During the fourth quarter of fiscal 2015, the Company recorded a special charge related to the write-off of excess inventory of $667,000. Excess inventory charges were the result of weakening demand for certain older product lines. Net loss for the fourth quarter of fiscal 2015 was $(503,000), excluding this special charge, compared to the net loss of $(299,000) for the same period in the previous year. The net loss for fiscal year 2015 was $(1,155,000), excluding the special charge, compared to the net loss of $(2,565,000) for the previous year.
Commenting on corporate performance, Carl H. Guild, Jr., President and Chief Executive Officer of TCC, said, "The market for high-end communications security systems is competitive and subject to long government procurement cycles, unpredictable order fulfillment lead times, and fluctuating market conditions. While TCC has a pipeline of potential contracts and initiatives in development, the timing and outcome of these potential contracts is unknown. As a result, in fiscal 2015 we began to closely monitor and reduce operating expenses as appropriate, while strategically continuing to invest in business development efforts, develop strategic relationships and expand our sales channel network."
Mr. Guild continued, "Providing custom cryptographic products, services and solutions continues to be an important market niche for the Company and, we believe, a competitive differentiator. Moving forward, we expect our expertise in engineering services, custom and national algorithm integration, systems design and integration, and custom training services to produce recurring revenue from established customers as well as provide new business opportunities. In fiscal 2015, TCC received $1,000,000 in contracts for such engineering services. Delivery under these contracts began in fiscal 2015 and is expected to be completed in fiscal 2016."
In fiscal 2016, TCC announced its next-generation CipherTalk® secure mobile phone, which provides military-grade encrypted and stealthy voice and text communications. The solution is based on a hardened Android™ (Android is a trademark of Google Inc.) platform, which combines user functionality with maximum-level security features, differentiating it from several competitors. The target audience for the CipherTalk is governments and corporations that need to protect highly sensitive mobile phone communications. TCC believes its CipherTalk secure mobile phone positions the Company to meet growing demand for high-end secure mobile voice and text communications globally.
Fiscal Year 2015 Highlights
Escalating turmoil around the world presents both significant opportunities and challenges for TCC. The threat of terrorism and other political unrest increases the demand for security products that provide both strategic and tactical benefits, and are readily available. At the same time, political disruptions can cause unpredictable and erratic delays in the processing of procurements and delivery of products. The combined effects present a situation that challenges both our sales capture teams and our production capabilities. The Company believes these market conditions will provide opportunities to build a successful future through its efforts to enlarge and enhance its product line and expand its customer base by both identifying new customers for existing and new products and offering such products to current customers.
About Technical Communications Corporation
For over 50 years, TCC has specialized in superior-grade secure communications systems and customized solutions, supporting ourCipherONE® 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 Form 10-Q for the quarters ended June 27, 2015, March 28, 2015 and December 27, 2014, and its Annual Report on Form 10-K for the fiscal year ended October 3, 2015 to be filed with the Commission and the “Risk Factors” section included therein.
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Our solutions meet TCC's CipherONE Optimized Network Encryption best-in-class criteria for maximum cryptographic strength, and are optimized for performance and ease of use for our customers.