CORRECTING and REPLACING Tel-Instrument Electronics Corp. Reports Net Income of $1.0 Million for Second Quarter 2022

EAST RUTHERFORD, N.J.--(BUSINESS WIRE)-- Please replace the release with the following corrected version due to multiple revisions.

The updated release reads:

TEL-INSTRUMENT ELECTRONICS CORP. REPORTS NET INCOME OF $1.0 MILLION FOR SECOND QUARTER 2022

Tel-Instrument Electronics Corp. (“Tel” or the “Company”) (OTCQB: TIKK), a leading designer and manufacturer of avionics test and measurement solutions, today reported net income of $1.0 million ($0.28 per common share) on revenues of $3.6 million for the second quarter of fiscal year 2022 ended September 30, 2021.

Highlights include:

• Revenues for the second quarter increased to $3.6 million, an 8% increase from the year-ago quarter.
• Gross margin percentages improved 46.2% due to manufacturing efficiencies, tight cost controls, and product mix pricing.
• Quarterly operating expenses increased 25% to $1.3 million due to higher engineering and higher profit-sharing accruals.
• Operating income increased to $385K for the current quarter as compared to $342K in the year ago quarter.
• Six month operating income increased to $1,151K versus $551K in the year-ago period.
• The Company received full loan forgiveness on the $722k second draw PPP loan.
• Net income increased to $1.0 million, or $0.28 per common share and $0.20 per share on a fully diluted basis.
• Cash balances improved to $6.8 million, compared to $5.5 million at the start of the fiscal year.
• Net worth improved to $6.6 million compared to $5.2 million at the start of the fiscal year.

Mr. Jeffrey O’Hara, Tel-Instrument’s President and CEO commented, “The Company recorded a profitable second quarter despite ongoing supply chain interruptions which have hampered our production. With the recent forgiveness of the PPP loan, we now have zero debt and a growing cash balance which has allowed us to continue our aggressive engineering programs such as the SDR/OMNI. We have started to market this product to key customers with production and deliveries expected to commence in the first quarter of calendar year 2022. We believe that this will be a strong competitor in both commercial and military markets. We were informed this week that the Lockheed Martin has lifted the stop work order on the MADL program. This will generate non-recurring engineering revenues over the next two quarters and should result in ongoing production revenues in what is essentially a new market for TIC. We are also actively working with the U.S. Navy on a 'mid-life' update of our CRAFT test sets which could result in significant revenues over the next five to 10 years. We also continue to invest in our market leading Mode 5 products and successfully demonstrated new Mode 5 Level 2B test capabilities at an international military test event. This new Mode 5 capability could potentially lead to future software upgrades of all of our Mode 5 test sets in the field.

“With respect to the Aeroflex litigation, we continue to believe that we have strong grounds for the award to be vacated or reduced. The appeal process has been delayed due to the COVID-19 pandemic, but we expect a decision within the next 12 months.”

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, 2021				March 31, 2021
		(unaudited)
ASSETS
Current assets:
Cash		$	4,808,457			$	3,485,275
Accounts receivable, net			1,530,060				1,933,321
Inventories, net			2,910,721				3,437,989
Restricted cash to support appeal bond			2,011,050				2,011,050
Prepaid expenses and other current assets			188,127				263,067
Total current assets			11,448,415				11,130,702
Equipment and leasehold improvements, net			142,277				200,769
Operating lease right-of-use assets			1,815,304				1,922,805
Deferred tax asset, net			2,443,042				2,675,040
Other long-term assets			35,109				35,110
Total assets		$	15,884,147			$	15,964,426
LIABILITIES & STOCKHOLDERS’ EQUITY
Current liabilities:
Operating lease liabilities – current portion		$	190,622			$	201,883
Accounts payable			391,247				906,149
Deferred revenues - current portion			149,223				150,709
Accrued expenses ‐vacation pay, payroll and payroll withholdings			342,170				457,232
Accrued legal damages			5,993,433				5,889,023
Accrued expenses - other			235,310				365,975
Total current liabilities			7,302,005				7,970,971
Operating lease liabilities – long-term			1,624,682				1,720,921
Long term debt - PPP			-				722,577
Deferred revenues – long-term			312,420				332,428
Total liabilities			9,239,107				10,746,897
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 issued and outstanding, par value $0.10 per share			3,695,998				3,695,998
Preferred stock, 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 shares issued and outstanding, respectively			325,586				325,586
Additional paid-in capital			7,170,954				7,318,620
Accumulated deficit			(5,694,865	)			(7,270,042	)
Total stockholders’ equity			6,645,040				5,217,529
Total liabilities and stockholders’ equity		$	15,884,147			$	15,964,426

TEL-INSTRUMENT ELECTRONICS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
		Three Months Ended								Six Months Ended
		September 30, 2021				September 30, 2020				September 30, 2021				September 30, 2020
Net sales		$	3,610,863			$	3,336,396			$	7,743,256			$	6,275,833
Cost of sales			1,942,956				1,969,573				4,060,602				3,404,399
Gross margin			1,667,907				1,366,823				3,682,654				2,871,434
Operating expenses:
Selling, general and administrative			596,618				464,809				1,150,651				1,126,060
Litigation expenses			3,220				5,514				4,400				8,210
Engineering, research, and development			682,852				554,555				1,376,427				1,186,508
Total operating expenses			1,282,690				1,024,878				2,531,478				2,320,778
Income from operations			385,217				341,945				1,151,176				550,656
Other income (expense):
Interest income			995				1,879				1,980				4,725
Other income			22,260				-				35,853				13,854
Gain on forgiveness of PPP loan			722,577				-				722,577				-
Interest expense – judgement			(52,490	)			(52,490	)			(104,410	)			(127,634	)
Interest expense			-				(9,380	)			-				(19,160	)
Total other net income, (expense)			693,342				(59,991	)			656,000				(128,215	)
Income before income taxes			1,078,559				281,954				1,807,176				422,441
Income tax expense			78,883				59,206				231,999				88,713
Net income			999,676				222,748				1,575,177				333,728
Preferred dividends			80,000				80,000				160,000				160,000
Net income attributable to common shareholders		$	919,676			$	142,748			$	1,415,177			$	173,728
Basic income per common share		$	0.28			$	0.04			$	0.43			$	0.05
Diluted income per common share		$	0.20			$	0.04			$	0.31			$	0.05
Weighted average shares outstanding:
Basic			3,255,887				3,255,887				3,255,887				3,255,887
Diluted			5,095,665				5,068,949				5,095,665				3,255,887

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20211115005425/en/

Pauline Romeo

Tel-Instrument Electronics Corp.

(201) 933-1600

Source: Tel-Instrument Electronics Corp.