ETC Announces Fiscal 2023 Second Quarter Results
Environmental Tectonics Corporation (ETCC) reported strong financial results for the 2023 second quarter, noting a 19% increase in sales to $5.2 million compared to the prior year. Bookings surged 466% year-over-year, boosting the backlog by 39% to $25.3 million. Net income reached $1.2 million or $0.07 per share, contrasting with a loss of $1.4 million in Q2 2022. The gross profit rose to $1.3 million, marking a 24.2% margin, up from 16.5% last year. However, operating expenses increased by 18% to $2.2 million due to heightened administrative costs.
- 19% increase in Q2 sales to $5.2 million
- 466% increase in Q2 bookings, raising backlog to $25.3 million
- Net income of $1.2 million or $0.07 EPS, up from a loss of $1.4 million
- Gross profit increased to $1.3 million with a gross margin of 24.2%
- Operating expenses increased by 18% to $2.2 million, driven by higher administrative costs
SOUTHAMPTON, Pa., Oct. 10, 2022 (GLOBE NEWSWIRE) -- Environmental Tectonics Corporation (OTC Pink: ETCC) (“ETC” or the “Company”) today reported its financial results for the thirteen week period ended August 26, 2022 (the “2023 second quarter”) and the twenty-six week period ended August 26, 2022.
Robert L. Laurent, Jr., ETC’s Chief Executive Officer and President stated, “We are pleased with the overall
Fiscal 2023 Second Quarter Results of Operations
Net Income (Loss) Attributable to ETC
Net income attributable to ETC was
Net Sales
Net sales in the 2023 second fiscal quarter were
Gross Profit
Gross profit for the 2023 second fiscal quarter of
Operating Expenses
Operating expenses, including sales and marketing, general and administrative, and research and development, for the 2023 second quarter were
Other Expenses (Income), Net
Other income, net, for the 2023 second fiscal quarter was
Fiscal 2023 First Half Results of Operations
Net Income (Loss) Attributable to ETC
Net income attributable to ETC was
Net Sales
Net sales in the 2023 first half were
Gross Profit
Gross profit for the 2023 first half was
Operating Expenses
Operating expenses, including sales and marketing, general and administrative, and research and development, for the 2023 first half were
Other Income, Net
Other income, net for the 2023 first half was
Cash Flows from Operating, Investing, and Financing Activities
During the 2023 first half, due primarily from a decrease in accounts receivable, an increase in customer deposits and the sale of the facility at 125 James Way, the Company provided
Cash used for investing activities primarily relates to funds used for capital expenditures of equipment and software development. However, as related to ASC 842, the Company’s investing activities used
The Company’s financing activities used
About ETC
ETC was incorporated in 1969 in Pennsylvania. For over five decades, we have provided our customers with products, services, and support. Innovation, continuous technological improvement and enhancement, and product quality are core values that are critical to our success. We are a significant supplier and innovator in the following areas: (i) software driven products and services used to create and monitor the physiological effects of flight, including high performance jet tactical flight simulation, fixed and rotary wing upset prevention and recovery and spatial disorientation, and both suborbital and orbital commercial human spaceflight, collectively, Aircrew Training Systems (“ATS”); (ii) altitude (hypobaric) chambers; (iii) hyperbaric chambers for multiple persons (multiplace chambers); (iv) Advanced Disaster Management Simulators (“ADMS”); (v) steam and gas (ethylene oxide) sterilizers; and (vi) environmental testing and simulation systems (“ETSS”).
We operate in two primary business segments, Aerospace Solutions (“Aerospace”) and Commercial/Industrial Systems (“CIS”). Aerospace encompasses the design, manufacture, and sale of: (i) ATS products; (ii) altitude (hypobaric) chambers; (iii) hyperbaric chambers for multiple persons (multiplace chambers); and (iv) ADMS, as well as integrated logistics support (“ILS”) for customers who purchase these products or similar products manufactured by other parties. These products and services provide customers with an offering of comprehensive solutions for improved readiness and reduced operational costs. Sales of our Aerospace products are made principally to U.S. and foreign government agencies and to civil aviation organizations. CIS encompasses the design, manufacture, and sale of: (i) steam and gas (ethylene oxide) sterilizers; and (ii) ETSS; as well as parts and service support for customers who purchase these products or similar products manufactured by other parties. Sales of our CIS products are made principally to the healthcare, pharmaceutical, and automotive industries.
ETC-PZL Aerospace Industries Sp. z o.o. (“ETC-PZL”), our
The majority of our net sales are generated from long-term contracts with U.S. and foreign government agencies (including foreign military sales (“FMS”) contracted through the U.S. Government) for the research, design, development, manufacture, integration, and sustainment of ATS products, including Chambers and the simulators manufactured and sold through ETC-PZL, collectively, ATS. The Company also enters into long-term contracts with domestic customers for the sale of sterilizers and ETSS. Net sales of ADMS are generally much shorter term in nature and vary between domestic and international customers. We generally provide our products and services under fixed-price contracts.
ETC’s unique ability to offer complete systems, designed and produced to high technical standards, sets it apart from its competition. ETC’s headquarters is located in Southampton, PA. For more information about ETC, visit http://www.etcusa.com/.
Forward-looking Statements
This news release contains forward-looking statements, which are based on management’s expectations and are subject to uncertainties and changes in circumstances. Words and expressions reflecting something other than historical fact are intended to identify forward-looking statements, and these statements may include words such as “may”, “will”, “should”, “expect”, “plan”, “anticipate”, “believe”, “estimate”, “future”, “predict”, “potential”, “intend”, or “continue”, and similar expressions. We base our forward-looking statements on our current expectations and projections about future events or future financial performance. Our forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about ETC and its subsidiaries that may cause actual results to be materially different from any future results implied by these forward-looking statements. We caution you not to place undue reliance on these forward-looking statements.
| Contact: | Joseph F. Verbitski, Jr., CFO |
| Phone: | (215) 355-9100 x1531 |
| E-mail: | jverbitski@etcusa.com |
- Financial Tables Follow -
| Environmental Tectonics Corporation | ||||||||||||
| Summary Table of Results (unaudited) | ||||||||||||
| Thirteen Weeks Ended | ||||||||||||
| (in thousands, except per share information) | August 26, 2022 | August 27, 2021 | Variance | Variance % | ||||||||
| Net sales | $ | 5,237 | $ | 4,386 | $ | 851 | ||||||
| Cost of goods sold | 3,970 | 3,664 | (306 | ) | - | |||||||
| Gross Profit | 1,267 | 722 | 545 | |||||||||
| Gross profit margin % | 24.2% | 16.5% | 7.7% | |||||||||
| Operating expenses | 2,204 | 1,863 | (341 | ) | - | |||||||
| Operating (loss) income | (937 | ) | (1,141 | ) | (204 | ) | ||||||
| Operating margin % | - | - | 8.1% | |||||||||
| Interest expense, net | 121 | 138 | 17 | |||||||||
| Other (income) expense, net | (2,242 | ) | 79 | 2,321 | ||||||||
| Income/(loss) before income taxes | 1,184 | (1,358 | ) | (2,542 | ) | |||||||
| Pre-tax margin % | 22.6% | - | 53.6% | |||||||||
| Income tax provision (benefit) | 20 | 20 | - | |||||||||
| Net income (Loss) | 1,164 | (1,378 | ) | |||||||||
| Loss (income) attributable to non-controlling interest | 13 | 8 | (5 | ) | ||||||||
| Net Income/(loss) attributable to ETC | 1,177 | (1,370 | ) | (2,547 | ) | |||||||
| Preferred Stock Dividends | (121 | ) | (121 | ) | - | |||||||
| Income/(loss) attributable to common and participating shareholders | $ | 1,056 | $ | (1,491 | ) | $ | (2,547 | ) | ||||
| Per share information: | ||||||||||||
| Basic earnings (loss) per common and participating share: | ||||||||||||
| Distributed earnings per share: | ||||||||||||
| Common | $ | - | $ | - | ||||||||
| Preferred | $ | 0.02 | $ | 0.02 | $ | - | ||||||
| Undistributed earnings per share: | ||||||||||||
| Common | $ | 0.07 | $ | (0.10 | ) | $ | 0.17 | |||||
| Preferred | $ | 0.07 | $ | (0.10 | ) | $ | 0.17 | |||||
| Diluted earnings/(loss) per share | $ | 0.07 | $ | (0.10 | ) | $ | 0.17 | |||||
| Environmental Tectonics Corporation | ||||||||||||
| Summary Table of Results (unaudited) | ||||||||||||
| Twenty-six weeks ended | ||||||||||||
| (in thousands, except per share information) | August 26, 2022 | August 27, 2021 | Variance | Variance % | ||||||||
| Net sales | $ | 11,111 | $ | 10,466 | $ | 645 | ||||||
| Cost of goods sold | 8,216 | 8,070 | (146 | ) | - | |||||||
| Gross Profit | 2,895 | 2,396 | 499 | |||||||||
| Gross profit margin % | 26.1% | 22.9% | ||||||||||
| Operating expenses | 4,235 | 3,585 | (650 | ) | - | |||||||
| Operating (loss) income | (1,340 | ) | (1,189 | ) | (151 | ) | ||||||
| Operating margin % | - | - | ||||||||||
| Interest expense, net | 245 | 289 | 44 | |||||||||
| Other (income) expense, net | (2,179 | ) | (2,330 | ) | (151 | ) | ||||||
| Income/(loss) before income taxes | 594 | 852 | (258 | ) | ||||||||
| Pre tax margin % | 5.3% | 8.1% | ||||||||||
| Income tax provision (benefit) | 40 | 40 | ||||||||||
| Net income (Loss) | 554 | 812 | ||||||||||
| Loss (income) attributable to non-controlling interest | 24 | 11 | 13 | |||||||||
| Net Income/(loss) attributable to ETC | 578 | 823 | (245 | ) | ||||||||
| Preferred Stock Dividends | (121 | ) | (121 | ) | - | |||||||
| Income/(loss) attributable to common and participating shareholders | $ | 457 | $ | 702 | $ | (245 | ) | |||||
| Per share information: | ||||||||||||
| Basic earnings (loss) per common and participating share: | ||||||||||||
| Distributed earnings per share: | ||||||||||||
| Common | $ | - | $ | - | ||||||||
| Preferred | $ | 0.04 | $ | 0.04 | $ | - | ||||||
| Undistributed earnings per share: | ||||||||||||
| Common | $ | 0.02 | $ | 0.04 | $ | (0.02 | ) | |||||
| Preferred | $ | 0.02 | $ | 0.04 | $ | (0.02 | ) | |||||
| Diluted earnings (loss) per share | $ | 0.02 | $ | 0.04 | $ | (0.02 | ) | |||||
| ENVIRONMENTAL TECTONICS CORPORATION | |||||||||||||
| OTHER SELECTED FINANCIAL HIGHLIGHTS | |||||||||||||
| (amounts in thousands) | |||||||||||||
| Thirteen weeks ended | Twenty-six weeks ended | ||||||||||||
| 26-Aug-22 | 27-Aug-21 | 26-Aug-22 | 27-Aug-21 | ||||||||||
| EBITDA * | $ | 1,627 | $ | (898 | ) | $ | 1,479 | $ | 1,781 | ||||
| As of | |||||||||||||
| 26-Aug-22 | 25-Feb-22 | ||||||||||||
| Working capital | $ | (4,457 | ) | $ | 6,589 | ||||||||
| Total shareholders’ equity | $ | 1,681 | $ | 1,595 | |||||||||
* In addition to disclosing financial results that are determined in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), we also disclose Earnings Before Income, Taxes, Depreciation, and Amortization (“EBITDA”). The presentation of a non-U.S. GAAP financial measure such as EBITDA is intended to enhance the usefulness of financial information by providing a measure that management uses internally to evaluate our expenses and operating performance and factors into several of our financial covenant calculations.
A reader may find this item important in evaluating our performance. Management compensates for the limitations of using non-U.S. GAAP financial measures by using them only to supplement our U.S. GAAP results to provide a more complete understanding of the factors and trends affecting our business.
FAQ
What were the financial results for ETCC in Q2 2023?
How much did bookings increase for ETCC in Q2 2023?
What was ETCC's gross profit margin for Q2 2023?
What were the main drivers behind ETCC's sales growth in Q2 2023?
