Environmental Tectonics Corporation (ETCC) Stock Message Board

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Last Post: 11/4/2018 11:15:38 PM - Followers: 9 - Board type: Free - Posts Today: 0

ETCC was incorporated in 1969 in Pennsylvania and last year we celebrated our 40th anniversary. Our core technologies include the design, manufacture and sale of Training Services (TSG) which includes (1) software driven products and services used to create and monitor the physiological effects of flight; (2) high performance jet tactical flight simulation, and; (3) driving and disaster simulation systems, and Control Systems (CSG) which includes: (1) steam and gas sterilization; (2) testing and simulation devices for the automotive industry, and; (3) hyperbaric and hypobaric chambers. Product categories included in TSG are Aircrew Training Systems (ATS) and flight simulators, disaster management systems and entertainment applications. CSG includes sterilizers, environmental control devices and hyperbaric chambers along with parts and service support.

Contact: Duane D. Deaner, CFO
Tel: 215-355-9100 (ext. 1203)
Fax: 215-357-4000

Environmental Tectonics Corporation

Condensed Consolidated Income Statements

(unaudited)
(in thousands, except share and per share information)


	Thirteen week
	periods ended
	May 28,			May 29,
	2010			2009
Net sales	$	12,121		$	9,581
Cost of goods sold		6,991			5,154

Gross profit		5,130			4,427


Operating expenses:
Selling and marketing		1,102			1,254
General and administrative		1,463			1,602
Research and development		324			228

		2,889			3,084


Operating income		2,241			1,343


Other expenses:
Interest expense		228			516
Other, net		72			55

		300			571


Income before income taxes		1,941			772
Provision for income taxes		—			—


Income before noncontrolling interest		1,941			772
Income attributable to noncontrolling interest		5			2


Net income		1,936			770

Preferred stock dividend		(577	)		(235	)

Income applicable to common shareholders	$	1,359		$	535


Per share information:

Earnings per common share:
Basic	$	0.15		$	0.06

Diluted	$	0.09		$	0.06

Weighted average common shares:
Basic		9,085,000			9,054,000

Diluted		20,967,000			9,054,000

The accompanying notes are an integral part of the condensed consolidated financial statements.

Environmental Tectonics Corporation

Condensed Consolidated Balance Sheets

(in thousands, except share information)


	May 28,
	2010			February 26,
	(unaudited)			2010
ASSETS
Cash and cash equivalents	$	874		$	2,408
Restricted cash		5,476			2,751
Accounts receivable, net		4,087			17,356
Costs and estimated earnings in excess of billings on uncompleted long-term contracts		3,666			3,576
Inventories, net		4,788			5,114
Deferred tax assets, current		5,391			4,983
Prepaid expenses and other current assets		1,602			545

Total current assets		25,884			36,733

Property, plant and equipment, at cost, net		13,606			13,643
Construction in progress		440			316
Software development costs, net		837			691
Other assets		291			346

Total assets	$	41,058		$	51,729


LIABILITIES
Current portion of long-term debt	$	213		$	285
Accounts payable — trade		1,710			1,783
Billings in excess of costs and estimated earnings on uncompleted long-term contracts		8,105			13,944
Customer deposits		1,683			1,799
Accrued interest and dividends		833			782
Other accrued liabilities		2,400			2,814

Total current liabilities		14,944			21,407


Long-term obligations, less current portion:
Credit facility payable to bank		4,508			9,808
Other long-term debt		—			12

		4,508			9,820

Deferred tax liabilities		3,298			3,066

Unearned interest		19			22

Total liabilities		22,769			34,315


Commitments and contingencies		—			—

STOCKHOLDERS’ EQUITY
Cumulative convertible participating preferred stock, Series D, $.05 par value, 11,000 shares authorized; 155 shares outstanding		155			155
Cumulative convertible participating preferred stock, Series E, $.05 par value, 25,000 shares authorized; 22,741 and 23,741 shares outstanding at May 28, 2010 and February 26, 2010, respectively		22,741			23,741
Common stock, $.05 par value, 20,000,000 shares authorized; 9,086,999 and 9,083,573 shares issued and outstanding at May 28, 2010 and February 26, 2010, respectively		454			454
Additional paid-in capital		13,508			14,050
Accumulated other comprehensive income (loss)		45			(431	)
Accumulated deficit		(18,657	)		(20,593	)

Total stockholders’ equity before noncontrolling interest		18,246			17,376

Noncontrolling interest		43			38

Total stockholders’ equity		18,289			17,414

Total liabilities and stockholders’ equity	$	41,058		$	51,729

The accompanying notes are an integral part of the condensed consolidated financial statements.

Environmental Tectonics Corporation

Condensed Consolidated Statements of Cash Flows

(unaudited)
(in thousands)


	Thirteen week periods
	ended
	May 28,			May 29,
	2010			2009
Cash flows from operating activities:
Net income	$	1,936		$	770
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization		346			567
Decrease in valuation allowance for deferred tax assets		(867	)		—
Accretion of debt discount		55			95
Increase in allowances for accounts receivable and inventories, net		110			316
Income attributable to noncontrolling interest		5			2
Stock compensation expense		24			—
Changes in operating assets and liabilities:
Accounts receivable		13,259			(791	)
Costs and estimated earnings in excess of billings on uncompleted long-term contracts		(90	)		(319	)
Inventories		226			(432	)
Prepaid expenses and other assets		(1,057	)		214
Deferred tax assets, net		691			—
Accounts payable		(73	)		320
Billings in excess of costs and estimated earnings on uncompleted long-term contracts		(5,839	)		(1,337	)
Customer deposits		(116	)		(966	)
Accrued interest and dividends		51			329
Other accrued liabilities		(417	)		76

Net cash provided by (used in) operating activities		8,244			(1,156	)


Cash flows from investing activities:
Acquisition of equipment		(359	)		(289	)
Capitalized software development costs		(220	)		(104	)

Net cash used in investing activities		(579	)		(393	)


Cash flows from financing activities:
(Repayment) borrowings under line of credit		(5,300	)		1,400
(Repurchase) issuance of preferred stock		(1,000	)		55
Issuance of common stock		10			1
Payment of preferred stock dividends		(576	)		—
Payments of other debt obligations		(84	)		(2	)
Increase in restricted cash for performance guarantee		(2,725	)		(7	)

Net cash (used in) provided by financing activities		(9,675	)		1,447


Effect of exchange rate changes on cash		476			(131	)

Net decrease in cash		(1,534	)		(233	)
Cash at beginning of period		2,408			520

Cash at end of period	$	874		$	287


Supplemental schedule of cash flow information:
Interest paid	$	96		$	103
Income taxes paid		182			—

Supplemental information on non-cash operating and investing activities:
Accrued dividends on preferred stock	$	577		$	235

The accompanying notes are an integral part of the condensed consolidated financial statements.

Environmental Tectonics Corporation

Notes to the Condensed Consolidated Financial Statements

1. Nature of Business:

Environmental Tectonics Corporation (“ETC” or the “Company”) is principally engaged in the design, manufacture and sale of software driven products and services used to simulate and measure certain environmental conditions and to monitor the physiological effects of motion on humans in certain environmental conditions. These products and services include aircrew training systems (aeromedical, tactical combat and general), disaster management systems, entertainment products, sterilizers (steam and gas), environmental testing products, and hyperbaric chambers and other products that involve similar manufacturing techniques and engineering technologies. ETC focuses on software enhancements, product extensions, new product development and new marketplace applications. Presently, sales of the Company’s products are made principally to U.S. and foreign government agencies. We operate in two primary business segments, the Training Services Group (“TSG”) and the Control Systems Group (“CSG”).

Training Services Group. This segment includes three primary product groups: aircrew training devices and related services, disaster management training and systems, and entertainment products.

Control Systems Group. This segment includes three primary product lines: sterilizers, environmental control systems, and hyperbaric chambers, along with parts and service support.

The Company’s fiscal year is the 52-or 53-week annual accounting period ending the last Friday in February. Certain amounts from prior consolidated financial statements have been reclassified to conform to the presentation in fiscal 2011.

Environmental Tectonics Corporation
Consolidated Balance Sheets
(amounts in thousands, except share information)


	February 26,			February 27,
	2010			2009
ASSETS
Cash and cash equivalents	$	2,408		$	520
Restricted cash		2,751			4,454
Accounts receivable, net		17,356			5,100
Costs and estimated earnings in excess of billings on uncompleted long-term contracts		3,576			2,460
Inventories, net		5,114			4,435
Deferred tax assets, current		4,983			2,350
Prepaid expenses and other current assets		545			479


Total current assets		36,733			19,798

Property, plant and equipment, at cost, net		13,643			15,786
Construction in progress		316			275
Software development costs, net		691			1,013
Other assets		346			406

Total assets	$	51,729		$	37,278


LIABILITIES
Current portion of long-term debt	$	285		$	9
Accounts payable – trade		1,783			2,105
Billings in excess of costs and estimated earnings on uncompleted long-term contracts		13,944			4,155
Customer deposits		1,799			2,397
Accrued interest and dividends		782			4,197
Other accrued liabilities		2,814			2,251

Total current liabilities		21,407			15,114


Long-term obligations, less current portion:
Credit facility payable to bank		9,808			10,510
Promissory note payable		—			1,891
Subordinated convertible debt		—			9,664
Other long-term debt		12			7

		9,820			22,072

Deferred tax liabilities		3,066			2,350

Unearned interest		22			152

Total liabilities		34,315			39,688


Commitments and contingencies		—			—
Cumulative convertible participating preferred stock, Series B, $.05 par value, 15,000 shares authorized; 6,000 shares issued and outstanding		—			6,000

Cumulative convertible participating preferred stock, Series C, $.05 par value, 3,300 shares authorized, issued and outstanding		—			3,300


STOCKHOLDERS’ EQUITY (DEFICIENCY)
Cumulative convertible participating preferred stock, Series D, $.05 par value, 11,000 shares authorized; 155 shares outstanding		155			—
Cumulative convertible participating preferred stock, Series E, $.05 par value, 25,000 shares authorized; 23,741 shares outstanding		23,741			—
Common stock, $.05 par value, 20,000,000 shares authorized; 9,083,573 and 9,049,351 shares issued and outstanding as February 26, 2010 and February 27, 2009, respectively		454			452
Additional paid-in capital		14,050			15,399
Accumulated other comprehensive loss		(431	)		(557	)
Accumulated deficit		(20,593	)		(27,046	)

Total stockholders’ equity (deficiency) before noncontrolling interest		17,376			(11,752	)

Noncontrolling interest		38			42

Total stockholders’ equity (deficiency)		17,414			(11,710	)

Total liabilities and stockholders’ equity (deficiency)	$	51,729		$	37,278

The accompanying notes are an integral part of the consolidated financial statements.

Environmental Tectonics Corporation
Consolidated Statements of Operations
(amounts in thousands, except share and per share information)


	Fiscal Years ended:
	February 26, 2010			February 27, 2009
Net sales	$	42,271		$	36,687
Cost of goods sold		23,447			24,829

Gross profit		18,824			11,858


Operating expenses:
Selling and marketing		5,010			4,670
General and administrative		6,405			6,424
Research and development		809			1,110

		12,224			12,204


Operating profit (loss)		6,600			(346	)


Other expenses:
Interest expense		1,308			1,569
Loss on extinguishment of debt		315			—
Other, net		347			67

		1,970			1,636


Income (loss) before income taxes		4,630			(1,982	)
Income tax benefit		1,819			—


Income (loss) before noncontrolling interest		6,449			(1,982	)
Loss attributable to noncontrolling interest		(4	)		(8	)


Net income (loss)		6,453			(1,974	)

Preferred stock dividends		(1,885	)		(927	)


Income (loss) applicable to common shareholders	$	4,568		$	(2,901	)


Per share information:
Earnings (loss) per common share:
Basic	$	0.50		$	(0.32	)

Diluted	$	0.30		$	(0.32	)

Weighted average common shares:
Basic		9,069,000			9,037,000

Diluted		21,235,000			9,037,000

The accompanying notes are an integral part of the consolidated financial statements.

ETCC - Internet Home Page: http://www.etcusa.com

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Environmental Tectonics Corporation (ETCC)

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