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

Published

EAST RUTHERFORD, N.J.--(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 reported a net loss of $435K (($0.16 ) per basic share) on revenues of $1.6 million for the second quarter of 2024 fiscal year, ended September 30, 2023.

Notes On First Quarter:

  • TIC paid the full Aeroflex judgement amount of $6,559,233 on September 15, 2023.
  • TIC issued $721K of Series B and Series C Preferred Stock to Company insiders.
  • Revenues for the second quarter were $1.6 million, a 22% decrease from $2 million in the year-ago quarter.
  • Bookings for the second quarter improved to $2.8 million and backlog increased to $6.5 million.
  • The gross margin percentage decreased to 23% versus 27% in the year-ago quarter. This decline was largely volume related.
  • Operating expenses decreased by $250K, a 23% decline versus the year-ago level as a result of funded engineering projects.
  • Net loss was $435K or $(0.16) per share, compared to net loss of $477K or $(0.17) per share in the year-ago quarter.
  • Net loss for the first two quarters was $140K versus a net loss of $710K in the first half of the last fiscal year.

Mr. Jeffrey O’Hara, Tel-Instrument’s President and CEO commented: “The second quarter was disappointing from both a revenue and profitability standpoint as several large orders for our older test sets could not be shipped due to parts availability issues. $500k of revenue was shifted into the third quarter as the engineering work to replace an obsolete display on our TR-401 product was more complicated than anticipated. The improvement in bookings and backlog is encouraging but getting the necessary parts in a timely manner has been a continuing challenge. Large contracts in process include: (1) a $1.7 million German T-4530i order; (2) a $1.5 million MADL order and (3) a $1.2 CRAFT 708 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. The engineering for the U.S. Army software upgrade for the TS-4530A product is now complete and we are conducting final design verification testing. We expect to submit the $875k invoice for this work in the next few months. The CRAFT ECP engineering is proceeding on schedule and the Test Readiness Review (“TRR”) will take place late in the Spring of 2024. The CRAFT ECP production contract should commence later next 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

 

 

 

September 30, 2023

 

March 31, 2023

 

 

(unaudited)

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash

 

$

356,942

 

 

$

3,839,398

 

Accounts receivable, net

 

 

941,826

 

 

 

900,881

 

Inventories, net

 

 

4,102,786

 

 

 

3,586,065

 

Restricted cash to support appeal bond

 

 

-

 

 

 

2,011,083

 

Prepaid expenses and other current assets

 

 

233,670

 

 

 

817,625

 

Total current assets

 

 

5,635,224

 

 

 

11,155,052

 

 

 

 

 

 

 

 

Equipment and leasehold improvements, net

 

 

93,194

 

 

 

85,167

 

Operating lease right-of-use assets

 

 

1,426,491

 

 

 

1,526,551

 

Deferred tax asset, net

 

 

2,720,638

 

 

 

2,627,935

 

Other long-term assets

 

 

35,109

 

 

 

35,109

 

Total assets

 

$

9,910,656

 

 

$

15,429,814

 

 

 

 

 

 

 

 

LIABILITIES & STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Line of credit

 

$

690,000

 

 

$

690,000

 

Operating lease liabilities – current portion

 

 

206,060

 

 

 

202,087

 

Accounts payable

 

 

607,564

 

 

 

322,582

 

Deferred revenues - current portion

 

 

132,345

 

 

 

123,117

 

Accrued expenses ‐vacation pay, payroll and payroll withholdings

 

 

307,757

 

 

 

240,034

 

Accrued legal damages

 

 

-

 

 

 

6,360,698

 

Accrued expenses - other

 

 

186,553

 

 

 

157,896

 

Total current liabilities

 

 

2,130,279

 

 

 

8,096,414

 

 

 

 

 

 

 

 

Operating lease liabilities – long-term

 

 

1,220,431

 

 

 

1,324,464

 

Other long term liabilities

 

 

49,459

 

 

 

53,416

 

Deferred revenues – long-term

 

 

142,497

 

 

 

173,883

 

 

 

 

 

 

 

 

Total liabilities

 

 

3,542,666

 

 

 

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, par value $0.10 per share

 

 

3,995,998

 

 

 

3,875,998

 

Preferred stock, 302,000 shares 8% Cumulative Series B Convertible Preferred

authorized, 233,224 and 166,667 issued and outstanding, respectively, par value $0.1 per share

 

 

1,648,701

 

 

 

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

 

 

322,375

 

 

 

-

 

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

 

 

6,564,040

 

 

 

6,721,535

 

Accumulated deficit

 

 

(6,488,710

)

 

 

(6,348,849

)

Total stockholders’ equity

 

 

6,367,990

 

 

 

5,781,637

 

Total liabilities and stockholders’ equity

 

$

9,910,656

 

 

$

15,429,814

 

TEL-INSTRUMENT ELECTRONICS CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

 

Three Months Ended

 

Six Months Ended

 

 

September 30, 2023

 

September 30, 2022

 

September 30, 2023

 

September 30, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

1,565,094

 

 

$

2,012,758

 

 

$

4,432,024

 

 

$

4,266,515

 

Cost of sales

 

 

1,205,610

 

 

 

1,459,286

 

 

 

2,777,990

 

 

 

2,877,858

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross margin

 

 

359,484

 

 

 

553,472

 

 

 

1,654,034

 

 

 

1,388,657

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

 

521,070

 

 

 

479,253

 

 

 

1,105,928

 

 

 

1,036,186

 

Engineering, research, and development

 

 

317,715

 

 

 

609,636

 

 

 

607,155

 

 

 

1,131,739

 

Total operating expenses

 

 

838,785

 

 

 

1,088,889

 

 

 

1,713,083

 

 

 

2,167,925

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

 

(479,301

)

 

 

(535,417

)

 

 

(59,049

)

 

 

(779,268

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

12,320

 

 

 

2,137

 

 

 

51,609

 

 

 

3,123

 

Interest expense – judgement

 

 

(128,290

)

 

 

(71,016

)

 

 

(198,535

)

 

 

(122,936

)

Interest expense – other

 

 

(13,133

)

 

 

-

 

 

 

(26,587

)

 

 

-

 

Total other net (expense) income

 

 

(129,103

)

 

 

(68,879

)

 

 

(173,513

)

 

 

(119,813

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss before income taxes

 

 

(608,404

)

 

 

(604,296

)

 

 

(232,562

)

 

 

(899,081

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax benefit

 

 

(173,251

)

 

 

(126,928

)

 

 

(92,701

)

 

 

(188,844

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

(435,153

)

 

 

(477,368

)

 

 

(139,861

)

 

 

(710,237

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred dividends

 

 

(82,708

)

 

 

(80,000

)

 

 

(162,708

)

 

 

(160,000

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss attributable to common shareholders

 

$

(517,861

)

 

$

(557,368

)

 

$

(302,569

)

 

$

(870,237

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic net loss per common share

 

$

(0.16

)

 

$

(0.17

)

 

$

(0.09

)

 

$

(0.27

)

Diluted net loss per common share

 

$

(0.16

)

 

$

(0.17

)

 

$

(0.09

)

 

$

(0.27

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

3,255,887

 

 

 

3,255,887

 

 

 

3,255,887

 

 

 

3,255,887

 

Diluted

 

 

3,255,887

 

 

 

3,255,887

 

 

 

3,255,887

 

 

 

3,255,887

 

 

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

Source: Tel-Instrument Electronics Corp.

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