Exhibit 99.1
TECHNOLOGY RESEARCH CORPORATION REPORTS FINANCIAL RESULTS INCLUDING RECORD ANNUAL REVENUES
AND RECORD FOURTH QUARTER EARNINGS
CLEARWATER, FLORIDA, May 5, 2006 -- Technology Research Corporation (TRC), (NASDAQ-TRCI), today announced
revenues and earnings for its fourth quarter and fiscal year ended March 31, 2006.
Fourth quarter revenues were $15.0 million, a decrease of $.5 million or 3% from the $15.5 million reported
in the same quarter last year. Net income for the fourth quarter increased $.4 million to $1.2 million compared
with $.9 million for the prior year. Diluted net income per share increased $.06 to $.21 per share for the
fourth quarter compared with $.15 per share for the same quarter last year.
For the full fiscal 2006 year, revenues were a record $45.6 million, an increase of $6.2 million, or 16%, over
the $39.4 million of revenues in the prior fiscal year. Net income was $2.1 million for the fiscal year ended
March 31, 2006, an improvement of $.1 million from fiscal 2005 results. Diluted net income per share increased
$.02 from $.34 to $.36 in fiscal 2006.
Robert S. Wiggins, Chairman, President & CEO said, Our excellent fourth quarter performance, including an all
time TRC quarterly earnings record, combined with our strong third quarter, allowed the Company to overcome a
slow start in the first two quarters of the fiscal year. This outstanding second half achievement resulted in
the Company exceeding last years net income as well as contributing to our significantly improved balance sheet.
We were able to achieve these results in spite of incurring more than $.3 million in legal fees related to the
patent infringement lawsuit, which was initiated during fiscal 2006. Our strong performance in fiscal 2006
generated significant cash flow from operations. Cash and short-term investments increased $1.8 million over
our balances at the close of our previous fiscal year, while total debt declined $2.4 million to $3.0 million
during the same period. Wiggins added, Our financial results are a reflection of the Companys dedication and
commitment to controlling costs despite the intensely competitive nature of the markets in which our business
operates, as well as the increases in our raw material costs we experienced, especially the 60% increase in
copper prices over this past year. Improved operating efficiencies helped us to maintain our gross profit
percentage within 1% of the previous year.
With respect to fiscal 2007, TRC is forecasting revenues to increase 10 to 15% from fiscal 2006 levels with the
largest increases in the international and U.S. commercial markets. Military revenues are expected to remain
steady but slightly lower than our outstanding fiscal 2006 results. Room air conditioner revenues are forecasted
to be at approximately the same level as in fiscal 2006, however, the Company plans to introduce a lower cost
technology for the room air conditioner market that should improve our competitive position. Operating expenses
are estimated to grow at approximately the same rate as our revenues reflecting increased investments in new
products and markets that are expected to accelerate growth in fiscal 2008. Based on these forecasts, net income
should increase at a rate at or above our revenue growth rate. From a balance sheet perspective, we are planning
to generate positive cash flow from operations that will allow us to continue paying down our debt as well as
funding strategic growth for our future. TRC intends to introduce several new products in fiscal 2007 that will
not only advance our leadership in electrical safety products with additional features and functionality but will
also provide us with new, competitive low-cost alternative solutions that the market is demanding. In summary,
fiscal 2007 is expected to be a year where the Company makes key investments for the future while achieving
sustainable growth in revenues and earnings. This guidance will not be updated during the year unless there is a
significant change in forecasts. From a quarterly perspective, as many investors are aware, TRCs revenues tend
to be seasonal in nature, mostly as a result of the seasonal nature of our room air conditioner business. The
highest demand for most of our room air conditioner products runs from November through March when manufacturers
are preparing for building units for the upcoming season. The Companys fiscal third and fourth quarters are the
highest revenue quarters while the first and second quarters usually have relatively lower revenues. TRC believes
that the best measure of our success is from year-to-year rather than from quarter-to-quarter.
The fourth quarter dividend of $.015 per share was paid on April 21, 2006 to shareholders of record on March 31,
2006.
************
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 Year ended
----------------------- ------------------------
March 31 March 31 March 31 March 31
2006 2005 2006 2005
---- ---- ---- ----
Operating revenues:
Commercial $ 10,926,096 12,191,321 32,250,339 27,022,170
Military 4,100,984 3,255,177 13,369,478 12,269,581
Royalties - 81,583 - 141,596
---------- ---------- ---------- ----------
15,027,080 15,528,081 45,619,817 39,433,347
---------- ---------- ---------- ----------
Operating expenses:
Cost of sales 11,309,616 12,530,375 34,977,728 29,618,620
Selling, general, and administrative 1,723,886 1,484,888 5,967,076 5,138,838
Research, development and engineering 511,094 501,062 1,955,345 2,034,387
---------- ---------- ---------- ----------
13,544,596 14,516,325 42,900,149 36,791,845
---------- ---------- ---------- ----------
Operating income 1,482,484 1,011,756 2,719,668 2,641,502
Interest and sundry income (expense) (51,296) (37,188) (195,655) (17,465)
---------- ---------- ---------- ----------
Income before income taxes 1,431,188 974,568 2,524,013 2,624,037
Income tax expense 193,485 116,687 412,050 611,528
---------- ---------- ---------- ----------
Net income $ 1,237,703 857,881 2,111,963 2,012,509
========== ========== ========== ==========
Net income per common share:
Basic $ .21 .15 .37 .35
Diluted $ .21 .15 .36 .34
Weighted average number of common
shares outstanding:
Basic 5,805,637 5,762,563 5,786,129 5,754,816
Diluted 5,859,660 5,891,856 5,833,947 5,954,052
Dividends paid $ .015 .015 .060 .060
TECHNOLOGY RESEARCH CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
*
March 31 March 31
ASSETS 2006 2005
Current assets: ---- ----
Cash and cash equivalents $ 2,607,011 815,411
Short-term investments 500,415 487,072
Accounts receivable, net 10,729,579 13,114,548
Inventories 9,632,873 11,460,302
Prepaid expenses and other current assets 210,274 514,922
Deferred income taxes 445,262 488,413
---------- ----------
Total current assets 24,125,414 26,880,668
---------- ----------
Property, plant and equipment 14,284,279 13,560,106
Less accumulated depreciation 9,345,604 8,089,950
---------- ----------
Net property, plant and equipment 4,938,675 5,470,156
---------- ----------
Other assets 69,807 96,004
---------- ----------
$ 29,133,896 32,446,828
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 1,000,000 3,000,000
Trade accounts payable 4,848,934 7,970,920
Accrued expenses 1,296,271 1,327,944
Dividends payable 101,111 100,175
Income taxes payable 357,432 112,239
---------- ----------
Total current liabilities 7,603,748 12,511,278
Long-term debt, less current portion 2,000,000 2,350,000
Deferred income taxes 244,058 378,143
---------- ----------
Total liabilities 9,847,806 15,239,421
---------- ----------
Stockholders' equity:
Common stock 2,982,811 2,955,641
Additional paid-in capital 8,770,246 8,483,237
Retained earnings 7,573,178 5,808,674
Treasury stock, 21,500 shares at cost (40,145) (40,145)
---------- ----------
Total stockholders' equity 19,286,090 17,207,407
---------- ----------
$ 29,133,896 32,446,828
========== ==========
* The condensed consolidated balance sheet is derived from the Companys audited
balance sheet as of that date.
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