EAST RUTHERFORD, N.J.--(BUSINESS WIRE)--Tel-Instrument Electronics Corp. (NYSE MKT:TIK), a leading designer and manufacturer of avionics test and measurement solutions, today reported its financial results for the fourth quarter and year ended March 31, 2016.

Highlights for Fiscal Year 2016

• Revenues increased to $24.8 million, a 36% increase versus fiscal year 2015
• Gross margin as a percentage of revenues improved to 32.2% versus 29.9% in fiscal year 2015
• Operating income increased to $2.6 million as compared to $330,000 in fiscal year 2015
• Net Income of $1 million as compared to a loss of $280,000 last year
• Earnings per share of $0.31 compared to a loss of $0.09 in fiscal year 2015
• Non-GAAP Adjusted EBITDA was $2.8 million as compared to $541,000 in fiscal year 2015
• Working capital improved by $1.4 million to $4.0 million at March 31, 2016
• Continued development of key hand-held modular communications and avionics test set products

Highlights for Fourth Quarter of Fiscal Year 2016

• Revenues decreased slightly to $6.17 million from $6.45 million in the fourth quarter last year
• Operating income declined to $481,000 as compared to $636,000 in fourth quarter of 2015
• Earnings per share of $0.09 as compared to $0.11 in fourth quarter of 2015
• Non-GAAP Adjusted EBITDA was $532,000 as compared to $682,000 in the fourth quarter last year
• Established $500,000 line of credit with Bank of America

Subsequent Events

• Filed a summary judgment motion to dismiss the Aeroflex lawsuit based on lack of standing
• BCA Mezzanine Fund LLP exercised its warrants effective April 30, 2016, representing a $935,000 liability at year-end
• Announcement of our new T-47M5 Mode 5 test set which will be available for sale later this year
• Received orders for 80 Mode 5 IFF test sets at a value of $2.5 million including an Army Special Forces order for 36 AN/USM-708 (“CRAFT”) units and Navy orders for the Presidential Helicopter Program

Revenues for the fiscal year ended March 31, 2016 were $24.8 million, a 36% increase from $18.2 million for fiscal year 2015. Gross margin for the year was $7.98 million, or 32.2% of sales, a $2.5 million (46.8%) improvement over the prior year. The increase in gross margin for the year was primarily due an increase in volume and a change in product mix to include higher priced CRAFT AN/USM-708 units. Research and development expenses increased slightly for the year as the Company continued to invest in its new hand-held test set for the avionics and communication test markets as well as the new T-47M5 Mode 5 IFF test set. Net income for the fiscal year ended March 31, 2016 was just over $1 million, or $0.31 per fully diluted share compared to a net loss of $280k or $0.09 in the comparable period for 2015. Non-GAAP adjusted EBITDA (see attached reconciliation) for the year was $2.8 million compared to $540,000 in the prior year.

Revenues for the fourth quarter were $6.17 million, a modest decline from $6.45 million for the fourth quarter of fiscal year 2015. Gross margin in the fourth quarter was 30.7% of revenues compared to 29.5% in the same quarter last year. The gross margin in the fourth quarter was also negatively impacted by changes in the product mix and additional warranty costs for two military programs, but this was partially offset by higher prices for CRAFT. Operating income declined to $481,000 as compared to $636,000 in the fourth quarter of fiscal year 2015. Non-GAAP adjusted EBITDA for the fourth quarter was $532,000, compared to $682,000 for the comparable period in 2015. On a GAAP basis, net income for the fourth quarter was $299,000, or $0.09 per fully diluted share compared to net income of $372,000, or $0.11 for the fourth quarter ended March 31, 2015.

Commenting on the results, Mr. Jeffrey O’Hara, President and CEO of Tel, stated, “We are pleased to report a solid fourth quarter and record revenues for the 2016 fiscal year. Our improved operating results in 2016 enhanced the Company’s liquidity position, thereby enabling us to expand our world-wide marketing efforts and increase our new product development efforts. Tel has done a solid job keeping a tight rein on operating costs while substantially increasing revenues. This will become even more important in fiscal year 2017 with the completion of two large Navy programs scheduled during the second quarter of the current fiscal year. We anticipated that BCA would exercise its warrants and the amounts are fully reserved for in our financial statements. These warrants have been a drag on Tel’s profitability for the last several years, and we believe that their exercise will result in a cleaner balance sheet and more predictable financial reporting going forward.

“We have started to see increasing quote and contract activity both domestically and internationally for Mode 5 test sets and we were excited to receive our first major order for CRAFT AN/USM-708 test sets from the U.S. Special Forces. The international Mode 5 test equipment markets have also been picking up with recent activity in both the Far East and European markets and we believe our current product offerings, plus the new T-47M5, will be very competitive. Tel is well positioned for this business as our CRAFT and TS-4530A flight-line test sets have been endorsed by the U.S. military and we have already delivered test sets into 18 international markets. The new T-47M5 product is also being offered as a retro-fit kit for our large base of installed Mode 4 IFF test sets. These sales should be at attractive margins as we look to return to our traditional 50% gross margin levels within the next 18 months. We are also seeing increased market interest in our other military and commercial test sets including our new TR-36 Nav/Com product.

“We have some exciting new products under development and continue to work on our next generation multi-purpose hand-held test set with the initial product currently scheduled to be introduced in the fourth quarter of the current fiscal year. This product will have the capabilities that address both our current avionic test set market as well as the much larger radio test set market. We believe that this new product family will be extremely competitive and will help drive the long term growth of our business. We are excited and optimistic about our near and long-term prospects,” Mr. O’Hara concluded.

The Company encourages investors to read its full results of operations as contained in our Annual Report on Form 10-K filed on June 29, 2016 at www.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.