UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2002
Commission File Number: 0-13763
TECHNOLOGY RESEARCH CORPORATION
(Exact name of registrant as specified in its charter)
Florida 59-2095002
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No,)
5250 140th Avenue North, Clearwater, Florida 33760
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (727) 535-0572
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 a 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.
Class Outstanding at October 31, 2002
Common stock, $.51 par value 5,437,497
TECHNOLOGY RESEARCH CORPORATION
INDEX
Part I - Financial Information Page
Item 1. Financial Statements
Condensed Consolidated Balance Sheets (unaudited)
- September 30, 2002 and March 31, 2002............................. 1
Condensed Consolidated Statements of Operations (unaudited)
- Three months and Six months ended
September 30, 2002 and September 30, 2001......................... 2
Condensed Consolidated Statements of Cash Flows (unaudited)
- Six months ended September 30, 2002 and September 30, 2001........ 3
Notes to Condensed Consolidated Financial Statements (unaudited)......... 4
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations............................. 5
Item 3 - Quantitative and Qualitative Disclosure Regarding Market Risk... 9
Item 4 - Controls and Procedures......................................... 9
Part II - Other Information
Item 1 - Legal Proceedings.............................................. 10
Item 2 - Changes in Securities and Use of Proceeds...................... 10
Item 3 - Defaults Upon Senior Securities................................ 10
Item 4 - Submission of Matters to a Vote of Security Holders............ 10
Item 5 - Other Information.............................................. 10
Item 6 - Exhibits and Reports on Form 8-K............................... 10
Signatures.............................................................. 11
Certifications.......................................................... 12
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
TECHNOLOGY RESEARCH CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
September 30 March 31
2002 2002
----------- ---------
ASSETS
Current assets:
Cash and cash equivalents $ 1,072,437 1,163,099
Accounts receivable, net 2,268,711 2,516,603
Inventories:
Raw material 3,036,905 3,130,889
Work in process 297,433 190,348
Finished goods 1,634,644 1,477,494
---------- ----------
Total inventories 4,968,982 4,798,731
Prepaid expenses 262,135 97,720
Deferred income taxes 143,356 271,569
---------- ----------
Total current assets 8,715,621 8,847,722
---------- ----------
Property, plant, and equipment 9,726,120 9,493,313
Less accumulated depreciation 6,156,185 5,795,667
---------- ----------
Net property, plant, and equipment 3,569,935 3,697,646
---------- ----------
Non-current deferred income taxes 162,861 162,861
Other assets 50,399 58,708
---------- ----------
$ 12,498,816 12,766,937
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 511,492 551,300
Accrued expenses 316,541 293,422
Dividends payable 69,178 68,804
Income taxes payable 21,358 -
---------- ----------
Total current liabilities 918,569 913,526
Long-term debt - 500,000
Deferred income - long term 50,000 50,000
---------- ----------
Total liabilities 968,569 1,463,526
---------- ----------
Stockholders' equity:
Common stock 2,784,088 2,784,088
Additional paid-in capital 7,526,472 7,526,472
Retained earnings 1,259,832 1,032,996
---------- ----------
11,570,392 11,343,556
Treasury stock, at cost - 21,500 shares (40,145) (40,145)
---------- ----------
Total stockholders' equity 11,530,247 11,303,411
---------- ----------
$ 12,498,816 12,766,937
========== ==========
See accompanying notes to condensed consolidated financial statements.
- 1 -
TECHNOLOGY RESEARCH CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Three Months Ended Six Months Ended
September 30 September 30
2002 2001 2002 2001
---------- ---------- ---------- ----------
Operating revenues:
Net sales $ 3,904,857 4,802,025 7,742,637 8,880,062
Royalties 63,959 68,646 81,497 97,962
---------- ---------- ---------- ----------
3,968,816 4,870,671 7,824,134 8,978,024
---------- ---------- ---------- ----------
Operating expenses:
Cost of sales 2,592,708 3,707,121 5,189,980 6,692,764
Selling, general, and
administrative 756,205 828,553 1,541,985 1,653,517
Research, development and
engineering 315,213 235,522 600,269 498,668
---------- ---------- ---------- ----------
3,664,126 4,771,196 7,332,234 8,844,949
---------- ---------- ---------- ----------
Operating income 304,690 99,475 491,900 133,075
---------- ---------- ---------- ----------
Other income (deductions):
Interest and sundry income 927 4,935 5,079 6,233
Interest expense - (27,371) (1,153) (59,063)
Loss on disposal of assets (10,766) (2,161) (10,669) (2,581)
---------- ---------- ---------- ----------
(9,839) (24,597) (6,743) (55,411)
---------- ---------- ---------- ----------
Earnings before income taxes 294,851 74,878 485,157 77,664
Earnings taxes expense 88,720 18,720 149,571 19,416
---------- ---------- ---------- ----------
Net earnings $ 206,131 56,158 335,586 58,248
========== ========== ========== ==========
Basic earnings per share $ 0.04 0.01 0.06 0.01
========== ========== ========== ==========
Weighted average number of
Common shares outstanding 5,437,497 5,437,497 5,437,497 5,437,497
========== ========== ========== ==========
Diluted earnings per share $ 0.04 0.01 0.06 0.01
========== ========== ========== ==========
Weighted average number of
common and equivalent shares
outstanding 5,449,788 5,446,850 5,453,601 5,449,590
========== ========== ========== ==========
Dividends paid per share $ 0.01 0.01 0.02 0.02
========== ========== ========== ==========
See accompanying notes to condensed consolidated financial statements.
- 2 -
TECHNOLOGY RESEARCH CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Six Months Ended
September 30
2002 2001
---------- ----------
Cash flows from operating activities:
Net earnings $ 335,586 58,248
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation 464,730 449,521
Amortization 215,646 178,635
Loss on disposal of assets 10,669 2,581
Decrease (increase) in accounts receivable 247,892 (183,292)
Decrease in income taxes receivable - 201,752
Decrease (increase) in inventories (170,251) 660,903
Increase in prepaid expenses (380,061) (257,338)
Decrease in deferred income taxes 128,213 30,499
Decrease (increase) in other assets 8,309 (13,205)
Decrease in accounts payable (39,808) (642,521)
Increase (decrease) in accrued expenses 23,119 (29,987)
Increase in income taxes payable 21,358 -
Decrease in deferred income - (11,765)
---------- ----------
Net cash provided by operating activities 865,402 444,031
---------- ----------
Cash flows from investing activities:
Capital expenditures (347,688) (129,612)
---------- ----------
Net cash used in investing activities (347,688) (129,612)
---------- ----------
Cash flows from financing activities:
Principal payments on long-term debt (500,000) -
Dividends paid (108,376) (108,377)
---------- ----------
Net cash used in financing activities (608,376) (108,377)
---------- ----------
Increase (decrease) in cash and cash equivalents (90,662) 206,042
Cash and cash equivalents at beginning of period 1,163,099 184,772
---------- ----------
Cash and cash equivalents at end of period $ 1,072,437 390,814
========== ==========
See accompanying notes to condensed consolidated financial statements.
- 3 -
TECHNOLOGY RESEARCH CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
September 30, 2002 and March 31, 2002
1. The financial information included herein is unaudited; however, such
information reflects all adjustments (consisting of normal recurring
adjustments) which are, in the opinion of management, necessary for the
fair statement of results for the interim period. These statements
should be read in conjunction with the consolidated financial statements
included in the Company's annual report on Form 10-K for the year ended
March 31, 2002.
The results of operations for the six-month period ended September 30, 2002
are not necessarily indicative of the results to be expected for the full
year.
2. Basic earnings per share has been computed by dividing net earnings by the
weighted average number of common shares outstanding.
Diluted earnings per share has been computed by dividing net earnings by
the weighted average number of common and equivalent shares outstanding.
Common share equivalents included in the computation represent shares
issuable upon exercise of stock options which would have a dilutive effect
in periods where there are earnings. For the three-month and six-month
periods ended September 30, 2002, 534,750 and 387,250 shares, respectively,
were considered anti-dilutive for purposes of calculating earnings per
share. For the three-month and six-month periods ended September 30, 2001,
327,000 shares were considered anti-dilutive for purposes of calculating
earnings per share.
- 4 -
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULT OF OPERATIONS
The following is management's discussion and analysis of certain significant
factors that have affected the Company's financial position and operating
results during the periods included in the accompanying condensed consolidated
financial statements.
Current Three Months and Six Months Ended September 30, 2002 versus
September 30, 2001
The Company's operating revenues (net sales and royalties) for the second
quarter ended September 30, 2002 were $3,968,816, compared to $4,870,671
reported in the same quarter last year, a decrease of approximately 19%. Net
income for the current quarter was $206,131, compared to $56,158, for the same
quarter last year, an increase of approximately 267%. Basic and diluted
earnings for the current period were $.04 per share compared to $.01 per share
for the same quarter last year.
The Company's operating revenues (net sales and royalties) for the six-month
period ended September 30, 2002 were $7,824,134, compared to $8,978,024
reported in the same period of the prior year, a decrease of approximately 13%.
Net earnings for the six-month period was $335,586, compared to $58,248, for
the same period in the prior year, an increase of approximately 476%. Basic
and diluted earnings for the six-month period were $.06 per share compared to
basic and diluted earnings of $.01 per share for the same period last year.
The improvement in net earnings for the comparative three-month and six-month
periods was the result of increased gross profit margins and lower interest
expense. Gross profit margins improved as the result of product mix plus
productivity and quality improvements in manufacturing. Interest expense was
reduced as a result of the Company remaining debt-free during its second
quarter.
For the six-month period ended September 30, 2002, commercial sales decreased
by $1,390,015, military sales improved by $252,590 and royalty income was down
by $16,465 compared to the prior year's period. The decrease in commercial
sales was primarily due to competitive pressures and the current weakness in
the global economy, which the Company believes will continue to affect
commercial sales for the remainder of the fiscal year. Military sales remained
strong throughout the second quarter due to direct military shipments of spare
parts for existing systems and due to sub-contractor shipments of control
devices related to the Tactical Quiet Generator (TQG) programs.
The market for the Company's Fire Shield(r) products continues to develop.
During the second quarter, the Company shipped Fire Shield Power Surge Strips,
a new product, to approximately 600 Wal-Mart Stores, Inc. In addition, Fire
Shield licensed technology generated royalties of approximately $34,000 during
the fiscal year so far. Also, as previously reported, the 2002 National
Electrical Code now requires that room air conditioners be manufactured with
cord fire prevention, which the Company's Fire Shield cord set provides.
Underwriters Laboratories recently implemented this requirement into its
product standard for room air conditioners to become effective in August 2004.
- 5 -
The Company expects to play a significant role in this newly developed
marketplace. Although Fire Shield product sales were not material as a
percentage of the Company's total revenues for the three and six-month periods
ended September 30, 2002, the Company continues to believe that its patented
Fire Shield technology represents its most significant opportunity for growth.
The Company's gross profit margin on net sales was approximately 34% for the
current quarter and approximately 33% for the six-month period ended September
30, 2002, compared to 23% and 25% for the same periods last year. The
improvement in gross profit margins was the result of product mix plus
productivity and quality improvements in manufacturing.
Selling, general and administrative expenses were $756,205 for the current
quarter and $1,541,985 for the six-month period ended September 30, 2002,
compared to $828,553 and $1,653,517 for the same periods last year, a decrease
of 9% and 7%, respectively. The decrease in expenses for the six-month period
was due to lower certain employee benefits costs of $90,542, advertising costs
of $5,253, outside sales commissions of $9,349 and other expenses of $6,388.
Selling expenses were $432,740 for the current quarter and $892,667 for the
six-month period ended September 30, 2002, compared to $486,706 and $963,959
for the same periods last year, a decrease of approximately 11% and 7%,
respectively. General and administrative expenses were $323,465 for the
current quarter and $649,318 for the six-month period ended September 30, 2002,
compared to $341,847 and $689,558 for the same periods last year, a decrease of
approximately 5% and 6%, respectively.
Research, development and engineering expenses were $315,213 for the current
quarter and $600,269 for the six-month period ended September 30, 2002,
compared to $235,522 and $498,668 for the same periods last year, an increase
of approximately 34% and 20%, respectively. The increase was related to the
Company re-qualifying its portable GFCI products with Underwriters Laboratories
("UL"). As previously reported in the Company's Fiscal Year 2002 Form 10-K,
UL announced on November 1, 2001 that it would toughen the test standard for
portable GFCI devices as a result of a National Electrical Manufacturers
Association ("NEMA") sponsored investigation of the long term performance and
installations of GFCI Dual Outlet Receptacles across the United States. All
of the Company's GFCI devices will need to be re-tested and re-certified by
January 1, 2003, according to the present UL timetable. The re-certification
will test for 1) expanded surge requirements, 2) new requirements for moisture
and corrosion, and 3) new requirements for reverse line-load miss wiring. Of
those products that represent significant revenues to the Company, re-
certification is 100% complete, and of those products that represent minor
revenues, UL is scheduled to review those products before the January 2003
deadline.
Interest and sundry income, net of interest expense, for the current quarter
was $927 and $3,926 for the six-month period ended September 30, 2002,
compared to interest expense, net of interest and sundry income of ($22,436)
and ($52,830) for the same periods last year, reflecting lower interest expense
due to the Company reducing borrowings on its line of credit.
- 6 -
In accordance with SFAS 109, "Accounting for Income Taxes", the Company does
not record deferred income taxes on the undistributed earnings of its
foreign subsidiary, as it is management's intention to permanently reinvest
these earnings outside of the U.S. Accordingly, as the Company's Honduras
subsidiary was profitable, this has a favorable impact on the Company's
overall effective income tax rate. Should circumstances change, and it
becomes necessary to repatriate these undistributed earnings, the Company
will record U.S. income taxes associated with these amounts in the period in
which any such change in facts and circumstances occurs.
Liquidity and Capital Resources
As of September 30, 2002, the Company's cash and cash equivalents decreased to
$1,072,437 from the March 31, 2002 total of $1,163,099. Cash provided by
operating activities was $865,402, cash used in investing activities was
$347,688 and cash used in financing activities was $608,376, giving a total
decrease of $90,662.
Cash provided by operating activities was primarily due to net earnings of
$335,586, depreciation in the amount of $464,730, amortization of $215,646, a
decrease in accounts receivable of $247,892 and deferred income taxes of
$128,213, offset to some extent, by an increase in inventories and prepaid
expenses of $170,251 and $380,061, respectively. The decrease in accounts
receivable was the results of the Company collecting those overdue accounts
that were mentioned in the Company's first quarter Form 10-Q. Inventories rose
as the result of increased military business, and the increase in prepaid
expenses was the result of up front payments by the Company for its one year
Honduran facility lease and for its commercial property and casualty insurance.
Cash used in investing activities was related to purchases of capital equipment
only. The Company's capital expenditures were $347,688 for the six-month
period ended September 30, 2002 compared to $129,612 in the prior year's
period. Increased capital expenditures were due to the following: 1) the
Company purchasing a 375 ton molding press to further vertically integrate its
plastic parts requirements; 2) the Company's tooling for parts required on
new programs; and 3) the Company's tooling for several new and existing
products to be manufactured at the Company's contract manufacturer in China.
Cash used in financing activities was due to the Company's repaying its line
of credit by $500,000 and the payment of its cash dividend in the amount of
$108,376.
On November 12, 2002, the Company renewed its $3,000,000 revolving credit loan
with its institutional lender, extending the maturity date to December 14,
2004. Although the Company did not utilize its line of credit in the second
quarter, the Company has the option of borrowing at the lender's prime rate of
interest minus 25 basis points or the 30-day London Interbank Offering Rate
(L.I.B.O.R.) plus 175 basis points. The loan is collateralized with a
perfected first security interest on all of its accounts receivable and
inventories, and a blanket security interest on all of its assets. The Company
continues to comply with its loan covenants. The Company has no off-balance
sheet arrangements and no debt relationships other than noted above.
- 7 -
The Company's working capital decreased by $137,144 to $7,797,052 at
September 30, 2002, compared to $7,934,196 at March 31, 2002. The decrease was
due to the Company's reduction of its line of credit, as noted above. The
Company believes cash flow from operations, the available bank line and
current cash position will be sufficient to meet its working capital
requirements for the immediate future.
The Company's earnings before interest, income taxes, depreciation and
amortization ("EBITDA") was $639,703 for the three-month period and $1,166,686
for the six-month period ended September 30, 2002, compared to $415,397 for
the three-month period and $764,883 for the six-month period ended
September 30, 2001. The chart below shows the reconciliation of EBITDA to
net earnings:
Three Months Ended Six Months Ended
September 30 September 30
2002 2001 2002 2001
---------- ---------- ---------- ----------
Net earnings $206,131 56,158 335,586 $ 58,248
Interest expense - 27,371 1,153 59,063
Income tax expense 88,720 18,720 149,571 19,416
Depreciation expense 226,834 229,149 464,730 449,521
Amortization expense 118,018 83,999 215,646 178,635
---------- ---------- ---------- ----------
EBITDA $639,703 415,397 1,166,686 $764,883
The record date for the Company's second fiscal quarter dividend of $.01 per
share was September 30, 2002, and the Company paid that dividend on
October 25, 2002.
New Accounting Standards
In June 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 143, "Accounting for Asset
Retirement Obligations." This Statement addresses financial accounting and
reporting for obligations associated with the retirement of tangible long-lived
assets and the associated asset retirement costs. This Statement applies to
all entities that have legal obligations associated with the retirement of
long-lived assets that result from the acquisition, construction, development
or normal use of the asset. As used in this Statement, a legal obligation
results from existing law, statute, ordinance, written or oral contract, or by
legal construction of a contract under the doctrine of promissory estoppel.
Enterprises are required to adopt SFAS No. 143 for fiscal years beginning after
June 15, 2002. The Company does not believe the adoption of SFAS No. 143 will
have a material effect on its financial statements.
In June 2002, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities," which is effective for exit or
disposal activities that are initiated after December 31, 2002. SFAS No. 146
requires that a liability for a cost associated with an exit or disposal
activity be recognized when the liability is incurred and can be measured at
- 8 -
fair value and nullifies EITF 94-3, "Liability Recognition for Certain Employee
Termination Benefits and Other Costs to Exit an Activity (including Certain
Costs Incurred in Restructuring)." The Company does not believe the adoption
of SFAS No. 146 will have a material effect on its financial statements.
Item 3. Quantitative and Qualitative Disclosure Regarding Market Risk
The Company has no derivative securities as of September 30, 2002. The
Company's exposure to market risk for changes in interest rates would relate
primarily to the Company's debt obligations due to its variable LIBOR Rate
pricing; however, the Company has no debt obligations as of September 30, 2002.
Forward Looking Statements
Some of the statements in this report constitute forward-looking statements,
within the meaning of the Private Securities Litigation Reform Act of 1995 and
the Securities Exchange Act of 1934. These statements related to future
events, other future financial performance or business strategies, and may be
identified by terminology such as "may," "will," "should," "expects,"
"scheduled," "plans," "intends", "anticipates," "believes," "estimates,"
"potential," or "continue" or the negative of such terms or other comparable
terminology. These statements are only predictions, and actual events or
results may differ materially. In evaluating these statements, you should
specifically consider the factors described throughout this report. Such key
factors include, but are not limited to, the acceptance of any new products,
such as "Fire Shield", into the marketplace, the effective utilization of the
Company's Honduran manufacturing facility, changes in manufacturing
efficiencies and the impact of competitive products and pricing. The Company
cannot be assured that future results, levels of activity, performance or goals
will be achieved, and the Company disclaims any obligation to revise any
forward-looking statements subsequent to events or circumstances or the
occurrence of unanticipated events.
Item 4. Controls and Procedures
The Company's management, including the Chairman of the Board (serving as the
principal executive officer) and Chief Financial Officer, have conducted an
evaluation of the effectiveness of disclosure controls and procedures pursuant
to Exchange Act Rule 13a-14. Based on that evaluation, the Chairman of the
Board and the Chief Financial Officer concluded that the disclosure controls
and procedures are effective in ensuring that all material information required
to be filed in this quarterly report has been made known to them in a timely
fashion. There have been no significant changes in internal controls, or in
other factors that could significantly affect internal controls, subsequent to
the date the Chairman of the Board and Chief Financial Officer completed their
evaluation.
- 9 -
Part II - Other Information
Item 1. Legal Proceedings
Not Applicable.
Item 2. Changes in Securities
Not Applicable.
Item 3. Defaults Upon Senior Securities
Not Applicable.
Item 4. Submission of Matters to a Vote of Security Holders
At the Company's annual meeting of shareholders held on August 22, 2002, the
following matters were submitted for a vote by the shareholders:
1. To elect six members of the Board of Directors who will be elected
to a one-year term of office.
VOTES FOR VOTES WITHHELD
--------- --------------
Robert S. Wiggins 4,809,025 229,884
Raymond H. Legatti 4,810,060 228,849
Raymond B. Wood 4,810,525 228,384
Gerry Chastelet 4,844,692 194,217
Edmund F. Murphy, Jr. 4,844,526 194,383
Martin L. Poad 4,845,692 193,217
2. To ratify the selection by the Company's Board of Directors of
KPMG LLP as independent auditors of the Company for its fiscal
year ending March 31, 2003.
VOTES FOR VOTES AGAINST VOTES ABSTAINED
--------- ------------- ---------------
To ratify auditors 5,032,371 2,003 4,535
Item 5. Other Information
Not Applicable.
Item 6. Exhibits and Reports on Form 8-K
The Company filed no reports on Form 8-K during the quarter covered by this
Report.
Exhibit 99.1 The Chief Executive Officer's certification required under
Section 906 of the Sarbanes-Oxley Act of 2002.
Exhibit 99.2 The Chief Financial Officer's certification required under
Section 906 of the Sarbanes-Oxley Act of 2002.
- 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.
TECHNOLOGY RESEARCH CORPORATION
(registrant)
November 14, 2002 /s/ Scott J. Loucks
___________________________ __________________________________
Date Scott J. Loucks
Chief Financial Officer,
(principal financial, accounting and
Duly Authorized Officer)
- 11 -
CERTIFICATIONS PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
CERTIFICATION
- -------------
I, Robert S. Wiggins, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Technology Research
Corporation:
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is being
prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
- 12 -
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
November 14, 2002 /s/ Robert S. Wiggins
___________________________ __________________________________
Date Robert S. Wiggins
Chairman of the Board and
Chief Executive Officer
CERTIFICATION
- -------------
I, Scott J. Loucks, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Technology Research
Corporation:
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is being
prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
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a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
November 14, 2002 /s/ Scott J. Loucks
___________________________ __________________________________
Date Scott J. Loucks
Chief Financial Officer,
(principal financial, accounting and
Duly Authorized Officer)
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