Espey(US:ESP)2022-09-21 16:00Revenue and Orders - Management expects revenues in fiscal year 2023 to be higher than in fiscal year 2022, driven by existing sales backlog[30]. - The total backlog as of June 30, 2022, was approximately $76.8 million, up from $65.6 million at June 30, 2021[36]. - The company received $43.2 million in new orders during fiscal year 2022, with expectations for new orders in fiscal 2023 to exceed this amount[35]. - The company has outstanding opportunities exceeding $74.6 million as of August 31, 2022, for both repeat and new programs[38]. Financial Performance - Gross profits for the twelve months ended June 30, 2022, were $5,472,158, representing a gross profit margin of 17% compared to 12.1% in the previous year[45]. - Net income for fiscal year 2022 was $1,265,127, or $0.52 per share, compared to a net loss of $(181,543), or $(0.08) per share, for fiscal year 2021[50]. - Selling, general, and administrative expenses for fiscal year 2022 were $3,942,991, an increase of $157,245 compared to the previous year[47]. - The effective tax rate for fiscal year 2022 was 20.6%, compared to a benefit of 50.7% in fiscal year 2021[49]. Cash Flow and Capital Management - Net cash provided by operating activities for the fiscal year 2022 was $2,219,687, compared to $594,996 in 2021[52]. - Net cash used in investing activities increased to $(918,339) in 2022 from $2,006,910 in 2021, primarily due to reinvestment of matured securities[52]. - The Company did not repurchase any shares held by the ESOP during the twelve months ended June 30, 2022, and has authorization to purchase an additional $783,460 of Company stock[52]. - Cash flow generated from operations is expected to be sufficient to meet long-term funding requirements for the foreseeable future[53]. - There was no cash used for financing activities in the twelve months ended June 30, 2022, due to the suspension of dividend payments[52]. - The increase in cash provided by operating activities was primarily due to an increase in net income and a decrease in inventory purchases[52]. Operational Challenges - The company continues to face inflationary cost challenges impacting operating income in fiscal year 2023 due to rising raw material and labor costs[32]. - Engineering programs in the backlog aggregate $7.3 million, with successful conversion dependent on timely execution and completion[34]. Working Capital and Investments - The Company's working capital as of June 30, 2022, was approximately $29.5 million, an increase from $27.5 million in 2021[52]. - Management has budgeted approximately $500,000 for new equipment and plant improvements in fiscal year 2023[54]. - The Company has a reserve for bad debts of $3,000, which management believes is adequate given the customer base[55]. - The Company did not borrow any funds during the last two fiscal years and has a $3,000,000 line of credit available if necessary[52].