For: TECHNOLOGY RESEARCH CORPORATION Contact: Scott J. Loucks
5250 140th Avenue North Investor Relations
Clearwater, Florida 33760 Tel: (727) 535-0572
Robert S. Wiggins, Chairman & CEO Fax: (727) 535-4828
Web Page: www.trci.net
TECHNOLOGY RESEARCH CORPORATION
ANNOUNCES RECORD YEAR END AND FOURTH QUARTER RESULTS
CLEARWATER, FLORIDA, April 27, 2004 -- Technology Research Corporation ("TRC"),
(NASDAQ-TRCI), announced today revenues and net income at an all-time high for
the fourth quarter ended March 31, 2004. Revenues were $6,658,512, compared to
$5,355,518 reported in the same quarter last year, an increase of 24%, and net
income was $617,808 for the fourth quarter, compared to $367,242 for the same
quarter last year, an increase of 68%. Basic earnings were $.11 per share and
diluted earnings were $.10 per share for the current quarter compared to basic
and diluted earnings of $.07 per share for the same quarter last year.
The improvement in net income for the fourth quarter ended March 31, 2004,
compared to the prior year's fourth quarter was due to an increase in revenues
and gross profit margins. Military sales increased by $1,533,359, and
commercial sales and royalty income decreased by $219,791 and $10,574,
respectively. In the prior year's fourth quarter, commercial sales include
shipments of $650,000 to Alfred Karcher, GMBH which did not repeat in the
current year's fourth quarter. The Company recently announced that it signed a
three year agreement with Alfred Karcher, GMBH for approximately $3.5 million,
which will favorably impact commercial sales going forward. Direct military
shipments of support parts for existing systems and control devices related to
the Tactical Quiet Generator (TQG) programs continued to be the catalyst for
growth in military sales. The Company's operating expenses increased by
$539,488 for the current year's fourth quarter, compared to the prior year's
fourth quarter, as a result of year end performance bonuses of approximately
$300,000 and an increase in personnel resulting from the growth in business.
Revenues for the year ended March 31, 2004("Fiscal 2004") were $24,336,637,
compared to $17,761,936 reported in the year ended March 31, 2003("Fiscal
2003"), an increase of 37%. Net income was $2,676,156 for the current year,
compared to $1,014,791 reported in the prior year, an increase of 164%. Basic
earnings were $.48 per share and diluted earnings were $.46 per share in the
current year, compared to basic and diluted earnings of $.19 per share for the
prior year.
The improvement in net income for Fiscal 2004, compared to Fiscal 2003 was due
to an increase in revenues and gross profit margins. Commercial and military
revenues increased by $1,686,715 and $4,918,119, respectively while royalty
income decreased by $30,133. The increase in commercial revenues was primarily
attributed to product expansion into retail stores. Total retail sales were
$1,666,564 in the current year compared to $300,502 in the prior year. New
accounts in the Recreational Vehicle, Brand Label and Commercial Distribution
markets contributed to the remainder of the growth. Military revenues continue
to be strong due to direct military shipments of support parts for existing
systems and control devices related to the Tactical Quiet Generator (TQG)
programs. The increase in direct military shipments is primarily the result of
on-going U.S. military activity.
The Company made significant progress in establishing Fire Shield(R) as a brand
name during Fiscal 2004. Fire Shield(R) product sales were $922,550, or 7.7%
of commercial sales, compared to $304,139, or 3.0% of commercial sales in the
prior year. In addition, the Company recorded royalty income of $78,060 for
the current year from Applica Inc., a licensee that incorporates a Fire
Shield(R) cord set on its line of Black & Decker(R) portable heaters. TRC's
Fire Shield(R) LCDI products meet UL's requirement for cord fire protection on
room air conditioners manufactured after August 1, 2004. This represents an
estimated total market of $60 million for which the Company's products will
compete. The Company's Fire Shield(R) LCDI products have been and are
currently being evaluated by most room air conditioning manufacturers. The
normal manufacturing cycle for room air conditioners is typically from late
fall through early spring. This means that the selection of cord fire
protection products need to be finalized by the manufacturers to assure
delivery of these products in early fall to their worldwide manufacturing
locations. The Company recently announced its first order for this
application, of approximately $1.0 million, and is currently negotiating supply
agreements with several major room air conditioning manufacturers. The
Company's patented Fire Shield(R) technology has numerous applications and
represents significant growth potential for the Company.
Mr. Wiggins commented, "The Company achieved its best performance ever in
Fiscal 2004 with record revenues and net income for the fiscal year. Gross
profit margins improved as the result of product mix plus productivity and
quality improvements in manufacturing. The Company ended the year debt-free
with $5,968,122 in cash." Mr. Wiggins added, "The Company expects its core
military and commercial business to remain strong in the coming year. In
addition, the Company could achieve significant growth in the coming year
depending on the amount of business it captures in the emerging room air
conditioner market. We look forward to another exciting year at TRC."
The fourth quarter dividend of $.015 per share was paid on April 23, 2004 to
shareholders of record on March 31, 2004. The Company paid dividends of $.06
per share for Fiscal Year 2004.
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.
Comparative Operating Results
Three Months Ended Twelve Months Ended
3/31/2004 3/31/2003 3/31/2004 3/31/2003
Operating revenues $ 6,658,512 $ 5,355,518 $24,336,637 $17,761,936
Income before taxes $ 950,616 $ 496,537 $ 3,836,804 $ 1,424,329
Net income $ 617,808 $ 367,242 $ 2,676,156 $ 1,014,791
Basic earnings per share $ .11 $ .07 $ .48 $ .19
Weighted average number
of common shares
outstanding 5,717,801 5,440,370 5,589,181 5,438,381
Diluted earnings per share $ .10 $ .07 $ .46 $ .19
Weighted average number
of common and equivalent
shares outstanding 6,082,931 5,554,020 5,827,726 5,482,450
Dividends paid $ .015 $ .015 $ .06 $ .045
Net income $ 617,808 $ 367,242 $ 2,676,156 $ 1,014,791
Interest expense - - - 1,153
Income taxes 332,808 129,295 1,160,648 409,538
Depreciation 213,090 199,962 837,020 857,374
Amortization - - - -
EBITDA $ 1,163,706 $ 696,499 $ 4,673,824 $ 2,282,856
Note: EBITDA refers to earnings before interest, income taxes, depreciation and
amortization. The Company wishes to present its EBITDA results as an
indication of its liquidity and should not be interpreted as earnings.
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