4TH QUARTER EARNINGS RELEASE (FY 2006)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities and Exchange Act of 1934

Date of Report (Date of earliest event reported): May 5, 2006

TECHNOLOGY RESEARCH CORPORATION

(Exact name of registrant as specified in its charter)

Florida	0-13763	59-2095002
(State or other jurisdiction	(Commission File Number)	(IRS Employer
of incorporation)		Identification No.)

5250-140th Avenue North, Clearwater, Florida	33760
(Address of principal executive officers)	(Zip Code)

Registrant's telephone number, including area code: (727) 535-0572

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):

[_] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17CFR 240.14a-12)

[_] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[_] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

On May 5, 2006, Technology Research Corporation issued a press release announcing its financial results for its fourth quarter and year ended March 31, 2006. In addition, the Company provided general financial guidance for its fiscal year ended March 31, 2007. A copy of the press release is furnished as Exhibit 99.1 to this report.

In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits.

(d) The following exhibit is filed as part of this report:

Exhibit No.

99.1

Description

Press release issued May 5, 2006

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	TECHNOLOGY RESEARCH CORPORATION


Date: May 8, 2006	By: /s/ Barry H. Black
	Name: Barry H. Black
	Title: VP of Finance CFO

Exhibit 99.1 TECHNOLOGY RESEARCH CORPORATION REPORTS FINANCIAL RESULTS INCLUDING RECORD ANNUAL REVENUES AND RECORD FOURTH QUARTER EARNINGS CLEARWATER, FLORIDA, May 5, 2006 -- Technology Research Corporation (TRC), (NASDAQ-TRCI), today announced revenues and earnings for its fourth quarter and fiscal year ended March 31, 2006. Fourth quarter revenues were $15.0 million, a decrease of $.5 million or 3% from the $15.5 million reported in the same quarter last year. Net income for the fourth quarter increased $.4 million to $1.2 million compared with $.9 million for the prior year. Diluted net income per share increased $.06 to $.21 per share for the fourth quarter compared with $.15 per share for the same quarter last year. For the full fiscal 2006 year, revenues were a record $45.6 million, an increase of $6.2 million, or 16%, over the $39.4 million of revenues in the prior fiscal year. Net income was $2.1 million for the fiscal year ended March 31, 2006, an improvement of $.1 million from fiscal 2005 results. Diluted net income per share increased $.02 from $.34 to $.36 in fiscal 2006. Robert S. Wiggins, Chairman, President & CEO said, Our excellent fourth quarter performance, including an all time TRC quarterly earnings record, combined with our strong third quarter, allowed the Company to overcome a slow start in the first two quarters of the fiscal year. This outstanding second half achievement resulted in the Company exceeding last years net income as well as contributing to our significantly improved balance sheet. We were able to achieve these results in spite of incurring more than $.3 million in legal fees related to the patent infringement lawsuit, which was initiated during fiscal 2006. Our strong performance in fiscal 2006 generated significant cash flow from operations. Cash and short-term investments increased $1.8 million over our balances at the close of our previous fiscal year, while total debt declined $2.4 million to $3.0 million during the same period. Wiggins added, Our financial results are a reflection of the Companys dedication and commitment to controlling costs despite the intensely competitive nature of the markets in which our business operates, as well as the increases in our raw material costs we experienced, especially the 60% increase in copper prices over this past year. Improved operating efficiencies helped us to maintain our gross profit percentage within 1% of the previous year. With respect to fiscal 2007, TRC is forecasting revenues to increase 10 to 15% from fiscal 2006 levels with the largest increases in the international and U.S. commercial markets. Military revenues are expected to remain steady but slightly lower than our outstanding fiscal 2006 results. Room air conditioner revenues are forecasted to be at approximately the same level as in fiscal 2006, however, the Company plans to introduce a lower cost technology for the room air conditioner market that should improve our competitive position. Operating expenses are estimated to grow at approximately the same rate as our revenues reflecting increased investments in new products and markets that are expected to accelerate growth in fiscal 2008. Based on these forecasts, net income should increase at a rate at or above our revenue growth rate. From a balance sheet perspective, we are planning to generate positive cash flow from operations that will allow us to continue paying down our debt as well as funding strategic growth for our future. TRC intends to introduce several new products in fiscal 2007 that will not only advance our leadership in electrical safety products with additional features and functionality but will also provide us with new, competitive low-cost alternative solutions that the market is demanding. In summary, fiscal 2007 is expected to be a year where the Company makes key investments for the future while achieving sustainable growth in revenues and earnings. This guidance will not be updated during the year unless there is a significant change in forecasts. From a quarterly perspective, as many investors are aware, TRCs revenues tend to be seasonal in nature, mostly as a result of the seasonal nature of our room air conditioner business. The highest demand for most of our room air conditioner products runs from November through March when manufacturers are preparing for building units for the upcoming season. The Companys fiscal third and fourth quarters are the highest revenue quarters while the first and second quarters usually have relatively lower revenues. TRC believes that the best measure of our success is from year-to-year rather than from quarter-to-quarter. The fourth quarter dividend of $.015 per share was paid on April 21, 2006 to shareholders of record on March 31, 2006. ************ 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 Year ended ----------------------- ------------------------ March 31 March 31 March 31 March 31 2006 2005 2006 2005 ---- ---- ---- ---- Operating revenues: Commercial $ 10,926,096 12,191,321 32,250,339 27,022,170 Military 4,100,984 3,255,177 13,369,478 12,269,581 Royalties - 81,583 - 141,596 ---------- ---------- ---------- ---------- 15,027,080 15,528,081 45,619,817 39,433,347 ---------- ---------- ---------- ---------- Operating expenses: Cost of sales 11,309,616 12,530,375 34,977,728 29,618,620 Selling, general, and administrative 1,723,886 1,484,888 5,967,076 5,138,838 Research, development and engineering 511,094 501,062 1,955,345 2,034,387 ---------- ---------- ---------- ---------- 13,544,596 14,516,325 42,900,149 36,791,845 ---------- ---------- ---------- ---------- Operating income 1,482,484 1,011,756 2,719,668 2,641,502 Interest and sundry income (expense) (51,296) (37,188) (195,655) (17,465) ---------- ---------- ---------- ---------- Income before income taxes 1,431,188 974,568 2,524,013 2,624,037 Income tax expense 193,485 116,687 412,050 611,528 ---------- ---------- ---------- ---------- Net income $ 1,237,703 857,881 2,111,963 2,012,509 ========== ========== ========== ========== Net income per common share: Basic $ .21 .15 .37 .35 Diluted $ .21 .15 .36 .34 Weighted average number of common shares outstanding: Basic 5,805,637 5,762,563 5,786,129 5,754,816 Diluted 5,859,660 5,891,856 5,833,947 5,954,052 Dividends paid $ .015 .015 .060 .060 TECHNOLOGY RESEARCH CORPORATION AND SUBSIDIARY CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) * March 31 March 31 ASSETS 2006 2005 Current assets: ---- ---- Cash and cash equivalents $ 2,607,011 815,411 Short-term investments 500,415 487,072 Accounts receivable, net 10,729,579 13,114,548 Inventories 9,632,873 11,460,302 Prepaid expenses and other current assets 210,274 514,922 Deferred income taxes 445,262 488,413 ---------- ---------- Total current assets 24,125,414 26,880,668 ---------- ---------- Property, plant and equipment 14,284,279 13,560,106 Less accumulated depreciation 9,345,604 8,089,950 ---------- ---------- Net property, plant and equipment 4,938,675 5,470,156 ---------- ---------- Other assets 69,807 96,004 ---------- ---------- $ 29,133,896 32,446,828 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current portion of long-term debt $ 1,000,000 3,000,000 Trade accounts payable 4,848,934 7,970,920 Accrued expenses 1,296,271 1,327,944 Dividends payable 101,111 100,175 Income taxes payable 357,432 112,239 ---------- ---------- Total current liabilities 7,603,748 12,511,278 Long-term debt, less current portion 2,000,000 2,350,000 Deferred income taxes 244,058 378,143 ---------- ---------- Total liabilities 9,847,806 15,239,421 ---------- ---------- Stockholders' equity: Common stock 2,982,811 2,955,641 Additional paid-in capital 8,770,246 8,483,237 Retained earnings 7,573,178 5,808,674 Treasury stock, 21,500 shares at cost (40,145) (40,145) ---------- ---------- Total stockholders' equity 19,286,090 17,207,407 ---------- ---------- $ 29,133,896 32,446,828 ========== ========== * The condensed consolidated balance sheet is derived from the Companys audited balance sheet as of that date. # # #