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 May 31, 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
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:
May 31, 1995 - 4,207,379
<PAGE>
AIC International, Inc. and Subsidiaries
Consolidated Balance Sheets
(000's omitted except for share data)
<TABLE>
<CAPTION>
May 31, February 28,
1995 1995
- - ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
(Unaudited)
Assets
Current:
Cash $ 368 $ 569
Trade receivable, less allowance of $67 and $67 for
possible losses 1,703 1,633
Merchandise inventories 4,793 3,670
Prepaid expenses and other current assets 916 322
Due from related party 79 98
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Total current assets 7,859 6,292
Property and equipment, at cost less accumulated
depreciation and amortization 79 67
Other assets 18 18
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$ 7,956 $ 6,377
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Liabilities and Stockholders' Equity
Current:
Bank loans $ 2,993 $ 2,219
Accounts payable - trade 522 63
Due to related party 1,127 1,127
Income taxes payable 167 195
Other taxes 205 204
Liability for product warranties 41 83
Accrued expenses and other liabilities 410 280
- - ------------------------------------------------------------------------------------------------------------------------------------
Total current liabilities 5,465 4,171
Accrued pension costs 139 133
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Total liabilities 5,604 4,304
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Stockholders' equity
Common stock, $.10 par-shares authorized -
10,000,000; issued - 4,244,879 424 424
Additional paid-in capital 6,720 6,720
Deficit (6,102) (6,280)
Accumulated translation adjustment 1,422 1,321
Treasury stock, at cost - 37,500 shares (112) (112)
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Total stockholders' equity 2,352 2,073
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$ 7,956 $ 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's omitted except per share data)
<TABLE>
<CAPTION>
<S> <C> <C>
Three months ended May 31, 1995 1994
- - ------------------------------------------------------------------------------------------------------------------------------------
Net sales $3,163 $2,108
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Cost of goods sold 1,986 1,412
Selling, general and administrative expenses 999 809
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Total costs and expenses 2,985 2,221
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Net income (loss) $ 178 $ (113)
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Net income (loss) per share .04 (.03)
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Weighted average number of shares 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's omitted)
<TABLE>
<CAPTION>
<S> <C> <C>
Three months ended May 31 1995 1994
- - ------------------------------------------------------------------------------------------------------------------------------------
Cash flows from operating activities:
Net income (loss) $ 178 $ (113)
- - ------------------------------------------------------------------------------------------------------------------------------------
Adjustments to reconcile net income (loss) to net cash used in operating
activities:
Depreciation, amortization 16 13
Decrease in provision for possible losses on accounts
receivable - 1
Other 101 112
Decrease (increase) in:
Trade receivable (70) (90)
Merchandise inventories (1,123) (29)
Due from related party 19 21
Prepaid expenses and other current assets (594) (253)
Other assets - 18
Increase (decrease) in:
Accounts payable - trade 459 192
Taxes 94 (66)
Accrued expenses and other liabilities (27) 43
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Total adjustments (1,125) (38)
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Net cash used in operating activities (947) (151)
Cash flows from investing activities:
Purchase of fixed assets (28) (16)
Cash flows from financing activities
Net borrowings from banks 774 66
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Net increase (decrease) in cash (201) (101)
Cash, beginning of period 569 716
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Cash, end of period $ 368 $ 615
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</TABLE>
See accompanying notes to financial statements.
4
<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 management, 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 May 31, 1995.
Note 4. The financial data are subject to year-end audit. Note disclosures
required under generally accepted accounting principles are included in the
Company'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).
5
<PAGE>
AIC International, Inc. and Subsidiaries
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results of Operations: Three months ended May 31, 1995 compared with three
months ended May 31, 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 three months ended May 31, 1995 the Company's net sales increased
by $1,055,000 to $3,163,000 from sales of $2,108,000 for the three months ended
May 31, 1994. Sales by the Company's German subsidiary, Soligor GmbH, Foto Optik
Video Electronik ("Soligor GmbH"), increased by DM 938,000 for the three months
ended May 31, 1995 which, when combined with changes in the exchange rate,
resulted in an increase in sales of $1,055,000 after translation. The Company's
sales increased due to efforts of Soligor GmbH in promoting the sale of new
products, such as electronic products and video equipment, an increasing number
of accessories, as well as video surveillance equipment.
Cost of Goods Sold
As a percentage of sales, the Company's cost of goods sold for the three
months ended May 31, 1995 and 1994 were 62.8% and 67% of sales, respectively.
Cost of goods sold increased from $1,421,000 for the three months ended May 31,
1994 to $1,986,000 for the three months ended May 31, 1995.
6
<PAGE>
AIC International, Inc. and Subsidiaries
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Selling, General and Administrative Expenses
As a percentage of sales, selling, general and administrative ("SG & A")
expenses for the three months ended May 31, 1995 and 1994 were 31.6% and 38.4%
of sales, respectively. SG & A expenses increased from $809,000 for the three
months ended May 31, 1994 to $999,000 for the three months ended May 31, 1995.
The decrease in SG & A expenses as a percentage of sales was the result of
increased net sales.
7
<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
\s\ Stephen Lai
-----------------------------
Stephen Lai
Chief Financial Officer and
Chief Accounting Officer
8
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<ARTICLE> 5
<CIK> 0000002880
<NAME> AIC INTERNATIONAL, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> FEB-29-1996
<PERIOD-START> MAR-01-1995
<PERIOD-END> MAY-31-1995
<CASH> 368
<SECURITIES> 0
<RECEIVABLES> 1,703
<ALLOWANCES> 67
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<CURRENT-ASSETS> 7,859
<PP&E> 79
<DEPRECIATION> 6
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<CURRENT-LIABILITIES> 5,465
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0
0
<COMMON> 424
<OTHER-SE> 1,928
<TOTAL-LIABILITY-AND-EQUITY> 7,956
<SALES> 3,163
<TOTAL-REVENUES> 3,163
<CGS> 1,986
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<INCOME-CONTINUING> 178
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<EXTRAORDINARY> 0
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<EPS-PRIMARY> 0.04
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