ETC Announces Fiscal 2016 Second Quarter Results
(Thomson Reuters ONE) -
For Immediate Release
SOUTHAMPTON, PA, USA, October 12, 2015 - Environmental Tectonics Corporation
(OTC Pink: ETCC) ("ETC" or the "Company") today reported its financial results
for the thirteen week period ended August 28, 2015 (the "2016 second quarter")
and the twenty-six week period ended August 28, 2015 (the "2016 first half").
Fiscal 2016 Second Quarter Results of Operations
Sales Backlog
Our sales backlog as of August 28, 2015, for work to be performed and revenue to
be recognized under written agreements after such date, was $59.1 million
compared to $32.5 million as of February 28, 2015. The $26.6 million increase
in sales backlog is due primarily to the 2016 first quarter award of multiple
International contracts totaling $45.4 million.
Net Loss Attributable to ETC
Net loss attributable to ETC was $0.5 million, or $0.04 diluted loss per share,
in the 2016 second quarter compared to $0.9 million during the 2015 second
quarter, equating to $0.07 diluted loss per share. The $0.4 million variance
reflects a decrease in loss before income taxes of $0.8 million due to the
combined effect of a $0.6 million increase in gross profit and $0.4 million
decrease in operating expenses, offset in part, by a $0.1 million increase in
interest expense and a $0.1 million increase in other expense. The $0.8 million
decrease in loss before income taxes was offset, in part, by a $0.3 million
decrease in the income tax benefit recorded in the 2016 second quarter compared
to the 2015 second quarter.
Net Sales
Net sales in the 2016 second quarter were approximately $10.0 million, an
increase of $0.5 million, or 5.4%, compared to 2015 second quarter net sales of
$9.5 million. The increase reflects increased ATS sales to International
customers, offset in part, by decreased Sterilizers and Environmental sales to
Domestic customers. Given the current progress made on U.S. Government
contracts in the Company's sales backlog, coupled with significant fiscal 2015
International bookings and the 2016 first quarter award of multiple
International contracts totaling $45.4 million, the Company anticipates that
although sales to the U.S. Government will remain steady, the concentration of
sales to the U.S. Government will continue to lessen in fiscal 2016.
Gross Profit
Gross profit for the 2016 second quarter was $2.5 million compared to $1.9
million in the 2015 second quarter, an increase of $0.6 million, or 31.2%. The
increase in gross profit was achieved despite only a 5.4% increase in net sales
due primarily to the combination of a reduction in the amount of additional work
required on several contracts and a higher concentration of net sales from more
off-the-shelf type products requiring less initial design and engineering work.
Gross profit margin as a percentage of net sales increased to 25.5% for the
2016 second quarter compared to 20.5% for the 2015 second quarter.
Operating Expenses
Operating expenses, including sales and marketing, general and administrative,
and research and development, for the 2016 second quarter were $2.9 million, a
decrease of $0.4 million, or 11.6%, compared to $3.3 million for the 2015 second
quarter. The decrease is due primarily to a reduction in general and
administrative and research and development expenses at our operating
subsidiaries.
Interest Expense, Net
Interest expense, net, for the 2016 second quarter was $237 thousand compared to
$148 thousand in the 2015 second quarter, an increase of $89 thousand, or
60.1%, due to the combination of a higher level of bank borrowing and an
increased interest rate.
Other Expense, Net
Other expense, net, for the 2016 second quarter was $253 thousand compared to
$107 thousand in the 2015 second quarter, an increase of $146 thousand, or
136.4%, due to an increase in letter of credit fees associated with the 2016
first quarter award of multiple International contracts and an increase in
realized foreign currency exchange net losses.
Fiscal 2016 First Half Results of Operations
Net Loss Attributable to ETC
Net loss attributable to ETC was $0.7 million, or $0.06 diluted loss per share,
in the 2016 first half compared to $1.1 million during the 2015 first half,
equating to $0.09 diluted loss per share. The $0.4 million variance reflects a
decrease in loss before income taxes of $0.7 million due to the combined effect
of a $0.8 million increase in gross profit and $0.1 million decrease in
operating expenses, offset in part, by a $0.1 million increase in interest
expense and a $0.1 million increase in other expense. The $0.7 million decrease
in loss before income taxes was offset, in part, by a $0.3 million decrease in
the income tax benefit recorded in the 2016 first half compared to the 2015
first half.
Net Sales
Net sales in the 2016 first half were $19.5 million, a decrease of $0.6 million,
or 3.2%, compared to 2015 first half net sales of $20.1 million. The decrease
reflects decreased Sterilizers and Environmental sales to Domestic customers,
offset in part, by increased ATS sales to International customers. Given the
current progress made on U.S. Government contracts in the Company's sales
backlog, coupled with significant fiscal 2015 International bookings and the
2016 first quarter award of multiple International contracts totaling $45.4
million, the Company anticipates that although sales to the U.S. Government will
remain steady, the concentration of sales to the U.S. Government will continue
to lessen in fiscal 2016.
Gross Profit
Gross profit for the 2016 first half was $5.6 million compared to $4.8 million
in the 2015 first half, an increase of $0.8 million, or 17.5%. The increase in
gross profit was achieved despite a 3.2% decrease in net sales due primarily to
the combination of a reduction in the amount of additional work required on
several contracts and a higher concentration of net sales from more off-the-
shelf type products requiring less initial design and engineering work. Gross
profit margin as a percentage of net sales increased to 28.7% for the 2016 first
half compared to 23.6% for the 2015 first half.
Operating Expenses
Operating expenses, including sales and marketing, general and administrative,
and research and development, for the 2016 first half were $6.1 million, a
decrease of $0.1 million, or 1.9%, compared to $6.2 million for the 2015 first
half. The decrease is due primarily to a reduction in general and
administrative and research and development expenses at our operating
subsidiaries.
Interest Expense, Net
Interest expense, net, for the 2016 first half was $457 thousand compared to
$297 thousand in the 2015 first half, an increase of $160 thousand, or 53.9%,
due to the combination of a higher level of bank borrowing and an increased
interest rate.
Other Expense, Net
Other expense, net, for the 2016 first half was $284 thousand compared to $174
thousand in the 2015 first half, an increase of $110 thousand, or 63.2%, due to
an increase in letter of credit fees associated with the 2016 first quarter
award of multiple International contracts and an increase in realized foreign
currency exchange net losses.
Cash Flows from Operating, Investing, and Financing Activities
During the 2016 first half, as a result of an increase in billings in excess of
costs and estimated earnings on uncompleted long-term percentage of completion
("POC") contracts, accounts payable, trade, and customer deposits, as well as a
decrease in accounts receivable and costs and estimated earnings in excess of
billings on uncompleted long-term POC contracts, the Company generated $5.8
million of cash from operating activities compared to $1.5 million during the
2015 first half. Under POC revenue recognition, these accounts, other than
customer deposits, represent the timing differences of spending on production
activities versus the billing and collecting of customer payments.
Cash used for investing activities primarily relates to funds used for capital
expenditures of equipment and software development. The Company's investing
activities used $0.7 million in both the 2016 first half and the 2015 first
half.
In the 2016 first half, the Company's financing activities used $5.2 million of
cash, which primarily reflected an increase in restricted cash and repayments
under the Company's various lines of credit. The Company's financing activities
used $1.3 million of cash in the 2015 first half on Term Loan payments, offset
in part, by a decrease in restricted cash.
About ETC
ETC was incorporated in 1969 in Pennsylvania. For over four decades, we have
provided our customers with products, service, 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, upset 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; (vi) environmental testing and simulation devices;
and (vii) hyperbaric (100% oxygen) chambers for one person (monoplace
chambers). We operate in two primary business segments, Aerospace Solutions
("Aerospace") and Commercial/Industrial Systems ("CIS").
Aerospace encompasses the design, manufacture, and sale of: (i) Aircrew Training
Systems; (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. We
offer integrated Aircrew Training Systems to commercial, governmental, and
military defense agencies, and training devices, including altitude (hypobaric)
and multiplace chambers ("Chambers"), to governmental and military defense
agencies and civil aviation organizations both in the United States and
internationally. We sell our ADMS line of products to state and local
governments, fire and emergency training schools, universities, and airports.
We also provide integrated logistics support for customers who purchase these
products or similar products manufactured by other parties.
CIS encompasses the design, manufacture, and sale of: (i) steam and gas
(ethylene oxide) sterilizers; (ii) environmental testing and simulation devices;
and (iii) hyperbaric (100% oxygen) chambers for one person (monoplace chambers),
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. We sell our sterilizers to pharmaceutical and medical device
manufacturers. We sell our environmental testing and simulation devices
primarily to commercial automobile and heating, ventilation, and air
conditioning ("HVAC") manufacturers. We sell our hyperbaric products (primarily
"monoplace" chambers) to hospitals and wound care clinics. We also provide
upgrade, maintenance, and repair services for our products and similar products
manufactured by other parties.
We presently have two operating subsidiaries. ETC-PZL Aerospace Industries Sp.
z o.o. ("ETC-PZL"), our 95%-owned subsidiary in Warsaw, Poland, manufactures
certain simulators and provides software to support products manufactured
domestically within our Aerospace segment. Environmental Tectonics Corporation
(Europe) Limited ("ETC-Europe"), our 99%-owned subsidiary, functions as a sales
office in the United Kingdom.
ETC's unique ability to offer complete systems, designed and produced to high
technical standards, sets it apart from its competition. ETC is headquartered
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 terminology 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: Mark Prudenti, CFO
Phone: (215) 355-9100 x1531
E-mail: mprudenti(at)etcusa.com
###
- Financial Tables Follow -
Table A
ENVIRONMENTAL TECTONICS CORPORATION
SUMMARY TABLE OF RESULTS
(in thousands, except per share information)
Thirteen weeks ended Variance
------------------------- -----------------
28-Aug-15 29-Aug-14 $ %
------------ ------------ --------- -------
Net sales $ 9,966 $ 9,456 $ 510 5.4
Cost of goods sold 7,423 7,518 (95) -1.3
------------ ------------ --------- -------
Gross profit 2,543 1,938 605 31.2
Gross profit margin % 25.5% 20.5% 5.0% 24.4%
Operating expenses 2,898 3,280 (382) -11.6
------------ ------------ --------- -------
Operating loss (355) (1,342) 987 -73.5
Operating margin % -3.6% -14.2% 10.6% -74.6%
Interest expense, net 237 148 89 60.1
Other expense, net 253 107 146 136.4
------------ ------------ --------- -------
Loss before income taxes (845) (1,597) 752 -47.1
Pre-tax margin % -8.5% -16.9% 8.4% -49.7%
Income tax benefit (338) (647) 309 -47.8
------------ ------------ --------- -------
Net loss (507) (950) 443 -46.6
Loss attributable to non-
controlling interest 1 11 (10) -90.9
------------ ------------ --------- -------
Net loss attributable to ETC (506) (939) 433 -46.1
Preferred Stock dividends (121) (121) - 0.0
------------ ------------ --------- -------
Loss attributable to common and
participating shareholders $ (627) $ (1,060) $ 433 -40.8
------------ ------------ --------- -------
Per share information:
Basic earnings (loss) per common
and
participating share:
Distributed earnings per share:
Common $ - $ - $ -
------------ ------------ --------- -------
Preferred $ 0.02 $ 0.02 $ - 0.0
------------ ------------ --------- -------
Undistributed loss per share:
Common $ (0.04) $ (0.07) $ 0.03 -42.9
------------ ------------ --------- -------
Preferred $ (0.04) $ (0.07) $ 0.03 -42.9
------------ ------------ --------- -------
Diluted loss per share $ (0.04) $ (0.07) $ 0.03 -42.9
------------ ------------ --------- -------
Total basic weighted average common
and
participating shares 15,248 15,248
Total diluted weighted average
shares 15,291 15,505
Table B
ENVIRONMENTAL TECTONICS CORPORATION
SUMMARY TABLE OF RESULTS
(in thousands, except per share information)
Twenty-six weeks ended Variance
------------------------- ------------------
28-Aug-15 29-Aug-14 $ %
------------ ------------ ---------- -------
Net sales $ 19,505 $ 20,141 $ (636) -3.2
Cost of goods sold 13,912 15,381 (1,469) -9.6
------------ ------------ ---------- -------
Gross profit 5,593 4,760 833 17.5
Gross profit margin % 28.7% 23.6% 5.1% 21.6%
Operating expenses 6,096 6,212 (116) -1.9
------------ ------------ ---------- -------
Operating loss (503) (1,452) 949 -65.4
Operating margin % -2.6% -7.2% 4.6% -63.9%
Interest expense, net 457 297 160 53.9
Other expense, net 284 174 110 63.2
------------ ------------ ---------- -------
Loss before income taxes (1,244) (1,923) 679 -35.3
Pre-tax margin % -6.4% -9.5% 3.1% -32.6%
Income tax benefit (498) (779) 281 -36.1
------------ ------------ ---------- -------
Net loss (746) (1,144) 398 -34.8
Loss attributable to non-
controlling interest - 8 (8) -100.0
------------ ------------ ---------- -------
Net loss attributable to ETC (746) (1,136) 390 -34.3
Preferred Stock dividends (242) (242) - 0.0
------------ ------------ ---------- -------
Loss attributable to common and
participating shareholders $ (988) $ (1,378) $ 390 -28.3
------------ ------------ ---------- -------
Per share information:
Basic earnings (loss) per common
and
participating share:
Distributed earnings per share:
Common $ - $ - $ -
------------ ------------ ---------- -------
Preferred $ 0.04 $ 0.04 $ - 0.0
------------ ------------ ---------- -------
Undistributed loss per share:
Common $ (0.06) $ (0.09) $ 0.03 -33.3
------------ ------------ ---------- -------
Preferred $ (0.06) $ (0.09) $ 0.03 -33.3
------------ ------------ ---------- -------
Diluted loss per share $ (0.06) $ (0.09) $ 0.03 -33.3
------------ ------------ ---------- -------
Total basic weighted average
common and
participating shares 15,248 15,248
Total diluted weighted average
shares 15,298 15,508
Table C
ENVIRONMENTAL TECTONICS CORPORATION
OTHER SELECTED FINANCIAL HIGHLIGHTS
(amounts in thousands)
Twenty-six weeks
Thirteen weeks ended ended
------------------------ ----------------------
28-Aug-15 29-Aug-14 28-Aug-15 29-Aug-14
----------- ------------ ----------- ----------
EBITDA $ (175) $ (1,019) $ 103 $ (711)
As of
------------------------
28-Aug-15 27-Feb-15
----------- ------------
Working capital $ 8,274 $ 8,029
Total shareholders' equity $ 19,419 $ 20,253
This announcement is distributed by GlobeNewswire on behalf of
GlobeNewswire clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: ETC via GlobeNewswire
[HUG#1958380]
Datum: 12.10.2015 - 22:31 Uhr
Sprache: Deutsch
News-ID 426292
Anzahl Zeichen: 26082
contact information:
Town:
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Kategorie:
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