| Southampton, PA: October 22, 2001 - Environmental Tectonics Corporation (AMEX: ETC) announced today financial results for the second quarter and six months ended August 24, 2001. For the current quarter, the company had net income of $297,000, or $.04 per share (diluted), versus net income of $118,000 or $.02 per share (diluted) for the corresponding second quarter of fiscal 2001. Sales for the current quarter were $7,414,000, an increase of $420,000 or 6.0% from the corresponding prior period. This was primarily attributable to an increase in Hypo/hyperbaric chamber sales, international Environmental sales, and an 83.1% increase in Entertainment group sales. Gross profit dollars were down $285,000 from the prior period, as the higher sales level was offset by a reduced rate as a percentage of sales of 6.0 percentage points. Rate decreases were evidenced primarily in the ATS and Environmental groups. ATS performance in the prior period included significant revenue at a high rate as a percent of sales for an International project. , while Environmental in the current period experienced lower rates primarily for a sale to Russia. Additionally, the Company's Polish Subsidiary experienced lower rates on a lower sales level. For the six month period ending August 24, 2001 the Company had net income of $521,000, or $.07 per share (diluted), versus net income of $1,000,000 or $.13 per share (diluted) for the corresponding prior period of fiscal 2001. Sales for the six months were $15,754,000, an increase of $1,603,000 or 11.3% over the corresponding prior period. The primary contributors to the sales increase were Entertainment sales (which were up 140.8%) and Hypo/hyperbaric chamber sales (which were up 150.3%). Partial offsets were decreased ATS sales and lower sales in the Company's Polish Subsidiary. Gross profit dollars for the six month period ended August 24, 2001 decreased $947,000 and the rate as a percent of sales dropped 10.3 percentage points, as the prior period included significant U.S. Government claims revenue at a high rate as a percent of sales. |
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William F. Mitchell, ETC's President and Chairman, noted that," In the economic climate we have seen this year, a Company such as ETC with a diverse product and world wide market base, historically one of our strongest suits, has a distinct advantage. Of course, our dependence on global conditions must be very focused on fulfilling long-term strategies and goals. Given the significant sales increase in the current period, I am happy to note that we have been extremely successful in fulfilling two of our key objectives; namely, to increase our domestic sales base and to strengthen our peripheral product lines. Domestic sales have increased from approximately 18% of total sales in fiscal 1999 to approximately 47% for fiscal 2001, and are currently running at approximately 61% in this fiscal year. Entertainment sales included in the domestic category have increased from a negligible amount in fiscal 1998 to over 46% of total sales in the current fiscal year. And year-to date combined sales of our Sterilizer, Environmental and Hypo/hyperbaric groups are up almost 102% over the prior period. Two additional accomplishments are noteworthy of special mention. Although only introduced at the EAA/Oshkosh Fly-in Convention in Oshkosh, Wisconsin, in July of this year, we have already sold three of our new GAT-II® second generation General Aviation Trainers, all to prestigious flight schools. Additionally, our Information Technologies group has begun booking systems and integration projects for domestic customers. The company's Virtual Reality based Disaster Management Simulator has received considerable interest since the September 11th New York incident. The company is exploring with US Government, State authorities and Airports in the use of its Incident Command and Simulation technologies in Anti Terrorist Training. Looking forward, it is difficult to predict the general impact of the recent terrorist incident and resulting economic impact will have on ETC. We are, however, seeing an increased interest in our military products as well as in our Disaster Management Unit. Whatever the case, we will continue to seek out new opportunities for growth throughout the World." ETC designs, develops, installs and maintains aircrew training systems, public entertainment systems, process simulation systems (sterilization and environmental), clinical hyperbaric systems, environmental testing and simulation systems, and related products for domestic and international customers. ETC is listed on the AMEX under the stock symbol "ETC". This report contains certain 'forward-looking statements' including, without limitation, statements containing the words 'believes', 'anticipates', 'intends', 'expects', and words of similar import relating to the Company's operations. There are important factors that could cause actual results to differ materially from those indicated by such forward-looking statements including contract cancellations, political unrest in customer countries, general economic conditions and the risk factors detailed from time to time in Environmental Tectonics Corporation's period reports filed with the Securities and Exchange Commissions, including, without limitation, Environmental Tectonics Corporation's Annual Report on Form 10-K for the fiscal year ended February 23, 2001. |
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