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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 12B-25
NOTIFICATION OF LATE FILING
Commission File Number 0-2642
(Check one): /X/ Form 10-K and Form 10-KSB / / Form 11-K
/ / Form 20-F / / Form 10-Q and Form 10-QSB / / Form N-SAR
For period ended DECEMBER 31, 1996
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/ / Transition Report on Form 10-K and Form 10-KSB
/ / Transition Report on Form 20-F
/ / Transition Report on Form 11-K
/ / Transition Report on Form 10-Q and Form 10-QSB
/ / Transition Report on Form N-SAR
For the transition period ended
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READ ATTACHED INSTRUCTION SHEET BEFORE PREPARING FORM. PLEASE PRINT OR
TYPE.
Nothing in this form shall be construed to imply that the Commission has
verified any information contained herein.
If the notification relates to a portion of the filing checked above,
identify the item(s) to which the notification relates:
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PART I
REGISTRANT INFORMATION
Full name of registrant TRIDENT ROWAN GROUP, INC.
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Former name if applicable
TWO WORLDS FAIR DRIVE
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Address of principal executive office (STREET AND NUMBER)
FRANKLIN TOWNSHIP
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City, State and Zip Code SOMERSET, NEW JERSEY 08873
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PART II
RULE 12B-25(B) AND (C)
If the subject report could not be filed without unreasonable effort or
expense and the registrant seeks relief pursuant to Rule 12b-25(b), the
following should be completed. (Check appropriate box.)
/X/ (a) The reasons described in reasonable detail in Part III of this
form could not be eliminated without unreasonable effort or expense;
/X/ (b) The subject annual report, semi-annual report, transition report
on Forms 10-K, 10-KSB, 20-F, 11-K or Form N-SAR, or portion thereof will be
filed on or before the 15th calendar day following the prescribed due date; or
the subject quarterly report or transition report on Form 10-Q, 10-QSB, or
portion thereof will be filed on or before the fifth calendar day following the
prescribed due date; and
/ / (c) The accountant's statement or other exhibit required by Rule
12b-25(c) has been attached if applicable.
PART III
NARRATIVE
State below in reasonable detail the reasons why Forms 10-K, 10-KSB, 11-K,
20-F, 10-Q, 10-QSB, N-SAR or the transition report portion thereof could not be
filed within the prescribed time period. (Attach extra sheets if needed.)
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Management of the Company has devoted much of its resources in recent
months to certain significant events, including the proposed and ultimately
terminated merger with The Carey Winston Company, the proposed sale by
Finprogetti S.p.A. of 1,635,000 shares of Trident Rowan's common stock to
Tamarix Investors, Ltd. and certain governance relationships appurtenant
thereto, and to preparations relating to the Company's Registration Statement on
Form S-1 filed on February 11, 1997 and expected to be amended shortly. The
allocation of management resources delayed the completion of the preparation of
the Company's Annual Report on Form 10-K by a few days.
PART IV
OTHER INFORMATION
(1) Name and telephone number of person to contact in regard to this
notification.
DAVID LERNER 212-735-8609
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(Name) (Area Code) (Telephone Number)
(2) Have all other periodic reports required under Section 13 or 15(d) or
the Securities Exchange Act of 1934 or Section 30 of the Investment Company Act
of 1940 during the preceding 12 months or for such shorter period that the
registrant was required to file such report(s) been filed? If the answer is no,
identify report(s).
/X/ Yes / / No
(3) Is it anticipated that any significant change in results of operations
from the corresponding period for the last fiscal year will be reflected by the
earnings statements to be included in the subject report or portion thereof?
/X/ Yes / / No
If so: attach an explanation of the anticipated change, both narratively
and quantitatively, and, if appropriate, state the reasons why a reasonable
estimate of the results cannot be made.
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The following is a quantitative and narrative summary of the results of
operations which the Company expects to report on its Form 10-K:
Year Ended Year Ended
December 31 December 31
1996 1995
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Lire m. Lire m.
Net sales 96,806 100.0% 72,253 100.0%
Cost of sales (84,165) (86.9%) (62,808) (86.9%)
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12,641 13.1% 9,445 13.1%
Selling, general and
administrative expenses (21,430) 22.1%)
(16,230) 22.5%)
Research and development (1,177) (1.2%) (602) (0.8%)
Rental income 1,483 1.5% 770 1.1%
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Operating loss (8,483) (8.8%) (6,617) (9.2%)
Impairment losses for
real estate properties (4,180) (4.3%)
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Other income, net 1,452 1.5% 513 0.7%
Interest expense (6,563) (6.8%) (4,458) (6.2%)
Interest income 3,747 3.9% 4,452 6.2%
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Loss before income taxes and
minority interests (14,027) (14.5%)
(6,110) (8.5%)
Income taxes (595) (0.6%) (420) (0.6%)
Minority interests (379) (0.4%) (450) (0.6%)
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Net loss (15,001) (15.5%) (6,980) (9.7%)
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NET SALES
Year ended December 31
1996 1995
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Lire m. Lire m.
Motorcycles 77,620 64,671
Steel Tubes 17,313 5,838
Corporate and Other 3,513 2,458
Intersegment eliminations (1,644) (712)
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96,806 72,253
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OVERALL. Net sales increased 34% in 1996 compared to 1995, principally as
a result of a 20% increase in sales of Moto Guzzi motorcycles and spare parts
and a 197% increase in sales of steel tubing from the inclusion of L.I.T.A. for
a full year, compared to 5 months in 1995.
MOTO GUZZI. Net sales of motorcycles and spare parts to unaffiliated third
parties increased in 1996 over 1995 by 23.2 % and 1.4% respectively. Growth in
motorcycle sales principally derives from increased volumes. Units sold by Moto
Guzzi S.p.A., the Italian manufacturing operation,
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increased from 5,198 in 1995 to 6,050 in 1996 (excluding sales of Benelli
inventory in 1995). Sales of the largest units, those with engine displacement
greater than 750cc, increased only by 6% in 1996 over 1995. Sales of large
units were held back in 1996 by delays in introducing the new Centauro model.
Sales of 750cc units, principally the Nevada 750 model, increased by 68% and
sales of units under 750 cc was unchanged from 1995. The growth in spare
part sales is attributable to the contribution of Moto America Inc. Sales of
spare parts by the Company's Italian spare parts distribution subsidiary were
limited by a relocation of its warehouse during the year. Overall, the
acquisition of Moto America Inc. did not have a material effect on net sales in
1996 compared to 1995.
L.I.T.A. Net sales for fiscal 1996 increased 19.0% over fiscal 1995. This
growth reflects volume increases of 23.3% to 12,056 tons and decreases in
selling prices due to falling steel prices, principally in the first and second
quarter. Volume growth has been achieved by entering export sales which amounted
to 8.7% in 1996 compared to 1.2% in 1995 and growth in domestic (Italian)
markets.
COST OF SALES AND MARGINS. Overall, margins remained constant at 13.1%.
Margins at Moto Guzzi increased from 13.1% to 15.3% largely as a result of the
absence of exceptional costs from writedowns of tooling and inventories
following the strategic decision to abandon production of smaller "Moto Guzzi"
and "Benelli" models which had negatively impacted 1995 margins. Margins at
L.I.T.A. fell from 22% in the 5 months to December 31, 1995 to 7% for 1996,
principally as a result of losses on inventory holdings caused by sharp raw
material decreases in the first half of 1996.
MOTO GUZZI. Margins in 1996 benefitted from higher volumes, which had the
effect of lowering per unit fixed costs, but were negatively impacted by higher
costs from the outsourcing of components. Sales price increases implemented in
March 1996 averaged 5%. The Company's plan foresaw that the gains from volume
increases in 1996 would exceed the extra cost of outsourcing, but this was not
realized in 1996 due to the loss of approximately 400 units in the autumn, as
described below. Unit production (completed units) by quarter was as follows:
1996 CHANGE 1995
First Quarter 1,520 87.2% 812
Second Quarter 1,760 21.0% 1,455
Third Quarter 1,103 (11.1%) 1,241
Fourth Quarter 1,644 ( 3.6%) 1,706
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6,027 15.6% 5,214
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Production delays occurred in August due to late delivery of parts by
suppliers. In September, the Company commenced production of its new Centauro
model which temporarily slowed production rate. In late November 1996, the
Company unit output was again limited due to production problems at suppliers
and strikes connected with the renewal of national labor contracts. In
consequence, the Company fell short of its production targets by approximately
400 units.
Cost of sales at Moto Guzzi was adversely impacted by inflationary
increases in raw material prices and wages and increased costs for purchases of
components which had previously been
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manufactured in-house. Aluminum prices, which had been a significant factor in
raw material cost increases in 1995, were stable in 1996, with a decrease in the
second half of the year, which helped to offset price rises of other components.
Total production labor costs increased by 8.0% in 1996 compared to 1995, as a
consequence of an increase in the number of employees and effects of pay
increases, offset by reduced overtime hours of 7.7% compared to 9.6% in 1995.
L.I.T.A. Costs of sales and margins were significantly affected by a fall
in steel prices averaging 22% in the first half of 1996. The Company purchased
steel at market prices at the time but when finished goods were sold, their
selling price reflected the falling steel price and a loss on inventories
resulted. The negative effect of these losses on margins for 1996 is estimated
at Lit. 600 million. Raw material prices stabilized in the second half of 1996
and margins recovered in the fourth quarter.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. The increase in selling,
general and administrative expenses results principally from the inclusion of
the costs of the Company's enlarged structure following the Finprogetti
acquisition for a full year against 6 months in 1995, increases at Moto Guzzi
for higher business levels and expenses to improve logistics and management
informations systems and the acquisition of Moto America, Inc. In 1996, the
Company also sustained substantial non- recurring legal, accounting and tax
advisory fees in connection with its share repurchase program, internal
restructuring and reorganization and in connection with the agreement,
subsequently terminated by mutual agreement, to acquire Carey Winston.
RESEARCH AND DEVELOPMENT. Amounts of research and product development
relating to Moto Guzzi, have increased in respect of planned new models and
continuing development of existing models.
RESERVES AGAINST REAL ESTATE. The Company recorded a reserve of Lit. 2,500
million in the third quarter of 1996 following the expiration of an option held
by third parties to acquire the Company's interest in undeveloped land in
Sardinia, Italy. The market value of this property in Sardinia had decreased in
1996 and changes in rules and practices by local and regional government
relating to construction permits and environmental authorizations increased
uncertainties in respect of development potential. Also in the third quarter,
the Company recorded reserves of Lit. 450 million for extraordinary maintenance
in respect of its Cologne, Italy property. Further reserves of Lit. 1,230
million were recorded in the fourth quarter to reflect the terms of an agreement
to sell the property made in March 1997.
RENTAL INCOME. The increase reflects the inclusion of the operations
acquired from Finprogetti for a full year against inclusion for 6 months in
1995, plus a small increase in rentals for inflationary adjustments.
OTHER INCOME, NET. Other income in 1996 primarily consists of gains of
sales of assets for Lit. 1,211 million (1995 - Lit. 321 million), a government
grant of Lit. 450 million received by Moto Guzzi in respect of research and
development in prior years and Lit. 527 million (1995 - Lit. 547 million) of
miscellaneous items offset by currency losses of Lit. 848 million (1995 - Lit.
443 million). Gains on disposals of assets primarily related to disposals of two
surplus properties, one in Rome, Italy and in one in Baltimore, MD. Other
income, net also includes, in both 1996 and
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1995, finance income and expense relating to factoring operations acquired as
part of the Finprogetti acquisition which are being wound down, with no
significant net income in either year from such operations.
INTEREST EXPENSE AND INTEREST INCOME. Higher interest expense in 1996
primarily resulted from the inclusion of real estate loans acquired as part of
the Finprogetti transaction for a full 12 months compared to 6 months in 1995
and in respect of increased interest expense on advances from banks which have
financed the growth of Moto Guzzi and L.I.T.A. Interest rates were slightly
lower in 1996 compared to 1995. Interest income decreased in 1996 compared to
1995, principally as a result of reduced cash balances reflecting cash used in
operations and cash used at the beginning of November to consummate the
Company's share repurchase program.
INCOME TAXES. Because Italian companies are taxed in Italy on their
individual results and are not able to file consolidated returns, one of the
Company's Italian subsidiaries had income tax expense in 1996 and 1995 on
interest income and gains on disposals of assets, despite consolidated operating
losses from operations in both years.
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TRIDENT ROWAN GROUP, INC.
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(Name of Registrant as Specified in Charter)
Has caused this notification to be signed on its behalf by the undersigned
thereunto duly authorized.
Date MARCH 31, 1997 By /s/ HOWARD E. CHASE
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Howard E. Chase, President
INSTRUCTION. The form may be signed by an executive officer of the
registrant or by any other duly authorized representative. The name and
title of the person signing the form shall be typed or printed beneath the
signature. If the statement is signed on behalf of the registrant by an
authorized representative (other than an executive officer), evidence of
the representative's authority to sign on behalf of the registrant shall be
filed with the form.
ATTENTION
Intentional misstatements or omissions of fact constitute Federal criminal
violations (SEE 18 U.S.C. 1001).
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