Exhibit 99.1
Tel-Instrument Electronics Corp. Reports Net Income of $1.3 Million for FY 2022
East Rutherford, NJ – June 17, 2022 – 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.
|
Contact: |
Pauline Romeo |
|
Tel-Instrument Electronics Corp. |
|
|
(201) 933-1600 (Ext 309) |
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 STOCKHOLDERS’ EQUITY |
||||||||
|
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 | ||||||