Firan Technology Group Corporation
TSX : FTG

Firan Technology Group Corporation

October 03, 2007 20:48 ET

Firan Technology Group Corporation (FTG) Announces Financial Results for Third Quarter 2007

- Sales growth of 1.6% over Q3 2006, despite strong Canadian dollar - Strong growth in Circuits - Chatsworth operation - Completed move into new facility for Aerospace operation

TORONTO, ONTARIO--(Marketwire - Oct. 3, 2007) - Firan Technology Group Corporation (TSX:FTG) today announced the third quarter 2007 results for the period ending August 31, 2007.

FTG achieved $13,895,000 in sales in the third quarter, a 1.6% increase over the third quarter 2006. The Company lost $182,000 in the quarter, primarily due to the strengthening of the Canadian dollar versus the US dollar.

Third Quarter Results: (three months ended August 31, 2007 compared with three months ended September 1, 2006)



Q3 2007 Q3 2006
-------------------------------

Sales $13,895,000 $13,670,000
Gross Margin $2,152,000 $3,100,000
Net (Loss) Earnings after Tax ($182,000) $300,000
(Loss) Earnings per share - basic & diluted ($0.01) $0.02


Year to Date Results (nine months ended August 31, 2007 compared with nine months ended September 1, 2006)



YTD 2007 YTD 2006
-------------------------------

Sales $43,069,000 $41,797,000
Gross Margin 8,926,000 9,223,000
Net Earnings After Tax $642,000 $886,000
Earnings per share - basic $0.04 $0.05
- diluted $0.03 $0.05


For the year-to-date, net sales are up $1,272,000 or 3% with the results being negatively impacted by the strengthening Canadian dollar.

Net sales increased by $225,000 or 1.6%, from $13,670,000 in the third quarter of 2006 to $13,895,000 in the third quarter of 2007. The Circuits Segment was down $140,000 or 1.3% over the same period last year. Weak market conditions in printed circuit boards and the strengthening Canadian dollar drove the year-over-year change. The Circuits segment is outperforming the overall market, which is down more than 10% in 2007 in North America, excluding any exchange rate impact. The Aerospace segment grew over the same quarter last year by 365,000 or 13.8% due to the investments made in 2006 to increase capacity and the ongoing lean manufacturing program which together with strong customer demand resulted in increased shipments. The increased revenue for the Corporation was achieved in spite of the ongoing strengthening of the Canadian dollar which impacted sales in the quarter by approximately $700,000.

Year-to-date gross margins are $8,926,000 versus $9,223,000 for the same period in 2006. The decrease resulted from internal and external factors experienced in the third quarter as noted below.

Gross margin in the quarter decreased by $948,000 to $2,152,000 as compared to the third quarter of 2006. The decrease in gross margins is attributable to the strengthening Canadian dollar, the ongoing margin squeeze in the circuit board industry due to the industry price pressures and material cost increases and the continued outsourcing of two critical manufacturing processes in the Circuits business. Progress has been made in identifying opportunities to reduce some material costs and all equipment necessary to eliminate the outsourcing has now been purchased, delivered and commissioned in the early part of the fourth quarter.

For the year-to-date, net earnings are $642,000 or $0.04 per share ($0.03 per diluted share) as compared to earning of $886,000 for year-to-date 2006. Earnings at Circuits are down $42,000 pre-tax year-to-date and are down $264,000 after tax due to the items mentioned above that impacted sales and margins, offset by SR&ED tax credits recorded earlier in 2007.

Net losses for the third quarter of 2007 were $182,000 or $0.01 per share ($0.01 per diluted share) as compared with earnings of $300,000 or $0.02 per share ($0.02 per diluted share) in the third quarter of 2006.

"In spite of the external pressures facing the business and the continued strengthening of the Canadian dollar, even after the quarter, we are pleased with our overall performance. While these factors have impacted our financial results, we are taking steps to offset them through investments in critical production equipment and processes," commented Brad Bourne, President and CEO, FTG Corporation. He added, "Our focus on the aerospace and defence market continues to prove to be a good decision, as this market has been robust and looks strong into the future. Our strong sales team continues to position FTG favourably on a number of key new accounts and programs."

Operating Business Update

FTG Aerospace has completed the move into a new facility that will enable it continue to grow. The move was completed in the first week of the fourth quarter, with no impact to customers and minimal impact to production throughput. In the quarter, the business performed well in all aspects of the business from new customer wins, through revenue growth, profitability, new product development, and operational performance.

FTG Circuits - Chatsworth efforts over the past 18 months to penetrate the rigid flex market is yielding positive results and almost 20% of their revenue in the final month of the third quarter was derived from this product. This was a key ingredient in their significant growth in the quarter. Key additions in Operations management have further strengthened the business unit, leading to increased throughput and strong operating metrics. Capacity continue to grow with the installation and commissioning of the equipment and systems purchased for that site over the past year.

FTG Circuits - Toronto is well positioned on many of the new aircraft being developed including the new air transport aircraft at Airbus and Boeing. The technology level continues to stretch the capability of the facility in the short term and there continues to be a significant amount of outsourcing costs for a few key processes. These costs will start to decrease now that equipment necessary to undertake these processes in-house has been delivered. The business was impacted in the third quarter by customer demand as two key customers transitioned their assembly work from one contract manufacturer to another. As these actions are concluded and as yields on the new products improve, this should lead to improved financial performance in 2008.

Conference Call

The Company will host a live conference call on October 4, 2007 at 8:30am (EDT) to discuss the results of the third quarter of 2007.

Anyone wishing to participate in the call should dial 416-695-9748 or 1-866-902-2211 and identify that you are calling into the FTG conference call. The Chairperson is Bradley Bourne. A replay of the call will be available until October 11, 2007. The number to call for a rebroadcast is 416-695-5800 or 1-800-408-3053 and the verbal password for the rebroadcast is 3237481#. The replay will also be available on the FTG website at www.ftgcorp.com.

Second Quarter Results: (three months ended August 31, 2007 compared with three months ended September 1, 2006)



Reconciliation of EBITDA(1): Q3 2007 Q3 2006
--------------------------------

Net earnings $(182,000) $ 300,000
Add:
Income taxes / (recovery) $ (98,000) $ 6,000
Interest expense $ 153,000 $ 129,000
Amortization of machinery and equipment $ 724,000 $ 781,000
Other amortization $ 32,000 $ 81,000
--------------------------------

EBITDA $ 629,000 $1,297,000
--------------------------------
--------------------------------


Year to Date Results (nine months ended August 31, 2007 compared with nine months ended September 1, 2006)



YTD 2007 YTD 2006
--------------------------------

Net earnings $ 642,000 $ 886,000
Add:
Income taxes / (recovery) $ 365,000 $ (59,000)
Interest expense $ 426,000 $ 348,000
Amortization of machinery and equipment $2,211,000 $2,342,000
Other amortization $ 154,000 $ 297,000
--------------------------------

EBITDA $3,798,000 $3,814,000
--------------------------------
--------------------------------

(1) EBITDA is not a measure recognized under Canadian generally accepted
accounting principles ("GAAP"). EBITDA is calculated as earnings before
provision for income taxes, interest expense, amortization of machinery
and equipment and amortization of other assets. Management believes
that many of the Company's shareholders, creditors, other stakeholders
and analysts prefer to assess the Company's performance using EBITDA in
addition to the GAAP measures. The Company's method of calculating
EBITDA may differ from other companies and accordingly may not be
comparable to measures used by other companies.


ABOUT FIRAN TECHNOLOGY GROUP CORPORATION

FTG is an aerospace and defense electronics product and subsystem supplier to the North American marketplace. 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 and Chatsworth, California.

FTG Aerospace manufactures illuminated cockpit panels, keyboards and sub-assemblies for original equipment manufacturers of avionics products as well as airframe manufacturers.

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

This news release contains certain forward-looking statements. Such statements are based on the current expectations of management of the Company and inherently involve numerous risks and uncertainties, known and unknown, including economic factors and the Company'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 Company. The reader is cautioned to consider these and other factors carefully when making decisions with respect to the Company and not place undue reliance on forward-looking statements.



FIRAN TECHNOLOGY GROUP CORPORATION
Interim Consolidated Balance Sheets
(in thousands of dollars)
---------------------------------------------------------------------------
---------------------------------------------------------------------------

August 31, November 30, September 1,
2007 2006 2006
(unaudited) (audited) (unaudited)
---------------------------------------------------------------------------
ASSETS

CURRENT
Cash $ 345 $ 2,348 $ 2,531
Accounts receivable 11,433 10,432 9,683
Income taxes recoverable 59 254 -
Inventories 8,967 7,622 6,776
Prepaid expenses 238 329 607
---------------------------------------------------------------------------
21,042 20,985 19,597

DUE FROM RELATED PARTY (Note 10) - 154 154
MACHINERY AND EQUIPMENT 7,608 6,969 6,534
FUTURE INCOME TAXES (Note 4) 4,886 4,350 3,724
GOODWILL (Note 6) 4,065 4,549 4,549
OTHER ASSETS 117 162 88
---------------------------------------------------------------------------

$ 37,718 $ 37,169 $ 34,646
---------------------------------------------------------------------------
---------------------------------------------------------------------------

LIABILITIES

CURRENT
Accounts payable and accrued
liabilities $ 8,030 $ 8,567 $ 7,059
Current portion of long-term
debt and capital leases (Note 5) 1,339 990 953
---------------------------------------------------------------------------
9,369 9,557 8,012
LONG-TERM DEBT AND CAPITAL
LEASES (Note 5) 6,126 5,561 5,532
---------------------------------------------------------------------------
15,495 15,118 13,544
---------------------------------------------------------------------------

SHAREHOLDERS' EQUITY

Share capital
Common shares 12,681 12,681 12,681
Preferred shares 2,218 2,218 2,218
Contributed surplus (Note 3(a)) 7,913 7,804 7,754
Deficit (11) (653) (1,564)
Accumulated other
comprehensive income (Note 2) (578) 1 13
---------------------------------------------------------------------------
22,223 22,051 21,102
---------------------------------------------------------------------------

$ 37,718 $ 37,169 $ 34,646
---------------------------------------------------------------------------
---------------------------------------------------------------------------

See accompanying notes.



FIRAN TECHNOLOGY GROUP CORPORATION
Interim Consolidated Statements of (Loss) Earnings
(in thousands of dollars except per share amounts)
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Three Months Ended Nine Months Ended
---------------------------------------------------------------------------
August 31, September 1, August 31, September 1,
2007 2006 2007 2006
(unaudited) (unaudited) (unaudited) (unaudited)
---------------------------------------------------------------------------
SALES $ 13,895 $ 13,670 $ 43,069 $ 41,797
COST OF SALES (Note 4) 11,743 10,570 34,143 32,574
---------------------------------------------------------------------------
2,152 3,100 8,926 9,223
---------------------------------------------------------------------------

EXPENSES
Selling, general
and administrative 1,555 1,884 5,282 5,706
Amortization of
machinery and
equipment 724 781 2,211 2,342
Interest expense on
long-term debt 153 129 426 348
---------------------------------------------------------------------------
2,432 2,794 7,919 8,396
---------------------------------------------------------------------------

(LOSS) EARNINGS
BEFORE INCOME TAXES (280) 306 1,007 827

INCOME TAXES (RECOVERY)
(Note 4) (98) 6 365 (59)
---------------------------------------------------------------------------

NET (LOSS) EARNINGS $ (182) $ 300 $ 642 $ 886
---------------------------------------------------------------------------
---------------------------------------------------------------------------

NET (LOSS) EARNINGS
PER SHARE
Basic (Note 3(b)) $ (0.01) $ 0.02 $ 0.04 $ 0.05
Diluted (Note 3(b)) $ (0.01) $ 0.02 $ 0.03 $ 0.05
---------------------------------------------------------------------------
---------------------------------------------------------------------------

See accompanying notes.



FIRAN TECHNOLOGY GROUP CORPORATION
Interim Consolidated Statements of Changes in Shareholders' Equity
(in thousands of dollars) (unaudited)
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Accum-
ulated
Other
Compre- Total Total
Pref- Contri- hensive Deficit Share-
Common erred Total buted Income and holders'
Shares Shares Capital Surplus Deficit ("AOCI") AOCI Equity
---------------------------------------------------------------------------

Balance,
November
30,
2006 $12,681 $2,218 $14,899 $7,804 $-653 $1 $-652 $22,051
Other
compre-
hensive
income:
Net
earnings 642 - 642 642
Foreign
currency
trans-
lation
adjust-
ments
(Note 6) - (579) (579) (579)
---------------------------------------------------------------------------
Other
compre-
hensive
income 642 (579) 63 63
Stock
based
compen-
sation 109 109

---------------------------------------------------------------------------
---------------------------------------------------------------------------
Balance,
August
31,
2007 $12,681 $2,218 $14,899 $7,913 $-11 $-578 $-589 $22,223
---------------------------------------------------------------------------
---------------------------------------------------------------------------



Accum-
ulated
Other
Compre- Total Total
Pref- Contri- hensive Deficit Share-
Common erred Total buted Income and holders'
Shares Shares Capital Surplus Deficit ("AOCI") AOCI Equity
---------------------------------------------------------------------------

Balance,
November
30,
2005 $12,681 $2,218 $14,899 $7,604 $-2,450 $-4 $-2,454 $20,049
Other
compre-
hensive
income:
Net
earnings 886 - 886 886
Foreign
currency
trans-
lation
adjust
ments - 17 17 17
---------------------------------------------------------------------------
Other
compre-
hensive
income 886 17 903 903
Stock
based
compen-
sation 150 150
---------------------------------------------------------------------------
Balance,
Septem-
ber 1,
2006 $12,681 $2,218 $14,899 $7,754 $-1,564 $13 $-1,551 $21,102
---------------------------------------------------------------------------
---------------------------------------------------------------------------

See accompanying notes.



FIRAN TECHNOLOGY GROUP CORPORATION
Interim Consolidated Statements of Cash Flows
(in thousands of dollars)
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Three Months Ended Nine Months Ended
---------------------------------------------------------------------------
August 31, September 1, August 31, September 1,
2007 2006 2007 2006
(unaudited) (unaudited) (unaudited) (unaudited)
---------------------------------------------------------------------------

NET INFLOW (OUTFLOW)
OF CASH RELATED
TO THE FOLLOWING
ACTIVITIES:

OPERATING
Net (loss) earnings $ (182) $ 300 $ 642 $ 886
Items not
affecting cash
Stock based
compensation expense 20 54 109 150
Future income
taxes (Note 4) (87) - 274 -
Scientific research
and experimental
development tax
credits (Note 4) - - (814) -
Amortization of
other assets 12 27 45 147
Amortization of
machinery and
equipment 724 781 2,211 2,342
Effect of exchange
rates on U.S. dollar
Canadian debt (19) (35) (237) (169)
Changes in non-cash
operating working
capital items (536) (958) (2,841) (2,159)
---------------------------------------------------------------------------
(68) 169 (611) 1,197
---------------------------------------------------------------------------

INVESTING
Additions to machinery
and equipment (1,156) (401) (2,977) (1,694)
Repayment from
related party 154 - 154 -
---------------------------------------------------------------------------
(1,002) (401) (2,823) (1,694)

FINANCING
Proceeds from issuance
of long-term debt - 6,819 - 6,819
Payment of long-term
debt and capital leases (243) (5,030) (735) (5,992)
Proceeds from capital
expenditure facility 1,054 - 2,115 -
Increase in deferred
financing fees - (64) - (64)
---------------------------------------------------------------------------
811 1,725 1,380 763
---------------------------------------------------------------------------

Effects of foreign
exchange rate
changes on cash flow 24 91 51 214
---------------------------------------------------------------------------

NET CASH FLOW (235) 1,584 (2,003) 480

CASH, BEGINNING OF PERIOD 580 947 2,348 2,051
---------------------------------------------------------------------------

CASH, END OF PERIOD $ 345 $ 2,531 $ 345 $ 2,531
---------------------------------------------------------------------------
---------------------------------------------------------------------------

DISCLOSURE OF CASH
PAYMENTS
Interest $ 149 $ 129 $ 410 $ 358
Income taxes
(recovery) $ (157) $ 30 $ (157) $ 373

See accompanying notes.



FIRAN TECHNOLOGY GROUP CORPORATION
Notes to the Interim Consolidated Financial Statements
(Unaudited) (in thousands of dollars except per share amounts)


1. BASIS OF PRESENTATION

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with Canadian generally accepted accounting principles on a basis consistent with those followed in the November 30, 2006 audited consolidated financial statements of Firan Technology Group Corporation and are presented in Canadian dollars. These unaudited interim consolidated financial statements do not include all the information and note disclosures required by Canadian generally accepted accounting principles for annual financial statements and therefore should be read in conjunction with the said November 30, 2006 audited consolidated financial statements and the notes below.

In the opinion of management, the unaudited interim consolidated financial statements include all adjustments (consisting of normal recurring accruals) considered necessary by management to present a fair statement of the results of operations, financial position and cash flows. The unaudited interim consolidated financial statements were prepared using the same accounting policies and methods as those used in the Corporation's audited financial statements for the year ended November 30, 2006, except as explained in Note 2.

The unaudited interim consolidated financial statements include the accounts of Firan Technology Group Corporation (the "Corporation") and its 100% owned subsidiaries, FTG Circuits Inc. ("FTG Circuits - Chatsworth") and Firan Technology Group (USA) Corporation.

2. CHANGES IN ACCOUNTING POLICY

Effective December 1, 2006, the Corporation adopted CICA Handbook Section 1530, Comprehensive Income, CICA Handbook Section 3855, Financial Instruments - Recognition and Measurement and CICA Handbook Section 3865, Hedges. These new Handbook Sections provide comprehensive requirements for the recognition and measurement of financial instruments, as well as standards on when and how hedge accounting may be applied. Handbook Section 1530 also introduces a new component of equity referred to as other comprehensive income.

In accordance with the provisions of these new standards, the Corporation reflected the following adjustments as of December 1, 2006:

- A presentational reclassification of amounts previously recorded in "Cumulative translation adjustment" to "Accumulated other comprehensive income."

The adoption of these standards had no impact on the Corporation's interim consolidated statement of earnings. The unrealized gains and losses included in "Accumulated other comprehensive income" were recorded net of taxes, which were nil.

The Company's financial assets and liabilities are recorded and measured as follows:



Asset / Liability Category Measurement
-----------------------------------------------------------------------

Cash Held-for-trading Fair value
Accounts receivable Loans and receivables Amortized cost
Due from related party Loans and receivables Amortized cost
Accounts payable and
accrued liabilities Other liabilities Amortized cost
Long-term debt Other liabilities Amortized cost


Other balance sheet accounts, such as inventories, prepaid expenses, current and future income taxes, other assets, goodwill, machinery and equipment are not within the scope of the new accounting standards as they are not financial instruments.

Embedded derivatives are required to be separated and measured at fair values if certain criteria are met. Embedded derivates include elements of contracts whose cash flows move independently from the host contract. Management reviewed contracts and determined that the Company does not currently have any embedded derivatives in these contracts that require separate accounting and disclosure.

3. SHARE CAPITAL

(a) Stock based compensation to employees

The Corporation recognized stock based compensation expense in the interim consolidated statement of earnings of $20 for the third quarter of 2007 and $109 for the year to date period. Of the year to date amount, approximately $17 relates to the following current year grants.



Option Fair Value
# of Options Expiry Price of Vesting of Options
Grant Date Granted Date Grant Period Granted
---------------------------------------------------------------------------

January 23, 150,000 January 23, $ 1.35 3 years $ 69
2007 2013
---------------------------------------------------------------------------
April 3, 10,000 April 3, $ 1.65 3 years $ 7
2007 2013
---------------------------------------------------------------------------
July 11, 30,000 July 11, $ 1.73 3 years $ 20
2007 2013
---------------------------------------------------------------------------
---------------------------------------------------------------------------


The total stock based compensation was expensed in the current period and credited to contributed surplus. The fair value of options granted were estimated at the date of the grant using the Black-Scholes valuation model with the following assumptions: risk-free rate of 6%; expected life of 3 years; volatility of 55% and a dividend yield of nil.

(b) Earnings per share

The Corporation has 1,775,000 voting convertible preferred shares outstanding. While the convertible preferred shares have the same voting rights as common shares they are not considered in calculating basic earnings per share but are included in calculating diluted earnings per share and will receive no dividends. The first, second and third quarter of 2006 and 2007 weighted average number of shares used in calculating basic and diluted earnings per share were 17,800,227 and 19,575,227 respectively.

4. INCOME TAXES

The Corporation accounts for income taxes under the liability method. Under the liability method, a future tax asset would be recorded only to the extent that based on available evidence, it is more likely than not that a future tax asset would be realized. The valuation allowance is reviewed and adjusted for each reporting period. Should management estimates of taxable income change in future periods, it may be necessary to adjust the valuation allowance, which could affect the results of operations in the period such a determination was made.

Recorded in the August 31, 2007 year to date cost of sales is $814 relating to non-refundable, federal government Scientific Research & Experimental Development ("SR&ED") tax credits used to reduce future taxable income. Similarly, there were $84 of refundable, provincial government SR&ED tax credits recorded in the third quarter and $219 of refundable provincial government SR&ED tax credits recorded on a year to date basis. There were no federal or provincial SR&ED tax credits recorded in the first, second or third quarters of 2006.

The income tax for the third quarter of 2007 consists of a Canadian operations future tax recovery of $87 at a 34.0% income tax rate and a U.S. subsidiary current tax recovery of $11 at a 45.4% income tax rate. This compares to a $6 U.S. subsidiary current tax at a 45.4% income tax rate for the third quarter of 2006.

On a year to date basis for 2007, the income tax consists of a Canadian operations future tax of $274 at a 34.0% income tax rate and a U.S. subsidiary current tax of $91 at a 45.4% income tax rate. This compares to a $59 U.S. subsidiary tax recovery at a 45.4% income tax rate for the same period on 2006.

5. LONG TERM DEBT & CAPITAL LEASES

At August 31, 2007 the Corporation has drawn U.S. $2,000 of the available U.S. $2,500 capital expenditure facility. The capital expenditure loans are amortized over 60 months with monthly principal payments beginning August 1, 2007 in the amounts of U.S. $33 plus interest charged at 8.25% which represents U.S. prime plus applicable margin for the U.S. subsidiary and 7.86% which represents a 90 day LIBOR rate plus applicable margin for the Canadian borrower.

6. TRANSLATION OF FOREIGN CURRENCIES

FTG Circuits - Chatsworth and Firan Technology Group (USA) Corporation are considered self-sustaining subsidiaries. Accordingly, their assets and liabilities are translated at exchange rates in effect at the balance sheet date. Revenues and expenses are translated at average exchange rates prevailing during each month. The resulting translation adjustments are included in the accumulated other comprehensive income section of shareholders' equity until there is a realized reduction in the net investment.

At the end of the third quarter of 2007, the goodwill relating to the self sustaining operations was reduced by $484 as a result of the impact of the strengthening Canadian dollar. The offset was included in the accumulated other comprehensive income.

7. FOREIGN CURRENCY RISK

As at August 31, 2007, the Corporation has oustanding U.S. dollar forward sales contracts maturing in the fourth quarter of 2007 of U.S. $2,000 at rates between $1.04 and $1.0698. The unrealized loss on the contracts was less than $1 and was recorded in the interim consolidated statement of earnings as a increase in selling, general and administrative costs and on the balance sheet as an increase in accounts payable and accrued liabilities.

8. OPERATING LEASES

During the second quarter of 2007, the Corporation signed a new 10 year facility lease for the FTG Aerospace Canadian operations. Monthly lease rent payments are $16 for the first 5 years and $17 for the second five years. Provided that the Corporation is in good standing, the landlord will grant a new lease for 2 further terms of 5 years subject to the same covenants and conditions as the original lease.

9. SEGMENTED INFORMATION

The Corporation operates in two operating segments, FTG Circuits and FTG Aerospace. FTG Circuits is a leading manufacturer of high technology/high reliability printed circuit boards within the North American marketplace. FTG Aerospace is a manufacturer of illuminated cockpit panels, keyboards, bezels and sub assemblies for original equipment manufacturers of avionic products and airframe manufacturers. FTG Circuits and FTG Aerospace financial information is shown below:



Three Months Ended August 31, 2007 September 1, 2006
---------------------------------------------------------------------------
Circuits Aerospace Total Circuits Aerospace Total
-------------------------------------------------------------
Sales $ 10,877 $ 3,018 $13,895 $ 11,017 $ 2,653 $ 13,670
Amortization
of machinery
and equipment 684 40 724 764 17 781
(Loss) earnings
before interest
and taxes (393) 266 (127) 167 268 435
Interest expense
on long-term
debt 153 - 153 129 - 129
Income taxes
(recovery) (188) 90 (98) 6 - 6
-------------------------------------------------------------
Net (loss)
earnings (358) 176 (182) 32 268 300
-------------------------------------------------------------
-------------------------------------------------------------

Segment assets 29,970 7,748 37,718 28,056 6,590 34,646
Goodwill 4,065 - 4,065 4,549 - 4,549
Additions to
machinery and
equipment 839 317 1,156 385 16 401
---------------------------------------------------------------------------
---------------------------------------------------------------------------


Nine Months Ended August 31, 2007 September 1, 2006
---------------------------------------------------------------------------
Circuits Aerospace Total Circuits Aerospace Total
-------------------------------------------------------------
Sales $ 33,705 $ 9,364 $43,069 $ 34,236 $ 7,561 $ 41,797
Amortization
of machinery
and equipment 2,082 129 2,211 2,219 123 2,342
Earnings before
interest and
taxes 609 824 1,433 651 524 1,175
Interest expense
on long-term
debt 426 - 426 348 - 348
Income taxes
(recovery) 85 280 365 (59) - (59)
-------------------------------------------------------------
Net earnings 98 544 642 362 524 886
-------------------------------------------------------------
-------------------------------------------------------------

Segment assets 29,970 7,748 37,718 28,056 6,590 34,646
Goodwill 4,065 - 4,065 4,549 - 4,549
Additions to
machinery and
equipment 2,331 646 2,977 1,647 47 1,694
---------------------------------------------------------------------------
---------------------------------------------------------------------------


Geographic location

Three Months Ended August 31, 2007 September 1, 2006
---------------------------------------------------------------------------
United United
Canada States Total Canada States Total
--------------------------------------------------------

Sales (by location
of customer) $ 2,174 $ 11,721 $ 13,895 $ 1,982 $ 11,688 $ 13,670
Goodwill (by
location of
division) 1,039 3,026 4,065 1,039 3,510 4,549
Machinery and
equipment (by
location of
division) 5,961 1,647 7,608 5,883 651 6,534
---------------------------------------------------------------------------
---------------------------------------------------------------------------


Geographic location

Nine Months Ended August 31, 2007 September 1, 2006
---------------------------------------------------------------------------
United United
Canada States Total Canada States Total
--------------------------------------------------------
Sales (by location
of customer) $ 6,687 $ 36,382 $ 43,069 $ 5,438 $ 36,359 $ 41,797
Goodwill (by
location of
division) 1,039 3,026 4,065 1,039 3,510 4,549
Machinery and
equipment (by
of division) 5,961 1,647 7,608 5,883 651 6,534
---------------------------------------------------------------------------
---------------------------------------------------------------------------


10. RELATED PARTY TRANSACTIONS

During the third quarter, the Corporation was repaid the $154 due from Glendale International Corp. (significant shareholder).

11. COMPARATIVE FIGURES

Certain of the comparative figures in the interim consolidated statements of cash flows have been reclassified to conform with the current periods presentation.

Contact Information