Environmental Tectonics Corporation Announces Third Quarter and Year To Date Fiscal 20...(3.4%. Gross profit for the first...),Health

Gross profit for the first nine months of fiscal 2009 was $7,494,000 as compared to $2,794,000 in the first nine months of fiscal 2008, an increase of $4,700,000 or 168.2%. This increase reflected the aforementioned increased sales level and corresponding gross profit coupled with an improvement in the gross profit rate as a percent of revenue to 27.4% compared to 18.3% in the prior period. The improved gross profit percentage was primarily the result of an improved product mix which included significant sales of higher margin pilot training equipment. Most product and geographic categories generated higher gross profit rates.

Selling and administrative expenses for the first nine months of fiscal 2009 were $8,502,000 as compared to $8,353,000 in the first nine months of fiscal 2008, an increase of $149,000 or 1.8%. Higher commissions on the higher sales levels and increased accounting fees were partially offset by lower legal costs. As a percentage of sales, selling and administrative expenses were 31.0% for the first nine months of fiscal 2009 compared to 54.6% in the first nine months of fiscal 2008.

Claims settlement costs in the first nine months of fiscal 2008 consisted of a write off of contract accounts receivables of $89,000 and a reserve for a tentative payment to the Government of $3,550,000.

Research and development expenses, which are charged to operations as incurred, were $946,000 for the first nine months of fiscal 2009 compared to $355,000 for the first nine months of fiscal 2008. The prior period benefited from the receipt of monies under a NASA grant and higher grant awards from the Turkish government.

Interest expense for the first nine months of fiscal 2009 was $1,287,000 as compared to $1,146,000 for the first nine months of fiscal 2008, representing an increase of $141,000 or 12.3%. The increase reflected higher interest expense on additional borr
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