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 August 31, 1995 Commission file number 1-7948
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 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 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:
August 31, 1995 - 4,207,379
<PAGE>
AIC International, Inc. and Subsidiaries
Consolidated Balance Sheets
(000 omitted except for share data)
<TABLE>
<CAPTION>
August 31, February 28,
1995 1995
<S> <C> <C>
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Assets (Unaudited)
Current:
Cash $ 323 $ 569
Trade receivables, less allowances of $99 and $67 for possible losses 1,888 1,633
Merchandise inventories 4,289 3,670
Prepaid expenses and other current assets 389 322
Due from related party 51 98
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Total current assets 6,940 6,292
Property and equipment, at cost less accumulated depreciation and
amortization 72 67
Other assets 18 18
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$ 7,030 $ 6,377
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Liabilities and Stockholders' Equity
Current:
Notes and loans payable - banks $ 2,640 $ 2,219
Accounts payable - trade 79 63
Due to related party 1,179 1,127
Income taxes payable 124 195
Other taxes 250 204
Liability for product warranties 58 83
Accrued expenses and other liabilities 596 280
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Total current liabilities 4,926 4,171
Accrued pension costs 137 133
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Total liabilities 5,063 4,304
- ------------------------------------------------------------------------------------------------------------------------------------
Commitments and Contingencies
Stockholders' equity:
Common stock, $.10 par - shares authorized, 10,000,000; issued,
4,244,879 424 424
Additional paid-in capital 6,720 6,720
Deficit (6,363) (6,280)
Accumulated translation adjustment 1,298 1,321
Treasury stock, at cost - 37,500 shares (112) (112)
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Total stockholders' equity 1,967 2,073
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$ 7,030 $ 6,377
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</TABLE>
See accompanying notes to financial statements.
2
<PAGE>
AIC International, Inc. and Subsidiaries
Consolidated Statements of Loss
(Unaudited)
(000 omitted except per share data)
<TABLE>
<CAPTION>
Six months ended August 31, Three months ended August 31,
--------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1995 1994 1995 1994
- -----------------------------------------------------------------------------------------------------------------------------------
Net sales $6,879 $4,643 $3,716 $2,535
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Cost of goods sold 4,834 3,335 2,848 1,923
Selling, general and administrative
expenses 2,128 1,616 1,129 806
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Total costs and expenses 6,962 4,951 3,977 2,729
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Net loss (83) (308) (261) (194)
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Net loss per share $ (.02) $(.07) $ (.06) $ (.04)
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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>
Six months ended August 31, 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------------
Cash flows from operating activities:
Net loss $(83) $ (308)
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Adjustments to reconcile net loss to net cash provided by (used in) operating
activities:
Depreciation, amortization 10 31
Increase (decrease) in provision for possible losses on ac-
counts receivable 32 2
Other (23) 231
Decrease (increase) in:
Trade receivable (287) (225)
Merchandise inventories (619) 312
Due from related party 47 -
Prepaid expenses and other current assets (67) 211
Other assets - 18
Increase (decrease) in:
Accounts payable - trade 16 8
Due to related party 52 -
Taxes (25) (259)
Accrued expenses and other liabilities 295 58
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Total adjustments (569) 387
- ------------------------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) operating activities (652) 79
Cash flows from investing activities:
Purchase of fixed assets (15) (36)
Cash flows from financing activities
Net borrowings from (repayments to) bank 421 (560)
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Net increase (decreased) in cash (246) (517)
Cash, beginning of period 569 716
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Cash, end of period $ 323 $ 199
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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
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
August 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
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).
5
<PAGE>
AIC International, Inc. and Subsidiaries
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results of Operations: Six months ended August 31, 1995 compared with six
months ended August 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 six months ended August 31, 1995, the Company's net sales increased
by $2,236,000 to $6,879,000 from sales of $4,643,000 for the six months ended
August 31, 1994. Sales by the Company's German subsidiary, Soligor GmbH, Foto
Optik Video Electronik ("Soligor GmbH"), increased by DM 2,104,000 which, when
combined with changes in the exchange rate, resulted in an increase in sales of
$2,236,000 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 August 31,
1995, were $3,716,000 as compared to $2,535,000 for the three months ended
August 31, 1994, an increase of $1,181,000, or 46.6%. Sales by Soligor GmbH for
the three months ended August 31, 1995 increased by DM 1,165,000 which, when
combined with changes in the exchange rate, resulted in an increase in sales of
$1,181,000 after translation.
6
<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 70.3% for the six months
ended August 31, 1995 as compared to 71.8% for the six months ended August 31,
1994.
For the three months ended August 31, 1995 and 1994, cost of goods sold as
a percentage of sales was 76.6% and 75.9% of sales, respectively. The increase
in cost of goods sold as a percentage of sales was caused by changes of exchange
rates on Japanese Yen and U.S. Dollar.
Selling, General and Administrative Expenses
For the six months ended August 31, 1995 and 1994, selling, general and
administrative expenses ("SG & A") were 30.9% and 34.8% of sales, respectively.
For the three months ended August 31, 1995 and 1994 SG & A expenses were
30.4% and 31.8% of sales, respectively.
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
By: \s\ Stephen Lai
------------------------------
Stephen Lai,
Chief Financial Officer and
Chief Accounting Officer
8
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<CIK> 0000002880
<NAME> AIC INTERNATIONAL, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> FEB-29-1996
<PERIOD-START> JUN-01-1995
<PERIOD-END> AUG-31-1995
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0
0
<COMMON> 424
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