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Tel-Instrument Electronics Corp. Reports Financial Results For Third Quarter FY 2023Tel-Instrument Electronics Corp. ("Tel-Instrument," "TIC," or the "Company") (OTCQB: TIKK), a leading designer and manufacturer of avionics test and measurement solutions, today reported a net income of $393K ($0.10 per basic and $0.08 per diluted share) on revenues of $2.3 million for the third quarter of 2023 fiscal year, ended December 31, 2022. Notes On Third Quarter:
Mr. Jeffrey O'Hara, Tel-Instrument's President and CEO commented, "This has been the fourth consecutive quarter that has been negatively impacted by parts shortages. Due to the chip shortage situation, vendor lead times have tripled to as long as nine months in some cases. This prevented us from shipping certain high dollar orders in the last quarter. We have been ordering additional components from our vendors to mitigate the impact of extended lead times. This has resulted in an inventory increase of almost $500K since the start of the year. We expect to have sufficient parts on hand to reach normal production levels starting in the first quarter of Fiscal Year 2024 which starts in April. We also have several major contracts pending. including a large AN/USM-708 order for the F-35 program and a follow-on T-4530i order from Germany. With the commencement of SDR/OMNI shipments, we are projecting a return to solid profitability next fiscal year and strong revenue and profitability growth once we start shipping Navy CRAFT ECP Upgrade KITS. We are extremely excited by the prospects of the SDR/OMNI which commenced initial low-rate production in December. We continue to conduct product demonstrations with the major Primes ("major customers") and airlines. The reaction from all customers has been extremely positive. We expect to ship $300K of these test sets in the fourth quarter. The SDR/OMNI is the only multi-purpose avionic test set in the market that meets Class 1 military environmental specification. We believe that this will be a strong competitor in both commercial and military avionic and communication test set markets. The CRAFT ECP contract will be critical for the Company as this is expected to generate millions of dollars of annual production revenues, starting when the engineering work is completed. The CRAFT engineering effort is a funded $2.9 million program and is expected to take two years to complete. The next major milestone is the Critical Design Review ("CDR") which is scheduled to take place in April 2023. This will generate almost $700K of non-recurring engineering revenues. The Lockheed Martin F-35 MADL Test Set development program has been completed. This is expected to generate ongoing production revenues in the $600K-$700K range. Finally, we have been in negotiations with the U.S. Army on a software upgrade for the TS-4530A product to include new functionality such as Mode 5 Level 2B and compatibility with European CCI ("COMSEC Controlled Item") devices. This software upgrade effort is expected to result in a funded engineering program. The Aeroflex appeal hearing has been set for March 30, 2023 with a final decision expected this summer. We believe that we have excellent arguments to reduce or reverse the judgment. Regardless of the outcome, we look forward to resolving this case and stopping the accrual of judgment interest." 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.
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