UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1995 *
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period N/A
Commission file number: 0-10877
TCI INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Delaware 94-
3026925
(State of other jurisdiction of (I.R.S.
Employer Identification
Number)
incorporation or organization)
222 Caspian Drive, Sunnyvale, California 94089-
1014
(Address of principal executive offices)
(Zip Code)
(408)747-6100
(Registrant's telephone number, including area code)
* The Company is on a 52/53 week fiscal year. The
quarter ended on April 2, 1995.
For presentation purposes, the Company has indicated its
quarter end as March 31, 1995.
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 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 ___
As of March 31, 1995, 3,118,232 shares of Common Stock were
outstanding.
TCI INTERNATIONAL, INC.
PART I FINANCIAL INFORMATION
Condensed Consolidated Financial Statements
(Unaudited)
The unaudited condensed consolidated financial statements
included herein have been
prepared by the Company pursuant to the rules and
regulations of the Securities and
Exchange Commission. Certain information and footnote
disclosures normally included in
financial statements prepared in accordance with generally
accepted accounting principles
have been condensed or omitted pursuant to such rules and
regulations, although the
Company believes the information included herein, when read
in conjunction with the
financial statements and related notes included in the
Company's Annual Report on Form
10-K for the year ended September 30, 1994, filed with the
Securities and Exchange
Commission, to be not misleading. Further, the following
financial statements reflect, in
the opinion of management, all adjustments necessary to
present fairly the financial position
and results of operations as of and for the periods
indicated.
The results of operations for the six months ended March 31,
1995, are not necessarily
indicative of results to be expected for the entire year
ending September 30, 1995.
TCI INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except per share amounts)
Three Months Ended
Six
Months Ended
March 31 March 31
1995 1994 1995 1994
Revenues $ 6,881 $ 5,706 $13,720 $11,687
Operating Costs and Expenses:
Cost of revenues 4,454 3,091 8,377 6,826
Marketing, general and administrative 2,421 2,606
5,098 4,792
6,875 5,697 13,475 11,618
Income from operations 6 9 245 69
Investment income, net 315 92 503
216
Income before provision
for income taxes 321 101 748 285
Provision for income taxes 19 5
45 11
Income before change in accounting for
income taxes 302 96 703 274
Change in accounting for income taxes
(SFAS No. 109) - - - 1,511
Net income $ 302 $ 96 $ 703 $ 1,785
Per Share:
Income before change in accounting for
income taxes $ .09 $ .03 $ .22 $ .08
Net income $ .09 $ .03 $ .22 $ .53
Shares used in per share
computations 3,262 3,356 3,250 3,398
See accompanying Notes to Condensed Consolidated Financial
Statements.
TCI INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
March 31, September 30,
1995 1994
(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents $ 2,415 $ 7,578
Short-term investments 15,416 11,938
Accounts receivable -
Billed 2,912 2,686
Unbilled 2,334 2,935
Refundable income taxes 172 739
Inventories 5,329 4,901
Prepaid expenses 468 490
Total current assets 29,046 31,267
Property and equipment, net 1,764 1,889
Other assets 90 85
Total Assets $30,900 $33,241
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 1,520 $ 2,168
Customer deposits and billings on uncompleted
contracts in excess of revenue recognized 1,129
2,477
Accrued liabilities 4,129 4,524
Total current liabilities 6,778 9,169
Stockholders' Equity:
Common Stock:
Authorized - 5,000 shares, $.01 par value
Issued - 3,281 shares 11,780 11,993
Shares held in treasury at cost:
163 Shares in March 1995 (720) -
78 Shares in Sept. 1994 - (311)
Retained earnings 13,126 12,483
Valuation allowance-short -term investments
(64) (93)
Total stockholders' equity 24,122 24,072
Total Liabilities and Stockholders Equity $30,900
$33,241
See accompanying Notes to Condensed Consolidated Financial
Statements.
TCI INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended March 31,
(In thousands)
1995
1994___
(Unaudited)
Cash provided by (used in):
Operations:
Net income $ 703 $1,785
Reconciliation to cash provided by (used in)
operations:
Depreciation 304 396
Gain on sale of investments - (82)
Effect of change in accounting for income taxes
(SFAS 109) - (1,511)
Changes in assets and liabilities:
Accounts receivable 375 9,384
Refundable income taxes 567 -
Inventories (428) 236
Prepaid expenses 17 53
Accounts payable (648) (269)
Customer deposits (1,348) (2,294)
Accrued liabilities (396) (420)
Cash provided by (used in) operations (854)
7,278
Investing activities:
Purchases of property and equipment (179) (12)
Purchases of short-term investments (3,449)
(58,318)
Proceeds from sale of short-term investments -
50,892
Sale of building - 703
Other - (8)
Cash used in investing activities (3,628) (6,743)
Financing activities:
Repurchase of common stock for treasury stock
(681) (517)
Cash used in financing activities (681) (517)
Net increase (decrease) in cash and cash equivalents
(5,163) 18
Cash and cash equivalents at beginning of period 7,578
5,739
Cash and cash equivalents at end of period $ 2,415 $
5,757
See accompanying Notes to Condensed Consolidated Financial
Statements
TCI INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 1
Inventories included in the consolidated balance sheet
consist of the following (in
thousands):
March 31, September 30,
1995
1994
(Unaudited)
Material and component parts $3,718 $3,235
Work-in-Process 1,611 1,666
$5,329 $4,901
Note 2
At March 31, 1995, there were outstanding standby letters of
credit of approximately
$2,666,000 serving as performance and payment bonds. The
standby letters of credit
expire at various dates through 1997; however, certain
performance bonds are
automatically renewable until canceled by the beneficiary.
These outstanding standby
letters of credit are fully secured by the Company's short
term investments.
TCI INTERNATIONAL, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Second Fiscal Quarter of 1995
Compared to Second Fiscal Quarter of 1994
Revenues for the first six months of fiscal year 1995 were
$13,720,000, an increase of
17% over revenues of $11,687,000 for the same period a year
ago. Revenues for the
second quarter increased 21% from $5,706,000 in fiscal year
1994 to $6,881,000 in fiscal
year 1995. The increase in revenues is due to a general
increase in business activity as well
as changes in material flows and the timing of completion of
various fixed priced, long-
term contracts.
Gross profit as a percentage of revenue decreased from 42%
to 39% and from 46% to 35%
for the six month period and the second quarter,
respectively. The decline in gross profit
as a percentage of revenue is primarily due to the timing of
completion of various foreign
and domestic contracts which have a range of gross profit
margin associated with them.
Gross profit as a percentage of revenues during the
remaining six months of the fiscal year
may fluctuate significantly, and perhaps decline further due
to competitive bidding
pressures the Company has recently experienced in its
pursuit of significant Broadcast
related contracts.
Marketing, general and administrative expenses decreased by
7% for the second quarter but
have increased 6% for the six month period ending March 31,
1995 compared with prior
year periods. The expense variance is due in part to the
timing of bids and proposals
requiring significant engineering effort and resultant
research and development costs. As
the Company continues to position itself for commercial
pursuits, research and
development costs are anticipated to increase during the
remaining periods of the fiscal
year.
Net investment income for the first six months of fiscal
year 1995 was $503,000, an
increase of 133% over net investment income of $216,000 for
the same period in fiscal
year 1994. This increase is due to the Company's higher
cash balance, cash equivalents
and short-term investments and the benefit of comparatively
higher interest rates.
Net income for the first six months of fiscal year 1995 was
$703,000 or $0.22 per share,
compared to net income of $1,785,000 or $0.53 per share for
the same period in fiscal year
1994. The net income for fiscal year 1994 included the
benefit of $1,511,000 or $0.44 per
share, to reflect the cumulative effect of adopting SFAS No.
109 "Accounting for Income
Taxes." The decline in the average number of outstanding
shares is a reflection of the
Company's continuing efforts to repurchase its stock under a
stock repurchase program
initially authorized by its Board of Directors in December
of 1993.
The Company's total backlog as of March 31, 1995 was $34
million compared to $28
million as of September 30, 1994. The total funded portion
of the Company's backlog as
of March 31, 1995 was $17 million compared to $21 million as
of September 30, 1994.
The Company's funded backlog excludes unfunded and
unexercised options which the
Company believes are likely to be exercised
The results of operations for the first six months in fiscal
year 1995 are not necessarily
indicative of future quarterly or annual performance
expectations.
LIQUIDITY AND CAPITAL RESOURCES
March 31, 1995 Compared to September 30, 1994
Consolidated cash, cash equivalents and marketable
securities totaled $17,831,000 on
March 31, 1995, compared to $19,516,000 on September 30,
1994. The Company
currently believes that its cash, cash equivalents and short-
term investments, together with
expected revenues from operations, will be sufficient to
fund its operations through fiscal
1995.
As of March 31, 1995 , the Company has standby letters of
credit outstanding of
approximately $2,666,000. The standby letters of credit are
collateralized by the
Company's short-term investments.
The Company purchased 144,005 shares of its stock and
retired 59,501 shares during the
first six months of the fiscal year. The Company held
162,504 of treasury stock as of
March 31, 1995.
TCI INTERNATIONAL, INC.
PART II OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security
Holders:
The following matters were acted upon at the
Annual Meeting of
Stockholders of TCI International, Inc. on February
14, 1995.
a. Management's nominees for directors, as set forth
in the TCI International,
Inc. proxy statement dated January 20, 1995 and filed with
the Commission, were all
elected. Votes for the directors were as follows:
John W. Ballard For 2,733,615
Withheld 47,160
Hamilton W. Budge For 2,733,946
Withheld 46,829
Directors whose term of office as a director continued
after the meeting were Asaph
H. Hall, Arthur H. Hausman, E.M.T. Jones, and Barry J.
Shillito.
b. A proposal to ratify the selection of Deloitte &
Touche LLP as independent
public accountants for the fiscal year ending September 30,
1995 was approved.
2,742,225 votes were cast in favor, 34,308 votes were cast
against, and 4,242 abstained.
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits: None
b. Reports on Form 8-K: None
No other applicable items.
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.
TCI INTERNATIONAL, INC.
(Registrant)
__________________________________
John W. Ballard III
Vice President , Chief
Financial
Officer
(Duly authorized officer
of the registrant
and principal financial
officer of the
registrant)
___________________________
Date
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This schedule contains summary financial information extracted from SEC Form 10Q
and is qualified in its entirety by reference to such financial statements.
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<NAME> TCI INTERNATIONAL, INC.
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