Tel-Instrument Electronics Corp. Reports First Quarter Fiscal Year 2016 Financial Results
August 12, 2015 | By Business Wire News
EAST RUTHERFORD, N.J.
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 first quarter of fiscal year 2016 ended June 30, 2015.
Highlights
- Revenues increased to $5.8 million, an 87% increase versus the comparable period of fiscal year 2015.
- Pre-tax income increased to $494k, a $991k improvement versus the first quarter of fiscal year 2015.
- Operating expenses declined to 23% of revenues versus 44% in the first quarter of fiscal year 2015.
- GAAP basic earnings of $0.09 per share, versus a loss of $0.12 per share in the year ago period.
- Non-GAAP EBITDA of $506,000 or $0.16 per share. It should be emphasized that the tax accrual included in our GAAP accounting is a non-cash item due to the Company’s large net operating loss carry-forward (“NOL”).
Revenues for the first quarter were $5,845,919, an 87% increase from $3,129,076 in the comparable period of fiscal year 2015. Gross margin for the quarter increased to $1,815,295 as compared to $1,120,217 for the same period last year. This increase is mostly attributed to the increase in volume of revenues, especially for the TS-4530A KITS and ITATS. Gross margin percentage decreased compared to the same quarter last year due to a change in sales mix, primarily due to the increase in sales for the TS-4530 and ITATS programs which have lower margins as these programs were competitively bid. Research and development expenses increased slightly as the Company focuses on developing its next generation of avionics and communications test sets.
Non-GAAP adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for the first quarter increased to $506,354 or $0.16 per share, compared to loss of $185,747 for the first quarter of fiscal year 2015. On a GAAP basis, net income for the quarter was $279,066, or $0.09 per basic share compared to a net loss of $384,005, or $0.12 per share, in the year ago period.
Commenting on the results, Mr. Jeffrey O’Hara, President and CEO of Tel, stated, “We are pleased to report a second consecutive quarter of improved operating results. 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, and will also benefit from the full production release of the TS-4530A SETS which are expected to begin shipping in volume prior to calendar year end. The Company also continues to do a solid job in keeping a tight rein on operating costs despite substantially increased revenues. We continue 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 the commercial and military market that we believe will be extremely competitive. We believe that the Company has a solid position in its core Mode 5 flight-line market and we are actively working both domestic and overseas opportunities. The untapped Mode 5 market is significant and securing these higher margin sales could further enhance our operating profitability. 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 August 12, 2015, which can be found at sec.gov.
Conference Call
The Companywill host a conference call and webcast on Wednesday, August 12, 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 September 12, 2015 and may be accessed by dialing (877) 660-6853. International callers may dial (201) 612-7415. Callers should use conference ID: 13617180.
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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TEL-INSTRUMENT ELECTRONICS CORP. |
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June 30, |
March 31, |
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| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 178,023 | 185,932 | |||||
| Accounts receivable, net | 1,856,985 | 1,625,171 | ||||||
| Inventories, net | 4,523,832 | 4,032,074 | ||||||
| Prepaid expenses and other current assets | 328,720 | 281,002 | ||||||
| Deferred financing costs | 5,429 | 5,429 | ||||||
| Deferred income tax asset | 1,064,395 | 1,064,395 | ||||||
| Total current assets | 7,957,384 | 7,194,003 | ||||||
| Equipment and leasehold improvements, net | 234,252 | 270,792 | ||||||
| Deferred financing costs – long-term | 7,435 | 8,792 | ||||||
| Deferred income tax asset – non-current | 2,162,405 | 2,377,583 | ||||||
| Other long-term assets | 32,317 | 32,317 | ||||||
| Total assets | 10,393,793 | 9,883,487 | ||||||
| LIABILITIES & STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Current portion of long-term debt, net of debt discount | 393,846 | 387,839 | ||||||
| Capital lease obligations – current portion | 17,345 | 16,758 | ||||||
| Accounts payable and accrued liabilities | 3,903,312 | 3,577,566 | ||||||
| Deferred revenues – current portion | 8,167 | 18,609 | ||||||
| Accrued payroll, vacation pay and payroll taxes | 676,288 | 594,114 | ||||||
| Total current liabilities | 4,998,958 | 4,594,886 | ||||||
| Subordinated notes payable – related parties | 250,000 | 250,000 | ||||||
| Capital lease obligations – long-term | – | 4,561 | ||||||
| Long-term debt | 607,927 | 708,604 | ||||||
| Deferred revenues – long-term | 133,650 | 133,650 | ||||||
| Warrant liability | 451,202 | 518,962 | ||||||
| Other long-term liabilities | 26,700 | 33,000 | ||||||
| Total liabilities | 6,468,437 | 6,243,663 | ||||||
| Commitments | ||||||||
| Stockholders’ equity: | ||||||||
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Common stock, 4,000,000 shares authorized, par value $0.10 per share, |
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3,256,887 and 3,256,887 shares issued and outstanding, respectively |
325,686 | 325,686 | ||||||
| Additional paid-in capital | 8,052,634 | 8,046,168 | ||||||
| Accumulated deficit | (4,452,964 | ) | (4,732,030 | ) | ||||
| Total stockholders’ equity | 3,925,356 | 3,639,824 | ||||||
| Total liabilities and stockholders’ equity | $ | 10,393,793 | $ | 9,883,487 | ||||
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TEL-INSTRUMENT ELECTRONICS CORP. |
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| Three Months Ended | ||||||||
| June 30, 2015 | June 30, 2014 | |||||||
| Net sales | $ | 5,845,919 | $ | 3,129,076 | ||||
| Cost of sales | 4,030,624 | 2,008,859 | ||||||
| Gross margin | 1,815,295 | 1,120,217 | ||||||
| Operating expenses: | ||||||||
| Selling, general and administrative | 865,688 | 879,193 | ||||||
| Engineering, research and development | 492,132 | 483,896 | ||||||
| Total operating expenses | 1,357,820 | 1,363,089 | ||||||
| Income (loss) from operations | 457,475 | (242,872 | ) | |||||
| Other income (expense): | ||||||||
| Amortization of debt discount | – | (30,874 | ) | |||||
| Amortization of deferred financing costs | (1,357 | ) | (27,080 | ) | ||||
| Change in fair value of common stock warrants | 67,760 | (133,881 | ) | |||||
| Interest expense | (29,634 | ) | (62,480 | ) | ||||
| Total other income (expense) | 36,769 | (254,315 | ) | |||||
| Income (loss) before income taxes | 494,244 | (497,187 | ) | |||||
| Income tax provision (benefit) | 215,178 | (113,182 | ) | |||||
| Net income (loss) | $ | 279,066 | $ | (384,005 | ) | |||
| Net income (loss) per share: | ||||||||
| Basic income (loss) per common share | $ | 0.09 | $ | (0.12 | ) | |||
| Diluted income (loss) per common share | $ | 0.02 | $ | (0.12 | ) | |||
| Weighted average shares outstanding: | ||||||||
| Basic | 3,256,887 | 3,251,387 | ||||||
| Diluted | 3,320,442 | 3,251,387 | ||||||
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TEL-INSTRUMENT ELECTRONICS CORP. |
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| Three Months | Three Months | ||||||||||
| Ended | Ended | ||||||||||
| June 30, | June 30, | ||||||||||
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2015 |
2014 |
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| Net income (loss) | $ | 279,066 | $ | (384,005 | ) | ||||||
| Income tax provision (benefit) | 215,178 | (113,182 | ) | ||||||||
| Depreciation and amortization | 42,413 | 45,062 | |||||||||
| Amortization of debt discount | – | 30,874 | |||||||||
| Amortization of deferred financing costs | 1,357 | 27,080 | |||||||||
| Change on fair value of common stock warrants | (67,760 | ) | 133,881 | ||||||||
| Interest, net | 29,634 | 62,480 | |||||||||
| Non-cash stock-based compensation | 6,466 | 12,063 | |||||||||
| Non-GAAP EBITDA | $ | 506,354 | $ | (185,747 | ) | ||||||
| Non-GAAP EBITDA per common share | $ | 0.16 | $ | (0.06 | ) | ||||||
| Basic weighted average shares outstanding | 3,256,887 | 3,251,387 | |||||||||
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.
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Tel-Instrument Electronics Corp.
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or
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