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Tel-Instrument Electronics Corp

Tel-Instrument Electronics Corp. Reports Financial Results For Third Quarter FY 2024

EAST RUTHERFORD, N.J.--(BUSINESS WIRE)--Feb. 13, 2024-- 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 a net income of $134K ($0.01 per basic share) on revenues of $2.4 million for the third quarter of 2024 fiscal year, ended December 31, 2023.

Notes On Third Quarter:

  • Revenues for the third quarter were $2.4 million, a 3% increase from $2.3 million in the year-ago quarter.
  • The gross margin percentage increased to 40% versus 38% in the year-ago quarter.
  • Operating expenses decreased by $239K, a 25% decline versus the year-ago level as a result of funded engineering projects.
  • The order backlog remained strong at $6.0 million.
  • Net income was $134K or $0.01 per share and $0.02 per diluted share.
  • The Aeroflex lawsuit was paid in full. This was partially funded through the issuance of $721k of preferred shares.
  • $690k credit line from Bank of America has been extended until June 30, 2024.

Mr. Jeffrey O’Hara, Tel-Instrument’s President and CEO commented: “We were disappointed by the Aeroflex lawsuit result but are glad to finally put it behind us. The third quarter represented a modest improvement, but we are still being impacted by supply chain issues that are delaying customer shipments. We have hired a new Supply Chain Manager to be more proactive in managing the difficult environment. We are expecting a much stronger FY 2025 due to the commencement of CRAFT ECP production; increased SDR-OMNI sales; and a $1.5 million MADL order for the F-35 program. The SDR-OMNI test sets continue to gain market traction and we expect to secure a market leading position in the commercial avionics segment. We recently introduced an SDR-OMNI/MIL version and have received orders from two international customers. The engineering for the U.S. Army software upgrade for the TS-4530A product is now complete and we are waiting for government certification to close out this program. The CRAFT ECP engineering is proceeding on schedule and the Test Readiness Review (“TRR”) will take place this May. This will generate a $1.2 million invoice which should shore up our cash position. The CRAFT ECP production contract should commence later this year and is expected to generate annual revenues of up to $5 million per year.”

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.

TEL-INSTRUMENT ELECTRONICS CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

December 31,

2023

 

 

March 31,

2023

 

 

 

(unaudited)

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash

 

$

220,791

 

 

$

3,839,398

 

Accounts receivable, net

 

 

1,176,203

 

 

 

900,881

 

Inventories, net

 

 

4,319,840

 

 

 

3,586,065

 

Restricted cash to support appeal bond

 

 

-

 

 

 

2,011,083

 

Prepaid expenses and other current assets

 

 

243,907

 

 

 

817,625

 

Total current assets

 

 

5,960,741

 

 

 

11,155,052

 

 

 

 

 

 

 

 

 

 

Equipment and leasehold improvements, net

 

 

83,495

 

 

 

85,167

 

Operating lease right-of-use assets

 

 

1,375,726

 

 

 

1,526,551

 

Deferred tax asset, net

 

 

2,630,274

 

 

 

2,627,935

 

Other long-term assets

 

 

35,109

 

 

 

35,109

 

Total assets

 

$

10,085,345

 

 

$

15,429,814

 

 

 

 

 

 

 

 

 

 

LIABILITIES & STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Line of credit

 

$

690,000

 

 

$

690,000

 

Operating lease liabilities – current portion

 

 

208,076

 

 

 

202,087

 

Accounts payable

 

 

804,363

 

 

 

322,582

 

Deferred revenues - current portion

 

 

82,797

 

 

 

123,117

 

Accrued expenses ‐vacation pay, payroll and payroll withholdings

 

 

230,992

 

 

 

240,034

 

Accrued legal damages

 

 

-

 

 

 

6,360,698

 

Accrued expenses - other

 

 

220,808

 

 

 

157,896

 

Total current liabilities

 

 

2,237,036

 

 

 

8,096,414

 

 

 

 

 

 

 

 

 

 

Operating lease liabilities – long-term

 

 

1,167,650

 

 

 

1,324,464

 

Other long term liabilities

 

 

48,140

 

 

 

53,416

 

Deferred revenues – long-term

 

 

128,778

 

 

 

173,883

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

 

3,581,604

 

 

 

9,648,177

 

 

 

 

 

 

 

 

 

 

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 authorized, issued, and outstanding, respectively par value $0.10 per share

 

 

4,055,998

 

 

 

3,875,998

 

Preferred stock, 320,000 shares 8% Cumulative Series B Convertible Preferred authorized; 233,334 and 166,667 issued, and outstanding, par value $0.1 per share

 

 

1,676,701

 

 

 

1,207,367

 

Preferred stock, 166,667 shares 8% Cumulative Series C Convertible Preferred authorized; 53,500 and 0 issued, and outstanding, par value $0.10 per share

 

 

328,795

 

 

 

-

 

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

 

Additional paid-in capital

 

 

6,471,562

 

 

 

6,721,535

 

Accumulated deficit

 

 

(6,354,901

)

 

 

(6,348,849

)

Total stockholders’ equity

 

 

6,503,741

 

 

 

5,781,637

 

Total liabilities and stockholders’ equity

 

$

10,085,345

 

 

$

15,429,814

 

TEL-INSTRUMENT ELECTRONICS CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

December 31,

2023

 

 

December 31,

2022

 

 

December 31,

2023

 

 

December 31,

2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

2,403,099

 

 

$

2,328,254

 

 

$

6,835,123

 

 

$

6,594,768

 

Cost of sales

 

 

1,434,981

 

 

 

1,434,547

 

 

 

4,212,971

 

 

 

4,312,405

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross margin

 

 

968,118

 

 

 

893,707

 

 

 

2,622,152

 

 

 

2,282,363

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

 

414,458

 

 

 

588,937

 

 

 

1,520,386

 

 

 

1,625,123

 

Engineering, research, and development

 

 

306,546

 

 

 

370,795

 

 

 

913,701

 

 

 

1,502,534

 

Total operating expenses

 

 

721,004

 

 

 

959,732

 

 

 

2,434,087

 

 

 

3,127,657

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from operations

 

 

247,114

 

 

 

(66,025

)

 

 

188,065

 

 

 

(845,294

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

35

 

 

 

5,665

 

 

 

50,642

 

 

 

8,782

 

Income other

 

 

-

 

 

 

628,400

 

 

 

1,000

 

 

 

628,406

 

Interest expense – judgement

 

 

-

 

 

 

(71,017

)

 

 

(198,535

)

 

 

(193,953

)

Interest expense

 

 

(22,976

)

 

 

-

 

 

 

(49,561

)

 

 

-

 

Total other net (expense) income

 

 

(22,941

)

 

 

563,048

 

 

 

(196,454

)

 

 

443,235

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

 

224,173

 

 

 

497,023

 

 

 

(8,389

)

 

 

(402,059

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense (benefit)

 

 

90,364

 

 

 

104,396

 

 

 

(2,337

)

 

 

(84,449

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) income

 

 

133,809

 

 

 

392,627

 

 

 

(6,052

)

 

 

(317,610

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred dividends

 

 

(94,420

)

 

 

(80,000

)

 

 

(257,128

)

 

 

(240,000

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to common shareholders

 

$

39,389

 

 

$

312,627

 

 

$

(263,180

)

 

$

(557,610

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic net income (loss) per common share

 

$

0.01

 

 

$

0.10

 

 

$

(0.08

)

 

$

(0.17

)

Diluted net income (loss) per common share

 

$

0.02

 

 

$

0.08

 

 

$

(0.08

)

 

$

(0.17

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

3,255,887

 

 

 

3,255,887

 

 

 

3,255,887

 

 

 

3,255,887

 

Diluted

 

 

5,610,634

 

 

 

5,155,665

 

 

 

3,255,887

 

 

 

3,255,887

 

 

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

Source: Tel-Instrument Electronics Corp.