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 Third Quarter Ended June 24, 2006

 

CONCORD, MA, July 28, 2006 – Technical Communications Corporation (OTCBB: TCCO.OB) today announced its results for its fiscal third quarter.  For the quarter ended June 24, 2006, the Company reported net income of $114,000, or $0.08 per share, on revenue of $1,133,000, as compared to a net loss of $60,000, or $(0.04) per share, on revenue of $751,000 for the same period in fiscal 2005.  For the nine months ended June 24, 2006, the Company reported a net loss of $149,000, or $(0.11) per share, on revenue of $3,052,000, as compared to a net loss of $379,000 or $(0.28) per share, on revenue of $2,493,000 for the same period in fiscal 2005.

Commenting on corporate performance, Mr. Carl H. Guild, Jr., President and Chief Executive Officer of TCC said, “TCC’s performance in the third quarter continues to show steady improvement with a 13% increase in revenues when compared to the previous quarter. Although revenues are up, we still maintain a cautiously optimistic view of revenue growth, as foreign national budgets are unpredictable and are experiencing procurement delays in the areas into which we sell.  During the third quarter, the company did achieve profitability while maintaining a strong investment in internal product development – a critical balance we believe fuels the development of new products, market initiatives and, ultimately, revenue.

We have actively pursued expansion of our secure telephony product line which features the CSD3324SE Secure Telephone. During the quarter, TCC completed deliveries to an Asian customer under a contract valued at more than $730,000. This delivery will complete another phase of this customer’s national government deployment. In addition, improved features are under development as requested by this customer. These features and improvements will be available in future versions of the CSD3324SE and via an upgrade program to existing deployed equipment. In another Asian country, TCC is competing for a large national secure telephone system that is expected to begin initial deployment in 2007. This program could potentially require approximately 1700 secure telephones for the full national deployment.”

 

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 December 24, 2005 and March 25, 2006 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)

 

                                                                                                                         6/24/06                              6/25/05

Net sales                                                                                     $ 1,133,000                          $   751,000

Gross profit                                                                                      677,000                               484,000

S, G & A expense                                                                            332,000                               366,000

Product development costs                                                          250,000                               188,000

Operating income (loss)                                                                   95,000                              (70,000)

Net income (loss)                                                                      $    114,000                          $  (60,000)

Net income (loss) per share:

Basic                                                                                   $  0.08                             $  ( 0.04)

Diluted                                                                                $  0.07                             $  ( 0.04)

 

 

                                                                                                                                     Nine months ended

                                                                                                                                          (Unaudited)

 

                                                                                                                         6/24/06                              6/25/05

Net sales                                                                                    $  3,052,000                        $  2,493,000

Gross profit                                                                                   1,808,000                            1,535,000

S, G & A expense                                                                         1,198,000                            1,207,000

Product development costs                                                          797,000                               743,000

Operating loss                                                                              (187,000)                            (415,000)

Net loss                                                                                      $  (149,000)                        $  (379,000)

Net loss per share:

Basic                                                                                 $ ( 0.11)                              $ ( 0.28)

Diluted                                                                             $ ( 0.11)                              $ ( 0.28)

 

Condensed Consolidated Balance Sheets

                                                                                                                         6/24/06                              9/25/05

                                                                                                                      (Unaudited)

Cash                                                                                           $  1,805,000                        $  1,199,000

Accounts receivable, net                                                               566,000                               973,000

Inventory                                                                                      1,305,000                            1,448,000

Other current assets                                                                         99,000                                 83,000

Total current assets                                                             3,775,000                            3,703,000

Property and equipment, net                                                           86,000                                 99,000

Total assets                                                                          $  3,861,000                        $  3,802,000

 

Accounts payable                                                                   $     149,000                        $     104,000

Accrued expenses and

  other current liabilities                                                                 536,000                               382,000

Total current liabilities                                                           685,000                               486,000

Total stockholders’ equity                                                 3,176,000                            3,316,000

Total liabilities and stockholders’ equity                             $  3,861,000                        $  3,802,000