FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarter Ended September 27, 1996
Commission File Number 0-13914
TRIO-TECH INTERNATIONAL
(Exact name of Registrant as specified in its Charter)
California 95-2086631
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
355 Parkside Drive, San Fernando, California 91340
(Address of principle executive offices) (Zip Code)
Registrant's Telephone Number: 818-365-9200
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed with the Commission 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 October 22, 1996, the Registrant had outstanding approximately 1,208,279*
Shares of Common Stock.
* See PART II. OTHER INFORMATION, ITEM 2 in connection with a one-for-
four reverse stock split, whose effective date of record was October
13, 1994.
This document contains a total of 8 pages.
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<CAPTION>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
TRIO-TECH INTERNATIONAL
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(In Thousands)
Sep. 27 Jun. 28,
1996 1996
-------- --------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ 743 $ 2,114
Certificates of deposit 4,665 3,114
Accounts receivable - net 4,908 4,783
Notes & other receivables 403 179
Inventories 1,813 1,430
Prepaid expenses 271 140
------- -------
Total current assets 12,803 1,760
------- -------
PROPERTY, EQUIPMENT AND CAPITALIZED LEASES, NET 5,033 5,330
------- -------
OTHER ASSETS 304 326
------- -------
TOTAL ASSETS $ 18,140 $ 17,416
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable $ 131 $ 245
Accounts payable 1,822 1,813
Accrued expenses 4,063 4,032
Income taxes payable 1,960 1,598
Current portion of long-term debt and
capitalized leases 408 481
------ -------
Total current liabilities 8,384 8,169
======= ========
LONG-TERM DEBT AND CAPITALIZED LEASES,
Net of current portion 675 688
DEFERRED TAXES 770 771
MINORITY INTEREST 2,874 2,581
SHAREHOLDERS' EQUITY:
Common stock; authorized, 2,500,000 shares;
issued and outstanding, 1,208,279 shares
at September 27, 1996, and 1,205,804
shares at June 28, 1996 stated at 4,884 4,878
Accumulated deficit (1,167) (1,336)
Cumulative currency translation 1,720 1,665
------- --------
Total shareholders' equity 5,437 5,207
------- --------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 18,140 $ 17,416
======== ========
<FN>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TRIO-TECH INTERNATIONAL
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
(In Thousands, except Earnings per Share Data)
THREE MONTHS ENDED
----------------------
SEP. 27, SEP. 29,
1996 1995
---------- -----------
<S> <C> <C>
Revenues $ 5,616 $ 5,733
Cost of revenues 3,322 3,721
------------- ------------
Gross profit 2,294 2,012
------------- ------------
Selling, general & administrative expenses 1,416 1,275
------------- -------------
Income from operations 878 737
------------- ------------
Other income (expense):
Interest expense (35) (41)
Other income 126 184
------------ ------------
Total 91 143
------------ ------------
Income before income taxes and minority interest 969 880
Income taxes 421 360
----------- ------------
Income before minority interest 548 520
Minority interest 379 400
----------- ------------
Net income $ 169 $ 120
=========== ============
Net income per share:
Primary $ 0.13 $ 0.09
Fully diluted $ 0.13 $ 0.09
Weighted average number of shares outstanding
Primary 1,280 1,274
Fully diluted 1,289 1,304
<FN>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TRIO-TECH INTERNATIONAL
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(In Thousands)
THREE MONTHS ENDED
--------------------
SEP. 27, SEP. 29,
1996 1995
---------- -----------
<S> <C> <C>
Net income $ 169 $ 120
Cash flows from operating activities:
Adjustments to reconcile net income to
Cash provided by operations:
Depreciation and amortization 370 388
Loss on disposal of property and equipment 37
Effect of exchange rate changes on
Operating assets (29) (54)
Changes in assets and liabilities:
Accounts receivable, net (125) (946)
Notes and other receivables (224) 8
Inventories (383) (68)
Prepaid expenses & other current assets (131) (132)
Other assets 3 60
Accounts payable and accrued expenses 402 1,200
Deferred taxes (1) (26)
-------- ----------
Net cash (used in) provided by operating
activities (81) 430
-------- ----------
Cash flows from investing activities:
Certificates of deposit (1,551) (497)
Capital expenditures, net (17) (200)
Minority interest 305 586
------- ----------
Net cash used in investing activities (1,263) (111)
------- ----------
Cash flows from financing activities:
Payments on notes payable and lines of
credit (104) (219)
Proceeds from long-term debt and
capitalized leases 30 19
Principal payments of long-term debt
capitalized leases (126) (59)
Issuance of common stock 6
------- ----------
Net cash used in financing activities (194) (259)
------- ----------
Effect of exchange rate changes on cash (2) 31
Net (decrease) increase in cash (1,371) 211
Cash, beginning of the period 2,114 674
------- ----------
Cash , end of the period $ 743 $ 885
======= ==========
Supplemental disclosure of cash flow information
Cash paid during the period for:
Interest $ 29 $ 39
Income taxes $ 25 $ 25
<FN>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
</TABLE>
<PAGE>
TRIO-TECH INTERNATIONAL
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. Basis of Presentation
The interim financial statements as of September 27, 1996, and for the three-
months ended September 27, 1996, are unaudited. In the opinion of management,
the unaudited financial statements include all adjustments necessary, consisting
of normal recurring accruals, for a fair presentation of such information.
Certain reclassifications of prior year amounts have been made to conform to the
current year financial statement presentation.
The consolidated results of operations for the three-month periods ending
September 27, 1996 and September 29, 1995, are not necessarily indicative of the
results expected for a full year.
<TABLE>
NOTE 2. Inventories
The composition of inventories is as follows (in thousands):
<CAPTION>
Sept. 27, June 28,
1996 1996
---------- -----------
<S> <C> <C>
Raw materials $ 790 $ 640
Work in process 383 294
Finished goods 640 496
---------- -----------
$ 1,813 $ 1,430
========== ===========
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<TABLE>
NOTE 3. Other Assets
The composition of other assets is as follows (in thousands):
<CAPTION>
Sept. 27, June 28,
1996 1996
--------- ---------
<S> <C> <C>
Cost in excess of net assets
acquired, net of accumulated
amortization $ 209 $ 228
Other assets 95 98
--------- --------
$ 304 $ 326
========= ========
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NOTE 4. Common Stock
In October, 1994 the Board of Directors approved a one-for-four reverse stock
split. Common stock and stock options have been retroactively adjusted for the
split.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
1. Liquidity and Capital Resources
The Company's working capital improved $ 828,000 during the first quarter. This
is due to increases in inventories and receivables.
The Company's subsidiary, TTI Pte, has a secured credit agreement with Standard
Chartered Bank which provides for a total line of credit of $ 655,000.
Borrowings under these lines amounted to $16,000 as of September 27, 1996. The
interest rate on borrowings is at the bank's prime rate (6.5% at September 27,
1996) plus 2%. Borrowings under this agreement are collateralized by
substantially all of TTI Pte's assets.
The Company's subsidiary, TTBk, has a secured line of credit with a bank which
provides for a total line of credit of $78,000. There were no borrowings under
the line as of September 27, 1996.
The Company's subsidiary, WGP, has a short-term loan of $210,000 from a bank.
Interest is at 1.31% above the bank reference rate (13.29% at September 27,
1996).
The Company's subsidiary, EETC, has a credit agreement with a bank which
provides a term loan of $376,000. Interest is at the bank's prime rate (6.25%
at September 27,1996) plus 3%.
The Company has a revolving line of credit of $125,000 from a bank bearing
interest at 1.5% above the bank's reference rate (8.25% at September 27, 1996).
Borrowings under the line amounted to $115,000 as of September 27, 1996.
2. Material Changes in Financial Position
There were no material changes in the financial position of the Company during
the three-month period ending September 27, 1996.
3. Material Changes in Results of Operations
(a) Comparison of the three-month period ending September 27,
1996 and September 29, 1995.
The Company recorded $ 169,000 of profit during the first quarter ($ 120,000 for
the three months ended September 29, 1995). Sales have decreased by 2% in the
three-month period ending September 27, 1996 as compared to the corresponding
period in the previous year. Gross margins have improved by 6% to 41% for the
period ended September 27, 1996, as compared to 35% for the corresponding period
in the previous year. Selling, general and administrative expenses have
increased $141,000 or 11% as a result of increases in manufacturing costs and
have increased as a percentage to sales to 25% for the three months ended
September 27, 1996, as compared to 22% for the three months ended September 29,
1995. Interest expenses have declined as a result of a reduction in borrowings
against a line of credit. Other income decreased $ 58,000 due to a decrease in
realized and unrealized gains. Minority interest has decreased mainly due to
the performance from the Malaysia operations.
<PAGE>
PART II. OTHER INFORMATION
Item 2. Changes in securities.
A reverse stock split (the "Reverse Split" ) of the common stock was confirmed
with a date of record for determining the Stockholders entitled to participate
in the Reverse Split of October 13, 1994. The Reverse Split was a one-for-four
reverse stock split whereby each outstanding share of existing common stock was
automatically converted into one-fourth of a share of common stock. Fractional
interests resulting from the Reverse Split were rounded up to the nearest whole
share, with half-shares being rounded up to the next whole number. For example,
a person holding 101 shares prior to the Reverse Split would now hold 25 shares,
the remaining 1/4 share having been canceled and disregarded; persons holding
102 or 103 shares received 26 full shares after the Reverse Split. As of
January 31, 1994 3,724,000 shares had been delivered to the Transfer Agent for
the new stock certificates. The Company approximates the number of currently
outstanding shares to be 1,208,279.
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.
TRIO-TECH INTERNATIONAL
Registrant
By
A. Charles Wilson
Chairman
Dated: November 6, 1996
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<CAPTION>
TRIO-TECH INTERNATIONAL
EXHIBIT 11.1
STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS
(unaudited)
(in thousands, except Earnings per Share Data)
THREE MONTHS ENDED
------------------
SEP. 27, SEP. 29,
1996 1995
-------- --------
<S> <C> <C>
Net income $ 169 $ 120
Primary earnings per share:
Weighted average number of common shares
outstanding 1,206 1,181
Dilutive effect of stock options and warrants
after application of treasury stock method 74 93
------- -------
Number of shares used to compute primary
earnings per share 1,280 1,274
======= =======
Primary earnings per share:
Net income per share $ 0.13 $ 0.09
======= =======
Fully diluted earnings per share:
Weighted average number of common shares
outstanding 1,206 1,181
Dilutive effect of stock options and warrants
after application of treasury stock method 83 123
------- --------
Number of shares used to compute fully diluted
earnings per share 1,289 1,304
======= ========
Fully diluted earnings per share:
Net income per share $ 0.13 $ 0.09
======= ========
</TABLE>
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000732026
<NAME> TRIO-TECH INTERNATIONAL
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-27-1997
<PERIOD-START> JUN-29-1996
<PERIOD-END> SEP-27-1996
<CASH> 743
<SECURITIES> 4665
<RECEIVABLES> 4908
<ALLOWANCES> 0
<INVENTORY> 1813
<CURRENT-ASSETS> 12803
<PP&E> 5956
<DEPRECIATION> 370
<TOTAL-ASSETS> 18140
<CURRENT-LIABILITIES> 8384
<BONDS> 0
<COMMON> 4884
0
0
<OTHER-SE> 553
<TOTAL-LIABILITY-AND-EQUITY> 18140
<SALES> 5616
<TOTAL-REVENUES> 5616
<CGS> 3322
<TOTAL-COSTS> 3322
<OTHER-EXPENSES> 1290
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 35
<INCOME-PRETAX> 590
<INCOME-TAX> 421
<INCOME-CONTINUING> 169
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 169
<EPS-PRIMARY> .13
<EPS-DILUTED> .13
</TABLE>
