UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 2002
Commission File Number: 0-13763
TECHNOLOGY RESEARCH CORPORATION
(Exact name of registrant as specified in its charter)
Florida 59-2095002
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No,)
5250 140th Avenue North, Clearwater, Florida 33760
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (727) 535-0572
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for a shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
YES [X] NO [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at Janaury 31, 2003
Common stock, $.51 par value 5,440,370
TECHNOLOGY RESEARCH CORPORATION
INDEX
Part I - Financial Information Page
Item 1. Financial Statements
Condensed Consolidated Balance Sheets (unaudited)
- December 31, 2002 and March 31, 2002.............................. 1
Condensed Consolidated Statements of Operations (unaudited)
- Three months and nine months ended
December 31, 2002 and December 31, 2001........................... 2
Condensed Consolidated Statements of Cash Flows (unaudited)
- Nine months ended December 31, 2002 and December 31, 2001......... 3
Notes to Condensed Consolidated Financial Statements (unaudited)......... 4
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations............................. 5
Item 3 - Quantitative and Qualitative Disclosure Regarding Market Risk.. 10
Item 4 - Controls and Procedures........................................ 10
Part II - Other Information
Item 1 - Legal Proceedings.............................................. 11
Item 2 - Changes in Securities and Use of Proceeds...................... 11
Item 3 - Defaults Upon Senior Securities................................ 11
Item 4 - Submission of Matters to a Vote of Security Holders............ 11
Item 5 - Other Information.............................................. 11
Item 6 - Exhibits and Reports on Form 8-K............................... 11
Signatures.............................................................. 12
Certifications.......................................................... 13
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
TECHNOLOGY RESEARCH CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
December 31 March 31
2002 2002
----------- ---------
ASSETS
Current assets:
Cash and cash equivalents $ 1,763,364 1,163,099
Accounts receivable, net 2,608,587 2,516,603
Inventories:
Raw material 2,636,297 3,130,889
Work in process 376,511 190,348
Finished goods 1,577,066 1,477,494
---------- ----------
Total inventories 4,589,874 4,798,731
Prepaid expenses 184,471 97,720
Deferred income taxes 332,449 271,569
---------- ----------
Total current assets 9,478,745 8,847,722
---------- ----------
Property, plant, and equipment 9,718,628 9,493,313
Less accumulated depreciation 6,194,879 5,795,667
---------- ----------
Net property, plant, and equipment 3,523,749 3,697,646
---------- ----------
Non-current deferred income taxes - 162,861
Other assets 40,388 58,708
---------- ----------
$ 13,042,882 12,766,937
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 695,571 551,300
Accrued expenses 305,021 293,422
Dividends payable 69,393 68,804
Income taxes payable 41,619 -
---------- ----------
Total current liabilities 1,111,604 913,526
Long-term debt - 500,000
Deferred income - long term 50,000 50,000
Deferred income taxes - long term 90,285 -
---------- ----------
Total liabilities 1,251,889 1,463,526
---------- ----------
Stockholders' equity:
Common stock 2,785,554 2,784,088
Additional paid-in capital 7,528,194 7,526,472
Retained earnings 1,517,390 1,032,996
---------- ----------
11,831,138 11,343,556
Treasury stock, at cost - 21,500 shares (40,145) (40,145)
---------- ----------
Total stockholders' equity 11,790,993 11,303,411
---------- ----------
$ 13,042,882 12,766,937
========== ==========
See accompanying notes to condensed consolidated financial statements.
- 1 -
TECHNOLOGY RESEARCH CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Three Months Ended Nine Months Ended
December 31 December 31
2002 2001 2002 2001
---------- ---------- ---------- ----------
Operating revenues:
Net sales $ 4,557,732 3,688,432 12,300,369 12,568,494
Royalties 24,552 36,296 106,049 134,258
---------- ---------- ---------- ----------
4,582,284 3,724,728 12,406,418 12,702,752
---------- ---------- ---------- ----------
Operating expenses:
Cost of sales 3,066,482 2,608,760 8,256,462 9,301,505
Selling, general, and
administrative 741,506 801,053 2,283,489 2,454,589
Research, development and
engineering 309,182 246,835 909,453 745,502
---------- ---------- ---------- ----------
4,117,170 3,656,648 11,449,404 12,501,596
---------- ---------- ---------- ----------
Operating income 465,114 68,080 957,014 201,156
---------- ---------- ---------- ----------
Other income (deductions):
Interest and sundry income 1,553 2,418 6,668 5,718
Interest expense - (12,650) (1,153) (71,713)
Loss on disposal of asset (24,032) (642) (34,737) (291)
---------- ---------- ---------- ----------
(22,479) (10,874) (29,222) (66,286)
---------- ---------- ---------- ----------
Income before income taxes 442,635 57,206 927,792 134,870
Income tax expense 130,672 13,937 280,243 33,353
---------- ---------- ---------- ----------
Net income $ 311,963 43,269 647,549 101,517
========== ========== ========== ==========
Basic earnings per share $ 0.06 0.01 0.12 0.02
========== ========== =========== =========
Weighted average number of common
shares outstanding 5,438,215 5,437,497 5,437,784 5,437,497
========== ========== ========== ==========
Diluted earnings per share $ 0.06 0.01 0.12 0.02
========== ========== =========== =========
Weighted average number of
common and equivalent
shares outstanding 5,449,051 5,456,994 5,453,231 5,455,262
========== ========== ========== ==========
Dividends paid $ 0.01 0.01 0.03 0.03
========== ========== ========== ==========
See accompanying notes to condensed consolidated financial statements.
- 2 -
TECHNOLOGY RESEARCH CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Nine Months Ended
December 31
2002 2001
---------- ----------
Cash flows from operating activities:
Net income $ 647,549 101,517
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 657,412 662,300
Amortization 325,631 293,780
Loss on disposal of assets 34,737 291
Decrease (increase) in accounts receivable (91,984) 880,475
Decrease in inventories 208,857 871,755
Decrease (increase) in prepaid expenses (412,382) (281,824)
Decrease in income taxes receivable - 200,439
Change in deferred income taxes 192,266 45,751
Decrease (increase) in other assets 18,320 (17,924)
Increase (decrease) in accounts payable 144,271 (1,091,962)
Increase (decrease) in accrued expenses 11,599 (68,213)
Increase in income taxes payable 41,619 -
Decrease in deferred income - (17,648)
---------- ----------
Net cash provided by operating activities 1,777,895 1,578,737
---------- ----------
Cash flows from investing activities:
Capital expenditures (518,252) (264,930)
---------- ----------
Net cash used in investing activities (518,252) (264,930)
---------- ----------
Cash flows from financing activities:
Net payments of long-term debt (500,000) (750,000)
Proceeds from exercise of stock options 3,188 -
Dividends paid (162,566) (162,564)
---------- ----------
Net cash used in financing activities (659,378) (912,564)
---------- ----------
Increase in cash and cash equivalents 600,265 401,243
Cash and cash equivalents at beginning of period 1,163,099 184,772
---------- ----------
Cash and cash equivalents at end of period $ 1,763,364 586,015
========== ==========
Supplemental cash flow information:
Cash paid for interest $ 1,153 71,713
========= =========
Cash paid (received) for income taxes $ 46,358 (208,500)
========= =========
See accompanying notes to condensed consolidated financial statements.
- 3 -
TECHNOLOGY RESEARCH CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
December 31, 2002 and March 31, 2002
1. The financial information included herein is unaudited; however, such
information reflects all adjustments (consisting of normal recurring
adjustments) which are, in the opinion of management, necessary for the
fair statement of results for the interim period. These statements
should be read in conjunction with the consolidated financial statements
included in the Company's annual report on Form 10-K for the year ended
March 31, 2002.
The results of operations for the nine-month period ended December 31, 2002
are not necessarily indicative of the results to be expected for the full
year.
2. Basic earnings per share has been computed by dividing net earnings by the
weighted average number of common shares outstanding.
Diluted earnings per share have been computed by dividing net earnings by
the weighted average number of common and equivalent shares outstanding.
Common share equivalents included in the computation represent shares
issuable upon exercise of stock options which would have a dilutive effect
in periods where there are earnings. For the three-month and nine-month
periods ended December 31, 2002, 544,750 and 397,250 shares, respectively,
were considered anti-dilutive for purposes of calculating earnings per
share. For the three-month and nine-month periods ended December 31, 2001,
272,000 and 372,250 shares, respectively, were considered anti-dilutive for
purposes of calculating earnings per share.
- 4 -
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULT OF OPERATIONS
The following is management's discussion and analysis of certain significant
factors that have affected the Company's financial position and operating
results during the periods included in the accompanying condensed consolidated
financial statements.
Current Three Months and Nine Months Ended December 31, 2002 versus
December 31, 2001
The Company's operating revenues for the third quarter ended December 31, 2002
were $4,582,284, compared to $3,724,728 reported in the same quarter last year,
an increase of approximately 23%. Net income for the current quarter was
$311,963, compared to $43,269, for the same quarter last year, an increase of
approximately 621%. Basic and diluted earnings for the current quarter were
$.06 per share compared to $.01 per share for the same quarter last year.
The Company's operating revenues for the nine-month period ended December 31,
2002 were $12,406,418, compared to $12,702,752 reported in the same period of
the prior year, a decrease of approximately 2%. Net income for the nine-month
period was $647,549, compared to $101,517, for the same period in the prior
year, an increase of approximately 538%. Basic and diluted earnings for the
nine-month period were $.12 per share compared to basic and diluted earnings
of $.02 per share for the same period of the prior year.
The improvement in net income for the Company's third quarter and nine-month
periods was the result of increased gross profit margins and lower interest
expense. Gross profit margins improved as the result of product mix plus
productivity and quality improvements in manufacturing. Interest expense was
reduced as a result of the Company remaining debt-free during its second and
third quarters. Currently, all of the Company's $3,000,000 line of credit is
available for use, and the Company's cash balance as of December 31, 2002 grew
to $1,763,364.
For the nine-month period ended December 31, 2002, commercial revenues
decreased by $913,037, military revenues improved by $644,912 and royalty
income was down by $28,209 compared to the prior year's period. The decrease
in commercial revenues was primarily due to competitive pressures and the
current weakness in the global economy; however, commercial revenues for the
fourth quarter should strengthen somewhat as the Company recently announced
that it received orders in the amount of $650,000 for its Ground Fault Circuit
Interrupters from a major sprayer/washer manufacturer to be shipped in the
fourth quarter. Increased direct military shipments of field support parts for
existing systems and strong shipments of control devices related to the
Tactical Quiet Generator (TQG) programs resulted in record military revenues of
$2,027,695 for the Company in the third quarter.
The market for the Company's Fire Shield(r) products continues to develop.
During the second and third quarters, the Company shipped Fire Shield Power
Surge Strips, a new product, to approximately 600 Wal-Mart Stores, Inc. In
addition, during the three fiscal quarters ended December 31, 2002, Fire Shield
licensed technology generated royalties of approximately $50,000. Fire Shield
product sales and royalties currently represent approximately 1% of the
Company's total revenues. The Company believes that its patented Fire Shield
technology represents its most significant opportunity for growth.
- 5 -
The Company's gross profit margin on net sales was approximately 33% for the
quarter and nine-month periods ended December 31, 2002, compared to 29% and 26%
for the same periods last year. The improvement in the Company's gross profit
margin was the result of product mix plus productivity and quality improvements
in manufacturing.
Selling, general and administrative expenses were $741,506 for the current
quarter and $2,283,489 for the nine-month period ended December 31, 2002,
compared to $801,053 and $2,454,589 for the same periods last year, a decrease
of 7% in each period. The decrease in expenses for the nine-month period was
due to lower employee wages and benefit costs of $106,189, advertising costs
of $32,411, outside sales commissions of $22,770 and other expenses of $9,730.
Selling expenses were $435,307 for the current quarter and $1,327,972 for the
nine-month period ended December 31, 2002, compared to $453,509 and $1,417,467
for the same periods last year, a decrease of approximately 4% and 6%,
respectively. General and administrative expenses were $306,199 for the
current quarter and $955,517 for the nine-month period ended December 31, 2002,
compared to $347,544 and $1,037,122 for the same periods last year, a decrease
of approximately 12% and 8%, respectively.
Research, development and engineering expenses were $309,182 for the current
quarter and $909,453 for the nine-month period ended December 31, 2002,
compared to $246,835 and $745,502 for the same periods last year, an increase
of approximately 25% and 22%, respectively. The increase was related to the
Company re-qualifying its portable GFCI products with Underwriters Laboratories
("UL"). As previously reported in the Company's Fiscal Year 2002 Form 10-K,
UL announced on November 1, 2001 that it would change the test standard for
portable GFCI devices as a result of a National Electrical Manufacturers
Association ("NEMA") sponsored investigation of the long term performance and
installations of GFCI Dual Outlet Receptacles across the United States. All
of the Company's GFCI devices needed to be re-tested and re-certified by
January 1, 2003, according to the present UL timetable. The re-certification
tested for 1) expanded surge requirements, 2) new requirements for moisture
and corrosion, and 3) new requirements for reverse line-load miss wiring. Of
those products that represent significant revenues to the Company, re-
certification is 100% complete.
Interest and sundry income, net of interest expense, for the current quarter
was $1,553 and $5,515 for the nine-month period ended December 31, 2002,
compared to interest expense, net of interest and sundry income of ($10,232)
and ($65,995) for the same periods last year, reflecting lower interest expense
due to the Company reducing borrowings on its line of credit.
In accordance with SFAS 109, "Accounting for Income Taxes", the Company does
not record deferred income taxes on the undistributed earnings of its
foreign subsidiary, as it is management's intention to permanently reinvest
these earnings outside of the U.S. Accordingly, as the Company's Honduras
subsidiary was profitable, this has a favorable impact on the Company's
overall effective income tax rate. Should circumstances change, and it
becomes necessary to repatriate these undistributed earnings, the Company
will record U.S. income taxes associated with these amounts in the period in
which any such change in facts and circumstances occurs.
-6 -
Liquidity and Capital Resources
As of December 31, 2002, the Company's cash and cash equivalents increased to
$1,763,364 from the March 31, 2002 total of $1,163,099. Cash provided by
operating activities was $1,777,895, cash used in investing activities was
$518,252 and cash used in financing activities was $659,378, giving a total
increase of $600,265.
Cash provided by operating activities was primarily due to net earnings of
$647,549, depreciation in the amount of $657,412, amortization of $325,631,
an increase in accounts payable of $144,271, a decrease in inventory of
$208,857 and deferred income taxes of $192,266, offset to some extent, by an
increase in accounts receivable and prepaid expenses of $91,984 and $412,382,
respectively. The increase in accounts receivable and accounts payable was
the result of the increase in the Company's level of business in the quarter.
The increase in prepaid expenses was the result of up front payments by the
Company for its one year Honduran facility lease and for its commercial
property and casualty insurance.
Cash used in investing activities was related to purchases of capital
equipment. The Company's capital expenditures were $518,252 for the nine-month
period ended December 31, 2002 compared to $264,930 in the prior year's
period. Increased capital expenditures were due to the following: 1) the
acquisition of a 375 ton molding press to further vertically integrate its
plastic parts requirements; 2) tooling for parts required on new programs;
3) the Company's tooling for several new and existing products to be
manufactured at the Company's contract manufacturer in China; and 4) tooling
for the re-certification of the Company's GFCI products as required by UL,
as noted above.
Cash used in financing activities was due to the Company's repaying its line
of credit by $500,000 and the payment of its cash dividend in the amount of
$162,566, offset slightly by proceeds from the exercise of stock options in the
amount of $3,188.
On November 12, 2002, the Company renewed its $3,000,000 revolving credit loan
with its institutional lender, extending the maturity date to December 14,
2004. Although the Company did not utilize its line of credit in the second
or third quarter, the Company has the option of borrowing at the lender's prime
rate of interest minus 25 basis points or the 30-day London Interbank Offering
Rate (L.I.B.O.R.) plus 175 basis points. The loan is collateralized with a
perfected first security interest on all of its accounts receivable and
inventories, and a blanket security interest on all of its assets. The Company
continues to comply with its loan covenants. The Company has no off-balance
sheet arrangements and no debt relationships other than noted above.
The Company's working capital increased by $432,945 to $8,367,141 at
December 31, 2002, compared to $7,934,196 at March 31, 2002. The
Company believes cash flow from operations, the available bank line and
current cash position will be sufficient to meet its working capital
requirements for the next twelve months.
- 7 -
The Company's earnings before interest, income taxes, depreciation and
amortization ("EBITDA") was $745,302 for the three-month period and $1,911,988
for the nine-month period ended December 31, 2002, compared to $397,781 for
the three-month period and $1,162,663 for the nine-month period ended
December 31, 2001. The chart below shows the reconciliation of EBITDA to
net earnings:
Three Months Ended Nine Months Ended
December 31 December 31
2002 2001 2002 2001
---------- ---------- ---------- ----------
Net earnings $311,963 43,269 $ 647,549 101,517
Interest expense - 12,650 1,153 71,713
Income tax expense 130,672 13,937 280,243 33,353
Depreciation expense 192,682 212,779 657,412 662,300
Amortization expense 109,985 115,146 325,631 293,780
---------- ---------- ---------- ----------
EBITDA $745,302 397,781 $1,911,988 1,162,663
The third quarter dividend of $.01 per share was paid on January 24, 2003 to
shareholders of record on December 31, 2002. The fourth quarter dividend of
$.015 per share will reflect the increase in the Company's quarterly dividend
and will be paid on April 25, 2003 to shareholders of record on March 31, 2003.
New Accounting Standards
In June 2001, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 143, "Accounting for
Asset Retirement Obligations." This Statement addresses financial accounting
and reporting for obligations associated with the retirement of tangible long-
lived assets and the associated asset retirement costs. This Statement applies
to all entities that have legal obligations associated with the retirement of
long-lived assets that result from the acquisition, construction, development
or normal use of the asset. As used in this Statement, a legal obligation
results from existing law, statute, ordinance, written or oral contract, or by
legal construction of a contract under the doctrine of promissory estoppel.
Enterprises are required to adopt SFAS No. 143 for fiscal years beginning after
June 15, 2002. The Company does not believe the adoption of SFAS No. 143 will
have a material effect on its financial statements.
In June 2002, the FASB issued Statement of Financial Accounting Standards
("SFAS") No. 146, "Accounting for Costs Associated with Exit or Disposal
Activities," which is effective for exit or disposal activities that are
initiated after December 31, 2002. SFAS No. 146 requires that a liability for a
cost associated with an exit or disposal activity be recognized when the
liability is incurred and can be measured at fair value and nullifies
EITF 94-3, "Liability Recognition for Certain Employee Termination Benefits and
Other Costs to Exit an Activity (including Certain Costs Incurred in
Restructuring)." The Company does not believe the adoption of SFAS No. 146 will
have a material effect on its financial statements.
- 8 -
In December 2002, the FASB issued Statement of Financial Accounting Standards
("SFAS") No. 148, "Accounting for Stock - Based Compensation - Transition and
Disclosure." This SFAS amends SFAS No. 123, "Accounting for Stock - Based
Compensation" to provide alternative methods of transition for entities
electing the fair value based method of accounting for stock - based employee
compensation. This SFAS also requires additional and more prominent disclosure
related to accounting methods used for stock - based employee compensation and
pro forma amounts related to any period accounted for under the intrinsic
method of Opinion 25. The Company has adopted SFAS No. 148 and will present
such disclosures in its Form 10-K for Fiscal Year 2003 ending March 31, 2003.
In November 2002, the FASB issued Interpretation No. 45, "Guarantor's
Accounting and Disclosure Requirement for Guarantees, Including Indirect
Guarantees for Others." The interpretation addresses the disclosure to be made
by a guarantor in its interim and annual financial statements about its
obligations under guarantees. The Interpretation also requires the recognition
of a liability by a guarantor at the inception of certain guarantees. The
Interpretation requires the guarantor to recognize a liability for the
non-contingent component of the guarantee, this is the obligation to stand
ready to perform in the event that specified triggering events or conditions
occur. The initial measurement of this liability is the fair value of the
guarantee at inception. The recognition of the liability is required even if it
is not probable that payments will be required under the guarantee or if the
guarantee was issued with a premium payment or as part of a transaction with
multiple elements. The Company does not expect the adoption of FASB
Interpretation No. 45 to have a material effect on the Company's consolidated
financial statements.
In January 2003, the FASB issued Interpretation No. 46, "Consolidation of
Variable Interest Entities." The interpretation addresses the
consolidation of variable interest entities. Variable interest entities
are identified by reviewing the Company's equity investment at risk, the
ability to make decisions about the entity's activities and the obligation
to absorb the entity's losses or right to receive expected residual
returns. The Company does not expect the adoption of FASB issued
Interpretation No. 46 to have a material effect on the Company's consolidated
financial statements.
- 9 -
Item 3. Quantitative and Qualitative Disclosure Regarding Market Risk
The Company has no derivative securities as of December 31, 2002. The
Company's exposure to market risk for changes in interest rates would relate
primarily to the Company's debt obligations due to its variable LIBOR Rate
pricing; however, the Company has no debt obligations as of December 31, 2002.
Forward Looking Statements
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, and actual events as well
as results may differ materially. In evaluating these statements, you should
specifically consider the factors described throughout this report. Such key
factors include, but are not limited to, the acceptance of any new products,
such as "Fire Shield", into the marketplace, the effective utilization of the
Company's Honduran manufacturing facility, changes in manufacturing
efficiencies and the impact of competitive products and pricing. The Company
cannot provide any assurance that predicted future results, levels of activity,
performance or goals will be achieved, and the Company disclaims any obligation
to revise any forward-looking statements subsequent to events or circumstances
or the occurrence of unanticipated events.
Item 4. Controls and Procedures
The Company's management, including the Chairman of the Board (serving as the
principal executive officer) and Chief Financial Officer, have conducted an
evaluation of the effectiveness of disclosure controls and procedures pursuant
to Exchange Act Rule 13a-14. Based on that evaluation, the Chairman of the
Board and the Chief Financial Officer concluded that the disclosure controls
and procedures are effective in ensuring that all material information required
to be filed in this quarterly report has been made known to them in a timely
fashion. There have been no significant changes in internal controls, or in
other factors that could significantly affect internal controls, subsequent to
the date the Chairman of the Board and Chief Financial Officer completed their
evaluation.
- 10 -
Part II - Other Information
Item 1. Legal Proceedings
In November 2002, a civil complaint was filed against the Company and nine
other defendants in the United States District Court in and for the District of
Nevada. The complaint alleges infringement by each of the defendants of two
patents registered in the name of the plaintiff, in the case of the Company
arising out of its manufacture and sale of recreational vehicle voltage
monitors and controllers, and seeks injunctive relief, an accounting of past
profits generated from such sales, monetary damages and cost recoveries. The
Company has filed a general denial of plaintiff's claims and management
believes that the alleged infringement has not occurred. Although in its
preliminary stage, it is management's opinion that, irrespective of the
outcome, the action will have no material adverse effect upon the Company's
consolidated financial position, liquidity or results of operations.
Item 2. Changes in Securities
Not Applicable.
Item 3. Defaults Upon Senior Securities
Not Applicable.
Item 4. Submission of Matters to a Vote of Security Holders
Not Applicable.
Item 5. Other Information
Not Applicable.
Item 6. Exhibits and Reports on Form 8-K
The Company filed no reports on Form 8-K during the quarter covered by this
Report.
Exhibit 99.1 The Chief Executive Officer's certification required under
Section 906 of the Sarbanes-Oxley Act of 2002.
Exhibit 99.2 The Chief Financial Officer's certification required under
Section 906 of the Sarbanes-Oxley Act of 2002.
- 11 -
___________________________________________
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TECHNOLOGY RESEARCH CORPORATION
(registrant)
February 11, 2003 /s/ Scott J. Loucks
___________________________ __________________________________
Date Scott J. Loucks
Chief Financial Officer,
(principal financial, accounting and
Duly Authorized Officer)
- 12 -
CERTIFICATIONS PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
CERTIFICATION
- -------------
I, Robert S. Wiggins, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Technology Research
Corporation:
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is being
prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
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6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
February 11, 2003 /s/ Robert S. Wiggins
___________________________ __________________________________
Date Robert S. Wiggins
Chairman of the Board and
Chief Executive Officer
CERTIFICATION
- -------------
I, Scott J. Loucks, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Technology Research
Corporation:
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is being
prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
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a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
February 11, 2003 /s/ Scott J. Loucks
___________________________ __________________________________
Date Scott J. Loucks
Chief Financial Officer,
(principal financial, accounting and
Duly Authorized Officer)
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