Exhibit 99.1
TECHNOLOGY RESEARCH CORPORATION
ANNOUNCES RECORD REVENUES FOR THIRD FISCAL QUARTER
CLEARWATER, FLORIDA, February 1, 2005 -- Technology Research Corporation (TRC), (NASDAQ-TRCI) today announced record quarterly revenues for the third quarter ended December 31, 2004. Revenues for the quarter were $9,704,795, compared to $5,805,556 reported in the same quarter last year, an increase of 67%. Commercial revenues increased by $4,046,785 and military revenues and royalty income decreased slightly by $116,960 and $30,586, respectively. Net income for the current quarter was $162,913, compared to $680,388, for the same quarter last year, a decrease of 76%. Basic and diluted earnings were $.03 per share for the current quarter compared to basic earnings of $.12 per share and diluted earnings of $.11 per share for the same quarter last year. Net income was negatively impacted during the quarter by higher costs which resulted in lower operating margins.
The major factors impacting the Company’s operating margins during the quarter were (i) competitive pricing required to capture market share in the new room air conditioning (“RAC”) market; (ii) higher than planned startup expenses in Honduras and at three Far East contract manufacturers to produce the new Fire Shield® LCDI Power Cords for use on room air conditioners; and (iii) significant additional freight costs, which the Company incurred to meet its RAC customers’ delivery requirements.
Mr. Kendall, President and Chief Executive Officer, c
ommented, “As was stated in an earlier release, we are pleased with the sales effort in penetrating this new room air conditioner opportunity. However, the timing and customization of RAC orders and the implementation and coordination of bringing multiple manufacturing locations on line, in a compressed time frame, have presented start up challenges that, to date, have negatively impacted our operating profits on these products. Monthly shipments are increasing as we enter the fourth fiscal quarter, ending March 31, 2005. The Company believes it is better positioned to perform more efficiently for this application in the fourth quarter and ensuing years. As a result, we expect strong fourth quarter revenue growth, exceeding third fiscal quarter record revenues, and we remain encouraged that earnings per share will exceed the comparable quarter last year.” He added, “Aside from the important room air conditioning opportunity, we are pleased to see that our core commercial business is experiencing a strong growth year and our military business continues to be steady.”
The Company's operating revenues for the nine-month period ended December 31, 2004 were $23,905,266, compared to $17,678,125 reported in the same period of the prior year, an increase of 35%. Net income for the nine-month period was $1,154,628, compared to $2,058,348, for the same period in the prior year, a decrease of 4
4%. Basic earnings were $.20 per share and diluted earnings were $.19 per share for the nine-month period compared to basic earnings of $.37 per share and diluted earnings of $.36 per share for the same period of the prior year. Commercial and military revenues increased by $5,813,976 and $439,642, respectively, and royalty income was down $26,477 for the nine-month period ended December 31, 2004, compared to the same period of the prior year. The increase in commercial revenues was primarily attributed to RAC product shipments and strong growth in the Company’s core commercial business. Military revenues remain steady due to solid demand for its control devices related to the Tactical Quiet Generator (TQG) programs for both existing and new systems.
The third quarter dividend of $.015 per share was paid on January 21, 2005 to shareholders of record on December 31, 2004.
TRC is an internationally recognized leader in electrical safety products that prevent electrocution and electrical fires and protect against serious injury from electrical shock. Based on its core technology in ground fault sensing, products are designed to meet the needs of the consumer, commercial and industrial markets worldwide. The Company also supplies power monitors and control equipment to the United States Military and its prime contractors.
“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: Some of the statements in this report constitute forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995 and the Securities Exchange Act of 1934. These statements are related to future events, other future financial performance or business strategies, and may be identified by terminology such as "may," "will," "should," "expects," "scheduled," "plans," "intends," "anticipates," "believes," "estimates," "potential," or "continue," or the negative of such terms, or other comparable terminology. These statements are only predictions. Actual events as well as results may differ materially. In evaluating these statements, you should specifically consider the factors described throughout this report. We cannot be assured that future results, levels of activity, performance or goals will be achieved.
TECHNOLOGY RESEARCH CORPORATION AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
Three-months ended December 31 December 31 September 30 2004 2003 2004Operating revenues: Commercial $ 6,822,319 2,775,534 4,232,477 Military 2,879,845 2,996,805 2,832,299 Royalties 2,631 33,217 4,751 9,704,795 5,805,556 7,069,527Operating expenses: Cost of sales 7,652,981 3,437,637 4,925,848 Selling, general, and administrative 1,322,936 1,109,686 1,174,214 Research, development and engineering 565,433 323,173 501,423 9,541,350 4,870,496&n
bsp; 6,601,485 Operating income 163,445 935,060 468,042Interest and sundry income 5,853 4,416 6,650 Income before income taxes 169,298 939,476 474,692Income taxes 6,385 259,088 156,647 Net income $ 162,913 680,388 318,045
Net income per common share: Basic $ .03 .12 .06 Diluted $ .03 .11 .05
Weighted average number of commonshares outstanding: Basic 5,756,292 5,664,032 5,755,584 Diluted 5,913,005 5,974,485 5,947,031
Dividends paid $ .015 .015 .015
Nine-months ended December 31 December 31 2004 2003Operating revenues: Commercial $ 14,830,849 9,016,873 Military 9,014,404 8,574,762 Royalties 60,013 86,490 23,905,266 17,678,125Operating expenses: Cost of sales 17,088,245 10,878,635 Selling, general, and administrative 3,653,948 2,963,136 Research, developme
nt and engineering 1,533,327 959,605 22,275,520 14,801,376 Operating income 1,629,746 2,876,749Interest and sundry income 19,723 9,439 Income before income taxes 1,649,469 2,886,188Income taxes 494,841 827,840 Net income $ 1,154,628 2,058,348
Net income per common share: Basic $ .20 .37 Diluted $ .19 .36
Weighted average number of commonshares outstanding: Basic 5,752,015 5,549,324 Diluted 5,955,391 5,763,281
Dividends paid $ .045 .045
TECHNOLOGY RESEARCH CORPORATION AND SUBSIDIARY CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) * December 31 March 31 ASSETS 2004 2004Current assets: Cash and cash equivalents $ 1,294,821 5,968,122 Short-term investments 483,879 - Accounts receivable, net 6,560,350 3,420,701 Income taxes receivable 8,951 - Inventories 10,196,290 5,633,177 Prepaid expenses and other current assets 490,196 206,295 Deferred income taxes
254,797 239,169 Total current assets 19,289,284 15,46
7,464
Property, plant and equipment 13,499,061 10,268,976 Less accumulated depreciation 7,819,356 7,203,205 Net property, plant and equipment 5,679,705 3,065,771
Other assets 90,791 38,633 $ 25,059,780 18,571,868
LIABILITIES AND STOCKHOLDERS' EQUITYCurrent liabilities: Trade accounts payable $ 5
,489,111 1,547,979 Accrued expenses 798,886 767,185 Dividends payable 99,900 99,295 Income taxes payable - 431,093 Short-term debt 2,000,000 - Deferred income 10,525 10,525 Total current liabilities 8,398,422 2,856,077Deferred income 21,058 28,951Deferred income taxes 235,120 235,120 Total liabilities 8,654,600 3,120,148Stockholders' equity: Common stock 2,947,439 2,932,377 Additional paid-in capital 8,460,484 8,417,686 Retained earnings 5,037,402 4,141,802 Treasury stock, 21,500 shares at cost (40,145) (40,145) Total stockholders' equity 16,405,180 15,451,720 $ 25,059,780 18,571,868
* The condensed consolidated balance sheet is derived from the Companys audited
balance sheet as of that date.
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Technology Research (TRCI) Inactive
Filed: 2 Feb 05, 12:00am