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Tel-Instrument Electronics Corp. Reports Net Income of $1.0 Million for Second Quarter 2022

. Posted in About Us

Tel-Instrument Electronics Corp. Reports Net Income of $1.0 Million for Second Quarter 2022

East Rutherford, NJ – November 15, 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 $1.0 million ($0.28 per common share) on revenues of $3.6 million for the second quarter of fiscal year 2022 ended September 30, 2021.

Highlights include:

·   Revenues for the second quarter increased to $3.6 million, an 8% increase from the year-ago quarter.

·   Gross margin percentages improved 46.2% due to manufacturing efficiencies, tight cost controls, and product mix pricing.

·   Quarterly operating expenses increased 25% to $1.3 million due to higher engineering and higher profit-sharing accruals.

·   Operating income increased to $385K for the current quarter as compared to $342K in the year ago quarter.

·   Six month operating income increased to $1,151K versus $551K in the year-ago period.

·   The Company received full loan forgiveness on the $722k second draw PPP loan.

·   Net income increased to $1.0 million, or $0.28 per common share and $0.20 per share on a fully diluted basis.

·   Cash balances improved to $6.8 million, compared to $5.5 million at the start of the fiscal year.

·   Net worth improved to $6.6 million compared to $5.2 million at the start of the fiscal year.

Mr. Jeffrey O’Hara, Tel-Instrument’s President and CEO commented, “The Company recorded a profitable second quarter despite ongoing supply chain interruptions which have hampered our production. With the recent forgiveness of the PPP loan, we now have zero debt and a growing cash balance which has allowed us to continue our aggressive engineering programs such as the SDR/OMNI. We have started to market this product to key customers with production and deliveries expected to commence in the first quarter of calendar year 2022. We believe that this will be a strong competitor in both commercial and military markets. We were informed this week that the Lockheed Martin has lifted the stop work order on the MADL program. This will generate non-recurring engineering revenues over the next two quarters and should result in ongoing production revenues in what is essentially a new market for TIC. 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 successfully demonstrated new Mode 5 Level 2B test capabilities at an international military test event. This new Mode 5 capability could potentially lead to future software upgrades of all of our Mode 5 test sets in the field.

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.



Contact:

Pauline Romeo



Tel-Instrument Electronics Corp.



(201) 933-1600



TEL-INSTRUMENT ELECTRONICS CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS







September 30,

2021





March 31,

2021







(unaudited)











ASSETS



































Current assets:

















Cash



$

4,808,457





$

3,485,275



Accounts receivable, net





1,530,060







1,933,321



Inventories, net





2,910,721







3,437,989



Restricted cash to support appeal bond





2,011,050







2,011,050



Prepaid expenses and other current assets





188,127







263,067



Total current assets





11,448,415







11,130,702





















Equipment and leasehold improvements, net





142,277







200,769



Operating lease right-of-use assets





1,815,304







1,922,805



Deferred tax asset, net





2,443,042







2,675,040



Other long-term assets





35,109







35,110



Total assets



$

15,884,147





$

15,964,426





















LIABILITIES & STOCKHOLDERS’ EQUITY



































Current liabilities:

















Operating lease liabilities – current portion



$

190,622





$

201,883



Accounts payable





391,247







906,149



Deferred revenues - current portion





149,223







150,709



Accrued expenses ‚Äźvacation pay, payroll and payroll withholdings





342,170







457,232



Accrued legal damages





5,993,433







5,889,023



Accrued expenses - other





235,310







365,975



Total current liabilities





7,302,005







7,970,971





















Operating lease liabilities – long-term





1,624,682







1,720,921



Long term debt - PPP





-







722,577



Deferred revenues – long-term





312,420







332,428





















Total liabilities





9,239,107







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 $0.10 per share,

3,255,887 shares issued and outstanding, respectively





325,586







325,586



Additional paid-in capital





7,170,954







7,318,620



Accumulated deficit





(5,694,865

)





(7,270,042

)

Total stockholders’ equity





6,645,040







5,217,529



Total liabilities and stockholders’ equity



$

15,884,147





$

15,964,426



TEL-INSTRUMENT ELECTRONICS CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)







Three Months Ended





Six Months Ended







September 30,

2021





September 30,

2020





September 30,

2021





September 30,

2020





































Net sales



$

3,610,863





$

3,336,396





$

7,743,256





$

6,275,833



Cost of sales





1,942,956







1,969,573







4,060,602







3,404,399





































Gross margin





1,667,907







1,366,823







3,682,654







2,871,434





































Operating expenses:

































Selling, general and administrative





596,618







464,809







1,150,651







1,126,060



Litigation expenses





3,220







5,514







4,400







8,210



Engineering, research, and development





682,852







554,555







1,376,427







1,186,508



Total operating expenses





1,282,690







1,024,878







2,531,478







2,320,778





































Income from operations





385,217







341,945







1,151,176







550,656





































Other income (expense):

































Interest income





995







1,879







1,980







4,725



Other income





22,260







-







35,853







13,854



       Gain on forgiveness of PPP loan





722,577







-







722,577







-



Interest expense – judgement





(52,490

)





(52,490

)





(104,410

)





(127,634

)

Interest expense





-







(9,380

)





-







(19,160

)

Total other net income, (expense)





693,342







(59,991

)





656,000







(128,215

)



































Income before income taxes





1,078,559







281,954







1,807,176







422,441





































Income tax expense





78,883







59,206







231,999







88,713





































Net income





999,676







222,748







1,575,177







333,728





































Preferred dividends





80,000







80,000







160,000







160,000





































Net income attributable to common shareholders



$

919,676





$

142,748





$

1,415,177





$

173,728





































Basic income per common share



$

0.28





$

0.04





$

0.43





$

0.05



Diluted income per common share



$

0.20





$

0.04





$

0.31





$

0.05





































Weighted average shares outstanding:

































Basic





3,255,887







3,255,887







3,255,887







3,255,887



Diluted





5,095,665







5,068,949







5,095,665







3,255,887



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