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Previous: AIC INTERNATIONAL INC, 10QSB, 1997-07-22 |
Next: ALLEGHENY POWER SYSTEM INC, DEFA14A, 1997-07-22 |
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, 1996 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 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, 1996 - 4,207,379
<PAGE>
AIC International, Inc.
and Subsidiaries
Condensed Consolidated Balance Sheets
(000 omitted except share data)
<TABLE>
<CAPTION>
November 30, February 29,
1996 1996
------------- ------------
(Unaudited)
<S> <C> <C>
Assets
Current:
Cash $ 331 $ 471
Trade receivables, less allowances of $95 and $83
for possible losses 2,219 1,480
Merchandise inventories 3,701 3,529
Prepaid expenses and other current assets 709 318
______ _____
Total current assets 6,960 5,798
Property and equipment, at cost less accumulated
depreciation and amortization 67 62
Other assets 18 18
_____ _____
$7,045 $5,878
===== =====
Liabilities and Stockholders' Equity
Current:
Bank loans $2,298 $1,566
Accounts payable - trade 49 109
Due to related party 1,373 1,399
Income taxes payable 262 83
Other taxes 373 213
Liability for product warranties 109 94
Accrued expenses and other liabilities 506 293
_____ _____
Total current liabilities 4,970 3,757
Accrued pension costs 121 127
_____ _____
Total liabilities 5,091 3,884
_____ _____
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 (6,233) (6,315)
Accumulated translation adjustment 1,155 1,277
Treasury stock, at cost - 37,500 shares (112) (112)
_____ _____
Total stockholders' equity 1,954 1,994
_____ _____
$7,045 $5,878
===== =====
</TABLE>
See accompanying notes to condensed consolidated financial statements.
2
<PAGE>
AIC International, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
(000 omitted except per share data)
<TABLE>
<CAPTION>
Nine months ended November 30, Three months ended November 30,
---------------------------------------------------------------------------------------
1996 1995 1996 1995
_________ ________ _______ _______
<S> <C> <C> <C> <C>
Net sales $12,000 $10,927 $4,519 $4,048
_________ ________ _______ _______
Cost of goods sold 8,459 7,673 3,179 2,839
Selling, general and administrative
expenses 3,459 3,305 1,345 1,177
________ _______ _______ ______
Total costs and expenses 11,918 10,978 4,524 4,016
________ _______ _______ ______
Net income (loss) 82 (51) (5) 32
________ _______ _______ ______
Net income (loss) per share .02 $ (.01) $ - (.01)
======== ======= ======= ======
Weighted average number of
shares 4,207 4,207 4,207 4,207
======== ======= ======= ======
</TABLE>
See accompanying notes to condensed consolidated financial statements
3
<PAGE>
AIC International, Inc. and Subsidiaries
Condensed Consolidated Statement of Stockholders' Equity
(Unaudited)
(000 omitted)
<TABLE>
<CAPTION>
Accumulated
Additional Paid- Translation Treasury Stock,
Total Common Stock In Capital Deficit Adjustment at Cost
______ ____________ ______________ _______ ________ __________
<S> <C> <C> <C> <C> <C> <C>
Balance, March 1, 1996 $1,994 $424 $6,720 $(6,315) $1,277 $(112)
Net income, for the nine months ended Novem-
ber 30, 1996 82 82
Aggregate adjustment for the nine months ended
November 30, 1996 resulting from the transla-
tion of foreign currency statements (122) (122)
______ ______ _______ _______ ________ _______
Balance, November 30, 1996 $1,954 $424 $6,720 $(6,233) $1,155 $(112)
======= ======= ======= ======= ======== =======
</TABLE>
See accompanying notes to condensed consolidated financial statements.
4
<PAGE>
AIC International, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(000 omitted)
<TABLE>
<CAPTION>
Nine months ended November 30, 1996 1995
____ ____
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 82 $(51)
===== =====
Adjustments to reconcile net income (loss) to net cash used in operating
activities:
Depreciation, amortization 20 18
Increase in provision for possible losses on accounts receiv-
able 12 -
Other (122) 23
Decrease (increase) in:
Trade receivable (751) (335)
Accounts receivable - affiliate - (110)
Merchandise inventories (172) (321)
Due from related party - 117
Prepaid expenses and other current assets (391) (103)
Increase (decrease) in:
Accounts payable - trade (60) 61
Due to related party (26) 192
Taxes 339 20
Accrued expenses and other liabilities 222 461
_____ _____
Total adjustments (929) 23
_____ _____
Net cash used in operating activities (847) (28)
Cash flows from investing activities:
Capital expenditures, net of proceeds from sale of equipment (25) (20)
Cash flows from financing activities
Net borrowings from bank 732 117
_____ _____
Net increase (decreased) in cash (140) 69
Cash, beginning of period 471 569
_____ _____
Cash, end of period $331 $638
===== =====
</TABLE>
See accompanying notes to condensed consolidated financial statements.
5
<PAGE>
AIC International, Inc. and Subsidiaries
Notes to Condensed Consolidated 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 November 30, 1996.
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-KSB) for the fiscal year ended February 29,
1996. Form 10-QSB should be read in conjunction with such annual report (Form
10-KSB).
6
<PAGE>
AIC International, Inc. and Subsidiaries
Management's Discussion and Analysis of Financial
Condition and Results of Operations
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.
Results of Operations: Nine months ended November 30, 1996 compared with
nine months ended November 30, 1995:
Net Sales
For the nine months ended November 30, 1996 the Company's net sales
increased by $1,073,000 to $12,000,000 from sales of $10,927,000 for the nine
months ended November 30, 1995. Sales by the Company's German subsidiary,
Soligor GmbH, Foto Optik Video Electronik ("Soligor GmbH"), increased by DM
2,564,000 which, when combined with changes in the exchange rate, resulted in an
increase in sales of $1,073,000 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.
Cost of Goods Sold
As a percentage of sales, cost of goods sold was 70.5% for the nine months
ended November 30, 1996 as compared to 70.2% for the nine months ended November
30, 1995. The increase in cost of goods sold as a percentage of sales was caused
by changes of exchange rate on Japanese Yen, Dutch Mark and U.S. Dollars.
Selling, General and Administrative Expenses
For the nine months ended November 30, 1996 and 1995, selling, general and
administrative ("SG & A") expenses were 28.8% and 30.2% of sales, respectively.
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
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results of Operations: Three months ended November 30, 1996 compared with
three months ended November 30, 1995:
Net Sales
Net sales for the three months ended November 30, 1996 were $4,519,000 as
compared to $4,048,000 for the three months ended November 30, 1995, an increase
of $471,000, or 11.6%. Sales by Soligor GmbH for the three months ended November
30, 1996 increased by DM 1,101,000, which when combined with changes in exchange
rate, resulted in an increase in sales of $471,000 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.
Cost of Goods Sold
For the three months ended November 30, 1996 and 1995, cost of goods sold
as a percentage of sales was 70.3% and 70.1% 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, Dutch Mark and U.S. Dollars.
Selling, General and Administrative Expenses
For the three months ended November 30, 1996 and 1995 S G & A expenses were
29.8% and 29.1% 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
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000002880
<NAME> AIC INTERNATIONAL, INC.
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> Feb-28-1997
<PERIOD-START> Sep-1-1996
<PERIOD-END> Nov-30-1996
<CASH> 331
<SECURITIES> 0
<RECEIVABLES> 2,314
<ALLOWANCES> (95)
<INVENTORY> 3,701
<CURRENT-ASSETS> 6,960
<PP&E> 382
<DEPRECIATION> 315
<TOTAL-ASSETS> 7,045
<CURRENT-LIABILITIES> 4,970
<BONDS> 0
0
0
<COMMON> 424
<OTHER-SE> 1,530
<TOTAL-LIABILITY-AND-EQUITY> 7,045
<SALES> 12,000
<TOTAL-REVENUES> 12,000
<CGS> 8,459
<TOTAL-COSTS> 11,918
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 82
<INCOME-TAX> 0
<INCOME-CONTINUING> 82
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 82
<EPS-PRIMARY> 0.02
<EPS-DILUTED> 0
</TABLE>
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