Firan Technology Group Corporation (FTG.TO)
- ACCESSWIRE
Firan Technology Group Corp. to Host Earnings Call
NEW YORK, NY / ACCESSWIRE / October 8, 2020/ Firan Technology Group Corp.
- GlobeNewswire
Firan Technology Group Corporation (“FTG”) Announces Third Quarter 2020 Financial Results
TORONTO, Oct. 07, 2020 (GLOBE NEWSWIRE) -- Firan Technology Group Corporation (TSX: FTG) today announced financial results for the third quarter 2020. * Ended Q3 2020 with over $47M in total backlog, of which $26M is due in Q4 2020 * Generated $3.2M in cash in Q3 and ended the quarter with $8.8M in net cash on the balance sheet * Achieved a gross margin percentage of 27.6% * Received $0.8M in Canadian Emergency Wage Subsidy in the quarter * Entered into a new 2 year, $20M USD committed credit facility on terms similar to the previous agreement with our current lender Third Quarter Results: (three months ended August 28, 2020 compared with three months ended August 30, 2019) Q3 2020 Q3 2019 Sales$24,364,000 $27,953,000 Gross Margin 6,722,000 7,923,000 Gross Margin (%) 27.6% 28.3% Operating Earnings (1): 3,600,000 4,367,000 • R&D Investment 1,302,000 1,223,000 • R&D Tax Credits (195,000) (214,000) • Foreign Exchange Loss 1,011,000 236,000 • Amortization of Intangibles 94,000 284,000 Net Earnings before Tax 1,388,000 2,838,000 • Income Tax 773,000 1,087,000 • Non-controlling Interests (30,000) (32,000) Net Earnings After Tax$645,000 $1,783,000 Earnings per share \- basic$0.03 $0.08 \- diluted$0.03 $0.07 Year-to-Date: (nine months ended August 28, 2020 compared with nine months ended August 30, 2019) YTD 2020 YTD 2019 Sales$75,724,000 $85,578,000 Gross Margin 19,356,000 24,394,000 Gross Margin (%) 25.6% 28.5% Operating Earnings (1): 8,155,000 13,073,000 • R&D Investment 3,966,000 3,507,000 • R&D Tax Credits (570,000) (409,000) • Foreign Exchange Loss 596,000) 532,000 • Amortization of Intangibles 490,000 827,000 • Impairment of Intangibles 1,145,000 - Net Earnings before Tax 2,528,000 8,616,000 • Income Tax 2,544,000 3,242,000 • Non-controlling Interests (98,000) (109,000) Net Earnings After Tax$82,000 $5,483,000 Earnings per share \- basic$0.00 $0.24 \- diluted$0.00 $0.22 (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. Business HighlightsFTG accomplished many goals in Q3 2020 that continue to improve the Corporation and position it for the future, including: * Received further Canadian government support to offset the impact of COVID-19, in the form of $0.8M grant * Reduced overtime across FTG to reduce wage costs, particularly in sites focused on the commercial aerospace markets * Reduced headcount by 3-4% primarily through attrition * Achieved a 0.87:1 book-to-bill ratio with increased backlog in the US sites focused more on defense work and decreased backlog in Canadian and Chinese sites focused more on commercial aerospace programs * Backlog negatively impacted by strengthening Canadian dollar that reduced backlog by approximately $3M compared to prior quarter * FTG Aerospace Toronto was approved by Transport Canada as an approved maintenance organization (AMO) opening up future aftermarket opportunitiesFor FTG, overall sales decreased by $3.6M or 13% from $28.0M in Q3 2019 to $24.4M in Q3 2020. The Canadian dollar was $0.02 weaker in Q3 this year versus Q3 last year. The COVID-19 pandemic has negatively impacted commercial aerospace activity this year and this impacted FTG’s sites predominantly focused on this market which include Circuits Toronto and the facilities in China. On a year-to-date basis, sales were $75.7M compared to $85.6M for the same period last year. The drop is due to the COVID-19 pandemic in combination with timing on simulator related orders.The Circuits Segment sales were down $2.6M, or 14% in Q3 2020 versus Q3 2019. Included in Q3 2020 were sales of $1.6M from Circuits Fredericksburg compared to $1.2M in Q3 last year when that site was acquired. Circuits Fredericksburg was slightly impacted by a fire in that facility at the start of the quarter. The facility is fully operational and remediation is complete. The Toronto and the Joint Venture in China sites were all down in the quarter due to reduced demand. Year-to-date sales in the Circuits Segment were $51.7M vs $52.8M in 2019. Circuits Fredericksburg contributed $6.3M in 2020 compared to $1.2M in 2019. For the Aerospace Segment, sales in Q3 2020 were $8.7M compared to $9.6M in Q3 last year. Simulator related sales were down $1M in Q3 2020. Simulator revenues are expected to be strong in the fourth quarter. The Aerospace sites were negatively impacted by extended component lead times as a result of COVID-19 impacts on the supply chain. Year-to-date 2020, Aerospace Segment sales were down $8.8M or 27%, partly due to lower demand and partly due to timing of simulator related orders.Gross margins in Q3 2020 were $6.7M or 27.6% compared to $7.9M or 28.3% in Q3 2019. The lower sales impacted the overall margin while strong cost control and the Canadian wage subsidy partially offset this drop.Earnings before interest, tax, depreciation and amortization (EBITDA) for FTG for Q3 2020 was $3.3M compared to $4.3M in Q3 2019. The following table reconciles net earnings to EBITDA(2) for the quarter and the trailing 12 months ended August 28, 2020. Q3 2020Trailing 12 Months Net earnings to equity holders of FTG 645,000 657,000 Add: Interest, accretion 200,000 630,000 Income taxes 773,000 3,048,000 Depreciation/Amortization Stock Comp./Impairment 1,646,000 7,615,000 EBITDA$3,264,000$11,950,000 (2) EBITDA are not measures recognized under International Financial Reporting Standards (“IFRS”). Management believes that these measures are important to many of the Corporation’s shareholders, creditors and other stakeholders. The Corporation’s method of calculating EBITDA may differ from other corporations and accordingly may not be comparable to measures used by other corporations. Net profit after tax at FTG in Q3 2020 was $0.6M or $0.03 per diluted share compared to a net profit of $1.8M or $0.07 per diluted share in Q3 2019. Net profit after tax in Q3 2020 was impacted by the lower sales, offset by strong cost controls and the Canadian wage subsidy.The Circuits Segment net earnings before corporate and interest and other costs was $1.2M in Q3 2020 compared to $3.3M in Q3 2019. The lower sales was the most significant impact on the segment profitability. For the year-to-date, the net earnings before corporate and interest and other costs was $5.7M compared to $9.4M in the first 9 month of 2019.The Aerospace net earnings before corporate and interest and other costs in the quarter was $1.2M in Q3 2020 versus $0.1M in Q3 2019. The improvement is primarily due to improved performance at the Chatsworth facility, offset by the impact of lower sales. In the first 9 months of 2020, the net earnings before corporate and interest and other costs was ($0.2M) compared to $1.3M in the same period last year. Reduced sales impacted earnings and Q1 2020 included $1.1M cost for impairment of intangible assets.As at August 28, 2020, the Corporation’s net working capital was $37.1M, compared to $28.6M at year-end in 2019. The increase is due to higher cash, higher inventories, lower accounts payable offset by lower accounts receivable. Also at year-end, all debt was classified as current and with the new bank facility, $4.2M is now long term debt.Net cash at the end of Q3 2020 was $8.8M compared to net cash of $2.2M at the end of 2019. The Corporation will host a live conference call on Thursday October 8, 2020 at 8:30am (Eastern) to discuss the results of Q3 2020.Anyone wishing to participate in the call should dial 647-427-2311 or 1-866-521-4909 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 November 7, 2020 and will be available on the FTG website at www.ftgcorp.com. The number to call for a rebroadcast is 416-621-4642 or 1-800-585-8367, Conference ID 3473018. ABOUT FIRAN TECHNOLOGY GROUP CORPORATIONFTG 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, Fredericksburg, Virginia and a joint venture in Tianjin, China.FTG Aerospace manufactures and repairs 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.The Corporation's shares are traded on the Toronto Stock Exchange under the symbol FTG.FORWARD-LOOKING STATEMENTSThis 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.For further information please contact: Bradley C. Bourne, President and CEO Firan Technology Group Corporation Tel: (416) 299-4000 x314 bradbourne@ftgcorp.comJamie Crichton, Vice President and CFO Firan Technology Group Corporation Tel:(416) 299-4000 x264 jamiecrichton@ftgcorp.comAdditional information can be found at the Corporation’s website www.ftgcorp.com FIRAN TECHNOLOGY GROUP CORPORATION Interim Condensed Consolidated Statements of Financial Position (Unaudited) August 28,November 30, (in thousands of Canadian dollars) 2020 2019 ASSETS Current assets Cash $ 15,710$7,647 Accounts receivable 15,634 21,085 Contract assets 498 432 Inventories 23,456 21,990 Prepaid expenses 2,332 1,770 57,630 52,924 Non-current assets Plant and equipment, net 13,206 13,830 Right-of-use assets 12,540 - Deferred income tax assets 724 724 Investment tax credits receivable 1,587 3,035 Deferred development costs 218 279 Intangible assets and other assets, net 943 2,585 Total assets $ 86,848$73,377 LIABILITIES AND EQUITY Current liabilities Accounts payable and accrued liabilities$ 11,994$17,104 Provisions 767 946 Contract liabilities 2,623 216 Current portion of bank debt 2,704 5,416 Current portion of lease liabilities 1,717 - Income tax payable 732 639 20,537 24,321 Non-current liabilities Bank debt 4,246 - Lease liabilities 11,080 - Deferred tax payable 1,412 1,297 Total liabilities 37,275 25,618 Equity Retained earnings$ 17,827$17,745 Accumulated other comprehensive loss 583 (1,554) 18,410 16,191 Share capital Common Shares 19,663 19,323 Preferred Shares 2,218 2,218 Contributed surplus 8,285 8,933 Total equity attributable to FTG's shareholders 48,576 46,665 Non-controlling interest 997 1,094 Total equity 49,573 47,759 Total liabilities and equity$ 86,848$73,377 FIRAN TECHNOLOGY GROUP CORPORATION Interim Condensed Consolidated Statements of Earnings (loss) Three months endedNine months ended (Unaudited)August 28, August 30, August 28, August 30, (in thousands of Canadian dollars, except per share amounts) 2020 2019 2020 2019 Sales $ 24,364 $27,953 $ 75,724 $85,578 Cost of sales Cost of sales 16,203 19,097 52,080 58,564 Depreciation of plant and equipment 1,048 933 3,111 2,620 Depreciation of right-of-use assets 391 - 1,177 - Total cost of sales 17,642 20,030 56,368 61,184 Gross margin 6,722 7,923 19,356 24,394 Expenses Selling, general and administrative 2,827 3,367 10,314 10,728 Research and development costs 1,302 1,223 3,966 3,507 Recovery of investment tax credits, net (195) (214) (570) (409) Depreciation of plant and equipment 62 40 162 123 Depreciation of right-of-use assets 12 - 37 - Amortization of intangible assets 94 284 490 827 Interest expense on bank debt, net 61 69 159 236 Accretion on lease liabilities 139 - 417 - Stock based compensation 21 80 112 234 Foreign exchange loss 1,011 236 596 532 Impairment of intangible assets - - 1,145 - Total expenses 5,334 5,085 16,828 15,778 Earnings before income taxes 1,388 2,838 2,528 8,616 Current income tax expense 734 1,044 2,429 3,115 Deferred income tax expense 39 43 115 127 Total income tax expense 773 1,087 2,544 3,242 Net earnings (loss)$ 615 $1,751 $ (16) $5,374 Attributable to: Non-controlling interest$ (30) $(32) $ (98) $(109) Equity holders of FTG$ 645 $1,783 82 5,483 Earnings per share, attributable to the equity holders of FTG Basic$ 0.03 $0.08 $ - $0.24 Diluted$ 0.03 $0.07 $ - $0.22 FIRAN TECHNOLOGY GROUP CORPORATION Interim Condensed Consolidated Statements of Comprehensive Income (Loss) Three months endedNine months ended (Unaudited) August 28, August 30, August 28, August 30, (in thousands of Canadian dollars) 2020 2019 2020 2019 Net earnings (loss) $ 615 $1,751 $ (16) $5,374 Other comprehensive earnings (loss) to be reclassified to net earnings (loss) in subsequent periods: Change in foreign currency translation adjustments (1,071) (634) (305) (344) Change in net unrealized loss (gain) on derivative financial instruments designated as cash flow hedges 4,117 543 3,257 (782) Change in tax impact (1,030) (136) (814) 195 2,016 (227) 2,138 (931) Total comprehensive income $ 2,631 $1,524 $ 2,122 $4,443 Attributable to: Equity holders of FTG $ 2,685 $1,613 $ 2,219 $4,580 Non-controlling interest $ (54) $(89) $ (97) $(137) FIRAN TECHNOLOGY GROUP CORPORATION Interim Condensed Consolidated Statements of Changes in Equity Nine months ended August 28, 2020 Attributed to the equity holders of FTG Accumulated other Non- (Unaudited)CommonPreferredRetainedContributedcomprehensive controlling Total (in thousands of Canadian dollars)sharessharesearningssurpluslossTotalinterestequity Balance, November 30, 2019$ 19,323 $ 2,218$ 17,745$ 8,933 $ (1,554)$ 46,665 $ 1,094 $ 47,759 Net earnings (loss) - - 82 - - 82 (98) (16) Stock-based compensation - - - 112 - 112 - 112 Transfer from contributed surplus to share capital for PSU’s exercised 760 (760) - - - - Common shares repurchase and issue on exercise of PSU's (420) - - - - (420) - (420) Change in foreign currency translation adjustments - - - - (306) (306) 1 (305) Change in net unrealized loss on derivative financial instruments designated as cash flow hedges, net of tax impact - - - - 2,443 2,443 - 2,443 Balance, August 28, 2020$ 19,663 $ 2,218$ 17,827$ 8,285 $ 583 $ 48,576 $ 997 $ 49,573 Nine months ended Augus 30, 2019 Attributed to the equity holders of FTG Accumulated Other Non- (Unaudited)CommonPreferredRetainedContributedComprehensive controllingTotal (in thousands of Canadian dollars)sharessharesearningssurpluslossTotalinterestequity Balance, November 30, 2018$19,323 $2,218$11,687$8,672 $(774)$41,126 $1,181 $42,307 Net earnings (loss) - - 5,483 - - 5,483 (109) 5,374 Stock-based compensation - - - 234 - 234 - 234 Change in foreign currency translation adjustments - - - - (316) (316) (28) (344) Change in net unrealized loss on derivative financial instruments designated as cash flow hedges net of tax impact - - - - (587) (587) - (587) Balance, August 30, 2019$19,323 $2,218$17,170$8,906 $(1,677)$45,940 $1,044 $46,984 FIRAN TECHNOLOGY GROUP CORPORATION Interim Condensed Consolidated Statements of Cash Flows Three months endedNine months ended (Unaudited) August 28, August 30, August 28, August 30, (in thousands of Canadian dollars) 2020 2019 2020 2019 Net inflow (outflow) of cash related to the following: Operating activities Net earnings (loss) $ 615 $1,751 $ (16) $5,374 Items not affecting cash: Stock-based compensation 21 80 112 234 Loss (gain) on disposal of plant and equipment - - 6 (1) Effect of exchange rates on US dollar debt (415) (111) (217) 15 Depreciation of plant and equipment 1,111 973 3,274 2,743 Depreciation of right-of-use assets 403 - 1,214 - Amortization of intangible assets 94 284 490 827 Amortization, other 17 3 28 9 Impairment of intangible assets - - 1,145 - Investment tax credits/deferred income taxes 950 779 1,555 1,331 Accretion on lease liabilities 139 - 417 - Decrease (increase) in net unrealized loss on derivative financial instruments designated as cash flow hedges, net of taxes 3,087 (35) 2,442 (737) Net change in non-cash operating working capital (2,653) 3,603 588 (1,001) 3,369 7,327 11,038 8,794 Investing activities Additions to plant and equipment (236) (1,384) (2,721) (2,385) Acquisition of Colonial Circuits Inc., net of cash acquired - (3,817) - (3,817) Recovery (additions) of contract and other costs 11 13 60 (6) (225) (5,188) (2,661) (6,208) Net cash flow from operating and investing activities 3,144 2,139 8,377 2,586 Financing activities Proceeds from bank debt - - 3,309 - Repayments of bank debt (514) (505) (1,552) (1,526) Lease liability payments (448) - (1,360) - Repurchase of common shares on exercise of PSU's - - (420) - (962) (505) (23) (1,526) Effects of foreign exchange rate changes on cash flow (730) (36) (291) (176) Net increase in cash flow 1,452 1,598 8,063 884 Cash, beginning of the period 14,258 4,312 7,647 5,026 Cash, end of period $ 15,710 $5,910 15,710 $5,910 Disclosure of cash payments Payment for interest $ 46 $74 $ 155 $245 Payments for income taxes $ 18 $265 $ 1,136 $1,386
- Simply Wall St.
How Is Firan Technology Group's (TSE:FTG) CEO Paid Relative To Peers?
This article will reflect on the compensation paid to Brad Bourne who has served as CEO of Firan Technology Group...
