Tel-Instrument Electronics Corp. announces net income of $1.3 million for fiscal 2022

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EAST RUTHERFORD, New Jersey, June 17, 2022–(BUSINESS WIRE)–Tel-Instrument Electronics Corp. (“Tel-Instrument”, “TIC” or the “Company”) (OTCQB: TIKK), a leading designer and manufacturer of avionics test and measurement solutions, today announced net earnings of $1,309,738 or $0.30 per share basic and $0.26 per diluted share on revenue of $12.9 million for fiscal 2022 ended March 31, 2022.

Highlights include:

  • Revenue for the year ended March 31, 2022 increased $1.4 million, or 12%, from the prior year.

  • Gross margins for fiscal 2022 were 44.6%, an improvement of 3.3 percentage points over the prior year.

  • Operating expenses increased by $120,000 year-over-year, with the increase primarily due to accruals for profit sharing.

  • Operating profit increased to $937,000 from $73,000 in the prior year.

  • Net income improved to $1.3 million ($0.30 per basic share) from $600,000 in the prior year.

  • Cash balances improved to $7 million from $5.5 million at the start of the year.

  • Working capital at year end improved to $3.7 million from $3.2 million in the prior year.

  • Net worth improved to $6.2 million from $5.2 million at the start of the year.

Mr. Jeffrey O’Hara, President and CEO of Tel-Instrument, said, “Despite continued supply chain disruptions, TIC has been able to improve its revenues and profitably and substantially strengthen its balance sheet over the of the last fiscal year. The fourth quarter was affected by parts shortages due to the doubling and tripling of lead times from suppliers in some cases. decline in the second quarter of the current fiscal year. The good news is that we are in a strong financial position to deal with these supply chain issues. We are also excited by the initial positive reception we have seen with customers during the SDR/OMNI test. We have scheduled product demonstrations with Boeing and Airbus and our international distributors are beginning to place orders for demonstration units. Production deliveries of /OMNI are expected to begin in the second quarter of this fiscal year. We believe it will be a strong contender in the commercial and military avionics and communications test set markets. The Lockheed Martin F-35 MADL development program passed a successful Test Readiness Review (“TRR”) in May and the product is currently undergoing environmental and EMI/EMC qualification testing. This contract will generate non-recurring engineering (“NRE”) revenue over the next few quarters and is expected to generate ongoing production revenue in the order of $600,000. We are in final negotiations with the US Navy on a “mid-life” update to our CRAFT test sets. This should result in NRE revenue over the next two years and significant production revenue from 24 months after contract award.

Regarding the Aeroflex litigation, the status of the appeal has not changed even though the employees have returned to the Kansas Judicial Center. Aeroflex filed a motion earlier this year with the Court of Appeals to significantly increase the bail amount from the existing $2 million. We have filed a strong opposition to this motion and expect it to be denied. Despite planning conference requests, no information was received from the court. Interest accrued on the judgment amount continues to weigh on our financial results, but we continue to believe that we have a strong case that warrants continuing the appeals 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, aerospace and government/military defense markets. Tel-Instrument provides instruments to test, measure, calibrate and repair a wide range of airborne navigation and communication equipment. For more information, visit our website at www.telinstrument.com.

This press release contains statements that are not historical in nature and qualify as “forward-looking statements,” including those relating to future financial and operating results, benefits and synergies of the combined companies, statements regarding the outlook for the Company, pricing trends, and strengths within the industry, completion dates for capital projects, anticipated sales growth, cost reduction strategies and their results, long-term goals and other statements of expectations, beliefs, future plans and strategies, anticipated events or trends, and similar expressions regarding matters that are not historical facts. All predictions of future results contain a measure of uncertainty and, therefore, actual results could differ materially. Factors that could cause a difference include: 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; transport, environmental issues; and other unforeseen circumstances. A number of these factors are discussed in the Company’s previous filings with the United States 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.

TEL-INSTRUMENT ELECTRONICS CORP.

Consolidated balance sheets

ASSETS

March, 31st,
2022

March, 31st,
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 call 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 SHAREHOLDERSEQUITY

Current liabilities:

Operating lease debts – current portion

$

194,370

$

201 883

Accounts payable

406 489

906 149

Deferred revenue – current portion

119,835

150,709

Accruals – vacation pay, payroll and source deductions

410 538

457,232

Damages payable

6,097,273

5,889,023

Accrued expenses – other

174 145

365,975

Total current liabilities

7,402,650

7,970,971

Operating lease debts – long term

1,526,551

1,720,921

Long-term debt-PPP

722,577

Deferred revenue – long term

289,071

332 428

Total responsibilities

9,218,272

10,746,897

Commitments and contingencies

Shareholders equity

Preferred shares, 1,000,000 shares authorized, par value $0.10 per share

Preferred shares, 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 shares, 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 and 3,255,887 shares issued and outstanding, respectively

325,586

325,586

Premium

7,018,353

7,318,620

Accumulated deficit

(5,960,304

)

(7,270,042

)

Total shareholders equity

6,227,000

5,217,529

Total liabilities and shareholders equity

$

15,445,272

$

15,964,426

TEL-INSTRUMENT ELECTRONICS CORP.

Consolidated Statements of Income

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 costs :

Selling, general and administrative expenses

2,250,576

2,165,190

Litigation costs

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 (expenses):

interest income

3,951

7,483

PPP loan forgiveness

722,577

722,577

Interest expense

(29,779

)

Debt interest – judgment

(208 250

)

(231,474

)

Other income, net

30,254

30,819

Total other income

548 532

499,626

income before taxes

1,485,191

573,030

Provision (benefit) for income taxes

175,453

(27,027

)

Net revenue

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 earnings 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

See the source version on businesswire.com: https://www.businesswire.com/news/home/20220617005040/en/

contacts

Pauline Romeo
Tel-Instrument Electronics Corp.
(201) 933-1600 (ext. 309)

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