Exhibit 99.1 TECHNOLOGY RESEARCH CORPORATION ANNOUNCES RECORD FOURTH QUARTER AND YEAR END REVENUESCLEARWATER, FLORIDA, May 9, 2005 -- Technology Research Corporation (“TRC”), (NASDAQ-TRCI),announced today record revenues for the fourth quarter and year ended March 31, 2005. Revenuesfor the fourth quarter were $15,528,081, compared to $6,658,512 reported in the same quarterlast year, an increase of 133%. Net income was $857,881 for the fourth quarter, compared to$617,808 for the same quarter last year, an increase of 39%. Basic and diluted earnings were$.15 per share for the fourth quarter compared to basic earnings of $.11 per share and dilutedearnings of $.10 per share for the same quarter last year.Revenues for the year ended March 31, 2005 (“Fiscal 2005”) were $39,433,347, compared to$24,336,637 reported in the year ended March 31, 2004 (“Fiscal 2004”), an increase of 62%.Net income for Fiscal 2005 was $2,012,509, compared to $2,676,156 reported in Fiscal 2004,a decrease of 25%. Basic earnings were $.35 per share and diluted earnings were $.34 pershare for Fiscal 2005 compared to basic earnings of $.48 per share and diluted earnings of$.46 per share for Fiscal 2004.Jerry Kendall, President and CEO stated, “We have just completed an exciting but challengingyear. The record revenue performance for the quarter and the year was accomplished bysuccessfully penetrating the important, seasonal room air conditioner (“RAC”) market with ourFire Shield® technology, achieving strong revenue growth of 16.4% in our core commercialbusiness and delivering a steady year in our military business. While we accomplished excellentrevenue growth, we are disappointed that our first year penetration of the room air conditioningmarketplace did not generate the level of net income that we had anticipated. Challenges withthe ramp-up of new offshore manufacturing facilities, material suppliers, short lead times,more product customization than expected and substantially greater freig ht expense, all impactedour expected net income.” Having established the framework for the RAC business in 2005,Mr. Kendall added, “In looking forward to our 2006 fiscal year, the Company expects to pursuerevenue growth with the focus on significantly improving net income and cash flow performance.”Commercial revenues increased by $9,266,481 for the quarter and $15,080,457 for the year en dedMarch 31, 2005, compared to same periods in the prior year, whereas military revenues decreasedby $474,324 for the quarter and $34,682 for the year. Royalty income increased $77,412 for thequarter and $50,935 for the year ended March 31, 2005, compared to the same periods in the prioryear. The increase in commercial revenues was primarily attributed to strong growth in theCompany’s core commercia l business throughout Fiscal 2005 plus shipments in the third and fourthquarters of its Fire Shield® LCDI products, which meet the new cord fire protection requirementsfor room air conditioners. Military revenues remained steady due to continued demand for theCompany’s control devices related to the Tactical Quiet Generator (TQG) programs for bothexisting and new systems. Royalties increased as the result of cancellation fees recorded bythe Company in the fourth quarter related to the termination of certain license agreements withApplica, Inc. pertaining to the use of the Company’s Fire Shield® technology.Gross profit was 19.3% of total revenues for the quarter and 24.9% for the year ended March 31, 2005,compared to 40.6% and 39.1%, respectively, for the same periods last year. The decrease was due tothe competitive pricing required for the Company to capture a significant share of the new RACmarket and those factors mentioned above which impacted the Company’s gross profit margins duringthe third and fourth quarters, specifically higher freight costs, warranty repair costs andmanufacturing start-up expenses.Income taxes as a percent of income before income taxes were 12.0% for the quarter and 23.3% forthe year ended March 31, 2005, compared to 35.0% and 30.3%, respectively, for the same periods inthe prior year. The Company’s effective tax rate varies based on the mix of income before incometaxes derived from the Company’s Honduran subsidiary, which is not subject to income taxes, andthe balance of income before income taxes, which is subject to income taxes. The Company estimatedits effective tax rate through three quarters ended December 31, 2004 to be 30.0%, but due to thehigher proportion of income before income taxes generated from its Honduras subsidiary, its actualeffective tax rate was significantly lower then anticipated.The fourth quarter dividend of $.015 per share was paid on April 22, 2005 to shareholders of recordon March 31, 2005. The Com pany paid dividends of $.06 per share during each of Fiscal 2005 andFiscal 2004.As previously announced, the Company has retained Heritage Capital to assist in the Company’sAcquisition Growth Strategy. Part of the Company’s Strategic Plan is to use carefully selectedacquisitions to supplement planned internal revenue growth in future years. Acquisitions are
targeted to expand the Company ’s markets and product lines. Targeted acquisitions would be of asize that the Company can readily assimilate and fund.TRC is an internationally recognized leader in electrical safety products that preventelectrocution 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 needsof the consumer, commercial and industrial markets worldwide. The Company also supplies powermonitors and control equipment to the United St ates Military and its prime contractors.“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: Some ofthe statements in this report constitute forward-looking statements, within the meaning of thePrivate 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 businessstrategies, 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 statementsare only predictions. Actual events as well as results may differ materially. In evaluatingthese statements , you should specifically consider the factors described throughout thisreport. We cannot be assured that future results, levels of activity, performance or goalswill be achieved.TECHNOLOGY RESEARCH CORPORATION AND SUBSIDIARYCONDENSED CONSOLIDATED STATEMENTS OF INCOME(unaudited)Three-months endedMarch 31 March 31 December 312005 2004 2004Operating revenues:Commercial $ 12,191,321 2,924,840 6,822,319Military 3,255,177 3,729,501 2,879,845Royalties 81,583 4,171 2,63115,528,081 6,658,512 9,704,795Operating expenses:Cost of sales 12,530,375 3,951,970 7,652,981Selling, general, and administrative 1,484,891 1,341,843 1,322,936Research, development and engineering 501,059 420,690 565,43314,516,325 5,714,503 9,541,350Operating income 1,011,756 944,008 163,445Interest and sundry income (37,188) 6,608 5,853Income before income taxes 974,568 950,616 169,298Income taxes 116,687 332,808 6,385Net income $ 857,881 617,808 162,913
Net income per common share:Basic $ .15 .11 .03Diluted $ .15 .10 .03Weighted average number of commonshares outstanding:Basic 5,762,563 5,717,801 5,756,292Diluted 5,891,856 6,082,931 5,913,005Dividends paid $ .015 .015 .015Year endedM arch 31 March 312005 2004Operating revenues:Commercial $ 27,022,170 11,941,713Military 12,269,581 12,304,263Royalties 141,596 ; 90,66139,433,347 24,336,637Operati ng expenses:Cost of sales 29,618,620 14,830,606Selling, general, and administrative 5,138,840 4,304,979Research, development and engineering 2,034,385 1,380,295Other (1,390) (1,194)36,790,455 20,514,686Operating income 2,642,892 3,821,951Interest and sundry income (18,855) 14,853Income before income taxes 2,624,037 3,836,804Income taxes 611,528 1,160,648Net income $ 2,012,509 2,676,156Net income per common share:Basic $ .35 .48Diluted $ .34 .46Weighted average number of commonshares outstanding:Basic 5,754,816 5,589,181Diluted 5,954,052 5,827,726Dividends paid $ .06 .06TECHNOLOGY RESEARCH CORPORATION AND SUBSIDIARYCONDENSED CONSOLIDATED BALANCE SHEETS(unaudited)*March 31 March 31ASSETS 2005 2004Current assets:Cash and cash equivalents $ 815,411 5,968,122Short-term investments 487,072 -Accounts receivable, net 13,114,548 3,420,701Inventories 11,460,302 5,633,177Prepaid expenses and other current assets 514,922 206,295Deferred income taxes 488,413 239,169Total current assets 26,880,668 15,467,464Property, plant and equipment 13,560,106 10,268,976Less accumulated depreciation 8,089,950 7,203,205Net property, plant and equipment 5,470,156 3,065,771Other assets 96,004 38,633$ 32,446,828 18,571,868LIABILITIES AND STOCKHOLDERS' EQUITYCurrent liabilities:Short term debt $ 3,000,000 -Trade accounts payable 7,970,920 1,547,979Accrued expenses 1,327,944 767,185Dividends payable 100,175 99,295Income taxes payable 112,239 431,093Deferred income - 10,525Total current liabilities 12,511,278 2,856,077Long term debt 2,350,000 -Deferred income - 28,951Deferred income taxes 378,143 235,120Total liabilities 15,239,421 3,120,148Stockholders' equity:Common stock 2,955,641 2,932,377Additional paid-in capital 8,483,237 8,417,686Retained earnings 5,808,674 4,141,802Treasury stock, 21,500 shares at cost (40,145) (40,145)Total stockholders' equity 17,207,407 15,451,720$ 32,446,828 18,571,868* The condensed consolidated balance sheet is derived from the Companys audited balance sheet as of that date. # # #
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8-K Filing
Technology Research (TRCI) Inactive 8-KResults of Operations and Financial Condition
Filed: 10 May 05, 12:00am