UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
FORM 10-Q
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2003
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File No. 33-18978
TEL-INSTRUMENT ELECTRONICS CORP.
(Exact name of the Registrant as specified in Charter)
New Jersey 22-1441806
(State of Incorporation) (I.R.S. Employer ID Number)
728 Garden Street, Carlstadt, New Jersey 07072
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone No. including Area Code: 201-933-1600
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes |X| No |_|
Indicate the number of shares outstanding of the issuer's common stock, as of
the latest practical date:
2,142,801 shares of Common stock, $.10 par value as of August 11, 2003.
TEL-INSTRUMENT ELECTRONICS CORPORATION
TABLE OF CONTENTS
PAGE
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Item 1. Financial Statements (Unaudited):
Condensed Comparative Balance Sheets
June 30, 2003 and March 31, 2003 1
Condensed Comparative Statements of Operations -
Three Months Ended June 30, 2003 and 2002 2
Condensed Comparative Statements of Cash Flows -
Three Months Ended June 30, 2003 and 2002 3
Notes to Condensed Financial Statements 4-6
Item 2. Management's Discussion and Analysis of the Results of
Operations and Financial Conditions 7-10
Item 4. Controls and Procedures 11
Part II - Other Information
Item 6. Exhibits and Reports on Form 8-K 11
Signatures 11
Certifications 12-13
Item 1 - Financial Statements
TEL-INSTRUMENT ELECTRONICS CORPORATION
CONDENSED COMPARATIVE BALANCE SHEETS
(Unaudited)
ASSETS June 30, 2003 March 31, 2003
------------- --------------
Current assets:
Cash and cash equivalents $1,842,908 $1,680,124
Accounts receivable, net of allowance for
doubtful accounts of $36,598 at
June 30, 2003 and March 31, 2003 2,013,879 1,966,815
Inventories, net 2,372,239 2,262,147
Prepaid expenses and other current assets 80,093 42,587
Deferred income tax benefit - current 597,741 535,448
---------- ----------
Total current assets 6,906,860 6,487,121
Property, plant and equipment, net 716,001 726,594
Other assets 277,389 97,462
---------- ----------
Total assets 7,900,250 7,311,177
========== ==========
LIABILITIES & STOCKHOLDERS EQUITY
Current liabilities:
Note payable - related party - current portion 200,000 200,000
Convertible subordinated notes - related party 7,500 7,500
Capitalized lease obligations - current portion 29,583 28,637
Accounts payable 589,349 503,216
Deferred revenues 55,594 51,203
Accrued payroll, deferred wages, vacation pay and
payroll taxes 494,708 436,630
Income taxes payable 269,485 103,924
Accrued expenses 985,423 1,001,124
---------- ----------
Total current liabilities 2,631,642 2,332,234
Notes payable - related party - non-current portion 50,000 50,000
Capitalized lease obligations - excluding current portion 14,166 21,069
---------- ----------
Total liabilities 2,695,808 2,403,303
Stockholders' equity:
Common stock 214,283 213,583
Additional paid-in capital 3,958,737 3,944,812
Retained earnings 1,031,422 749,479
---------- ----------
Total stockholders' equity 5,204,442 4,907,874
---------- ----------
Total liabilities and stockholders' equity $7,900,250 $7,311,177
========== ==========
See accompanying notes to condensed financial statements
-1-
TEL-INSTRUMENT ELECTRONICS CORPORATION
CONDENSED COMPARATIVE STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
------------------
June 30, 2003 June 30, 2002
------------- -------------
Sales - government $ 1,869,489 $ 2,405,708
Sales - commercial 1,188,417 444,025
----------- -----------
Total sales 3,057,906 2,849,733
Cost of sales 1,286,522 1,385,283
----------- -----------
Gross margin 1,771,384 1,464,450
Operating expenses:
Selling, general and administrative 734,999 573,068
Engineering, research and development 567,910 451,727
----------- -----------
Total operating expenses 1,302,909 1,024,795
----------- -----------
Income from operations 468,475 439,655
Other income (expense):
Interest income 10,722 6,476
Interest expense (8,985) (17,408)
----------- -----------
Income before taxes 470,212 428,723
Provision for income taxes 188,269 171,276
----------- -----------
Net income 281,943 257,447
=========== ===========
Basic and diluted income per common share $ 0.13 $ 0.12
=========== ===========
Dividends per share None None
Weighted average shares outstanding
Basic 2,138,551 2,135,151
Diluted 2,169,585 2,161,770
See accompanying notes to condensed financial statements
-2-
TEL-INSTRUMENT ELECTRONICS CORPORATION
CONDENSED COMPARATIVE STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months ended
------------------
June 30, 2003 June 30, 2002
------------- -------------
Cash flows from operating activities:
Net income $ 281,943 $ 257,447
Adjustments to reconcile net income to net
cash provided by operating activities:
Deferred income taxes (62,293) 57,690
Depreciation 60,313 62,636
Changes in assets and liabilities:
Increase in accounts receivable (47,064) (190,873)
(Increase) decrease in inventories (110,092) 297,747
(Increase ) decrease in prepaid expenses & other
current assets (37,506) 3,125
(Increase) decrease in other assets (7,501) 3,143
Increase in accounts payable 86,133 29,637
Increase in income taxes payable 165,561 --
Increase in accrued payroll, deferred wages,
vacation pay and payroll taxes 58,078 55,724
(Decrease) increase in deferred
revenues and accrued expenses (11,310) 228,473
----------- -----------
Net cash provided by operating activities 376,262 804,749
----------- -----------
Cash flows from investing activities:
Purchases of property, plant and equipment (49,720) (36,679)
----------- -----------
Net cash used in investing activities (49,720) (36,679)
----------- -----------
Cash flows from financing activities:
Proceeds from the exercise of stock options 14,625 3,000
Repayment of loan on life insurance policy (172,426) --
Repayment of capitalized lease obligations (5,957) (39,042)
----------- -----------
Net cash used in financing activities (163,758) (36,042)
----------- -----------
Net increase in cash and cash equivalents 162,784 732,028
Cash and cash equivalents at beginning of period 1,680,124 1,198,191
----------- -----------
Cash and cash equivalents at end of period $ 1,842,908 $ 1,930,219
=========== ===========
Taxes paid $ 85,000 --
Interest paid $ 23,362 $ 16,327
See accompanying notes to condensed financial statements
-3-
TEL-INSTRUMENT ELECTRONICS CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
Note 1 Basis of Presentation
In the opinion of management, the accompanying unaudited condensed financial
statements contain all adjustments necessary to present fairly the financial
position of Tel-Instrument Electronics Corp. as of June 30, 2003, the results of
operations for the three months ended June 30, 2003 and June 30, 2002, and
statements of cash flows for the three months ended June 30, 2003 and June 30,
2002. These results are not necessarily indicative of the results to be expected
for the full year.
The financial statements have been prepared in accordance with the requirements
of Form 10-Q and consequently do not include disclosures normally made in an
Annual Report on Form 10-K. The March 31, 2003 results included herein have been
derived from the audited financial statements included in the Company's annual
report on Form 10-K. Accordingly, the financial statements included herein
should be reviewed in conjunction with the financial statements and notes
thereto included in the Company's Annual Report on Form 10-K for the fiscal year
ended March 31, 2003.
Note 2 Accounts Receivable, net
Accounts receivable, net consist of:
June 30, 2003 March 31, 2003
------------- --------------
Commercial $ 730,023 $ 555,076
Government 1,320,454 1,448,337
Less: Allowance for bad debts (36,598) (36,598)
------------ ------------
$ 2,013,879 $ 1,966,815
============ ============
Note 3 Inventories, net
Inventories, net consist of: June 30, 2003 March 31, 2003
------------- --------------
Purchased parts $ 969,041 $ 1,074,442
Work-in-process 1,500,422 1,289,578
Finished Goods 30,589 10,940
Less: Reserve for obsolescence (127,813) (112,813)
------------ -----------
$ 2,372,239 $ 2,262,147
============ ============
-4-
TEL-INSTRUMENT ELECTRONICS CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS (continued)
Note 4 Earnings Per Share
The Company's basic income per common share is based on net income for the
relevant period, divided by the weighted average number of common shares
outstanding during the period. Diluted income per common share is based on net
income, divided by the weighted average number of common shares outstanding
during the period, including common share equivalents, such as outstanding stock
options.
Note 5 Stock Options
The Company accounts for its stock option plan in accordance with the provisions
of Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock
Issued to Employees," and related interpretations. The Company has adopted the
disclosure only provisions of Statement of Financial Accounting Standards No.
123 and 148, "Accounting for Stock-Based Compensation" ("SFAS 123 and 148").
Under SFAS 123 and 148 the Company provides pro forma net income and pro forma
earnings per share disclosures for employee stock option grants made since
fiscal 1996 as if the fair-value-based method as defined in SFAS No. 123 has
been applied. The Company currently does not plan to adopt the fair value based
method prescribed by SFAS123.
The Company estimates the fair value of each option using the Black Scholes
option-pricing model with the following weighted-average assumptions: expected
dividend yield of 0.0%, risk-free interest rate of 3.5% and volatility at 50%
and an expected life of 5 years. Had the Company determined compensation cost
based on the fair market value at the grant date for its stock options under
SFAS No. 123, the pro forma amounts are indicated below:
Three Months Ended Three Months Ended
June 30, 2003 June 30, 2002
Net income - as reported $281,943 $257,447
Less fair value of stock options (17,333) (18,035)
-------- --------
Net income - pro forma 264,610 239,412
======== ========
Basic earnings per share - as reported 0.13 0.12
Basic earnings per share - pro forma 0.12 0.11
Diluted earnings per share - as reported 0.13 0.12
Diluted earnings per share - pro forma 0.12 0.11
-5-
TEL-INSTRUMENT ELECTRONICS CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS (continued)
Note 6 Government and Commercial Sales
Information has been presented for the Company's two reportable activities,
government and commercial.
The Company is organized primarily on the basis of its avionics products. The
government market consists primarily of the sale of test equipment to U.S. and
foreign governments and militaries, either direct or through distributors. The
commercial market consists of sales of test equipment to domestic and foreign
airlines and to commercial distributors. The commercial market also includes
sales related to repairs and calibration which have a lower gross margin. The
Company primarily develops and designs test equipment for the avionics industry
and, as such, the Company's products and designs may be sold in both the
government and commercial markets.
The table below presents information about sales and gross margin. Cost of sales
includes certain allocation factors for indirect costs.
Three Months Ended Three Months Ended
June 30, 2003 June 30, 2002
Government Commercial Government Commercial
---------- ---------- ---------- ----------
Sales $1,869,489 1,188,417 $2,405,708 444,025
Cost of sales 726,926 559,596 1,133,885 251,398
---------- --------- ---------- -------
Gross margin $1,142,563 628,821 $1,271,823 192,627
========== ========= ========== =======
-6-
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Results of Operations
A number of the statements made by the Company in this report may be regarded as
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995.
Forward-looking statements include, among others, statements concerning the
Company's outlook, pricing trends and forces within the industry, the completion
dates of capital projects, expected sales growth, cost reduction strategies and
their results, long-term goals of the Company and other statements of
expectations, beliefs, future plans and strategies, anticipated events or trends
and similar expressions concerning matters that are not historical facts.
All predictions as to future results contain a measure of uncertainty and
accordingly, actual results could differ materially. Among the factors that
could cause a difference are: changes in the general economy; changes in demand
for the Company's products or in the cost and availability of its raw materials;
the actions of its competitors; the success of our customers; technological
change; changes in employee relations; government regulations; litigation,
including its inherent uncertainty; difficulties in plant operations and
materials; transportation, environmental matters; and other unforeseen
circumstances. A number of these factors are discussed in the Company's filings
with the Securities and Exchange Commission.
Critical Accounting Policies
In preparing our financial statements and accounting for the underlying
transactions and balances, we apply our accounting policies as disclosed in Note
2 of our Notes to Financial Statements included in our Form 10-K. The Company's
accounting policies that require a higher degree of judgment and complexity used
in the preparation of financial statements include:
Revenue recognition - revenues are recognized at the time of shipment to, or
acceptance by customer provided title and risk of loss is transferred to the
customer. Provisions, when appropriate, are made where the right to return
exists. Revenues under service contracts are recognized when the services are
performed.
Property and equipment - property and equipment are stated at cost, less
accumulated depreciation. Depreciation is provided using the straight-line
method over the estimated useful lives of the respective assets over periods
ranging from three to eight years. Useful lives are estimated at the time the
asset is acquired and are based upon historical experience with similar assets
as well as taking into account anticipated technological or other changes.
Leasehold improvements are amortized over the term of the lease or the useful
life of the asset, whichever is shorter.
Inventory reserves - inventory reserves or write-downs are estimated for excess,
slow-moving and obsolete inventory as well as inventory whose carrying value is
in excess of net realizable value. These estimates are based on current
assessments about future demands, market conditions and related management
initiatives. If market conditions and actual demands are less favorable than
those projected by management, additional reserves or inventory write-downs may
be required.
-7-
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE
RESULTS OF OPERATIONS AND FINANCIAL CONDITION (Continued)
Results of Operations (continued)
Critical Accounting Policies (continued)
Accounts receivable - the Company performs ongoing credit evaluations of its
customers and adjusts credit limits based on customer payment and current credit
worthiness, as determined by review of their current credit information. The
Company continuously monitors credits and payments from its customers and
maintains provision for estimated credit losses based on its historical
experience and any specific customer issues that have been identified. While
such credit losses have historically been within our expectation and the
provision established, the Company cannot guarantee that it will continue to
receive positive results.
Warranty reserves - warranty reserves are based upon historical rates and
specific items that are identifiable and can be estimated at time of sale. While
warranty costs have historically been within our expectations and the provisions
established, future warranty costs could be in excess of our warranty reserves.
A significant increase in these costs could adversely affect our operating
results for the period and the periods these additional costs materialize.
Warranty reserves are adjusted from time to time when actual warranty claim
experience differs from estimates.
Income taxes - deferred tax assets and liabilities are determined based on
differences between financial reporting and tax bases of assets and liabilities
and are measured using enacted tax rates and laws that will be in effect when
such differences are expected to reverse. The measurement of deferred tax assets
is reduced, if necessary, by a valuation allowance for any tax benefit which is
not more likely than not to be realized. The effect on deferred tax assets and
liabilities of a change in tax rate is recognized in the period that such tax
rate changes are enacted.
Overview
For the first quarter ended June 30, 2003, sales increased 7.3% to $3,057,906
and net income increased 9.5% to $281,943. Deliveries of the AN/APM-480 IFF
(Identification, Friend or Foe) Transponder Set Test Set (TSTS) to the U.S. Navy
continue, but accounted for only 27.7% of sales for the quarter ended June 30,
2003 as compared to 65.2% of sales for the quarter ended June 30, 2002. The
Company, in agreement with the U.S. Navy, has temporarily decreased the number
of units it is currently shipping monthly in anticipation of these units being
returned for upgrades and enhancements, in respect of which the Company has
increased its warranty reserves. Shipments under this contract should continue
until the fourth quarter of the current fiscal year. This program firmly
established the Company as one of the leading suppliers in the avionics test
equipment industry, and improved its market position. Commercial sales also
increased substantially during this period as a result of the introduction of
the TR-220 Multi-Function test set and a sales promotion of the T-49C
Transponder/TCAS test set.
Investment in new product development continues in order to meet the expected
needs of its customers and remain as one of the leaders in the industry. The
Company continues its work on the next generation of IFF test sets in
anticipation of U.S. and NATO requirements for more sophisticated IFF testing.
The Company anticipates that most of the AN/APM-480's will need to be returned
and modified, in the future, to accommodate the more sophisticated IFF testing.
Although there is no assurance that the Company will receive any such contracts,
the Company believes that it is well positioned to obtain such contracts. The
-8-
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE
RESULTS OF OPERATIONS AND FINANCIAL CONDITION (Continued)
Results of Operations (continued)
Overview (continued)
recently introduced TR-220, a commercial Multi-Function ramp test set has been
favorably received by the marketplace.
The Company has been active in responding to customer requests for quotation, in
addition to adapting its product designs to respond to these requests. The
Company continues actively to pursue opportunities in both the commercial and
government avionics markets, both domestically and internationally. Exploration
of opportunities in other government and commercial markets also continues in an
attempt to broaden the Company's product line. The Company continues its efforts
with Semaphore Capital Advisors LLC to pursue growth through acquisitions and
alliances of compatible businesses or technologies.
Sales
For the three months ended June 30, 2003, total sales increased $208,173 (7.3%)
to $3,057,906 as compared to the three months ended June 30, 2002. Government
sales decreased $536,219 (22.3%) to $1,869,489 as compared to $2,405,708 for the
first three months of the prior fiscal year. The decrease in government sales is
mainly attributed to the decrease in the shipment of the AN/APM 480 to the U.S.
Navy. Deliveries of the AN/APM-480 IFF to the U.S. Navy continue, but accounted
for only 27.7% of sales for the quarter ended June 30, 2003 as compared to 65.2%
of sales for the quarter ended June 30, 2002. The Company, in agreement with the
U.S. Navy, has temporarily decreased the number of units it is currently
shipping monthly in anticipation of these units being returned for upgrades and
enhancements. Shipments under this contract should continue until the fourth
quarter of the current fiscal year. This decrease was partially offset by an
increase in sales in other government products, such as the T-47SH, T-36M, and
the T-76. Commercial sales increased (167.6%) to $1,188,417 for the three months
ended June 30, 2003, as compared to $444,025 for the three months ended June 30,
2002. Commercial sales increased during this period as a result of the
introduction of the TR-220 Multi-Function test set and a sales promotion of the
T-49C Transponder/TCAS test set. However, the commercial market remains weak,
primarily as a result of the weak financial position of most commercial
airlines. As such, management does not believe that this significant growth in
commercial sales will continue.
Gross Margin
Gross margin dollars increased $306,934 (21%) for the three months ended June
30, 2003 as compared to the same three months in the prior fiscal year. The
increase in gross margin is attributed to an increase in sales volume, higher
margins on certain products and to production efficiencies obtained as a result
of the higher volume. The gross margin percentage for the three months ended
June 30, 2003 was 57.9% as compared to 51.4% for the three months ended June 30,
2002.
Operating Expenses
Selling, general and administrative expenses increased $161,931 (28.3%) for the
three months ended June 30, 2003, as compared to the three months ended June 30,
2002. This increase is attributed to a higher level of sales and marketing
activities and the additions of a Customer Support Manager and a West Coast
Regional Sales Manager. Selling, general and administrative expenses also
increased as a result of the
-9-
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE
RESULTS OF OPERATIONS AND FINANCIAL CONDITION (Continued)
Results of Operations (continued)
Operating Expenses (continued)
addition of a new Chief Operating Officer, an increase in legal fees associated
with an appeal of an award of a significant contract by the U.S. Army to another
contractor, and an increase in consulting services.
Engineering, research and development expenses increased $116,931 (28.3%). The
higher level of expenditures is associated with an increase in research and
development activities, including the continued effort on the next generation of
IFF test sets, a new transponder/interrogator bench test set, and enhancements
to existing products.
Income Taxes
A provision for income taxes was recorded in the amount of $188,269 for the
three months ended June 30, 2003 as compared to a tax provision of $171,276 for
the three months ended June 30, 2002. These amounts represent the effective
federal and state tax rate of approximately 40% on the Company's net income
before taxes. The Company has used all of its net operating loss carryforwards
and the Company will pay federal taxes this fiscal year.
Liquidity and Capital Resources
At June 30, 2003 the Company had working capital of $4,275,218 as compared to
$4,154,887 at March 31, 2003. For the three months ended June 30, 2003, cash
provided by operations was $376,262 as compared to $804,749 for the three months
ended June 30, 2002. This decline in cash from operations is primarily
attributed to an increase in inventories and a decrease in accrued expenses as
compared to the same period last year.
The Company has a line of credit of $1,750,000 from Fleet Bank. The line of
credit bears an interest rate of 0.5% above the lender's prevailing base rate,
which is payable monthly, based upon the outstanding balance. As of June 30,
2003 the Company had no outstanding balance. The line of credit is
collateralized by substantially all of the assets of the Company and expires in
September 2003. The credit facility requires the Company to maintain certain
financial covenants. As of June 30, 2003, the Company was in compliance with all
financial covenants. The Company is in the process of renewing this line.
Based upon the current backlog, its existing credit line, and cash balance, the
Company believes that it has sufficient working capital to fund its operating
plans for at least the next twelve months. However, as the Company pursues
additional opportunities, the need for additional capital may arise. The Company
will evaluate its alternatives when these opportunities arise. The Company has
also retained Semaphore Capital Advisors as its investment bankers to help
pursue acquisitions and alliances and, if needed, to help raise capital. The
Company maintains its cash balance primarily in a money market account in the
event the cash is needed for acquisition. There was no significant impact on the
Company's operations as a result of inflation for the three months ended June
30, 2003. These financial statements should be read in conjunction with the
Company's Annual Report on Form 10-K to the Securities and Exchange Commission
for the fiscal year ended March 31, 2003.
-10-
Item 4. Controls and Procedures
The Company adopted disclosure controls and procedures, as called for by the
recently adopted legislation and rules of the Securities and Exchange
Commission. Under rules promulgated by the S.E.C., disclosure controls and
procedures are defined as "those controls or other procedures of the issuer that
are designed to ensure that information required to be disclosed by the issuer
in the reports filed or submitted by it under the Exchange Act is recorded,
processed, summarized and reported, within the time periods specified in the
Commission's rules and forms." The Chief Executive Officer and the Principal
Accounting Officer of the Company evaluated the Company's disclosure controls
and procedures at May 30, 2003, and concluded that they are effective.
Furthermore, there were no significant changes in the Company's internal
controls, or in other factors that could significantly affect these controls
after May 30, 2003, the date of the evaluation by the Chief Executive Officer
and the Principal Accounting Officer.
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
None.
b. Reports on Form 8-K.
None.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TEL-INSTRUMENT ELECTRONICS CORP.
Date: August 13, 2003 By: /s/ Harold K. Fletcher
----------------------------
/s/ Harold K. Fletcher
Chairman and President
Date: August 13, 2003 By: /s/ Joseph P. Macaluso
----------------------------
/s/ Joseph P. Macaluso
Principal Accounting Officer
-11-
Tel-Instrument Electronics Corp
CEO Certification
I, Harold K. Fletcher, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Tel-Instrument
Electronics Corp;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant is made known to us
by others within registrant, particularly during the period in which
this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date
of this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date.
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
Date: August 13, 2003 /s/ Harold K. Fletcher
----------------------
/s/ Harold K. Fletcher
Chairman and President
-12-
Tel-Instrument Electronics Corp
CFO Certification
I, Joseph P. Macaluso, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Tel-Instrument
Electronics Corp;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant is made known to us
by others within registrant, particularly during the period in which
this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date
of this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date.
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
Date: August 13, 2003 /s/ Joseph P. Macaluso
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/s/ Joseph P. Macaluso
Principal Accounting Officer
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