ETC Announces Fiscal 2027 First Quarter Results
SOUTHAMPTON, Pa., July 15, 2026 (GLOBE NEWSWIRE) -- Environmental Tectonics Corporation (OTCID: ETCC) (“ETC” or the “Company”) today reported its financial results for the thirteen week period ended May 29, 2026 (the “2027 first fiscal quarter”).
Robert L. Laurent, Jr., ETC’s Chief Executive Officer and President stated, “We once again generated positive operating results and are especially pleased with the 17% increase in backlog vs. prior year driven by $39.5 million in contract awards during the 2027 first fiscal quarter. We are well positioned for continued positive results as we exit the quarter with a sales backlog of $85 million.”
Fiscal 2027 First Quarter Results of Operations
Net Income
Net income was $0.2 million, or $0.01 diluted earnings per share, in the 2027 first fiscal quarter, compared to net income of $1.3 million during the 2026 first fiscal quarter, or $0.07 diluted earnings per share. The $1.1 million, or 82.6% decrease is primarily attributable to a $0.8 million, or 16.4% decrease in gross profit, a $0.4 million, or 15.8% increase in operating expense and a $0.2 million, or 203.8% increase in other expense (income), net partially offset by a $0.2 million, or 61.5% decrease in income tax provision in the 2027 first fiscal quarter as compared to 2026 first fiscal quarter.
Net Sales
Net sales in the 2027 first fiscal quarter were $16.2 million, a decrease of $1.4 million, or 8.0%, compared to 2026 first fiscal quarter net sales of $17.6 million. Excluding sales related to the construction of the aeromedical center building, sales were $0.3 million or 2.5% higher for first fiscal quarter 2027 at $13.9 million as compared to $13.6 million for first fiscal quarter 2026. The decrease in net sales was mainly a result of a $1.8 million, or 16.5% decrease in ATS sales, all of which relates to aeromedical center building revenue as well as a $2.7 million or 54.4% decrease in Sterilizer Systems sales partially offset by a $3.1 million, or 1760.1% increase in ETSS sales in the 2027 first fiscal quarter as compared to 2026 first fiscal quarter.
Gross Profit
Gross profit for the 2027 first fiscal quarter was $3.9 million, or 24.1% of net sales compared to $4.7 million, or 26.5% of net sales in the 2026 first fiscal quarter. Excluding the impact of the aeromedical center building revenue, gross profit margin was 27.9% for first fiscal quarter 2027 as compared to 34.3% for first fiscal quarter 2026. The decrease in gross profit margin as a percentage of sales was attributable to two ATS projects that had negative job costs revisions in the first fiscal quarter of 2027 as well as one ATS project having a significant positive impact on gross profit margin in the first fiscal quarter 2026.
Operating Expenses
Operating expenses, including sales and marketing, general and administrative, and research and development, for the 2027 first fiscal quarter were $2.9 million, an increase of $0.4 million, or 15.8%, compared to $2.5 million for the 2026 first fiscal quarter. The increase in operating expenses was due primarily to higher selling and general administrative expense in the 2027 first fiscal quarter as compared to the 2026 first fiscal quarter.
Operating Income
Operating income for the 2027 fiscal first quarter was $1.0 million, a decrease of $1.2 million, or 53.6%, compared to $2.2 million for the 2026 first fiscal quarter. The decrease in operating income is attributable to a $0.8 million decrease in gross profit attributable to lower gross profit margins and a $0.4 million increase in operating expenses.
Interest Expense, Net
Interest expense, net, was consistent for the 2027 first fiscal quarter as compared to the 2026 first fiscal quarter.
Other Expense (Income)
Other Expense was $0.1 million for the 2027 first fiscal quarter as compared to other income of ($0.1) million for the 2026 first fiscal quarter, an increase of $0.2 million, or 203.8%.
Income Tax Provision
Income tax provision for the 2027 first fiscal quarter was $0.2 million compared to $0.4 million in the 2026 first fiscal quarter, a decrease of $0.2 million, or 61.5%. The decrease is attributable to a decrease in income before income taxes in the first fiscal quarter 2027 as compared to the first fiscal quarter 2026.
Cash Flows from Operating, Investing, and Financing Activities
During the 2027 first fiscal quarter, cash provided by operating activities were $1.2 million, an increase of $4.1 million compared to cash used in operating activities of $2.9 million during the 2026 first fiscal quarter. Cash flows during the 2027 first fiscal quarter were positively impacted by a decrease in accounts receivable, net, and an increase in accounts payable and other accrued liabilities slightly offset by a decrease in net income as compared to 2026 first fiscal quarter.
Cash used for investing activities primarily relates to funds used for capital expenditures of equipment and software development. The Company’s investing activities used $0.1 million during the 2027 and 2026 first fiscal quarters.
The Company’s financing activities used $1.6 million of cash during the 2027 first fiscal quarter from repayments under the Company’s credit facility as compared to borrowings under the Company’s credit facility of $1.0 million during the 2026 first fiscal quarter.
About ETC
ETC was incorporated in 1969 in Pennsylvania. For over five decades, we have provided our customers with products, services, and support. Innovation, continuous technological improvement and enhancement, and product quality are core values that are critical to our success. We are a significant supplier and innovator in the following areas: (i) software driven products and services used to create and monitor the physiological effects of flight, including high performance jet tactical flight simulation, fixed and rotary wing upset prevention and recovery and spatial disorientation, and both suborbital and orbital commercial human spaceflight: altitude (hypobaric) chambers; hyperbaric chambers for multiple persons (multiplace chambers) collectively, Aircrew Training Systems (“ATS”); (ii) Advanced Disaster Management Simulators (“ADMS”); (iii) steam and gas (ethylene oxide) sterilizer systems (“Sterilizer Systems” or “Sterilizers”); and (iv) Environmental Testing and Simulation Systems (“ETSS”).
We operate in two primary business segments, Aerospace Solutions (“Aerospace”) and Commercial/Industrial Systems (“CIS”). Aerospace encompasses the design, manufacture, and sale of: (i) ATS products; and (ii) ADMS, as well as integrated logistics support (“ILS”) for customers who purchase these products or similar products manufactured by other parties. These products and services provide customers with an offering of comprehensive solutions for improved readiness and reduced operational costs. Sales of our Aerospace products are made principally to U.S. and foreign government agencies and to civil aviation organizations. CIS encompasses the design, manufacture, and sale of: (i) sterilizer systems; and (ii) ETSS; as well as parts and service support for customers who purchase these products or similar products manufactured by other parties. Sales of our CIS products are made principally to the healthcare, pharmaceutical, and automotive industries.
ETC-PZL Aerospace Industries Sp. z o.o. (“ETC-PZL”), our 100%-owned subsidiary in Warsaw, Poland, is currently our only operating subsidiary. ETC-PZL manufactures certain simulators within our Aerospace segment.
The majority of our net sales are generated from long-term contracts with U.S. and foreign government agencies (including foreign military sales (“FMS”) contracted through the U.S. Government) for the research, design, development, manufacture, integration, and sustainment of ATS products, including Chambers and the simulators manufactured and sold through ETC-PZL, collectively, ATS. The Company also enters into long-term contracts with domestic and international customers for the sale of sterilizer systems and ETSS. Net sales of ADMS are generally much shorter term in nature and vary between domestic and international customers. We generally provide our products and services under fixed-price contracts.
ETC’s unique ability to offer complete systems, designed and produced to high technical standards, sets it apart from its competition. ETC’s headquarters is located in Southampton, PA. For more information about ETC, visit http://www.etcusa.com/. The information contained on our website is not incorporated by reference in this news release.
Forward-looking Statements
This news release contains forward-looking statements, which are based on management’s expectations and are subject to uncertainties and changes in circumstances. Words and expressions reflecting something other than historical fact are intended to identify forward-looking statements, and these statements may include words such as “may”, “will”, “should”, “expect”, “plan”, “anticipate”, “believe”, “estimate”, “future”, “predict”, “potential”, “intend”, or “continue”, and similar expressions. We base our forward-looking statements on our current expectations and projections about future events or future financial performance. Our forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about ETC and its subsidiaries that may cause actual results to be materially different from any future results implied by these forward-looking statements. We caution you not to place undue reliance on these forward-looking statements. Except as required by law, we assume no obligation to update or revise any forward looking statements.
- Financial Table Follows -
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Table A | ||||||||||||||||
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ENVIRONMENTAL TECTONICS CORPORATION | ||||||||||||||||
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SUMMARY TABLE OF RESULTS | ||||||||||||||||
| (in thousands, except per share information) | ||||||||||||||||
| (unaudited) | ||||||||||||||||
| Thirteen weeks ended | Variance | |||||||||||||||
| (in thousands, except per share information) | May 29, 2026 | May 30, 2025 | ($) | (%) | ||||||||||||
| Net sales | $ | 16,186 | $ | 17,601 | $ | (1,415) | -8.0 | |||||||||
| Cost of goods sold | 12,290 | 12,939 | (649) | -5.0 | ||||||||||||
| Gross Profit | 3,896 | 4,662 | (766) | -16.4 | ||||||||||||
| Gross profit margin % | 24.1% | 26.5% | -2.4% | -9.1% | ||||||||||||
| Operating expenses | 2,892 | 2,498 | 394 | 15.8 | ||||||||||||
| Operating income | 1,004 | 2,164 | (1,160) | -53.6 | ||||||||||||
| Operating margin % | 6.2% | 12.3% | -6.1% | -49.6% | ||||||||||||
| Interest expense, net | 549 | 563 | (14) | -2.5 | ||||||||||||
| Other expense (income), net | 81 | (78) | 159 | -203.8 | ||||||||||||
| Income before income taxes | 374 | 1,679 | (1,305) | -77.7 | ||||||||||||
| Pre-tax margin % | 2.3% | 9.5% | -7.2% | -75.8% | ||||||||||||
| Income tax provision | 150 | 390 | (240) | -61.5 | ||||||||||||
| Net income | 224 | 1,289 | (1,065) | -82.6 | ||||||||||||
| Preferred Stock dividends | (121) | (121) | - | 0.0 | ||||||||||||
| Income attributable to common and | ||||||||||||||||
| participating shareholders | $ | 103 | $ | 1,168 | $ | (1,065) | -91.2 | |||||||||
| Per share information: | ||||||||||||||||
| Basic earnings per common and participating share: | ||||||||||||||||
| Distributed earnings per share: | ||||||||||||||||
| Common | $ | - | $ | - | $ | - | ||||||||||
| Preferred | $ | 0.02 | $ | 0.02 | $ | - | 0.0 | |||||||||
| Undistributed earnings per share: | ||||||||||||||||
| Common | $ | 0.01 | $ | 0.07 | $ | (0.06) | -85.7 | |||||||||
| Preferred | $ | 0.01 | $ | 0.07 | $ | (0.06) | -85.7 | |||||||||
| Diluted earnings per share | $ | 0.01 | $ | 0.07 | $ | (0.06) | -85.7 | |||||||||
| Total basic weighted average common and participating shares |
15,704 | 15,665 | ||||||||||||||
| Total diluted weighted average shares | 16,631 | 16,998 | ||||||||||||||
Contact:Tim Kennedy, CFO Phone:(215) 355-9100 x1531 E-mail:tkennedy@etcusa.com
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