Technical Communications Corporation Reports Third Fiscal Quarter 2013 Financial Results

  Technical Communications Corporation Reports Third Fiscal Quarter 2013
  Financial Results

Business Wire

CONCORD, Mass. -- August 12, 2013

Technical Communications Corporation (NasdaqCM: TCCO) today announced its
fiscal 2013 third quarter and year-to-date financial results. For the three
months ended June 29, 2013, the Company reported a net loss of $522,000, or
$(0.28) per share, on revenue of $970,000, as compared to a net loss of
$915,000, or $(0.50) per share, on revenue of $734,000 for the three months
ended June 23, 2012.

For the nine months ended June 29, 2013, the Company reported a net loss of
$1,160,000, or $(0.63) per share, on revenue of $3,112,000. This compares to a
net loss of $352,000, or $(0.19) per share, on revenue of $6,791,000 for the
nine months ended June 23, 2012.

Commenting on corporate performance, Carl H. Guild, Jr., President and Chief
Executive Officer of TCC, said, “Revenues for the third quarter continued to
be low, reflecting the slowdown in bookings during the first two quarters of
the fiscal year. We expect that sales from the previously announced major
production contract awarded in May 2013 from the U.S. Army Communications and
Electronics Command will result in increased revenues in the fourth quarter of
fiscal 2013 and the first quarter of fiscal 2014. In the third fiscal quarter
of 2013, TCC completed the development and started the marketing of certain
new products, secured key contracts, and continued pursing strategic
partnerships and original equipment manufacturer opportunities.”

Fiscal Third Quarter Highlights
In the third quarter of fiscal 2013, the Company completed development and
began marketing of the DSD 72B-SP SONET/SDH encryptor with KEYNET Optical
Manager, and the Cipher X^® 7211 IP encryptor with KEYNET IP Manager. These
solutions are designed to meet the mission-critical private network secure
communications needs of government, military and satellite users. The Cipher X
7211 has been sold and successfully installed in select customer networks. TCC
is continuing with the development of new software features for the Cipher X
7211 that will expand the system’s capabilities and applications.

Additionally, customer demonstrations of our new HSE 6000 have been conducted
in several countries. The HSE 6000 is a low-cost, battery-powered, body-worn
headset radio encryptor for public safety personnel. The HSE 6000
interoperates with TCC’s widely deployed DSP 9000 military radio encryption
system, enabling secure communications between public safety and military
field and base command units. The HSE 6000 has several derivative forms that
are being considered for research and development investment in 2014.

Also, as previously announced in July 2013, TCC was selected to supply the
secure radio and telephone encryption solutions and customized cryptographic
services and tools for a domestic prime contractor’s program supporting a
government customer in North Africa.

TCC plans to continue to increase our sales and marketing efforts with lead
generation initiatives and strategic partnerships. Additionally, the Company
expects to focus technical efforts going forward on three principal areas:
development of solutions that meet the needs of original equipment
manufacturers (OEMs); product enhancements that include expanded features,
planned capability and applications growth; and custom solutions that tailor
our products to meet the unique needs of our customers.

The Company began pursuing OEM technical partnerships in 2012, which continue
to develop albeit at a slower pace than originally projected. TCC believes
that the resulting products will be embedded proprietary encryption solutions
that will significantly enhance the value of the OEMs’ products and allow TCC
encryption to be carried to the market by major equipment providers.

Escalating turmoil around the world presents both significant opportunities
and challenges to TCC. The threat of terrorism increases the demand for
security products that provide both strategic and tactical benefits, and are
readily available. At the same time, political disruptions cause unpredictable
and erratic delays in the processing of procurements and delivery of products.
The combined effects present a situation that challenges both our sales
capture teams and our production capabilities. The Company believes these
market conditions will provide sufficient opportunities to build a successful

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:

Statements made in this press release, including any discussion of our
anticipated operating results, financial condition and earnings, including
statements about the Company's ability to achieve and sustain growth and
profitability and expand product lines and market share, constitute
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements, identified by
the use of such terms as "anticipates," "believes," "expects," "may," "plans"
and "estimates," among others, involve known and unknown risks. The Company's
results may differ significantly from the results expressed or implied by such
forward-looking statements.The Company's 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 secure adequate capital resources. These and other risks
are detailed from time to time in the Company's filings with the Securities
and Exchange Commission, including its Quarterly Reports on Form 10-Q for the
quarters ended March 30, 2013 and December 29, 2012 and the Company's Annual
Report on Form 10-K for the fiscal year ended September 29, 2012.

Technical Communications Corporation
Condensed consolidated income statements
                              Quarter Ended
                           06/29/2013   06/23/2012
Net sales                   $ 970,000    $ 734,000
Gross profit                593,000      572,000
S, G & A expense            739,000      788,000
Product development costs   586,000      1,350,000
Operating loss              (732,000)    (1,566,000)
Income tax benefit          (199,000)    (646,000)
Net loss                    (522,000)    (915,000)
Net loss per share:                     
Basic                       $ (0.28)     $ (0.50)
Diluted                     $ (0.28)     $ (0.50)

                           Nine Months Ended
                           06/29/2013    06/23/2012
Net sales                   $ 3,112,000   $ 6,791,000
Gross profit                2,184,000     5,211,000
S, G & A expense            2,210,000     2,525,000
Product development costs   2,231,000     3,299,000
Operating loss              (2,257,000)   (614,000)
Income tax benefit          (1,068,000)   (253,000)
Net loss                    (1,160,000)   (352,000)
Net loss per share:                      
Basic                       $ (0.63)      $ (0.19)
Diluted                     $ (0.63)      $ (0.19)

Condensed consolidated balance sheets
                                      06/29/2013     09/29/2012
                                        (Unaudited)      (derived from audited
                                                   financial statements)
Cash and marketable securities        $ 5,432,000    $ 6,725,000
Accounts receivable, net              468,000        1,381,000
Inventory                             2,931,000      2,633,000
Deferred & refundable income taxes    2,102,000      1,477,000
Other current assets                  249,000        171,000
Total current assets                  11,182,000     12,387,000
Property and equipment, net           395,000        453,000
Total assets                          $ 11,577,000   $ 12,840,000
Accounts payable                      231,000        167,000
Accrued expenses and other current    418,000        546,000
Total current liabilities             649,000        713,000
Total stockholders’ equity            10,928,000     12,127,000
Total liabilities and stockholders’   $ 11,577,000   $ 12,840,000


Technical Communications Corporation
Michael P. Malone, 978-287-5100
Chief Financial Officer
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