Firan Technology Group Corporation (TSX: FTG) today announced
financial results for the third quarter of 2023.
- Third quarter bookings of $35.7M
were up 28% over Q3 2022.
- FTG third quarter revenues of
$36.6M were up 59% over Q3 2022, as FTG ramps up production to meet
customer demand. Revenue included $9.2M from the newly acquired
Circuits sites.
- FTG achieved Net Earnings in Q3
2023 of $1.3M, which was up $0.6M from Q2 2022.
- Net debt on the balance sheet as of
Q3 2023 is $5.7M, which is 0.36x Adjusted EBITDA for the trailing
12 months.
Business Highlights
FTG continued to play offence through the first
three quarters of 2023. The company has invested in technology in
existing sites, grown the business organically, and completed two
acquisitions. Through all these actions, FTG is strategically
deploying its capital in ways that will drive increased shareholder
returns for the future in both the near term and long term.
Specifically, FTG accomplished many goals in Q3
2023 that continue to improve the Corporation and position it for
the future, including:
- Backlog at the end of Q3 2023 is
$98.0M compared to $65.5M at the end of 2022. Backlog as of Q3 2023
includes $18.2M at the newly acquired sites.
- FTG employs approximately 700
people across its nine operating sites after adding additional
staff in Q3 2023, including executive leadership at the Circuits
Minnetonka site. FTG staffing is essentially in line with customer
demand as reflected by the parity between bookings and shipments in
the quarter.
- FTG received funding of $0.7
million in the quarter for a total of $4.4M received to-date under
the Canadian Aerospace Regional Recovery Initiative (ARRI)
program.
- During Q3 2023, FTG bought back
6,200 Common Shares.
Table 1 / Key Financial
Metrics
|
Three months ended |
Nine months ended |
|
September 1, |
September 2, |
|
September 1, |
September 2, |
|
2023 |
2022 |
|
2023 |
2022 |
|
|
|
|
|
|
Sales |
$36,611 |
$23,095 |
|
$95,209 |
$65,874 |
|
|
|
|
|
|
Gross
Margin |
8,776 |
5,708 |
|
28,546 |
15,574 |
Gross Margin
(%) |
24.0% |
24.7% |
|
30.0% |
23.6% |
|
|
|
|
|
|
Net Earnings to FTG Equity Holders |
$1,320 |
$723 |
|
$7,795 |
$4 |
|
|
|
|
|
|
Adjusted Net
Earnings(1) |
|
|
|
|
|
Government assistance |
- |
- |
|
($3,758) |
($314) |
Acquisition and divesture expenses |
$79 |
$34 |
|
$615 |
$41 |
|
$1,399 |
$757 |
|
$4,652 |
($269) |
|
|
|
|
|
|
Earnings (Loss) Per
Share |
|
|
|
|
|
Basic |
$0.06 |
$0.03 |
|
$0.33 |
$0.00 |
Diluted |
$0.05 |
$0.03 |
|
$0.32 |
$0.00 |
|
|
|
|
|
|
Adjusted Earnings
(Loss) Per Share |
|
|
|
|
|
Basic |
$0.06 |
$0.03 |
|
$0.19 |
($0.01) |
Diluted |
$0.06 |
$0.03 |
|
$0.19 |
($0.01) |
|
|
|
|
|
|
(1) Adjusted Net 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
Adjusted Net Earnings may differ from other corporations and
accordingly may not be comparable to measures used by other
corporations.
For FTG overall sales increased by $13.5M or
58.5% from $23.1M in Q3 2022 to $36.6M in Q3 2023. Increased
revenue in Q3 2023 is the result of organic growth, acquisitions
and favourable foreign exchange rates. The
average foreign exchange rate in Q3 2023 was 3% (4.2 cents) higher
than in Q3 2022, with a positive impact on sales of $0.8M. On a
year-to-date basis, sales increased by $29.3M or 44.5% from
2022.
The Circuits segment sales in Q3 2023 were up
$12.7M, or 86.8% compared to last year. The sales increase included
a $9.2M contribution from the newly acquired Circuits sites in
Minnetonka and Haverhill. On a year-to-date
basis, the Circuits segment sales were up $19.8M or 44.7%.
For the Aerospace segment, sales in Q3 2023 were
up $0.3M or 3.9% compared to last year. On a year-to-date basis,
the Aerospace segment sales were up $8.4M or 32.9%, which included
incremental Simulator revenue of $7.2M primarily delivered in the
first half of 2023.
Gross margin in Q3 2023 was $8.8M or 24.0% as
compared to $5.7M or 24.7% in Q3 2022. The decrease in the gross
margin rate is due to increased sales volumes offset by lower gross
margins in the Circuits Minnetonka site. Margins at that site are
expected to increase over time as it ramps up throughput, achieve
material cost savings and adjust pricing.
Net earnings after tax at FTG in Q3 2023 was
$1.3 million or $0.05 per diluted share compared to a net income of
$0.7M or $0.03 per diluted share in Q3 2022. Adjusted net earnings
was $1.4M or $0.06 per diluted share in Q3 2023 as compared to an
adjusted net earnings of $0.8M or $0.03 per diluted share in the
prior year quarter. The $0.6M increase in adjusted net earnings is
the result of higher sales volume, operational improvements and a
more favourable foreign exchange rate. On a year-to-date basis,
adjusted net earnings was $4.7M or $0.19 per diluted share compared
to a net loss of ($0.3M) or ($0.01) per diluted share in the prior
year period.
The Circuits segment earnings before interest
and income taxes was $2.2M in Q3 2023 as compared to $0.8M in Q3
2022. Higher sales and improved pricing drove the increase in
earnings. The Minnetonka and Haverhill acquisitions did not
materially impact earnings before interest and income taxes for
this segment.
The Aerospace segment earnings before interest
and income taxes was $1.6M in Q3 2023 versus $1.4M in Q3 2022. The
increase in earnings was driven by higher sales and improved
pricing on a range of products.
Table 2 / EBITDA
|
Three months ended |
|
Nine months ended |
|
Trailing12Months |
|
September 1, |
September 2, |
|
September 1, |
September 2, |
|
|
2023 |
2022 |
|
2023 |
2022 |
|
EBITDA(2) |
|
|
|
|
|
|
|
Net earnings to equity holders of FTG |
$1,320 |
$723 |
|
$7,795 |
$4 |
|
$8,489 |
Add: |
|
|
|
|
|
|
|
Interest, accretion |
$542 |
$104 |
|
$771 |
$319 |
|
$895 |
Income taxes |
$944 |
$509 |
|
$2,693 |
$1,339 |
|
$2,928 |
Depreciation/Amortization/Stock Comp. |
$2,088 |
$1,419 |
|
$5,253 |
$4,521 |
|
$6,599 |
|
$4,894 |
$2,755 |
|
$16,512 |
$6,183 |
|
$18,911 |
Adjusted EBITDA(2) |
|
|
|
|
|
|
|
Government assistance |
$0 |
$0 |
|
($3,758) |
($314) |
|
($3,758) |
Acquisition and divesture expenses |
$79 |
$34 |
|
$615 |
$41 |
|
$742 |
|
$4,973 |
$2,789 |
|
$13,369 |
$5,910 |
|
$15,895 |
|
|
|
|
|
|
|
|
(2) EBITDA and Adjusted 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
and Adjusted EBITDA may differ from other corporations and
accordingly may not be comparable to measures used by other
corporations.
The trailing twelve-month earnings before
interest, tax, depreciation and amortization (EBITDA) was $18.9M or
$15.9M for adjusted EBITDA as compared to approximately $9M for the
full year 2022.
EBITDA for FTG in Q3 2023 was $4.9M or 13.4% of
sales compared to $2.8M or 11.9% of sales in Q3 2022. On a
year-to-date basis, EBITDA in 2023 was $16.5M or 17.3% compared to
$6.2M or 9.4% in 2022.
Adjusted EBITDA for Q3 2023, which excludes
government assistance, and expenses related to the acquisitions,
was $5.0M or 13.6% of net sales, as compared to $2.8M or 12.1% of
net sales in Q3 2022. The increase in profitability is driven by
increased operating leverage from higher sales, operational
improvements and a favourable foreign exchange impact. For the
trailing twelve months period ended September 1, 2023, adjusted
EBITDA was $15.9M or 15.1% of sales.
As at September 1, 2023, the Corporation’s net
working capital was $35.2M, compared to $30.5M at year-end in
2022.
Net debt at the end of Q3 2023 was ($5.7M)
compared to net cash of $12.3M at the end of 2022, after the
combined impact of a net cash outlay of $26.3M for acquisitions,
net proceeds of $8.5M from the Aerospace Chatsworth facility sale
leaseback transaction, and receiving $3.8M from the U.S. Employment
Retention Credit program (“ERC”). In addition, FTG has access to
committed credit lines of approximately $22.3M.
The Corporation will host a live conference call
on Thursday, October 12, 2023, at 8:30am (Eastern) to discuss the
results of Q3 2023.
Anyone wishing to participate in the call should
dial 416-764-8658 or 1-888-886-7786 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 12 , 2023 and will be available on the FTG website at
www.ftgcorp.com. The number to call for a rebroadcast is
416-764-8692 or 1-877-674-7070, Playback Passcode 572945 #.
ABOUT FIRAN TECHNOLOGY GROUP CORPORATION
FTG is an aerospace and defence 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, defence, and high technology
industries. FTG Circuits has operations in Toronto, Ontario,
Chatsworth, California, Fredericksburg, Virginia, Minnetonka,
Minnesota, Haverhill Massachusetts 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 defence
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.
FORWARD-LOOKING STATEMENTS
This 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 CEOFiran
Technology Group CorporationTel: (416) 299-4000
x314bradbourne@ftgcorp.com
Jamie Crichton, Vice President and CFOFiran
Technology Group CorporationTel: (416) 299-4000
x264jamiecrichton@ftgcorp.com
Additional information can be found at the
Corporation’s website www.ftgcorp.com
Firan Technology (TSX:FTG)
Gráfica de Acción Histórica
De May 2024 a Jun 2024
Firan Technology (TSX:FTG)
Gráfica de Acción Histórica
De Jun 2023 a Jun 2024