Firan Technology Group Corporation
TSX : FTG

Firan Technology Group Corporation

July 09, 2008 19:25 ET

Firan Technology Group Corporation (FTG) Announces Record Revenue in Second Quarter 2008

TORONTO, ONTARIO--(Marketwire - July 9, 2008) - Firan Technology Group Corporation (TSX:FTG) today announced the second quarter 2008 results for the period ending May 30, 2008.

- Record revenue for the Corporation, despite strong Canadian dollar

- Return to profitability, despite strong Canadian dollar

- Completed integration and transition of Filtran Microcircuits acquisition



Second Quarter Results: (three months ended May 30, 2008 compared with
----------------------- three months ended June 1, 2007)

Q2 2008 Q2 2007
----------- -----------

Sales $16,458,000 $15,263,000
Gross Margin 4,388,000 3,889,000
Earnings Before Undernoted Items(1) 659,000 195,000
SR&ED Tax Recovery - (564,000)
Filtran R&D 374,000 -
Filtran Operating Losses 190,000 -
Tax (111,000) 417,000
Net Earnings After Tax 206,000 342,000
Earnings per share - basic & diluted $0.01 $0.02



Year to Date Results (six months ended May 30, 2008 compared with
-------------------- six months ended June 1, 2007)

YTD 2008 YTD 2007
----------- -----------

Sales $30,056,000 $29,174,000
Gross Margin 7,285,000 7,200,000
Earnings Before Undernoted Items(1) 79,000 324,000
SR&ED Tax Recovery - (963,000)
Filtran Restructuring and R&D 582,000 -
Filtran Operating Losses 472,000 -
Tax (134,000) 463,000
Net (Loss)/Earnings After Tax ($841,000) $824,000
(Loss)/Earnings per share - basic ($0.05) $0.05
- diluted ($0.05) $0.04

(1) Earnings Before Undernoted Items is not a measure recognized under
Canadian generally accepted accounting principles ("GAAP"). Management
believes that this measure is important to many of the Company's
shareholders, creditors and other stakeholders.


Net sales increased by $1,195,000 or 8%, from $15,263,000 in the second quarter of 2007 to $16,458,000 in the second quarter of 2008. Excluding the impact of the strengthening Canadian dollar versus the US dollar, revenue would have been up approximately $3M or 20% over the same period last year. The Canadian dollar has strengthened over 13% between May 2007 and May 2008 and 83% of FTG's sales are in US dollars. Sales increased $2,860,000 or 21% sequentially in Q2 over Q1, 2008.

The Circuits Segment revenue was up $801,000 or 7% over the same period last year. Excluding the impact of the exchange rate, revenue was up $2.3M or 19%. The acquisition of Filtran increased revenues during the quarter by $1M. The transition continues to progress well and FTG is currently bidding or negotiating over $3M in additional opportunities as a result of the acquisition. All of the Filtran equipment has been moved to FTG's facilities and all critical items are operational.

For the Aerospace segment, sales in the second quarter, 2008 were $3,711,000 compared to $3,317,000 in Q2, 2007, an increase of $394,000 or 12%. The growth is due to the investments made in 2007 to increase capacity, including the move to a new larger facility, their outstanding quality and delivery metrics with their customers through 2008, as well as strong demand from existing and new customers.

For the year-to-date, the Corporation's revenues are up $882,000 or 3% versus the same period last year. Excluding the impact of the exchange rate, revenues would have been up $4.5M or 15% year over year.

FTG experienced solid bookings across the Corporation in Q2, 2008, although the normal slowdown was seen as the summer months approached. Total bookings in the quarter were over $15M and the book-to-bill for the Corporation was 0.93:1. The book-to-bill was 0.95:1 for FTG Circuits and 0.84:1 for FTG Aerospace. Total backlog of orders at the end of Q2 were $15M. FTG continues to add customers and reduce its dependence on any one customer.

Gross margin increased by $499,000 to $4,388,000 or 27% of sales for the second quarter of 2008 as compared with $3,889,000 or 25% of sales in the second quarter of 2007 and $2,897,000 or 21% of sales in Q1, 2008. The increase in gross margin is directly attributable to the higher revenue and the ongoing focus on higher technology products offset by the impact of the exchange rate and material cost increases.

Net earnings for the second quarter of 2008 were $206,000 or $0.01 per share ($0.01 per diluted share) as compared with $342,000 or $0.02 per share ($0.02 per diluted share) in the second quarter of 2007. FTG continues to invest in R&D to expand its product offerings and capture new customers and programs. R&D investments in Q2 2008 were $960,000 versus $800,000 in Q2, 2007. Included in the second quarter 2008 was $374,000 of R&D costs related to the Filtran acquisition. Included in Q2, 2007 was a recovery of $564,000 for research and development costs. Sequentially, net earnings were up $1,253,000 in Q2 versus Q1, 2008. Year to date, net loss is $841,000 versus a profit of $823,000 for the same period last year.

FTG had many accomplishments in Q2, 2008 that continue to improve the company and position it for the future, including:

- The integration and transition of the equipment and customers of Filtran Microcircuits, Inc. to existing FTG facilities

- The awards from Rockwell Collins recognizing supplier excellence and best-in-class lean manufacturing processes for FTG Aerospace

- The completion of a new 3 year agreement with Honeywell for FTG Circuits - Chatsworth

FTG reduced the total debt by $644,000 in the quarter. This reduction was achieved while incurring over $560,000 of Filtran related costs for customer qualifications, product learning, facility closure, and integration.

"We are extremely pleased with the continued revenue growth for the Corporation and are excited to exceed $16 million in revenue in a quarter for the first time. Our focus on the aerospace and defence market is proving to be very beneficial as this market continues to be robust," commented Brad Bourne, President and CEO, FTG Corporation. He added, "Our recent acquisition of Filtran Microcircuits has accelerated FTG's penetration of high speed, radio frequency circuit boards and brought many new customers yielding immediate benefits to FTG."

"To continue to improve our financial performance, FTG remains focused on achieving Operational Excellence. Our customers demand high quality products, on time delivery and outstanding customer service. With the recent performance awards from Rockwell, FTG has now won three such awards so far this year"added Mr. Brad Bourne, President and CEO.

"Both FTG facilities in Canada have overcome the strength of the Canadian dollar through significant top line growth and were profitable in our second quarter," stated Joe Ricci, Vice President and CFO, FTG Corporation. He added, "FTG Circuits - Chatsworth had a strong top line but saw some significant yield issues, primarily around the Filtran transition that impacted their bottom line, although they were profitable before these costs in the quarter. Approximately 11% of their revenue in the quarter was derived from former Filtran customers that have transitioned production to FTG."

The Company will host a live conference call on July 10, 2008 at 8:30am (EDT) to discuss the results of the second quarter of 2008.

Anyone wishing to participate in the call should dial 416-641-6140 or 1-866-542-4265 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 July 24, 2008. The number to call for a rebroadcast is 416-695-5800 or 1-800-408-3053, pass code 3265563. The replay will also be available on the FTG website at www.firantechnology.com

ABOUT FIRAN TECHNOLOGY GROUP CORPORATION

FTG is a North American supplier of aerospace and defense electronics products and subsystems. FTG has two operating units, FTG Circuits and FTG Aerospace.

FTG Circuits is a manufacturer of high technology/high reliability printed circuit boards. Its 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. FTG Aerospace has operations in Toronto, Ontario.

The Company'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 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. 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.



FIRAN TECHNOLOGY GROUP CORPORATION
Interim Consolidated Balance Sheets
----------------------------------------------------------------------------
----------------------------------------------------------------------------
May 30, 2008 November 30, 2007
(in thousands of dollars) (unaudited) (audited)
----------------------------------------------------------------------------
----------------------------------------------------------------------------

ASSETS

CURRENT
Cash $ 183 $ 234
Accounts receivable 12,251 10,761
Income taxes recoverable 91 74
Inventories 8,698 7,621
Prepaid expenses 430 412
----------------------------------------------------------------------------
21,653 19,102

CAPITAL ASSETS 7,906 7,757
FUTURE INCOME TAXES - 34
GOODWILL AND INTANGIBLES (Note 5) 4,291 3,904
----------------------------------------------------------------------------
$ 33,850 $ 30,797
----------------------------------------------------------------------------
----------------------------------------------------------------------------

LIABILITIES

CURRENT
Bank indebtedness (Note 6) $ 3,067 $ 400
Accounts payable and accrued liabilities 8,985 7,604
Current portion of long-term debt 1,254 1,368
----------------------------------------------------------------------------
13,306 9,372
LONG-TERM DEBT 5,830 5,900
----------------------------------------------------------------------------
19,136 15,272
----------------------------------------------------------------------------
CONTINGENCIES (Note 13)

SHAREHOLDERS' EQUITY

Share capital
Common shares 12,681 12,681
Preferred shares 2,218 2,218
Contributed surplus (Note 7(c)) 8,003 7,939
Deficit (7,325) (6,484)
Accumulated other comprehensive loss (863) (829)
----------------------------------------------------------------------------
14,714 15,525
----------------------------------------------------------------------------

$ 33,850 $ 30,797
----------------------------------------------------------------------------
----------------------------------------------------------------------------
See accompanying notes.



FIRAN TECHNOLOGY GROUP CORPORATION
Interim Consolidated Statements of Earnings (Loss)

----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three Months Ended Six Months Ended
----------------------------------------------- ----------------------------
----------------------------------------------- ----------------------------
(in thousands of May 30, June 1, May 30, June 1,
dollars except 2008 2007 2008 2007
per share amounts) (unaudited) (unaudited) (unaudited) (unaudited)
----------------------------------------------------------------------------
----------------------------------------------------------------------------

SALES $ 16,458 $ 15,263 $ 30,056 $ 29,174
COST OF SALES 12,070 11,374 22,771 21,974
----------------------------------------------------------------------------
4,388 3,889 7,285 7,200
----------------------------------------------------------------------------

EXPENSES
Selling, general
and administrative 2,102 2,062 4,116 3,727
Research and
development costs
(Note 8) 960 800 1,823 1,389
Filtran research
and development
costs (Note 8) 374 - 374 -
Recovery of
research and
development costs
(Note 8) - (564) - (963)
Amortization of
capital assets 681 697 1,381 1,487
Interest expense
on long-term debt 124 128 263 266
Interest expense on
short-term debt 52 7 95 7
Restructuring costs
(Note 9) - - 208 -
----------------------------------------------------------------------------
4,293 3,130 8,260 5,913
----------------------------------------------------------------------------

EARNINGS (LOSS) BEFORE
INCOME TAXES 95 759 (975) 1,287

INCOME TAXES (RECOVERY)
(Note 10) (111) 417 (134) 463
----------------------------------------------------------------------------
----------------------------------------------------------------------------

NET EARNINGS (LOSS) $ 206 $ 342 $ (841) 824
----------------------------------------------------------------------------
----------------------------------------------------------------------------

NET EARNINGS (LOSS)
PER SHARE
Basic (Note 7(b)) $ 0.01 $ 0.02 $ (0.05) $ 0.05
Diluted (Note 7(b)) $ 0.01 $ 0.02 $ (0.05) $ 0.04
----------------------------------------------------------------------------
----------------------------------------------------------------------------
See accompanying notes.



FIRAN TECHNOLOGY GROUP CORPORATION
Interim Consolidated Statements of Shareholders' Equity

----------------------------------------------------------------------------
(in thousands of dollars) Common Preferred Total Contributed
(unaudited) Shares Shares Capital Surplus
----------------------------------------------------------------------------

Balance, November 30, 2007 $ 12,681 $ 2,218 $ 14,899 $ 7,939
----------------------------------------------------------------------------
Net loss
Other comprehensive loss:
Foreign currency translation
adjustments (Note 14)
Comprehensive loss
Stock based compensation 64

----------------------------------------------------------------------------
Balance, May 30, 2008 $ 12,681 $ 2,218 $ 14,899 $ 8,003
----------------------------------------------------------------------------



----------------------------------------------------------------------------
(in thousands of dollars) Common Preferred Total Contributed
(unaudited) Shares Shares Capital Surplus
----------------------------------------------------------------------------

Balance, November 30, 2006 $ 12,681 $ 2,218 $ 14,899 $ 7,804
----------------------------------------------------------------------------
Net earnings
Other comprehensive income:
Foreign currency translation
adjustments (Note 14)
Comprehensive income
Stock based compensation 89

----------------------------------------------------------------------------
Balance, June 1, 2007 $ 12,681 $ 2,218 $ 14,899 $ 7,893
----------------------------------------------------------------------------



----------------------------------------------------------------------------
Accumulated Total
Other Deficit Total
(in thousands of dollars) Comprehensive and Shareholders'
(unaudited) Deficit Loss ("AOCL") AOCL Equity
----------------------------------------------------------------------------

Balance, November 30, 2007 $(6,484) $ (829) $ (7,313) $ 15,525
----------------------------------------------------------------------------
Net loss (841) - (841) (841)
Other comprehensive loss:
Foreign currency
translation adjustments
(Note 14) - (34) (34) (34)
--------------------------------------------------
Comprehensive loss (841) (34) (875) (875)
--------------------------------------------------
Stock based compensation 64

----------------------------------------------------------------------------
Balance, May 30, 2008 $(7,325) $ (863) $ (8,188) $ 14,714
----------------------------------------------------------------------------



----------------------------------------------------------------------------
Total
Deficit Total
(in thousands of dollars) and Shareholders'
(unaudited) Deficit AOCL AOCL Equity
----------------------------------------------------------------------------
Balance, November 30, 2006 $ (653) $ 1 $ (652) $ 22,051
----------------------------------------------------------------------------
Net earnings 824 - 824 824
Other comprehensive
income:
Foreign currency
translation adjustments
(Note 14) - (553) (553) (553)
--------------------------------------------------
Comprehensive income 824 (553) 271 271
--------------------------------------------------
Stock based compensation 89

----------------------------------------------------------------------------
Balance, June 1, 2007 $ 171 $ (552) $ (381) $ 22,411
----------------------------------------------------------------------------

See accompanying notes.



FIRAN TECHNOLOGY GROUP CORPORATION
Interim Consolidated Statements of Cash Flows
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three Months Ended Six Months Ended
----------------------------------------------- ----------------------------
----------------------------------------------- ----------------------------
May 30, June 1, May 30, June 1,
(in thousands of 2008 2007 2008 2007
dollars) (unaudited) (unaudited) (unaudited) (unaudited)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
NET (OUTFLOW) INFLOW
OF CASH RELATED
TO THE FOLLOWING
ACTIVITIES:

OPERATING
Net earnings (loss) $ 206 $ 342 $ (841) $ 824
Items not affecting
cash
Stock based
compensation expense 35 42 64 89
Future income taxes - 358 - 361
Recovery of research
and development
costs (Note 8) - (419) - (814)
Effect of exchange
rates on U.S. dollar
Canadian debt 29 (281) (28) (218)
Amortization of
capital assets 681 697 1,381 1,487
Changes in non-cash
operating working
capital (273) (1,160) (1,358) (2,272)
----------------------------------------------------------------------------
678 (421) (782) (543)
----------------------------------------------------------------------------

INVESTING
Acquisition of Filtran
Microcircuits Inc.
(Note 4) - - (1,462) -
Additions to capital
assets (295) (961) (396) (1,821)
----------------------------------------------------------------------------
(295) (961) (1,858) (1,821)
----------------------------------------------------------------------------

FINANCING
(Decrease) increase
in bank indebtedness (826) - 2,667 -
Proceeds from capital
expenditure facility 501 1,061 501 1,061
Repayments of
long-term debt (319) (226) (637) (492)
----------------------------------------------------------------------------
(644) 835 2,531 569
----------------------------------------------------------------------------

Effects of foreign
exchange rate changes
on cash flow 59 54 58 27
----------------------------------------------------------------------------

NET CASH FLOW (202) (493) (51) (1,768)

CASH, BEGINNING OF PERIOD 385 1,073 234 2,348
----------------------------------------------------------------------------

CASH, END OF PERIOD $ 183 $ 580 $ 183 $ 580
----------------------------------------------------------------------------

DISCLOSURE OF CASH PAYMENTS
Payments for interest $ 176 $ 123 $ 358 $ 261
Payments for income
taxes $ - $ - $ 2 $ -
Refund of income taxes $ 73 $ - $ 73 $ -
----------------------------------------------------------------------------

See accompanying notes.


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


4. ACQUISITION OF FILTRAN MICROCIRCUITS INC. ("FILTRAN")

On December 28, 2007, the Corporation acquired substantially all of the assets of Filtran Microcircuits Inc. ("Filtran"), a Canadian printed circuit board manufacturer based in Ottawa, Ontario and focused primarily on the manufacture of microwave printed circuit boards for high frequency applications.

The transaction was effected pursuant to an asset purchase agreement entered into between the Corporation, Filtran and Filtran's parent company, Merrimac Industries Inc. ("Merrimac") (AMEX:MRM). The total consideration payable by the Corporation was $1,450 in cash plus the assumption of certain liabilities. The Corporation paid $800 of the purchase price at closing with the balance payable 49 calendar days after closing. The Corporation financed the acquisition from existing cash and its bank operating line.

The preliminary allocation of the purchase price to the fair values of assets and liabilities acquired was made using the purchase method of accounting and are as follows:



Accounts receivable $ 384
Inventories 321
Prepaid expenses 6
Capital assets (machinery & equipment) 1,162
Accounts payable and accrued liabilities (821)
Goodwill and intangible assets 410
----------------------------------------------------------------------------

Purchase price including acquisition expenses of $59 and net of
cash acquired of $47 $ 1,462
----------------------------------------------------------------------------


5. GOODWILL AND INTANGIBLES

Goodwill results from the Circuit World Corporation and FTG Inc. combination in fiscal 2003 of $1,039 and $2,865 from the acquisition of FTG Circuits - Chatsworth in fiscal 2005. $410 of goodwill and intangibles results from the fiscal 2008 acquisition of Filtran Microcircuits Inc. FTG Circuits - Chatsworth is a considered self-sustaining subsidiary; accordingly its goodwill is translated at exchange rates in effect at the balance sheet date. The resulting year to date loss of $23 on the translation of the goodwill is included in the accumulated other comprehensive loss section of shareholder's equity.

6. BANK INDEBTEDNESS

The US subsidiary utilized $700 U.S. of the revolving facility at May 30, 2008 ($400 U.S. at November 30, 2007) and $2,372 (nil at November 30, 2007) was utilized by the Canadian parent mainly to finance the purchase of Filtran Microcircuits Inc. and general working capital purposes. The revolving credit facility is secured by a first charge on all of the property and assets of the Corporation. During the second quarter, the Corporation drew $500 U.S. from its second $2,000 U.S. capital expenditure facility. This five year facility expires December 31, 2013 with principal payments of $8 plus interest commencing the month after the expiration of the December 31, 2008 drawdown period. Interest rates are at US prime less (50) basis points. The Corporation was in compliance with all of its bank covenants as at May 30, 2008.

8. RESEARCH AND DEVELOPMENT COSTS AND RECOVERIES

Research and development costs include the cost of direct labour, materials and an allocation of overhead. Generally, these costs represent specific activities regarding the technical uncertainty of production processes and exotic materials. The Corporation recorded $960 of research and development costs in the quarter and $1,823 on a year to date basis. This compares to $800 and $1,389 for the same periods in 2007.

Filtran research and development costs were $374 for the second quarter and on a year to date basis. These costs include the cost of direct labour, materials and an allocation of overhead for the radio frequency product line which has been introduced into the Circuits segment.

During the second quarter of 2007, recovery of research and development costs represented $419 of non-refundable Scientific Research and Experimental Development ("SR&ED") tax credit claims which could be used to reduce future taxable income, $135 of refundable tax credits from the Ontario government Ontario Innovation Tax Credit ("OITC") program and $10 of refundable expenditures from the Ontario government Industrial Research Assistance Program ("IRAP"). Of the 2007 year to date amount, $814 relates to SR&ED tax credits, $135 to the OITC refund and $14 for IRAP refunds.

During the second quarter of 2008, the Corporation earned additional SR&ED tax credits of $182 and $331 on a year to date basis which were not recorded as recoveries.

9. RESTRUCTURING COSTS

The Corporation recorded and paid $208 in restructuring costs on a year to date basis for costs associated with integrating and closing the Filtran facility.

10. 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.

Taxes on the second quarter 2008 Canadian income of $333 were offset by unrecorded loss carry forwards. On a year to date basis, there were no current tax recovery recorded on the Canadian loss.

The income tax recovery for the second quarter of 2008 consists of a U.S. subsidiary current tax recovery of $111 at a 45.2% income tax rate as a result of the second quarter loss . There is no current income tax provision recorded for the Canadian operation during the quarter or year to date basis as a result of the year to date loss. This compares to a second quarter 2007 Canadian operation provision of $358 at a 34.0% income tax rate and a U.S. subsidiary provision of $59 at a 45.4% income tax rate.

On a year to date basis, the income tax recovery consists of a U.S. subsidiary current tax recovery of $134 at a 45.2% income tax rate as the result of the year to date loss. This compares to a 2007 Canadian operation provision of $361 at a 34.0% income tax rate and a U.S subsidiary provision of $102 at a 45.4% income tax rate.

13. CONTINGENCIES

On December 10, 2004, the Corporation acquired from Ambitech International Inc. all of the shares of SnS Enterprises Inc. (operating as Young Electronics), a U.S. printed circuit board manufacturer based in Los Angeles, California. Ambitech International Inc. has tax filings which were due for the 15 month period preceding the acquisition by the Corporation. In accordance with the purchase and sale agreement the Corporation was indemnified for any tax liabilities preceding the agreement. The status of Ambitech International Inc. is unknown which may cause the tax authorities to pursue the matter with the Corporation. Any potential liability of the Corporation at this time is undeterminable. During the second quarter of 2008, the Corporation received confirmation from the Receiver of Ambitech International Inc. that the subject returns will be filed during the third quarter of 2008. The Corporation is working with the Franchise Tax Board of the State of California and the Ambitech receiver to resolve the matter. Management does not feel the impact of this matter will be material.

The Corporation has received claims from the former landlord and severed employees of the Filtran business in connection with the Corporation's purchase of selected assets and liabilities of Filtran. The Corporation feels the claims have no merit and will not have an impact on the Corporation as it is indemnified by Filtran and Merrimac.

15. 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 May 30, 2008
----------------------------------------------------------------------------
Corporate
Circuits Aerospace Office Total
----------------------------------------------------------------------------
Sales 12,747 3,711 - 16,458
Costs and SG&A expenses 10,580 3,044 548 14,172
Amortization of capital assets 585 96 - 681
Research and development costs 917 43 - 960
Filtran research and
development costs 374 - - 374
----------------------------------------------------------------------------
Earnings (loss) before
interest and taxes 291 528 (548) 271
Interest expense 176 - - 176
Income taxes (recovery) (111) - - (111)
----------------------------------------------------------------------------
Net earnings (loss) 226 528 (548) 206
----------------------------------------------------------------------------
Segment assets 25,488 8,362 - 33,850
Goodwill and intangibles 4,291 - - 4,291
Additions to capital assets 262 33 - 295
----------------------------------------------------------------------------



----------------------------------------------------------------------------
Three Months Ended June 1, 2007
----------------------------------------------------------------------------
Corporate
Circuits Aerospace Office Total
----------------------------------------------------------------------------
Sales 11,946 3,317 - 15,263
Costs and SG&A expenses 10,147 2,813 476 13,436
Amortization of capital assets 670 27 - 697
Research and development costs 777 23 800
Recovery of research and
development costs (554) (10) (564)
----------------------------------------------------------------------------
Earnings (loss) before
interest and taxes 906 464 (476) 894
Interest expense 135 - - 135
Income taxes 295 122 - 417
----------------------------------------------------------------------------
Net earnings (loss) 476 342 (476) 342
----------------------------------------------------------------------------
Segment assets 29,659 7,920 - 37,579
Goodwill 4,080 - - 4,080
Additions to capital assets 772 189 - 961
----------------------------------------------------------------------------



Geographic location
----------------------------------------------------------------------------
(in thousands of dollars) For Three Months Ended May 30, 2008
----------------------------------------------------------------------------
United
Canada States Asia Europe Total
----------------------------------------------------------------------------
Sales (by location of customer) 3,516 12,093 727 122 16,458
Goodwill and intangibles
(by location of division) 1,446 2,845 - - 4,291
Capital assets
(by location of division) 6,648 1,258 - - 7,906
----------------------------------------------------------------------------

----------------------------------------------------------------------------
For Three Months Ended June 1, 2007
----------------------------------------------------------------------------
United
Canada States Asia Europe Total
----------------------------------------------------------------------------
Sales (by location of customer) 2,846 11,883 360 174 15,263
Goodwill (by location of division) 1,039 3,041 - - 4,080
Capital assets
(by location of division) 5,527 1,659 - - 7,186
----------------------------------------------------------------------------



----------------------------------------------------------------------------
Six Months Ended May 30, 2008
----------------------------------------------------------------------------
Corporate
Circuits Aerospace Office Total
----------------------------------------------------------------------------
Sales 23,316 6,740 - 30,056
Costs and SG&A expenses 19,975 5,773 1,139 26,887
Amortization of capital assets 1,244 137 - 1,381
Research and development costs 1,705 118 - 1,823
Filtran research and development
costs 374 - - 374
Restructuring costs 208 - - 208
(Loss) earnings before interest
and taxes (190) 712 (1,139) (617)
Interest expense 358 - - 358
Income taxes (recovery) (134) - - (134)
Net (loss) earnings (414) 712 (1,139) (841)
Segment assets 25,488 8,362 - 33,850
Goodwill and intangibles 4,291 - - 4,291
Additions to capital assets 363 33 - 396
----------------------------------------------------------------------------



----------------------------------------------------------------------------
Six Months Ended June 1, 2007
----------------------------------------------------------------------------
Corporate
Circuits Aerospace Office Total
----------------------------------------------------------------------------
Sales 22,828 6,346 - 29,174
Costs and SG&A expenses 19,295 5,465 941 25,701
Amortization of capital assets 1,398 89 - 1,487
Research and development costs 1,353 36 1,389
Recovery of research and
development costs (949) (14) (963)
Earnings (loss) before interest
and taxes 1,731 770 (941) 1,560
Interest expense 273 - - 273
Income taxes (recovery) 273 190 - 463
Net earnings (loss) 1,185 580 (941) 824
Segment assets 29,659 7,920 - 37,579
Goodwill 4,080 - - 4,080
Additions to capital assets 1,492 329 - 1,821
----------------------------------------------------------------------------



----------------------------------------------------------------------------
Geographic location
(in thousands of dollars) For Six Months Ended May 30, 2008
----------------------------------------------------------------------------
United
Canada States Asia Europe Total
----------------------------------------------------------------------------
Sales (by location of customer) 5,784 22,501 1,467 304 30,056
Goodwill and intangibles
(by location of division) 1,426 2,865 - - 4,291
Capital assets
(by location of division) 6,648 1,258 - - 7,906
----------------------------------------------------------------------------



----------------------------------------------------------------------------
For Six Months Ended June 1, 2007
----------------------------------------------------------------------------
United
Canada States Asia Europe Total
----------------------------------------------------------------------------
Sales (by location of customer) 5,025 23,345 444 360 29,174
Goodwill (by location of division) 1,039 3,041 - - 4,080
Capital Assets
(by location of division) 5,527 1,659 - - 7,186
----------------------------------------------------------------------------


16. COMPARATIVE FIGURES

Certain of the comparative figures in the interim consolidated financial statements have been reclassified to conform with the current period's presentation.

Contact Information