-
- News
- Books
Featured Books
- pcb007 Magazine
Latest Issues
Current IssueThe Growing Industry
In this issue of PCB007 Magazine, we talk with leading economic experts, advocacy specialists in Washington, D.C., and PCB company leadership to get a well-rounded picture of what’s happening in the industry today. Don’t miss it.
The Sustainability Issue
Sustainability is one of the most widely used terms in business today, especially for electronics and manufacturing but what does it mean to you? We explore the environmental, business, and economic impacts.
The Fabricator’s Guide to IPC APEX EXPO
This issue previews many of the important events taking place at this year's show and highlights some changes and opportunities. So, buckle up. We are counting down to IPC APEX EXPO 2024.
- Articles
- Columns
Search Console
- Links
- Events
||| MENU - pcb007 Magazine
FTG Announces Third Quarter 2021 Financial Results
October 14, 2021 | GlobeNewswireEstimated reading time: 5 minutes
Firan Technology Group Corporation announced financial results for the third quarter of 2021.
- FTG achieved a third sequential quarter of increased bookings as the aerospace industry recovers from the COVID-19 pandemic.
- Third-quarter bookings are up 7% over Q2 2021 and up 28% over Q4 2020.
- FTG increased net cash on the balance sheet to $17.1M, an increase of $2.3M in Q3 2021 again showing the cash-generating nature of the business. Over the past 21 months, during the pandemic, FTG has generated $13M in Free Cash Flow, after investments in R&D and capital equipment.
- FTG received forgiveness of USD 1.3M, being the residual of US Paycheck Protection Program funds received by our US operations as a result of FTG maintaining our workforce for the required period of time.
- FTG was approved for an additional $0.7M in Canada Emergency Wage Subsidy (CEWS) in the quarter which we used to help maintain our workforce in the face of revenue reductions due to COVID-19.
- Extended the existing $20M USD committed credit facility with our primary lender to July 2026 with improved financial terms.
Business Highlights
FTG accomplished many goals in Q3 2021 that continue to improve the Corporation and position it for the future, including:
- Achieved a 1.06:1 book-to-bill ratio for Q3 2021. Increased bookings by 7% compared to Q2 2021, and by 28% compared to Q4 2020 as the Commercial aerospace industry moves into recovery.
- FTG Aerospace Chatsworth has been awarded a $3.7M CAD after-market contract from the United States Defense Logistics Agency (DLA) to provide electronic assemblies to retrofit airborne radar systems on various US defense aircraft.
- Shipped first parts to a new customer for a bezel to be used on the new US T-7A trainer jet. Received first orders from a second customer for cockpit panels, also for the US trainer jet program.
- The Averatek semi-additive circuit board manufacturing equipment in our Circuits Fredericksburg facility completed installation and was operational in Q2. Activities are underway with over 10 potential customers to develop this process to address future industry demands.
- Subsequent to quarter end, FTG Circuits Chatsworth has been approved for USD 0.4M of funding from the Aviation Manufacturing Jobs Protection (AMJP) program, which will be used to offset eligible employee compensation costs for a six-month period ending March 2022.
- FTG Aerospace Chatsworth, which maintained an engineering office in Dallas-Fort Worth since the acquisition of Photo-Etch in 2016, will close this office by the end of 2021. Some employees will move to a work-from-home model, and some roles will move to the Chatsworth site in California. This will result in a $200K reduction in costs in 2022 and beyond.
Overall for FTG, sales decreased by $4.6M or 19% from $24.4M in Q3 2020 to $19.7M in Q3 2021. The COVID-19 pandemic has negatively impacted commercial aerospace activity as well as the weaker US dollar has negatively impacted sales reported in Canadian currency. The average exchange rate for Q3 2021 was $1.25 as compared to $1.34 for Q3 2020. This represents approximately a $1.6M negative impact on sales in the quarter compared to Q3 last year. On a year-to-date basis, sales were $59.0M compared to $75.7M for the same period last year. The drop is due to the COVID-19 pandemic, timing on Simulator related orders and the year-to-date foreign exchange impact.
The Circuits Segment sales were down $2.6M or 17% from $15.7M in Q3 2020 to $13.1M in Q3 2021. All sites were down but the largest decline was seen in the Circuits Toronto plant which is more heavily exposed to the Commercial Aerospace market. On a year-to-date basis, net sales were $38.1M as compared to $51.7M for the prior year period.
For the Aerospace Segment, sales were down $2.0M or 24% from $8.7M in Q3 2020 to $6.6M in Q3 2021. Simulator related sales were down $2.8M in Q3 2021, which was partially mitigated by the continued strength in military business, which is primarily executed at the FTG Chatsworth site. On a year-to-date basis, net sales were $21.0M as compared to $24.0M for the prior year period.
Gross margins in Q3 2021 were $3.8M or 19.2% compared to $6.7M or 27.6% in Q3 2021. The lower sales impacted the overall margin. The CEWS added $0.7M to gross margin or 3.3 percentage points (Q3 2020 – $0.7M or 2.9 percentage points). On a year-to-date basis, gross margin was $12.9M or 21.8% as compared to $19.4M or 25.6% for the comparable prior year period. The decline in gross margin is due to the lower level of sales, partially offset by CEWS of $2.6M in 2021 as compared to $1.4M in 2020.
Trailing Twelve Month (TTM) earnings before interest, tax, depreciation and amortization (EBITDA) for FTG was $11.3M. Lower sales, unfavourable foreign exchange impact and some operational challenges in Circuits Chatsworth, were partially offset by wage subsidies in Canada and the PPP forgiveness in the US.
Net earnings after tax at FTG in Q3 2021 was $0.8M or $0.03 per diluted share compared to $0.6M or $0.03 per diluted share in Q3 2020. Revenues were reduced due to the decline in the Commercial Aerospace market as a result of the COVID-19 pandemic and the weaker US dollar. In Q3 2021, the average FX rate was 1.25 as compared to 1.34 in Q3 2020. The reduction in sales in Q3 2021 is offset by $1.6M of debt forgiveness, whereas Q3 2020 had no debt forgiveness. For the year-to-date period, FTG incurred a net earnings of $0.4M or $0.01 per share as compared to a net earnings of $0.1M or $0.00 per share for the comparable period of 2020. Apart from the reduction in sales, the 2021 year-to-date period included $3.0M of debt forgiveness, whereas the prior year period included $1.1M of impairment of intangible assets.
The Circuits Segment net earnings before corporate and interest and other costs was $1.6M in Q3 2021 compared to $1.1M in Q3 2020. Segment profitability was negatively impacted by lower sales and operational issues at the Chatsworth site. We are addressing the operational issues at Chatsworth through continuous improvement initiatives and investment in capital equipment. PPP debt forgiveness of $1.6M helped offset reduced sales and operational issues.
The Aerospace net earnings before corporate and interest and other costs in the quarter was $0.3M in Q3 2021 versus $1.1M in Q3 2020. Segment profitability was negatively impacted by lower sales and the weaker US dollar.
As at September 3, 2021, the Corporation’s net working capital was $40.5M, compared to $39.4M at year-end in 2020.
Net cash at the end of Q3 2021 was $17.1M compared to net cash of $12.6M at the end of 2020.
Suggested Items
The Pulse: Drilling Down on Documentation
04/18/2024 | Martyn Gaudion -- Column: The PulseHow did a product aimed at signal integrity end up being more about documentation? For a little backstory, the Polar team has an unspoken “no business speak” rule at certain times. So, why is this column titled “Drilling Down?” I find it fascinating when a company sets off in one direction, but customers steer it in another. That’s what has happened here as customers took a product down a fork in the road we couldn’t predict. Your destination isn’t always where you initially set off to go, and that’s how we got to our subject of drills and drill documentation.
Real Time with... IPC APEX EXPO 2024: IPC Government Relations Holds Lawmakers Accountable
04/16/2024 | Real Time with...IPC APEX EXPOThe IPC Government Relations team is constantly educating Congress and the executive branch about the importance of a robust domestic electronics manufacturing industry. As Richard Cappetto explains, the GR team is focused on proactive strategies, workforce policies, and sustainability, as well as the significance of apprenticeship programs, President Biden's executive order, and employer incentives. Also discussed is the PCB Act, its investment program, tax incentive, and DoD's understanding of supply chain risk.
Catching Up With Chasom Electronics
04/16/2024 | Dan Beaulieu, D.B. Management GroupI recently met with Chasom Electronics’ founding director Anil Kumar. Chasom offers a unique menu of services for companies looking to extend their technology capabilities on a short- or long-term basis. Read on to learn about this very unique service company.
Marcy's Musings: The Growing Industry
04/16/2024 | Marcy LaRont -- Column: Marcy's MusingsAfter decades of steady decline in the U.S. and Europe, the PCB industry is finally growing, especially in China Plus One countries. The U.S. for example, which seemed to have abdicated its title as the world leader in innovating high-technology cutting-edge manufacturing processes, is now in a race to regain what it lost and then some. The PCB fabrication industry is growing in the West, thanks to DoD funding, the CHIPS and Science Act, and hopefully, the passing of HR 3249, the Printed Circuit Board and Substrates Act.
PCB007 Magazine April 2024 — The Growing Industry Issue
04/15/2024 | I-Connect007 Editorial TeamAfter more than two decades of steady decline in the U.S., the PCB industry is finally growing in the West thanks to the CHIPS and Science Act, DoD funding, and hopefully, the passing of HR 3249, the Printed Circuit Board and Substrates Act. The U.S. is now in a race to regain what was lost and then some. But what does “growing” look like for the organizations that have received DoD funding, and for the rest of us? How can we sustain this growth?