| Southampton, PA: July 10, 2002 - Environmental Tectonics Corporation (AMEX: ETC) today announced financial results for the first quarter ended May 24, 2002. For the first quarter ended May 24, 2002, net income was $585,000, or $.08 per share (diluted), versus a net income of $224,000 or $.03 per share (diluted) for 2002. Sales were $11,207,000, an increase of $2,867,000 or 34.4% from the prior year. Sales increases were most notably evidenced domestically in entertainment (which increased $2,248,000, 55.8%) and internationally in the Environmental product area, with significant activity on two large projects for automotive manufacturers in China. Partially offsetting these increases were reductions in domestic sterilizer sales, U.S. government sales, and international Aircrew Training Systems (ATS) and hyperbaric sales. Geographically, domestic sales were up $3,350,000, 73.0%, primarily reflecting the aforementioned entertainment activity. Government sales were down $204,000, 26.0% and international sales, including those from the Company's foreign subsidiaries, were down $279,000, 9.3%. Gross profit for the first quarter of fiscal 2003 increased by $890,000 or 33.0% reflecting the increased sales volume partially offset by a 0.3 percentage point reduction in the rate as a percent of sales. Rate increases were evidenced in entertainment and international hyperbaric and ATS sales. As previously announced, on May 9, 2002, the Company reached a final settlement agreement with the U. S. Navy totaling approximately $6.9 million. These funds were received on July 2, 2002. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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William F. Mitchell, ETC's President and Chairman, stated that, "The results for the first quarter of fiscal 2003 were encouraging given the difficult global economic and political environment. However, to a large extent the positive performance is evidence of ETC's ability to capitalize on its vast technological base through new product extensions. The significant domestic sales in the entertainment subsidiary were a diversified offset to the current lag in ATS sales, although the Company is presently negotiating several significant projects for its ATS products and services in the international markets. These negotiations are expected to be finalized within the next twelve months, including contracts for the Company's ETC-Information Systems subsidiary in Turkey and our Polish subsidiary in Warsaw. "Interest in our General Aviation Trainer II (GAT II&#reg;), the first general aviation trainer that addresses Spatial Disorientation in flight, continues strong as well as responses for Orlando's Disaster Management Virtual Reality-based products (ADMS&#reg;) from airports, emergency management schools and the law enforcement community. "It was also very gratifying to receive the proceeds from the settlement agreement with the U. S. Navy. ETC has always supported the state of the art centrifuge installation at the U. S. Naval Air Station, Lemoore, Ca., and all our outstanding issues were concluded on very amicable terms. "Looking forward, you can rest assured that ETC will continue to "push the technology envelope" through product enhancements and new product applications." 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. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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