Environmental Tectonics Corporation (ETC) reported its financial results for the the 2016 third quarter ended November 27, 2015.
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Net loss attributable to ETC was $0.3 million, or $0.03 diluted loss per share, in the 2016 third quarter compared to $1.7 million during the 2015 third quarter, equating to $0.12 diluted loss per share.
The $1.5 million variance reflects a decrease in loss before income taxes of $2.4 million due primarily to the $2.5 million increase in gross profit, offset in part, by a $0.1 million increase in other expense.
The $2.4 million decrease in loss before income taxes was offset, in part, by a $0.9 million decrease in the income tax benefit recorded in the 2016 third quarter compared to the 2015 third quarter.
Net sales for the 2016 third quarter were $11.9 million, an increase of $4.1 million, or 51.4%, compared to 2015 third quarter net sales of $7.8 million. The increase reflects increased ATS sales to both International customers and the U.S. Government.
Given the current progress made on U.S. Government contracts in the company’s sales backlog, coupled with significant fiscal 2015 International bookings and the 2016 first quarter award of multiple International contracts totaling $45.4 million, the company anticipates that although sales to the U.S. Government will remain steady, the concentration of sales to the U.S. Government will continue to lessen in fiscal 2016 as International sales continue to increase.
Gross profit for the 2016 third quarter was $3.4 million compared to $0.9 million in the 2015 third quarter, an increase of $2.5 million, or 278.9%.
The significant increase in gross profit was a combination of both increased net sales and a higher gross profit margin percentage due primarily to the combination of a reduction in the amount of additional work required on several contracts and a higher concentration of net sales from more off-the-shelf type products requiring less initial design and engineering work.
Gross profit margin as a percentage of net sales increased to 28.9% for the 2016 third quarter compared to 11.5% for the 2015 third quarter.
Operating expenses, including sales and marketing, general and administrative, and research and development, for the 2016 third quarter were $3.4 million, a decrease of $0.1 million, or 1.4%, compared to $3.5 million for the 2015 third quarter.
The slight decrease is due to a reduction in general and administrative expenses, offset in part, by an increase in research and development expenses. ■