was 7 cents weaker in Q1 2019 compared to the same quarter last year and this contributed approximately $1.5M to the growth.
The circuits segment sales in Q1 2019 were $15.2M, up $1.1M or 7.6% versus Q1 2018, of which Circuits Toronto was up while Circuits Chatsworth was down. Activity in China was approximately $1M and is reported in the Circuits Toronto sales as all orders flow through the Toronto site.
For the aerospace segment, sales in Q1 2019 were $10.2M compared to $13.4M in Q1 of last year, or $8.4M in Q1 last year excluding the one-time development program revenue adjustment. Excluding this amount, sales were up $1.8M or 21.1%. All three Aerospace sites were up year-over-year against the adjusted Q1 2018 sales.
Gross margins of $6.8M in Q1 2019 were up $1.9M compared to Q1 2018. In Q1 2019, the gross margin was 26.6% compared to 17.6% in Q1 2018 (or about 20.2% in Q1 2018 excluding the $5M one-time revenue and $0.3M one-time margin).
Earnings before interest, tax, depreciation and amortization (EBITDA) for FTG in Q1 2019 was $3.2M compared to $1.4M in Q1 2018. Trailing twelve month EBITDA is $12.3M.
Net profit after tax at FTG in Q1 2019 was $1.2M compared to a net loss of $0.3M in Q1 2018. Higher margins, lower R&D spending and lower interest costs were offset by higher SG&A costs and higher foreign exchange losses. Five of FTG’s six sites had improved profitability while the FTG Printronics JV in China was flat.
The Circuits segment net earnings before corporate and interest and other costs was $2.2M in Q1 2019 compared to $0.8M in Q1 2018.
The Aerospace net earnings before corporate and interest and other costs in Q1 2019 was $0.5M versus $0.0M in Q1 2018. Q1 2018 had approximately $0.3M benefit from the one-time revenue adjustment noted above.
As at March 1, 2019, the Corporation’s net working capital was $30.4M, an increase of $1.7M over year-end 2018. Higher inventories and lower accounts payable/accrued liabilities were offset by lower cash, lower accounts receivables and higher bank indebtedness.
Cashflow in Q1 2019 was ($1.9M) compared to ($0.3M) in Q1 last year, after investments in capital equipment and contract costs. In Q1 2019, cash incentive compensation payments were $1.0M and cash taxes paid were $0.7M. The incentive compensation payments were higher in 2019 due to improved performance. The cash tax payments are the result of being taxable in Ontario and represent a one-time catch up payment of $0.6M for 2018 and installment payments for Q1 2019.
Net debt to EBITDA was 0.35:1 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.
Suggested Items
Absolute EMS Successfully Recertifies ISO 9001:2015 and AS9100 Standards
03/26/2024 | Absolute EMS, Inc.Absolute EMS, Inc., an award-winning EMS provider of turnkey contract manufacturing services, is proud to announce the successful recertification of its ISO 9001:2015 and AS9100 Rev D SAE International Aerospace Standards.
Arlon EMC Receives IPC-4101 QPL Recertification
03/20/2024 | Arlon Electronic MaterialsArlon Electronic Materials has successfully completed an intensive two-day recertification audit by IPC Validation Services that examined Arlon’s manufacturing processes and testing procedures to assure that they are in conformance to the requirements of IPC-4101E-WAM1, the Specification for Base Materials for Rigid and Multilayer Printed Boards.
Northrop Grumman Honors Suppliers for Excellence
03/14/2024 | Northrop GrummanNorthrop Grumman Corporation honored more than 70 suppliers for their outstanding contributions in 2023. In an annual recognition event, the companies included women-, minority- and veteran-owned small businesses as well as those operating in underdeveloped areas.
Cicor Acquires TT Electronics IoT Solutions
03/04/2024 | Cicor Technologies Ltd.The Cicor Group has signed an agreement to acquire TT Electronics IoT Solutions Ltd, with three production sites in the UK and China.
AEM, Texas Aerospace Technologies Bolster Partnership for Latin America
02/26/2024 | AEM Corp.Canadian avionics manufacturer, Anodyne Electronics Manufacturing Corp. (AEM), is pleased to announce a partnership expansion with Texas Aerospace Technologies, a subsidiary of Texas Aerospace Services, to add AEM’s new MTP136D modern panel-mount P25 VHF FM Forest Service radio to its lineup of product offerings for their Latin American customers.