<PAGE>
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 JUNE 30, 2000
--------------
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)
47300 KATO ROAD, FREMONT, CALIFORNIA 94538-7334
(Address of principal executive offices) (Zip Code)
(510) 687-6100
(Registrant's telephone number, including area code)
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 July 19, 2000, 3,459,510 shares of Common Stock were outstanding.
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TCI INTERNATIONAL, INC.
Table of Contents
<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION PAGE
<S> <C>
Item 1. Unaudited Condensed Consolidated Financial Statements
Unaudited Condensed Consolidated Statements of Operations and
Comprehensive Income 3
Unaudited Condensed Consolidated Balance Sheets 4
Unaudited Condensed Consolidated Statements of Cash Flows 5
Unaudited Notes to Condensed Consolidated Financial Statements 6-8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9-13
Item 3. Quantitative and Qualitative Disclosure about Market Risk
Derivatives and Financial Instruments 14
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 15
Signatures 15
</TABLE>
2
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TCI INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND OTHER COMPREHENSIVE INCOME
(In thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
June 30, June 30
200 1999 2000 1999
<S> <C> <C> <C> <C>
Revenues $ 7,369 $ 6,507 $ 21,694 $ 17,825
-------- -------- --------- ---------
Operating costs and expenses:
Cost of revenues 4,871 4,203 14,395 12,097
Marketing, general and administrative 2,356 2,405 7,258 7,549
------- --------- -------- --------
7,227 6,608 21,653 19,646
------- -------- ------ ---------
Income (loss) from operations 142 (101) 41 (1,821)
Interest income, net 168 109 502 411
------- -------- -------- --------
Income (loss) before provision 310 8 543 (1,410)
for income taxes
Provision for income taxes 11 - (152) -
-------- -------- --------- ---------
Net income (loss) $ 299 $ 8 $ 695 $ (1,410)
======== ======== ========= =========
Other comprehensive income:
Unrealized gain on investments - - 5 8
-------- -------- --------- ---------
Net comprehensive income (loss) $ 299 $ 8 $ 700 $ (1,402)
======== ======== ========= =========
Basic earnings per share:
Net income (loss) per share $ .09 $ - $ .21 $ (.44)
======== ========= ========= =========
Shares used in per share
computations 3,456 3,205 3,382 3,210
======== ========= ========= =========
Dilutive earnings per share:
Net income (loss) per share $ .08 $ - $ .20 $ (.44)
======== ========== ======== =========
Shares used in per share
computations 3,694 3,256 3,554 3,210
======== =========== ========= =========
</TABLE>
See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.
3
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TCI INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
June 30, September 30,
2000 1999
-------- --------
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 3,630 $ 11,310
(Includes restricted cash of $131 and $3,846
on June 30, 2000, and Sept 30, 1999, respectively)
Short-term investments 6,167 3,360
Accounts receivable, net
Billed 1,846 2,434
Unbilled 9,637 3,416
Inventories 1,522 1,704
Prepaid taxes 188 1,724
Prepaid expenses 620 427
-------- --------
Total current assets 23,610 24,375
Property and equipment, net 1,764 2,033
Other assets 326 321
-------- --------
Total assets $ 25,700 $ 26,729
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,089 $ 1,830
Customer deposits and billings on uncompleted
contracts in excess of revenue recognized 1,580 3,310
Accrued liabilities 4,758 5,967
-------- --------
Total current liabilities 8,427 11,107
-------- --------
Stockholders' equity:
Common stock, par value $.01; authorized 5,000 shares; issued 3,468 and 3,281
shares on June 30,2000, and Sept. 30, 1999, respectively 12,491 11,780
Retained earnings 4,818 4,176
Accumulated other comprehensive loss (3) (8)
Treasury shares at cost; 10 and 76 shares on
June 30, 2000, and Sept 30, 1999, respectively (33) (326)
-------- --------
Total stockholders' equity 17,273 15,622
-------- --------
Total liabilities and stockholders' equity $ 25,700 $ 26,729
======== ========
</TABLE>
See accompanying Notes to Unaudited Condensed Consolidated Financial Statements
4
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TCI INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED JUNE 30,
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
2000 1999
---------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 695 $ (1,410)
Adjustments to reconcile net income to net cash
used in operating activities:
Depreciation 495 377
Changes in assets and liabilities:
Accounts receivable (5,633) (2,891)
Inventories 182 (624)
Prepaid taxes 1,536 28
Prepaid expenses and other assets (198) (70)
Accounts payable 259 807
Customer deposits/billing in excess of revenue (1,730) (361)
Accrued liabilities (1,208) 141
---------- ---------
Net cash used in operating activities (5,602) (4,003)
---------- ----------
Cash flows from investing activities:
Purchases of property and equipment (226) (1,159)
Purchases of short-term investments (14,754) (7,344)
Proceeds from sale of short-term investments 11,951 10,835
--------- ---------
Net cash provided by (used in) investing activities (3,029) 2,332
---------- ---------
Cash flows from financing activities:
Stock options exercised 951 5
Treasury stock purchases - (26)
v --------- ---------
Net cash provided by (used in) financing activities 951 (21)
Net decrease in cash and cash equivalents (7,680) (1,692)
Cash and cash equivalents, at beginning of period 11,310 8,782
--------- ---------
Cash and cash equivalents, at end of period $ 3,630 $ 7,090
========= =========
</TABLE>
See accompanying Notes to Unaudited Condensed Consolidated Financial Statements
5
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TCI INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1. Basis of Presentation
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. These condensed consolidated financial statements should
be 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,
1999, filed with the Securities and Exchange Commission. Further, the
accompanying financial statements reflect, in the opinion of management, all
adjustments necessary (consisting of normal recurring entries) to present fairly
the financial position and results of operations as of and for the periods
indicated.
The results of operations for the nine months ended June 30, 2000, are not
necessarily indicative of results to be expected for the entire year ending
September 30, 2000.
NOTE 2. Inventories
Inventories consist of the following (in thousands):
<TABLE>
<CAPTION>
June 30, September 30,
2000 1999
------- ------------
<S> <C> <C>
Material and component parts $817 $1,326
Work in process 705 378
------- ------
$1,522 $1,704
======= ======
</TABLE>
NOTE 3. Standby Letters of Credit
At June 30, 2000 there were outstanding standby letters of credit of
approximately $3,044,000 serving as performance and payment bonds. The standby
letters of credit expire at various dates through 2001; 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
cash or short term investment portfolio.
NOTE 4. Net Income per Share
Basic per share amounts are computed using the weighted average number of common
shares outstanding during the period. Dilutive per share amounts are computed
using the weighted average number of common and dilutive common equivalent
shares outstanding during the period. Dilutive common equivalent shares consist
of common stock issuable upon the exercise of stock options using the treasury
stock method.
6
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TCI INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The following schedule reconciles, in thousands, the shares used in the
Company's basic and diluted net income (loss) per share calculation.
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
June 30, June 30,
------------------ -----------------
2000 1999 2000 1999
-------- -------- ------- -------
<S> <C> <C> <C> <C>
Basic earnings per share weighted 3,456 3,205 3,382 3,210
average shares outstanding
Effect of dilutive securities options
outstanding 238 51 172 0
-------- -------- ------- -------
Denominator for diluted earnings
per share - adjusted weighted
average shares 3,694 3,256 3,554 3,210
</TABLE>
49,171 shares of common stock issuable upon exercise of options were excluded
from the diluted earning per share calculation for the nine months ended June
30, 1999, due to their antidilutive effect. As of June 30, 2000 and 1999, there
were options outstanding to purchase 629,666 and 841,900 respectively, shares of
the Company's common stock.
NOTE 5. RECENT ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board issued SFAS No. 133
"Accounting for Derivative Instruments and Hedging Activities." SFAS No. 133
establishes accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in other contracts,
(collectively referred to as derivatives) and for hedging activities. This
statement as amended will be effective for all annual and interim periods
beginning after June 15, 2000, and management does not believe the adoption of
SFAS No. 133 will have a material effect on the financial position of the
Company.
In December 1999, the Securities and Exchange Commission ("SEC") issued Staff
Accounting Bulletin ("SAB") No. 101, "Revenue Recognition in Financial
Statements". SAB 101 summarizes the SEC's views in applying generally accepted
accounting principles to revenue recognition in financial statements. In March
2000, the SEC issued SAB No. 101A that delayed the implementation date of SAB
No. 101. In June 2000, the SEC issued SAB No. 101B that further delayed the
implementation date of SAB No. 101. The Company must adopt SAB No. 101 no later
than in the fourth quarter of fiscal 2001. The Company does not expect the
adoption of SAB No. 101 to have a material impact on its financial position or
results of operations.
7
<PAGE>
TCI INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 5. RECENT ACCOUNTING PRONOUNCEMENTS
In March 2000, the FASB issued Interpretation No. 44, "accounting for Certain
Transactions Involving Stock Compensation --- an Interpretation of APB No. 25"
(FIN No. 44"). FIN No. 44 clarifies the application of Opinion No. 25 for
certain issues including: (a) the definition of employee for purposes of
applying Opinion No. 25, (b) the criteria for determining whether a plan
qualifies as noncompensatory plan, (c) the accounting consequence of various
modifications to the terms of a previously fixed stock option or award, and (d)
the accounting for an exchange of stock compensation awards in a business
combination. In general, FIN No. 44 is effective July 1, 2000. The Company does
not expect the adoption of FIN No. 44 to have a material impact on its financial
position or results of operations.
8
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TCI INTERNATIONAL, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Third Fiscal Quarter of 2000
Compared to Third Fiscal Quarter of 1999
Except for historical information contained herein, the matters discussed in
this report contain forward-looking statements that involve risks and
uncertainties which could cause future results to differ materially. The results
of operations for the third three months of fiscal year 2000 are not necessarily
indicative of future quarterly or annual performance expectations.
Total revenue for the third quarter of fiscal year 2000 was $7,369,000, an
increase of 13% over revenue of $6,507,000 for the same period a year ago. Total
revenue for the first nine months of fiscal year 2000 was $21,694,000 compared
to $17,825,000 a year ago, an increase of 22%. Total net income for the third
quarter of fiscal year 2000 was $299,000 compared to a net income of $8,000 in
the prior year. Net income for the first nine months of fiscal year 2000 was
$695,000 compared to a net loss of $1,410,000 a year ago. The increase in
revenue for the current fiscal year reflects growth in both product groups as
discussed in more detail below.
The Company has two distinct product groups, the Broadcast Products Group and
the Signal Processing Products Group. The Company's product offerings are
managed and directed by separate management teams. While the two business
segments currently share facilities and certain manufacturing resources, the
customers who routinely purchase these products are distinct.
Segment revenue and operating income for the two product groups were as follows
(in thousands):
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
June 30, June 30,
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenue
Broadcast Products 2,491 2,282 6,607 5,781
Signal Processing Products 4,878 4,225 15,087 12,044
Operating income (loss)
Broadcast Products (165) (364) (824) (754)
Signal Processing Products 307 263 865 (1,067)
</TABLE>
9
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TCI INTERNATIONAL, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Third Fiscal Quarter of 2000
Compared to Third Fiscal Quarter of 1999
Revenue for the Broadcast Products group in the third quarter ended June 30,
2000, increased 9% over revenue a year ago. The net loss for the current quarter
was significantly less than last year due to improved gross margins and lower
operating expenses. These lower operating expenses were a result of
restructuring in the marketing department whereby a remote marketing office was
closed earlier in the fiscal year and corresponding reductions in expense are
now being realized.. Fluctuations in revenue from one quarter to the next are
inherent in the Company's business due to the project-oriented nature of the
business. The Broadcast Products group continued to make substantial investment
in research and development associated with the design efforts on the Digital TV
products in the current quarter.
Revenue for the Signal Processing Products group for the third quarter ended
June 30, 2000, increased 15% over a year ago. Net operating income was $307,000
compared to $263,000 in the third quarter of fiscal year 1999, an increase of
17%. Orders received in the last quarter of fiscal year 1999 for Spectrum
Management Systems contributed significantly to the increase in revenue and
profitability for the current fiscal quarter.
Total gross margins for the Company expressed as a percentage of revenue for the
current quarter were approximately the same when compared to the same period in
fiscal year 1999. Gross margins were $2,498,000 in the current quarter compared
to $2,304,000 for the same period in fiscal 1999. For the nine months ending
June 30, 2000, gross margins expressed as a percentage of revenue were 34%
compared to 32% for the nine months ending June 30, 1999.
Marketing, general and administrative expenses for the third quarter of fiscal
year 2000 remained constant with those of fiscal 1999 and decreased as a
percentage of revenue to 32% as compared to 37% a year ago. Marketing, general
and administrative expenses for the nine months ending June 30, 2000, were
$7,258,000 compared to $7,549,000 a year ago.
The Company's total backlog as of June 30, 2000 was $20,000,000 compared to
$25,000,000 as of June 30, 1999. The total funded portion of the Company's
backlog, which excludes unfunded and unexercised options (on U.S. Government
contracts) the Company believes are likely to be exercised, was $20,000,000 and
$15,000,000, respectively.
10
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TCI INTERNATIONAL, INC.
LIQUIDITY AND CAPITAL RESOURCES
June 30, 2000 Compared to September 30, 1999
Consolidated cash, cash equivalents and short-term investments totaled
$9,797,000 on June 30, 2000, compared to $14,670,000 on September 30, 1999. 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 year 2001.
Cash used in operations for the first three quarters of fiscal year 2000 was
$5,206,000 compared to $4,003,000 for the same quarters in fiscal 1999. Cash
used in the first three quarters of fiscal year 2000 resulted primarily from the
increase in accounts receivables of $5,633,000 and the decrease in customer
deposits and billing in excess of revenue of $1,730,000 and accrued liabilities
of $1,208,000. The increase in accounts receivables was due to revenue
recognition timing differences and varying payment milestones on large,
long-term contracts. Cash used in the first three quarters of fiscal year 1999
was primarily due to the net loss of $1,410,000 and an increase in accounts
receivable of $2,891,000. Cash used in investing activities in the first three
quarters of fiscal year 2000 was $3,029,000 compared to cash provided by
investing activities of $2,332,000 in fiscal year 1999.
A significant portion of the Company's sales is associated with long-term
contracts and programs in which there are significant inherent risks. These
risks include the uncertainty of economic conditions, dependence on future
appropriations and administrative allotments of funds, changes in governmental
policies, difficulty of forecasting costs and work schedules, product
obsolescence, and other factors characteristic of the industry. Contracts with
agencies of the U.S. Government or with prime contractors working on U.S.
Government contracts contain provisions permitting termination at any time for
the convenience of the Government. No assurance can be given regarding future
financial results, as such results are dependent upon many factors including
economic and competitive conditions, incoming order levels, shipment volume,
product margins and foreign exchange rates.
The large size of certain of the Company's orders makes it possible that a
single contract termination, cancellation, delay, or failure to perform could
have a significant adverse effect on revenue, results of operations, and the
cash position of the Company.
A portion of the Company's revenues is derived from governments in areas of
political instability. The Company generally attempts to reduce the risks
associated with such instability by requesting advance payment if appropriate,
as well as letters of credit or central government guarantees. Most of the
Company's overseas contracts provide for payments in U.S. dollars. However, in
certain instances, the Company, for competitive reasons, must accept payment in
a foreign currency.
At June 30, 2000, the Company has standby letters of credit outstanding of
approximately $3,044,000. The standby letters of credit are collateralized by
the Company's cash or short-term investments.
11
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TCI INTERNATIONAL, INC.
FACTORS THAT MAY AFFECT FUTURE OPERATING RESULTS
The Company operates in a highly competitive environment that involves a number
of risks, some of which are beyond the Company's control. The following
discussion highlights some of these risks.
FLUCTUATIONS IN OPERATING RESULTS
The Company's operating results may fluctuate from quarter to quarter and year
to year for a number of reasons. While there is no seasonality to the Company's
business, because of the Company's relatively small size, combined with the
extended delivery cycles of its long-term project-oriented business, revenue and
accompanying gross margins are inherently difficult to predict. Since the
Company records revenue on a percentage of completion basis, unexpected changes
in project budgets during the course of execution can cause revenue and
accompanying gross margins to vary from quarter to quarter. Because the Company
plans its operating expenses, many of which are relatively fixed in the short
term, based on the assumption of stable performance, a relatively small revenue
shortfall may cause profitability from operations to suffer. Historically, the
Company has endured periods of volatility in its revenue results due to a number
of factors, including shortfalls in new orders, delays in the availability of
new products, delays in subcontractor provided materials and services, and
delays associated with foreign construction activities. Gross margins are
strongly influenced by several factors, including pressures to be the low price
supplier in competitive bid solicitations, the mix of contract material and
non-recurring engineering services, and the mix of newly developed and existing
product sold to various customers. The Company believes these historical
challenges will continue to affect its future business.
In order to address these challenges, the Company intends to pursue a product
and market diversification strategy. By leveraging its expertise in RF
technology applications, and its ability to conduct business in foreign
countries, the Company will pursue outside technology and business acquisitions,
which complement various characteristics of its existing core business.
MANAGING A CHANGING BUSINESS
The Company is in the process of adopting a business management plan that
includes substantial investments in its sales and marketing organizations,
increased funding of existing internal research and development programs, and
certain investments in corporate infrastructure that will be required to support
the Company's diversification objectives during the next three years. Inherent
in this process are a number of risks, including a higher level of operating
expenses, the difficulty of competing with companies of larger size for talented
technical personnel, and the complexities of managing a changing business. There
also exists the risk the Company may inaccurately estimate the viability of any
one or all of its diversification efforts and as a result, may experience
substantial revenue shortfalls of a size so significant as to generate losses
from operations.
12
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TCI INTERNATIONAL, INC.
RISK ASSOCIATED WITH EXPANSION INTO ADDITIONAL MARKETS AND PRODUCT DEVELOPMENT
The Company believes that its future success is substantially dependent on its
ability to successfully acquire, develop and commercialize new products and
penetrate new markets. In addition to the Company's ongoing efforts to diversify
its product offerings within its core businesses such as the spectrum management
system business, the Company intends to pursue a diverse, but focused product
and market development initiative during the next three years. The Company
believes that its general knowledge of RF technology and its related
applications combined with its ability to conduct business in overseas markets
can be exploited to return the Company to an aggressive growth posture. While
not strictly limited to these product areas, the Company is currently pursuing
certain product and turnkey project initiatives in the FM and digital TV
transmission equipment markets which compliment the Company's antenna expertise.
There can be no assurance that the Company can successfully develop these or any
other additional products, that any such products will be capable of being
produced in commercial quantities at reasonable cost, or that any such products
will achieve market acceptance. Should the Company expend funds to acquire
outside entities or technology, there can be no assurance that sufficient
returns will be realized to offset these investments. The inability of the
Company to successfully develop or commercialize new products or failure of such
products to achieve market acceptance would have a material adverse effect on
the Company's business, financial condition and results of operations.
RISKS ASSOCIATED WITH CONDUCTING BUSINESS OVERSEAS
A substantial part of the Company's revenue is derived from fixed priced
contracts with foreign governmental entities. With increasing frequency, the
Company finds a demand for its products in third world countries and developing
nations which have an inherently more volatile and uncertain political and
credit risk profile than the U.S. Government market with which the Company is
accustomed to conducting its business. While the Company seeks to minimize the
collection risks on these contracts by normally securing significant advanced
payments with the balance secured by irrevocable letters of credit, the Company
cannot always be assured of receiving full payment for work that it has
performed due to unforeseen credit and political risks. Should such default on
payments owed the Company ever occur, a significant effect on earnings, cash
flows and cash balances may result.
COMPETITION
Most of the Company's products are positioned in niche markets, which include
strong elements of imbedded proprietary technology. In most of these markets,
the Company competes with companies of significantly larger size, many of whom
have substantially greater technical, marketing, and financial resources
compared to similar resources available within the Company. This type of
competition has resulted in, and is expected to continue to result in,
significant price competition.
13
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TCI INTERNATIONAL, INC.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
DERIVATIVES AND FINANCIAL INSTRUMENTS
FOREIGN CURRENCY HEDGING INSTRUMENTS
The Company transacts business in various foreign currencies. Accordingly, the
Company is subject to exposure from adverse movements in foreign currency
exchange rates. As of June 30, 2000, the Company had no hedging contracts
outstanding.
The Company does not use derivative financial instruments for speculative
trading purposes, nor does the Company hedge its foreign currency exposure in a
manner that entirely offsets the effects of changes in foreign exchange rates.
The Company regularly reviews its hedging program and may, as part of this
process, determine at any time to change its hedging program.
No sensitivity analysis was performed on the Company's hedging portfolio as of
June 30, 2000, as there were no hedging contracts outstanding as of June 30,
2000.
FIXED INCOME INVESTMENTS
The Company's investments in U.S. corporate securities include commercial paper.
Foreign securities include certificates of deposit with financial institutions,
most of which are denominated in U.S. dollars. The Company's cash equivalents
and short-term investments have generally been held until maturity. Gross
unrealized gains and losses were negligible as of June 30, 2000.
The Company's exposure to market risk for changes in interest rates relate
primarily to the Company's investments. The Company places its investments with
high credit quality issuers and, by policy, limits the amount of credit exposure
to any one issuer. The Company's general policy is to limit the risk of
principal loss and ensure the safety of invested funds by limiting market and
credit risk. All highly liquid investments with a maturity of three months or
less at the date of purchase are considered to be cash equivalents; investments
with maturities between three and twelve months are considered to be short-term
investments. The average interest rate on the investment portfolio is 6.2%. As
of June 30, 2000, there are no investments with maturities greater than 12
months.
14
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TCI INTERNATIONAL, INC.
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits: Exhibit 27.1-Financial Data Schedule
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)
/s/ Mary Ann W. Alcon
--------------------------------
Mary Ann W. Alcon
Chief Financial Officer
(Duly authorized officer of the registrant and
principal financial officer of the registrant)
Date: August 3, 2000
15
