ETC Announces Fiscal 2027 Second Quarter Results

SOUTHAMPTON, Pa., Oct. 19, 2026 (GLOBE NEWSWIRE) -- Environmental Tectonics Corporation (OTCID: ETCC) (“ETC” or the “Company”) today reported its financial results for the thirteen week period ended August 28, 2026 (the “2027 fiscal second quarter”).

Robert L. Laurent, Jr., ETC’s Chief Executive Officer and President stated, “We are pleased with the 8.6% increase in ETC sales from continuing operations, or 18.6% excluding the impact of the Aeromedical building sales, driven by an increase in sales of Environmental Test and Simulation Systems (“ETSS”) and Advanced Disaster Management Simulators (“ADMS”) for the 2027 fiscal second quarter”.

Subsequent to the 2027 fiscal second quarter close, ETC completed the sale of 100% of the equity interests of its wholly owned Polish subsidiary, ETC-PZL Aerospace Industries sp. z.o.o. (“ETC-PZL). ETC and ETC-PZL entered into a separate 10-year Cooperation Agreement under which ETC-PZL will serve as a preferred supplier to the Company for certain products manufactured by ETC-PZL. Under the agreement, the Company retains the option to manufacture the applicable products internally. The operations of ETC-PZL are presented as discontinued operations in the consolidated financial statements for the fiscal 2027 and 2026 thirteen week and first half ended August 28, 2026 and August 29, 2025, respectively.

2027 Fiscal Second Quarter Results of Operations

Net Income from Continuing Operations

Net income from continuing operations was $1.2 million, or $0.06 diluted earnings per share in the 2027 fiscal second quarter, compared to net income from continuing operations of $1.5 million during the 2026 fiscal second quarter, equating to $0.08 diluted earnings per share. The $0.3 million decrease is a result of a $0.5 million decrease in gross profit partially offset by a $0.2 million decrease in income tax provision attributable to lower operating income.

Net Sales

Net sales in the 2027 fiscal second quarter were $18.3 million, an increase of $1.4 million, or 8.6%, compared to 2026 fiscal second quarter net sales of $16.9 million. The increase in net sales was driven by a $2.0 million, or 468.2% increase in ETSS and a $0.7 million, or 161.1% increase in ADMS net sales in the 2027 fiscal second quarter compared to the 2026 fiscal second quarter slightly offset by a $0.6 million, or 13.1% decrease in Sterilizer Systems net sales and a $0.8 million, or 7.4% decrease in ATS sales in the 2027 fiscal second quarter compared to the 2026 fiscal second quarter. Excluding the impact of Aeromedical building sales, net sales were $2.6 million, or 18.6% higher in the 2027 fiscal second quarter as compared to the 2026 fiscal second quarter.

Gross Profit

Gross profit for the 2027 fiscal second quarter of $4.4 million decreased from $4.9 million in the 2026 fiscal second quarter, a decrease of $0.5 million, or 9.3%. Gross profit margin of 24.1% decreased by 4.7% in the 2027 fiscal second quarter compared to 28.8% in the 2026 fiscal second quarter. The decrease in gross profit margin as a percentage of sales was primarily attributable to the sale and subsequent leaseback of an aeromedical training device in the 2026 fiscal second quarter, two negative job costs revisions in the Aerospace Segment in the 2027 fiscal second quarter, and lower gross profit margin for completed contract projects in the 2027 fiscal second quarter as compared to the 2026 fiscal second quarter.

Operating Expenses

Operating expenses, including sales and marketing, general and administrative, and research and development, for the 2027 and 2026 fiscal second quarter were $2.3 million.

Operating Income

Operating income for the 2027 fiscal second quarter was $2.1 million, a decrease of $0.5 million, or 17.7%, compared to $2.6 million for the 2026 fiscal second quarter. The decrease in operating income in the 2027 fiscal second quarter as compared to the 2026 fiscal second quarter is attributable to a $0.5 million, or 9.3% decrease in gross profit as described above, partially offset by a $1.4 million, or 8.6% increase in net sales in the 2027 fiscal second quarter as compared to the 2026 fiscal second quarter.

Interest Expense, Net and Other Expense

Interest expense, net, and other expense of $0.6 million for the 2027 fiscal second quarter were flat compared to the 2026 fiscal second quarter expense of $0.6 million.

Income Tax Provision

Income tax provision for the 2027 fiscal second quarter was $0.3 million compared to $0.5 million in the 2026 fiscal second quarter, a decrease of $0.2 million, or 34.8%. The decrease is attributable to lower operating income in the 2027 fiscal second quarter as compared to the 2026 fiscal second quarter.

(Loss) from Discontinued Operations

(Loss) from discontinued operations for the 2027 fiscal second quarter was ($0.4) million compared to ($0.0) million in the 2026 fiscal second quarter, an increased loss of ($0.4) million attributable to limited third party sales during the 2027 fiscal second quarter.

2027 Fiscal First Half Results of Operations

Net Income from Continuing Operations

Net income from continuing operations was $1.8 million, or $0.09 earnings per diluted share, in the 2027 fiscal first half, compared to net income from continuing operations of $2.4 million during the 2026 fiscal first half, equating to $0.13 earnings per diluted share. The $0.6 million decrease is a result of a $0.6 million decrease in gross profit, attributable to lower gross profit margins and a $0.3 million increase in operating expenses, partially offset by a $0.6 million increase in net sales and $0.4 million lower income tax provision attributable to lower operating income.

Net Sales

Net sales in the 2027 fiscal first half were $34.5 million, an increase of $0.6 million, or 1.9%, compared to the 2026 fiscal first half net sales of $33.9 million. The increase in net sales was driven by a $5.2 million, or 842.1% increase in ETSS and a $0.8 million, or 64.0% increase in ADMS net sales in the 2027 fiscal first half compared to the 2026 fiscal first half net sales, partially offset by a $3.3 million, or 35.1% decrease in Sterilizer Systems and a $2.1 million, or 9.5% decrease in ATS net sales. Excluding the impact of Aeromedical building sales, net sales increased by $3.5 million, or 13.1% in the 2027 fiscal first half as compared to the 2026 fiscal first half.

Gross Profit

Gross profit for the 2027 fiscal first half of $8.3 million decreased from $8.9 million in the 2026 fiscal first half, a decrease of $0.6 million, or 7.2%. Gross profit margin of 24.0% decreased by 2.4% in the 2027 fiscal first half compared to 26.4% in the 2026 fiscal first half. Excluding the impact of the lower margins realized from the Aeromedical center building revenue, gross profit margin was 27.3% for fiscal 2027 first half as compared to 33.7% for 2026 fiscal first half. The decrease in gross profit margin, excluding the Aeromedical center building revenue, is primarily attributable to negative job cost revisions in the Aerospace business segment in the 2027 fiscal first half and lower gross profit margins on completed contracts in the 2027 fiscal first half. The gross profit margin decrease is also attributable to a significant positive job costs revision in the ATS business unit in the 2026 fiscal first half as well as the positive gross profit margin in the 2026 fiscal first half attributable to the sale and leaseback of a product held in finished goods inventory.

Operating Expenses

Operating expenses, including sales and marketing, general and administrative, and research and development, for the 2027 fiscal first half were $4.8 million, an increase of $0.3 million, or 6.1%, compared to $4.5 million for the 2026 fiscal first half. The increase in operating expenses was due primarily to higher general administrative expense in the 2027 fiscal first half as compared to the 2026 fiscal first half.

Operating Income

Operating income for the 2027 fiscal first half was $3.5 million, a decrease of $0.9 million, or 21.0%, compared to $4.4 million for the 2026 fiscal first half. The decrease in operating income in the 2027 fiscal first half as compared to the 2026 fiscal first half is attributable to a $0.6 million, or 7.2% decrease in gross profit attributable to lower gross profit margin and a $0.3 million, or 6.1% increase in operating expenses in the 2027 fiscal first half as compared to the 2026 fiscal first half.

Interest Expense, Net

Interest expense, net for the 2027 fiscal first half was $1.1 million compared to interest expense, net of $1.0 million for the 2026 fiscal first half.

Income Tax Provision

Income tax provision for the 2027 fiscal first half was $0.4 million compared to $0.8 million in the 2026 fiscal first half, a decrease of $0.4 million, or 47.2%. The decrease is attributable to lower operating income in the 2027 fiscal first half as compared to the 2026 fiscal first half.

(Loss) Income from Discontinued Operations

(Loss) from discontinued operations for the 2027 fiscal first half was ($0.8) million compared to income of $0.4 million in the 2026 fiscal first half, a decrease of ($1.1) million attributable to limited third party sales during the 2027 fiscal first half.

Cash Flows from Operating, Investing, and Financing Activities

During the 2027 fiscal first half, the Company provided $3.7 million of cash from operating activities, due primarily to net income from continuing operations and an increase in contract liabilities and other accrued liabilities slightly offset by an increase in accounts receivable and contract assets as compared to providing $1.9 million during the 2026 fiscal first half.

Cash used for investing activities was $0.1 million during the 2027 and 2026 fiscal first half, respectively, primarily relating to funds used for capital expenditures on equipment.

The Company’s financing activities used $3.0 million during the 2027 fiscal first half, included repayments of $3.0 million during the 2027 fiscal first half under the Company’s credit facility as compared to cash used in financing activities of $1.9 million during the 2026 fiscal first half.

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; (ii) altitude (hypobaric) chambers; (iii) hyperbaric chambers for multiple persons (multiplace chambers); and (iv) 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) steam and gas (ethylene oxide) sterilizers; 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.

The majority of our net sales are generated from long-term contracts with foreign and U.S. governments and agencies (including foreign military sales (“FMS”) contracted through the U.S. Government) for the research, design, development, manufacture, integration, and sustainment of ATS products, as well as long-term contracts with domestic and international customers for the sale of Sterilizer systems. The Company also enters into long-term contracts with domestic customers for the sale of 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.

Table A
Environmental Tectonics Corporation
Summary Table of Results
		Thirteen weeks ended								Variance
(in thousands, except per share information)		August 28, 2026				August 29, 2025				($)				(%)
Net sales		$	18,319			$	16,876			$	1,443			8.6
Cost of goods sold			13,906				12,010				1,896			15.8
Gross Profit			4,413				4,866				(453	)		-9.3
	Gross profit margin %		24.1	%			28.8	%			-4.7	%		-16.3	%
Operating expenses			2,310				2,312				(2	)		-0.1
Operating income			2,103				2,554				(451	)		-17.7
	Operating margin %		11.5	%			15.1	%			-3.6	%		-23.8	%
Interest expense, net			564				531				33			6.2
Other expense, net			54				89				(35	)		-39.3
Income before income taxes			1,485				1,934				(449	)		-23.2
	Pre-tax margin %		8.1	%			11.5	%			-3.4	%		-29.6	%
Income tax provision			292				448				(156	)		-34.8
Net income from continuing operations			1,193				1,486				(293	)		-19.7
Discontinued operations
(Loss) from discontinued operations			(364	)			(6	)			(358	)		-5966.7
Net income			829				1,480				(651	)		-44.0
Preferred Stock dividends			(121	)			(121	)			-			0.0
Income attributable to common and
participating shareholders		$	708			$	1,359			$	(651	)		-47.9
Per share information:
	Basic earnings per common and participating share:
	Distributed earnings per share:
	Common	$	-			$	-			$	-
	Preferred	$	0.02			$	0.02			$	-
	Undistributed earnings per share - continuing operations:
	Common - continuing operations	$	0.07			$	0.09			$	(0.02	)
	Preferred - continuing operations	$	0.07			$	0.09			$	(0.02	)
	Diluted earnings per share - continuing operations	$	0.06			$	0.08			$	(0.02	)
	Undistributed (loss) per share - discontinued operations:
	Common - discontinued operations	$	(0.02	)		$	-			$	(0.02	)
	Preferred - discontinued operations	$	(0.02	)		$	-			$	-
	Diluted (loss) per share - discontinued operations	$	(0.02	)		$	-			$	(0.02	)
	Diluted earnings per share	$	0.04			$	0.08			$	(0.04	)
Total basic weighted average common and participating shares			15,704				15,704
Total diluted weighted average shares			17,408				16,628

Table B
Environmental Tectonics Corporation
Summary Table of Results
(in thousands, except per share information)		Twenty-six weeks ended								Variance
		August 28, 2026				August 29, 2025				($)				(%)
Net sales		$	34,491			$	33,857			$	634			1.9
Cost of goods sold			26,197				24,920				1,277			5.1
Gross Profit			8,294				8,937				(643	)		-7.2
	Gross profit margin %		24.0	%			26.4	%			-2.4	%		-9.1	%
Operating expenses			4,822				4,543				279			6.1
Operating income			3,472				4,394				(922	)		-21.0
	Operating margin %		10.1	%			13.0	%			-2.9	%		-22.3	%
Interest expense, net			1,089				1,048				41			3.9
Other expense, net			135				127				8			6.3
Income before income taxes			2,248				3,219				(971	)		-30.2
	Pre tax margin %		6.5	%			9.5	%			-3.0	%		-31.6	%
Income tax provision			442				837				(395	)		-47.2
Net income from continuing operations			1,806				2,382				(576	)		-24.2
Discontinued operations
(Loss) income from discontinued operations			(753	)			388				(1,141	)		-294.1
Net income			1,053				2,770				(1,717	)		-62.0
Preferred Stock Dividends			(242	)			(242	)			-			0.0
Income attributable to common and participating shareholders		$	811			$	2,528			$	(1,717	)		-67.9
Per share information:
	Basic earnings per common and participating share:
	Distributed earnings per share:
	Common	$	-			$	-
	Preferred	$	0.04			$	0.04			$	-
	Undistributed earnings per share - continuing operations:
	Common - continuing operations	$	0.10			$	0.14			$	(0.04	)
	Preferred - continuing operations	$	0.10			$	0.14			$	(0.04	)
	Diluted earnings per share - continuing operations	$	0.09			$	0.13			$	(0.04	)
	Undistributed (loss) earnings per share - discontinued operations:
	Common - discontinued operations	$	(0.05	)		$	0.02			$	(0.07	)
	Preferred - discontinued operations	$	(0.05	)		$	0.02			$	0.02
	Diluted (loss) income per share - discontinued operations	$	(0.04	)		$	0.02			$	(0.06	)
	Diluted earnings per share	$	0.05			$	0.15			$	(0.10	)
Total basic weighted average common and participating shares			15,704				15,684
Total diluted weighted average shares			16,659				16,649

Contact: Tim Kennedy, CFO
Phone: (215) 355-9100 x1531
E-mail: tkennedy@etcusa.com