Technology Research Corp. (TRCI) filed Quarterly Report for the period ended 2009-11-09.
TECHNOLOGY RESEARCH CORP. designs, develops, manufactures & markets electronic control & measurement devices related to the distribution of electric power & specializes in electrical safety products that protect against shock, electrocution & fires. Such products include ground fault protective devices, fire protective devices for fires caused by aging appliance extension cords, controls for electrical power generating systems,products with energy management applications, transformers magnetics. These products are used in providing safe and efficient utilization and controlled distribution o Technology Research Corp. has a market cap of $23.3 million; its shares were traded at around $3.96 with a P/E ratio of 7.8 and P/S ratio of 0.7. The dividend yield of Technology Research Corp. stocks is 2%.
Highlight of Business Operations:
Revenue for the three months and six months ended September 30, 2009 increased $0.3 million and $1.4 million, respectively, compared with the comparable periods for the prior year. Military revenue increased by $2.2 million and $5.4 million over the comparable three month and six month periods for the prior year, respectively. The increase in military revenue was primarily due to an accelerated delivery schedule in our military business. Commercial revenue , including royalties, decreased by $1.9 million and $4.0 million for the three month and six month periods, ended September 30, 2009, respectively. The recent extreme volatility and disruption of financial markets in the United States, Europe and Asia and depressed conditions in the real estate market have all contributed to weakening worldwide economic conditions and have contributed to a reduction in revenue in our commercial business. The decline in commercial revenue was principally a result of weakness in our traditional markets, including RV OEM and industrial construction, and a continuing decline in RAC revenue, a market that we exited as of June 30, 2009.
Gross profit improved by $0.4 million and $1.9 million over the three month and six month periods, for the prior year comparable periods, respectively. The increase in gross margin was due to a favorable shift in the mix of military and commercial business, higher overall revenue, and the related favorable impact in factory overhead absorption. The prior year gross profit margins for both the three and six month periods ended September 30, 2008 were favorably impacted by $0.6 million from the disposition of inventory held with one of our contract manufacturers. The current year margins for both the three and six month periods ended September 30, 2009 were negatively impacted by a $0.3 million increase in inventory reserves based on an analysis of the future utility of inventory, primarily in our commercial product lines, and an increased warranty provision of $0.1 million. Additionally, gross margin for the six month period ended September 30, 2009 was reduced by $0.3 million due to the write-off of RAC inventory and tooling.
Revenue for the second quarter ended September 30, 2009 and 2008 was $9.6 million and $9.3 million, respectively. Military revenue increased $2.2 million while commercial revenue, including royalties, decreased by $1.9 million. Revenue for the six-month period ended September 30, 2009 was $19.3 million compared to $17.9 million reported in the same period of the prior year, an increase of 7.8%. Military revenue increased $5.4 million while commercial revenue, including royalties, for the six months ended September 30, 2009 decreased $4.0 million from the same period last year. The increase in military revenue was primarily due to an accelerated delivery schedule in our military business. We anticipate that military revenue will return to prior year levels for the remainder of fiscal year 2010. The recent extreme volatility and disruption of financial markets in the United States, Europe and Asia and depressed conditions in the real estate market have all contributed to weakening worldwide economic conditions and have contributed to a reduction in revenue in our commercial business. The decline in commercial revenue was principally a result of weakness in our traditional markets, including RV OEM and industrial construction, and a continuing decline in RAC revenue, a market that we exited as of June 30, 2009.
Gross profit increased $0.4 million, or 10.8%, to $3.9 million for the quarter ended September 30, 2009, as compared to the same period in the prior year. Included in the current quarter results of operations was an increase in inventory reserves of $0.3 million based upon an analysis of the future utility of inventory, primarily in our commercial products lines, and an increased warranty provision of $0.1 million. The prior year period was favorably impacted by $0.6 million from the favorable disposition of inventory held with one of our contract manufacturers. The increase in gross margin for the quarter over and above the items discussed above was due to a favorable shift in the mix of military and commercial business, higher overall revenue and the related favorable impact on factory overhead absorption. Gross profit increased $1.9 million or 31.3% to $8.0 million for the six months ended September 30, 2009. As a result of the continued decline in RAC revenue, we wrote-off the remaining inventory and tooling associated with this product line, which reduced gross margin by approximately $0.3 million in the quarter ended June 30, 2009.
Net income for the quarter ended September 30, 2009 was $1.2 million, compared to a $0.9 million in the same quarter last year. The basic and diluted earnings per share was $0.21 for the quarter ended September 30, 2009, compared to basic and diluted earnings per share of $0.16 for the same quarter last year. The net income for the six-month period ended September 30, 2009 was $2.4 million, compared to net income of $1.0 million for the same period in the prior year. The basic and diluted earnings per share was $0.41 and $0.40, respectively, for the six-month period ended September 30, 2009, compared to basic and diluted earnings per share of $0.17 for the same period of the prior year.
Our cash and cash equivalents increased from $2.9 million as of March 31, 2009 to $7.1 million as of September 30, 2009. Cash provided by operating activities was $5.6 million, cash used in investing activities was $1.2 million and cash used in financing activities was $0.2 million resulting in a total increase in cash of $4.1 million for the six-month period ended September 30, 2009.
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