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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, 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 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, 1996 - 4,207,379
<PAGE>
AIC International, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(000 omitted except share data)
<TABLE>
<CAPTION>
August 31, February 29,
1996 1996
___________ ____________
(Unaudited)
<S> <C> <C>
Assets
Current:
Cash $ 572 $ 471
Trade receivables, less allowances of $95 and $83
for possible losses 1,731 1,480
Merchandise inventories 3,615 3,529
Prepaid expenses and other current assets 684 318
______ ______
Total current assets 6,602 5,798
Property and equipment, at cost less accumulated
depreciation and amortization 72 62
Other assets 18 18
______ ______
$ 6,692 $ 5,878
====== ======
Liabilities and Stockholders' Equity
Current:
Notes and loans payable - banks $ 1,285 $ 1,566
Accounts payable - trade 98 109
Due to related party 1,484 1,399
Income taxes payable 167 83
Other taxes 382 213
Liability for product warranties 63 94
Accrued expenses and other liabilities 1,207 293
______ ______
Total current liabilities 4,686 3,757
Accrued pension costs 126 127
______ ______
Total liabilities 4,812 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 (6,228) (6,315)
Accumulated translation adjustment 1,076 1,277
Treasury stock, at cost - 37,500 shares (112) (112)
______ ______
Total stockholders' equity 1,880 1,994
______ ______
$ 6,692 $ 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>
Six months ended August 31, Three months ended August 31,
___________________________ _____________________________
1996 1995 1996 1995
_______ ______ ______ ______
<S> <C> <C> <C> <C>
Net sales $7,481 $6,879 $3,694 $3,716
_______ ______ ______ ______
Cost of goods sold 5,280 4,834 2,596 2,848
Selling, general and administrative
expenses 2,114 2,128 1,078 1,129
_______ ______ ______ ______
Total costs and expenses 7,394 6,962 3,674 3,977
_______ ______ ______ ______
Net income (loss) 87 (83) 20 (261)
_______ ______ ______ ______
Net income (loss) per share $ .02 $ (.02) $ - $ (.06)
======= ====== ====== ======
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 six months ended August 31,
1996 87 87
Aggregate adjustment for the six months ended
August 31, 1996 resulting from the translation
of foreign currency statements (201) (201)
______ ______ ______ _______ ______ ______
Balance, August 31, 1996 $1,880 $424 $6,720 $(6,228) $1,076 $(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>
Six months ended August 31, 1996 1995
______ ______
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 87 $ (83)
______ ______
Adjustments to reconcile net income (loss) to net cash provided by (used in)
operating activities:
Depreciation, amortization 13 10
Increase in provision for possible losses on accounts receiv-
able 12 32
Other (201) (23)
Decrease (increase) in:
Trade receivable (263) (287)
Merchandise inventories (86) (619)
Due from related party - 47
Prepaid expenses and other current assets (366) (67)
Increase (decrease) in:
Accounts payable - trade (11) 16
Due to related party 85 52
Taxes 253 (25)
Accrued expenses and other liabilities 882 295
______ ______
Total adjustments 318 (569)
______ ______
Net cash provided by (used in) operating activities 405 (652)
Cash flows from investing activities:
Capital expenditures, net of proceeds from sale of equipment (23) (15)
Cash flows from financing activities
Net borrowings from (repayments to) bank (281) 421
______ ______
Net increase (decreased) in cash 101 (246)
Cash, beginning of period 471 569
______ ______
Cash, end of period $ 572 $ 323
====== ======
</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 August 31, 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: Six months ended August 31, 1996 compared with six
months ended August 31, 1995:
Net Sales
For the six months ended August 31, 1996, the Company's net sales increased
by $602,000 to $7,481,000 from sales of $6,879,000 for the six months ended
August 31, 1995. Sales by the Company's German subsidiary, Soligor GmbH, Foto
Optik Video Electronik ("Soligor GmbH"), increased by DM 1,463,000 which, when
combined with changes in the exchange rate, resulted in an increase in sales of
$602,000 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 70.6% for the six months
ended August 31, 1996 as compared to 70.3% for the six months ended August 31,
1995.
Selling, General and Administrative Expenses
For the six months ended August 31, 1996 and 1995, selling, general and
administrative expenses ("SG & A") were 28.3% and 30.9% of sales, respectively.
The decrease in S G & 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 August 31, 1996 compared with
three months ended August 31, 1995:
Net Sales
Net sales for the three months ended August 31, 1996, were $3,694,000 as
compared to $3,716,000 for the three months ended August 31, 1995, a decrease of
$22,000, or 0.6%. Sales by Soligor GmbH for the three months ended August 31,
1996 increased by DM 274,000 which, when combined with changes in the exchange
rate, resulted in a decrease in sales of $22,000 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 August 31, 1996 and 1995, cost of goods sold as
a percentage of sales was 70.3% and 76.6% of sales, respectively. The decrease
in cost of goods sold as a percentage of sales was caused by changes of exchange
rates on Japanese Yen, Dutch Mark and U.S. Dollar.
Selling, General and Administrative Expenses
For the three months ended August 31, 1996 and 1995 SG & A expenses were
29.2% and 30.4% of sales, respectively. The decrease in S G & A expenses as a
percentage of sales was the result of increased net sales.
8
<PAGE>
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> 6-MOS
<FISCAL-YEAR-END> Feb-28-1997
<PERIOD-START> Jun-01-1996
<PERIOD-END> Aug-31-1996
<CASH> 572
<SECURITIES> 0
<RECEIVABLES> 1,826
<ALLOWANCES> (95)
<INVENTORY> 3,615
<CURRENT-ASSETS> 6,602
<PP&E> 350
<DEPRECIATION> 278
<TOTAL-ASSETS> 6,692
<CURRENT-LIABILITIES> 4,686
<BONDS> 0
0
0
<COMMON> 424
<OTHER-SE> 1,456
<TOTAL-LIABILITY-AND-EQUITY> 6,692
<SALES> 7,481
<TOTAL-REVENUES> 7,481
<CGS> 5,280
<TOTAL-COSTS> 7,394
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 87
<INCOME-TAX> 0
<INCOME-CONTINUING> 87
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 87
<EPS-PRIMARY> 0.02
<EPS-DILUTED> 0
</TABLE>
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