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Torotel Inc. (fka TTLO) RSS Feed

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Torotel, Inc. (Torotel) conducts business primarily through its wholly owned subsidiary, Torotel Products, Inc. (Torotel Products) but also operates another wholly owned subsidiary Electronika, Inc. (Electronika) that licenses, markets, and sells ballast transformers to the airline industry. Another subsidiary, Torotel Manufacturing Corporation provides manufacturing services to Torotel Products. Torotel Products specializes in the custom design and manufacture of a range of precision magnetic components, consisting of transformers, inductors, reactors, chokes, toroidal coils, and electro-mechanical assemblies. Torotel Products sells these products to original equipment manufacturers, which use them in products, such as aircraft navigational equipment, digital control devices, voice and data secure communications, airport lighting devices, medical equipment, avionics equipment, down-hole drilling, conventional missile guidance systems, and other defense related applications. FY2013 Earnings: $0.23/shr. <6MM shares outstanding From 10K: Positive: • Taxable earnings have been present in recent years; • We have realized a significant amount of our net deferred tax asset created in fiscal year 2011; • The available carryforward periods of most of our net operating losses are of sufficient length and are at minimum risk of expiring unused; • We currently are performing on a contract that should enable us to sustain the current sales volume for the next few fiscal years; and • Our products are included in applications that generally have a longer lifecycle. Negative: • We have a history of inconsistent earnings; • Long-term demand for the potted coil assembly used on the Hellfire II missile system is uncertain due to Department of Defense budget constraints and the possibility that the potted coil assembly could eventually be replaced; • The trend of positive and negative cycles may be difficult to predict due to the nature of our industry; and • We are in a highly competitive industry. We anticipate that near-term demand for aerospace and industrial products will remain consistent with current demand. We also believe that the long-term outlook remains positive because of the nature of the customers' applications for these products; however, the fragile global economic recovery and the inventory of Boeing 787's in partially completed stages may hinder any near-term increase in demand. As of April 30, 2013, our consolidated order backlog for the aerospace and industrial markets was $1.8 million. Business Outlook Our order activity increased 13% to $15.0 million during fiscal year 2013. This order rate included an $8.3 million contract award for the potted coil assembly for the Hellfire II missile system. As a result, our consolidated order backlog is $12.6 million heading into the new fiscal year, which is a 29% increase compared to the beginning of the prior year. This strong backlog position combined with other anticipated orders for new electro-mechanical assemblies and magnetics have us anticipating another solid performance in fiscal year 2014.
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