Tel-Instrument Electronics Corp (OTCQB:TIKK)

Tel-Instrument Electronics (OOTC:TIKK) ($3.40, $11.0M market cap) (aerospace & defense) announced Q2 2021 results:

• Sales of $3.3 million vs $3.9 million in the prior year
• EPS of $0.04 vs $0.11 in the prior year

“We continue to be profitable with our second quarter income before taxes approximately double that of our first quarter, despite the impact of COVID-19 on our supply chain and labor force. The pandemic has resulted in a significant reduction in our commercial test set bookings and has delayed some orders from our domestic and international military customers. With the resurgence of the COVID-19 virus across the country, managing our supply chain and manufacturing operations will remain a challenge for the remainder of this fiscal year….

the Company has never been in a stronger position with orders for Mode 5 and legacy test sets continuing and the Company aggressively expanding into related high-growth areas such as specialty engineering for Lockheed Martin and the military communications test set market. On a final note, we wish the best for Joe Macaluso, our Chief Accounting Officer, who announced his departure from the Company earlier this week. Joe has done a fantastic job at TIC and will be missed. Mr. O’Hara will assume Joe’s responsibilities until a replacement is named.”

Tel-Instrument Electronics (OOTC:TIKK) ($4.44, $14.4M market cap) announced Q1 2021 results:

• Sales of $2.9 million vs $3.3 million in the prior year
• EPS of $0.01 vs $0.04 in the prior year
• Backlog of $4.4 million vs $4.0 million in March 2020
• Awarded new $956K contract from Lockheed Martin

“Despite the impact of COVID-19 on our supply chain and labor force, the Company remained profitable in the first quarter of the 2021 fiscal year. This was a difficult quarter as we were forced to shut down our manufacturing facility in May for over a week as a result of COVID-19 infections among our manufacturing staff. We have also had numerous at-risk members of our manufacturing staff opt out of work due to the severity of the pandemic in the Tri-State area. The pandemic has also resulted in significant reductions in our commercial test set bookings and has delayed some orders from our domestic and international military customers.

TIC was also notified this week that it has been awarded a $956K contract from Lockheed Martin to support the F-35 Joint Strike Fighter... Lockheed Martin is a key customer and we are thrilled to be working with them on this critical program. It is expected that this development and testing program will be completed within 12 months.”

Tel-Instrument Electronics Corp (NYSE AMEX:TIKK) ($2.88; $9.3M market cap), a company that designs, manufactures, and sells avionics test and measurement solutions for the commercial air transport, general aviation, and government/military aerospace and defense market, announced a new order for $535k from the U.S. Military for its Mode 5 test set.

This order brings Q2 bookings to $4.6 million and $19.4 million for past 12 months. 

“bookings have improved substantially over the last year reflecting a combination of strong U.S. DoD orders as well as growing international demand for our Mode 5 test sets. In the current quarter, we have secured large Mode 5 test set orders from both Canada and Germany. We anticipate continued strong international demand for Mode 5 test sets as we approach the July 1, 2020 deadline for the decertification of Mode 4 IFF. We are currently working on other significant international opportunities which we hope to secure later this fiscal year. We continue to do a solid job in capturing the lion’s share of large Mode 5 test set market which should result in improved revenues and profitability going forward.”

EAST RUTHERFORD, N.J.--(BUSINESS WIRE)--Tel-Instrument Electronics Corp. (“Tel”, “Tel-Instrument” or the “Company”) (NYSE MKT: TIK), a leading designer and manufacturer of avionics test and measurement solutions, today announced that preliminary unaudited revenues for the second quarter ending September 30, 2015 increased to a record $6.8 million, a 90% increase over the same quarter last year. Preliminary six months revenues increased to $12.7 million, representing an 89% increase over the same period last year.

Jeff O’Hara, Tel’s President and CEO noted, “Tel has done a solid job of driving revenues and profitability during the first half of this fiscal year. We have also made great strides improving our balance sheet. We continue to explore opportunities worldwide and to invest in research and development to position our products and services for future growth.”

First Quarter 2016 Results

• Revenues increased to $5.8 million, an 87% increase versus the comparable period of fiscal year 2015.
• GAAP basic earnings of $0.09 per share, versus a loss of $0.12 per share in the year ago period.
• Non-GAAP EPS of $0.07 vs a loss of $0.09 in the prior year period.

Commenting on the results, Mr. Jeffrey O’Hara, President and CEO of Tel, stated, “We are pleased to report a second consecutive quarter of improved operating results. Management believes that our operating results going forward will continue to benefit from increased volume and the shipment of more of the higher priced CRAFT units, and will also benefit from the full production release of the TS-4530A SETS which are expected to begin shipping in volume prior to calendar year end. The Company also continues to do a solid job in keeping a tight rein on operating costs despite substantially increased revenues. We continue to invest in new product development with the TR-36 Nav/Comm test set being the first product to be released from these efforts. We are also actively working on next generation test sets for both the commercial and military market that we believe will be extremely competitive. We believe that the Company has a solid position in its core Mode 5 flight-line market and we are actively working both domestic and overseas opportunities. The untapped Mode 5 market is significant and securing these higher margin sales could further enhance our operating profitability. We are excited about fiscal year 2016 and beyond.”

Fourth Quarter 2015 Results

• Revenues increased to $6.4 million, a 43% increase versus the same quarter in the previous year.
• Non GAAP EPS of $0.15 vs a loss of $0.09 in the prior year period

Quotes from management:

"Revenue growth exceeded our expectations for the fourth quarter, and we were pleased to report a return to solid profitability. Management believes that our operating results going forward will benefit from increased volume and the shipment of more of the higher priced CRAFT units. The Company also continues to do a solid job in keeping a tight rein on operating costs despite substantially increased revenues. The Company continues to invest in new product development with the TR-36 Nav/Comm test set being the first product to be released from these efforts. The worldwide Nav/Comm test set market is significant and we believe that this new modern test set will allow us to effectively compete in both the commercial and military market segments. We are excited about fiscal year 2016 and beyond.”

$TIK ($6.25) - GeoBargain on the radar Tel-Instrument Corp. (TIK) designs, manufactures, and sells avionics test and measurement solutions for the commercial air transport, general aviation, and government/military aerospace and defense markets in the United States and internationally.  

TIK announced fourth quarter 2014 revenues are expected to be $6.44 million, an increase of 43% vs prior year, and ahead of previous guidance of $5.6 million.  Management made the following bullish comments:

“This continues the steady momentum we have achieved during this fiscal year with revenues increasing sequentially each quarter. This substantial revenue increase is expected to result in solid bottom line profitability for the quarter.”

EAST RUTHERFORD, N.J.--(BUSINESS WIRE)--Tel-Instrument Electronics Corp. (“Tel”, “Tel-Instrument” or the “Company”) (NYSE MKT: TIK) today reported receipt of a $775k order from Lockheed Martin for 21 CRAFT units with delivery scheduled for the first and second quarter of the 2016 fiscal year.

The Company will release unaudited fourth quarter revenues next week.

Third Quarter 2015 Results

• Q3 2015 revenues of $5.0 million vs $4.0 million in Q3 2014
• Q3 2015 Non-GAAP EPS of $0.05 vs $0.05 in Q3 2014 

“We are generating strong momentum across all aspects of our business, and anticipate that the U.S. Army will authorize a production release on the TS-4530A SETS in the April timeframe,” stated Jeffrey O’Hara, CEO and President of Tel. “Revenue growth met expectations for the quarter, but the bottom line results were negatively impacted by about approximately $188,000 related to the write-off of deferred financing costs associated with the previous banking arrangement, as well as approximately $190,000 in legal fees and expenses related to the Aeroflex litigation.”

Mr. O’Hara continued, “In an effort to be more transparent and to allow for a better evaluation of our results, Tel will begin to report Non-GAAP results, which will eliminate non-cash transactions, such as the write-down deferred financing costs, changes in the warrant liability, and taxes, which are not owed due to our tax-loss carry-forward. This Non-GAAP adjustment will become more material beginning in the fourth quarter and for fiscal year 2016, when we anticipate reporting increased revenues and stronger bottom line results. Management believes that our profitability is expected to benefit from the increased volume leading to gross margin improvement as well as Tel’s largely fixed cost structure. For the fourth quarter, Tel anticipates revenues to exceed $5.6 million, and a return to profitability.”

EAST RUTHERFORD, N.J.--(BUSINESS WIRE)--Tel-Instrument Electronics Corp. (“TIC”) (NYSE MKT:TIK) held its Annual Meeting on January 21, 2015, and delivered a presentation to the shareholders. A copy of the Shareholder Presentation has been filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on January 22, 2015. The Company also announced that third quarter revenues are estimated at $5 million, a 40% increase over the second quarter.

Second Quarter 2015 Results

• Q2 2015 revenues of $3.6 million vs $4.0 million in the prior year
• Q2 2015 net loss per share of $0.08 vs net loss of $0.02 in the prior year

Jeff O’Hara, Tel President and CEO commented, “Revenues of $3.58 were below our expectations as a result of a six week interruption in CRAFT deliveries due to delayed component shipments from vendors, and a technical issue with the U.S. Navy. The technical issue has been resolved, and CRAFT shipments resumed in October. As previously announced, the Company began shipment of the TS-4530 KITS in the second quarter, amounting to almost $1.5 million. We continue to wait for U.S. Army approval on the SETS, but the expectation is that we are still a few months from obtaining approval. Tel also began limited deliveries of the new ITATS product in the second quarter with full rate production expected to be achieved in the third quarter. Revenues are expected to grow in the second half of the fiscal year as a result of our three major programs in full production, except for the TS-4530 SETS. While our backlog at September 30, 2014 was approximately $34 million, our ability to rapidly increase shipments is limited by our financial resources, but we are working with our vendors to increase shipments as rapidly as possible.”

Mr. O’Hara continued, “Second quarter revenues and profitability were negatively impacted by the delays in the CRAFT program which reduced revenues by over $1 million. Gross margins were lower than projected based on the product mix and by higher labor and overhead variances due in part to additional staffing associated with the startup of the TS-4530A and ITATS programs. This also contributed to a temporary increase in inventory and payable levels. These CRAFT issues are now resolved and we are anticipating revenues and profits to substantially improve for the balance of this fiscal year. The key to a sustained improvement in profitability is to secure a production release for the TS-4530A SETS, which is currently scheduled for December, but could potentially slip another month or two. The good news is that the U.S. Army has asked us to increase shipments of TS-4530A KITS starting in the third quarter. Tel’s backlog currently stands at $35 million and more than 50% of the CRAFT backlog is now comprised of higher margin follow-on orders which will start shipping in volume in the next fiscal year. It should be noted that the Company has over $7 million in federal loss carry-forwards, and that earnings will not be subject to significant federal taxes until this is exhausted. We are very encouraged by the new Bank of America term loan as this will substantially reduce interest expense going forward.”

Confernce Call Notes for Q1 2015

·         Fiscal Q I 2015 ended June 30, 2014, was a transitional quarter for TIK setting the company up for strong performance in Q II and throughout the rest of fiscal 2015:   

o   Company invested substantial time, labor and inventory in ramping up TS-4530A and ITATS programs and began generating revenues for both programs in July.  

o   Had to upgrade hardware and software at no charge to the Navy on 400 CRAFT units, only seven remain.  Once upgrades completed begin shipping new units and billing Navy. 

o   Absorbed $345,000 legal costs for the Aeroflex litigation and the legal costs should drop substantially in Q II.  Company believes suit without merit but will continue to be a nuisance. 

·         Fiscal Q II 2015 revenues should exceed Q II 2014 ($4 million).  Fiscal Q III and IV 2015 should be substantially greater than Q III ($4 million) and Q IV 2014 ($4.1 million).  Fiscal 2015 revenues will be substantially more than 2014 and the company will be solidly profitable. 

·         Three main sources of revenues: 

o   CRAFT test sets IDIQ (Navy) 

o   TS-4530A (US Army) 

o   ITAT (US Navy) 

·         Beginning fiscal Q III, three government contracts alone will generate nearly $6 million revenues per quarter: TS-4530 ($3 million), ITAT ($750,000) and CRAFT (around $2 million).  In addition, the company will generate around $750,000 a quarter in commercial and foreign sales and those revenues should increase based on new technologies related to product releases.  It is not unreasonable to assume Q II revenues of around $5 million and Q III and IV revenues in excess of $6 or even $7 million if commercial and foreign sales also pick up. 

·         One analyst on call perturbed that company doesn’t give more detailed guidance and the Street doesn’t know what to expect or how to value the company.  Suggested that is main reason for lack of interest in stock. 

·         Company has an $8 million NOL that will reduce future tax payments but not impact EPS. 

·         Company has been paying down mezzanine debt at the rate of $68,000 per month and will have it paid off by August 2015, substantially reducing interest expense.  Company will seek new credit facility under more favorable terms. 

First Quarter 2015 Results

• For the three months ended June 30, 2014, the Company recorded net sales of $3,129,076 versus net sales of $3,199,975 in the year ago quarter.
• For the three months ended June 30, 2014, the Company recorded a net loss of $384,005 ($0.12 per share) as opposed to a net loss of $85,772 ($0.03 per share) in the year ago quarter. The current quarter results were adversely impacted by a $133,881 ($0.04 per share) charge due to the revaluation of the common stock warrants due to the increase in stock price versus a gain of $24,572 in the year ago quarter. Interest expense continued to decline falling to $62,480 in the current quarter versus $104,077 in the year ago quarter.

Jeff O’Hara, President and Chief Executive Officer of TIC, stated, “The first quarter was challenging as we invested a significant amount of time and labor and inventory dollars in ramping up for the TS-4530A and ITATS programs, and we also experienced much higher legal costs related to the deposition phase of the Aeroflex lawsuit. These legal expenses are expected to decline over the next quarter but this will continue to be a drag on profitability until this case is resolved. Working down the CRAFT ship in place was a major achievement as this will allow us to start shipping some of the higher priced Navy CRAFT orders starting in the third fiscal quarter. We are excited to be in KIT production on the TS-4530A program and are pushing for the release of the TS-4530A SETS that should increase monthly revenues by over $500,000. The Company anticipates that second quarter revenues should exceed year ago levels with the third and fourth quarters expected to increase substantially due to higher CRAFT production levels and sales prices and the achievement of full rate production on the TS-4530A and ITATS programs.”

Fourth Quarter 2014 Results

• Fourth quarter 2014 revenues were $4.5 million compared to $1.9 in the prior year period.
• Non-GAAP earnings for the fourth quarter 2014 were $0.15 vs. a loss of $0.36 in the prior year.
• The Company also announced the receipt of full rate production approval for the U.S. Army TS-4530A KITS with deliveries of about $400k per month to begin in July 2014.

Quotes from management:
“We are pleased to have made solid progress this last year, with strong revenue growth, a return to modest profitability, and an improved balance sheet. Completing the CRAFT ship in place units this summer will allow us to increase CRAFT shipments including some of the higher priced new orders. While first quarter FY 15 revenues will approximate the year ago levels, we are anticipating further improvements in revenue and profitability for FY 2015 due to the two new programs coming online next month.”

Third Quarter 2014 Results

• Third quarter 2014 reveneus were $4.1 million compared to $2.3 in the prior year period
• Non-GAAP earnings for the third quarter 2014 were $0.03 vs. a loss of $0.30 in the prior year

The Company continues to work with the U.S. Army for a production release. The current U.S. Army schedule calls for a production release in March 2014 but it is possible that this date could slip into the first quarter of the next fiscal year. The Company has shipped most of the SETS and KITS required under the initial limited rate production release and it is critical that the Company receives this production release in a timely manner to continue to build on the growth and profitability it is starting to achieve.

The Company also previously announced that it had negotiated a $2.14 million contract modification on the ITATS program. The ITATS product (“AN/ARM-206”) is a fully automated TACAN test set for use in U.S. Navy Intermediate Level repair locations. This contract modification entails the sale of the IP to the U.S. Navy plus the sale of ancillary test support equipment and a modest increase in the recurring price to reflect several product enhancements. A portion of the IP sale proceeds will go to the Company’s subcontractor on this program. This contract modification is expected to result in a pre-tax benefit of about $1.2 million over the next two fiscal quarters. Management believes that the sale of the IP for the ITATS program should have no impact on sales of these units to the U.S. Navy or other customers, and should improve the Company’s balance sheet and liquidity position and help facilitate the commencement of the ITATS full rate production this summer.

Jeff O’Hara, the Company’s President and CEO, noted that: “the Company has made great strides over the last year in improving its liquidity and looks forward to the commencement of full rate production on the TS-4530A program in the near term. The Company is also making solid progress in working down its inventory of CRAFT “ship in place” units which has been limiting new production builds of CRAFT. It is expected that the CRAFT ship in place units will all be upgraded by this summer which should result in an increase in CRAFT production levels. The Company may also explore opportunities to secure lower cost commercial financing to replace its expensive existing debt this summer. Looking ahead, we are excited by our prospects for a strong conclusion to the current fiscal year and further growth in fiscal year 2015 and years to come. The Company also plans to begin earnings conference calls starting with the filing of the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2014, in June 2014.”

The Company is also announcing the receipt of $4.1 million of additional orders for the U.S. Army TS-4530A program bringing the total backlog on this program to $19.7 million.