TCC Completes Restatement of Prior Financial Statements; Files Form 10-K for the year ended September 29, 2018 and Forms 10-Q/A for Fiscal 2018; and Files Forms 10-Q for the quarters ended December 29, 2018 and March 30, 2019
CONCORD, Mass. – June 21, 2019 – Technical Communications Corporation (NasdaqCM: TCCO) today announced the filing of its Annual Report on Form 10-K for the fiscal year ended September 29, 2018 with the Securities and Exchange Commission. The Form 10-K contains financial statements for fiscal year 2018 and restated information for fiscal year 2017. The Company also filed its Quarterly Reports on Form 10-Q for the quarters ended December 29, 2018 and March 30, 2019.
TCC had announced financial information and results of operations for the fiscal year and quarter ended September 29, 2018 in a Current Report on Form 8-K filed on December 10, 2018. Subsequent to such filing, management conducted a review of TCC's revenue recognition policies, including its interpretations of ASC 605, Revenue Recognition, among other matters. Based upon this review, the Audit Committee of TCC's Board of Directors, on the recommendation of management after consultation with the Company's independent registered public accounting firm, concluded that the Company should modify the application of its revenue recognition policies, specifically in connection with a services contract. This modification resulted in the restatement of the previously announced financial information for the fiscal year and quarter ended September 29, 2018 as set forth in the Form 8-K filed on December 10, 2018, as well as a restatement of the financial information included in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2017 and Quarterly Reports on Form 10-Q for the fiscal quarters ended December 30, 2017, March 31, 2018 and June 30, 2018. The Company filed Quarterly Reports on Forms 10-Q/A for such periods today to reflect the restatements.
The Company believes that the restatement will have no impact on total revenue recognized over the life of the service contract that is currently in effect. Furthermore, TCC believes, based on information available to date, that the restatement will have no impact on the timing or magnitude of cash flows from operations. The impact of the modification of revenue recognition was to recognize $484,000 of revenue originally recorded in TCC's fiscal year ended September 30, 2017 in the fiscal year ended September 29, 2018, and to recognize $1,623,000 of revenue originally recorded in the Company's fiscal year ended September 29, 2018 in the fiscal year ending September 28, 2019. As of September 29, 2018, the Company had $2,107,000 of deferred revenue recorded on its balance sheet as a result of these modifications.
About Technical Communications Corporation
For over 50 years, TCC has specialized in superior-grade secure communications systems and customized solutions, supporting our CipherONE® best-in-class criteria, to protect highly sensitive voice, data and video transmitted over a wide range of networks. Government entities, military agencies and corporate enterprises in 115 countries have selected TCC's proven security to protect their communications. Learn more: www.tccsecure.com.
Statements made in this press release or as may otherwise be incorporated by reference herein constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include but are not limited to statements regarding anticipated operating results, future earnings, and the ability to achieve growth and profitability. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, including but not limited to the effect of foreign political unrest; domestic and foreign government policies and economic conditions; future changes in export laws or regulations; changes in technology; 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. Such risks, uncertainties and other factors could cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. For a more detailed discussion of the risks facing the Company, see the Company's filings with the Securities and Exchange Commission, including its Quarterly Reports on Forms 10-Q/A for the quarters ended December 30, 2017, March 31, 2018 and June 30, 2018 and its Annual Report on Form 10-K for the fiscal year ended September 29, 2018 filed with the Commission and the "Risk Factors" section included therein (as the same may be amended from time to time).
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