Tel-Instrument Electronics Corp (TIK) has reported 37.55 percent plunge in profit for the quarter ended Dec. 31, 2016. The company has earned $0.14 million, or $0.03 a share in the quarter, compared with $0.23 million, or $0.07 a share for the same period last year.
Revenue during the quarter dropped 29.05 percent to $4.24 million from $5.97 million in the previous year period. Gross margin for the quarter expanded 450 basis points over the previous year period to 38.58 percent. Total expenses were 96.37 percent of quarterly revenues, up from 87.85 percent for the same period last year. That has resulted in a contraction of 852 basis points in operating margin to 3.63 percent.
Operating income for the quarter was $0.15 million, compared with $0.73 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $0.19 million compared with $0.77 million in the prior year period. At the same time, adjusted EBITDA margin contracted 857 basis points in the quarter to 4.39 percent from 12.96 percent in the last year period.
Mr. Jeffrey O’Hara, President and Chief executive officer of Tel, stated, “We were pleased to report an eighth consecutive quarter of profitability despite spending $287k on Aeroflex litigation expenses. These costs included hiring a technical expert witness firm which confirmed that no Aeroflex technology was used in our TS-4530A product. We believe that we have a very strong case and are looking to put this costly litigation behind us this later this spring. The current trial date is set for March 13, 2017, and the trial is expected to last several weeks. The Kansas court is currently evaluating our motion to dismiss based on the merits, and we expect to receive a written response later this month. We are also awaiting a written response from the Kansas court relative to our earlier motion to dismiss based on standing arguments.
Working capital decreases marginally
Tel-Instrument Electronics Corp has witnessed a decline in the working capital over the last year. It stood at $4.06 million as at Dec. 31, 2016, down 3.22 percent or $0.14 million from $4.19 million on Dec. 31, 2015. Current ratio was at 2.20 as on Dec. 31, 2016, up from 2.17 on Dec. 31, 2015. Days sales outstanding went up to 21 days for the quarter compared with 15 days for the same period last year.
Days inventory outstanding has decreased to 79 days for the quarter compared with 111 days for the previous year period.
Debt comes down significantly
Tel-Instrument Electronics Corp has recorded a decline in total debt over the last one year. It stood at $0.42 million as on Dec. 31, 2016, down 49.38 percent or $0.41 million from $0.83 million on Dec. 31, 2015. Total debt was 4.51 percent of total assets as on Dec. 31, 2016, compared with 8.51 percent on Dec. 31, 2015. Debt to equity ratio was at 0.08 as on Dec. 31, 2016, down from 0.19 as on Dec. 31, 2015. Interest coverage ratio deteriorated to 13.24 for the quarter from 30.62 for the same period last year.
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