Exhibit 99.1
| For: TECHNOLOGY RESEARCH CORPORATION | Contact: Thomas G. Archbold |
| 5250 140th Avenue North | Chief Financial Officer |
| Clearwater, Florida 33760 | Tel: (727) 812-0659 |
| Owen Farren, President and CEO | Fax: (727) 535-9691 |
| Web Page: www.trci.net |
TECHNOLOGY RESEARCH CORPORATION REPORTS FISCAL YEAR AND FOURTH QUARTER FINANCIAL RESULTS
RECORD EARNINGS AND A STRATEGIC ACQUISITION HIGHLIGHT FISCAL YEAR RESULTS
CLEARWATER, FLORIDA, June 7, 2010 -- Technology Research Corporation (“TRC”), (NASDAQ-TRCI), today announced revenue and earnings for its fiscal year and fourth quarter ended March 31, 2010.
Revenue was $34.8 million for the fiscal year ended March 31, 2010, an increase of $1.1 million from revenue of $33.7 million for the fiscal year ended March 31, 2009. Net income for the fiscal year ended March 31, 2010 was $2.8 million or $.47 per diluted common share compared with net income of $1.6 million or $0.27 per diluted common share for the fiscal year ended March 31, 2009.
As previously announced on March 31, 2010, TRC acquired 100% of the stock of Patco Electronics, Inc. (“Patco”) from its shareholders for $5.0 million in cash, approximately 675,000 shares of TRC common stock and contingent cash payments if certain revenue targets for Patco related sales are met for either or both of the two years after the closing of the transaction. The cash portion of the purchase price was funded with cash on hand. The acquisition is expected to be accretive to TRC’s earnings per share in its fiscal year ending March 31, 2011. As the Patco acquisition will involve significant amortization of intangibles in fiscal 2011, future earnings releases will be supplemented by an EBITDA analysis.
Revenue was $7.9 million for the fiscal quarter ended March 31, 2010, which was flat with revenue of $8.0 million for the fiscal quarter ended March 31, 2009. Net loss for the fourth fiscal quarter ended March 31, 2010 was ($0.1) million or ($.01) per diluted common share compared with net income of $0.4 million or $.06 per diluted common share for the fiscal quarter ended March 31, 2009. Fourth quarter expenses in fiscal year 2010 included $0.5 million of non-deductible expenses incurred to purchase Patco.
Orders for the fiscal year were $26.0 million, a decrease of $14.8 million from the prior fiscal year. Military orders were $10.5 million, a decrease of $13.1 million from the previous year and commercial orders were $15.4 million, a decrease of $1.7 million from the prior year. Orders for the fourth fiscal quarter were $9.0 million, a decrease of $5.8 million from the same fiscal quarter last year. Military orders were $5.3 million, a decrease of $6.7 million from the fourth fiscal quarter of the previous year and commercial orders were $3.7 million, an increase of $0.9 million from the fourth quarter of the prior year. The decrease in military orders is principally due to our prime military customer releasing full calendar year orders prior to the closing of our fiscal 2009 year, resulting in orders for the fourth quarter and full year of fiscal 2009 being uncharacteristically high.
Net cash and cash equivalents and short-term investments were approximately $8.2 million at March 31, 2010, after payment of $5.0 million for the cash portion of the Patco purchase price, an increase of approximately $2.3 million from March 31, 2009.
Owen Farren, President & CEO said, “Fiscal year 2010 resulted in record net income and strong cash flow from operations as the Company began to realize the benefits of our strategic initiatives to migrate the business to being more of a solutions based electrical applications technology provider. At the same time the financial strength of the Company allowed us to complete the self funded acquisition of Patco which is a further step in executing on our strategy to deliver future growth to our shareholders.
Mr Farren added, “With the current strength of our balance sheet and the increased diversification in our product portfolio, I feel confident that the Company is well positioned to capitalize on the emerging opportunities of intelligent power management in both our Commercial and Military markets.
The fourth quarter dividend of $.02 per share was paid on April 15, 2010 to shareholders of record as of March 31, 2010.
************
TRC is a recognized leader in providing cost effective engineered solutions for applications involving power management and control, intelligent battery systems technology and electrical safety products based on our proven ground fault sensing and Fire Shield® technology. These products are designed, manufactured and distributed to 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. More information is available at www.trci.net.
“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 SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
Three Months Ended March 31, | Year Ended March 31, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Revenue: | ||||||||||||||||
| Commercial | $ | 4,140 | 3,562 | 14,709 | 18,582 | |||||||||||
Military | 3,619 | 4,215 | 19,706 | 14,674 | ||||||||||||
| Royalties | 160 | 207 | 418 | 477 | ||||||||||||
| Total revenue | 7,919 | 7,984 | 34,833 | 33,733 | ||||||||||||
Cost of sales | 4,994 | 5,126 | 21,196 | 22,266 | ||||||||||||
| Gross profit | 2,925 | 2,858 | 13,637 | 11,467 | ||||||||||||
| Operating expenses: | ||||||||||||||||
Selling and marketing | 582 | 687 | 2,444 | 2,899 | ||||||||||||
| General and administrative | 979 | 954 | 3,896 | 4,627 | ||||||||||||
Research and development | 693 | 665 | 2,589 | 2,381 | ||||||||||||
| Acquisition related expenses | 515 | - | 515 | - | ||||||||||||
| Total operating expenses | 2,769 | 2,306 | 9,444 | 9,907 | ||||||||||||
Income from operations | 156 | 552 | 4,193 | 1,560 | ||||||||||||
Other income (expense): | ||||||||||||||||
| Other income, net | 24 | 45 | 29 | 590 | ||||||||||||
Interest expense | - | - | - | (10 | ) | |||||||||||
| Other income (expense) net | 24 | 45 | 29 | 580 | ||||||||||||
Income before income taxes | 180 | 597 | 4,222 | 2,140 | ||||||||||||
| Income tax expense | 256 | 208 | 1,384 | 500 | ||||||||||||
Net income (loss) | $ | (76) | 389 | 2,838 | 1,640 | |||||||||||
Earnings per share - basic | $ | (0.01) | 0.06 | 0.48 | 0.27 | |||||||||||
Earnings per share - diluted | $ | (0.01) | 0.06 | 0.47 | 0.27 | |||||||||||
Shares outstanding - basic | 5,931,954 | 5,890,828 | 5,902,532 | 5,890,828 | ||||||||||||
Shares outstanding - diluted | 6,074,212 | 5,899,814 | 5,996,599 | 5,897,237 | ||||||||||||
Dividend Paid | 0.02 | 0.02 | 0.08 | 0.08 | ||||||||||||
TECHNOLOGY RESEARCH CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
March 31, | March 31, | ||||||
ASSETS | 2010 | 2009 | |||||
Current assets: | |||||||
| Cash and cash equivalents | $ | 8,216 | $ | 2,954 | |||
Short-term investments | - | 3,996 | |||||
| Trade and other accounts receivable, net | 4,400 | 5,372 | |||||
Income taxes receivable | 29 | 631 | |||||
| Inventories | 7,315 | 8,013 | |||||
Deferred income taxes | 729 | 622 | |||||
| Prepaid expenses and other current assets | 299 | 265 | |||||
Total current assets | 20,988 | 21,853 | |||||
Property, plant and equipment, net | 3,123 | 3,189 | |||||
| Intangible asset, net | 3,929 | 404 | |||||
| Goodwill | 5,465 | - | |||||
Other assets | 33 | 33 | |||||
Total assets | $ | 33,538 | $ | 25,479 | |||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Trade accounts payable | $ | 1,423 | 1,309 | ||||
| Unsettled treasury obligation | - | 998 | |||||
| Accrued expenses | 1,720 | 1,422 | |||||
Accrued dividends | 134 | 121 | |||||
Total current liabilities | 3,277 | 3,850 | |||||
Income taxes payable | 303 | 111 | |||||
Deferred income taxes | 2,460 | 37 | |||||
Patco earn-out | 738 | - | |||||
| Total liabilities | 6,778 | 3,998 | |||||
| Stockholders' equity: | |||||||
Common stock | 3,379 | 3,015 | |||||
| Additional paid-in capital | 12,570 | 9,982 | |||||
Retained earnings | 10,867 | 8,524 | |||||
| Common stock held in treasury | (56 | ) | (40 | ) | |||
Total stockholders' equity | 26,760 | 21,481 | |||||
| Total liabilities and stockholders' equity | $ | 33,538 | $ | 25,479 | |||