EAST RUTHERFORD, N.J.–(BUSINESS WIRE)–Please replace the release with the following corrected version due to multiple revisions.

The updated release reads:

TEL-INSTRUMENT ELECTRONICS CORP. REPORTS NET INCOME OF $1.0 MILLION FOR SECOND QUARTER 2022

Tel-Instrument Electronics Corp. (“Tel” or the “Company”) (OTCQB: TIKK), a leading designer and manufacturer of avionics test and measurement solutions, today reported net income of $1.0 million ($0.28 per common share) on revenues of $3.6 million for the second quarter of fiscal year 2022 ended September 30, 2021.

Highlights include:

  • Revenues for the second quarter increased to $3.6 million, an 8% increase from the year-ago quarter.
  • Gross margin percentages improved 46.2% due to manufacturing efficiencies, tight cost controls, and product mix pricing.
  • Quarterly operating expenses increased 25% to $1.3 million due to higher engineering and higher profit-sharing accruals.
  • Operating income increased to $385K for the current quarter as compared to $342K in the year ago quarter.
  • Six month operating income increased to $1,151K versus $551K in the year-ago period.
  • The Company received full loan forgiveness on the $722k second draw PPP loan.
  • Net income increased to $1.0 million, or $0.28 per common share and $0.20 per share on a fully diluted basis.
  • Cash balances improved to $6.8 million, compared to $5.5 million at the start of the fiscal year.
  • Net worth improved to $6.6 million compared to $5.2 million at the start of the fiscal year.

Mr. Jeffrey O’Hara, Tel-Instrument’s President and CEO commented, “The Company recorded a profitable second quarter despite ongoing supply chain interruptions which have hampered our production. With the recent forgiveness of the PPP loan, we now have zero debt and a growing cash balance which has allowed us to continue our aggressive engineering programs such as the SDR/OMNI. We have started to market this product to key customers with production and deliveries expected to commence in the first quarter of calendar year 2022. We believe that this will be a strong competitor in both commercial and military markets. We were informed this week that the Lockheed Martin has lifted the stop work order on the MADL program. This will generate non-recurring engineering revenues over the next two quarters and should result in ongoing production revenues in what is essentially a new market for TIC. We are also actively working with the U.S. Navy on a ‘mid-life’ update of our CRAFT test sets which could result in significant revenues over the next five to 10 years. We also continue to invest in our market leading Mode 5 products and successfully demonstrated new Mode 5 Level 2B test capabilities at an international military test event. This new Mode 5 capability could potentially lead to future software upgrades of all of our Mode 5 test sets in the field.

“With respect to the Aeroflex litigation, we continue to believe that we have strong grounds for the award to be vacated or reduced. The appeal process has been delayed due to the COVID-19 pandemic, but we expect a decision within the next 12 months.”

About Tel-Instrument Electronics Corp.

Tel-Instrument is a leading designer and manufacturer of avionics test and measurement solutions for the global commercial air transport, general aviation, and government/military aerospace and defense markets. Tel-Instrument provides instruments to test, measure, calibrate, and repair a wide range of airborne navigation and communication equipment. For further information please visit our website at www.telinstrument.com.

This press release includes statements that are not historical in nature and may be characterized as “forward-looking statements,” including those related to future financial and operating results, benefits, and synergies of the combined companies, statements concerning the Company’s outlook, pricing trends, and forces within the industry, the completion dates of capital projects, expected sales growth, cost reduction strategies, and their results, long-term goals of the Company and other statements of expectations, beliefs, future plans and strategies, anticipated events or trends, and similar expressions concerning matters that are not historical facts. All predictions as to future results contain a measure of uncertainty and, accordingly, actual results could differ materially. Among the factors which could cause a difference are: changes in the general economy; changes in demand for the Company’s products or in the cost 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 its inherent uncertainty; difficulties in plant operations and materials; transportation, environmental matters; and other unforeseen circumstances. A number of these factors are discussed in the Company’s previous filings with the U.S. Securities and Exchange Commission. The Company disclaims any intention or obligation to update any forward-looking statements as a result of developments occurring after the date of this press release. The safe harbor for forward-looking statements contained in the Securities Litigation Reform Act of 1995 (the “Act”) protects companies from liability for their forward-looking statements if they comply with the requirements of the Act.

 

TEL-INSTRUMENT ELECTRONICS CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

September 30,

2021

 

 

March 31,

2021

 

 

 

(unaudited)

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash

 

$

4,808,457

 

 

$

3,485,275

 

Accounts receivable, net

 

 

1,530,060

 

 

 

1,933,321

 

Inventories, net

 

 

2,910,721

 

 

 

3,437,989

 

Restricted cash to support appeal bond

 

 

2,011,050

 

 

 

2,011,050

 

Prepaid expenses and other current assets

 

 

188,127

 

 

 

263,067

 

Total current assets

 

 

11,448,415

 

 

 

11,130,702

 

 

 

 

 

 

 

 

 

 

Equipment and leasehold improvements, net

 

 

142,277

 

 

 

200,769

 

Operating lease right-of-use assets

 

 

1,815,304

 

 

 

1,922,805

 

Deferred tax asset, net

 

 

2,443,042

 

 

 

2,675,040

 

Other long-term assets

 

 

35,109

 

 

 

35,110

 

Total assets

 

$

15,884,147

 

 

$

15,964,426

 

 

 

 

 

 

 

 

 

 

LIABILITIES & STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Operating lease liabilities – current portion

 

$

190,622

 

 

$

201,883

 

Accounts payable

 

 

391,247

 

 

 

906,149

 

Deferred revenues – current portion

 

 

149,223

 

 

 

150,709

 

Accrued expenses ‐vacation pay, payroll and payroll withholdings

 

 

342,170

 

 

 

457,232

 

Accrued legal damages

 

 

5,993,433

 

 

 

5,889,023

 

Accrued expenses – other

 

 

235,310

 

 

 

365,975

 

Total current liabilities

 

 

7,302,005

 

 

 

7,970,971

 

 

 

 

 

 

 

 

 

 

Operating lease liabilities – long-term

 

 

1,624,682

 

 

 

1,720,921

 

Long term debt – PPP

 

 

 

 

 

722,577

 

Deferred revenues – long-term

 

 

312,420

 

 

 

332,428

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

 

9,239,107

 

 

 

10,746,897

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Preferred stock, 1,000,000 shares authorized, par value $0.10 per share

 

 

 

 

 

 

 

 

Preferred stock, 500,000 shares 8% Cumulative Series A Convertible Preferred

issued and outstanding, par value $0.10 per share

 

 

3,695,998

 

 

 

3,695,998

 

Preferred stock, 166,667 shares 8% Cumulative Series B Convertible Preferred

issued and outstanding, par value $0.10 per share

 

 

1,147,367

 

 

 

1,147,367

 

Common stock, 7,000,000 shares authorized, par value $0.10 per share,

3,255,887 shares issued and outstanding, respectively

 

 

325,586

 

 

 

325,586

 

Additional paid-in capital

 

 

7,170,954

 

 

 

7,318,620

 

Accumulated deficit

 

 

(5,694,865

)

 

 

(7,270,042

)

Total stockholders’ equity

 

 

6,645,040

 

 

 

5,217,529

 

Total liabilities and stockholders’ equity

 

$

15,884,147

 

 

$

15,964,426

 

 

TEL-INSTRUMENT ELECTRONICS CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

September 30,

2021

 

 

September 30,

2020

 

 

September 30,

2021

 

 

September 30,

2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

3,610,863

 

 

$

3,336,396

 

 

$

7,743,256

 

 

$

6,275,833

 

Cost of sales

 

 

1,942,956

 

 

 

1,969,573

 

 

 

4,060,602

 

 

 

3,404,399

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross margin

 

 

1,667,907

 

 

 

1,366,823

 

 

 

3,682,654

 

 

 

2,871,434

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

 

596,618

 

 

 

464,809

 

 

 

1,150,651

 

 

 

1,126,060

 

Litigation expenses

 

 

3,220

 

 

 

5,514

 

 

 

4,400

 

 

 

8,210

 

Engineering, research, and development

 

 

682,852

 

 

 

554,555

 

 

 

1,376,427

 

 

 

1,186,508

 

Total operating expenses

 

 

1,282,690

 

 

 

1,024,878

 

 

 

2,531,478

 

 

 

2,320,778

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

 

385,217

 

 

 

341,945

 

 

 

1,151,176

 

 

 

550,656

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

995

 

 

 

1,879

 

 

 

1,980

 

 

 

4,725

 

Other income

 

 

22,260

 

 

 

 

 

 

35,853

 

 

 

13,854

 

Gain on forgiveness of PPP loan

 

 

722,577

 

 

 

 

 

 

722,577

 

 

 

 

Interest expense – judgement

 

 

(52,490

)

 

 

(52,490

)

 

 

(104,410

)

 

 

(127,634

)

Interest expense

 

 

 

 

 

(9,380

)

 

 

 

 

 

(19,160

)

Total other net income, (expense)

 

 

693,342

 

 

 

(59,991

)

 

 

656,000

 

 

 

(128,215

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

1,078,559

 

 

 

281,954

 

 

 

1,807,176

 

 

 

422,441

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense

 

 

78,883

 

 

 

59,206

 

 

 

231,999

 

 

 

88,713

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

999,676

 

 

 

222,748

 

 

 

1,575,177

 

 

 

333,728

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred dividends

 

 

80,000

 

 

 

80,000

 

 

 

160,000

 

 

 

160,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to common shareholders

 

$

919,676

 

 

$

142,748

 

 

$

1,415,177

 

 

$

173,728

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic income per common share

 

$

0.28

 

 

$

0.04

 

 

$

0.43

 

 

$

0.05

 

Diluted income per common share

 

$

0.20

 

 

$

0.04

 

 

$

0.31

 

 

$

0.05

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

3,255,887

 

 

 

3,255,887

 

 

 

3,255,887

 

 

 

3,255,887

 

Diluted

 

 

5,095,665

 

 

 

5,068,949

 

 

 

5,095,665

 

 

 

3,255,887

 

 

Contacts

Pauline Romeo

Tel-Instrument Electronics Corp.

(201) 933-1600

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