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Tel-Instrument Electronics Corp (“TIC”) (NYSE MKT: TIK) announced results for its first quarter of fiscal year 2013. For the three months ended June 30, 2012, sales decreased $2,812,923 to $1,177,288, as compared to $ 3,990,211 for the same period in the prior year. The Company recorded a net loss of $668,800 or $0.25 per share for the three months ended June 30, 2012, as compared to a net loss of $80,795 or $0.03 per share for the three months ended June 30, 2011.
As previously reported, the sharp decline in revenues and profitability for the first quarter ended June 30, 2012 was due to a temporary cessation of CRAFT 708 and CRAFT 719 production shipments to correct issues discovered in prior CRAFT 719 deliveries and our acceptance test procedures and to incorporate the final AIMS approved software configuration which includes several product enhancements. The Company and the Navy also conducted a complete review of the CRAFT acceptance test procedures and added numerous tests to validate functionality over the complete range of power and frequency levels. This entailed an extensive upgrade to our automated and manual test procedures and related manufacturing and quality processes which has taken several months to complete. The Company has resumed limited CRAFT production and upgrade of ship-in-place units in the current quarter and expects to receive Navy approval to resume full production in September 2012.
Jeff O’Hara, the Company’s President and CEO indicated that “the CRAFT, 4530A, and ITATS programs are important to the long-term success of the Company. The temporary hold on the CRAFT shipments, while difficult from a financial perspective, has resulted in a substantial upgrade of our manufacturing and quality organizations, including our production test procedures. These efforts have resulted in a more consistent manufacturing process and improved quality levels for both the CRAFT product line as well as our other products. Given these delays and the negative impact on short term cash flow, we recently announced $600,000 in additional financing and a $990,000 progress payment relative to CRAFT inventory. To mitigate the impact of any further unexpected delays on our major programs, the Company continues to explore financing alternatives, including additional Board stock purchases and progress payment submissions. The Company remains optimistic with respect to our near term prospects and still expects to show both revenue and profitability improvements for the 2013 fiscal year.”