UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
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| (State or other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
(Address of principal executive offices)
(Telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
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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:
| | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On August 12, 2021, the Company announced its financial results for the quarter ended June 30, 2021. The information furnished under this Item 2.02 and in the accompanying Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference in such filing.
A copy of the Company’s press release is attached hereto as Exhibit 99.1.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
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Exhibit No. |
Description |
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99.1* |
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104 |
Cover Page Interactive Data File (formatted as Inline XBRL) |
*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.
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TEL-INSTRUMENT ELECTRONICS CORP. |
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Date: August 13, 2021 |
By: |
Jeffrey O’Hara |
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Name: Jeffrey O’Hara |
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Title: Chief Executive Officer |
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Item 9.01
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 | ||||
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Accounts receivable, net |
1,318,276 | 1,933,321 | ||||||
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Inventories, net |
3,051,343 | 3,437,989 | ||||||
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Restricted cash to support appeal bond |
2,011,050 | 2,011,050 | ||||||
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Prepaid expenses and other current assets |
259,556 | 263,067 | ||||||
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Total current assets |
11,399,044 | 11,130,702 | ||||||
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Equipment and leasehold improvements, net |
169,388 | 200,769 | ||||||
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Operating lease right-of-use assets |
1,867,505 | 1,922,805 | ||||||
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Deferred tax asset, net |
2,521,926 | 2,675,040 | ||||||
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Other long-term assets |
35,109 | 35,110 | ||||||
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Total assets |
$ | 15,992,972 | $ | 15,964,426 | ||||
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LIABILITIES & STOCKHOLDERS’ EQUITY |
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Current liabilities: |
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Operating lease liabilities – current portion |
$ | 194,469 | $ | 201,883 | ||||
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Accounts payable |
384,559 | 906,149 | ||||||
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Deferred revenues – current portion |
154,382 | 150,709 | ||||||
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Accrued expenses ‐- vacation pay, payroll and payroll withholdings |
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 revenues – long-term |
329,886 | 332,428 | ||||||
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Total liabilities |
10,273,774 | 10,746,897 | ||||||
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Commitments and contingencies |
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Stockholders’ equity: |
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Preferred stock, 1,000,000 shares authorized, par value $0.10 per share |
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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 | ||||||
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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 | ||||||
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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 | ||||||
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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 stockholders’ equity |
5,719,198 | 5,217,529 | ||||||
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Total liabilities and stockholders’ equity |
$ | 15,992,972 | $ | 15,964,426 | ||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
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Three Months Ended |
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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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Cost of sales |
2,117,646 | 1,434,826 | ||||||
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Gross margin |
2,014,747 | 1,504,611 | ||||||
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Operating expenses: |
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Selling, general and administrative |
554,031 | 661,251 | ||||||
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Litigation expenses |
1,181 | 2,696 | ||||||
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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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Income from operations |
765,960 | 208,711 | ||||||
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Other income (expense): |
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Interest income |
984 | 2,846 | ||||||
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Other income |
13,593 | 13,854 | ||||||
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Interest expense - judgment |
(51,920 |
) |
(75,144 |
) |
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Interest expense |
- | (9,780 |
) |
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Total other net (expense) |
(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 | 29,507 | ||||||
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Net income |
575,501 | 110,980 | ||||||
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Preferred stock dividends |
(80,000 |
) |
(80,000 |
) |
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Net income attributable to common shareholders |
$ | 495,501 | $ | 30,980 | ||||
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Basic income per common share |
$ | 0.15 | $ | 0.01 | ||||
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Diluted income per common 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 | ||||||
Exhibit 99.1
Tel-Instrument Electronics Corp. Reports Net Income
of $ 576k for First Quarter 2022
East Rutherford, NJ – August 12, 2021 – 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 $576k ($0.15 per common share) on revenues of $4.1 million for the first quarter of fiscal year 2022 ended June 30, 2021.
Highlights include:
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Revenues for the first quarter increased to $4.1 million, a 40.6% increase from the year-ago quarter. |
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Gross margins remained solid at 48.8% due to manufacturing efficiencies, tight cost controls, and product mix. |
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Quarterly operating expenses declined 4% to $1.25 million despite increased revenues and profit sharing accruals. |
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Operating income increased to $766k for the current quarter as compared to $209k in the year ago quarter. |
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Net income increased to a $576k, or $0.15 per common share and $0.11 per share on a fully diluted basis. |
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First quarter EBITDA improved to $812k versus $255k in the year-ago quarter. |
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Cash balances improved to $6.8 million, compared to $5.5 million at the start of the fiscal year. |
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Net worth improved to $5.7 million from $5.2 million at the start of the fiscal year. |
Mr. Jeffrey O’Hara, Tel-Instrument’s President and CEO commented, “We are pleased to report improved operating results for the first quarter, on revenues of $4.1 million. This was generated by strong sales from our military business and a modest rebound in our commercial business. The COVID-19 supply chain issues we experienced in the prior fiscal year appear to be easing and we are cautiously optimistic that this trend will continue. The Company continues to do an excellent job at managing operating expenses with a 4% year-over-year reduction. Backlog remains strong at the end of the first quarter at $6.1 million. We expect the international Mode 5 test set business and orders for the F-35 program to remain strong for the next several years. 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 plan to demonstrate new Mode 5 Level 2B test capabilities at an upcoming military test event. This could potentially lead to future software upgrades of all of our Mode 5 test sets in the field.
Our goal over the last several years has been to strengthen our balance sheet and set aside cash sufficient to fully discharge the Aeroflex damage award, as may be necessary, in the event that we are unsuccessful with our pending legal appeal. This has now been accomplished with a $6.8 million cash balance at June 30, 2021. The Company plans to file for full forgiveness of the $722k PPP loan in the second quarter which is expected to result in a balance sheet with zero external debt.
To meet the standards for the next generation of military applications, we have upgraded our 4.5-pound SDR/OMNI hand-held test set to include a much faster processor with improved video graphics processing capability. It has been designed to meet Class 1 environmental specifications which will make it an ideal test set for the military market. The goal of this new test set is to recapture market share in the commercial avionics test set business and expand into the much larger secure communications radio test market. We will be demonstrating this unit to customers starting next month and expect to begin taking commercial orders starting this fall.
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.
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Contact: |
Pauline Romeo |
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Tel-Instrument Electronics Corp. |
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(201) 933-1600 |
Document And Entity Information |
Aug. 12, 2021 |
|---|---|
| Document Information Line Items | |
| Entity Registrant Name | TEL-INSTRUMENT ELECTRONICS CORP. |
| Trading Symbol | N/A |
| Document Type | 8-K |
| Amendment Flag | false |
| Entity Central Index Key | 0000096885 |
| Document Period End Date | Aug. 12, 2021 |
| Entity Emerging Growth Company | false |
| Entity Incorporation, State or Country Code | NJ |
| Entity File Number | 001-31990 |
| Entity Tax Identification Number | 22-1441806 |
| Entity Address, Address Line One | One Branca Road |
| Entity Address, City or Town | East Rutherford |
| Entity Address, State or Province | NJ |
| Entity Address, Postal Zip Code | 07073 |
| City Area Code | (201) |
| Local Phone Number | 933-1600 |
| Title of 12(b) Security | N/A |
| Security Exchange Name | NONE |
| Written Communications | true |
| Soliciting Material | true |
| Pre-commencement Tender Offer | true |
| Pre-commencement Issuer Tender Offer | true |
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