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Tel-Instrument Electronics Corp Announces Third Quarter FY 2012 Results

Tel-Instrument Electronics Corp (“Tel”, “Tel-Instrument” or the “Company”) (NYSE Amex: TIK) today announced results for the three and nine months ended December 31, 2011. During the first nine months of fiscal 2012, the Company reported solid sales growth and a significant increase in net income.

For the first nine months of fiscal year 2012, revenues grew 16% to $11,337,800 as compared to revenue of $9,772,435 for the same period in the prior year. Tel reported net income of $376,596 or $0.14 per share in the first nine months of fiscal 2012 as compared to a net loss of $334,394 or a loss of $0.13 per share in the first nine months of fiscal 2011.

Tel reported revenues of $3.7 million in the third quarter ended December 31, 2011, a 13% decrease as compared to revenues of $4.3 million in the same prior year quarter. The Company achieved net income of $97,441 or $0.04 per share in the third quarter of fiscal 2012, as compared to net income of $29,012 or $0.01 per share in the third quarter of fiscal 2011. Results for the fiscal third quarter were below the Company’s expectations due to a disruption in manufacturing operations associated with the move to a new facility and ramp-up issues associated with the AN/USM-708 program. Revenue growth in the fourth quarter of the current fiscal year is expected to materially accelerate with the full rate production of the AN/USM-708 and initial production of the TS-4530 units.

Jeff O’Hara, President and Chief Executive Officer of Tel stated, “The Company did a solid job completing the facility move in the third quarter while also achieving a sixth consecutive quarter of profitability. With our backlog of approximately $45 million providing a great foundation for growth, we continue to be excited about the future. The substantial completion of three major development programs during the quarter is a significant achievement for the Company and represents the culmination of our pre-production phase, bringing us to the beginning of significant growth. The technologies developed will provide a platform for future development programs and allow the Company to extend its product line and expand into new markets. We are at the beginning of a new phase for our Company, and we look forward to continued growth and significantly improved profitability.”

We encourage everyone to read our full results of operations contained in our Form 10-Q filed at sec.gov

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 CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

 

   

December 31,

2011

March 31,

2011

(unaudited)
ASSETS
 
Current assets:
Cash and cash equivalents $ 640,170 $ 123,955
Accounts receivable, net 1,769,817 2,585,619
Unbilled government receivables 1,466,623 1,466,623
Inventories, net 3,785,971 2,970,378
Prepaid expenses and other 137,542 70,970
Deferred debt expense 108,321 108,321
Deferred income tax asset   1,126,247   1,131,175
Total current assets 9,034,691 8,457,041
 
Equipment and leasehold improvements, net 617,213 330,694
Deferred debt expenses – long-term 291,865 373,105
Deferred income tax asset – non-current 1,461,664 1,461,664
Other assets   56,872   35,235
Total assets $ 11,462,305 $ 10,657,739
 
LIABILITIES & STOCKHOLDERS’ EQUITY
 
Current liabilities:
Current portion long-term debt 522,959 282,798
Capital lease obligations 62,397 15,685
Accounts payable 1,996,916 1,598,679
Progress billings - 424,202
Deferred revenues – current portion 19,985 28,382
Accrued payroll, vacation pay and payroll taxes 410,865 445,738
Accrued expenses   1,674,819   1,287,034
Total current liabilities 4,687,941 4,082,518
 
Subordinated notes payable-related parties 250,000 250,000
Capital lease obligations – long-term 166,727 -
Deferred revenues 6,342 15,381
Warranty Liability 299,399 366,137
Long-term debt, net of debt discount   1,620,638   1,979,114
Total liabilities   7,031,047   6,693,150
 
Commitments
 
Stockholders' equity:
Common stock, par value $.10 per share, 2,652,815 and
2,646,215 issued and outstanding as of December 31,
2011 and March 31, 2011, respectively 265,281 264,621
Additional paid-in capital 5,800,944 5,711,531
Accumulated deficit   (1,634,967 )   (2,011,563 )
Total stockholders' equity   4,431,258   3,964,589
Total liabilities and stockholders' equity $ 11,462,305 $ 10,657,739
 

TEL-INSTRUMENT ELECTRONICS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

   
Three Months Ended Nine Months Ended
December 31,

2011

  December 31,

2010

December 31,

2011

  December 31,

2010

 
Net sales $ 3,673,235 $ 4,261,222 $ 11,337,800 $ 9,772,435
Cost of sales   2,227,856   2,395,206   6,547,563   5,354,804
 
Gross margin 1,445,379 1,866,016 4,790,237 4,417,631
 
Operating expenses:
Selling, general and administrative 724,636 686,380 2,191,332 2,137,055
Engineering, research and development   633,136   767,366   2,160,107   2,385,802
Total operating expenses   1,357,772   1,453,746   4,351,439   4,522,857
 
Income (loss) from operations 87,607 412,270 438,798 (105,226 )
 
Other income (expense):
Amortization of debt discount (13,386 ) (19,164 ) (40,177 ) (33,678 )
Amortization of debt expense (27,081 ) (27,080 ) (81,241 ) (33,098 )
Change in fair value of common stock warrants 130,433 (129,684 ) 66,738 (129,684 )
Gain on sale of capital asset 500 - 500 3,600
Proceeds from life insurance policy - - 300,029 -
Interest income 224 71 418 219
Interest expense   (103,155 )   (102,016 )   (302,265 )   (172,715 )
Total other expense   (12,465 )   (277,873 )   (55,998 )   (365,356 )
 
Income (loss) before income taxes 75,142 134,397 382,800 (470,582 )
 
Income tax expense (benefit)   (22,289 )   105,385   6,204   (136,188 )
 
Net income (loss)   97,431   29,012   376,596   (334,394 )
 
Basic income (loss) per common share $ 0.04 $ 0.01 $ 0.14 $ (0.13 )
Diluted income (loss) per common share $ 0.04 $ 0.01 $ 0.14 $ (0.13 )
 
Weighted average shares outstanding:
Basic 2,652,864 2,626,149 2,650,032 2,621,417
Diluted 2,706,078 2,642,747 2,718,720 2,621,417
 

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