ENVIRONMENTAL TECTONICS CORPORATION
ANNOUNCES FOURTH QUARTER AND FISCAL 2003 RESULTS
Southampton, PA: May 14, 2003 - Environmental Tectonics Corporation (AMEX: ETC)
(the "Company") today announced financial results for the fiscal fourth quarter
and year ended February 28, 2003.
For the fiscal year ended February 28, 2003, net income was $2,493,000,
or $.33 per share (diluted), versus a net income of $1,741,000 or $.23 per share
(diluted) for fiscal 2002. Sales were $43,123,000, an increase of $10,596,000 or
32.6% from the prior year. Overall, all groups except hyperbaric evidenced sales
increases, with the primary contributors being additional international revenues
for Aircrew Training Systems (ATS), which benefited from a human centrifuge
project in Southeast Asia, higher government sales for ATS including the impact
of an aforementioned settlement with the U.S. Navy and hyperbaric sales for a
large U.S. Navy submarine rescue project, higher domestic sterilizer sales, and
additional sales for domestic entertainment which was involved in full
production of a large project. Hyperbaric systems in the prior period, fiscal
2002, benefited from a major project in Thailand. Geographically, domestic sales
were up $2,468,000 or 11.6% from fiscal 2002, primarily reflecting the
aforementioned sterilizer and entertainment sales increase; U.S. Government
sales increased to $4,626,000, as compared to $1,194,000 in fiscal 2002; while
international sales, including those from the Company's foreign subsidiaries,
were up $4,695,000 or 46.4% from fiscal 2002.
Gross profit for the fiscal year ended February 28, 2003 increased by
$2,733,000 or 23.8% from fiscal 2002 as the increased sales volume was only
partially offset by a 2.3 percentage point reduction in the rate as a percent of
sales. Reduced rates as a percent of sales were primarily evidenced in
international environmental, government hyperbaric and domestic simulation.
Acting as a partial offset in the current fiscal year was an increase in gross
profit dollars and rate as a percent of sales for Aircrew Training Systems.
For the fiscal fourth quarter ended February 28, 2003, ETC realized
net income of $736,000, or $.10 per share (diluted), versus net income of
$558,000, or $.07 per share (diluted) for the corresponding period of fiscal
2002. Sales for the current period were $8,713,000, an increase of $170,000 or
2.0% over the corresponding period in fiscal 2002. The primary contributors to
the sales increase were additional revenues for government ATS and hyperbaric
sales and domestic sterilizer revenues. Acting as a partial offset were domestic
entertainment sales.
Gross profit for the fiscal fourth quarter ended February 28, 2003
increased by $1,061,000 or 39.1% over the corresponding period of fiscal 2002 as
the aforementioned sales increases were all at higher rates as a percent of
revenues.
Selected Financial Data
(thousands, except share
and per share information) Fiscal Quarter Ended Fiscal Year Ended
February 28, February 22, February 28, February 22,
2003 2002 2003 2002
------------ ------------ ------------ ------------
Sales $8,713 $8,543 $43,123 $32,527
Gross Profit $3,773 $2,712 $14,198 $11,465
Operating Income $1,059 $ 527 $ 4,116 $ 2,873
Pre-tax income $ 909 $ 398 $ 3,260 $ 1,635
Minority interest $ (1) $ (6) $ (38) $ (13)
Net income $ 736 $ 558 $ 2,493 $ 1,741
Net income avail.
to common shareholders $ 736 $ 558 $ 2,493 $ 1,741
Earnings per share
Basic $ .10 $ .08 $ .35 $ .24
Average shares 7,153,000 7,143,000 7,153,000 7,143,000
Diluted $ .10 $ .07 $ .33 $ .23
Average shares 7,513,000 7,482,000 7,497,000 7,499,000
William F. Mitchell, ETC's President and Chairman, stated "The results
for fiscal 2003 reflect the completion of the production phase of our large
entertainment project and also the booking of a major centrifuge project in
Southeast Asia. As such, the results were gratifying and significant. However,
it must be noted that your Company functions in a very difficult economic and
political environment. The impact of the events and distractions since September
11, 2001, including the recent conflict in Iraq, on our Aircrew Training
business (ATS) has been to materially delay new orders from many of our overseas
customers. On the positive side, our domestic sterilizer and international
environmental businesses have seen an increased order flow which should help
partially offset the downturn in ATS contracts. Also, we have continued the
development of a line of unique entertainment products and the initial reaction
from potential customers has been extremely favorable. Additionally, work on our
Disaster Management (ADMS) projects has continued while we expand the product's
functionality and flexibility.
"Your Company has a vast knowledge base of unique technologies and
people. No matter what the world conditions, you can rest assured that I and my
management team will always be exploring new applications and product extensions
to supplant our "off the shelf" products."
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.
Contact: Duane D. Deaner, CFO Tel: 215-355-9100 (ext. 1203) Fax: 215-357-4000
ETC - Internet Home Page: http://www.etcusa.com