SOUTHAMPTON, Pa., Oct. 10, 2022 (GLOBE NEWSWIRE) — Environmental Tectonics Corporation (OTC Pink: ETCC) (“ETC” or the “Company”) in the present day reported its monetary outcomes for the 13 week interval ended August 26, 2022 (the “2023 second quarter”) and the twenty-six week interval ended August 26, 2022.
Robert L. Laurent, Jr., ETC’s Chief Executive Officer and President said, “We are pleased with the overall 19% increase in second quarter sales vs. prior year, and more importantly, with the 466% increase in bookings in the second quarter when compared to prior year. This has increased our backlog 39%, to the current $25.3 million. This increased backlog, along with a solid pipeline of opportunities, position us well moving forward.
Fiscal 2023 Second Quarter Results of Operations
Net Income (Loss) Attributable to ETC
Net income attributable to ETC was $1.2 million, or $0.07 diluted earnings per share, in the 2023 second fiscal quarter, compared to net loss attributable to ETC of $1.4 million during the 2022 second quarter, equating to ($0.10) diluted loss per share. The $2.6 million variance is due primarily to the effect of proceeds gained on the sale of the facility at 125 James Way, Southampton, PA.
Net Sales
Net sales in the 2023 second fiscal quarter were $5.2 million, an increase of $0.85 million, or 16.3%, compared to 2022 second quarter net sales of $4.4 million. The increase in net sales was mainly a result of increased output related to Environmental contracts in the 2023 second quarter. Aerospace sales in 2023 second fiscal quarter accounted for 58% of overall sales, compared to 61% in second fiscal quarter 2022. Further, domestic sales of 41% in 2023 second fiscal quarter were increased slightly from 39% in second fiscal quarter of 2022. Bookings in the 2023 second fiscal quarter were $15.2 million, which were driven by $10.9 of Sterilizers orders.
Gross Profit
Gross profit for the 2023 second fiscal quarter of $1.3 million increased from $0.7 million in the 2022 second fiscal quarter, while gross profit margin of 24.2% increased by 7.7% compared to 16.5% in 2022 second fiscal quarter. The increase in gross profit was mainly a result of a reduction in expected costs on an International project. This assisted with offsetting some shortfalls in other programs as well.
Operating Expenses
Operating expenses, including sales and marketing, general and administrative, and research and development, for the 2023 second quarter were $2.2 million, an increase of $0.3 million, or 18.0%, compared to $1.9 million for the 2022 second quarter. The increase in operating expenses was due primarily to higher general and administrative expenses, in addition to an increase in expenses related to ETC-PZL.
Other Expenses (Income), Net
Other income, net, for the 2023 second fiscal quarter was $2.2 million compared to other expenses of $79 thousand for the 2022 second fiscal quarter, a favorable variance of $2.3 million. This is directly a result of the facility sale of 125 James Way referenced above.
Fiscal 2023 First Half Results of Operations
Net Income (Loss) Attributable to ETC
Net income attributable to ETC was $0.6 million, or $0.02 diluted earnings per share, in the 2023 first half, compared to $0.8 million during the 2022 first half, equating to $0.04 diluted loss per share. The ($0.2) million variance is due to the higher general and administrative expenses.
Net Sales
Net sales in the 2023 first half were $11.1 million, an increase of $0.6 million, or 5.8%, compared to 2022 first half net sales of $10.5 million. The increase in net sales was due primarily to an increase in Environmental domestic sales, driven by the higher backlog. Overall, sales of CIS accounted for 52% of overall first half 2023 sales, up from 42% of first half 2022 sales.
Gross Profit
Gross profit for the 2023 first half was $2.9 million compared to $2.4 million in the 2022 first half, an increase of $0.5 million, or 17.2%. The increase in gross profit was due to the combined effect of an increase in net sales along with efficiency gains compared to the first half of 2022, while the company was still navigating the COVID pandemic. Gross profit margin as a percentage of net sales increased to 26.1% for the 2023 first half compared to 22.9% for the 2022 first half. Cost reduction in an international project was a major factor in the 2023 YTD increase.
Operating Expenses
Operating expenses, including sales and marketing, general and administrative, and research and development, for the 2023 first half were $4.2 million, an increase of $0.6 million, or 15.3%, compared to $3.6 million for the 2022 first half. The increase in operating expenses includes increases in personnel and benefits costs, including at ETC-PZL.
Other Income, Net
Other income, net for the 2023 first half was $2.2 million compared to other income, net of $2.3 million for the 2022 first half, a slight increase of $0.1 million. This is mainly the difference between forgiveness of the PPP loan in 2022 and the facility sale in 2023.
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 $9.7 million of cash from operating activities as compared to providing $1.5 million during the 2022 first half.
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 $2.6 million during the 2023 first half compared to $79 thousand during the 2022 first half. $2.5 million was used in support of the new facility lease created by the right of use asset.
The Company’s financing activities used $6.0 million of cash during the 2023 first half for repayments under the Company’s credit facilities compared to using $1.3 million of cash during the 2022 first half. This repayment resulted in cash availability of $10.0 million at end of first half of 2023.
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 a number of individuals (multiplace chambers); (iv) Advanced Disaster Management Simulators (“ADMS”); (v) steam and gasoline (ethylene oxide) sterilizers; and (vi) environmental testing and simulation programs (“ETSS”).
We function in two main business segments, Aerospace Solutions (“Aerospace”) and Commercial/Industrial Systems (“CIS”). Aerospace encompasses the design, manufacture, and sale of: (i) ATS merchandise; (ii) altitude (hypobaric) chambers; (iii) hyperbaric chambers for a number of individuals (multiplace chambers); and (iv) ADMS, in addition to built-in logistics assist (“ILS”) for patrons who buy these merchandise or related merchandise manufactured by different events. These services and products present prospects with an providing of complete options for improved readiness and decreased operational prices. Sales of our Aerospace merchandise are made principally to U.S. and overseas authorities companies and to civil aviation organizations. CIS encompasses the design, manufacture, and sale of: (i) steam and gasoline (ethylene oxide) sterilizers; and (ii) ETSS; in addition to elements and repair assist for patrons who buy these merchandise or related merchandise manufactured by different events. Sales of our CIS merchandise are made principally to the healthcare, pharmaceutical, and automotive industries.
ETC-PZL Aerospace Industries Sp. z o.o. (“ETC-PZL”), our 95%-owned subsidiary in Warsaw, Poland, is presently our solely working subsidiary. ETC-PZL manufactures sure simulators and offers software program to assist merchandise manufactured domestically inside our Aerospace phase.
The majority of our web gross sales are generated from long-term contracts with U.S. and overseas authorities companies (together with overseas army gross sales (“FMS”) contracted by way of the U.S. Government) for the analysis, design, improvement, manufacture, integration, and sustainment of ATS merchandise, together with Chambers and the simulators manufactured and offered by way of ETC-PZL, collectively, ATS. The Company additionally enters into long-term contracts with home prospects for the sale of sterilizers and ETSS. Net gross sales of ADMS are usually a lot shorter time period in nature and fluctuate between home and worldwide prospects. We usually present our services and products underneath fixed-price contracts.
ETC’s distinctive means to supply full programs, designed and produced to excessive technical requirements, units it aside from its competitors. ETC’s headquarters is positioned in Southampton, PA. For extra details about ETC, go to http://www.etcusa.com/.
Forward-looking Statements
This information launch incorporates forward-looking statements, that are primarily based on administration’s expectations and are topic to uncertainties and modifications in circumstances. Words and expressions reflecting one thing apart from historic truth are meant to establish forward-looking statements, and these statements could embrace phrases equivalent to “may”, “will”, “should”, “expect”, “plan”, “anticipate”, “believe”, “estimate”, “future”, “predict”, “potential”, “intend”, or “continue”, and related expressions. We base our forward-looking statements on our present expectations and projections about future occasions or future monetary efficiency. Our forward-looking statements are topic to recognized and unknown dangers, uncertainties and assumptions about ETC and its subsidiaries that will trigger precise outcomes to be materially completely different from any future outcomes implied by these forward-looking statements. We warning you to not place undue reliance on these forward-looking statements.
– Financial Tables Follow –
| Environmental Tectonics Corporation | ||||||||||||
| Summary Table of Results (unaudited) | ||||||||||||
| Thirteen Weeks Ended | ||||||||||||
| (in 1000’s, besides per share data) | August 26, 2022 | August 27, 2021 | Variance | Variance % | ||||||||
| Net gross sales | $ | 5,237 | $ | 4,386 | $ | 851 | 16.3% | |||||
| Cost of products offered | 3,970 | 3,664 | (306 | ) | -7.7% | |||||||
| Gross Profit | 1,267 | 722 | 545 | 43.0% | ||||||||
| Gross revenue margin % | 24.2% | 16.5% | 7.7% | |||||||||
| Operating bills | 2,204 | 1,863 | (341 | ) | -15.5% | |||||||
| Operating (loss) revenue | (937 | ) | (1,141 | ) | (204 | ) | 21.8% | |||||
| Operating margin % | -17.9% | -26.0% | 8.1% | |||||||||
| Interest expense, web | 121 | 138 | 17 | 14.0% | ||||||||
| Other (revenue) expense, web | (2,242 | ) | 79 | 2,321 | ||||||||
| Income/(loss) earlier than revenue taxes | 1,184 | (1,358 | ) | (2,542 | ) | |||||||
| Pre-tax margin % | 22.6% | -31.0% | 53.6% | |||||||||
| Income tax provision (profit) | 20 | 20 | – | |||||||||
| Net revenue (Loss) | 1,164 | (1,378 | ) | |||||||||
| Loss (revenue) attributable to non-controlling curiosity | 13 | 8 | (5 | ) | ||||||||
| Net Income/(loss) attributable to ETC | 1,177 | (1,370 | ) | (2,547 | ) | |||||||
| Preferred Stock Dividends | (121 | ) | (121 | ) | – | |||||||
| Income/(loss) attributable to frequent and collaborating shareholders | $ | 1,056 | $ | (1,491 | ) | $ | (2,547 | ) | ||||
| Per share data: | ||||||||||||
| Basic earnings (loss) per frequent and collaborating 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 1000’s, besides per share data) | August 26, 2022 | August 27, 2021 | Variance | Variance % | ||||||||
| Net gross sales | $ | 11,111 | $ | 10,466 | $ | 645 | 5.8% | |||||
| Cost of products offered | 8,216 | 8,070 | (146 | ) | -1.8% | |||||||
| Gross Profit | 2,895 | 2,396 | 499 | 17.2% | ||||||||
| Gross revenue margin % | 26.1% | 22.9% | ||||||||||
| Operating bills | 4,235 | 3,585 | (650 | ) | -15.3% | |||||||
| Operating (loss) revenue | (1,340 | ) | (1,189 | ) | (151 | ) | 11.3% | |||||
| Operating margin % | -12.1% | -11.4% | ||||||||||
| Interest expense, web | 245 | 289 | 44 | 18.0% | ||||||||
| Other (revenue) expense, web | (2,179 | ) | (2,330 | ) | (151 | ) | ||||||
| Income/(loss) earlier than revenue taxes | 594 | 852 | (258 | ) | ||||||||
| Pre tax margin % | 5.3% | 8.1% | ||||||||||
| Income tax provision (profit) | 40 | 40 | ||||||||||
| Net revenue (Loss) | 554 | 812 | ||||||||||
| Loss (revenue) attributable to non-controlling curiosity | 24 | 11 | 13 | |||||||||
| Net Income/(loss) attributable to ETC | 578 | 823 | (245 | ) | ||||||||
| Preferred Stock Dividends | (121 | ) | (121 | ) | – | |||||||
| Income/(loss) attributable to frequent and collaborating shareholders | $ | 457 | $ | 702 | $ | (245 | ) | |||||
| Per share data: | ||||||||||||
| Basic earnings (loss) per frequent and collaborating 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 | |||||||||||||
| (quantities in 1000’s) | |||||||||||||
| 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’ fairness | $ | 1,681 | $ | 1,595 | |||||||||
* In addition to disclosing monetary outcomes which can be decided in accordance with accounting ideas usually accepted within the United States of America (“U.S. GAAP”), we additionally disclose Earnings Before Income, Taxes, Depreciation, and Amortization (“EBITDA”). The presentation of a non-U.S. GAAP monetary measure equivalent to EBITDA is meant to boost the usefulness of monetary data by offering a measure that administration makes use of internally to guage our bills and working efficiency and components into a number of of our monetary covenant calculations.
A reader could discover this merchandise vital in evaluating our efficiency. Management compensates for the constraints of utilizing non-U.S. GAAP monetary measures by utilizing them solely to complement our U.S. GAAP outcomes to offer a extra full understanding of the components and tendencies affecting our business.
