CONCORD, MA, November 27, 2000 – Technical
Communications Corporation (NASDAQ: TCCO) today reported that revenues for its
fiscal year ended September 30, 2000 were $5,574,000 compared to $6,434,000 for
the previous year. The Company reported a net loss of $1,740,000 or $1.35 per
share, compared to a net loss of $1,219,000 or $0.96 per share in fiscal
1999. The results for the quarter ended
September 30, 2000 included revenues of $1,196,000 and a net loss of $725,000
compared to revenues of $2,753,000 and net income of $217,000 for the fourth
quarter of fiscal 1999. The current
quarter’s loss included a charge to write-down the Company’s net deferred tax
asset by $608,000, due to continued losses affecting the Company’s ability to
recognize future benefit from the carryforward of net operating losses.
TCC’s President and Chief Executive Officer Carl Guild
stated “ The results for fiscal 2000 are a mix of below plan revenues and
profits and positive accomplishments in our efforts to broaden our product base
in the commercially oriented international markets. Clearly, our sales revenues
for fiscal 2000 fell below our expectations as reported a year ago. We had
forecasted that international contracting delays would continue with an
expected recovery in the latter half of 2000. This recovery is happening, but
at a much slower pace than anticipated. We remain confident that we will be
successful in winning these contracts currently under negotiation but the
awards are not expected to be confirmed until the first half of 2001. “
“To offset the trend toward longer contracting periods and
slower sales in foreign government areas, we have increased our marketing
activity with a focus on new, larger projects which have the potential for
higher sales volume and high probability for follow-on business. We are working
to establish partnerships with system suppliers that will carry TCC’s products
to the markets as part of a larger system solution. Three focus markets are
encryption systems for aircraft, microwave ground links and mobile satellite
communications. The results of the
partnerships will expand TCC’s ability to reach more market opportunities in a
shorter period of time and we expect to see results from these actions in
2001.”
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TCC Reports Fiscal 2000 Results / Page 2
“TCC continues on the course to expand into the
international commercial markets and has launched product development and
marketing initiatives in both the network and wireless areas. Our CipherONE™
network product line now covers link, frame relay and Internet protocol
requirements and with the introduction of the FIPS 140 certified CX 7200 IP
encryptor is now competing in the US
federal market. We are also pursuing product development and relationships that
will expand our network feature set to include firewall, traffic shaping and
IPSEC compliant interoperability for the internet. The range of our product
line is more attractive to foreign users and system developers as it provides a
single source for proven security performance that is easily integrated into a
system and can be customized to meet specific user needs. “
“The investment demands of re-orienting the company and the
unusually protracted foreign
procurement cycles have combined to adversely effect our financial
results. Streamlining of the company
has been an ongoing effort which has improved operational efficiency and is
reflected in an improvement in gross margins. Product development will continue
and is expected to increase as result of contract awards based upon the
proposal and concept work that has been completed. The award of funded
development projects will have a favorable effect on profitability and provide
expanded opportunities for significant follow-on equipment sales.”
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. 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 October
2, 1999, Form 10-Q for the quarter ended January 1, 2000, Form 10-Q for the
quarter ended April 1, 2000 and the form 10-Q for the quarter ended July 1,
2000.
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TCC
Reports Fiscal 2000 Results / Page 3
Technical Communications Corporation
Condensed
consolidated income statements
|
Year
ended: Quarter
ended: |
|
9/30/00 10/2/99 9/30/00 10/2/99 |
|
Net sales $
5,574,000 $ 6,434,000 $ 1,196,000 $ 2,753,000 |
|
Gross Profit 3,198,000 3,305,000 765,000 1,230,000 |
|
S, G & A expense 3,874,000 4,312,000 726,000 707,000 |
|
Product development
costs 1,157,000 1,936,000 237,000 397,000 |
|
Operating profit
(loss) (1,833,000) (2,943,000) (198,000) 126,000 |
|
Other income
(expense), net 266,000 1,318,000 81,000 163,000 |
|
Provision (benefit)
for income taxes 173,000 (406,000) 608,000 72,000 |
|
Net income (loss) (1,740,000) (1,219,000) (725,000) 217,000 |
|
Net
income (loss) per share |
|
Basic $
(1.35) $ (0.96) $ (0.56) $ 0.17 |
|
Diluted $
(1.35) $ (0.96) $ (0.56) $ 0.17 |
Condensed consolidated
balance sheets
|
9/30/00 10/2/99 |
|
Cash $
3,122,000 $
2,339,000 |
|
Accounts receivable,
net 364,000 2,603,000 |
|
Inventory 3,452,000 3,036,000 |
|
Other current assets 427,000 1,171,000 |
|
Total current assets 7,365,000 9,149,000 |
|
Property and
equipment, net 569,000 680,000 |
|
Goodwill, net 468,000 683,000 |
|
Other assets 1,000
149,000 |
|
$
8,403,000 $
10,661,000 |
|
|
|
Accounts payable $ 524,000 $ 258,000 |
|
Accrued expenses and
other current liabilities 598,000 1,102,000 |
|
Total current liabilities 1,122,000 1,360,000 |
|
Other long-term
liabilities - 366,000 |
|
Total stockholders’
equity 7,281,000 8,935,000 |
|
$
8,403,000 $
10,661,000 |