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Technology Research Corporation Reports Fourth Quarter and Full Year Financial Results

CLEARWATER, Fla.-(Business Wire)-June 27, 2008 - Technology Research Corporation ("TRC"), (NASDAQ:TRCI), today announced revenues and operating results for its fourth quarter and fiscal year ended March 31, 2008.

Revenues for the fourth quarter were $9.0 million, an increase of $.1 million or 1% from the $8.9 million reported in the same quarter last year. The net loss for the fourth quarter was $.9 million compared with net loss of $.5 million for the fourth quarter of the prior year. Diluted net loss per share was $.15 per share for the fourth quarter compared with net loss of $.08 per share for the same quarter last year.

Orders for the fourth quarter were $10.6 million, a decrease of $2.0 million from fourth quarter of fiscal 2007. Military orders for the fourth quarter were $4.4 million, a decrease of $2.8 million from the previous year and Commercial orders of $6.2 million increased $.8 million from fourth quarter of the previous year.

Fiscal 2008 revenues of $37.2 million declined $.8 million or 2% from prior year revenues of $38.0 million. Net income of $.4 million decreased $1.1 million from the prior year's net income of $1.5 million. Diluted net income per share was $.06 in fiscal 2008 compared to $.25 in fiscal 2007.

Orders for fiscal 2008 were $37.5 million, an increase of $2.1 million from fiscal 2007 orders of $35.4 million. For fiscal 2008, Commercial orders were $23.9 million, an increase of $1.0 million from the previous year, and Military orders of $13.6 million increased $1.0 million from the previous year.

Fourth quarter fiscal 2008 results were negatively impacted by $1.7 million of inventory related write downs. For all of fiscal 2008, the Company wrote down $2.0 million of inventory. The 2008 write-down was primarily related to reduction in demand and selling price for room air conditioner (RAC) products. We believe our inability to sell the product was greatly influenced by lost sales to a competitor who the Company believes is infringing on TRC intellectual property. For the fourth quarter of fiscal 2007, inventory related write-downs amounted to $.8 million. For all of fiscal 2007, the Company wrote down inventory by $1.3 million. Also in fiscal 2007, full year net income benefited from the $3.2 million settlement of a patent infringement lawsuit in our third fiscal quarter which was partially offset by related legal expenses for all of fiscal 2007 of approximately $.8 million.

Owen Farren, President and Chief Executive Officer, said: "The Company introduced several new products during fiscal 2008 including an entry level transfer switch and high end 90 amp transfer switch and these products are gaining acceptance with customers. TRC's new products and focused sales and marketing efforts should help mitigate the impact of the current difficult economic environment." Farren continued, "While I am disappointed by our fiscal 2008 financial results, I am encouraged by our new products and their acceptance by customers as well as operational improvements we have made to the business. Before RAC inventory related write-downs, operating income increased to $2.0 million in fiscal 2008 from $(.3) million in fiscal 2007. We are reinvesting some of this improved operating profit in dynamic leadership talent and engineers to accelerate new product development and further accelerate improved operational efficiency."

The Company's net cash position (cash plus investments minus debt) improved approximately $2.7 million from the end of fiscal 2007. Cash and short-term investments decreased approximately $.3 million from the previous year's balances but total debt declined $3.0 million as all debt was paid off during fiscal 2008.

The fourth quarter dividend of $.020 per share was paid on April 18, 2008 to shareholders of record on March 30, 2008.

TRC is an internationally recognized leader in electrical safety products that prevent electrocution and electrical fires and protect against serious injury from electrical shock. Based on its core technology in ground fault sensing, products are designed to meet the needs of the consumer, commercial and industrial markets worldwide. The Company also supplies power monitors and control equipment to the United States Military and its prime contractors.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Some of the statements in this report constitute forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995 and the Securities Exchange Act of 1934. These statements are related to future events, other future financial performance or business strategies, and may be identified by terminology such as "may," "will," "should," "expects," "scheduled," "plans," "intends," "anticipates," "believes," "estimates," "potential," or "continue," or the negative of such terms, or other comparable terminology. These statements are only predictions. Actual events as well as results may differ materially. In evaluating these statements, you should specifically consider the factors described throughout this report. We cannot be assured that future results, levels of activity, performance or goals will be achieved. -0- *T TECHNOLOGY RESEARCH CORPORATION AND SUBSIDIARY UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) Three Months Ended Year Ended March 31, March 31, March 31, March 31, 2008 2007 2008 2007 ————— ————— ————— ————— Operating revenues: Commercial $ 5,930 5,446 22,680 26,471 Military 2,942 3,408 14,152 11,521 Royalties 132 - 328 - ————— ————— ————— ————— 9,004 8,854 37,160 37,992 ————— ————— ————— ————— Operating expenses: Cost of sales 8,069 6,989 27,900 29,368 Selling, general and administrative 1,904 2,167 7,219 7,753 Research, development and engineering 474 506 1,904 2,026 Restructuring charges - 138 - 138 Other - 83 - 83 ————— ————— ————— ————— 10,447 9,883 37,023 39,368 ————— ————— ————— ————— Operating income (loss) (1,443) (1,029) 137 (1,376) Interest and sundry income (expense) 34 (5) 107 3,082 ————— ————— ————— ————— Income (loss) before income taxes (1,409) (1,034) 244 1,706 Income tax expense (benefit) (525) (539) (112) 244 ————— ————— ————— ————— Net income $ (884) (495) 356 1,462 ========== ========== ========== ========== Income per common share: Basic $ (0.15) (0.08) 0.06 0.25 Diluted $ (0.15) (0.08) 0.06 0.25 Weighted average number of common shares outstanding: Basic 5,889,828 5,888,828 5,889,136 5,884,083 Diluted 5,915,319 5,888,828 5,958,336 5,906,563 Dividends paid $ .02 .02 .08 .075 *T -0- *T TECHNOLOGY RESEARCH CORPORATION AND SUBSIDIARY UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (a) ASSETS March 31, March 31, 2008 2007 ————— ————- Current assets: Cash and cash equivalents $ 2,132 3,471 Short-term investments 1,495 498 Accounts receivable, net 6,573 6,950 Other receivables-current 869 884 Income taxes receivable 197 - Inventories 7,788 9,294 Prepaid expenses and other current assets 258 351 Deferred income taxes 1,446 999 ————— ————- Total current assets 20,758 22,447 Property, plant and equipment 15,288 14,884 Less accumulated depreciation 11,604 10,472 ————— ————- Net property, plant and equipment 3,684 4,412 ————— ————- Other receivables-long term - 850 Intangible assets (net) 463 523 Other assets 45 47 ————— ————- $ 24,950 28,279 ========== ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current portion of long-term debt $ 0 1,000 Trade accounts payable 3,111 3,027 Accrued expenses 1,781 1,409 Dividends payable 132 133 Income taxes payable 0 846 ————— ————- Total current liabilities 5,024 6,415 Long-term debt, less current portion 0 2,000 Deferred income taxes 37 139 ————— ————- Total liabilities 5,061 8,554 Stockholders' equity: Common stock 3,015 3,014 Additional paid-in capital 9,568 9,287 Retained earnings 7,346 7,464 Treasury stock, 21,500 shares at cost (40) (40) ————— ————- Total stockholders' equity 19,889 19,725 ————— ————- $ 24,950 28,279 ========== ========= (a) The condensed consolidated balance sheet is derived from the Company audited balance sheet as of that date. *T

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