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Firan Technology Group Corporation (TSX:FTG) today announced financial results for the third quarter 2018.
- Achieved record third quarter sales of $25 million, an increase of 31% over Q3 2017
- Grew circuits segment by 22% over Q3 last year
- Grew aerospace segment by 50% over Q3 last year
- Achieved $2.7M EBITDA, an increase of $0.9M over Q3 last year
- Grew Q3 2018 net income by 320% over same period last year
“The third quarter of 2018 came in as expected for the summer months, which typically experience a drop in sales from Q2 due to higher vacations and fewer production days,” stated Brad Bourne, president and chief executive officer. He added, “Sales and profitability were up dramatically from Q3 last year again demonstrating the transition activities are mostly behind us. We will continue to work on managing transition and one-time costs in our Chatsworth operations.”
FTG accomplished many goals in the third quarter of 2018 that continue to improve the Corporation and position it for the future, including:
- Began shipments to Flight Safety International for the KC-46 simulator program
- Shipped first set of the redesigned cockpit control devices for the third test aircraft for the C919 program in China
- Completed qualification testing of the cursor control device for a helicopter program and are progressing through Transport Canada approval
- Completed qualification testing of a cockpit power supply for the LE-700 training aircraft in China
- Achieved sales resulting from the 2016 acquisitions of $5.4M versus our target of $5.5M
- Received Authorization to Proceed on a new military helicopter simulation program with an expected value between $1-2M USD
- Received our first ever patent for High Temperature Rigid Flex circuit board technology in the UK
- Won a contract to develop cockpit panels for the Orion manned spacecraft being developed for NASA
- Completed our first robotic automation project including Industry 4.0 technology at our Circuits Toronto facility
For FTG, overall sales increased by $5.9M or 30.6% from $19.1M in Q3 2017 to $25.0M in Q3 2018. Both the circuits and aerospace segments contributed to the growth. Also contributing to the growth was the weakening of the Canadian dollar by 2.5 cents in Q3 this year compared to the same period last year. For the year-to-date, sales were up $9.6M or 13.3% due to the above items plus the one time revenue recognition of $5M from the C919 program in Q1 2018.
The circuits segment sales were up $3.0M or 22.1% in Q3 2018 versus Q3 2017. On a year-to-date basis, Circuits sales were up by $1.3M or 2.8%.
For the Aerospace segment, sales in Q3 2018 were $8.6M compared to $5.7M in the same quarter last year resulting in a 50.6% growth rate. Year-to-date sales were up $8.3M or 31.4% in the Aerospace segment.
Gross margins in Q3 2018 were up $0.7M compared to Q3 2017. The benefit of increased sales and lower costs were partially offset by a $0.95M inventory provision in Aerospace Chatsworth against inventory acquired in the two acquisitions in 2016.
Earnings before interest, tax, depreciation and amortization (EBITDA) for FTG for Q3 2018 was $2.7M and $9.2M for the trailing twelve months.
Net profit after tax at FTG in Q3 2018 was $0.6M compared to a net profit of $0.1M in Q3 2017. Q3 2018 had higher sales, lower R&D spending, offset by an inventory provision increase of $0.95M.
The Circuits segment net earnings before corporate and interest and other costs was $3.0M in Q3 2018 compared to $1.7M in Q3 2017.
The Aerospace net earnings before corporate and interest and other costs in the quarter was ($0.7M) versus ($1.3M) in Q3 2017. Q3 2018 had an inventory provision increase of $0.95M.
As at August 31, 2018, the Corporation’s net working capital was $28.5M, an increase of $4.1M over year end 2017. Higher accounts receivables, inventory and lower bank debt and lower accounts payable was offset by higher customer deposits.
Net debt to EBITDA, was 0.9:1 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.