Monday, September 27, 2010

Environmental Tectonics Corp. (ETCC.OB) Posts Solid FY 2011 Results on Heavy Contract Bookings

Environmental Tectonics Corp.’s subsidiaries and strategic business units are separated in two distinct categories: The Training Services Group (TSG) for the aviation, space, mass entertainment and emergency response markets; and The Control Systems Group (CSG) for the HVAC/engine development, clinical medicine, pharmaceutical and animal care markets.

Friday, the company announced its fiscal 2011 results, reporting sales for the second quarter ended August 27, 2010, at $13.24 million, up 34.3 percent compared to $9.86 million for the second quarter of fiscal 2010. Sales for the first half of fiscal 2011 were $25.36 million, a 30.5 percent increase over $19.44 million reported for the first half of fiscal 2010.

Net income for the quarter was $1.66 million, or $0.12 per share (basic) and $0.08 (diluted), up 33.4 percent compared to net income of $1.24 million, or $0.09 per share (basic) and $0.06 (diluted), for the second quarter of fiscal 2010.

For fiscal year-to-date, the company reported net income of $3.60 million, or $0.27 per share (basic) and $0.17 (diluted) during the first half of fiscal 2011, compared to net income of $2.01 million, or $0.15 per share (basic) and $0.09 (diluted), for the comparable quarter of fiscal 2010, representing a 78.4 percent increase.

Environmental Tectonics’ sales backlog at August 27, 2010, and February 26, 2010, for work to be performed and revenue to be recognized under written agreements after such dates, was $122.11 million and $96.96 million, respectively.

William F. Mitchell, Environmental Tectonics’ president and chairman said the results reflect the “significant impact” of several major contracts that were booked in the last 12 months.

“The impact of our positive cash flow from operations and availability under our lines cannot be underestimated. Multi-year long-term contracts require significant cash outlays during certain phases of execution. A growing company requires cash to expand its operation. I am very encouraged that ETC is finally benefiting from our many years of product development and engineering innovation,” Mitchell stated in the press release.

The 34.3 percent increase in sales wasn’t enough to off-set gross profit for the second quarter of fiscal 2011, which decreased $162,000 or 3.3 percent from the second quarter of fiscal 2010. The company said the reduction resulted from a 14.1 percentage point reduction in the gross margin rate as a percentage of sales to 36.2 percent for the second quarter of fiscal 2011 from 50.3 percent for the same period a year ago.

For more information on the company, visit www.etcusa.com

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