UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF
THE SECURITIES AND EXCHANGE ACT OF 1934
For Quarter Ended November 30, 1995 Commission file number 1-7948
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AIC INTERNATIONAL, INC,
(Exact name of small business issuer as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or organization)
11-2192898
(I.R.S. Employer Identification No.)
117 East 57th Street, Room 21-H New York, NY 10022 (Address of
principal executive offices - Zip code)
Issuer's telephone number, including area code (212) 838-3220
Former name, former address and former fiscal year, if changes 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 reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes X No
Number of shares of each class of common stock outstanding as of:
November 30, 1995 - 4,207,379
<PAGE>
AIC International, Inc.
and Subsidiaries
Consolidated Balance Sheets
(000 omitted except for share data)
<TABLE>
<CAPTION>
November 30, February, 28
1995 1995
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<S> <C> <C> <C>
(Unaudited)
Assets
Current:
Cash $ 638 $ 569
Trade receivables, less allowances of $67 and $67 for possible losses 1,968 1,633
Accounts receivable - affiliate 110 -
Merchandise inventories 3,991 3,670
Prepaid expenses and other current assets 425 322
Due from related party (19) 98
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Total current assets 7,113 6,292
Property and equipment, at cost less accumulated depreciation and
amortization 69 67
Other assets 18 18
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$7,200 $6,377
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Liabilities and Stockholders' Equity
Current:
Notes and loans payable - banks $2,336 $2,219
Accounts payable - trade 124 63
Accounts payable - affiliate 114 -
Due to related party 1,205 1,127
Income taxes payable 110 195
Other taxes 309 204
Liability for product warranties 79 83
Accrued expenses and other liabilities 737 280
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Total current liabilities 5,014 4,171
Accrued pension costs 141 133
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Total liabilities 5,155 4,304
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Commitments and Contingencies
Stockholders' equity:
Common stock, $.10 par - shares authorized, 10,000,000; issued,
4,244,879 424 424
Additional paid-in capital 6,720 6,720
Deficit (6,331) (6,280)
Accumulated translation adjustment 1,344 1,321
Treasury stock, at cost - 37,500 shares (112) (112)
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Total stockholders' equity 2,045 2,073
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$7,200 $6,377
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</TABLE>
See accompanying notes to financial statements.
2
<PAGE>
AIC International, Inc. and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
(000 omitted except per share data)
<TABLE>
<CAPTION>
Nine months ended November 30, Three months ended November 30,
-----------------------------------------------------------------------------------------
1995 1994 1995 1994
<S> <C> <C> <C> <C>
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Net sales $10,927 $7,830 $4,048 $3,187
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Cost of goods sold 7,673 5,475 2,839 2,140
Selling, general and administrative
expenses 3,305 2,575 1,177 959
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Total costs and expenses 10,978 8,050 4,016 3,099
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Net income (loss) (51) (220) 32 88
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Net income (loss) per share $ (.01) $ (.05) $ (.01) $ (.02)
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Weighted average number of
shares 4,207 4,207 4,207 4,207
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</TABLE>
See accompanying notes to financial statements
3
<PAGE>
AIC International, Inc. and Subsidiaries
Statements of Cash Flows
(Unaudited)
(000 omitted)
<TABLE>
<CAPTION>
<S> <C> <C>
Nine months ended November 30, 1995 1994
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Cash flows from operating activities:
Net loss $(51) $(220)
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Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation, amortization 18 38
Increase (decrease) in provision for possible losses on ac-
counts receivable - 63
Other 23 196
Decrease (increase) in:
Trade receivable (335) (870)
Accounts receivable - affiliate (110)
Merchandise inventories (321) 331
Due from related party 117 25
Prepaid expenses and other current assets (103) (43)
Other assets - 18
Increase (decrease) in:
Accounts payable - trade 61 100
Accounts payable - affiliate 114 -
Due to related party 78 59
Taxes 20 105
Accrued expenses and other liabilities 461 36
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Total adjustments 23 58
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Net cash used in operating activities (28) (162)
Cash flows from investing activities:
Purchase of fixed assets (20) (47)
Cash flows from financing activities
Net borrowings from (repayments to) bank 117 (343)
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Net increase (decreased) in cash 69 (552)
Cash, beginning of period 569 716
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Cash, end of period $638 164
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</TABLE>
See accompanying notes to financial statements.
5
<PAGE>
AIC International, Inc. and Subsidiaries
Notes to Financial Statements
(Unaudited)
Note 1. Results for the periods shown are not necessarily indicative of
results for the full year.
Note 2. The data herein reflects all the adjustments which, in the opinion
of manage- ment, are necessary for a fair statement of the results for the
interim periods.
Note 3. There were no sales of unregistered securities during the quarter
ended November 30, 1995.
Note 4. The financial data are subject to year-end audit. Note disclosures
required under generally accepted accounting principles are included in the
Compan- y's annual report (Form 10-K) for the fiscal year ended February 28,
1995. Form 10-Q should be read in conjunction with such annual report (Form 10-
K).
6
<PAGE>
AIC International, Inc. and Subsidiaries
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results of Operations: Nine months ended November 30, 1995 compared with nine
months ended November 30, 1994:
All statements contained herein that are not historical facts, including,
but not limited to, statements regarding the Company's current business
strategy, the Company's projected sources and uses of cash, and the Company's
plans for future development and operations, are based upon current
expectations. These statements are forward-looking in nature and involve a
number of risks and uncertainties. Actual results may differ materially. Among
the factors that could cause actual results to differ materially are the
following: the availability of sufficient capital to finance the Company's
business plans on terms satisfactory to the Company; competitive factors;
changes in labor, equipment and capital costs; changes in regulations affecting
the Company's business and economic conditions; and factors described from time
to time in the Company's reports filed with the Securities and Exchange
Commission. The Company cautions readers not to place undue reliance on any such
forward looking statements, which statements are made pursuant to the Private
Litigation Reform Act of 1995 and, as a result, speak only as of the date made.
Net Sales
For the nine months ended November 30, 1995 the Company's net sales
increased by $3,097,000 to $10,927,000 from sales of $7,830,000 for the nine
months ended November 30, 1994. Sales by the Company's German subsidiary,
Soligor GmbH, Foto Optik Video Electronik ("Soligor GmbH"), increased by DM
2,901,000 which, when combined with changes in the exchange rate, resulted in an
increase in sales of $3,097,000 after translation. The Company's sales increased
due to efforts of Soligor GmbH in promoting the sale of new products groups,
such as electronic products and video equipment, an increasing number of
accessories, as well as video surveillance equipment.
Net sales for the three months ended November 30, 1995 were $4,048,000 as
compared to $3,187,000 for the three months ended November 30, 1994, an increase
of $861,000, or 27%. Sales by Soligor GmbH for the three months ended November
30, 1995 increased by DM 797,000, which when combined with changes in exchange
rate, resulted in an increase in sales of $861,000 after translation.
7
<PAGE>
AIC International, Inc. and Subsidiaries
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Cost of Goods Sold
As a percentage of sales, cost of goods sold was 70.2% for the nine months
ended November 30, 1995 as compared to 69.9% for the nine months ended November
30, 1994.
For the three months ended November 30, 1995 and 1994, cost of goods sold
as a percentage of sales was 70.1% and 67.1% of sales, respectively.
The increase in cost of goods sold as a percentage of sales was caused by
changes of exchange rate on Japanese Yen and U.S. Dollars.
Selling, General and Administrative Expenses
For the nine months ended November 30, 1995 and 1994, selling, general and
administrative ("SG & A") expenses were 30.2% and 32.9% of sales, respectively.
For the three months ended November 30, 1995 and 1994 SG & A expenses were
29.1% and 30.1% of sales, respectively.
8
<PAGE>
AIC International, Inc. and Subsidiaries
Signatures
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AIC INTERNATIONAL, INC.
Registrant
By: /s/ Stephen Lai
-----------------------------
Stephen Lai,
Chief Financial Officer and
Chief Accounting Officer
9
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<NAME> AIC INTERNATIONAL, INC.
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<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> FEB-29-1996
<PERIOD-START> SEP-01-1995
<PERIOD-END> NOV-30-1995
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