| SOUTHAMPTON, Pa., Jan. 17 -- Environmental
Tectonics Corporation (Amex: ETC) announced today financial results for the
third quarter and nine months ended November 23, 2001. For the current
quarter, the company had net income of $662,000, or $.09 per share (diluted),
versus net income of $227,000 or $.03 per share (diluted) for the
corresponding third quarter of fiscal 2001. Sales for the current quarter
were $8,230,000, a decrease of $392,000 or 4.5% from the corresponding prior
period. This was primarily attributable to decreased Sterilizer and
Environmental shipments, although both groups had significant work-in progress
at quarter end, and reduced international ATS sales, which have been
negatively impacted by global economic conditions. Partial offsets were
increases in domestic Entertainment, which recently renegotiated the contract
with a major customer, which generated additional revenue in the quarter, and
international Hypo/hyperbaric sales.
Gross profit dollars for the quarter were up $858,000 or 30.5% from the prior period, as an improved rate as a percent of sales completely offset the lower sales level. Rate increases were evidenced in Environmental, Hypo/hyperbaric (which experienced higher international sales at a higher rate), and Entertainment, up 19.7 percentage points on a higher sales level, reflecting the aforementioned renegotiation. As a percentage of sales, gross profit was 44.6%, compared to 32.6% for the corresponding prior period. For the nine-month period ended November 23, 2001 the Company had net income of $1,183,000, or $.16 per share (diluted), versus net income of $1,227,000 or $.16 per share (diluted) for the corresponding prior period of fiscal 2001. Sales for the nine months were $23,984,000, an increase of $1,211,000 or 5.3% over the corresponding prior period. The primary contributors to the sales increase were Entertainment sales and Hypo/hyperbaric chamber sales, which were up 134.0%. Partial offsets were decreased ATS sales and lower sales in the Company's Polish Subsidiary, which has suffered from disruptions in the Polish economy. Gross profit dollars for the nine-month period ended November 23, 2001 decreased $89,000 or 1.0% and the rate as a percent of sales dropped 2.3 percentage points, as the prior period included significant U.S. government revenue at a high rate as a percent of sales. As a percentage of sales, gross profit was 36.5%, compared to 38.8% for the corresponding prior period. |
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William F. Mitchell, ETC's President and Chairman, noted that, "Given the current global economic climate and the impact of September 11, I was very pleased to note our Company's favorable results in the current quarter. The most significant event in the period was the successful conclusion of a number of matters with our major entertainment industry customer. Our other groups also experienced significant milestones. The ATS group announced the development of a Tactical Flight Simulation Centrifuge, the next generation of high performance aircraft simulator. Our Disaster Management Simulation group in Orlando, Florida, booked another Virtual Reality-Based Driver Trainer and also was awarded a contract to develop a virtual reality based `Terrorist Exercise' for Osceola County (Florida). And our Sterilizer group announced the development of a dynamic new `One-Step' sterilization and drying process for the pharmaceutical industry. "Recently the Company has seen an unprecedented amount of requests for proposals in the international ATS area, ranging across most of our major product offerings. Although the potential success of each individual project must be individually evaluated, and the economic climate has been a difficult one, I am cautiously optimistic that your Company will see an upsurge in international projects in the upcoming months." 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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