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 Fourth Quarter and Year Ended September 30, 2006

 

CONCORD, MA, November 21, 2006– Technical Communications Corporation (OTC BB: TCCO.OB) today announced its results for the fiscal quarter and year ended September 30, 2006.  For the quarter ended September 30, 2006, the Company reported net income of $54,000, or $0.04 per share, on revenue of $845,000, as compared to net income of $349,000, or $0.26 per share, on revenue of $1,228,000 for the same period in fiscal 2005.  For the year ended September 30, 2006, the Company reported revenue of $3,897,000 and a net loss of $94,000, or $0.07 per share, as compared to revenue of $3,721,000 and a net loss of $30,000, or $0.02 per share, for fiscal 2005. 

Commenting on corporate performance, Mr. Carl H. Guild, Jr., President and Chief Executive Officer of TCC said, “Revenues for the fourth quarter were below our expectations due to the delay in certain foreign procurements. However, profitability was achieved as the mix of the delivered products reflected higher gross margins when compared to those of the previous quarter. The delayed procurements, which are for encryption devices for military bulk data networks and the HF/VHF radio products, are expected to proceed in 2007. These projects are part of our broader effort to expand our installed equipment base, and to develop new users of TCC encryption products.

During the quarter, TCC delivered additional bulk encryption equipment for the ship-to-ship communication requirements of a foreign navy, secure telephones for the expansion of a network in South America, and over 250 radio encryption units for the initial deployment of TCC-encrypted military radio equipment in Afghanistan.”

Mr. Guild continued, “As we have mentioned in previous reports, TCC continues to maintain its investment levels in new product development and has announced CipherSMS™, a high security text messaging encryption application for mobile phones using the Windows Mobile 5.0 operating system. We believe CipherSMS™ works as easily as conventional Short Messaging Service (SMS) but provides robust end-to-end encryption for the user. Worldwide text messages can now be sent with complete security. Additional information on CipherSMS and our other wireless security products is available at our web site, www.tccsecure.com.”

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, March 25, 2006 and June 24, 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

 

                                                                                                                         9/30/06                              9/24/05

Net sales                                                                                    $   845,000                     $  1,228,000

Gross profit                                                                                    641,000                             870,000

S, G & A expense                                                                          480,000                             355,000

Product development costs                                                        127,000                             177,000

Operating income                                                                           34,000                             338,000

Net income                                                                              $      54,000                        $   349,000

Net income per share:

Basic                                                                                  $  0.04                                $  0.26

Diluted                                                                               $  0.04                                $  0.23

 

                                                                                                                                           Year ended

 

                                                                                                                         9/30/06                              9/24/05

Net sales                                                                                 $  3,897,000                      $ 3,721,000

Gross profit                                                                                 2,450,000                          2,405,000

S, G & A expense                                                                      1,679,000                          1,562,000

Product development costs                                                        924,000                             920,000

Operating income (loss)                                                            (153,000)                             (77,000)

Net income  (loss)                                                               $       (94,000)                       $   (30,000)

Net income (loss) per share:

Basic                                                                               $  (0.07)                             $ ( 0.02)

Diluted                                                                            $  (0.07)                             $  (0.02)

 

Condensed consolidated balance sheets

                                                                                                                         9/30/06                              9/24/05

Cash                                                                                        $  1,871,000                     $  1,199,000

Accounts receivable, net                                                             206,000                             973,000

Inventory                                                                                    1,505,000                          1,448,000

Other current assets                                                                        92,000                               83,000

Total current assets                                                           3,674,000                          3,703,000

Property and equipment, net                                                        83,000                               99,000

Total assets                                                                        $  3,757,000                     $  3,802,000

 

Accounts payable                                                                    $  114,000                      $     104,000

Accrued expenses and

  other current liabilities                                                               413,000                             382,000

Total current liabilities                                                         527,000                             486,000

Total stockholders’ equity                                               3,230,000                          3,316,000

Total liabilities and stockholders’ equity                          $  3,757,000                     $  3,802,000