Omni-Lite Industries Reports First Quarter Fiscal 2020 Results - Seite 2

In recent years, the Company has generated sales of approximately $1.5 million annually from our munitions product line, which Omni-Lite manufactures bullet and tracer components in support of certain small arms platforms.  We learned during in the quarter that we will be experiencing a more competitive climate as we seek to bid for munitions follow-on contracts which could impact our quarterly revenue as it did in the first quarter.  In the first quarter fiscal 2020, our munitions revenue was down 40% compared to the year ago period.  Also, while the long-term impact of COVID-19 on air travel remains uncertain, stress in the commercial airline market will most likely cause demand reductions and delivery deferrals for new aircraft and have some effect on our fastener product line offering.

We do serve several end markets where demand is robust. For example, Omni-Lite’s Monzite business manufactures customized high-performance electronic products that are used in self-protection and navigation systems on airborne and terrestrial platforms that serve domestic and international public safety and national security applications, including PAC-3, Joint Strike Fighter, AEGIS, EuroFighter, and F-16.  National security and public safety programs are amongst the top funded priorities in the current global climate. In addition, our electronics group supplies manufacturing services and products used in the development of next generation high bandwidth 5G communication systems and are currently under development contracts. 

Further, Omni-Lite is producing precision fasteners used for aerospace platforms, both commercial and defense applications, and some development programs for near net shaped fasteners components serving these same platforms that could lead to more Omni-Lite content per shipset.  Evidence that points to the strength of these defense programs is our 2019 results that experienced 26% year-over-year increase in aerospace fastener shipments and a 22% year-over-year increase in shipments in defense electronics applications. 

Across our business, we are managing production capacity to meet prevailing demand conditions and are taking steps to realign costs for volume shortfalls. We are approaching the uncertainty facing us over the rest of 2020 from a position of reduced costs and we are realigning to focus our energy in growth areas of defense aerospace and defense electronics.  We are appreciative of the PPP Funds established as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act) we have received. The safety and wellbeing of our employees and suppliers and our ability to meet our customer requirements is our highest priority. The PPP Funds will provide the flexibility necessary to cover our employee related costs and continue to operate at full staff during this unprecedented health crisis.