Exhibit 99
Tel-Instrument Electronics Corp Announces Results For Second Quarter and
Letter of Intent to Acquire Innerspace Technology, Inc.
Carlstadt, NJ-November 12, 2003-Tel-Instrument Electronics Corp ("TEL" or the
"Company") today announced its financial results for the three and six months
ended September 30, 2003:
Three Months Ended Six Months Ended
September 30, September 30,
2003 2002 2003 2002
---- ---- ---- ----
Sales $2,616,716 2,982,902 $5,674,622 5,832,635
Net Income Before Taxes 205,409 381,841 675,621 810,564
Provision For Taxes 81,642 152,544 269,911 323,820
Net Income $ 123,767 229,297 $ 405,710 486,744
Net Income Per Share, Diluted $0.06 $0.11 $0.18 $0.23
Weighted Average Shares
Outstanding, Diluted 2,202,281 2,162,386 2,199,435 2,162,032
Sales for the three and six months ended September 30, 2003 declined $366,186
(12.3%) and $158,103 (2.7%), as compared to the same periods in the last fiscal
year. The decrease in sales is primarily attributed to the reduced shipments of
the AN/APM-480 to the U.S. Navy. Deliveries of the AN/APM-480 continue, but
accounted for only 32.7% and 30% of total sales, respectively, for the three and
six months ended September 30, 2003, as compared to 64.9% and 59.3%,
respectively, for the same periods in the prior fiscal year. The Company, in
agreement with the U.S. Navy, has temporarily decreased the number of units it
is currently shipping in anticipation of these units being returned for upgrades
and enhancements. The total number of units under contract has not changed. The
Company anticipates an improvement in sales during the second half of the
current fiscal year.
The introduction of the TR-220 Multi-Function test set, a sales promotion of the
T-49C Transponder/TCAS test set, and additional sales of Precision DME test sets
partially offset these lower shipments. Investment in new product development
continues, and these expenses increased 19.8% and 22.9%, respectively, for the
three and six months ended September 30, 2003, as compared to the previous year.
Research and development activities include the next generation of IFF test
sets, developing a foundation technology for future products, and incorporating
other product enhancements to existing models. The Company has also begun work
on a bench test set, which will be a new market and a diversification
opportunity for the Company.
Innerspace Technology, Inc
The Company today announced that is has signed a non-binding letter of intent to
acquire privately held Innerspace Technology, Inc. (ITI) of Waldwick, NJ. ITI
has been in business for over 30 years designing, manufacturing and distributing
a variety of shipboard and underwater instruments to support hydrographers,
oceanographers, researchers, engineers, geophysicists, and surveyors worldwide.
ITI has total annual sales of approximately
$1 million dollars, and the letter of intent provides for a purchase price of
$547,000, options to purchase 25,000 TEL shares, and employment arrangements for
the two principals, subject to the Company's satisfactory completion of its due
diligence investigation, completion of a definitive acquisition agreement, and
approval of the Company's Board of Directors. The Company hopes to significantly
increase the sales of ITI's products by expanding distribution and enhancing
marketing and product development. Mr. Harold K. Fletcher, CEO of
Tel-Instrument, said, "This is an important first step in the Company's
diversification program. We are excited about this opportunity to penetrate a
market outside of our traditional market. Together, Tel and ITI will be a strong
team." Semaphore Capital Advisors, LLC of Stamford, CT, advised the Company on
this transaction.
The Company continues to actively pursue other opportunities in both the
commercial and government markets, both domestically and internationally.
The Company will hold its Annual Meeting of Shareholders on November 12, 2003.
The meeting will be at the Company's facilities at, 728 Garden Street,
Carlstadt, NJ, at 4:00 p.m.
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.
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.
The Company's stock is traded in the NASDAQ System under the symbol TINE.
Contact: Mr. Joseph P. Macaluso, 201-933-1600