United States
Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB/A
(Mark One)
[x] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 For the Period of Six Months 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 0-21725
The Translation Group, LTD.
(Exact name of registrant as specified in its charter)
Delaware 23-3382869
- ------------------------------ ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
44 Tanner Street
Haddonfield, NJ 08033
- ---------------------------------------- ------------------------------
(Address of principal executive offices) (Zip Code)
(609)795-8669 [Previously (609) 663-8600)]
(Registrant's telephone number, including area code)
7703 Maple Avenue, Pennsauken NJ 08109
(Former name, former address and former fiscal year, if changed since last
report)
Indicated by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 of 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months(or for such shorter periods that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES NO X
--- ---
Applicable Only to Issuers Involved in Bankruptcy
Proceedings During the Preceding Five Years
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13, or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by the court.
YES____ NO____
Applicable Only to Corporate Issuers
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date.
Common Stock, .001 Par Value-Issued 1,943,000 shares as of December 31, 1996
Index
Part I. Financial Information
Item 1. Financial Statements (Unaudited)
Condensed consolidated balance sheets--September 30, 1996 and March 31,
1996
Condensed consolidated statements of income--Three months ended
September 30, 1996 and 1995; six months ended September 30, 1996 and
1995
Condensed consolidated statements of cash flows--Six months ended
September 31, 1996 and 1995
Notes to condensed consolidated financial statements--September 30, 1996
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Part II. Other Information
Item 1. Legal Proceeding
Item 2. Changes In Securities
Item 3. Defaults upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports of Form 8-K
Signatures
The Translation Group, LTD.
and Subsidiary
Consolidated Balance Sheets
September 30, 1996 (unaudited) and March 31, 1996 (unaudited)
<TABLE>
<CAPTION>
September 30, March 31,
1996 1996
---- ----
ASSETS:
Current assets:
<S> <C> <C>
Cash end cash equivalents $ 429,524 $ 530,340
Accounts receivable, net of allowance for
doubtful accounts of $20,000 645,327 642,481
Deferred offering costs 143,930 34,540
----------- -----------
Total current assets 1,218,781 1,207,361
Property and equipment 466,859 362,177
Less: accumulated depreciation and amortization (229,537) (189,465)
----------- -----------
Net property and equipment 237,322 172,712
Other assets 51,513 58,759
----------- -----------
TOTAL ASSETS $ 1,507,616 $ 1,438,832
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable $ 93,548 $ 55,834
Accrued liabilities 23,590 26,000
Accrued income taxes 86,800 115,000
Deferred income taxes 176,664 233,394
----------- -----------
Total liabilities 380,602 430,228
Stockholders' equity:
Common stock, $.001 par value, 15,000,000
shares authorized, 1,226,000 outstanding
and 3,782,000 outstanding, respectively 1,226 3,782
Preferred stock, $.001 par value, 1,000,000
authorized, none outstanding
Additional paid-in capital 465,424 462,868
Retained earnings 660,364 541,954
----------- -----------
Total stockholders' equity 1,127,014 1,008,604
----------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 1,507,616 $ 1,438,832
=========== ===========
</TABLE>
The Translation Group, LTD
and Subsidiary
Consolidated Statements of Operations
For the three months ended September 30, 1996 and 1995 (unaudited)
and the six months ended September 30, 1996 and 1995 (unaudited)
<TABLE>
<CAPTION>
3 months 3 months 6 months 6 months
September 30, September 30, September 30, September 30,
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenue $ 826,887 $ 546,703 $ 1,647,557 $ 1,238,000
Cost of services 536,864 333,072 1,072,502 673,591
Depreciation and amortization 21,286 18,600 40,072 37,200
---------- ---------- ----------- -----------
Gross profit 268,737 195,031 534,983 527,209
Selling, general and
administration expense 197,484 145,294 346,121 274,982
---------- ---------- ----------- -----------
Operating income 71,253 49,737 188,862 252,227
Non-operating income (expense)
Interest income (expense) 1,324 1,544
---------- ---------- ----------- -----------
Income before income taxes 72,577 49,737 190,406 252,227
Provision for income taxes 28,975 19,865 71,996 91,030
---------- ---------- ----------- -----------
Net income $ 43,602 $ 29,872 $ 118,410 $ 161,197
======== ======== ========= =========
Net income per common share
outstanding $ 0.04 $ 0.04 $ 0.10 $ 0.21
====== ====== ====== ======
Weighted average shares
outstanding 1,226,000 755,000 1,226,000 755,000
========= ======= ========= =======
</TABLE>
The Translation Group, LTD.
and Subsidiary
Consolidated Statements of Cash Flow
For the six months ended September 30, 1996 and 1995 (unaudited)
<TABLE>
<CAPTION>
6 months 6 months
September 30, September 30,
1996 1995
---- ----
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES:
<S> <C> <C>
Net income $ 118,410 $ 161,197
Depreciation and amortization 40,072 37,200
CHANGE IN OPERATING ASSETS AND LIABILITIES:
Accounts receivable (2,846) (63,136)
Other assets 7,246 (13,056)
Accounts payable 37,714 99,068
Accrued liabilities (2,410) (714)
Accrued income taxes (28,200) 4,937
Deferred income taxes (56,730) 86,093
----------- -----------
Net cash flows provided by operating activities (45,226) 113,192
CASH FLOWS PROVIDED BY (USED FOR) INVESTING ACTIVITIES:
Purchase of property and equipment (104,682) (149,359)
CASH FLOWS PROVIDED BY (USED FOR) FINANCING ACTIVITIES:
Deferred offering costs (109,390)
Payments under line of credit (40,000)
Net borrowings (payments) on long-term debt 5,473
----------- -----------
Net cash flows provided by (used in) financing activities (109,390) (34,527)
----------- -----------
Net increase in cash and cash equivalents (100,816) 127,703
Cash and cash equivalents, beginning of period 530,340 2,238
----------- -----------
Cash and cash equivalents, end of period $ 429,524 $ 129,941
========= =========
</TABLE>
Notes to Condensed Consolidated Financial Statements
September 30, 1996 (Unaudited)
Note A--Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information. 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, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three and six month periods ended
September 30, 1996 are not necessarily indicative of the results that may be
expected for the year ended March 31, 1997. For further information, refer to
the consolidated financial statements and footnotes thereto included in the
Registration Statement of the Company that became effective December 2, 1996.
Note B--Earnings Per Share
As of April 1, 1996, there were 1,891,000 shares of outstanding common stock of
which 665,000 shares were subsequently returned by shareholders in accordance
with the agreement with underwriters. For the comparable period in 1995, the
Bureau of Translation Services, Inc.(BTS) had the equivalent of 755,000 shares
outstanding based on its merger agreement with The Translation Group Ltd.(TTGL)
dated January 17, 1996, in which the shareholders of TTGL received 895,000
shares.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Results of Operations-(stated in thousands)
For the six months ended September 30, net sales increased 33% over the
corresponding period in 1995, from $1,238.0 to $1,647.6. However, net income
declined by 27% in comparison to the prior period, from $161.2 to $118.4. Cost
of sales increased from $710.8 to $1,112.6, or 57%; selling, general and
administrative expenses (which included certain expenses of the IPO as described
below) increased from $275.0 to $ 346.1 but, as a percentage of sales, decreased
from 22% to 21%. Interest income increased in the amount of $1.5.
For the three months ended September 30, net sales increased 51% from
the corresponding period in 1995, from $546.7 to $826.9. Net income increased in
the amount of $13.7. Gross profit increased from $195.0 to $268.7, decreasing
however as a percentage of sales from 36% to 32%. Selling, general and
administrative expenses also increased in the amount of $52.2 to $197.5, or 36%,
and decreased as a percentage of sales from 27% to 24%.
Discussion
While there was an increase of 33% of sales between the comparable six
month periods ended September 30, 1996 and 1995, gross profit as a percentage of
sales decreased from 43% to 32% as a result of changing customer and language
mix and of increasing costs of expanding capacity. Selling, general and
administrative expenses also increased by approximately $71,000, which amount
includes $49,000 of salary and related costs of the CEO who was involved
entirely during this period in the various aspects of the Company's initial
public offering.
The statements presented for the comparative periods are reclassified
to agree with the classifications of the current statements.
Liquidity and Sources of Capital
The Company generated cash from operations for the six months ended
September 30, 1996 of $158,482 and invested $104,682 in equipment and related
software and incurred $109,390 of costs in connection with the Company's initial
public offering. The net change in operating assets and liabilities amounted to
$45,226. Accordingly, cash and equivalents decreased by $100,816, from $530,340
as of April 1, 1996 to $429,524 as of September 30, 1996.
PART II. OTHER INFORMATION
Item 1. Legal Proceeding
none
Item 2. Changes In Securities
none
Item 3. Defaults upon Senior Securities
n.a.
Item 4. Submission of Matters to a Vote of Security Holders
none
Item 5. Other Information
none
Item 6. Exhibits and Reports of Form 8-K
There were no reports filed on Form 8-K
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.
The Translation Group, LTD.
---------------------------
(Registrant)
Date February 1997 /s/
----------------------------- ---------------------------
(Name and Title)
Date February 1997 /s/
----------------------------- ---------------------------
(Name and Title)
