TORONTO, April 08, 2020 (GLOBE NEWSWIRE) -- Firan Technology Group Corporation (TSX: FTG) today announced financial results for the first quarter 2020.

  • Ended Q1 2020 with over $51M in total backlog.  Of this, over $30M is due in Q2 2020
  • Generated $3.5M in cash in Q1 and ended the quarter with $5.2M in net cash on the balance sheet
  • Included in the Q1 2020 net loss was a non-cash expense to reduce the intangible asset from an acquisition in 2016 due to increased market uncertainty going forward

First Quarter Results: (three months ended Feb 28, 2020 compared with three months ended Mar 1, 2019)

 Q1 2020
 Q1 2019
Sales$24,538,000 $25,390,000
Gross Margin 3,960,000  6,754,000
Gross Margin (%) 16.1%  26.6%
Operating Earnings (1): 242,000  3,318,000
•  R&D Investment 1,081,000  1,116,000
•  R&D Tax Credits (172,000)  (205,000)
•  Foreign Exchange Loss 49,000  156,000
•  Amortization of Intangibles 299,000  271,000
•  Impairment of Intangibles 1,145,000  -
Net (Loss) Earnings before Tax (2,160,000)  1,980,000
•  Income Tax 469,000  807,000
•  Non-controlling Interests (32,000)  (45,000)
Net (Loss) Earnings After Tax($2,597,000) $1,218,000
(Loss) Earnings per share  
- basic($0.11) $0.05
- diluted($0.11) $0.05

(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 Highlights

FTG accomplished many goals in Q1 2020 that continue to improve the Corporation and position it for the future, including:

  • Continued to receive orders across FTG at consistent historical rates through Q1
  • Through ongoing improvements in working capital management and some significant advance payments on future orders, improved FTG’s net cash position to $5.2M
  • Went live with FTG standard ERP System in Circuits Fredericksburg site
  • Achieved AS9100 certification of FTG Circuits Fredericksburg site
  • Maintained a number of other certifications across FTG through regularly planned external audits

For FTG, overall sales decreased by $0.9M or 3.4% from $25.4M in Q1 2019 to $24.5M in Q1 2020.  Circuits Fredericksburg contributed $2.1M in Q1 2020, compared to $0 last year.  Impacting sales in Q1 2020 was a $2M drop in simulator related sales compared to Q1 last year.  Also negatively impacting sales in Q1 2020 was the shutdown of FTG’s operations in Tianjin, China for the month of February.

The Circuits Segment sales were up $1.3M, or 8.2% in Q1 2020 versus Q1 2019.  Included in Q1 2020 were sales of $2.1M from Circuits Fredericksburg, acquired in July last year.  The drop in sales at existing sites was at FTG Circuits Toronto.  The lower activity was not due to a reduction in orders, and activity recovered towards the end of Q1.

For the Aerospace segment, sales in Q1 2020 were $8.1M compared to $10.2M in Q1 last year.  Simulator related sales were down $2M in Q1 2020, which impacted all three sites.  Simulator revenues are expected to rebound in the second half of 2020 as the backlog in simulator work at the end of Q1 2020 was over $8.0M.

Gross margins in Q1 2020 were $4.0M or 16.1% compared to $6.8M or 26.6% in Q1 2019.  The lower sales hurt margins in Q1 this year, as did the overhead costs of the Circuits Fredericksburg facility.

Earnings before interest, tax, depreciation and amortization (EBITDA) for FTG for Q1 2020 was $1.0M compared to $3.3M in Q1 2019.

The following table reconciles EBITDA(2)  to the net earnings for the trailing 12 months as at Feb 28, 2020.

 Trailing 12
Net earnings to equity holders of FTG 2,243,000
Interest, accretion 391,000
Income taxes 3,408,000
Depreciation/Amortization/Stock Comp./Impairment 6,881,000

(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 loss after tax at FTG in Q1 2020 was $2.6M or ($0.11) per diluted share compared to a net profit of $1.2M or $0.05 per diluted share in 2018.  Net profit after tax in Q1 2020 was impacted by the lower sales and by the write down of the intangible asset related to the acquisition of the Teledyne PCT business in 2016, due to increased uncertainty in the aerospace and defense market.

The Circuits segment net earnings before corporate and interest and other costs was $0.8M in Q1 2020 compared to $2.3M in Q1 2019.

The Aerospace net earnings before corporate and interest and other costs in the quarter was ($0.8M) in Q1 2020 (excluding the non-cash intangible asset expense) versus $0.6M in Q1 2019. The drop is due primarily to reduced sales from the simulator related market and the shutdown of Aerospace Tianjin in February due to the COVID-19 pandemic.

As at February 28, 2020, the Corporation’s net working capital was $25.8M, compared to $28.6M at year-end in 2019.  All debt is classified as current as the bank facility agreement currently in place expires in less than 12 months.  Activity is underway to obtain a new bank facility in 2020.

Net cash at the end of Q1 2020 was $5.2M compared to net cash of $2.2M at the end of 2019. 

The Corporation will host a live conference call on Thursday April 9, 2020 at 8:30am (Eastern) to discuss the results of Q1 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 May 9, 2020 and will be available on the FTG website at  The number to call for a rebroadcast is 416-621-4642 or 1-800-585-8367, Conference ID 7695678.


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, Fredericksburg, Virginia 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.

The Corporation's shares are traded on the Toronto Stock Exchange under the symbol FTG.


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 CEO                                                                      
Firan Technology Group Corporation
Tel: (416) 299-4000 x314

Jamie Crichton, Vice President and CFO                                            
Firan Technology Group Corporation
Tel:(416) 299-4000 x264

Additional information can be found at the Corporation’s website

Interim Condensed Consolidated Statements of Financial Position 
(Unaudited) February 28,November 30,
(in thousands of Canadian dollars) 2020  2019 
Current assets  
Cash  $ 10,152 $7,647 
Accounts receivable 19,199  21,085 
Contract assets 556  432 
Income tax receivable 247  - 
Inventories  20,489  21,990 
Prepaid expenses 1,476  1,770 
     52,119  52,924 
Non-current assets  
Plant and equipment, net 13,923  13,830 
Right-of-use assets 13,434  - 
Deferred income tax assets 724  724 
Investment tax credits receivable 2,983  3,035 
Deferred development costs 267  279 
Intangible assets and other assets, net 1,152  2,585 
Total assets $ 84,602 $73,377 
Current liabilities  
Accounts payable and accrued liabilities$ 14,566 $17,104 
Provisions  920  946 
Contract liabilities 4,154  216 
Bank debt  4,966  5,416 
Current portion of lease liabilities 1,729  - 
Income tax payable -  639 
     26,335  24,321 
Non-current liabilities  
Lease liabilities 11,792  - 
Deferred tax payable 1,332  1,297 
Total liabilities 39,459  25,618 
Retained earnings$ 15,148 $17,745 
Accumulated other comprehensive loss (1,610) (1,554)
     13,538  16,191 
Share capital  
 Common Shares 19,323  19,323 
 Preferred Shares 2,218  2,218 
Contributed surplus 8,984  8,933 
Total equity attributable to FTG's shareholders 44,063  46,665 
Non-controlling interest 1,080  1,094 
Total equity 45,143  47,759 
Total liabilities and equity$ 84,602 $73,377 

Interim Condensed Consolidated Statements of (Loss) Earnings  
    Three months ended
(Unaudited)February 28, March 1,
(in thousands of Canadian dollars, except per share amounts) 2020   2019 
Sales $ 24,538  $25,390 
Cost of sales   
 Cost of sales 19,199   17,808 
 Depreciation of plant and equipment 994   828 
 Depreciation of right-of-use assets 385   - 
Total cost of sales 20,578   18,636 
Gross margin 3,960   6,754 
 Selling, general and administrative 3,431   3,242 
 Research and development costs 1,081   1,116 
 Recovery of investment tax credits (172)  (205)
 Depreciation of plant and equipment 46   43 
 Depreciation of right-of-use assets 12   - 
 Amortization of intangible assets 299   271 
 Interest expense on bank debt, net 41   77 
 Accretion on lease liabilities 137   - 
 Stock based compensation 51   74 
 Foreign exchange loss 49   156 
 Impairment of intangible assets 1,145   - 
Total expenses 6,120   4,774 
(Loss) earnings before income taxes (2,160)  1,980 
Current income tax expense 434   777 
Deferred income tax expense 35   30 
Total income tax expense 469   807 
Net (loss) earnings$ (2,629) $1,173 
Attributable to:   
Non-controlling interest$ (32) $(45)
Equity holders of FTG$ (2,597) $1,218 
(Loss) earnings per share, attributable to the equity holders of FTG   
 Basic$ (0.11) $0.05 
 Diluted$ (0.11) $0.05 

Interim Condensed Consolidated Statements of Comprehensive (Loss) Income
     Three months ended
(Unaudited) February 28, March 1,
(in thousands of Canadian dollars)  2020   2019 
Net (loss) earnings $ (2,629) $1,173 
Other comprehensive loss to be reclassified to net (loss) earnings    
 in subsequent periods:    
 Change in foreign currency translation adjustments  248   (12)
 Change in net unrealized loss on derivative financial instruments    
  designated as cash flow hedges  (382)  (67)
 Change in tax impact  96   17 
     (38)  (62)
Total comprehensive (loss) income $ (2,667) $1,111 
Attributable to:    
Equity holders of FTG $ (2,653) $1,116 
Non-controlling interest $ (14) $(5)

Interim Condensed Consolidated Statements of Changes in Equity     
Three months ended February 28, 2020  Attributed to the equity holders of FTG   
      other  Non- 
   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 (loss) earnings - - (2,597) - -  (2,597) (32) (2,629)
Stock-based compensation - - -  51 -  51  -  51 
Change in foreign currency translation adjustments  - - -  - 230  230  18  248 
Change in net unrealized loss on derivative financial       
instruments designated as cash flow hedges, net of       
tax impact - - -  - (286) (286) -  (286)
Balance, February 28, 2020$ 19,323$ 2,218$ 15,148 $ 8,984$ (1,610)$ 44,063 $ 1,080 $ 45,143 
Three months ended March 1, 2019  Attributed to the equity holders of FTG   
      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) - - 1,218  - -  1,218  (45) 1,173 
Stock-based compensation - - -  74 -  74  -  74 
Foreign currency translation adjustments - - -  - (52) (52) 40  (12)
Net unrealized loss on derivative financial        
instruments designated as cash flow hedges        
net of tax impact - - -  - (50) (50) -  (50)
Balance, March 1, 2019$19,323$2,218$12,905 $8,746$(876)$42,316 $1,176 $43,492 

Interim Condensed Consolidated Statements of Cash Flows   
     Three months ended
(Unaudited) February 28, March 1,
(in thousands of Canadian dollars)  2020   2019 
Net inflow (outflow) of cash related to the following:    
Operating activities    
Net (loss) earnings $ (2,629) $1,173 
Items not affecting cash:    
 Stock-based compensation  51   74 
 Loss on disposal of plant and equipment  6   7 
 Effect of exchange rates on US dollar debt  53   (14)
 Depreciation of plant and equipment  1,040   871 
 Depreciation of right-of-use assets  397   - 
 Amortization of intangible assets  299   271 
 Amortization of deferred financing costs  3   3 
 Impairment of intangible assets  1,145   - 
 Investment tax credits/deferred income taxes  87   346 
 Accretion on lease liabilities  137   - 
 Increase in net unrealized loss on derivative financial instruments    
  designated as cash flow hedges, net of taxes  (286)  (50)
Net change in non-cash operating working capital  4,022   (4,087)
      4,325   (1,406)
Investing activities    
 Additions to plant and equipment  (1,046)  (391)
 Recovery (additions) of contract and other costs  6   (18)
      (1,040)  (409)
Net cash flow from (used in) operating and investing activities  3,285   (1,815)
Financing activities    
 Increase in bank indebtedness  -   995 
 Repayments of bank debt  (503)  (509)
 Lease liability payments  (446)  - 
      (949)  486 
Effects of foreign exchange rate changes on cash flow  169   (71)
Net increase (decrease) in cash flow  2,505   (1,400)
Cash, beginning of the period  7,647   5,026 
Cash, end of period $ 10,152  $3,626 
Disclosure of cash payments    
 Payment for interest $ 55  $81 
 Payments for income taxes $ 979  $738 

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