Tel-Instrument Electronics Corp. (Ticker: TIKK) reported its financial results for the three and six months ended September 30, 2024, showing notable changes in revenue, profitability, and operational metrics compared to the previous fiscal period.
For the three months ended September 30, 2024, net sales increased to $1,777,342, a 14% rise from $1,565,094 in the same period of 2023. For the six months, net sales reached $4,619,518, up 4% from $4,432,024. However, gross margins declined significantly, with the three-month gross margin at $206,940 (12%) compared to $359,484 (23%) in 2023, and the six-month gross margin at $952,842 (21%) down from $1,654,034 (37%). This decline was attributed to increased fixed production costs and a margin true-up related to the Navy Craft ECP.
The company reported a net loss of $814,594 for the three months ended September 30, 2024, compared to a loss of $435,153 in the prior year. For the six months, the net loss was $772,346, a significant increase from $139,861 in 2023. Losses before income taxes also widened, reaching $(1,031,131) for the three months and $(977,653) for the six months, compared to $(608,404) and $(232,562) in the respective prior periods.
Total assets as of September 30, 2024, were $10,218,558, down from $10,751,790 at the end of March 2024. Total liabilities increased to $4,133,391 from $3,898,163, while total stockholders' equity decreased to $6,085,167 from $6,853,627. The company reported positive working capital of $3,264,454, down from $4,249,777.
Operationally, Tel-Instrument faced challenges with component delays affecting shipments, particularly for the CRAFT product and SDR-OMNI test sets. The company has a sales backlog of $7.9 million as of September 30, 2024, up from $7.2 million in March 2024, and received a significant order of $1.55 million for a new MADL test set for the F-35 program.
The company renewed its line of credit with Bank of America, with an outstanding balance of $965,000 and an available line of $1,000,000 as of September 30, 2024. Management is actively working to address internal control deficiencies and has engaged an external consulting firm to enhance financial reporting and operations.
Overall, while Tel-Instrument Electronics Corp. experienced revenue growth, it faced increased losses and operational challenges, prompting strategic measures to improve future performance.
About TEL INSTRUMENT ELECTRONICS CORP
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