Tel-Instrument Electronics Corp Announces Final First Quarter Results For 2014 Fiscal Year and Reten

Tel-Instrument Electronics Corp Announces Final First Quarter Results For 2014 Fiscal Year and Retention of OEM Capital to Explore Strategic Options For The Company

EAST RUTHERFORD, N.J.--(BUSINESS WIRE)-- Tel Instrument Electronics Corp. (Tel) announced today that it recorded a net loss of $85,772 on sales of $3.2 million as compared to a net loss of $668,800 on sales of $1.2 million in the year ago quarter. This improvement is mostly attributed to the resumption of shipments on the CRAFT program as well as improved sales of other products including a partial production release on the TS-4530A program. The Company is expecting continued revenue and profitability growth for the balance of this fiscal year as a result of higher shipments on the U.S. Army TS-4530A and U.S. Navy ITATS programs.

The Company also announced that it has retained OEM Capital as its exclusive financial advisor to explore strategic alternatives, including debt recapitalization, merger, sale or business combination of the Company with a third party with a goal to enhance shareholder value. There can be no assurance that any transaction will occur, and there is no defined timeline for the process. The Company does not intend to comment further regarding the process until such time, if any, as the Company determines that disclosure is appropriate or required.


We encourage everyone to read our full results of operations contained in our Form 10-Q filed on August 14, 2013 at sec.gov.

About Tel-Instrument Electronics Corp

Tel-Instrument is a leading designer and manufacturer of avionics test and measurement solutions for the global commercial air transport, general aviation, and government/military aerospace and defense markets. Tel-Instrument provides instruments to test, measure, calibrate, and repair a wide range of airborne navigation and communication equipment. For further information please visit our website at www.telinstrument.com.

This press release includes statements that are not historical in nature and may be characterized as "forward-looking statements," including those related to future financial and operating results, benefits, and synergies of the combined companies, statements concerning the Company's outlook, pricing trends, and forces within the industry, the completion dates of capital projects, expected sales growth, cost reduction strategies, and their results, long-term goals of the Company and other statements of expectations, beliefs, future plans and strategies, anticipated events or trends, and similar expressions concerning matters that are not historical facts. All predictions as to future results contain a measure of uncertainty and, accordingly, actual results could differ materially.Among the factors which could cause a difference are:changes in the general economy; changes in demand for the Company's products or in the cost and availability of its raw materials; the actions of its competitors; the success of our customers; technological change; changes in employee relations; government regulations; litigation, including its inherent uncertainty; difficulties in plant operations and materials; transportation, environmental matters; and other unforeseen circumstances.A number of these factors are discussed in the Company's previous filings with the Securities and Exchange Commission. The Company disclaims any intention or obligation to update any forward-looking statements as a result of developments occurring after the date of this press release.

The Company's stock is traded in the American Stock Exchange under the symbol TIK.

TEL-INSTRUMENT ELECTRONICS CORP

CONDENSED CONSOLIDATED BALANCE SHEETS

June 30, 2013

March 31, 2013

(unaudited)

ASSETS

Current assets:

Cash and cash equivalents

$

193,950

310,297

Accounts receivable, net

970,052

557,879

Inventories, net

5,477,243

6,241,181

Prepaid expenses and other

87,042

115,852

Deferred financing costs

108,321

108,321

Deferred income tax asset

1,238,421

1,238,421

Total current assets

8,075,029

8,571,951

Equipment and leasehold improvements, net

534,607

587,958

Deferred financing costs - long-term

129,383

156,463

Deferred income tax asset - non-current

2,564,059

2,546,190

Other assets

56,872

56,872

Total assets

11,359,950

11,919,434

LIABILITIES & STOCKHOLDERS' EQUITY

Current liabilities:

Current portion long-term debt

598,663

1,229,643

Capital lease obligations - current portion

77,231

74,508

Accounts payable

2,815,982

4,272,431

Progress billing

858,050

-

Deferred revenues - current portion

11,930

18,460

Accrued payroll, vacation pay and payroll taxes

431,904

442,522

Accrued expenses

1,643,586

1,525,538

Total current liabilities

6,437,346

7,563,102

Subordinated notes payable-related parties

350,000

250,000

Capital lease obligations - long-term

55,695

76,055

Deferred revenues - long-term

236

1,045

Warrant liability

173,758

198,330

Long-term debt, net of debt discount

1,051,976

1,134,549

Total liabilities

8,069,011

9,223,081

Commitments

Stockholders' equity:

Common stock, par value $.10 per share, 3,211,739 and 3,011,739 issued and outstanding

as of June 30, 2013 and March 31, 2013, respectively

321,171

301,171

Additional paid-in capital

7,768,658

7,108,300

Accumulated deficit

(4,798,890

)

(4,713,118

)

Total stockholders' equity

3,290,939

2,696,353

Total liabilities and stockholders' equity

$

11,359,950

$

11,919,434

TEL-INSTRUMENT ELECTRONICS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

Three Months Ended

June 30, 2013

June 30, 2012

Net sales

$

3,199,975

$

1,177,288

Cost of sales

2,013,817

893,594

Gross margin

1,186,158

283,694

Operating expenses:

Selling, general and administrative

653,250

653,888

Engineering, research and development

480,377

578,604

Total operating expenses

1,133,627

1,232,492

Income (loss) from operations

52,531

(948,798

)

Other income (expense):

Amortization of debt discount

(22,987

)

(13,392

)

Amortization of deferred financing costs

(27,080

)

(27,080

)

Change in fair value of common stock warrants

24,572

249,394

Loss on extinguishment of debt

(26,600

)

-

Interest expense

(104,077

)

(92,468

)

Total other income (expense)

(156,172

)

116,454

Loss before income taxes

(103,641

)

(832,344

)

Income tax benefit

(17,869

)

(163,544

)

Net loss

$

(85,772

)

$

(668,800

)

Net loss per share:

Basic loss per common share

$

(0.03

)

$

(0.25

)

Diluted loss per common share

$

(0.03

)

$

(0.25

)