Tel-Instrument Electronics Corp. (“Tel & CloseCurlyDoubleQuote; or” Company & CloseCurlyDoubleQuote;) (OTCQB: TIKK), a leading designer and manufacturer of avionics testing and measurement solutions, today reported net income of $ 576k ($ 0.15 per share) on revenue of $ 4.1 million for the first quarter of fiscal 2022 ended June 30, 2021.
Highlights include:
- Revenue for the first quarter rose to $ 4.1 million, up 40.6 percent from a year ago.
- Gross margins remain stable at 48.8% due to production efficiency, strict cost control and product mix.
- Quarterly operating expenses fell 4 percent to $ 1.25 million despite increased revenue and profit-sharing accruals.
- Operating income rose to $ 766k for the current quarter from $ 209k in the quarter a year ago.
- Net income rose to $ 576k, or $ 0.15 per ordinary share and $ 0.11 per share on a fully diluted basis.
- EBITDA for the first quarter improved to $ 812k from $ 255k in the previous quarter.
- Cash balances improved to $ 6.8 million, compared to $ 5.5 million at the beginning of the fiscal year.
- Net worth improved to $ 5.7 million from $ 5.2 million at the beginning of the fiscal year.
Mr. Jeffrey O & CloseCurlyQuote; Hara, president and CEO of Tel-Instrument & CloseCurlyQuote, commented: “We are pleased to report improved first-quarter operating results, with revenue of $ 4.1 million. This was generated by strong sales from our military business and a moderate recovery in our trading business. The problems with the COVID-19 supply chain that we experienced in the previous fiscal year seem to be easing, and we are cautiously optimistic that this trend will continue. The company continues to do well in managing operating costs with a reduction of 4% on an annual basis. The delay remained strong at the end of the first quarter at $ 6.1 million. We expect the business with international test modes 5 and orders for the F-35 program to remain strong over the next few years. We are also actively working with the US Navy on ‘Medium Life & CloseCurlyDoubleQuote; update our CRAFT test kits, which can generate significant revenue over the next five to 10 years. We also continue to invest in our market-leading Mode 5 products and plan to demonstrate new test capabilities for Mode 5 Level 2B at an upcoming military test event. This could potentially lead to future software upgrades to all of our Mode 5 on-site test kits.
Our goal over the last few years has been to strengthen our balance sheet and set aside enough money to pay full compensation for Aeroflex’s damages, if necessary, in the event that we fail with our forthcoming legal appeal. This has already been achieved with a cash balance of $ 6.8 million on June 30, 2021. The company plans to apply for full forgiveness of the $ 722 thousand PPP loan in the second quarter, which is expected to lead to a balance with zero external debt.
To meet the standards for the next generation of military applications, we upgraded our 4.5kg manual SDR / OMNI test to include a much faster processor with improved video graphics capabilities. It is designed to meet Class 1 environmental specifications, making it an ideal set of tests for the military market. The goal of this new set of tests is to regain market share in the commercial avionics test kits business and expand into a much larger market for secure radio communications tests. We will demonstrate this device to customers from next month and expect to start accepting commercial orders this fall.
With regard to litigation with Aeroflex, we continue to believe that we have serious grounds for canceling or reducing the award. The appeal process has been delayed due to the COVID-19 pandemic, but we expect a decision within the next 12 months.
For Tel-Instrument Electronics Corp.
Tel-Instrument is a leading designer and manufacturer of avionics testing and measurement solutions for global commercial air transport, general aviation and government / military space and defense markets. Tel-Instrument provides tools for testing, measuring, calibrating and repairing a wide range of on-board navigation and communication equipment. For more information, please visit our website at www.telinstrument.com.
This press release includes statements that are not historical in nature and can be described as “statements for the future, & CloseCurlyDoubleQuote; including those related to future financial and operational results, benefits and synergies of the combined companies, statements about the company’s prospects and CloseCurlyQuote; and their results, long-term goals of the Company and other statements of expectations, beliefs, future plans and strategies, expected events or trends and similar expressions on matters that are not historical facts. All forecasts of future results contain a measure of uncertainty and, accordingly, actual results may differ significantly. Among the factors that could make a difference are: changes in the general economy; changes in demand for the company’s products and CloseCurlyQuote; or in the price and availability of its raw materials; the actions of its competitors; the success of our customers; technological change; changes in employee relations; government regulations; litigation, including their inherent uncertainty; difficulties in the work and materials of the plant; transport, environmental issues; and other unforeseen circumstances. A number of these factors have been discussed in previous Company & CloseCurlyQuote documents to the US Securities and Exchange Commission. The Company rejects any intention or obligation to update any forward-looking statements as a result of developments since the date of this press release. The safe port for forward-looking statements contained in the Securities Litigation Reform Act 1995 (the Act & CloseCurlyDoubleQuote;) protects companies from liability for their forward-looking statements if they meet the requirements of the law.
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TEL-INSTRUMENT ELECTRONICS CORP. CONDENSED CONSOLIDATED BALANCE SHEETS |
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June 30, 2021 |
March 31, 2021 |
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(unaudited) |
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ASSETS |
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Current assets: |
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|
Cash |
$ |
4,758,819 |
$ |
3,485,275 |
||||
|
Receivables, net |
1,318,276 |
1 933 321 |
||||||
|
Stocks, net |
3,051,343 |
3,437,989 th most common |
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|
Limited cash in support of the appeal |
2,011,050 |
2,011,050 |
||||||
|
Prepaid expenses and other current assets |
259 556 |
263 067 |
||||||
|
Total current assets |
11,399,044 |
11 130 302 |
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|
Improvements in equipment and leasing, no |
169 388 |
200 769 |
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|
Assets with the right to use in operating lease |
1 867 505 |
1 922 805 |
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|
Deferred tax asset, net |
2,521,926 |
2,675,040 th most common |
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|
Other long – term assets |
35,109 th most common |
35 110 |
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The total amount of assets |
$ |
15,992,972 |
$ |
15 964 426 |
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LIABILITIES AND SHAREHOLDERS & CloseCurlyQuote; CAPITAL |
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Current liabilities: |
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Operating lease liabilities – current part |
$ |
194 469 |
$ |
201,883 th most common |
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|
Credit accounts |
384,559 |
906 149 |
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|
Deferred income – current part |
154 382 |
150 709 |
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Accrued costs & dash; |
542 074 |
457 232 |
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Accrued legal damages |
5,940,943 |
5,889,023 |
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Accrued expenses – other |
331 848 |
365 975 |
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Total current liabilities |
7,548,275 |
7 970 971 |
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Operating lease liabilities – long-term |
1,673,036 |
1 720 921 |
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Long-term debt – PPP |
722,577 |
722,577 |
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Deferred income – long-term |
329 886 |
332,428 |
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General obligations |
10,273,774 |
10,746,897 |
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Commitments and unforeseen circumstances |
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Shareholders and CloseCurlyQuote; equity: |
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Preference shares, 1,000,000 authorized shares, par value $ 0.10 per share |
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Preference Shares, 500,000 Shares 8% Cumulative Series A Convertible Preferred issued and unpaid, par value $ 0.10 per share |
3,695,998 |
3,695,998 |
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Preference shares, 166,667 shares 8% cumulative series B convertible Preferred issued and unpaid, par value $ 0.10 per share |
1,147,367 |
1,147,367 |
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Ordinary shares, 7,000,000 authorized shares, par value $ 0.10 per share, 3 255 887 issued and in circulation respectively |
325 586 |
325 586 |
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Additional paid-in capital |
7,244,788 |
7 318 620 |
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Accumulated deficit |
(6 694 541 |
) |
(7,270,042 |
) |
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Total shareholders & CloseCurlyQuote; equity |
5,719,198 |
5,217,529 |
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General Liabilities and Shareholders & CloseCurlyQuote; equity |
$ |
15,992,972 |
$ |
15 964 426 |
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TEL-INSTRUMENT ELECTRONICS CORP. CONDENSED CONSOLIDATED DECLARATIONS OF OPERATIONS (Unaudited) |
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Three months are over |
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June 30, 2021 |
June 30, 2020 |
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Net sales |
$ |
4,132,393 |
$ |
2 939 437 |
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Sales costs |
2,117,646 th most common |
1,434,826 |
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Gross profit |
2,014,747 |
1,504,611 th most common |
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Operating expenses: |
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Sales, general and administrative |
554 031 |
661,251 |
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Legal expenses |
1,181 th most common |
2,696 th most common |
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Engineering, research and development |
693 575 |
631,953 |
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Total operating expenses |
1 248 787 |
1,295,900 |
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Revenues from operations |
765 960 |
208,711 th most common |
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Other income (expenses): |
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Interest income |
984 |
2,846 th most common |
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|
Other income |
13 593 |
13,854 th most common |
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Interest expenses – judgment |
(51 920 |
) |
(75,144 |
) |
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Interest expenses |
– |
(9 780 |
) |
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Total other net (costs) |
(37 343 |
) |
(68,224 |
) |
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Income before income taxes |
728,617 |
140 487 |
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Income tax expense |
153,116 th most common |
29 507 |
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Net profit |
575 501 |
110 980 |
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Preference shares dividends |
(80,000 |
) |
(80,000 |
) |
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Net profit due to ordinary shareholders |
$ |
495 501 |
$ |
30 980 |
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Basic income per ordinary share |
$ |
0.15 |
$ |
0.01 |
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Diluted income per ordinary share |
$ |
0.11 |
$ |
0.01 |
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Weighted average shares outstanding: |
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|
Basic |
3,255,887 |
3,255,887 |
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Diluted |
5,095,665 |
3,255,887 |
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