EAST RUTHERFORD, N.J.–(BUSINESS WIRE)–Tel-Instrument Electronics Corp. (“Tel-Instrument,” “TIC,” or the “Company”) (OTCQB: TIKK), a leading designer and manufacturer of avionics test and measurement solutions, today reported net income of $1,309,738 or $0.30 per basic share and $0.26 per diluted share on revenues of $12.9 million for the 2022 fiscal year ended March 31, 2022.

Highlights include:

  • Revenues for the fiscal year ended March 31, 2022, increased $1.4 million, or 12%, versus the prior fiscal year.
  • Gross margins for the 2022 fiscal year were 44.6%, or a 3.3 percentage point improvement over the prior fiscal year.
  • Operating expenses increased by $120K year-over-year, with the increase primarily due to profit sharing accruals.
  • Operating income increased to $937K as compared to 73K in the prior fiscal year.
  • Net Income improved to $1.3 million ($0.30 per basic share), compared to $600K in the prior fiscal year.
  • Cash balances improved to $7 million, compared to $5.5 million at the start of the fiscal year.
  • Working capital at fiscal year-end improved to $3.7 million versus $3.2 million in the prior fiscal year.
  • Net worth improved to $6.2 million compared to $5.2 million at the start of the fiscal year.

Mr. Jeffrey O’Hara, Tel-Instrument’s President and CEO commented, “Despite ongoing supply chain interruptions, TIC was able to improve revenues and profitably and substantially strengthen its balance sheet in the last fiscal year. The fourth quarter was adversely impacted by parts shortages due to vendor lead times doubling and tripling in some cases. This disruption has continued in the first quarter of fiscal year 2023. We have been ordering additional components from our vendors to mitigate the impact of extended lead times and we expect the supply disruptions to lessen in the second quarter of the current fiscal year. The positive news is that we are in a strong financial position to weather these supply chain issues. We are also excited by the positive initial reception we have seen from customers on the SDR/OMNI test set. We have scheduled product demonstrations with both Boeing and Airbus and our international distributors are starting to place orders for demo units. Initial SDR/OMNI production deliveries are expected to commence in the second quarter of this fiscal year. We believe that this will be a strong competitor in both commercial and military avionic and communication test set markets. The Lockheed Martin F-35 MADL development program had a successful Test Readiness Review (“TRR”) in May and the product is now in environmental and EMI/EMC qualification testing. This contract will generate non-recurring engineering (“NRE”) revenues over the next few quarters and is expected to generate ongoing production revenues in the $600K range. We are in final negotiations with the U.S. Navy on a “mid-life” update of our CRAFT test sets. This should entail NRE revenue over the next two years and significant production revenues starting 24 months after contract award.

With respect to the Aeroflex litigation, the status of the appeal has not changed even though employees have returned to the Kansas Judicial Center. Aeroflex filed a motion earlier this year with the Appeals Court to substantially increase the bond amount from the $2 million existing amount. We have filed a strong counter to this motion and expect it to be denied. Despite requests for a scheduling conference, no information has been received back from the court. The accrued interest on the judgment amount continues to be a drag on our financial results but we continue to believe that we have a strong case that justifies continuing the appeal process.”

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.

Consolidated Balance Sheets

 

ASSETS

 

March 31,

2022

 

 

March 31,

2021

 

Current assets:

 

 

 

 

 

 

 

 

Cash

 

$

4,949,690

 

 

$

3,485,275

 

Accounts receivable, net of allowance for doubtful accounts of $7,425 and $7,500, respectively

 

 

1,049,040

 

 

 

1,933,321

 

Inventories, net

 

 

2,820,497

 

 

 

3,437,989

 

Restricted cash to support appeal bond

 

 

2,011,050

 

 

 

2,011,050

 

Prepaid expenses and other current assets

 

 

244,040

 

 

 

263,067

 

Total current assets

 

 

11,074,317

 

 

 

11,130,702

 

 

 

 

 

 

 

 

 

 

Equipment and leasehold improvements, net

 

 

115,338

 

 

 

200,769

 

Operating lease right-of-use assets

 

 

1,720,921

 

 

 

1,922,805

 

Deferred tax asset, net

 

 

2,499,587

 

 

 

2,675,040

 

Other assets

 

 

35,109

 

 

 

35,110

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

15,445,272

 

 

$

15,964,426

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERSEQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Operating lease liabilities – current portion

 

$

194,370

 

 

$

201,883

 

Accounts payable

 

 

406,489

 

 

 

906,149

 

Deferred revenues – current portion

 

 

119,835

 

 

 

150,709

 

Accrued expenses – vacation pay, payroll and payroll withholdings

 

 

410,538

 

 

 

457,232

 

Accrued legal damages

 

 

6,097,273

 

 

 

5,889,023

 

Accrued expenses – other

 

 

174,145

 

 

 

365,975

 

Total current liabilities

 

 

7,402,650

 

 

 

7,970,971

 

 

 

 

 

 

 

 

 

 

Operating lease liabilities – long-term

 

 

1,526,551

 

 

 

1,720,921

 

Long term debt-PPP

 

 

 

 

 

722,577

 

Deferred revenues – long-term

 

 

289,071

 

 

 

332,428

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

 

9,218,272

 

 

 

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 $.10 per share,

3,255,887 and 3,255,887 shares issued and outstanding, respectively

 

 

325,586

 

 

 

325,586

 

Additional paid-in capital

 

 

7,018,353

 

 

 

7,318,620

 

Accumulated deficit

 

 

(5,960,304

)

 

 

(7,270,042

)

 

 

 

 

 

 

 

 

 

Total stockholders equity

 

 

6,227,000

 

 

 

5,217,529

 

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders equity

 

$

15,445,272

 

 

$

15,964,426

 

TEL-INSTRUMENT ELECTRONICS CORP.

Consolidated Statements of Operations

 

 

For the years ended March 31,

 

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

12,932,790

 

 

$

11,582,520

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

 

7,167,450

 

 

 

6,800,021

 

 

 

 

 

 

 

 

 

 

Gross margin

 

 

5,765,340

 

 

 

4,782,499

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

Selling, general and administrative

 

 

2,250,576

 

 

 

2,165,190

 

Litigation expenses

 

 

29,479

 

 

 

248,004

 

Engineering, research, and development

 

 

2,548,626

 

 

 

2,295,901

 

 

 

 

 

 

 

 

 

 

Total operating expenses

 

 

4,828,681

 

 

 

4,709,095

 

 

 

 

 

 

 

 

 

 

Income from operations

 

 

936,659

 

 

 

73,404

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

Interest income

 

 

3,951

 

 

 

7,483

 

Forgiveness of PPP loan

 

 

722,577

 

 

 

722,577

 

Interest expense

 

 

 

 

 

(29,779

)

Interest expense – judgment

 

 

(208,250

)

 

 

(231,474

)

Other income, net

 

 

30,254

 

 

 

30,819

 

 

 

 

 

 

 

 

 

 

Total other income

 

 

548,532

 

 

 

499,626

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

1,485,191

 

 

 

573,030

 

 

 

 

 

 

 

 

 

 

Provision (benefit) for income taxes

 

 

175,453

 

 

 

(27,027

)

 

 

 

 

 

 

 

 

 

Net income

 

 

1,309,738

 

 

 

600,057

 

 

 

 

 

 

 

 

 

 

Preferred dividends

 

 

(320,000

)

 

 

(320,000

)

 

 

 

 

 

 

 

 

 

Net income attributable to common shareholders

 

$

989,738

 

 

$

280,057

 

 

 

 

 

 

 

 

 

 

Basic income per common share

 

$

0.30

 

 

$

0.09

 

Diluted income per common share

 

$

0.26

 

 

$

0.12

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares outstanding

 

 

 

 

 

 

 

 

Basic

 

 

3,255,887

 

 

 

3,255,887

 

Diluted

 

 

5,095,665

 

 

 

5,073,165

 

 

Contacts

Pauline Romeo

Tel-Instrument Electronics Corp.

(201) 933-1600 (Ext 309)

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