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): May 19, 2020
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 1.01. Entry into a Material Definitive Agreement.
Technical Communications Corporation (the “Company”) received an order on May 19, 2020 valued at approximately $1,848,000 from ADS, Inc. for the Company’s DSP9000 and HSE6000 encryption systems. This order is in support of a foreign military sales contract between the U.S. government and a Middle Eastern government.
Item 2.02. Results of Operations and Financial Condition.
On May 27, 2020, the Company announced its financial results for the quarter and six months ended March 28, 2020. A copy of the press release, dated May 27, 2020, describing such results 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 May 27, 2020
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: May 27, 2020 | By: | /s/ Carl H. Guild, Jr. |
| Carl H. Guild, Jr. | ||
| President and Chief Executive Officer | ||
EXHIBIT 99.1
Technical Communications Corporation Reports Results for the Quarter and Six Months Ended March 28, 2020 and Announces Order Valued at $1.85 Million for Secure Military Communications
CONCORD, Mass., May 27, 2020 (GLOBE NEWSWIRE) -- Technical Communications Corporation (NasdaqCM: TCCO) today announced its results for the quarter and six months ended March 28, 2020. For the quarter ended March 28, 2020, the Company reported a net loss of $(361,000), or $(0.20) per share, on revenue of $723,000, compared to net income of $173,000, or $0.09 per share, on revenue of $1,928,000 for the quarter ended March 30, 2019. For the six months ended March 28, 2020, the Company reported a net loss of $(842,000), or $(0.46) per share, on revenue of $1,389,000, compared to a net loss of $(75,000), or $(0.04) per share, on revenue of $3,041,000 for the quarter ended March 30, 2019.
Carl H. Guild Jr., President and CEO of Technical Communications Corporation, commented, “During the Company’s first six months of 2020, revenue bookings slowed due to delays on several projects and the associated field testing that was required. In January, the negative effects of the COVID-19 pandemic began to adversely impact our foreign customers’ operations, causing project flow to effectively shut down. As of this date, there are indications that procurement action is resuming, albeit slowly. We expect that the pre-virus projects remain viable and look to resume field testing and project capture during the next six months.”
Also, the Company received an order in May valued at $1.85 million from ADS, Inc. for the Company’s DSP9000 and HSE6000 encryption systems. This order is in support of a foreign military sales contract between the U.S. government and a Middle Eastern government. Delivery of the equipment and training services are expected to occur over the next six months.
Commenting on the contract award, Carl H. Guild, Jr. said, “This order is an add-on to a contract on which we initially began deliveries in September 2019. We are pleased that our customer has again selected TCC systems to secure its military communications network. We believe the combination of our quality systems, commitment to meeting unique requirements, and full lifecycle services have fostered this longstanding relationship. We also expect additional follow-on sales as our customer continues to expand its network.”
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 that are not purely historical 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 impact of the COVID-19 pandemic (including on customers) and governmental responses thereto; the effect of domestic and foreign political unrest; domestic and foreign government policies and economic conditions; 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 Annual Report on Form 10-K for the fiscal year ended September 28, 2019 and its Quarterly Report on Form 10-Q for the quarter ended December 28, 2019 and the “Risk Factors” section included therein.
Technical Communications Corporation
| Condensed consolidated statements of operations | ||||||
| Quarter Ended | ||||||
| 3/28/2020 (Unaudited) | 3/30/2019 (Unaudited) | |||||
| Net revenue | $ | 723,000 | $ | 1,928,000 | ||
| Gross profit | 309,000 | 799,000 | ||||
| S, G & A expense | 513,000 | 595,000 | ||||
| Product development costs | 157,000 | 36,000 | ||||
| Operating (loss) income | (361,000 | ) | 168,000 | |||
| Net (loss) income | (361,000 | ) | 173,000 | |||
| Net (loss) income per share: | ||||||
| Basic | $ | (0.20 | ) | $ | 0.09 | |
| Diluted | $ | (0.20 | ) | $ | 0.09 | |
| Six Months Ended | ||||||
| 3/28/2020 (Unaudited) | 3/30/2019 (Unaudited) | |||||
| Net revenue | $ | 1,389,000 | $ | 3,041,000 | ||
| Gross profit | 618,000 | 1,199,000 | ||||
| S, G & A expense | 1,097,000 | 1,140,000 | ||||
| Product development costs | 362,000 | 144,000 | ||||
| Operating loss | (842,000 | ) | (85,000 | ) | ||
| Net loss | (842,000 | ) | (75,000 | ) | ||
| Net loss per share: | ||||||
| Basic | $ | (0.46 | ) | $ | (0.04 | ) |
| Diluted | $ | (0.46 | ) | $ | (0.04 | ) |
Condensed consolidated balance sheets
| 3/28/2020 | 9/28/2019 | |||||
| (Unaudited) | (derived from audited financial statements) | |||||
| Cash and cash equivalents | $ | 607,000 | $ | 1,593,000 | ||
| Accounts receivable - trade | 228,000 | 126,000 | ||||
| Inventory | 1,032,000 | 1,042,000 | ||||
| Other current assets | 108,000 | 118,000 | ||||
| Total current assets | 1,975,000 | 2,879,000 | ||||
| Property and equipment, net | 26,000 | 38,000 | ||||
| Right-of-use asset | 633,000 | - | ||||
| Total assets | $ | 2,634,000 | $ | 2,917,000 | ||
| Current operating lease liability | $ | 149,000 | $ | - | ||
| Accounts payable | 48,000 | 355,000 | ||||
| Accrued expenses and other current liabilities | 549,000 | 342,000 | ||||
| Total current liabilities | 746,000 | 697,000 | ||||
| Long term operating lease liability | 483,000 | - | ||||
| Total liabilities | 1,229,000 | 697,000 | ||||
| Total stockholders’ equity | 1,405,000 | 2,220,000 | ||||
| Total liabilities and stockholders’ equity | $ | 2,634,000 | $ | 2,917,000 | ||
Michael P. Malone
Chief Financial Officer
(978) 287-5100
www.tccsecure.com