From: Malone, Michael
Sent: Friday, April 28, 2006 4:54 PM
Subject: Technical Communications Corp Q2 2006 Earnings

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 the Fiscal Second Quarter Ended March 25, 2006

 

CONCORD, MA, April 28, 2006 – Technical Communications Corporation (OTC BB: TCCO.OB) today announced its results for the fiscal quarter ended March 25, 2006.  For the quarter ended March 25, 2006, the Company reported a net loss of $159,000, or $0.12 per share, on revenue of $1,005,000, as compared to a net loss of $437,000, or $0.32 per share, on revenue of $555,000 for the same period in fiscal 2005.  For the six months ended March 25, 2006, the Company reported a net loss of $263,000, or $0.19 per share, on revenue of $1,919,000, as compared to a net loss of $319,000 or $0.24 per share, on revenue of $1,742,000 for the same period in fiscal 2005.

Commenting on corporate performance, Mr. Carl H. Guild, Jr., President and Chief Executive Officer of TCC said, “As we had advised in the prior quarter’s report, the sales slowdown we have been experiencing continued through the second quarter although revenues improved modestly by about 10%. The second quarter’s revenue increase combined with a significant quarter-end backlog growth to $1,190,000 (from $200,000 on December 24, 2005) indicates that the sales outlook is improving. During the second quarter internal product development expenses increased significantly (compared to the first quarter of this fiscal year) as we intensified our effort to develop new product technologies and applications in support of market expansions. Although we expect to continue our current level of internal product investment expense, increased sales revenues in the future are expected to return TCC to profitability.”

“During the second quarter, TCC completed shipments on several important programs; DSP9000 Radio Encryption systems were shipped in support of an on-going program in Africa; the CSD3324SE Secure Telephone was shipped to an Asian country to continue the country-wide deployment of a secure telephone network initiated in 2005; the DSD72A-SP Military Bulk Encryptor was delivered to a new Asian customer for testing in support of a new network deployment; and a South American country received initial deliveries of the DSP9000 HF Radio Encryptor for integration into a new mobile communications vehicle. All of these programs are expected to expand the application of TCC’s family of products and become part of on-going national procurements.”

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 security solutions protect information privacy on every continent in over 100 countries. Government agencies, militaries, financial institutions, telecommunications carriers and multinational corporations worldwide rely on TCC to protect their communications networks.

Statements made in this press release, including any discussion of our anticipated operating results, financial condition and earnings, including statements about the Company’s ability to achieve and sustain growth and profitability, contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements, identified by the use of such terms as “anticipates,” “believes,” “expects,” “may,” “plans” and “estimates,” among others, involve known and unknown risks. The Company’s results may differ significantly from the results expressed or implied by such forward-looking statements.  The Company’s 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 secure adequate capital resources. These and other risks are detailed from time to time in the Company’s filings with the Securities and Exchange Commission, including the Company’s Quarterly Reports on Form 10-QSB for the fiscal quarters ended March 25, 2006 and December 24, 2005, and the Company’s Annual Report on Form 10-KSB for the fiscal year ended September 24, 2005.


Technical Communications Corporation

Condensed consolidated income statements

 

                                                                                                                                         Quarter ended

                                                                                                                                          (Unaudited)

 

                                                                                                                         3/25/06                              3/26/05

Net sales                                                                                  $    1,005,000                       $      555,000

Gross profit                                                                                      590,000                               238,000

S, G & A expense                                                                            425,000                               386,000

Product development costs                                                          335,000                               306,000

Operating loss                                                                              (170,000)                            (454,000)

Net loss                                                                                     $   (159,000)                       $   (437,000)

Net loss per share:

Basic                                                                                 $ ( 0.12)                             $  ( 0.32)

Diluted                                                                             $ ( 0.12)                             $  ( 0.32)

 

 

                                                                                                                                      Six months ended

                                                                                                                                          (Unaudited)

 

                                                                                                                         3/25/06                              3/26/05

Net sales                                                                                    $  1,919,000                        $  1,742,000

Gross profit                                                                                   1,132,000                            1,051,000

S, G & A expense                                                                            866,000                               841,000

Product development costs                                                          548,000                               555,000

Operating loss                                                                              (282,000)                            (346,000)

Net loss                                                                                      $  (263,000)                        $  (319,000)

Net loss per share:

Basic                                                                                 $ ( 0.19)                              $ ( 0.24)

Diluted                                                                             $ ( 0.19)                              $ ( 0.24)

 

Condensed consolidated balance sheets

                                                                                                                         3/25/06                              9/25/05

                                                                                                                      (Unaudited)

Cash                                                                                           $  2,304,000                        $  1,199,000

Accounts receivable, net                                                               114,000                               973,000

Inventory                                                                                      1,201,000                            1,448,000

Other current assets                                                                         77,000                                 83,000

Total current assets                                                             3,696,000                            3,703,000

Property and equipment, net                                                          88,000                                 99,000

Total assets                                                                          $  3,784,000                        $  3,802,000

 

Accounts payable                                                                   $     158,000                        $     104,000

Accrued expenses and

  other current liabilities                                                                 566,000                               382,000

Total current liabilities                                                           724,000                               486,000

Total stockholders’ equity                                                 3,060,000                            3,316,000

Total liabilities and stockholders’ equity                             $  3,784,000                        $  3,802,000