The AN/ARM-206 ITATS
development program is completed and the Company completed its Production Readiness Review with the U.
The Company's sales increased substantially, but it still incurred a significant, but reduced, operating loss due to continuing high engineering expenditures for the CRAFT products (AN/USM-719 and AN/USM-708), a lower gross profit margin on the documentation and testing phase of the ITATS
(AN/ARM-206) program, and the fourth quarter write-down of Tel's investment in its ITI hydrographic subsidiary.
The increase in sales was offset partially by a reduction in the gross profit percentage on sales from the ITATS program due to use of a subcontractor, and an 18% increase in engineering expenditures, primarily associated with the CRAFT program.
Over the last few years, the Company has won competitive awards for two major contracts, CRAFT and ITATS, from the U.
The gross profit percentage declined partly due to the use of a subcontractor on the ITATS program discussed below.
Over the last two calendar years, the Company has won competitive awards for two major contracts, CRAFT and ITATS, from the U.
Over the last two calendar years the Company has won competitive awards for two major contracts, CRAFT and ITATS
, from the U.
As previously announced, Tel is in a transitional phase between the end of deliveries, pursuant to its multi-year AN/APM-480 contract, and the commencement of production deliveries under its two recent previously announced multi-year Navy contracts (Craft - AN/USM-708 and ITATS
Navy contract for ITATS
(Intermediate Level TACAN Test Set) ($4.
The ITATS award value for the firm-fixed price; indefinite-delivery/indefinite-quantity is estimated at $12,700,000, including future deliverables of up to 180 units.
The ITATS design combines advanced digital technology with state of the art automated testing capabilities.
Although research and development expenditures must remain high, in order to support the large CRAFT and ITATS
contract awards, the Company adopted a Profit Improvement Plan in March of this year, which resulted in substantial operating expense reductions for the six months ended September 30, 2006 as compared to the previous fiscal year.