Firan Technology Group (TSE:FTG) reported record third-quarter results for fiscal 2026, as demand from aerospace and defense customers supported higher bookings, revenue, profitability and backlog.
President and Chief Executive Officer Brad Bourne said the company recorded $90 million in bookings during the quarter, up 75% from the prior-year period, producing a book-to-bill ratio of 1.41-to-1. Quarter-end backlog reached $221 million, up 49% from year-end 2025. Revenue rose 34.3% year over year to $64 million.
Profitability expands as volumes rise
Chief Financial Officer Drew Knight said gross profit was $27.5 million, or 42.9% of sales, compared with $14.5 million, or 30.3% of sales, in the third quarter of 2025. Adjusted EBITDA rose to $15.1 million, or 23.6% of sales, from $7.7 million, or 16.1% of sales, a year earlier.
Net earnings were $10 million, or $0.39 per diluted share, compared with $2.8 million, or $0.11 per diluted share, in the comparable quarter. Knight said the year-over-year earnings improvement also benefited from a lower tax rate, as profits were distributed more broadly across business units and the company utilized historical tax losses.
Free cash flow was $7.1 million in the quarter, compared with negative $4.6 million a year earlier. FTG ended the quarter with net cash of $3.9 million after repaying its interest-bearing bank debt. The company retained interest-free government debt.
FTG reported $94 million in primary liquidity sources at quarter-end, consisting of $66 million in working capital and $28 million in unused credit facilities. Capital expenditures and non-current deposits totaled $4.2 million in the quarter. Knight said capital spending could run at 4% to 5% of revenue in coming quarters as FTG adds capacity in Canada, the U.S. and India, compared with its long-term target of about 3%.
Defense programs and expedited orders support circuits growth
The company’s Circuits segment generated $45.1 million in third-quarter sales, up 40% from a year earlier. Its aerospace business reported sales of $19.8 million, an 18% increase. Bourne said the ramp in two large classified defense programs contributed materially to quarterly sales and earnings, with deliveries beginning during the period.
During the question-and-answer session, Bourne estimated that the classified programs accounted for roughly 10% of quarterly revenue, while emphasizing that the figure was an estimate. He said both programs have potential annual volumes in a range of $50 million to $100 million each, though FTG will share work with other suppliers and could not serve all of the potential demand itself.
Bourne said the programs are expected to ramp through 2027 and then sustain for an unspecified number of years. He also said expedited delivery demand was primarily concentrated in defense, including the two classified programs. While expedited work generated premium pricing, he cautioned that this business has short-term visibility and that the level of premiums beyond the near term is uncertain.
Knight said faster throughput at FTG’s U.S. facilities enabled the company to offer quick-turnaround production, which carried higher margins. Aerospace Calgary also contributed through licensing revenue, a customer contract cancellation charge, repeat hardware sales and initial shipments of weather sensors.
International diversification and aerospace initiatives
FTG continued efforts to diversify its geographic revenue base and reduce exposure to potential U.S. tariffs. Sales in Canada increased 61% year over year, while sales to Asia rose 40%, helped by shipments associated with the C919 narrow-body aircraft. Sales in Europe were flat.
U.S.-based customers accounted for 70.9% of third-quarter sales, compared with 71.2% a year earlier. Bourne said FTG is seeking to grow revenue for its non-U.S. facilities while also expanding business at its U.S. operations.
The company opened its aerospace facility in Hyderabad, India, during the third quarter. Bourne said the site is expected to focus initially on staffing, training and intercompany activity, with no meaningful incremental contribution anticipated before 2027. FTG expects the facility to receive key aerospace certifications by the end of the year, after which it could ship to external customers.
FTG also said it is adding equipment at its Toronto Circuits site. Bourne said equipment delivery is expected by year-end, though installation and commissioning could extend into the end of the first quarter of next year.
Tariff and input-cost pressures remain a focus
Bourne said tariffs are increasing input costs in FTG’s Circuits business, particularly at U.S. sites that use materials originating outside North America. Toronto is also affected when materials move through the U.S. to Canada. FTG estimates the overall cost impact will amount to millions of Canadian dollars in 2026 and is working to pass increases on to customers.
The company is also seeing rapidly rising circuit-material costs tied to demand from artificial-intelligence data centers. Bourne said FTG is pursuing price increases but described the pace of input cost increases as difficult to manage.
Looking ahead, management said approximately 84.8% of the $221 million backlog is expected to convert to revenue over the next 12 months through the third quarter of 2027. Bourne said FTG has capacity to continue growing through additional hiring, higher equipment utilization, new Toronto equipment and the Hyderabad facility, though the pace of growth remains a key operational challenge.
About Firan Technology Group (TSE:FTG)
FTG is an aerospace and defence electronics product and subsystem supplier to customers around the globe. FTG has two operating units: FTG Circuits: 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, certifies, manufactures, and provides in-service support for illuminated cockpit products and electronic assemblies for original equipment manufacturers and operators of aerospace and defence equipment.
