| Southampton, PA: October 17, 2002 - Environmental Tectonics Corporation (AMEX: ETC) today announced financial results for the second quarter ended August 23, 2002. For the second quarter ended August 23, 2002, net income was $736,000, or $.10 per share (diluted), versus a net income of $297,000 or $.04 per share (diluted) for 2002. Sales were $11,041,000, an increase of $3,627,000 or 48.9% from the prior year. Sales increases were most notably evidenced domestically in entertainment, which benefited from continued full production on a large entertainment project, and increased U.S. government sales primarily for a submarine rescue chamber project. Partially offsetting these increases were reductions in domestic and international hyperbaric systems and international sales for Aircrew Training Systems (ATS), which have been negatively impacted by global economic conditions. Geographically, domestic sales were up $3,890,000, 78.6%, primarily reflecting the aforementioned entertainment activity. Government sales were up $730,000, 588.7%, while international sales, including those from the Company's foreign subsidiaries, were down $993,000, 42.4%. Gross profit for the second quarter of fiscal 2003 increased by $870,000 or 36.4% reflecting the increased sales volume partially offset by a 2.7 percentage point reduction in the rate as a percent of sales. Rate decreases were evidenced primarily in international environmental and domestic simulation 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. The results of operations for the second quarter ended August 23, 2002, included sales of $300,000 from this settlement. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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William F. Mitchell, ETC's President and Chairman, stated that, "The results for the second quarter of fiscal 2003 were encouraging given the difficult global economic and political environment. The Company was successful in offsetting a current lag in international ATS sales, although we were awarded a $14 million contract in the quarter for a large centrifuge project in southeast Asia, and this project should have a significant impact on results going forward. "Also in the quarter the Company launched its entertainment initiative, with several new product offerings under design. Some of these will be introduced at the International Association of Amusement Parks and Attractions (IAAPA) show in November in Orlando, Florida. The Company plans to capitalize on its vast knowledge of motion based physiology learned through its development of high-G fighter aircraft simulators to design amusement rides that will provide a true simulation alternative to the "bump and grind" of carnival rides. "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 continues to perform project work on the site. "Looking forward, you can expect ETC to introduce some very exciting and new product applications which should favorably expand our market reach." 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. This press release may include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended, and Section 21E of the Securities Exchange Act of 1934. We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about the Company that may cause our actual results, levels of activity, performance or achievements to be materially different from any other future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as"may","will","should',"could","would","expect","plan","anticipate","believe","estimate","continue", or the negative of such terms or similar expressions. Factors that might cause or contribute to such a discrepancy include, but are not limited to, contract cancellations, political unrest in customer countries, general economic conditions, and those issues identified from time to time in our Securities and Exchange Commission filings and other public documents, including, without limitation, our Annual Report on Form 10-K for the fiscal year ended February 22, 2002. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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