Exhibit 99.1
TECHNOLOGY RESEARCH CORPORATION REPORTS SECOND QUARTER FINANCIAL RESULTS REFLECTING
CONTINUING IMPROVED PROFITABILITY ON LOWER REVENUES
CLEARWATER, FLORIDA, November 13, 2007 -- Technology Research Corporation (“TRC”), (NASDAQ-TRCI), today announced revenues and earnings for its second fiscal quarter ended September 30, 2007.
Revenues were $9.3 million, a decrease of $.4 million or 5% from the revenues reported in the same quarter last year. Net income for the second fiscal quarter ended September 30, 2007 was $.4 million compared with net loss of ($.4) million for the fiscal quarter ended September 30, 2006. Diluted net income is $.07 per share for the current quarter compared with diluted net loss of $.07 per share for the same quarter last year.
Orders for the second quarter were $9.3 million, an increase of $3.0 million over the same quarter last year. Military orders were $3.8 million, an increase of $2.8 million over the second quarter of the previous year and Commercial orders were $5.5 million, an increase of $.2 million from the second quarter of the prior year.
Owen Farren, President & CEO said, “Operationally, TRC’s improved second quarter and year to date performance is mostly due to a favorable mix of more profitable business when compared with the prior year and the restructuring program undertaken in the fourth quarter of fiscal 2007. Through six months, our restructuring program has helped us reach our goal of reducing costs and expenses and improving productivity.” Farren continued, “The increase in revenues in the Military market is exceeded by a decrease in the Commercial business due to a 75% decline in our room air conditioner revenues compared with the second quarter of last year. The lost room air conditioner business is not profitable for TRC at current market pricing. In response to our belief that our patented technology has been infringed, we are continuing our vigorous defense of our patented intellectual property for the room air conditioner market.”
Mr. Farren concluded, “Our balance sheet is again stronger; we were able to pay down $2 million of debt during the quarter and we are now debt free. Days sales outstanding continued to improve this quarter, but with the increase in inventory during the current quarter, our inventory turns declined. We continue to focus on improving supply chain management, inventory turnover and on time customer deliveries.”
The first quarter dividend of $.02 per share was paid on October 19, 2007 to shareholders of record on September 28, 2007.
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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.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three Months Ended Sept 30, | Six months ended Sept 30, | ||||||||||||
2007 | 2006 | 2007 | 2006 | ||||||||||
| Operating revenues: | |||||||||||||
| Commercial | $ | 5,306 | 7,227 | 11,212 | 15,181 | ||||||||
| Military | 3,953 | 2,478 | 7,705 | 5,140 | |||||||||
| 9,259 | 9,705 | 18,917 | 20,321 | ||||||||||
| Operating expenses: | |||||||||||||
| Cost of sales | 6,405 | 7,739 | 13,223 | 15,925 | |||||||||
| Selling, general and administrative | 1,864 | 1,845 | 3,586 | 3,724 | |||||||||
| Research, development and engineering | 471 | 542 | 903 | 1,029 | |||||||||
| 8,740 | 10,126 | 17,712 | 20,678 | ||||||||||
| Operating income (loss) | 519 | (421 | ) | 1,205 | (357 | ) | |||||||
| Interest and sundry income (expense) | 38 | (40 | ) | 37 | (78 | ) | |||||||
| Income (loss) before income taxes | 557 | (461 | ) | 1,242 | (435 | ) | |||||||
| Income tax expense (benefit) | 156 | (30 | ) | 358 | (24 | ) | |||||||
| Net income (loss) | $ | 401 | (431 | ) | 884 | (411 | ) | ||||||
| Earnings (loss) per common share: | |||||||||||||
| Basic | $ | .07 | (.07 | ) | .15 | (.07 | ) | ||||||
| Diluted | $ | ..07 | (.07 | ) | .15 | (.07 | ) | ||||||
| Weighted average number of common | |||||||||||||
| shares outstanding: | |||||||||||||
| Basic | 5,888,828 | 5,888,828 | 5,888,828 | 5,880,017 | |||||||||
| Diluted | 5,921,154 | 5,888,828 | 5,929,621 | 5,880,017 | |||||||||
| Dividends paid | $ | .020 | .020 | .040 | .035 | ||||||||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
Sept 30, | March 31, | ||||||||
ASSETS | 2007 | 2007 | |||||||
| Current assets: | |||||||||
| Cash and cash equivalents | $ | 1,205 | 3,471 | ||||||
| Short-term investments | 998 | 498 | |||||||
| Accounts receivable, net | 5,787 | 6,950 | |||||||
| Other receivables-current | 947 | 884 | |||||||
| Income taxes receivable | 151 | - | |||||||
| Inventories | 9,758 | 9,294 | |||||||
| Prepaid expenses and other current assets | 209 | 351 | |||||||
| Deferred income taxes | 1,093 | 999 | |||||||
| Total current assets | 20,188 | 22,447 | |||||||
| Property, plant and equipment | 15,005 | 14,884 | |||||||
| Less accumulated depreciation | 11,077 | 10,472 | |||||||
| Net property, plant and equipment | 3,928 | 4,412 | |||||||
| Other Receivables-Long term | 850 | 850 | |||||||
| Intangible Assets (net) | 493 | 523 | |||||||
| Other assets | 47 | 47 | |||||||
| $ | 25,506 | 28,279 | |||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||
| Current liabilities: | |||||||||
| Current portion of long-term debt | $ | - | 1,000 | ||||||
| Trade accounts payable | 3,326 | 3,027 | |||||||
| Accrued expenses | 1,481 | 1,409 | |||||||
| Dividends payable | 132 | 133 | |||||||
| Income taxes payable | - | 846 | |||||||
| Total current liabilities | 4,939 | 6,415 | |||||||
| Long-term debt, less current portion | - | 2,000 | |||||||
| Deferred income taxes | 109 | 139 | |||||||
| Total liabilities | 5,048 | 8,554 | |||||||
| Stockholders' equity: | |||||||||
| Common stock | 3,014 | 3,014 | |||||||
| Additional paid-in capital | 9,371 | 9,287 | |||||||
| Retained earnings | 8,113 | 7,464 | |||||||
| Treasury stock, 21,500 shares at cost | (40 | ) | (40 | ) | |||||
| Total stockholders' equity | 20,458 | 19,725 | |||||||
| $ | 25,506 | 28,279 | |||||||
* The condensed consolidated balance sheet is derived from the Company’s audited balance sheet as of that date.
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