<PAGE> 1
U.S. 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 September 30, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________to________
Commission file number 0-27510
TMCI ELECTRONICS, INC.
(Exact name of small business issuer as specified in its charter)
Delaware 77-0413814
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
1875 DOBBIN DRIVE, SAN JOSE, CA 95133
(Address of principal executive offices)
(408) 272-5700
(Issuer's telephone number)
(Former name, former address and former fiscal year, if changed since last
report)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such report (s), and (2)
has been subject to such filing requirements for the past 90 days. Yes X No___
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required
to be filed by Section 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by court. Yes___ No___
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes
of common equity, as of September 30, 1996: 3,365,600.
Transitional Small Business Disclosure Format (check one): Yes___ No X
<PAGE> 2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
TMCI ELECTRONICS, INC.
CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 1996
(UNAUDITED)
<TABLE>
ASSETS:
Current Assets:
<S> <C>
Cash $ 2,147,314
Accounts Receivable, Net 1,691,391
Inventory 5,091,630
Deferred Income Taxes 29,700
Prepaid Expenses and Other Current Assets 352,405
-----------
Total Current Assets $ 9,312,440
-----------
Property and Equipment - Net $ 3,447,871
-----------
Other Assets:
Due from Stockholder $ 238,167
Due from Related Party 339,842
Other Assets 734
-----------
Total Other Assets $ 578,743
-----------
TOTAL ASSETS $13,339,054
===========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current Liabilities:
Accounts payable and Accrued Expenses $ 2,421,092
Notes Payable - Current Portion 395,875
Capital Lease Obligation - Current Portion 50,454
-----------
Total Current Liabilities $ 2,867,422
-----------
Long Term Liabilities:
Notes Payable - Net of Current Portion $ 1,394,241
Capital Lease Obligation - Net of Current Portion 223,538
Deferred Income Taxes 405,383
-----------
Total long-term liabilities $ 2,023,162
-----------
Total Liabilities $ 4,890,584
-----------
Commitment and Contingencies $ 0
Stockholders' Equity:
Common Stock - .001 par value, 25,000,000 shares
authorized, 3,365,600 issued and outstanding $ 3,366
Additional Paid in Capital 6,829,707
Retained Earnings 1,615,397
Total Stockholders' Equity $ 8,448,470
-----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $13,339,054
===========
</TABLE>
(SEE NOTES TO FINANCIAL STATEMENTS)
2
<PAGE> 3
TMCI ELECTRONICS, INC.
STATEMENT OF OPERATIONS
[UNAUDITED]
<TABLE>
<CAPTION>
Three Months ended Nine Months ended
September 30 September 30
1996 1995 1996 1995
---- ---- ---- ----
Consolidated Combined Consolidated Combined
------------ -------- ------------ --------
<S> <C> <C> <C> <C>
SALES, net $ 5,246,434 $ 6,807,106 $ 20,496,567 $ 20,543,000
Cost of Goods Sold 3,078,574 4,673,310 13,497,840 14,418,419
------------ ------------ ------------ ------------
Gross Profit 2,167,860 2,133,796 6,998,727 6,124,581
Operating Expenses 1,922,557 1,582,963 5,800,330 4,546,855
------------ ------------ ------------ ------------
Income from operations 245,303 550,834 1,198,397 1,577,726
------------ ------------ ------------ ------------
Other Income [Expense]:
Gain on sale of equipment 2,965 (2,754) 139,465 (2,828)
Life insurance (16) (3,825) (2,307) (3,825)
Interest expense (46,471) (130,944) (246,655) (447,328)
Non-cash finance charge -- -- (462,122) --
Other income -- -- 39,704 --
Interest income 25,606 11,332 53,624 29,961
------------ ------------ ------------ ------------
Total other [expense] (17,916) (126,191) (478,291) (424,020)
------------ ------------ ------------ ------------
Income Before Provision for Income Taxes 227,387 424,643 720,106 1,153,706
Provision for Income Taxes 54,646 138,873 254,736 394,677
Net Income 172,741 285,770 465,370 759,029
------------ ------------ ------------ ------------
Earnings per Share:
Net Income Per Share $ .05 $ .15 $ .15 $ .40
------------ ------------ ------------ ------------
Pro Forma Net Income [see note 7]
Income Before Provision for N/A 424,643 720,106 1,153,706
Income Taxes
Pro-Forma Income Taxes N/A 202,573 254,736 458,377
------------ ------------ ------------ ------------
Pro-Forma Net Income N/A 222,070 465,370 695,329
Pro Forma Net Income per Share
Income before Provision for N/A .22 .24 .61
Income Tax per Share
Pro-Forma Income Tax per Share N/A .10 .09 .24
------------ ------------ ------------ ------------
Pro-Forma Net Income per Share N/A .12 .15 .37
Weighted Average number of Shares 3,365,600 1,893,600 3,016,403 1,893,600
------------ ------------ ------------ ------------
</TABLE>
(SEE NOTES TO FINANCIAL STATEMENTS)
3
<PAGE> 4
TMCI ELECTRONICS, INC.
STATEMENT OF CASH FLOWS
[UNAUDITED]
<TABLE>
<CAPTION>
Nine Months ended
September 30
------------
1996 1995
---- ----
Consolidated Combined
------------ --------
Net Income
Operating Activities
<S> <C> <C>
Net Income $ 465,370 $ 759,029
Adjustments to reconcile net income to net cash from operations:
Depreciation and amortization 595,257 518,899
Deferred income taxes (38,572) 373,998
Gain on sale of equipment (139,465) 2,828
Non-cash financing charge 462,122 --
Amortization of Deferred loan fees 28,500 --
Charges in Assets and Liabilities:
[Increase] decrease in:
Accounts receivable, trade 1,436,215 (167,368)
Inventory (1,912,313) (515,703)
Prepaid expenses and other current assets (110,389) (149,342)
Employee Advances -- (7,273)
Increase (decrease) in:
Accounts payable and accrued expenses (904,029) 453,371
Income taxes payable (258,168) (28,972)
Net Cash - Operating Activities - Forward (375,472) 1,239,467
----------- -----------
Investing Activities:
Proceeds from sales of equipment 197,650 4,000
Purchase of equipment (538,989) (340,161)
Note receivable - Other 103,103 (92,222)
Due from Stockholder (6,134) (24,394)
----------- -----------
Net Cash - Investing Activities - Forward (244,370) (452,777)
----------- -----------
Financing Activities:
Credit line, net (1,644,576) (493,596)
Debt repayment (1,100,534) (563,770)
Repayment of Bridge note payable (1,000,000) --
Proceeds from public offering 5,810,594 --
Advance from affiliates -- 228,742
Note payable proceeds -- 50,000
----------- -----------
Net Cash - Financing Activities 2,065,484 (778,624)
----------- -----------
Net Increase [Decrease] in Cash 1,445,642 8,066
Cash - Beginning of Periods 701,672 15,917
----------- -----------
Cash - End of Periods 2,147,314 23,983
=========== ===========
</TABLE>
(SEE NOTES TO FINANCIAL STATEMENTS)
4
<PAGE> 5
TMCI ELECTRONICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
[UNAUDITED]
1)BASIS OF REPORTING
The entities noted below executed an exchange of shares among entities under
common control, upon the effectiveness of a public offering of securities. [ See
Note 6 ]
The balance sheet as of September 30, 1996 is presented on a consolidated basis
and includes TMCI Electronics, Inc. ["TMCI"], and its wholly owned subsidiaries,
Touche Manufacturing Company, Inc. ["Touche"] and Touche Electronics Inc.
["TEI"] [collectively, the "Company"]. The consolidated financial statements for
the periods ended September 30, 1996 include the results of operations and cash
flows for the Company.
The combined financial statements for the period ended September 30, 1995,
include the results of operations, and cash flows for Touche and TEI for the
three and nine months then ended.
All significant intercompany balances and transactions have been eliminated in
consolidation and combination.
The accompanying unaudited consolidated and combined financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-QSB and Item
310(b) of Regulation S-B. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements.
In the opinion of management, such statements include all adjustments
(consisting only of normal recurring items) which are considered necessary for a
fair presentation of the financial position of the Company at September 30, 1996
and the results of its operations and cash flows for the three and nine month
periods ended September 30, 1996 and 1995. The results of operations for the
periods presented are not necessarily indicative of the results to be expected
for the full year.
It is suggested that these financial statements be read in conjunction with the
financial statements and notes for the period ended December 31, 1995 included
in the Company's Annual Report on Form 10-KSB.
2) INCOME PER SHARE
Income per share of common stock is based on weighted average number of common
shares outstanding for each period presented. Common stock equivalents are
included if dilutive.
3) COMMON STOCK
At September 30, 1996, 3,365,600 shares of the Company's common stock were
issued and outstanding.
5
<PAGE> 6
4) INVENTORY
Inventory consists of the following:
<TABLE>
<CAPTION>
September 30, 1996
<S> <C>
Raw Materials $2,431,492
Finished goods 574,120
Work in process:
Materials 1,475,712
Direct Labor 334,731
Overhead 275,576
----------
Total $5,091,631
==========
</TABLE>
5) REVOLVING CREDIT LINE
On March 28, 1996, the Company entered into a loan and security agreement with a
financial institution providing for the Company to borrow up to 80% of its
eligible accounts receivable, as defined in the agreement, up to a maximum of $
4 million. Interest on this credit line is calculated at the lender's base rate
plus 3/4 %. The base rate at September 30, 1996 was 9%. The line of credit
agreement, which shall continue for one year, is collateralized by all of the
assets of the Company.
6) PUBLIC OFFERING
On March 11, 1996, the Company completed an Initial Public Offering of its
securities resulting in net proceeds to the Company of approximately $
5,800,000. The Company sold 1,472,000 Units consisting of one share of common
stock, $0.001 par value per share and one redeemable Class A warrant at a price
of $5.00 per Unit. Each Class A warrant entitles the holder to purchase one
share of common stock at a price of $5.50 per share for a period of four years
beginning March 5, 1997. The Company may redeem the Class A warrants any time
after March 5, 1997, upon thirty days' written notice, if the average closing
price or bid price of the common stock, as reported by the principal market on
which the common stock is quoted or traded, equals or exceeds $ 8.75 per share,
for any twenty consecutive trading days ending within five days prior to the
date of the notice of redemption.
7) PRO FORMA INCOME TAXES
As of March 10, 1996, the Initial Public Offering, which resulted in the
termination of the "S" corporation status of TEI, had not yet occurred. The pro
forma tax amounts have been computed as if the termination had occurred at the
beginning of all periods presented.
8) SUBSEQUENT EVENTS
In the prospectus for its Public Offering which closed on March 11, 1996, the
Company expressed its intention to seek out proposed acquisition candidates of
companies with business complementary to those of the Company. The Company
continues to evaluate prospective candidates. However, on November 7, 1996, the
Company's Board of Directors passed a Resolution which authorized Touche
Electronics, Inc. to acquire the business and net assets of Pen Interconnect,
Inc.'s San Jose Division, a manufacturer of custom designed wire cable harness
products. The acquisition of Pen Interconnect, Inc.'s San Jose Division was
completed on November 12, 1996, and is now an operating division of Touche
Electronics, Inc.
6
<PAGE> 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
Effective March 5, 1996, TMCI Electronics, Inc. ("Company") acquired Touche
Manufacturing Company, Inc. ("Touche") and Touche Electronics, Inc. ("TEI")
pursuant to certain Stock Purchase Agreements executed on December 28, 1995.
Prior to that time, the Company's operations consisted of forming of the
Company, preparing for the acquisition of Touche and TEI, as well preparing for
the initial public offering of its securities discussed below.
In the first quarter ended March 31, 1996, the Company made a limited investment
to start two new divisions at TEI: the Wire and Cable Manufacturing division and
the Clean Room Assembly division. These divisions will produce basic cable
products and will provide clean-room assembly capabilities for specialized
products for their customers, respectively. The Company's strategy has been to
expand its core and value added businesses by increasing its product offerings
to satisfy its customers' needs and their growing demand for more outsourcing of
contract manufacturing services.
Results of Operations
The results of operations utilizes the combined results from Touche and TEI
prior to their acquisition by the Company, eliminating intercompany transactions
as represented by the financial statements. The table and the discussion below
should be read in conjunction with the financial statements and the notes
thereto, that appear elsewhere in this report.
<TABLE>
<CAPTION>
Combined Statements of Income
Nine Months Ended
September 30,
1996 1995
---- ----
<S> <C> <C>
Sales(1) $ 20,496,567 $ 20,543,000
Cost of goods sold(1) 13,497,840 14,418,419
Gross Profit 6,998,727 6,124,581
Operating expenses 5,800,330 4,546,855
Income before tax provision 1,198,397 1,577,726
Other income (expense) (231,636) 23,308
Interest expense (246,655) (447,328)
Provision for tax (254,736) (394,677)
Net income 465,370 759,029
</TABLE>
( 1 ) Net of intercompany sales and cost of goods sold as follows:
<TABLE>
<S> <C>
September 30, 1996................................$3,257,678
September 30, 1995................................$3,456,519
</TABLE>
(SEE NOTES TO FINANCIAL STATEMENTS)
7
<PAGE> 8
Net Sales
Net sales decreased by approximately $46,400 to $20,496,567 from
$20,543,000 for the nine month period ended September 30, 1996 as compared to
the nine month period ended September 30, 1995. The slight decline in sales was
due primarily to a number of order cancellations and the rescheduling of
customer orders. In the third quarter ended September 30, 1996, the Company's
sales forecast was adjusted downward to reflect the impact of the general
slowdown in the industry, changing local market conditions, and the resulting
decline in sales and operations. In response to the decline in value-added
business, the Company has accelerated its sales and marketing to capture more of
the core business from new potential customers.
Gross Profit
Gross profit increased approximately $874,100 or 14% to $6,998,727 from
$6,124,581 for the nine month period ended September 30, 1996 as compared to the
nine month period ended September 30, 1995. As a percentage of sales, gross
profit increased approximately 4% to 34% from 30% for the nine month period
ended September 30, 1996 as compared to the nine month period ended September
30, 1995. Operating efficiencies continue playing a key part in the maintenance
of higher gross profit margins in the business.
Operating Expenses
Operating expenses increased approximately $1,253,500 or 22% to $5,800,330 from
$4,546,855 for the nine month period ended September 30, 1996 as compared to the
nine month period ended September 30, 1995. As a percentage of sales, the
Company's operating expenses increased 6% to 28% from 22% for the nine month
period ended September 30, 1996 as compared to the nine month period ended
September 30, 1995. The increase in operating expenses was primarily due to an
investment in infrastructure to support planned growth, including two new
operating divisions. This investment included additional personnel, building
rental costs, repairs, professional fees, promotions of certain engineers to
management positions and other items. The Company continues to respond quickly
to the changing market conditions by lowering its operating costs through
reduced labor force and other actions to levels that are more in line with its
revised sales and growth plans for the remainder of the calendar year ending
December, 1996.
Interest Expense
Interest expense for the nine month period ended September 30, 1996 was
approximately $246,600, representing a decrease of approximately $200,700 or 45%
from the nine month period ended September 30, 1995. Interest expense decreased
during the nine month period ended September 30, 1996 due to a substantial
reduction in outstanding long term debt, capital lease obligations, and bank
borrowings as compared to the nine month period ended September 30, 1995.
Net Income
Net income decreased approximately $293,700 or 39% to $465,370 from $759,029 for
the nine month period ended September 30, 1996 as compared to the nine month
period ended September 30, 1995. The decline in net income was due primarily to:
(1) a one-time financing charge of approximately $462,100 on certain bridge
loans that were made by the Company in the fourth quarter of 1995 to help fund
its initial public offering, and (2) increased operating expenses incurred to
fund two new divisions which did not generate income in the nine month period,
partially offset by a reduction in interest expense, a gain of approximately
$139,000 on the sale of capital equipment, and a $63,000 increase in interest
and other income.
(SEE NOTES TO FINANCIAL STATEMENTS)
8
<PAGE> 9
Liquidity and Capital Resources
The Company has a long-term revolving line of credit with Manufacturers Bank
("Mfrs."), which expires May 1, 1997, and bears interest at Mfrs.' base rate
plus 3/4%. This facility permits the Company to borrow up to $4,000,000 based on
a stipulated percentage of contractually defined eligible trade accounts
receivable. The Company had no outstanding borrowings under the line of credit
as of September 30, 1996. In addition, the Company and Mfrs. have agreed to a
term facility of up to $2,000,000 available for equipment purchases, which will
bear interest at Mfrs.' base rate plus 1 1/4%. There was approximately
$1,790,100 outstanding under this borrowing facility as of September 30, 1996.
On March 11, 1996, the Company closed an Initial Public Offering of its
securities resulting in net proceeds of approximately $ 5.8 million. The Company
used the proceeds of the offering to repay certain bridge notes and other debt
and applied the remaining proceeds to working capital.
The Company's working capital increased by approximately $5,325,000 from
$1,120,000 to $6,445,018 during the nine month period ended September 30, 1996.
This increase resulted primarily from an increase in cash of approximately
$1,445,600 from the Initial Public Offering net proceeds, an increase in
inventory of approximately $1,912,300, a decrease in accounts payable of
approximately $904,000, and a decrease in the line of credit drawdown of
approximately $1,644,600.
The Company required cash to fund operating activities of approximately
($375,500) in the nine month period ended September 30, 1996 as compared to
generating cash from operating activities of approximately $1,239,500 in the
nine month period ended September 30, 1995. Additional cash was required to pay
for inventory buildup, a reduction in accounts payable, tax payments and an
increase in prepaid expenses. Cash in the amount of approximately $1,821,100 was
provided by net investing and financing activities, which included sale and
purchase of equipment, debt reduction, and the initial public offering in the
nine month periods ended September 30, 1996, as compared to cash used in the
amount of approximately $ 1,231,400 for the nine months ended September 30,
1995.
During the nine month period ended September 30, 1996, the Company's property,
plant, and equipment increased by approximately $1,048,400. Management has
projected no significant capital expenditure requirements for the remainder of
fiscal 1996. During the nine month period ended September 30, 1996, the Company
spent approximately $539,000 of cash to purchase capital assets. The remainder
of the 1996 expenditures have been financed through capital lease obligations.
Management believes that its current financial position, together with available
borrowings under the Company's various credit facilities will be sufficient to
meet the Company's anticipated operating needs and projected capital assets
purchase requirements for the next twelve months. The Company's current
financial situation, including bank support, appear to be adequate to meet its
current operating needs and projected asset purchases, which are essential to
meet the requirements of business acquisitions contemplated by the prospectus
dated March 5, 1996
Certain statements made above relating to plans, objectives and economic
performance go beyond historical information and may provide an indication of
future results. To such extent, they are forward looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and 21E of the
Securities Exchange Act of 1934, as amended, and each is subject to factors that
could cause actual results to differ from those in the forward looking
statement. Such factors include but are not limited to, the assumption that no
material changes in general market conditions will occur and the assumption that
the Company does not incur any unanticipated expenditures.
(SEE NOTES TO FINANCIAL STATEMENTS)
9
<PAGE> 10
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None of the Company, Touche or TEI is a party to any material legal
proceedings and, to the best of the Company's information, knowledge and belief,
none is contemplated or has been threatened.
ITEM 5. OTHER INFORMATION
Please refer to footnote 8 -- Subsequent Events.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following exhibits are being filed with this report:
Exhibit No. Description
- ----------- -----------
11 Computation of Earnings per Share
99 Press Release
(b) No reports on Form 8-K were filed during the three month period
ended September 30, 1996.
10
<PAGE> 11
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
TMCI Electronics, Inc.
(Registrant)
Date: November 13, 1996 By: /s/ Charles Shaw
--------------------------------------
Charles Shaw, Chief Financial Officer
(Principal Financial Officer)
11
<PAGE> 12
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
11 Computation of Earnings per Share
27 Financial Data Schedule
99 Press Release
12
<PAGE> 1
EXHIBIT 11
COMPUTATION OF EARNINGS PER SHARE
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
-------------------- --------------------
1996 1995 1996 1995
---- ---- ---- ----
Fully Diluted: *
Weighted average number of Common Shares
Outstanding
Disregarding Potentially Dilutive Common Stock
<S> <C> <C> <C> <C>
Purchase Warrants and options 3,365,600 1,893,600 3,016,403 1,893,600
Assumed Exercise of Options (1) -- - 0 - - 0 - - 0 -
Assuming Conversion of Warrants(1) -- - 0 - - 0 - - 0 -
Weighted average number of Common Shares
Outstanding as adjusted 3,365,600 1,893,600 3,016,403 1,893,600
Income for Fully Diluted Calculations 172,741 222,070 465,370 695,329
Fully Diluted Earnings per Common Share .05 .12 .15 .37
</TABLE>
(1) The effects of the exercise of certain options to purchase Common Stock and
the exercise of the outstanding Class A Warrants are excluded from the
calculation as such financial instruments do not become exercisable until 1997.
However, if effect was given to the exercise of all such financial instruments,
the 1996 weighted average number of common shares outstanding as adjusted would
have been increased by approximately 866,000.
* This calculation is submitted in accordance with Securities Exchange Act of
1934 Release No. 9083, although not required by footnote 2 to paragraph 14 of
APB Opinion No. 15 because it results in dilution of less than 3%.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 2,147,314
<SECURITIES> 0
<RECEIVABLES> 1,699,670
<ALLOWANCES> 8,279
<INVENTORY> 5,091,630
<CURRENT-ASSETS> 9,312,440
<PP&E> 3,447,871
<DEPRECIATION> 623,757
<TOTAL-ASSETS> 13,339,054
<CURRENT-LIABILITIES> 2,867,422
<BONDS> 0
0
0
<COMMON> 3,366
<OTHER-SE> 8,445,104
<TOTAL-LIABILITY-AND-EQUITY> 13,339,054
<SALES> 20,496,567
<TOTAL-REVENUES> 0
<CGS> 13,497,840
<TOTAL-COSTS> 19,298,170
<OTHER-EXPENSES> 231,636
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 246,655
<INCOME-PRETAX> 720,106
<INCOME-TAX> 254,736
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 465,370
<EPS-PRIMARY> .15
<EPS-DILUTED> .15
</TABLE>
<PAGE> 1
EXHIBIT 99
PRESS RELEASE
TMCI ELECTRONICS, INC. ANNOUNCES THE ACQUISITION OF A WIRE CABLE AND HARNESS
MANUFACTURER LOCATED IN SAN JOSE
SAN JOSE, California, November 12, 1996--TMCI Electronics, Inc. (NASDAQ
Small Cap: TMEI) announced today that it has acquired the San Jose-Based wire
cable and harness manufacturing business of Pen Interconnect Inc. Under the
terms of the agreement, TMCI acquired 100% of the business and net assets of
Pen's San Jose Division, for a total purchase price of $3,300,000, consisting
of cash, notes, and shares of TMCI Electronics, Inc. stock. The business will
operate as a part of Touche Electronics, Inc., a wholly owned subsidiary of
TMCI Electronics, Inc.
"We are delighted to have completed the acquisition of Pen's wire cable and
harness manufacturing business. It will allow TMCI to provide a broader array
of services to our customers," said Rolando Loera, Chairman of the Board of
Directors and Chief Executive Officer of TMCI. "The completion of this
acquisition will allow TMCI to further satisfy the rapidly growing demand for
outsourcing of contract manufacturing services," Mr. Loera added.
TMCI Electronics, Inc., headquartered in San Jose, is the parent of Touche
Manufacturing Co. Inc. ("Touche") and Touche Electronics, Inc. ("TEI"). Touche
manufactures and assembles custom designed metal cabinets and enclosures for
original equipment manufacturers of computers, telecommunications equipment,
semiconductor manufacturing test equipment and medical testing equipment. TEI
provides value-added turnkey services to Touche's OEM and other customers.
TMCI's common stock is listed on the NASDAQ SmallCap Market under the symbol
TMEI.
CONTACT: Charles E. Shaw, Vice President - CFO
408-272-5700
