Glendale International reports third quarter fiscal 2005 financial results

About this update from Firan Technology Group Corporation

OAKVILLE, ON, Oct. 7 /CNW/ - Glendale International Corp. (TSX: GIN) today reported sales of $37.4 million and net earnings of $0.3 million, or $0.02 per share, for the third quarter of fiscal 2005, ended August 26, 2005. "Against the backdrop of record gasoline prices and a strong Canadian dollar, the Recreational Vehicles business continues to achieve pre-tax profit margins that are among the best in the North American towable RV industry, the result of our unique product lines and innovative option packages," said Edward C. Hanna, Chief Executive Officer and Chairman, Glendale International Corp. "During the third quarter, we launched our 2006 line-up, including the redesigned Titanium MPRV. In our Electronics business, successful initiatives to increase yields and lower costs at the Toronto facility contributed to dramatically improved results versus the second quarter, while FTG Chatsworth continued to perform well following its acquisition last year. Strong performance in our Navigational Aids business during the quarter contributed to year-to-date profitability that is well ahead of last year. The quarter was also marked by several significant contract awards." Financial Results Sales for the third quarter of fiscal 2005 were $37.4 million compared with $45.0 million for the third quarter of fiscal 2004, primarily due to lower sales for the Recreational Vehicles business. Net earnings for the third quarter of fiscal 2005 were $0.3 million, or $0.02 per share, compared with $4.8 million, or $0.38 per share, for the third quarter of fiscal 2004. Sales for the first nine months of fiscal 2005 were $123.8 million compared with $141.1 million for the corresponding period of fiscal 2004. Net earnings for the first nine months of fiscal 2005 were $2.1 million, or $0.17 per share, compared with $7.9 million or $0.63 per share for the first nine months of fiscal 2004. As of August 26, 2005, Glendale International had working capital of $11.1 million, including cash and cash equivalents of $5.8 million, compared to working capital of $10.9 million, including cash and cash equivalents of $5.0 million, on November 30, 2004. Recreational Vehicles (Glendale RV and Travelaire Canada) Sales for the Recreational Vehicles business for the third quarter of fiscal 2005 were $19.5 million compared with $25.6 million for the third quarter of last year. The decline in sales is primarily attributable to the currency translation impact of U.S. dollar denominated sales, increased price competition due to the higher Canadian dollar and higher gasoline prices, which impact the buying decisions of consumers. Operating earnings for the third quarter of fiscal 2005 were $0.2 million compared with $2.1 million for the same quarter last year. During the quarter, the Recreational Vehicles business launched its 2006 product line, which includes a brand new version of its unique Titanium Multi-Purpose Recreational Vehicle (MPRV). In addition to Glendale RV's patent pending "Bug Room", the MPRV features a versatile cargo area large enough to house a Smart Car and a redesigned rear door that folds down to become a ramp for loading convenience. Other 2006 Titanium models feature revolutionary kitchen designs that provide significantly more space than conventional designs. Glendale RV also launched a new line of fifth wheel under the Easy Rider-Golden Falcon banner. Electronics (Firan Technology Group Corporation) Performance of the Electronics business improved dramatically versus the second quarter of this year, with pre-tax operating earnings increasing by 77% resulting from substantially improved yields at FTG Circuits Toronto and the continued strong performance of FTG Circuits Chatsworth. During the quarter, FTG Circuits renewed its agreement with a major long-term customer for a period of three years. The agreement is valued at $20 to $30 million over the term of the agreement. Sales for Firan Technology Group Corporation (TSX:FTG) for the third quarter of fiscal 2005 were $13.2 million compared with $13.4 million for the third quarter of fiscal 2004. The appreciation in the Canadian dollar reduced the translated value of U.S.-denominated sales by approximately $1.0 million. Sales for the Circuits Division increased to $11.0 million from $10.8 million, with FTG Chatsworth contributing $3.3 million. Sales for the Aerospace Division were $2.2 million compared to $2.6 million for the third quarter of last year. Operating earnings for the third quarter of fiscal 2005 were $0.4 million compared to $0.8 million for the third quarter of fiscal 2004. In accordance with its ownership position in Firan Technology Group Corporation, Glendale International recorded net earnings from the company for the third quarter of fiscal 2005 of $0.1 million compared with net earnings of $0.4 million for the third quarter of fiscal 2004. Navigational Aids (Fernau Avionics) Sales for Fernau Avionics for the third quarter of fiscal 2005 were $4.2 million compared with $5.5 million for the third quarter of fiscal 2004. The decrease was primarily the result of timing of contracts. Operating earnings for the third quarter of fiscal 2005 were $0.4 million compared with $0.6 million for the third quarter of fiscal 2004. Operating margins remained strong due to the success of the revitalization of the existing product lines last year, as well as reductions in input costs and improvements in manufacturing efficiencies. For the year-to-date, profitability has improved significantly with operating earnings increasing 37% compared to the same period last year. During the quarter, Fernau was awarded two major contracts to provide traditional ground-based air navigation equipment. Executing on its strategy to penetrate the U.S. market, Fernau secured a contract to provide TACANs and DMEs to the U.S. Air Force Material Command (AFMC). The award is Fernau's first major contract to supply ground-based air navigation equipment in the U.S. In addition, Fernau secured a multi-million dollar contract with the United Kingdom Ministry of Defence to supply Direction Finder Systems to the Royal Navy and Royal Airforce. The systems will be installed at 14 sites in the UK, Germany and the Falkland Islands. Outlook Mr. Hanna continued, "We are very proud of our 2006 RV line up. With some of the most innovative features and options in the industry, our models position us to be competitive in the challenging environment created by the strong Canadian dollar and rising fuel costs, and over the long term as favourable demographics drive the growth in the North American RV industry. In addition to the acquisition of FTG Chatsworth, the Circuits division of our Electronics business continues to strengthen as a result of yield improvements and cost reductions, while the Aerospace division continues to benefit from strong demand. Our Navigational Aids business remains well positioned for continued growth supported by both the traditional ground-based air navigation system business and new products such as the Personal Locator Beacon." About Glendale International Corp. Glendale International Corp. manages businesses that provide the opportunity for superior long-term value creation through the application of proven managerial expertise and innovative business strategies. The Corporation has built a core portfolio of profitable growth businesses in the recreational vehicles, electronics and technology sectors and will seek to acquire complementary businesses that support its value-building proposition. Glendale International's businesses include: Glendale Recreational Vehicles/Travelaire Canada, the largest Canadian manufacturer of recreational vehicles (RVs); A controlling position in Firan Technology Group Corporation, the largest aerospace and defence supplier of advanced technology printed circuits in Canada and among the top 25 PCB manufacturers in North America; and Fernau Avionics, a leading international supplier of ground-based air navigational systems for military, naval and civil aviation applications. Glendale International Corp. is a public corporation whose shares trade on the Toronto Stock Exchange ("TSX") under the symbol "GIN". The Corporation has approximately 12.5 million common shares outstanding. To reach Glendale International via the worldwide web logon to www.glendaleint.com. This press release contains certain forward-looking statements that reflect the current views and/or expectations of management of Glendale International Corp. with respect to its performance, business and future events. Such statements are subject to a number of risks, uncertainties and assumptions. Actual results and events may vary significantly. >

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