NEWS
RELEASE
Technical
Communications Corporation
Michael P. Malone
100 Domino
Drive
Chief Financial Officer
Concord,
MA 01742 – 2892
(978) 287 5100
www.tccsecure.com
TECHNICAL
COMMUNICATIONS CORPORATION
Reports
Results for Third Quarter of Fiscal 2002
CONCORD, MA, August 12,
2002 – Technical Communications Corporation
(NASDAQ: TCCO) today reported revenue of $520,000 and a net loss of $664,000 or
$0.50 per share for its third fiscal quarter as compared to revenue of $254,000
and a net loss of $958,000, before excess inventory and other special charges or
$0.73 per share for the third quarter of fiscal 2001. For the nine months ended
June 28, 2002 the Company reported a net loss of $1,099,000 on revenue of
$2,552,000 as compared to a net loss of $2,431,000 before excess inventory and
other special charges on revenue of $2,354,000 for the same period in fiscal
2001.
Commenting on the results, TCC President and
CEO, Carl Guild, said, “The results of the third quarter are disappointing. We
did not expect market conditions to improve for some time and the continued
downturn will be met by our on-going plan to reduce costs and improve near term
sales. Operating expenses continue to be reduced through our initiatives to
align them with anticipated revenue levels. Overhead expense will be further
reduced by consolidating our operations into a more efficient and less costly
physical plant. This situation is being monitored very closely and we will
continue to make these adjustments as required. Although erratic revenue levels
make it difficult to predict, we remain committed to returning the Company to
profitability.”
Continuing Guild said, “Sales and business
development efforts will be strengthened in the US homeland security market
through the addition of a Washington based IT consultant with significant
expertise in developing the federal market space. TCC’s longer term pursuit of
international system level projects remains a key objective and continues to
require our persistence and patience.
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.
The Company has been
notified by The NASDAQ Stock Market that its common stock has failed to comply
with the continued listing requirement of having a market value of public float
greater than or equal to $1,000,000 and the requirement of having a minimum
share price of $1.00. In accordance with the notification received from NASDAQ
if the Company is unable to demonstrate compliance for ten consecutive days the
Company maybe delisted from the NASDAQ SmallCap Market. The deadlines for
achieving compliance are October 7, 2002 regarding the minimum $1,000,000 market
value of public float and December 23, 2002 regarding the minimum share price of
$1.00.
The Company hopes and
expects that this is a temporary situation, although no assurances can be given,
and the Company is considering various alternatives designed to address the
NASDAQ requirements. The Company is also considering an application to transfer
to the NASDAQ OTC Bulletin Board service if the situation cannot be addressed
timely.
About Technical Communications
Corporation
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 and the Company’s ability to renegotiate its line of credit with its banks. 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-KSB for the fiscal year ended September 29, 2001, the Form 10-QSB for the quarter ended December 29, 2001 and the Form 10-QSB for the quarter ended March 30, 2002.
Technical Communications
Corporation
Condensed consolidated income
statements
(Unaudited)
Quarter
ended
6/29/02
6/30/01
Net sales
$ 520,000
$
254,000
Gross profit (loss)
206,000
(1,615,000)a
S, G & A
expense
586,000
903,000b
Product development
costs
273,000
703,000c
Operating income
(loss)
(654,000)
(3,221,000)
Net income (loss)
$ (664,000)
$ (3,367,000)
Net income (loss) per
share:
Basic and diluted
$ (0.50)
$
(2.55)
Nine months
ended
6/29/02
6/30/01
Net sales
$ 2,552,000
$
2,354,000
Gross profit (loss)
1,481,000
(347,000)a
S, G & A
expense
1,593,000
3,055,000b
Product development
costs
993,000
1,273,000c
Operating income
(loss)
(1,104,000)
(4,675,000)
Net income (loss)
$ (1,099,000)
$ (4,840,000)
Net income (loss) per
share:
Basic and diluted
$ (0.83)
$
(3.73)
Condensed consolidated balance
sheets
6/29/02
9/29/01
(unaudited)
Cash
$ 648,000
$
1,619,000
Accounts receivable,
net
96,000
67,000
Inventory
1,264,000
1,262,000
Other current
assets
275,000
356,000
Total current assets
2,283,000
3,304,000
Property and equipment,
net
215,000
351,000
$ 2,498,000
$ 3,655,000
Accounts payable
$ 176,000
$
231,000
Accrued expenses
and
other current liabilities
737,000
747,000
Total current liabilities
913,000
978,000
Total stockholders’
equity
1,585,000
2,677,000
$ 2,498,000
$ 3,655,000
a gross profit reflects
excess inventory charge of $1,604,000
b S, G & A expenses
include a write-off of Goodwill of $307,000
c Product development
costs includes a write-off of work in process inventory of
$340,000