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…

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

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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…

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