Environmental Tectonics Corporation (ETC) believes virtual environments can teach us a lot about real life. Through its Aerospace Solutions segment (formerly Training Services Group), the company makes software-driven aircrew training systems and disaster simulators. Through its Commercial/Industrial Systems segment (formerly Control Systems Group), it designs, manufactures, and sells industrial steam and gas sterilizers for the pharmaceutical, medical device, and animal research industries, hyperbaric chambers for the medical industry, and environmental testing products for the automotive and HVAC industries.
To better define its marketing strategy, in fiscal 2012 ETC changed its segments from Training Services Group (TSG) and Control Systems Group (CSG) to Aerospace Solutions and Commercial/Industrial Systems (CIS). Besides the name change, another major adjustment included moving the altitude chamber business from the former CSG to the new Aerospace segment. This business addresses an aerospace operation, hypoxia training. After the transfer, the remainder of CSG's business addressed the commercial and industrial sectors.
Aerospace Solutions' focus is software that simulates the physiological effects of flight. Products offered by Aerospace Solutions include the GYROLAB GL-6000 Gryphon Disorientation Research Device and the GYRO IPT III Integrated Physiological Trainer. Services include training in night vision, water survival, tactical flight, and commercial human spaceflight. The segment operates two facilities in the US and one in Poland for manufacturing and product development and another in Turkey for software development.
Commercial/Industrial Systems' products include steam and gas ethylene oxide sterilizers and monoplace hyperbaric chambers for one person and multiplace chambers for several patients. To supplement its hyperbaric product, the segment provides Operating Systems for Control and Recordkeeping, electronic medical record keeping tool for monoplace chambers. Also offering parts and services, the segment operates a facility in the US and one in Turkey for software development.
The company has branch offices in China, Egypt, India, Japan, Malaysia, Turkey, Thailand, the United Arab Emirates, and the UK.
Revenue rose 19% in fiscal 2012 compared with 2011. By geographic segment, the company's method for reporting sales in fiscal 2012, US government, which accounted for 41% of sales, sales grew about 17% in fiscal 2012 compared with 2011. The International segment, representing about 34% of sales, recorded an uptick of about 12% in fiscal 2012 vs. 2011. Revenue for the Domestic geographic segment, 25% of sales, increased 36% in fiscal 2012 compared with 2011.
ETC markets and sells its products and services through its own sales force and independent sales representatives around the world. Product development, guided by customer feedback, is key to ETC's strategy for sales growth. Included among ETC's product innovations are the GYROLAB GL-6000's replication of physiologically stressful in-flight situations for training; the Authentic Tactical Fighting System's simulation of a high-gravity force fighter aircraft; and the Advanced Disaster Management Simulator's library of visual environments that include, besides aircraft accidents, building fires, wildfires, and school shootings.
Historically, in any given fiscal year, a substantial portion of ETC's revenues are generated by key contracts with a small number of customers. In fiscal 2012 and prior years, its Aerospace segment has been awarded three large, multi-year contracts from the US Department of Defense. Its aircrew training systems and altitude chamber products are generally sold to US and foreign governmental agencies. Municipalities, quasi-governmental agencies, and training schools are the main customers for disaster management simulators. Most sterilizer sales are made domestically, while hyperbaric and environmental system sales are also domestic, as well as international.
Company director H.F. Lenfest, a veteran of the cable TV industry, controls ETC with about a 67% stake. Chairman and CEO William Mitchell, who founded ETC in 1969, owns about 14% of the company.