8-K

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): November 8, 2010

TECHNOLOGY RESEARCH CORPORATION

(Exact name of registrant as specified in its charter)

Florida	0-13763	59-2095002
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer 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 November 8, 2010, Technology Research Corporation (the “Company”) issued a press release announcing its financial results for the three months period ended September 30, 2010. A copy of the press release is furnished as Exhibit 99.1. Exhibit 99.2 sets forth the reasons the Company believes that presentation of the non-GAAP financial measures contained in the press release provides useful information to investors regarding the Company’s financial condition and results of operations. To the extent material, Exhibit 99.2 also discloses the additional purposes, if any, for which Company management uses these non-GAAP financial measures. These exhibits are incorporated herein by reference.

The presentation of this financial information, which is not prepared under any comprehensive set of accounting rules or principles, is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with generally accepted accounting principles. Company management believes that its preparation of non-GAAP financial measures may assist investors in making comparisons of the Company’s core net profitability with historical periods. Management uses operating cash flow as a non-GAAP financial measure in evaluating its core results of operations and in allocating resources and capital, and believes that these measures are important components of its internal performance measurement process. When the Company consummates an acquisition, it records purchased intangible assets in its financial statements and amortizes the acquired assets over their useful lives. The amortization of such intangible assets is a non-cash expense which is not considered by management when assessing the core operating cash flow of the Company’s business. Management believes that its presentation of certain non-GAAP financial results is appropriate since it reflects the operating results used by the Company in assessing the Company’s core operating performance and in establishing internal budgets and forecasts.

The information in this Current Report on Form 8-K, including the exhibit, is furnished pursuant to Item 2.02 and shall not be deemed “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities under that Section. Furthermore, the information in the Current Report on Form 8-K, including the exhibit, shall not be deemed to be incorporated by reference into the filings of the Company under the Securities Act of 1933, as amended.

Item 9.01 Financial Statements and Exhibits.

(c) The following exhibit is furnished pursuant to Item 2.02 hereof and should not be deemed to be “filed” under the Exchange Act.

Exhibit No.	Description
99.1	Press Release issued November 8, 2010
99.2	Explanation of Non-GAAP Financial Measures

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: November 9, 2010	By:	/s/ Robert D. Woltil
	Name:	Robert D. Woltil
	Title:	Interim Chief Financial Officer

EX-99.1

Exhibit 99.1

For: TECHNOLOGY RESEARCH CORPORATION	Contact: Robert D. Woltil
5250 140th Avenue North	Chief Financial Officer
Clearwater, Florida 33760	Tel: (727) 535-0572
Owen Farren, President and CEO	Fax: (727) 535-9691
	Web Page: www.trci.net

TECHNOLOGY RESEARCH CORPORATION REPORTS SECOND QUARTER RESULTS

Clearwater, Florida, November 8, 2010 (Globe Newswire via COMTEX News Network) – Technology Research Corporation (“TRC”), (Nasdaq:TRCI), today announced revenue and earnings for its second fiscal quarter ended September 30, 2010.

Revenue was $9.2 million for the fiscal quarter ended September 30, 2010, a decrease of $0.4 million from revenue of $9.6 million for the fiscal quarter ended September 30, 2009. Net income for the quarter ended September 30, 2010 was $0.3 million, or $0.05 per diluted share compared with net income of $1.2 million, or $0.20 per diluted share for the same period one year earlier. Operating cash flow, which we define as earnings before interest, taxes, depreciation and amortization, was $1.1 million for the current quarter, as compared to $1.9 million in the second fiscal quarter of last year.

Orders for the quarter just ended were $7.0 million, an increase of $1.9 million from the same fiscal quarter last year. Military orders were $2.7 million, an increase of $1.5 million from the second quarter of the previous year and commercial orders were $4.3 million, an increase of $0.4 million from the first quarter of the prior year.

Owen Farren, President and CEO, said “While our commercial sales have rebounded nicely from last year’s levels, our results were impacted this quarter on the military side by delays in some orders and programs. This impacted Patco as well as TRC’s traditional military business. Furthermore, we faced a tough comparison to last year’s second quarter, which was exceptional as a result of heavy deliveries to our largest military customer. While we expect to continue to be impacted in our third quarter by similar delays, we remain positive about our Company’s direction.

TRC continues to make very good progress on our strategic goal of providing new and advanced power management and control products and intelligent battery systems to our customers. We will do this through a combination of targeted acquisitions and internal product development.”

Cash and cash equivalents were $9.3 million at September 30, 2010, an increase of $1.1 million from March 31, 2010. The Company continues to have no borrowings outstanding under it’s line of credit.

The second quarter dividend of $0.02 per share was paid on October 15, 2010 to shareholders of record as of September 30, 2010.

************

TRC is a recognized leader in providing cost effective engineered solutions for applications involving power management and control, intelligent battery systems technology and electrical safety products based on our proven ground fault sensing and Fire Shield^® technology. These products are designed, manufactured and distributed to 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. More information is available at www.trci.net.

“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.

Non-GAAP Financial Measures

This report sometimes refers to financial measures that are not presented according to generally accepted accounting principles (GAAP). Certain of these measures are considered “non-GAAP financial measures” under the Securities and Exchange Commission (SEC) regulations; those rules require the supplemental explanations and reconciliations that are in our Form 8-K (Quarterly Earnings Release) filed with the SEC.

TECHNOLOGY RESEARCH CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Income

(Unaudited)

(In thousands, except share and per share data)

	Three Months Ended September 30,				Six Months Ended September 30,
	2010		2009		2010		2009
Revenue:
Commercial	$	4,161		3,679	$	8,492		7,044
Military		4,880		5,901		10,891		12,109
Royalty		137		47		227		173
Total revenue		9,178		9,627		19,610		19,326
Cost of sales		5,869		5,721		12,050		11,370
Gross profit		3,309		3,906		7,560		7,956
Operating expenses:
Selling and marketing		579		608		1,251		1,280
General and administrative		1,551		994		3,356		1,998
Research and development		813		658		1,746		1,331
Total operating expenses		2,943		2,260		6,353		4,609
Income from operations		366		1,646		1,207		3,347
Other income, net		—		2		1		5
Income before income taxes		366		1,648		1,208		3,352
Income tax expense		51		431		302		920
Net income	$	315		1,217	$	906		2,432
Earnings per share - basic	$	0.05		0.20	$	0.14		0.41
Earnings per share - diluted	$	0.05		0.20	$	0.13		0.40
Shares outstanding - basic		6,605,419		5,891,828		6,602,680		5,891,828
Shares outstanding - diluted		6,870,316		5,985,691		6,894,575		5,944,280

TECHNOLOGY RESEARCH CORPORATION AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In thousands, except share data)

	September 30, 2010			March 31, 2010
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	9,264		$	8,216
Trade and other accounts receivable, net of allowance for doubtful accounts of $30 at September 30, 2010 and $38 at March 31, 2010		4,334			4,400
Income taxes receivable		—			29
Inventories		7,510			7,315
Deferred income taxes		881			729
Prepaid expenses and other current assets		232			299
Total current assets		22,221			20,988
Property, plant and equipment, net of accumulated depreciation of $10,921 at September 30, 2010 and $10,532 at March 31, 2010		3,067			3,123
Intangible assets, net of accumulated amortization of $1,421 at September 30, 2010 and $238 at March 31, 2010		2,746			3,929
Goodwill		4,402			4,402
Other assets		33			33
Total assets	$	32,469		$	32,475
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Trade accounts payable	$	881		$	1,423
Accrued expenses		1,295			1,720
Accrued dividends		135			134
Income taxes payable		368			—
Total current liabilities		2,679			3,277
Income taxes payable		442			303
Deferred income taxes		946			1,397
Patco earn-out		738			738
Total liabilities		4,805			5,715
Stockholders’ equity:
Common stock $0.51 par value; 10,000,000 shares authorized, 6,644,343 shares issued and 6,621,058 shares outstanding at September 30, 2010 and 6,629,405 shares issued and 6,603,620 shares outstanding at March 31, 2010		3,389			3,379
Additional paid-in capital		12,827			12,570
Retained earnings		11,504			10,867
Common stock held in treasury, 25,785 shares at cost		(56	)		(56	)
Total stockholders’ equity		27,664			26,760
Total liabilities and stockholders’ equity	$	32,469		$	32,475

TECHNOLOGY RESEARCH CORPORATION AND SUBSIDIARIES

Supplemental Information

Reconciliation of Operating Cash Flow to Income from Operations

(Unaudited)

(In thousand)

	Three Months Ended September 30,				Six Months Ended September 30,
	2010		2009		2010		2009
Income from Operations	$	366		1,646	$	1,207		3,347
Depreciation Expense		261		248		515		523
Amortization Expense		515		14		1,183		29
Operating Cash Flow	$	1,142	$	1,908	$	2,905	$	3,899

EX-99.2

Exhibit 99.2

Explanation of Non-GAAP Financial Measures

This Exhibit 99.2 to the accompanying Current Report on Form 8-K for Technology Research Corporation (“TRC”) sets forth the reasons we believe that presentation of financial measures not in accordance with generally accepted accounting principles (GAAP) contained in the earnings press release filed as Exhibit 99.1 to the Current Report on Form 8-K provides useful information to investors regarding TRC’s financial condition and results of operations. To the extent material, this Exhibit also discloses the additional purposes, if any, for which TRC’s management uses these non-GAAP financial measures. A reconciliation of these non-GAAP financial measures with the most directly comparable GAAP financial measures is included in the earnings press release itself.

Operating cash flow is the primary basis used to measure the operational strength of our business. We define operating cash flow as earnings before interest, income taxes, depreciation and amortization expense. This measure eliminates both depreciation expense and the significant level of amortization expense resulting from intangible assets recognized in business combinations. Additionally, it is unaffected by our capital structure or investment activities. Our management and Board of Directors use this financial measure to evaluate our operating performance and to allocate resources and capital. It is also a significant performance measure in our annual incentive compensation programs. We believe that Operating Cash Flow is useful to investors in comparing our operating performance to other companies in our industry, although our measure of Operating Cash Flow may not be directly comparable to similar measures used by other companies.

We reconcile Operating Cash Flow, which is a non-GAAP financial measure, to income from operations, which is the most comparable financial measure calculated and presented in accordance with GAAP.