SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
X Quarterly report pursuant to Section 13 or 15(d) of the Securities
--- Exchange Act of 1934 for the quarterly period ended June 30, 2001 or
Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period _________ to _________
Commission File Number: 0-8588
TECHNICAL COMMUNICATIONS CORPORATION
------------------------------------
(Exact name of registrant as specified in its charter)
Massachusetts 04-2295040
------------------------------- ---------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
100 Domino Drive, Concord, MA 01742-2892
---------------------------------------- ---------------------
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code: (978) 287-5100
--------------
N/A
----------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date. Number of shares of Common
Stock, $.10 par value, outstanding as of Aug 3, 2001: 1,321,506.
INDEX
Page
----
PART I Financial Information
Item 1. Financial Statements:
Condensed Consolidated Balance Sheets,
as of June 30, 2001 (unaudited) and September 30, 2000 1
Condensed Consolidated Statements of Operations,
Three (3) months ended June 30, 2001 and July 1, 2000 (unaudited), 2
Condensed Consolidated Statements of Operations,
Nine (9) months ended June 30, 2001 and July 1, 2000 (unaudited), 3
Condensed Consolidated Statements of Cash Flows,
Nine (9) months ended June 30, 2001 and July 1, 2000 (unaudited), 4
Notes to Condensed Consolidated Financial Statements 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations. 7
PART II Other Information 10
Signatures 11
PART I. Financial Information - Item 1. Financial Statements
TECHNICAL COMMUNICATIONS CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
June 30, 2001 September 30, 2000
------------- ------------------
(unaudited)
Assets
------
Current Assets:
Cash and cash equivalents $ 404,752 $3,121,617
Accounts receivable - trade, less allowance for
doubtful accounts of $70,000 155,957 363,742
Note receivable 659,590 -
Inventories 1,640,642 3,452,403
Deferred income taxes - 157,500
Other current assets 413,300 269,980
---------- ----------
Total current assets 3,274,241 7,365,242
Equipment and leasehold improvements 4,920,185 4,899,615
Less: accumulated depreciation and amortization 4,514,965 4,330,749
---------- ----------
405,220 568,866
Goodwill, net - 467,869
Other assets 740 740
---------- ----------
$3,680,201 $8,402,717
========== ==========
Liabilities and Stockholders' Equity
------------------------------------
Current Liabilities:
Accounts payable $ 399,451 $ 524,231
Accrued liabilities
Compensation and related expenses 256,425 162,420
Other 527,334 435,602
---------- ----------
Total current liabilities 1,183,210 1,122,253
---------- ----------
Commitments and contingencies
Stockholders' Equity:
Common stock, par value $.10 per share; authorized
3,500,000 shares; issued 1,323,328 shares
and 1,312,153 shares 132,333 131,215
Treasury stock at cost, 1,822 and 22,968 shares (14,463) (118,610)
Additional paid-in capital 1,365,600 1,341,742
Retained earnings 1,013,521 5,926,111
---------- ----------
Total stockholders' equity 2,496,991 7,280,458
---------- ----------
$3,680,201 $8,402,717
========== ==========
The accompanying notes are an integral part of these condensed consolidated
financial statements.
1
TECHNICAL COMMUNICATIONS CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Unaudited)
Three Months Ended
------------------
June 30, 2001 July 1, 2000
------------- ------------
Net sales $ 254,257 $ 744,010
Cost of sales 1,869,308 433,561
----------- -----------
Gross profit (loss) (1,615,051) 310,449
Operating expenses:
Selling, general and
administrative expenses 903,120 1,092,710
Product development costs 703,209 291,139
----------- -----------
Total operating expenses 1,606,329 1,383,849
----------- -----------
Operating income (loss) (3,221,380) (1,073,400)
----------- -----------
Other income (expense):
Interest income 7,786 59,156
Interest expense (122) (559)
Other 4,352 9,779
----------- -----------
Total other income (expense): 12,016 68,376
----------- -----------
Loss before income taxes (3,209,364) (1,005,024)
Provision (benefit) for income taxes 157,500 (301,507)
----------- -----------
Net loss $(3,366,864) $ (703,517)
=========== ===========
Net loss per common share:
Basic $(2.55) $(0.54)
Diluted $(2.55) $(0.54)
Weighted average common shares outstanding
used in computation:
Basic 1,320,481 1,292,685
Diluted 1,320,481 1,292,685
The accompanying notes are an integral part of these condensed consolidated
financial statements.
2
TECHNICAL COMMUNICATIONS CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Unaudited)
Nine Months Ended
-----------------
June 30, 2001 July 1,2000
------------- -----------
Net sales $ 2,354,471 $ 4,378,463
Cost of sales 2,701,121 1,946,041
----------- -----------
Gross profit (loss) (346,650) 2,432,422
Operating expenses:
Selling, general and
administrative expenses 3,055,053 3,148,071
Product development costs 1,273,788 919,454
----------- -----------
Total operating expenses 4,328,841 4,067,525
----------- -----------
Operating income (loss) (4,675,491) (1,635,103)
----------- -----------
Other income (expense): -
Interest income 62,905 163,869
Interest expense (1,560) (1,127)
Other (68,544) 22,447
----------- -----------
Total other income (expense): (7,199) 185,189
----------- -----------
Loss before income taxes (4,682,690) (1,449,914)
Provision (benefit) for income taxes 157,500 (434,975)
----------- -----------
Net loss $(4,840,190) $(1,014,939)
=========== ===========
Net loss per common share:
Basic $(3.73) $(0.79)
Diluted $(3.73) $(0.79)
Weighted average common shares outstanding
used in computation:
Basic 1,298,561 1,287,528
Diluted 1,298,561 1,287,528
The accompanying notes are an integral part of these condensed consolidated
financial statements.
3
TECHNICAL COMMUNICATIONS CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Nine Months Ended
-----------------
June 30, 2001 July 1, 2000
------------- ------------
Operating Activities:
Net loss $(4,840,190) $(1,014,939)
Adjustments to reconcile net loss to net cash provided (used)
by operating activities:
Depreciation and amortization 369,783 589,263
Non-cash compensation 31,741 34,309
Deferred income taxes 157,500 -
Write-off of goodwill 306,687 -
Noncash inventory charges 1,943,587 -
Gain on sale of investment - 117,121
Changes in assets and liabilities:
Accounts receivable 207,785 2,095,816
Note receivable (659,590) -
Inventories (131,826) 195,502
Refundable income taxes - 276,960
Other current assets (143,320) (116,742)
Accounts payable and other accrued liabilities 60,957 (573,288)
----------- -----------
Net cash provided (used) by operating activities (2,696,886) 1,604,003
----------- -----------
Investing Activities:
Additions to equipment and leasehold improvements (44,955) (250,827)
----------- -----------
Net cash used by investing activities (44,955) (250,827)
----------- -----------
Financing Activities:
Proceeds from stock issuance 24,976 37,633
----------- -----------
Net cash provided by financing activities 24,976 37,633
----------- -----------
Net increase (decrease) in cash and cash equivalents (2,716,865) 1,390,809
Cash and cash equivalents at beginning of the period 3,121,617 2,338,935
----------- -----------
Cash and cash equivalents at the end of the period $ 404,752 $ 3,729,744
=========== ===========
Supplemental Disclosures:
Interest paid $ 1,191 $ 20,256
Income taxes paid 3,256 64,051
The accompanying notes are an integral part of these condensed consolidated
financial statements.
4
TECHNICAL COMMUNICATIONS CORPORATION AND SUBSIDIARIES
FORWARD-LOOKING STATEMENTS
--------------------------
NOTE: THE DISCUSSIONS IN THIS FORM 10-Q, INCLUDING ANY DISCUSSION OF OR IMPACT,
EXPRESSED OR IMPLIED, ON TECHNICAL COMMUNICATIONS CORPORATION'S (THE COMPANY)
ANTICIPATED OPERATING RESULTS AND FUTURE EARNINGS, INCLUDING STATEMENTS ABOUT
THE COMPANY'S ABILITY TO ACHIEVE GROWTH AND PROFITABILITY, CONTAIN FORWARD-
LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT OF
1933, AS AMENDED. THE COMPANY'S OPERATING RESULTS MAY DIFFER SIGNIFICANTLY FROM
THE RESULTS INDICATED BY SUCH FORWARD-LOOKING STATEMENTS. THE COMPANY'S
OPERATING RESULTS MAY BE AFFECTED BY MANY FACTORS, INCLUDING BUT NOT LIMITED TO
FUTURE CHANGES IN EXPORT LAWS OR REGULATIONS, CHANGES IN TECHNOLOGY, THE EFFECT
OF FOREIGN POLITICAL UNREST, 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 RENEGOTIATE ITS LINE OF CREDIT WITH ITS BANK.
THESE AND OTHER RISKS ARE DETAILED FROM TIME TO TIME IN THE COMPANY'S FILINGS
WITH THE SECURITIES AND EXCHANGE COMMISSION, INCLUDING THE FORM 10-K FOR THE
FISCAL YEAR ENDED SEPTEMBER 30, 2000, FORM 10-Q FOR THE QUARTER ENDED DECEMBER
30, 2000, FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2001 AND THIS FORM 10-Q FOR
THE QUARTER ENDED JUNE 30, 2001.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------
STATEMENT OF FAIR PRESENTATION
------------------------------
Interim Financial Statements.
-----------------------------
The accompanying unaudited condensed consolidated
financial statements include all adjustments (consisting only of normal
recurring accruals), which are, in the opinion of management, necessary for fair
presentation of the results of operations for the periods presented. Interim
results are not necessarily indicative of the results to be expected for a full
year.
Certain disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted as allowed by Form 10-Q. The accompanying unaudited consolidated
financial statements should be read in conjunction with the Company's
consolidated financial statements for the year ending September 30, 2000 as
filed with the Securities and Exchange Commission on Form 10-K.
NOTE 1. Inventories
------- -----------
Inventories consisted of the following:
June 30, 2001 September 30, 2000
------------- ------------------
Finished Goods $ 372,073 $ 622,003
Work in Process 859,945 1,181,510
Raw Materials 408,624 1,648,890
---------- ----------
$1,640,642 $3,452,403
========== ==========
5
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)
-------------------------------------------------------------
NOTE 2. Line of Credit
------- --------------
The Company has a $5 million asset-based credit facility with Coast Business
Credit ("Coast"). The line carries an interest rate of prime plus 1/2% (7.5% at
June 30, 2001). This revolving line of credit is collateralized by
substantially all the assets of the Company and requires no compensating
balances. There are financial covenants associated with the line, which call for
a minimum net tangible worth of $5,634,000 at June 30, 2001 and increasing over
time based on certain criteria and an interest coverage ratio requirement. The
amount of borrowings is limited to a percentage of certain accounts receivable
balances. At June 30, 2001 the Company was in violation of its minimum net
tangible worth covenant. The Company is currently negotiating with the bank to
waive the default and modify the agreement to adjust the financial covenants for
the future. The Company expects to have the renegotiated agreement in place
within the next 60 days. The Company has negotiated a temporary credit
arrangement with Coast, whereby the Company may borrow on a short-term basis
amounts up to $1,350,000 based on its cash requirements for up to 60 days. The
revolving line of credit matures in August 2003. There were no outstanding
borrowings during the quarter.
NOTE 3. Note receivable
------ ---------------
At June 30, 2001 the Company's note consisted of a three year negotiable
instrument, payable in six (6) semi-annual installments of $109,932, plus
interest at an annual rate of 8.37%.
The Company successfully completed a sale of this instrument on July 18, 2001.
The proceeds of this sale were $641,000, which was net of a discount on the
transaction. As it was the intent of the Company to sell this instrument once
received and had accepted a commitment to sell it at a fixed rate, the discount
was recorded at the time of sale of product, which occurred during quarter ended
December 30, 2000.
NOTE 4. Special charges
------ ---------------
During the current quarter, the Company recorded certain special charges, which
included a $1,604,000 write-off of excess inventory, a write-off of work in
process inventory of $340,000, a write-off of goodwill of $307,000 and a write-
off of a deferred tax asset of $158,000. Excess inventory charges were the
result of weakening demand for certain product lines. Correspondingly, goodwill
associated with these product lines was also written off. Work in process
inventory was written off as a result of delayed or lost development contracts
bids.
NOTE 5. Liquidity
------ ---------
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles, which contemplate continuation of the
Company as a going concern. However, as disclosed in the financial statements,
the Company had a net loss of $4,840,000 during the first nine months of fiscal
2001, and the Company had significant losses in the prior two fiscal years.
Additionally, the Company's operations used significant cash during the first
nine months of fiscal 2001. The recoverability of a major portion of the
recorded asset amounts shown in the accompanying balance sheet is dependent upon
continued operations of the Company, which in turn is dependent upon the
Company's ability to increase sales and to succeed in its future operations. The
financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts and amounts and
classification of liabilities that might be necessary should the Company be
unable to continue.
Management has taken significant steps to streamline its operations and will
continue to do so as the situation warrants. These steps include reducing
headcount and eliminating infrastructure and other nonessential expenses and
capital expenditures. Management believes based on its understanding of the
marketplace that future sales will occur in a sufficient manner to allow the
Company to continue as a viable going concern.
6
PART I, Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
RESULTS OF OPERATIONS
---------------------
The Company is in the business of designing, manufacturing and marketing
communications security equipment. The Company receives orders for equipment
from customers, which may take several months or longer to manufacture and ship.
With the exception of long-term contracts where revenue is recognized under the
percentage of completion method, the Company generally recognizes income on a
unit-of-delivery basis. This latter method can cause revenues to vary widely
from quarter to quarter and therefore quarterly comparisons of revenue may not
be indicative of any trend.
THREE MONTHS ENDED JUNE 30, 2001 AS COMPARED
TO THE THREE MONTHS ENDED JULY 1, 2000
--------------------------------------------
During the quarter ended June 30, 2001, the Company recorded certain special
charges, which included a $1,604,000 write-off of excess inventory, a write-off
of work in process inventory of $340,000, a write-off of goodwill of $307,000
and a write-off of a deferred tax asset of $158,000. Excess inventory charges
were the result of weakening demand for certain product lines. Correspondingly,
goodwill associated with these product lines was also written off. Work in
process inventory was written off as a result of delayed or lost development
contracts bids.
Net sales for the quarter ended June 30, 2001 and July 1, 2000, were $254,000
and $744,000, respectively. Gross profit for the third quarter of fiscal 2001
was a loss of $11,000, before excess inventory charges, as compared to gross
profit of $310,000 for the same period of fiscal 2000. This represented a
significant decrease in gross profit for the quarter. Gross profit expressed as
a percentage of sales was (0.04%) in 2001 as compared to 42% for the same period
in fiscal 2000. These decreases were primarily attributable to exceptionally
low sales volume in the current quarter as compared to a year ago. Sales volume
was significantly impacted by our inability to complete certain contract
requirements on two orders amounting to $1,350,000, which were shipped during
the current quarter.
Selling, general and administrative expenses for the third quarter of fiscal
2001 were $596,000, before the write-off of goodwill, and $1,093,000 for the
same quarter in fiscal 2000. This decrease of 45% was primarily attributable to
$120,000 reduction in general and administrative expenses and a reduction of
$375,000 in selling and marketing costs.
The decrease in general and administrative costs were attributable to a $50,000
decrease in personnel related costs associated with a reduced headcount and
overall cost reductions of approximately $100,000 associated with a
restructuring program and the related workforce reductions. These reductions
were partially offset by an increase in financing costs associated with the
Company's new credit facility of $36,000.
The decrease in selling costs was primarily attributable to decreased third
party sales commissions and marketing contracts totaling $120,000. These
decreases also included a reduction in travel, payroll and benefit related costs
associated with the lower sales volume, of approximately $200,000.
Product development costs for the quarter ended June 30, 2001 were $363,000,
before the write-off of canceled and delayed contracts in process, compared to
$291,000 for the same period in fiscal 2000. This increase of 25% was primarily
attributable to a shift away from billable product development in fiscal 2001,
which increased product development cost in fiscal 2001 by approximately
$75,000.
The Company showed a net loss of $958,000, before all special charges, for the
third quarter of fiscal 2001 as compared to a net loss of $704,000 for the same
period in fiscal 2000. This decrease in profitability is primarily attributable
to the significant decrease in revenue, an increase in product development costs
and a reduction in income tax benefits and interest income. The negative impact
of these items was partially offset by a reduction of operating expenses.
7
NINE MONTHS ENDED JUNE 30, 2001 AS COMPARED
TO THE NINE MONTHS ENDED JULY 1, 2000
-------------------------------------------
During the quarter ended June 30, 2001, the Company recorded certain special
charges, which included a $1,604,000 write-off of excess inventory, a write-off
of work in process inventory of $340,000, a write-off of goodwill of $307,000
and a write-off of a deferred tax asset of $158,000. Excess inventory charges
were the result of weakening demand for certain product lines. Correspondingly,
goodwill associated with these product lines was also written off. Work in
process inventory was written off as a result of delayed or lost development
contracts bids.
Net sales for the nine months ended June 30, 2001 and July 1, 2000, were
$2,354,000 and $4,378,000, respectively. Gross profit for the first nine months
of fiscal 2001 was $1,268,000, before excess inventory charges, as compared to
gross profit of $2,432,000 for the same period of fiscal year 2000. This
represented a 48% decrease in gross profit for the period. This decrease was
primarily attributable to the exceptionally low sales volume in the quarter
ended June 30, 2001 as compared to a year ago. Sales volume was significantly
impacted by our inability to complete certain contract requirements on two
orders amounting to $1,350,000, which were shipped during the current quarter.
Selling, general and administrative expenses for the first nine months of fiscal
2001 were $2,748,000, before the write-off of goodwill, and $3,148,000 for the
previous year. This decrease of 13% was attributable to a decrease in selling
costs of approximately $88,000 and a reduction in general & administrative costs
of approximately $312,000.
The overall decrease in selling costs was primarily attributable to reductions
in travel, payroll, internal commissions and benefit related costs associated
with the lower sales volume, of approximately $289,000. These decreases were
offset by increased third party sales commissions and marketing contracts
totaling $50,000, increased bidding and proposal activity of $128,000 and
marketing studies and product evaluation amounting to $90,000.
The decrease in general and administrative expenses were primarily attributable
to $144,000 in costs associated with the settlement of litigation during fiscal
2000 and a decrease in payroll, recruiting and benefit related costs associated
with a reduced headcount of approximately $192,000. These decreases were
partially offset by a charge of approximately $40,000 associated with a
restructuring program and related workforce reductions
Product development costs for the nine months ended June 30, 2001 were $934,000,
before the write-off of canceled and delayed contracts in process, as compared
to $920,000 for the same period in fiscal 2000. This increase of 2% was
attributable to an increase in engineering efforts to develop bids and proposals
of approximately $107,000, which is classified as a selling expense and
decreases in training, recruiting, payroll and benefit related costs associated
with a slowdown in development related work of approximately $237,000. These
reductions were offset by a shift away from billable product development in
fiscal 2001, which increased product development cost in fiscal 2001 by
approximately $391,000.
The Company showed a net loss of $2,431,000, before all special charges, for the
first nine months of fiscal 2001 as compared to a net loss of $1,015,000 for the
same period in fiscal 2000. This decrease in profitability is primarily
attributable to the significant decrease in revenue and income tax benefit, as
described above. The Company has recorded a charge of approximately $75,000 for
the discount associated with the non-recourse sale of a long-term receivable in
fiscal 2001. In addition, the Company earned $101,000 less interest income due
to lower cash balances.
Recent Accounting Pronouncement
--------------------------------
In December 1999, the SEC issued Staff Accounting Bulletin No. 101 ("SAB No.
101"), "Revenue Recognition in Financial Statements." SAB No. 101 provides
guidance on applying generally accepted accounting principles to revenue
recognition, presentation and disclosure in financial statements. Subsequently,
the SEC has amended the implementation dates so that the Company is required to
adopt the provisions of SAB No. 101 in the fourth quarter of 2001. Management
does not expect the adoption of this statement to have a material impact on its
financial position or results of operations.
8
In June 1998, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards No. 133 (SFAS 133), "Accounting for Derivative
Instruments and Hedging Activities". The Statement establishes accounting and
reporting standards requiring that every derivative instrument (including
certain derivative instruments embedded in other contracts) be recorded in the
balance sheet as either an asset or liability measured at its fair value. In
June 1999, FASB issued Statement of Financial Accounting Standards No. 137 (SFAS
137), "Accounting for Derivative Instruments and Hedging Activities--Deferral of
the Effective Date of FASB Statement No. 133--an amendment of FASB Statement No.
133". This Statement has delayed the effective date of SFAS 133 until fiscal
years beginning after June 15, 2000. In June 2000, SFAS No. 133 was amended by
Statement of Financial Accounting Standards No. 138 (SFAS 138), "Accounting for
Derivative Instruments and Hedging Activities - an amendment of FASB Statement
No. 133. The Company has adopted this Statement during the first quarter of this
fiscal year. There was no material impact on the Company's financial position or
results of operations as a result of the adoption.
Liquidity and Capital Resources
-------------------------------
Cash and cash equivalents decreased by $2,717,000 or 87% to $405,000 as of June
30, 2001, from a balance of $3,122,000 at September 30, 2000. This decrease was
primarily due to a loss from operations and an increase of accounts and notes
receivable. The current ratio decreased to 2.8:1 at June 30, 2001 compared to
6.6:1 as of September 30, 2000.
The Company has a $5 million asset-based credit facility with Coast Business
Credit ("Coast"). The line carries an interest rate of prime plus 1/2% (7.5% at
June 30, 2001). This revolving line of credit is collateralized by
substantially all the assets of the Company and requires no compensating
balances. There are financial covenants associated with the line, which call for
a minimum net tangible worth of $5,634,000 at June 30, 2001 and increasing over
time based on certain criteria and an interest coverage ratio requirement. The
amount of borrowings is limited to a percentage of certain accounts receivable
balances. At June 30, 2001 the Company was in violation of its minimum net
tangible worth covenant. The Company is currently negotiating with the bank to
waive the default and modify the agreement to adjust the financial covenants for
the future. The Company expects to have the renegotiated agreement in place
within the next 60 days. The Company has negotiated a temporary credit
arrangement with Coast, whereby the Company may borrow on a short-term basis
amounts up to $1,350,000 based on its cash requirements for up to 60 days. The
revolving line of credit matures in August 2003. There were no outstanding
borrowings during the quarter. Management anticipates no unusual capital
expenditures during the remainder of fiscal 2001.
The Company's revenues have historically included significant transactions with
foreign governments and other organizations. The Company expects this trend to
continue. The timing of these transactions has in the past and will in the
future impact the cash flow of the Company. Although the Company believes there
are currently sufficient cash and available funds from operations, the temporary
credit arrangement and ultimately under the line of credit to meet its working
capital needs, delays in the timing of significant transactions may cause the
Company to reevaluate and adjust its operations.
9
PART II. Other Information
Item 1. Legal Proceedings:
There are no current matters pending.
Item 2. Changes in Securities and Use of Proceeds:
Not applicable.
Item 3. Defaults Upon Senior Securities:
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders:
None.
Item 5. Other Information:
None.
Item 6. Exhibits and Reports on Form 8-K:
a. Exhibits:
None.
b. Reports on Form 8-K:
None.
10
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 thereunto duly authorized.
TECHNICAL COMMUNICATIONS CORPORATION
------------------------------------
(Registrant)
August 10, 2001 By: /s/ Carl H. Guild, Jr.
--------------- --------------------------
Date Carl H. Guild, Jr., President and Chief
Executive Officer
August 10, 2001 By: /s/ Michael P. Malone
--------------- --------------------------
Date Michael P. Malone, Chief Financial Officer
11