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 Exchange Act of 1934
Date of Report (Date of earliest event Reported): June 21, 2019
Technical Communications Corporation
(Exact Name of Registrant as Specified in Charter)
Massachusetts | 001-34816 | 04-2295040 |
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification Number) |
100 Domino Drive, Concord, MA 01742 |
(Address of Principal Executive Offices) (Zip Code) |
(978) 287-5100
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
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: | ||
[ ] | 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 (17 CFR 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 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered or to be registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Common | TCCO | NASDAQ Capital Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company [ ]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Item 2.02. Results of Operations and Financial Condition.
On June 21, 2019, Technical Communications Corporation (the “Company”) announced revised financial results for the fiscal year and quarter ended September 29, 2018, and results for the fiscal quarters ended December 29, 2018 and March 30, 2019, and filed its annual and quarterly reports for such periods. The Company had previously reported the results for the fiscal year and quarter ended September 29, 2018 in a Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission on December 10, 2018; such previously announced results subsequently have been revised. The Company’s Annual Report on Form 10-K for the fiscal year ended September 29, 2018 also contains restated results for the fiscal year ended September 30, 2017. Further, the Company is filing Quarterly Reports on Forms 10-Q/A for the fiscal quarters ended December 30, 2017, March 31, 2018 and June 30, 2018 to reflect the restatement of certain financial statements contained therein. A copy of the press release dated June 21, 2019 describing such results for such periods, as well as other prior fiscal periods, is attached as Exhibit 99.1 to this report and incorporated herein.
Item 9.01. Financial Statements and Exhibits.
a. Financial statements of businesses acquired. Not applicable.
b. Pro forma financial information. Not applicable.
c. Shell company transactions. Not applicable
d. Exhibits. The following exhibit is furnished pursuant to Item 2.02 hereof, and the information contained in this report and such exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly stated therein.Exhibit No. Title 99.1 Press Release dated June 21, 2019
SIGNATURE
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.
Technical Communications Corporation | ||
Date: June 21, 2019 | By: | /s/ Carl H. Guild, Jr. |
Carl H. Guild, Jr. | ||
President and Chief Executive Officer | ||
EXHIBIT 99.1
Technical Communications Corporation Completes Restatement of Prior Financial Statements; Files Form 10-K for the year ended September 29, 2018 and Forms 10-Q/A for Fiscal 2018; and Files Forms 10-Q for the quarters ended December 29, 2018 and March 30, 2019
CONCORD, Mass., June 21, 2019 (GLOBE NEWSWIRE) -- Technical Communications Corporation (NasdaqCM: TCCO) today announced the filing of its Annual Report on Form 10-K for the fiscal year ended September 29, 2018 with the Securities and Exchange Commission. The Form 10-K contains financial statements for fiscal year 2018 and restated information for fiscal year 2017. The Company also filed its Quarterly Reports on Form 10-Q for the quarters ended December 29, 2018 and March 30, 2019.
TCC had announced financial information and results of operations for the fiscal year and quarter ended September 29, 2018 in a Current Report on Form 8-K filed on December 10, 2018. Subsequent to such filing, management conducted a review of TCC’s revenue recognition policies, including its interpretations of ASC 605, Revenue Recognition, among other matters. Based upon this review, the Audit Committee of TCC’s Board of Directors, on the recommendation of management after consultation with the Company’s independent registered public accounting firm, concluded that the Company should modify the application of its revenue recognition policies, specifically in connection with a services contract. This modification resulted in the restatement of the previously announced financial information for the fiscal year and quarter ended September 29, 2018 as set forth in the Form 8-K filed on December 10, 2018, as well as a restatement of the financial information included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2017 and Quarterly Reports on Form 10-Q for the fiscal quarters ended December 30, 2017, March 31, 2018 and June 30, 2018. The Company filed Quarterly Reports on Forms 10-Q/A for such periods today to reflect the restatements.
The Company believes that the restatement will have no impact on total revenue recognized over the life of the service contract that is currently in effect. Furthermore, TCC believes, based on information available to date, that the restatement will have no impact on the timing or magnitude of cash flows from operations. The impact of the modification of revenue recognition was to recognize $484,000 of revenue originally recorded in TCC’s fiscal year ended September 30, 2017 in the fiscal year ended September 29, 2018, and to recognize $1,623,000 of revenue originally recorded in the Company’s fiscal year ended September 29, 2018 in the fiscal year ending September 28, 2019. As of September 29, 2018, the Company had $2,107,000 of deferred revenue recorded on its balance sheet as a result of these modifications.
About Technical Communications Corporation
For over 50 years, TCC has specialized in superior-grade secure communications systems and customized solutions, supporting our CipherONE® 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 Forms 10-Q/A for the quarters ended December 30, 2017, March 31, 2018 and June 30, 2018 and its Annual Report on Form 10-K for the fiscal year ended September 29, 2018 filed with the Commission and the “Risk Factors” section included therein (as the same may be amended from time to time).
Technical Communications Corporation | ||||||||||||
Condensed consolidated statements of operations | ||||||||||||
Three Months Ended | ||||||||||||
(Unaudited) | ||||||||||||
03/30/2019 | 03/31/2018 | 12/29/2018 | 12/30/2017 | |||||||||
Net revenue | $ | 1,928,000 | $ | 804,000 | $ | 1,112,000 | $ | 837,000 | ||||
Gross profit | 799,000 | 243,000 | 399,000 | 292,000 | ||||||||
Selling, general and administrative | 595,000 | 531,000 | 545,000 | 460,000 | ||||||||
Product development costs | 36,000 | 153,000 | 107,000 | 166,000 | ||||||||
Operating income (loss) | 168,000 | (441,000) | (253,000) | (334,000) | ||||||||
Net income (loss) | 173,000 | (439,000) | (248,000) | (332,000) | ||||||||
Net income (loss) per share: | ||||||||||||
Basic | $ | 0.09 | $ | (0.24) | $ | (0.13) | $ | (0.18) | ||||
Diluted | $ | 0.09 | $ | (0.24) | $ | (0.13) | $ | (0.18) | ||||
Six Months Ended | ||||||||||||
(Unaudited) | ||||||||||||
03/30/2019 | 03/31/2018 | |||||||||||
Net revenue | $ | 3,041,000 | $ | 1,640,000 | ||||||||
Gross profit | 1,199,000 | 535,000 | ||||||||||
Selling, general and administrative | 1,140,000 | 991,000 | ||||||||||
Product development costs | 144,000 | 318,000 | ||||||||||
Operating loss | (85,000) | (774,000) | ||||||||||
Net loss | (75,000) | (771,000) | ||||||||||
Net loss per share: | ||||||||||||
Basic | $ | (0.04) | $ | (0.42) | ||||||||
Diluted | $ | (0.04) | $ | (0.42) | ||||||||
Condensed consolidated balance sheets | ||||||||
03/30/2019 | 12/29/2018 | 09/29/2018 | ||||||
(Unaudited) | (Unaudited) | (Unaudited) | ||||||
Cash and marketable securities | $ | 1,765,000 | $ | 1,748,000 | $ | 1,982,000 | ||
Accounts receivable - trade | 285,000 | 202,000 | 560,000 | |||||
Inventory | 1,043,000 | 1,373,000 | 1,369,000 | |||||
Other current assets | 137,000 | 96,000 | 142,000 | |||||
Total current assets | 3,230,000 | 3,419,000 | 4,053,000 | |||||
Property and equipment, net | 33,000 | 40,000 | 49,000 | |||||
Total assets | $ | 3,263,000 | $ | 3,459,000 | $ | 4,102,000 | ||
Accounts payable | $ | 248,000 | $ | 168,000 | $ | 188,000 | ||
Deferred revenue | 1,249,000 | 1,722,000 | 2,107,000 | |||||
Accrued expenses and other current liabilities | 290,000 | 275,000 | 274,000 | |||||
Total current liabilities | 1,787,000 | 2,165,000 | 2,569,000 | |||||
Total stockholders’ equity | 1,476,000 | 1,294,000 | 1,533,000 | |||||
Total liabilities and stockholders’ equity | $ | 3,263,000 | $ | 3,459,000 | $ | 4,102,000 | ||
Condensed consolidated statements of operations (Restated) | ||||||||||||||||||
Three Months Ended | ||||||||||||||||||
(Unaudited) | ||||||||||||||||||
9/29/2018 | 9/30/2017 | |||||||||||||||||
As reported | Adjustment | As adjusted | As reported | Adjustment | As adjusted | |||||||||||||
Net revenue | $ | 1,717,000 | $ | (580,000) | $ | 1,137,000 | $ | 1,125,000 | $ | (435,000) | $ | 690,000 | ||||||
Gross profit (loss) | 836,000 | (593,000) | 243,000 | 162,000 | (435,000) | (273,000) | ||||||||||||
Selling, general and administrative | 481,000 | (53,000) | 428,000 | 476,000 | 476,000 | |||||||||||||
Product development costs | 132,000 | (54,000) | 78,000 | 206,000 | 206,000 | |||||||||||||
Operating income (loss) | 223,000 | (486,000) | (263,000) | (520,000) | (435,000) | (955,000) | ||||||||||||
Net income (loss) | 228,000 | (487,000) | (259,000) | (518,000) | (435,000) | (953,000) | ||||||||||||
Net income (loss) per share: | ||||||||||||||||||
Basic | $0.12 | ($0.26) | ($0.14) | ($0.28) | ($0.24) | ($0.52) | ||||||||||||
Diluted | $0.12 | ($0.26) | ($0.14) | ($0.28) | ($0.24) | ($0.52) | ||||||||||||
Year Ended | ||||||||||||||||||
(Unaudited) | ||||||||||||||||||
9/29/2018 | 9/30/2017 | |||||||||||||||||
As reported | Adjustment | As adjusted | As reported | Adjustment | As adjusted | |||||||||||||
Net revenue | $ | 5,307,000 | $ | (1,622,000) | $ | 3,685,000 | $ | 4,209,000 | $ | (484,000) | $ | 3,725,000 | ||||||
Gross profit | 2,636,000 | (1,664,000) | 972,000 | 2,291,000 | (484,000) | 1,807,000 | ||||||||||||
Selling, general and administrative | 1,994,000 | (53,000) | 1,941,000 | 2,145,000 | 2,145,000 | |||||||||||||
Product development costs | 547,000 | (26,000) | 521,000 | 1,584,000 | 1,584,000 | |||||||||||||
Operating income (loss) | 95,000 | (1,585,000) | (1,490,000) | (1,438,000) | (484,000) | (1,922,000) | ||||||||||||
Net income (loss) | 105,000 | (1,585,000) | (1,480,000) | (1,429,000) | (484,000) | (1,913,000) | ||||||||||||
Net income (loss) per share: | ||||||||||||||||||
Basic | $0.06 | ($0.86) | ($0.80) | ($0.78) | ($0.26) | ($1.04) | ||||||||||||
Diluted | $0.06 | ($0.86) | ($0.80) | ($0.78) | ($0.26) | ($1.04) | ||||||||||||
Condensed consolidated balance sheets (Restated) | ||||||||||||||||||
9/29/2018 | 9/30/2017 | |||||||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||||
As reported | Adjustment | As adjusted | As reported | Adjustment | As adjusted | |||||||||||||
Cash and marketable securities | $ | 1,982,000 | $ | 1,982,000 | $ | 1,657,000 | $ | 1,657,000 | ||||||||||
Accounts receivable - trade | 560,000 | 560,000 | 730,000 | 730,000 | ||||||||||||||
Inventory | 1,369,000 | 1,369,000 | 1,358,000 | 1,358,000 | ||||||||||||||
Other current assets | 142,000 | 142,000 | 136,000 | 136,000 | ||||||||||||||
Total current assets | 4,053,000 | 4,053,000 | 3,881,000 | 3,881,000 | ||||||||||||||
Property and equipment, net | 49,000 | 49,000 | 54,000 | 54,000 | ||||||||||||||
Total assets | $ | 4,102,000 | $ | 4,102,000 | $ | 3,935,000 | $ | 3,935,000 | ||||||||||
Accounts payable | $ | 173,000 | 15,000 | $ | 188,000 | $ | 109,000 | $ | 109,000 | |||||||||
Accrued expenses and other current liabilities | 327,000 | (53,000) | 274,000 | 326,000 | 326,000 | |||||||||||||
Deferred revenue | - | 2,107,000* | 2,107,000 | - | 484,000 | 484,000 | ||||||||||||
Total current liabilities | 500,000 | 2,069,000 | 2,569,000 | 435,000 | 484,000 | 919,000 | ||||||||||||
Total stockholders’ equity | 3,602,000 | (2,069,000)* | 1,533,000 | 3,500,000 | (484,000) | 3,016,000 | ||||||||||||
Total liabilities and stockholders’ equity | $ | 4,102,000 | $ | 4,102,000 | $ | 3,935,000 | $ | 3,935,000 | ||||||||||
*Cumulative adjustment of the restatement for fiscal years ended September 29, 2018 and September 30, 2017 | ||||||||||||||||||
Condensed consolidated statements of operations (Restated) | ||||||||||||||||||
Three Months Ended 12/30/2017 | ||||||||||||||||||
(Unaudited) | ||||||||||||||||||
As reported | Adjustment | As adjusted | ||||||||||||||||
Net revenue | $ | 1,117,000 | $ | (280,000) | $ | 837,000 | ||||||||||||
Gross profit | 572,000 | (280,000) | 292,000 | |||||||||||||||
Selling, general and administrative | 460,000 | 460,000 | ||||||||||||||||
Product development costs | 166,000 | 166,000 | ||||||||||||||||
Operating loss | (54,000) | (280,000) | (334,000) | |||||||||||||||
Net loss | (52,000) | (280,000) | (332,000) | |||||||||||||||
Net loss per share: | ||||||||||||||||||
Basic | ($0.03) | ($0.15) | ($0.18) | |||||||||||||||
Diluted | ($0.03) | ($0.15) | ($0.18) | |||||||||||||||
Three Months Ended 03/31/2018 | Six Months Ended 03/31/2018 | |||||||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||||
As reported | Adjustment | As adjusted | As reported | Adjustment | As adjusted | |||||||||||||
Net revenue | $ | 930,000 | $ | (126,000) | $ | 804,000 | $ | 2,046,000 | $ | (406,000) | $ | 1,640,000 | ||||||
Gross profit | 351,000 | (108,000) | 243,000 | 923,000 | (388,000) | 535,000 | ||||||||||||
Selling, general and administrative | 531,000 | 531,000 | 991,000 | 991,000 | ||||||||||||||
Product development costs | 135,000 | 18,000 | 153,000 | 300,000 | 18,000 | 318,000 | ||||||||||||
Operating loss | (315,000) | (126,000) | (441,000) | (369,000) | (406,000) | (775,000) | ||||||||||||
Net loss | (313,000) | (126,000) | (439,000) | (365,000) | (406,000) | (771,000) | ||||||||||||
Net loss per share: | ||||||||||||||||||
Basic | ($0.17) | ($0.07) | ($0.24) | ($0.20) | ($0.22) | ($0.42) | ||||||||||||
Diluted | ($0.17) | ($0.07) | ($0.24) | ($0.20) | ($0.22) | ($0.42) | ||||||||||||
Three Months Ended 06/30/2018 | Nine Months Ended 06/30/2018 | |||||||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||||
As reported | Adjustment | As adjusted | As reported | Adjustment | As adjusted | |||||||||||||
Net revenue | $ | 1,544,000 | $ | (637,000) | $ | 907,000 | $ | 3,590,000 | $ | (1,042,000) | $ | 2,548,000 | ||||||
Gross profit (loss) | 877,000 | (683,000) | 194,000 | 1,790,000 | (1,061,000) | 729,000 | ||||||||||||
Selling, general and administrative | 522,000 | 522,000 | 1,513,000 | 1,513,000 | ||||||||||||||
Product development costs | 114,000 | 10,000 | 124,000 | 415,000 | 27,000 | 442,000 | ||||||||||||
Operating income (loss) | 241,000 | (693,000) | (452,000) | (128,000) | (1,098,000) | (1,226,000) | ||||||||||||
Net income (loss) | 243,000 | (693,000) | (450,000) | (123,000) | (1,098,000) | (1,221,000) | ||||||||||||
Net income (loss) per share: | ||||||||||||||||||
Basic | $0.13 | ($0.37) | ($0.24) | ($0.07) | ($0.59) | ($0.66) | ||||||||||||
Diluted | $0.13 | ($0.37) | ($0.24) | ($0.07) | ($0.59) | ($0.66) | ||||||||||||
Condensed consolidated balance sheets (Restated) | |||||||
12/30/2017 | |||||||
(Unaudited) | |||||||
As reported | Adjustment | As adjusted | |||||
Cash and marketable securities | $ | 1,889,000 | $ | 1,889,000 | |||
Accounts receivable - trade | 323,000 | 323,000 | |||||
Inventory | 1,403,000 | 1,403,000 | |||||
Other current assets | 112,000 | 112,000 | |||||
Total current assets | 3,727,000 | 3,727,000 | |||||
Property and equipment, net | 41,000 | 41,000 | |||||
Total assets | $ | 3,768,000 | $ | 3,768,000 | |||
Accounts payable | $ | 76,000 | $ | 76,000 | |||
Accrued expenses and other current liabilities | 240,000 | 240,000 | |||||
Deferred revenue | - | 764,000 | 764,000 | ||||
Total current liabilities | 316,000 | 764,000 | 1,080,000 | ||||
Total stockholders’ equity | 3,452,000 | (764,000) | 2,688,000 | ||||
Total liabilities and stockholders’ equity | $ | 3,768,000 | $ | 3,768,000 | |||
3/31/2018 | 6/30/2018 | ||||||||||||||
(Unaudited) | (Unaudited) | ||||||||||||||
As reported | Adjustment | As adjusted | As reported | Adjustment | As adjusted | ||||||||||
Cash and marketable securities | $ | 1,543,000 | $ | 1,543,000 | $ | 1,460,000 | $ | 1,460,000 | |||||||
Accounts receivable - trade | 316,000 | 316,000 | 598,000 | 598,000 | |||||||||||
Inventory | 1,475,000 | 1,475,000 | 1,555,000 | (56,000) | 1,499,000 | ||||||||||
Other current assets | 140,000 | 140,000 | 172,000 | 172,000 | |||||||||||
Total current assets | 3,474,000 | 3,474,000 | 3,785,000 | 3,729,000 | |||||||||||
Property and equipment, net | 63,000 | 63,000 | 59,000 | 59,000 | |||||||||||
Total assets | $ | 3,537,000 | $ | 3,537,000 | $ | 3,844,000 | $ | 3,788,000 | |||||||
Accounts payable | $ | 80,000 | $ | 80,000 | $ | 131,000 | $ | 131,000 | |||||||
Accrued expenses and other current liabilities | 345,000 | 345,000 | 350,000 | 350,000 | |||||||||||
Deferred revenue | - | 890,000 | 890,000 | - | 1,527,000 | 1,527,000 | |||||||||
Total current liabilities | 425,000 | 890,000 | 1,315,000 | 481,000 | 1,527,000 | 2,008,000 | |||||||||
Total stockholders’ equity | 3,112,000 | (890,000) | 2,222,000 | 3,363,000 | (1,583,000) | 1,780,000 | |||||||||
Total liabilities and stockholders’ equity | $ | 3,537,000 | $ | 3,537,000 | $ | 3,844,000 | $ | 3,788,000 | |||||||
Technical Communications Corporation
100 Domino Driver
Concord, MA 01742 – 2892
Michael P. Malone
Chief Financial Office
(978) 287-5100
www.tccsecure.com