Firan Technology Group (FTG) Q2 2024 earnings summary

Executive summary

• Q2 2024 bookings reached CAD 58.7 million, up 46% year-over-year, with revenues of CAD 38.8 million, up 14% from Q2 last year.

• Adjusted net earnings were CAD 2.6 million, up 13% year-over-year; adjusted EBITDA was CAD 6.5 million, up 25%.

• Free cash flow improved to CAD 2 million, an increase of CAD 2.4 million over Q2 2023.

• Backlog at quarter end was CAD 120 million, a 22% increase year-over-year.

• Major contract win: CAD 17 million for C919 cockpit assemblies, with deliveries through 2026.

Financial highlights

• Gross margin in Q2 2024 was CAD 10.8 million (27.9% of sales), up from CAD 10.1 million (29.4%) in Q2 2023.

• SG&A expense was CAD 4.8 million (12.3% of sales), up from CAD 4.4 million (13.0%) last year.

• R&D costs were CAD 1.6 million (4.1% of sales), flat in dollars but down as a percentage of sales.

• Adjusted EBITDA for the trailing twelve months was CAD 22.0 million (14.6% of sales); net debt reduced to 0.24x adjusted EBITDA.

• Net earnings attributable to equity holders were CAD 2.6 million ($0.11 per diluted share) in Q2 2024.

Outlook and guidance

• Record backlog of nearly CAD 120 million entering the second half of 2024.

• CapEx for H2 2024 expected to align with long-term target of 8% of revenue, excluding a CAD 1.1 million roof replacement.

• Growth expected in 2024, with full-year benefit from acquisitions and ramp-up at new sites.

• New defense program orders at U.S. sites to ramp in 2025 and beyond.