0001185185-15-003044.txt : 20151117 0001185185-15-003044.hdr.sgml : 20151117 20151117101711 ACCESSION NUMBER: 0001185185-15-003044 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20151116 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20151117 DATE AS OF CHANGE: 20151117 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TEL INSTRUMENT ELECTRONICS CORP CENTRAL INDEX KEY: 0000096885 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC COMPONENTS & ACCESSORIES [3670] IRS NUMBER: 221441806 STATE OF INCORPORATION: NJ FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-31990 FILM NUMBER: 151237294 BUSINESS ADDRESS: STREET 1: ONE BRANCA ROAD CITY: EAST RUTHERFORD STATE: NJ ZIP: 07073 BUSINESS PHONE: 2019331600 MAIL ADDRESS: STREET 1: ONE BRANCA ROAD CITY: EAST RUTHERFORD STATE: NJ ZIP: 07073 8-K 1 telinstrument8k111615.htm 8-K telinstrument8k111615.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
FORM 8-K

 
CURRENT REPORT

Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 16, 2015

TEL-INSTRUMENT ELECTRONICS CORP.
(Exact name of registrant as specified in its charter)

New Jersey
001-31990
22-1441806
(State or other Jurisdiction
of Incorporation)
(Commission File Number)
(IRS Employer
Identification No.)

One Branca Road
East Rutherford, New Jersey 07073
(Address of principal executive offices)

(201) 933-1600
(Telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
 
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
 
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
 
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 
 
 
 
Item 2.02.  Results of Operations and Financial Condition.
 
On November 16, 2015, Tel-Instrument Electronics Corp (“TIC”) (NYSE MKT: TIK) announced its financial results for the second quarter of fiscal year 2016 ended September 30, 2015.

A copy of the Company’s press release is attached hereto as Exhibit 99.1.
 
Item 9.01.  Financial Statements and Exhibits.
 
(d) Exhibits
 
Exhibit No.         Description
 
 
*Filed herewith
 
 
 
 
 
 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


 
TEL-INSTRUMENT ELECTRONICS CORP.
   
       
Date: November 17, 2015
By:
/s/ Joseph P. Macaluso
  
   
Name: Joseph P. Macaluso
  
   
Title: Principal Accounting Officer
  


 
 
 
 

EX-99.1 2 ex99-1.htm EX-99.1 ex99-1.htm
Exhibit 99.1
 
 
Tel-Instrument Electronics Corp. Reports Second Quarter Fiscal Year 2016
 Financial Results

Revenues for the Second Quarter 2016 increased 90% to a record $6.8 Million

Non-GAAP EBITDA of $964,465, or $0.30 per Share

East Rutherford, NJ – November 16, 2015 – Tel-Instrument Electronics Corp. (“Tel”, “Tel-Instrument” or the “Company”) (NYSE MKT: TIK), a leading designer and manufacturer of avionics test and measurement solutions, today reported its financial results for the second quarter of fiscal year 2016 ended September 30, 2015.
 
Highlights
 
 
·
Revenues increased to $6.8 million, a 90% increase versus the comparable period of fiscal year 2015.
 
·
Operating income increased to $916k, a $1.2 million improvement versus second quarter of 2015.
 
·
Strong operating cash flow and significant improvement in cash balances.
 
·
Interest expense dropped 55% over the comparable period of the previous year due to new bank deal and lower balances.
 
·
Non-GAAP EBITDA of $964,465 or $0.30 per share.
 
Ø
Tax accrual included in our GAAP accounting is a non-cash item due to Tel’s large tax NOL.
 
·
$519k warrant valuation increase due to trailing 12 months EBITDA doubling to over $2.4 million.
 
·
GAAP earnings per share of $0.06 per share, versus a loss of $0.08 per share in the comparable period of the previous year.
 
Revenues for the second quarter were $6,818,390, a 90% increase from $3,587,674 in the comparable period of fiscal year 2015. Gross margin for the quarter increased to $2,243,466 as compared to $869,344 for the same period last year. This gross margin improvement is primarily attributed to the increase in revenue levels and improved factory efficiency. Selling, general and administrative expenditures increased by $224k versus the comparable period ended September 30, 2014 due to profit sharing accruals and higher commission expenses. Research and development expenses decreased slightly from the comparable period ended September 30, 2014 despite continued investment in our next generation of avionics and communications test sets.

Non-GAAP adjusted earnings before interest, taxes, the change in warrant valuation, depreciation and amortization (EBITDA) for the second quarter increased to $964,465, or $0.30 per share, compared to loss of $234,847 for the second quarter of the previous fiscal year. On a GAAP basis, net income for the quarter was $199,466, or $0.06 per basic share compared to a net loss of $248,195, or $0.08 per share, in the year ago period. The net income results were significantly impacted by the $518,888 increase in the warrant liability. This increase in the warranty liability was due to our last 12 months trailing EBITDA increasing from $1,235,395 as of June 30, 2015 to $2,434,710 in the latest quarter.

Commenting on the results, Mr. Jeffrey O’Hara, President and CEO of Tel, stated, “We are pleased to report a fourth consecutive quarter of profitability as well as record revenues and operating income in the latest quarter. In the latest quarter, the Company’s cash balances increased to almost $800k despite continued reductions in accounts payable and long-term debt. Management believes that our operating results going forward will continue to benefit from increased volume and the shipment of more of the higher priced CRAFT units, as well as from the full production release of the TS-4530A SETS which are expected to begin shipping in January 2016.
 
 
 
 
 
“With backlog at the end of the second quarter now at $19.7 million, the Company is actively working both domestic and overseas opportunities. The untapped Mode 5 market is significant, and the Company has already sold Mode 5 test equipment to 18 different foreign countries, and we expect a longer term international growth opportunity as customers look to comply with the January 1, 2020 mandate for Mode 5 installation. The Company also continues to invest in new product development with the TR-36 Nav/Comm test set being the first product to be released from these efforts. We are also actively working on next generation test sets for both commercial and military market that we believe will be extremely competitive and will expand our core markets. We also continue to investigate opportunities in other markets based upon core competencies in RF, Digital Design and Test Solutions, and we are excited about fiscal year 2016 and beyond.”

We encourage everyone to read our full results of operations contained in our Quarterly Report on Form 10-Q filed with the United States Securities and Exchange Commission on November 16, 2015, which can be found at sec.gov.
 
Conference Call
 
The Company will host a conference call and webcast on Monday, November 16, 2015 at 9:00 a.m. Eastern Time to discuss the Company’s fiscal first quarter results.
 
To access the live webcast, log onto the Tel-Instrument Electronics Corp.’s website at:
 
https://www.telinstrument.com/learn-about-telinstrument/investor-relations.html.
 
To participate in the call by phone, dial (877) 407-8035 approximately five minutes prior to the scheduled start time. International callers please dial (201) 689-8035.
 
A replay of the teleconference will be available until December 15, 2015 and may be accessed by dialing (877) 660-6853. International callers may dial (201) 612-7415.  Callers should use conference ID: 13624963.
 
 
 
 
 
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.
                                                    
Contact:    Joseph P. Macaluso  John Nesbett or Jennifer Belodeau
  Tel-Instrument Electronics Corp.  Institutional Marketing Services (IMS)
  (201) 933-1600 (203) 972-9200
    jnesbett@institutionalms.com
 
 
 
 
 
 
 TEL-INSTRUMENT ELECTRONICS CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS

   
September 30,
2015
    
March 31,
2015
  
   
(unaudited)
        
ASSETS
            
             
Current assets:
            
Cash and cash equivalents
  
$
795,393
    
$
185,932
  
Accounts receivable, net
    
860,856
      
1,625,171
  
Inventories, net
    
4,686,063
      
4,032,074
  
Prepaid expenses and other current assets
    
376,568
      
281,002
  
Deferred financing costs
    
5,429
      
5,429
  
Deferred income tax asset
    
1,064,395
      
1,064,395
  
Total current assets
    
7,788,704
      
7,194,003
  
                 
Equipment and leasehold improvements, net
    
224,192
      
270,792
  
Deferred financing costs – long-term
    
6,077
      
8,792
  
Deferred income tax asset – non-current
    
1,991,718
      
2,377,583
  
Other long-term assets
    
33,509
      
32,317
  
Total assets
    
10,044,200
      
 9,883,487
  
                 
LIABILITIES & STOCKHOLDERS’ EQUITY
                
                 
Current liabilities:
                
Current portion of long-term debt, net of debt discount
    
405,718
      
387,839
  
Capital lease obligations – current portion
    
13,231
      
16,758
  
Accounts payable and accrued liabilities
    
3,022,230
      
3,577,566
  
Deferred revenues – current portion
    
15,483
      
18,609
  
Accrued payroll, vacation pay and payroll taxes
    
689,904
      
594,114
  
Total current liabilities
    
4,146,566
      
4,594,886
  
                 
Subordinated notes payable - related parties
    
125,000
      
250,000
  
Capital lease obligations – long-term
    
-
      
4,561
  
Long-term debt
    
516,977
      
708,604
  
Deferred revenues – long-term
    
132,068
      
133,650
  
Warrant liability
    
969,790
      
518,962
  
Other long-term liabilities
    
20,400
      
33,000
  
Total liabilities
    
5,910,801
      
6,243,663
  
                 
Commitments
                
                 
Stockholders' equity:
                
Common stock, 4,000,000 shares authorized, par value $0.10 per share,
3,256,887 and 3,256,887 shares issued and outstanding, respectively
    
325,686
      
325,686
  
Additional paid-in capital
    
8,061,211
      
8,046,168
  
Accumulated deficit
    
(4,253,498
)
    
(4,732,030
)
Total stockholders' equity
    
4,133,399
      
3,639,824
  
Total liabilities and stockholders' equity
  
$
10,044,200
    
$
9,883,487
  
 
 
 
 
 
TEL-INSTRUMENT ELECTRONICS CORP.
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 
   
Three Months Ended
    
Six Months Ended
  
   
September 30,
2015
    
September 30,
2014
    
September 30,
2015
    
September 30,
2014
  
                         
Net sales
  
$
6,818,390
    
$
3,587,674
    
$
12,664,309
    
$
6,716,750
  
Cost of sales
    
4,574,924
      
2,718,330
      
8,605,548
      
4,727,189
  
                                 
Gross margin
    
2,243,466
      
869,344
      
4,058,761
      
1,989,561
  
                                 
Operating expenses:
                                
Selling, general and administrative
    
883,876
      
660,034
      
1,749,564
      
1,539,227
  
Engineering, research and development
    
443,656
      
497,726
      
935,788
      
981,622
  
Total operating expenses
    
1,327,532
      
1,157,760
      
2,685,352
      
2,520,849
  
                                 
Income (loss) from operations
    
915,934
      
(288,416
)
    
1,373,409
      
(531,288
)
                                 
Other income (expense):
                                
Amortization of debt discount
    
-
      
(30,061
)
    
-
      
(60,935
)
Amortization of deferred financing costs
    
(1,358
)
    
(27,080
)
    
(2,715
)
    
(54,160
)
Change in fair value of common stock warrants
    
(518,588
)
    
27,801
      
(450,828
)
    
(106,080
)
Interest expense
    
(25,835
)
    
(57,387
)
    
(55,469
)
    
(119,867
)
Total other expense
    
(545,781
)
    
(86,727
)
    
(509,012
)
    
(341,042
)
                                 
Income (loss) before income taxes
    
370,153
      
(375,143
)
    
864,397
      
(872,330
)
                                 
Income tax expense (benefit)
    
170,687
      
(126,948
)
    
385,865
      
(240,130
)
                                 
Net income (loss)
  
$
199,466
    
$
(248,195
)
  
$
478,532
    
$
(632,200
)
                                 
Basic income (loss) per common share
  
$
0.06
    
$
(0.08
)
  
$
0.15
    
$
(0.19
)
Diluted income (loss) per common share
  
$
0.06
    
$
(0.08
)
  
$
0.15
    
$
(0.19
)
                                 
Weighted average shares outstanding:
                                
Basic
    
3,256,887
      
3,252,702
      
3,256,887
      
3,252,048
  
Diluted
    
3,260,799
      
3,252,702
      
3,262,058
      
3,252,048
  
 
 
 
 
 
TEL-INSTRUMENT ELECTRONICS CORP.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION
(Unaudited)
   
Three Months
    
Three Months
  
   
Ended
    
Ended
  
   
September 30,
    
September 30,
  
   
2015
    
2014
  
             
Net income (loss)
   $ 199,466     $ (248,195 )
                 
Income tax provision (benefit)
     170,687       (126,948 )
                 
Depreciation and amortization
     39,958       44,728  
Amortization of debt discount
     -       30,061  
Amortization  of deferred financing costs
     1,358       27,080  
Change on fair value of common stock warrants
     518,588       (27,801 )
Interest, net
     25,835       57,387  
Non-cash stock-based compensation
     8,577       8,841  
                 
Non-GAAP EBITDA
   $ 964,465     $ (234,847 )
                 
 Non-GAAP EBITDA per common share
   $ 0.30     $ (0.07 )
                 
Basic weighted average shares outstanding
     3,256,887       3,252,702  
 
The term EBITDA consists of net income (loss) plus interest, taxes, depreciation and amortization, amortization of debt discount and deferred financing charges, change in fair value of warrants, non-cash interest, and non-cash stock-based compensation. EBITDA is not a measure of financial performance under generally accepted accounting principles, and should not be considered in isolation from, or as a substitute for net income or cash flow measures prepared in accordance with generally accepted accounting principles, or as a measure of profitability or liquidity. Additionally, EBITDA may not be comparable to other similarly titled measures of other companies. The Company has included EBITDA as a supplemental disclosure because its management believes that EBITDA provides useful information regarding our ability to service debt, and to fund capital expenditures, and provides investors a helpful measure for analyzing its operating performance. The table above sets forth a reconciliation of EBITDA to net income (loss), which is the most directly comparable measure of financial performance, calculated under generally accepted accounting principles. Non-GAAP EBITDA per common share is calculated by dividing Non-GAAP EBITDA by basic weighted average shares outstanding.