ETC Announces Fiscal 2025 Full Year and Fourth Quarter Results

Core Insights - Environmental Tectonics Corporation (ETC) reported significant financial growth in fiscal 2025, with net sales reaching $62.9 million, a 45.3% increase from $43.3 million in fiscal 2024, and net income rising to $13.1 million from $1.8 million in the previous year, reflecting strong performance across all business units [2][3][4]. Financial Performance - Net Income: The net income for fiscal 2025 was $13.1 million, or $0.75 diluted earnings per share, compared to $1.8 million or $0.09 diluted earnings per share in fiscal 2024, marking an increase of $11.2 million [3][11]. - Net Sales: Net sales increased by $19.6 million to $62.9 million in fiscal 2025, driven by higher international sales of $13.4 million and domestic sales of $6.2 million [4][32]. - Gross Profit: Gross profit rose to $18.5 million, a 48.7% increase from $12.5 million in fiscal 2024, with a gross profit margin of 29.4% compared to 28.8% in the prior year [5][32]. - Operating Expenses: Operating expenses increased to $10.3 million, an 8.1% rise from $9.5 million in fiscal 2024, primarily due to higher sales and marketing expenses [6][32]. - Interest Expense: Interest expense increased to $1.2 million from $0.9 million in fiscal 2024, reflecting higher borrowing costs [7][32]. - Income Tax Benefit: An income tax benefit of $5.6 million was recorded in fiscal 2025, compared to $0.1 million in fiscal 2024, due to the reversal of a valuation allowance against deferred tax assets [10][32]. Fourth Quarter Results - Net Income: In the fiscal 2025 fourth quarter, net income was $7.6 million, or $0.45 diluted earnings per share, compared to $2.8 million or $0.17 diluted earnings per share in the same quarter of fiscal 2024 [11][33]. - Net Sales: The fourth quarter net sales were $19.1 million, a 16.4% increase from $16.4 million in the fourth quarter of fiscal 2024 [12][33]. - Gross Profit: Gross profit for the fourth quarter was $4.7 million, a decrease of 14.5% from $5.5 million in the prior year, with a gross profit margin of 24.6% compared to 33.5% [13][33]. - Operating Expenses: Operating expenses in the fourth quarter were $2.7 million, a 6.1% increase from $2.5 million in the same quarter of fiscal 2024 [14][33]. - Interest Expense: Interest expense for the fourth quarter was $0.6 million, up 146.6% from $0.2 million in the fourth quarter of fiscal 2024 [15][33]. - Income Tax Benefit: An income tax benefit of $5.7 million was recorded in the fourth quarter, compared to $0.2 million in the same quarter of fiscal 2024 [18][33]. Liquidity and Capital Resources - As of February 28, 2025, the company had $2.2 million available under its PNC Revolving Line of Credit, with working capital increasing to $19.7 million from $8.7 million a year earlier [19][20]. - The company entered into a Financing and Security Agreement with Coeur Capital, Inc., providing a line of credit of up to $3.0 million, with full availability as of February 28, 2025 [20]. Cash Flow Analysis - Operating Activities: Cash flows used by operating activities were $3.9 million in fiscal 2025, an increase from $3.7 million in fiscal 2024 [21]. - Investing Activities: Cash flows from investing activities provided $3.6 million in fiscal 2025, compared to a usage of $0.3 million in fiscal 2024, primarily due to the sale leaseback of demonstration equipment [22]. - Financing Activities: Financing activities provided $1.7 million from borrowings under the company's credit facility in fiscal 2025, compared to $2.7 million in fiscal 2024 [23].