Exhibit 99.1
TECHNOLOGY RESEARCH CORPORATION
ANNOUNCES RESULTS FOR SECOND FISCAL QUARTER
CLEARWATER, FLORIDA, November 1, 2005 -- Technology Research Corporation (TRC), (NASDAQ-TRCI),
today announced revenues and earnings for its second fiscal quarter ended September 30, 2005. Revenues were
$8,661,685, compared to $7,069,527 reported in the same quarter last year, an increase of 23%. The Company
reported a net loss for the current quarter of $(244,743), compared to net income of $318,045 for the same quarter
last year. Basic and diluted losses were $(.04) per share for the current quarter compared to basic earnings of $.06
per share and diluted earnings of $.05 per share for the same quarter last year.
Revenues for the six-month period ended September 30, 2005 were $19,238,435, compared to $14,200,471
reported in the same period of the prior year, an increase of 35%. Net income for the six-month period was $48,092,
compared to $991,715, for the same period last year. Basic and diluted earnings were $.01 per share for the six-month
period compared to basic and diluted earnings of $.17 per share for the same period last year.
While revenues were higher for both the quarter and six-month period ended September 30, 2005, compared to same
periods last year, net income was impacted by lower gross profit margins and non-recurring expenses totaling some
$550,000 incurred during the fiscal quarter, which included termination and severance costs, additional product warranty
costs associated with the new room air conditioning (RAC) product and legal expenses to defend Company patents.
Robert S. Wiggins, Chairman, President & CEO said, "The Companys earnings performance for the first two quarters
of fiscal 2006 has not been satisfactory. Revenue growth was strong, as compared to the previous year; however, net
income has not followed because of lower margins and special charges in the quarter. Gross profit margins, on products
across the board, will continue to be affected by higher commodity prices for metals such as copper and silver, as well
as the impact of oil prices on resins for plastics and fuel costs resulting in higher freight costs." Wiggins continued, "The
Company expects to return to profitability in the third quarter, showing both net income and revenue growth as compared
to the same quarter last year. We expect our military business to be consistent with last year, and while we expect that
our overall commercial business revenues will continue to grow, the market remains highly competitive with pressure on
margins. The Company recently added a large electronics retailer and a chain of super centers as new customers for our
commercial products. He added, "The Company now has more experience in supplying the RAC market and believes
the RAC business will provide a positive contribution to the Companys profit and cash flow for the remainder of the fiscal
year. We further expect that the fiscal 2006 total RAC revenues will exceed those of fiscal 2005. Our dedication and
principal focus is on improving the Companys profit performance."
For the quarter ended September 30, 2005, commercial revenues increased by $1,305,969, military revenues increased
by $290,940 and royalty income decreased by $4,751 compared to the same period ended September 30, 2004. The
increase in commercial revenues was primarily attributed to shipments of product into the RAC market, and to a lesser
extent brand label shipments. Military revenues showed some strengthening in the quarter as a result of the Department
of Defense releasing supplemental spending for its fiscal 2005 year in late June. For the six-month period ended
September 30, 2005, commercial revenues increased by $5,457,337, military revenues decreased by $361,991 and
royalty income decreased by $57,382 compared to the same period ended September 30, 2004. The increase in
commercial revenues was primarily attributable to shipments of product into the RAC market, and to a lesser extent
product expansion into retail stores and strong brand label shipments. The decrease in military revenues resulted from a
delay in certain follow-on equipment releases of existing contracts for control devices related to the Tactical Quiet
Generator (TQG) programs. In addition, certain direct military orders could not be placed until June, when the Department
of Defense released supplemental spending for its fiscal 2005 year. New orders totaling $8,320,129 were booked in the
quarter, as previously announced, and shipments commenced during the quarter with the remainder scheduled out over the
next 12 months. The second quarter dividend of $.015 per share was paid on October 21, 2005 to shareholders of
record on September 30, 2005.
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 OPERATIONS
(unaudited)
Three-months ended
September 30 September 30 June 30
2005 2004 2005
Operating revenues:
Commercial $ 5,538,446 4,232,477 7,927,421
Military 3,123,239 2,832,299 2,649,329
Royalties - 4,751 -
8,661,685 7,069,527 10,576,750
Operating expenses:
Cost of sales 6,882,845 4,925,848 8,283,552
Selling, general, and administrative 1,516,999 1,174,214 1,375,076
Research, development and engineering 538,018 501,423 487,404
8,937,862 6,601,485 10,146,032
Operating income (loss) (276,177) 468,042 430,718
Interest and sundry income (expense) (54,155) 6,650 (40,271)
Income (loss) before income taxes (330,332) 474,692 390,447
Income tax expense (benefit) (85,589) 156,647 97,612
Net income (loss) $ (244,743) 318,045 292,835
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Net income (loss) per common share:
Basic $ (.04) .06 .05
Diluted $ (.04) .05 .05
Weighted average number of common
shares outstanding:
Basic 5,775,625 5,755,584 5,774,375
Diluted 5,775,625 5,947,031 5,841,212
Dividends paid $ .015 .015 .015
Six-months ended
September 30 September 30
2005 2004
Operating revenues:
Commercial $ 13,465,867 8,008,530
Military 5,772,568 6,134,559
Royalties - 57,382
19,238,435 14,200,471
Operating expenses:
Cost of sales 15,166,395 9,435,264
Selling, general, and administrative 2,892,074 2,331,012
�� Research, development and engineering 1,025,424 967,894
19,083,893 12,734,170
Operating income 154,542 1,466,301
Interest and sundry income (expense) (94,427) 13,870
Income before income taxes 60,115 1,480,171
Income taxes 12,023 488,456
Net income $ 48,092 991,715
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Net income per common share:
Basic $ .01 .17
Diluted $ .01 .17
Weighted average number of common
shares outstanding:
Basic 5,775,018 5,750,111
Diluted 5,836,472 5,966,279
Dividends paid $ .03 .03
TECHNOLOGY RESEARCH CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
*
September 30 March 31
ASSETS 2005 2005
Current assets:
Cash and cash equivalents $ 2,273,926 815,411
Short-term investments 1,169 487,072
Accounts receivable, net 6,725,798 13,114,548
Income tax receivable 44,241 -
Inventories 12,005,117 11,460,302
Prepaid expenses and other current assets 302,391 514,922
Deferred income taxes 513,119 488,413
Total current assets 21,865,761 26,880,668
Property, plant and equipment 14,066,984 13,560,106
Less accumulated depreciation 8,712,501 8,089,950
Net property, plant and equipment 5,354,483 5,470,156
Other assets 64,088 96,004
$ 27,284,332 32,446,828
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt $ 2,210,200 3,000,000
Trade accounts payable 4,086,405 7,970,920
Accrued expenses 1,061,932 1,327,944
Dividends payable 100,273 100,175
Income taxes payable - 112,239
Total current liabilities 7,458,810 12,511,278
Long-term debt 2,350,000 2,350,000
Deferred income taxes 351,352 378,143
Total liabilities 10,160,162 15,239,421
Stockholders' equity:
Common stock 2,956,661 2,955,641
Additional paid-in capital 8,524,149 8,483,237
Retained earnings 5,683,505 5,808,674
Treasury stock, 21,500 shares at cost (40,145) (40,145)
Total stockholders' equity 17,124,170 17,207,407
$ 27,284,332 32,446,828
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* The condensed consolidated balance sheet is derived from the Companys audited balance sheet as of that date.
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