Technical Communications Corporation Completes Restatement of Prior Financial Statements; Files Form 10-K for the year ended ...
21 Junho 2019 - 7:30PM
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
CorporationFor 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. MaloneChief Financial Office(978)
287-5100www.tccsecure.com
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