Technical Communications Corporation Michael P. Malone

100 Domino Drive Chief Financial Officer

Concord, MA 01742 – 2892 (978) 287 5100

CONCORD, MA, August 8, 2001 – Technical Communications Corporation (NASDAQ: TCCO) today reported a net loss of $958,000, before excess inventory and other special charges, as compared to a net loss of $704,000 in the same period in the previous year. For the nine months ended June 30, 2001 the Company reported a net loss of $2,431,000, before excess inventory and other special charges, as compared to a net loss of $1,015,000 for the same period in fiscal 2000. Revenues for the fiscal quarter ended June 30, 2001 were $254,000 compared to $744,000 for the previous year and for the nine month periods then ended of $2,354,000 and $4,378,000, respectively.

The Company’s backlog on June 30, 2001 was $1,850,000, which included two orders, which were shipped during the third quarter totaling approximately $1,350,000. However, recording of sales on these shipments has been delayed due to certain provisions of the contracts not being met by June 30, 2001. The Company fully expects to meet these conditions during the current quarter and recognize the revenue accordingly. Had these contracts been recorded as revenue when shipped, total sales for the quarter would have been approximately $1,600,000, an improvement over the Q3, 2000 revenues of $779,000.

Total net loss for the third quarter of fiscal 2001 was $3,367,000, including all special charges, and is compared to the total net loss of $744,000 for the same period in the previous year. The net loss for the first nine months of fiscal 2001 was $4,840,000, including all special charges, and is compared to the total net loss of $1,015,000 for the same period in the previous year.

During the third quarter of fiscal 2001, the Company recorded certain special charges, which included $1,604,000 write-off of excess inventory, a write-off of work in process inventory of $340,000, a write-off of goodwill of $307,000 and a write-off of a deferred tax asset of $158,000. Excess inventory charges were the result of weakening demand for certain product lines. Correspondingly, goodwill associated with these product lines was also written off. Work in process inventory was written off as a result of delayed or lost development contracts bids. The write-off of the deferred tax asset was the result of continued losses affecting the Company’s ability to recognize future benefit from the carryforward of net operating losses.

Commenting on the company’s performance, Carl Guild, Chief Executive Officer said "TCC’s performance during the third quarter reflects both the realities of a tightening communications equipment market and our commitment to become leaner and more efficient in our operations. The downturn in commercial capital outlays in the communications equipment sector has caused us to revise our projections and write down certain equipment inventories. While we remain committed to expansion into the commercial markets, our approach is being modified to include a stronger component of services and OEM products – reducing the need for large inventories and technology turnover."

Continuing, Guild said "Third quarter shipments improved over the prior two quarters reflecting a positive trend in our international business. Focus on the South American market is putting us in competitive positions in a number of new secure communications projects expected to be sold over the next two years. This market is dynamic and is being fueled by increasing national interest in controlling borders and reducing drug traffic. The mid-east market is maintaining its overall strength and by leveraging certain product improvements in development will present several opportunities to broaden our radio and trunk encryption applications. Although we will continue to face long and unpredictable sales cycles, an increasing level of prospects should move to smooth out the level of business."

"TCC has successfully streamlined its operations, reduced its manufacturing costs and improved its product mix. General and administrative operating expenses have been driven down by 27% from Q2 of fiscal 2001, while the selling efforts have been maintained on major project opportunities. In addition, we have reduced manufacturing overhead, maintained our product development capability and focused sales efforts on higher margin products. Improving gross margins combined with reduced operating expenses will position the Company to return to sustainable profitability," concluded Guild.

TCC designs, manufactures, and supports superior grade secure communications systems that protect highly sensitive information transmitted over a wide range of data, voice and fax networks. TCC’s proven security solutions protect information privacy on every continent in over 100 countries. Government agencies, militaries, financial institutions, telecom carriers and multinational corporations worldwide rely on TCC to protect their communications networks.

Matters discussed in this news release, including any discussion of or impact, expressed or implied, on Technical Communications Corporation's (the Company) anticipated operating results and future earnings, including statements about the Company’s ability to achieve growth and profitability, contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended. The Company’s operating results may differ significantly from the results indicated by such forward-looking statements. The Company’s operating results may be affected by many factors, including but not limited to future changes in export laws or regulations, changes in technology, the effect of foreign political unrest, the ability to hire, retain and motivate technical, management and sales personnel, the risks associated with the technical feasibility and market acceptance of new products, changes in telecommunications protocols, the effects of changing costs, exchange rates and interest rates. These and other risks are detailed from time to time in the Company’s filings with the Securities and Exchange Commission, including the Form 10-K for the fiscal year ended September 30, 2000, the Form 10-Q for the quarter ended December 30, 2000 and the Form 10-Q for the quarter ended March 31, 2001.

Technical Communications Corporation