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	Firan Technology Group Corp	5.22	UNCH	0.0%
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TORONTO, April 11, 2024 (GLOBE NEWSWIRE) -- Firan Technology Group Corporation (TSX: FTG) today announced financial results from its first quarter of 2024.

• First quarter bookings of $37.5M were up 14% over Q1 2023.
• FTG first quarter revenues of $35.0M were up 42% over Q1 2023.
• FTG achieved Adjusted Net Earnings in Q1 2024 of $1.1M.
• FTG achieved Adjusted EBITDA of $4.6M, which was up 42% over Q1 2023.

Business Highlights

During Q1 2024, the Corporation has continued to invest in technology in existing sites, grow the business organically, and integrate the two acquisitions completed last year. 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 the following in Q1 2024, which continues to improve the Corporation and position it for the future:

• Integration activities at both acquisitions progressed well through 2023 and Q1 2024 with improved throughput, improved pricing, cost savings and FTG ERP implementation completed at Circuits Minnetonka, and cost savings, equipment investments and growth plans at Circuits Haverhill. More activities and full FTG ERP implementation for Circuits Haverhill are planned for the balance of 2024.
• Also, in support of the new acquisitions, and the overall growth of FTG, Leo LaCroix was hired as Executive Vice President, Circuits to oversee FTG's US Circuits operations including the newly acquired sites. Leo has extensive senior management experience in the circuit board industry selling into the defence market.
• FTG managed through a six-week strike by 67 unionized employees at the FTG Aerospace Toronto facility, which resulted in decreased product shipments during Q1 2024 of approximately $3.0M. The reduction in revenue had a negative impact on Net Earnings of approximately $1M. A new 4-year agreement with the employees was concluded and the employees returned to work on January 23, 2024. The new contract expires in August 2027.
• Customer orders received in Q1 2024 totaled $37.5M, resulting in a book-to-bill ratio of 1.07:1.
• As of March 1, 2024, FTG had a total backlog of $99.3 million, which is a 34% increase over the Q1 2023 backlog of $74.2 million. The two acquisitions added approximately $17.0 million of additional backlog as of their closing date.
  

Table 1 / Key Financial Metrics

(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.
(2) Gross margin in Q1 2024 was 25.5%. Gross margin in Q1 2023 included $2.9M of ERC funding for US sites, that was a one-time event. Excluding this Gross Margin in Q1 2023 was $6.9M or 28.0%.

For FTG in Q1 2024, overall sales increased by $10.3M or 41.9% from $24.6M in Q1 2023 to $35.0M in Q1 2024. Increased revenue in Q1 2024 is the result of acquisitions and organic growth, partially offset by a strike at the Aerospace Toronto facility and decreased shipments of Simulator products. The average foreign exchange rate in Q1 2024 was consistent with Q1 2023.

The Circuits segment sales in Q1 2024 were up $10.3M, or 65.9% compared to last year. The sales increase included a $9.6M contribution from the newly acquired Circuits sites in Minnetonka and Haverhill. Sales at Circuits Fredericksburg were down while sales at other sites were flat or up.

Sales for the Aerospace segment were flat as compared to Q1 2023 with sales increasing by 45% at Aerospace Chatsworth and by 80% at Aerospace Tianjin offsetting the sales impact of a strike at the Toronto site and reduced Simulator product shipments. There was a six-week strike at the Aerospace Toronto facility, which negatively impacted revenue in Q1 2024 by approximately $3.0M.

Gross margin in Q1 2024 was $8.9M or 25.5% as compared to $9.8M or 39.7% in Q1 2024. Gross margin in Q1 2023 included $2.9M of ERC funds. Excluding government assistance, gross margin increased in Q1 2024 by $2.0M. The increase in gross margin dollars is the result of higher sales volumes. There are still ongoing efforts, including cost savings, price increases and production rate increases, to drive gross margins at the acquired sites up to desired levels.

Net earnings after tax at FTG in Q1 2024 was $1.0 million or $0.04 per diluted share compared to a net income of $4.1M or $0.17 per diluted share in Q1 2023. Adjusted net earnings was $1.0M or $0.04 per diluted share in Q1 2024 which is consistent with the same quarter prior year. The six-week strike at Aerospace Toronto had an estimated negative impact on Q1 2024 net earnings of $1M.

The Circuits segment earnings before interest and income taxes ("EBIT") was $2.0M in Q1 2024 as compared to $3.4M in Q1 2023. Excluding ERC funds of $2.4M included in Circuits segment earnings in Q1 2023, Circuits segment EBIT increased to $2.0M in Q1 2024 from $1.0M in Q1 2023.

The Aerospace segment EBIT was $1.4M in Q1 2024 versus $2.3M in Q1 2023. Excluding ERC funds of $1.0M included in Aerospace segment EBIT in Q1 2023, Aerospace segment EBIT increased marginally in Q1 2024 from Q1 2023 on flat revenues.

Table 2 / EBITDA

(1) 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.

Adjusted EBITDA for Q1 2024, which excludes government assistance, and expenses related to the acquisitions, was $4.6M or 13.0% of net sales, as compared to $3.2M or 13.0% of net sales in Q1 2023. The strike at Aerospace Toronto decreased Adjusted EBITDA by approximately $1.0M.

As at March 1, 2024, the Corporation's net working capital was $41.4M, compared to $41.1M at year-end in 2023.

Net debt at the end of Q1 2024 was $7.2M compared to net debt of $3.6M at the end of 2023. Free cash flow in Q1 2024 was ($3.3M) as compared to ($0.1M) in Q1 2023. In Q1 2024, cashflow was impacted by cash tax payments of $2.3M and performance compensation payments of $1.6M, both due to the strong financial performance in FY 2023. Capital expenditures in Q1 2024 were $3.4M as compared to $0.6M in Q1 2023. Some capital expenditures were accelerated in support of efforts to complete FTG's scope of work related to the Government of Canada's ARRI program which has a completion date of March 31, 2024.

The Corporation will host a live conference call on Friday, April 12, 2024, at 8:30am (Eastern) to discuss the results of Q1 2024.

Anyone wishing to participate in the call should dial 289-514-5100 or 1-800-717-1738, Conference ID 34553 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 12, 2024, and will be available on the FTG website at www.ftgcorp.com. The number to call for a rebroadcast is 289-819-1325 or 1-888-660-6264, Playback Passcode # 34553.

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 designs, 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 CEO
Firan Technology Group Corporation
Tel: (416) 299-4000 x314
bradbourne@ftgcorp.com

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

Additional information can be found at the Corporation's website www.ftgcorp.com