PRESS RELEASE DATED NOVEMBER 1, 2005

EX-99.1 2 rel22006.htm PRESS RELEASE DATED NOVEMBER 1, 2005 PRESS RELEASE DATED NOVEMBER 1, 2005

Exhibit 99.1

TECHNOLOGY RESEARCH CORPORATION

ANNOUNCES RESULTS FOR SECOND FISCAL QUARTER

CLEARWATER, FLORIDA, November 1, 2005 -- Technology Research Corporation (TRC), (NASDAQ-TRCI),

today announced revenues and earnings for its second fiscal quarter ended September 30, 2005. Revenues were

$8,661,685, compared to $7,069,527 reported in the same quarter last year, an increase of 23%. The Company

reported a net loss for the current quarter of $(244,743), compared to net income of $318,045 for the same quarter

last year. Basic and diluted losses were $(.04) per share for the current quarter compared to basic earnings of $.06

per share and diluted earnings of $.05 per share for the same quarter last year.

Revenues for the six-month period ended September 30, 2005 were $19,238,435, compared to $14,200,471

reported in the same period of the prior year, an increase of 35%. Net income for the six-month period was $48,092,

compared to $991,715, for the same period last year. Basic and diluted earnings were $.01 per share for the six-month

period compared to basic and diluted earnings of $.17 per share for the same period last year.

While revenues were higher for both the quarter and six-month period ended September 30, 2005, compared to same

periods last year, net income was impacted by lower gross profit margins and non-recurring expenses totaling some

$550,000 incurred during the fiscal quarter, which included termination and severance costs, additional product warranty

costs associated with the new room air conditioning (RAC) product and legal expenses to defend Company patents.

Robert S. Wiggins, Chairman, President & CEO said, "The Companys earnings performance for the first two quarters

of fiscal 2006 has not been satisfactory. Revenue growth was strong, as compared to the previous year; however, net

income has not followed because of lower margins and special charges in the quarter. Gross profit margins, on products

across the board, will continue to be affected by higher commodity prices for metals such as copper and silver, as well

as the impact of oil prices on resins for plastics and fuel costs resulting in higher freight costs." Wiggins continued, "The

Company expects to return to profitability in the third quarter, showing both net income and revenue growth as compared

to the same quarter last year. We expect our military business to be consistent with last year, and while we expect that

our overall commercial business revenues will continue to grow, the market remains highly competitive with pressure on

margins. The Company recently added a large electronics retailer and a chain of super centers as new customers for our

commercial products. He added, "The Company now has more experience in supplying the RAC market and believes

the RAC business will provide a positive contribution to the Companys profit and cash flow for the remainder of the fiscal

year. We further expect that the fiscal 2006 total RAC revenues will exceed those of fiscal 2005. Our dedication and

principal focus is on improving the Companys profit performance."

For the quarter ended September 30, 2005, commercial revenues increased by $1,305,969, military revenues increased

by $290,940 and royalty income decreased by $4,751 compared to the same period ended September 30, 2004. The

increase in commercial revenues was primarily attributed to shipments of product into the RAC market, and to a lesser

extent brand label shipments. Military revenues showed some strengthening in the quarter as a result of the Department

of Defense releasing supplemental spending for its fiscal 2005 year in late June. For the six-month period ended

September 30, 2005, commercial revenues increased by $5,457,337, military revenues decreased by $361,991 and

royalty income decreased by $57,382 compared to the same period ended September 30, 2004. The increase in

commercial revenues was primarily attributable to shipments of product into the RAC market, and to a lesser extent

product expansion into retail stores and strong brand label shipments. The decrease in military revenues resulted from a

delay in certain follow-on equipment releases of existing contracts for control devices related to the Tactical Quiet

Generator (TQG) programs. In addition, certain direct military orders could not be placed until June, when the Department

of Defense released supplemental spending for its fiscal 2005 year. New orders totaling $8,320,129 were booked in the

quarter, as previously announced, and shipments commenced during the quarter with the remainder scheduled out over the

next 12 months. The second quarter dividend of $.015 per share was paid on October 21, 2005 to shareholders of

record on September 30, 2005.

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.

TECHNOLOGY RESEARCH CORPORATION AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

Three-months ended

September 30 September 30 June 30

2005 2004 2005

Operating revenues:

Commercial $ 5,538,446 4,232,477 7,927,421

Military 3,123,239 2,832,299 2,649,329

Royalties - 4,751 -

8,661,685 7,069,527 10,576,750

Operating expenses:

Cost of sales 6,882,845 4,925,848 8,283,552

Selling, general, and administrative 1,516,999 1,174,214 1,375,076

Research, development and engineering 538,018 501,423 487,404

8,937,862 6,601,485 10,146,032

Operating income (loss) (276,177) 468,042 430,718

Interest and sundry income (expense) (54,155) 6,650 (40,271)

Income (loss) before income taxes (330,332) 474,692 390,447

Income tax expense (benefit) (85,589) 156,647 97,612

Net income (loss) $ (244,743) 318,045 292,835

======= ======= ========

Net income (loss) per common share:

Basic $ (.04) .06 .05

Diluted $ (.04) .05 .05

Weighted average number of common

shares outstanding:

Basic 5,775,625 5,755,584 5,774,375

Diluted 5,775,625 5,947,031 5,841,212

Dividends paid $ .015 .015 .015

Six-months ended

September 30 September 30

2005 2004

Operating revenues:

Commercial $ 13,465,867 8,008,530

Military 5,772,568 6,134,559

Royalties - 57,382

19,238,435 14,200,471

Operating expenses:

Cost of sales 15,166,395 9,435,264

Selling, general, and administrative 2,892,074 2,331,012

Research, development and engineering 1,025,424 967,894

19,083,893 12,734,170

Operating income 154,542 1,466,301

Interest and sundry income (expense) (94,427) 13,870

Income before income taxes 60,115 1,480,171

Income taxes 12,023 488,456

Net income $ 48,092 991,715

========= =========

Net income per common share:

Basic $ .01 .17

Diluted $ .01 .17

Weighted average number of common

shares outstanding:

Basic 5,775,018 5,750,111

Diluted 5,836,472 5,966,279

Dividends paid $ .03 .03

TECHNOLOGY RESEARCH CORPORATION AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

September 30 March 31

ASSETS 2005 2005

Current assets:

Cash and cash equivalents $ 2,273,926 815,411

Short-term investments 1,169 487,072

Accounts receivable, net 6,725,798 13,114,548

Income tax receivable 44,241 -

Inventories 12,005,117 11,460,302

Prepaid expenses and other current assets 302,391 514,922

Deferred income taxes 513,119 488,413

Total current assets 21,865,761 26,880,668

Property, plant and equipment 14,066,984 13,560,106

Less accumulated depreciation 8,712,501 8,089,950

Net property, plant and equipment 5,354,483 5,470,156

Other assets 64,088 96,004

$ 27,284,332 32,446,828

========= ========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Short-term debt $ 2,210,200 3,000,000

Trade accounts payable 4,086,405 7,970,920

Accrued expenses 1,061,932 1,327,944

Dividends payable 100,273 100,175

Income taxes payable - 112,239

Total current liabilities 7,458,810 12,511,278

Long-term debt 2,350,000 2,350,000

Deferred income taxes 351,352 378,143

Total liabilities 10,160,162 15,239,421

Stockholders' equity:

Common stock 2,956,661 2,955,641

Additional paid-in capital 8,524,149 8,483,237

Retained earnings 5,683,505 5,808,674

Treasury stock, 21,500 shares at cost (40,145) (40,145)

Total stockholders' equity 17,124,170 17,207,407

$ 27,284,332 32,446,828

========= ========

* The condensed consolidated balance sheet is derived from the Companys audited balance sheet as of that date.

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