SOUTHAMPTON, Pa., Jan. 13, 2026 (GLOBE NEWSWIRE) -- Environmental Tectonics Corporation (OTCID: ETCC) (“ETC” or the “Company”) today reported its financial results for the thirteen week period ended November 28, 2025 (the “2026 fiscal third quarter”). Robert L. Laurent, Jr., ETC’s Chief Executive Officer and President stated, “Sales declined in the third fiscal quarter as we have been executing against several large contracts, which are in the final phase of completion. However, we are pleased with the 12% ...

Core Insights - Environmental Tectonics Corporation (ETC) reported a 21% increase in sales and a 26% increase in operating income for the second fiscal quarter of 2026 compared to the previous year, driven by strong sales in Aircrew Training Systems (ATS) and Sterilizer Systems [2][3]. Financial Performance - **Net Income**: Net income for the second quarter of fiscal 2026 was $1.5 million, or $0.08 diluted earnings per share, down from $1.7 million or $0.09 diluted earnings per share in the same quarter of fiscal 2025 [3][29]. - **Net Sales**: Net sales reached $17.0 million, a 20.5% increase from $14.1 million in the prior year, primarily due to a 30.9% increase in ATS sales and a 26.9% increase in Sterilizer Systems sales [4][29]. - **Gross Profit**: Gross profit increased to $5.0 million, up 18.8% from $4.2 million, with a gross profit margin of 29.4%, slightly down from 29.8% in the previous year [5][29]. - **Operating Expenses**: Operating expenses rose to $2.5 million, a 12.3% increase from $2.2 million, attributed to higher selling and marketing expenses [6][29]. - **Operating Income**: Operating income was $2.5 million, reflecting a 26.0% increase from $2.0 million in the same quarter of the previous year [7][29]. Tax and Interest Expenses - **Interest Expense**: Net interest expense for the second quarter was $0.5 million, a significant increase of 132.6% from $0.2 million in the prior year, due to increased borrowing [9][29]. - **Income Tax Provision**: The income tax provision was $0.4 million, a dramatic increase of 2140.0% compared to $0.0 million in the previous year, related to the utilization of Net Operating Loss (NOL) carryforwards [10][29]. First Half Results - **Net Income**: For the first half of fiscal 2026, net income was $2.8 million, or $0.15 earnings per diluted share, down from $3.1 million or $0.17 in the same period of fiscal 2025 [11][32]. - **Net Sales**: Net sales for the first half were $34.6 million, a 25.4% increase from $27.6 million, driven by a 49.6% increase in ATS sales [12][32]. - **Gross Profit**: Gross profit for the first half was $9.6 million, up 10.6% from $8.7 million, with a gross profit margin of 27.9%, down from 31.6% in the previous year [13][32]. - **Operating Expenses**: Operating expenses decreased to $5.0 million, a 3.9% decline from $5.2 million, primarily due to reduced research and development expenses [14][32]. - **Operating Income**: Operating income for the first half was $4.7 million, a 31.9% increase from $3.5 million in the prior year [15][32]. Cash Flow and Investments - **Cash Flows**: The company used $0.4 million in cash from operating activities during the first half, an improvement from $2.1 million used in the same period of the previous year [18][32]. - **Investing Activities**: Cash used for investing activities was $0.3 million, slightly up from $0.2 million in the prior year, primarily for capital expenditures [19][32]. - **Financing Activities**: Financing activities used $1.6 million, including repayments under the credit facility, compared to borrowing $1.6 million in the previous year [20][32].

Core Viewpoint - Environmental Tectonics Corporation (ETC) reported a 39% increase in operating income for the first fiscal quarter of 2026, driven by increased sales in Aircrew Training Systems (ATS) and reduced operating expenses compared to the previous year [2][7]. Financial Performance - **Net Income**: Net income for the first fiscal quarter of 2026 was $1.3 million, or $0.07 diluted earnings per share, a slight decrease from $1.4 million or $0.08 diluted earnings per share in the same quarter of 2025 [3][21]. - **Net Sales**: Net sales increased to $17.6 million, up $4.1 million or 30.5% from $13.5 million in the prior year, primarily due to a 74.9% increase in ATS sales [4][21]. - **Gross Profit**: Gross profit was $4.7 million, representing 26.5% of net sales, compared to $4.5 million or 33.6% of net sales in the previous year [5][21]. - **Operating Expenses**: Operating expenses decreased by $0.5 million, or 16.0%, to $2.5 million, mainly due to lower research and development costs [6][21]. - **Operating Income**: Operating income rose to $2.2 million, an increase of $0.6 million or 39.4% compared to the previous year [7][21]. Expense Analysis - **Interest Expense**: Interest expense increased to $0.6 million, a rise of $0.4 million or 385.3% from the previous year, due to increased borrowing [9][21]. - **Income Tax Provision**: The income tax provision was $0.4 million, up from $0.0 million in the prior year, reflecting a non-cash tax expense related to the utilization of Net Operating Loss carryforwards [10][21]. Cash Flow Overview - **Operating Activities**: Cash flows used in operating activities were $2.7 million, a decrease of $5.6 million compared to $2.9 million provided in the previous year [11][21]. - **Investing Activities**: Cash used for investing activities remained consistent at $0.1 million for both quarters [12][21]. - **Financing Activities**: Financing activities provided $1.0 million in cash during the first fiscal quarter of 2026, contrasting with $3.1 million used for repayments in the previous year [12][21]. Business Segments - ETC operates primarily in two segments: Aerospace Solutions and Commercial/Industrial Systems, focusing on products and services for government and civil aviation organizations [14][16].

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].