TECHNOLOGY RESEARCH CORPORATION EXPECTS THIRD QUARTER REVENUE INCREASE WITH CONTINUING PRESSURE ON MARGINS

CLEARWATER, FLORIDA, January 14, 2005 – Jerry T. Kendall, President and Chief Executive Officer of Technology Research Corporation (TRC), (NASDAQ–TRCI), announced today that the Company expects to report a revenue increase for the third quarter of 30% to 35% compared to the preceding quarter.  However, lower margins for air conditioner products will impact the level of profitability the Company expects to report for the third fiscal quarter ended December 31, 2004.

Mr. Kendall said, “While we are pleased with the sales effort in penetrating this new room air conditioner opportunity, the implementation and coordination of bringing on-line four separate manufacturing locations, almost simultaneously, has presented production and delivery challenges that have negatively impacted our profit margins on these products.  Although the initial startup process has been more difficult than we anticipated, monthly volumes are increasing for the current manufacturing season and the Company believes it will be well positioned to perform efficiently for this application in the ensuing years.”  

Major factors impacting margins on the air conditioner products include (i) unanticipated expenses in the  startup phase in Honduras and three far east contract manufacturers for the air conditioner application; (ii) lower air conditioner product margins during the startup phase; and (iii) significant additional freight charges of approximately $500,000 during the fiscal third quarter.  The Company incurred these incremental freight costs to keep commitments to its air conditioning customers during this initial phase.   With contract manufacturers on-line in China, the Company expects a decline in the freight and startup costs during the fourth fiscal quarter ending March 31, 2005.  

Kendall added, “Increasing quantities of air conditioner products are scheduled to be manufactured in Honduras and at our three far east contract manufacturers during the January through April 2005 time frame.   The Company expects continued revenue growth in the fourth fiscal quarter and is cautiously optimistic that earnings per share will exceed the comparable quarter last year.”

Technology Research Corporation designs, manufactures and markets electrical safety products that save lives, protect people from serious injury from electrical shock and prevent electrical fires in the home and workplace.  These products have worldwide application.  The Company also supplies power monitoring and control equipment to the United States Military and its prime contractors.  

“Safe Harbor” Statement:  Certain statements made in this press release are forward looking in nature and, accordingly, are subject to risks and uncertainties.  The actual results may differ materially from those described or contemplated.

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