ETC Announces Fiscal 2021 Full Year and Fourth Quarter Results
SOUTHAMPTON, Pa., Sept. 01, 2021 (GLOBE NEWSWIRE) -- Environmental Tectonics Corporation (OTC Pink: ETCC) (“ETC” or the “Company”) today reported its financial results for the fifty-two week period ended February 26, 2021 (“fiscal 2021”) and the thirteen week period ended February 26, 2021 (the “2021 fourth quarter”).
Robert L. Laurent, Jr., ETC’s Chief Executive Officer and President, stated, “Fiscal 2021 was another challenging year as future projects continued to be delayed as ETC entered fiscal 2021 in the early stages of the global COVID-19 pandemic; the effects of which are still ongoing. Now that we have entered fiscal 2022, we are beginning to see these effects diminish as fiscal 2022 first quarter bookings were in excess of
Fiscal 2021 Results of Operations
Bookings / Sales Backlog
Bookings in fiscal 2021 were
Net Loss Attributable to ETC
Net loss attributable to ETC was
Net Sales
Net sales for fiscal 2021 were
Gross Profit
Gross profit for fiscal 2021 was
Operating Expenses
Operating expenses, including sales and marketing, general and administrative, and research and development, for fiscal 2021 were
Interest Expense, Net
Interest expense, net, for fiscal 2021 was
Other Expense, Net
Other expense, net, for fiscal 2021 was
Income Taxes
As of February 26, 2021, the Company reviewed the components of its deferred tax assets and determined, based upon all available information, that it is more likely than not that deferred tax assets relating to its federal and state net operating loss (“NOL”) carryforwards and research and development tax credits will not be realized primarily due to uncertainties related to our ability to utilize them. Accordingly, we have established a
An income tax benefit of
Fiscal 2021 Fourth Quarter Results of Operations
Net Loss Attributable to ETC
Net loss to ETC was
Net Sales
Net sales for the 2021 fourth quarter were
Gross (Loss) Profit
ETC incurred a gross loss of
Operating Expenses
Operating expenses, including sales and marketing, general and administrative, and research and development, for the 2021 fourth quarter were
Interest Expense, Net
Interest expense, net, for the 2021 fourth quarter was
Other (Income) Expense, Net
Other income, net, for the 2021 fourth quarter was
Income Taxes
An income tax benefit of
Liquidity and Capital Resources
As of February 26, 2021, the Company’s availability under the Revolving Line of Credit was
Cash flows from operating activities
During fiscal 2021, due primarily from the conversion of contract assets into cash, the Company broke even with respect to cash flows from operating activities compared to using
Cash flows from investing activities
Cash used for investing activities primarily relates to funds used for capital expenditures in property, plant, and equipment and software development. The Company’s fiscal 2021 and fiscal 2020 investing activities used
Cash flows from financing activities
During fiscal 2021, the Company’s financing activities used
About ETC
ETC was incorporated in 1969 in Pennsylvania. For 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 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 systems (“ETSS”); and (vii) hyperbaric (
We operate in two primary business segments, Aerospace Solutions (“Aerospace”) and Commercial/ Industrial Systems (“CIS”). Aerospace encompasses the design, manufacture, and sale of: (i) ATS products; (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. CIS encompasses the design, manufacture, and sale of: (i) steam and gas (ethylene oxide) sterilizers; (ii) ETSS; and (iii) hyperbaric (
On November 27, 2019, the Company entered into an asset purchase agreement to sell substantially all of its rights, title, and interest in and to the assets related to monoplace chambers.
ETC-PZL Aerospace Industries Sp. z o.o. (“ETC-PZL”), our
The majority of our net sales are generated from long-term contracts with U.S. and foreign government agencies (including foreign military sales (“FMS”) contracted through the U.S. Government) for the research, design, development, manufacture, integration, and sustainment of ATS products, including altitude (hypobaric) and multiplace chambers (“Chambers”), and the simulators manufactured and sold through ETC-PZL, collectively, Aeromedical Training Solutions. The Company also enters into long-term contracts with domestic customers for the sale of sterilizers and ETSS. Net sales of ADMS and monoplace chambers are generally much shorter term in nature and vary between domestic and international customers. We generally provide our products and services under fixed-price contracts.
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 words 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@etcusa.com |
- Financial Tables Follow -
Table A | ||||||||||||||
ENVIRONMENTAL TECTONICS CORPORATION | ||||||||||||||
SUMMARY TABLE OF RESULTS | ||||||||||||||
(in thousands, except per share information) | ||||||||||||||
Fifty-two weeks ended | Fifty-three weeks ended | Variance | ||||||||||||
26-Feb-21 | 28-Feb-20 | $ | % | |||||||||||
Net sales | $ | 16,250 | $ | 40,580 | $ | (24,330 | ) | -60.0 | ||||||
Cost of goods sold | 14,986 | 31,623 | (16,637 | ) | -52.6 | |||||||||
Gross profit | 1,264 | 8,957 | (7,693 | ) | -85.9 | |||||||||
Gross profit margin % | 7.8 | % | 22.1 | % | -14.3 | % | -64.7 | % | ||||||
Operating expenses | 8,483 | 11,678 | (3,195 | ) | -27.4 | |||||||||
Operating loss | (7,219 | ) | (2,721 | ) | (4,498 | ) | 165.3 | |||||||
Operating margin % | -44.4 | % | -6.7 | % | -37.7 | % | 562.7 | % | ||||||
Interest expense, net | 650 | 779 | (129 | ) | -16.6 | |||||||||
Other expense, net | 19 | 497 | (478 | ) | -96.2 | |||||||||
Loss before income taxes | (7,888 | ) | (3,997 | ) | (3,891 | ) | 97.3 | |||||||
Pre-tax margin % | -48.5 | % | -9.8 | % | -38.7 | % | 394.9 | % | ||||||
Income tax (benefit) provision | (272 | ) | 12 | (284 | ) | |||||||||
Net loss | (7,616 | ) | (4,009 | ) | (3,607 | ) | 90.0 | |||||||
Loss (income) attributable to non-controlling interest | 124 | (9 | ) | 133 | ||||||||||
Net loss attributable to ETC | (7,492 | ) | (4,018 | ) | (3,474 | ) | 86.5 | |||||||
Preferred Stock dividends | (484 | ) | (493 | ) | 9 | -1.8 | ||||||||
Loss attributable to common and participating shareholders | $ | (7,976 | ) | $ | (4,511 | ) | $ | (3,465 | ) | 76.8 | ||||
Per share information: | ||||||||||||||
Basic earnings (loss) per common and participating share: | ||||||||||||||
Distributed earnings per share: | ||||||||||||||
Common | $ | - | $ | - | $ | - | ||||||||
Preferred | $ | 0.08 | $ | 0.08 | $ | - | 0.0 | |||||||
Undistributed loss per share: | ||||||||||||||
Common | $ | (0.51 | ) | $ | (0.29 | ) | $ | (0.22 | ) | 75.9 | ||||
Preferred | $ | (0.51 | ) | $ | (0.29 | ) | $ | (0.22 | ) | 75.9 | ||||
Diluted loss per share | $ | (0.51 | ) | $ | (0.29 | ) | $ | (0.22 | ) | 75.9 | ||||
Total basic weighted average common and participating shares | 15,569 | 15,569 | ||||||||||||
Total diluted weighted average shares | 15,569 | 15,569 |
Table B | ||||||||||||||
ENVIRONMENTAL TECTONICS CORPORATION | ||||||||||||||
SUMMARY TABLE OF RESULTS | ||||||||||||||
(in thousands, except per share information) | ||||||||||||||
Thirteen weeks ended | Variance | |||||||||||||
26-Feb-21 | 28-Feb-20 | $ | % | |||||||||||
Net sales | $ | 3,677 | $ | 10,046 | $ | (6,369 | ) | -63.4 | ||||||
Cost of goods sold | 3,713 | 7,735 | (4,022 | ) | -52.0 | |||||||||
Gross (loss) profit | (36 | ) | 2,311 | (2,347 | ) | |||||||||
Gross margin % | -1.0 | % | 23.0 | % | -24.0 | % | ||||||||
Operating expenses | 2,584 | 3,513 | (929 | ) | -26.4 | |||||||||
Operating loss | (2,620 | ) | (1,202 | ) | (1,418 | ) | 118.0 | |||||||
Operating margin % | -71.3 | % | -12.0 | % | -59.3 | % | 494.2 | % | ||||||
Interest expense, net | 143 | 220 | (77 | ) | -35.0 | |||||||||
Other (income) expense, net | (21 | ) | 127 | (148 | ) | |||||||||
Loss before income taxes | (2,742 | ) | (1,549 | ) | (1,193 | ) | 77.0 | |||||||
Pre-tax margin % | -74.6 | % | -15.4 | % | -59.2 | % | 384.4 | % | ||||||
Income tax benefit | (332 | ) | (48 | ) | (284 | ) | 591.7 | |||||||
Net loss | (2,410 | ) | (1,501 | ) | (909 | ) | 60.6 | |||||||
Loss attributable to non-controlling interest | 61 | 33 | 28 | 84.8 | ||||||||||
Net loss attributable to ETC | (2,349 | ) | (1,468 | ) | (881 | ) | 60.0 | |||||||
Preferred Stock dividends | (121 | ) | (121 | ) | - | 0.0 | ||||||||
Loss attributable to common and participating shareholders | $ | (2,470 | ) | $ | (1,589 | ) | $ | (881 | ) | 55.4 | ||||
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 | $ | (0.16 | ) | $ | (0.10 | ) | $ | (0.06 | ) | 60.0 | ||||
Preferred | $ | (0.16 | ) | $ | (0.10 | ) | $ | (0.06 | ) | 60.0 | ||||
Diluted loss per share | $ | (0.16 | ) | $ | (0.10 | ) | $ | (0.06 | ) | 60.0 | ||||
Total basic weighted average common and participating shares | 15,569 | 15,569 | ||||||||||||
Total diluted weighted average shares | 15,569 | 15,569 | ||||||||||||
Table C
ENVIRONMENTAL TECTONICS CORPORATION | |||||||||||||||
OTHER SELECTED FINANCIAL HIGHLIGHTS | |||||||||||||||
(amounts in thousands) | |||||||||||||||
Fifty-two weeks ended | Fifty-three weeks ended | Thirteen weeks ended | |||||||||||||
26-Feb-21 | 28-Feb-20 | 26-Feb-21 | 28-Feb-20 | ||||||||||||
EBITDA * | $ | (5,925 | ) | $ | (2,011 | ) | $ | (2,199 | ) | $ | (1,014 | ) | |||
As of | |||||||||||||||
26-Feb-21 | 28-Feb-20 | ||||||||||||||
Working capital | $ | 10,032 | $ | 17,979 | |||||||||||
Total shareholders’ (deficit) equity | $ | (76 | ) | $ | 8,023 | ||||||||||
* In addition to disclosing financial results that are determined in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), we also disclose Earnings Before Income Taxes, Depreciation, and Amortization (“EBITDA”). The presentation of a non-U.S. GAAP financial measure such as EBITDA is intended to enhance the usefulness of financial information by providing a measure that management uses internally to evaluate our expenses and operating performance and factors into several of our financial covenant calculations.
A reader may find this item important in evaluating our performance. Management compensates for the limitations of using non-U.S. GAAP financial measures by using them only to supplement our U.S. GAAP results to provide a more complete understanding of the factors and trends affecting our business.