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 March 31, 1995
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
periodthat 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 April 26, 1995, the Registrant had outstanding approximately 1,171,534*
Shares of Common Stock.
* See PART II. OTHER INFORMATION, ITEM 2 in connection with a 1-for-4
reverse stock split, whose effective date of record was October 13, 1994.
This document contains a
total of 8 pages.
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<TABLE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
TRIO-TECH INTERNATIONAL
(Condensed Consolidated Balance Sheet)
(in thousands)
<CAPTION>
MAR. 31, JUN. 25,
1995 1994
(unaudited)
----------- ----------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
CASH $ 292 $ 521
CERTIFICATES OF DEPOSIT 658 287
ACCOUNTS RECEIVABLE-NET 3,520 3,272
NOTES & OTHER RECEIVABLES 164 181
INVENTORIES 1,145 1,065
PREPAID EXPENSES AND OTHER CURRENT ASSET 181 199
TOTAL CURRENT ASSETS 5,960 5,525
PROPERTY, EQUIPMENT AND CAPITALIZED LEASES, NET 5,273 5,187
OTHER ASSETS 540 586
TOTAL ASSETS $ 11,773 $ 11,298
LIABILITIES & SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
NOTES PAYABLE $ 216 $ 330
ACCOUNTS PAYABLE 1,454 1,574
ACCRUED EXPENSES 2,819 2,508
CURRENT PORTION OF LONG-TERM DEBT
AND CAPITALIZED LEASES 407 $ 602
TOTAL CURRENT LIABILITIES 4,896 5,014
LONG-TERM DEBT AND CAPITALIZED LEASES,
NET OF CURRENT PORTION 697 939
DEFERRED TAXES 902 853
MINORITY INTEREST 1,285 866
TOTAL LIABILITIES 7,780 7,672
SHAREHOLDERS' EQUITY:
CAPITAL STOCK 4,759 4,753
ACCUMULATED DEFICIT (2,296) (2,712)
CUMULATIVE CURRENCY TRANSLATION 1,530 1,585
TOTAL SHAREHOLDERS' EQUITY 3,993 3,626
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $ 11,773 $ 11,298
See notes to Condensed Consolidated Financial Statements.
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<TABLE>
TRIO-TECH INTERNATIONAL
(Condensed Consolidated Statement of Income)
(in thousands, except Earnings per Share Data)
<CAPTION>
NINE MONTHS ENDED THREE MONTHS ENDED
MAR. 31, MAR. 25, MAR. 31, MAR. 25,
1995 1994 1995 1994
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
REVENUES $ 14,010 $ 10,840 $ 4,118 $ 3,520
COST OF REVENUES 9,412 7,403 2,611 2,402
GROSS PROFIT 4,598 3,437 1,507 1,118
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 3,791 3,083 1,229 894
INTEREST EXPENSE 139 236 49 87
OTHER INCOME (39) (122) (142) 68
MINORITY INTEREST 307 92 125 78
TOTAL OPERATING EXPENSES 3,798 3,289 1,261 1,127
INCOME (LOSS) BEFORE TAXES
AND EXTRAORDINARY GAIN 800 148 246 (9)
INCOME TAXES 384 334 53 45
NET INCOME (LOSS) BEFORE
EXTRAORDINARY GAIN 416 (186) 193 (54)
EXTRAORDINARY GAIN (LOSS)
(LESS APPLICABLE INCOME
TAXES OF $50,000) 1,737 (47)
NET INCOME(LOSS) $ 416 $ 1,551 $ 193 $ (101)
NET INCOME (LOSS) PER SHARE:
PRIMARY:
BEFORE EXTRAORDINARY
ITEM $ 0.35 $ (0.21) $ 0.16 $ (0.06)
EXTRAORDINARY ITEM 1.93 (0.05)
$ 0.35 $ 1.72 $ 0.16 $ (0.11)
FULLY DILUTED:
BEFORE EXTRAORDINARY
ITEM $ 0.35 $ (0.21) $ 0.16 $ (0.06)
EXTRAORDINARY ITEM 1.93 (0.05)
$ 0.35 $ 1.72 $ 0.16 $ (0.11)
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING:
PRIMARY 1,191,037 898,465 1,222,791 898,465
FULLY DILUTED 1,197,591 898,465 1,242,455 898,465
See notes to Condensed Consolidated Financial Statements.
</TABLE>
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<TABLE>
TRIO-TECH INTERNATIONAL
CONSOLIDATED STATEMENT OF CASH FLOW
(in thousands)
SIX MONTHS ENDED
MAR. 31, MAR. 25,
1995 1994
(unaudited) (unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCOME $ 416 $ 1,551
ADJUSTMENTS TO RECONCILE NET INCOME TO
CASH PROVIDED BY OPERATIONS:
DEPRECIATION & AMORTIZATION 911 734
PROVISION FOR BAD DEBT & INVENTORY
OBSOLESCENCE 20 11
EXTRAORDINARY GAIN (1,737)
EFFECT OF EXCHANGE RATE CHANGES ON
OPERATING ASSETS 80 10
CHANGE IN ASSETS & LIABILITIES:
ACCOUNTS RECEIVABLE (268) 107
NOTES AND OTHER RECEIVABLES 17 (87)
INVENTORIES (80) 4
PREPAID EXPENSES & OTHER CURRENT ASSETS 18 (51)
OTHER ASSETS (10) (175)
ACCOUNTS PAYABLE AND ACCRUED EXPENSES 191 (300)
DEFERRED TAXES 49 131
TOTAL ADJUSTMENTS 928 1,353)
NET CASH PROVIDED BY OPERATING ACTIVITIES 1,344 198
CASH FLOWS FROM INVESTING ACTIVITIES:
CERTIFICATES OF DEPOSIT (371) 742
CAPITAL EXPENDITURES, NET (941) (165)
MINORITY INTEREST 284 70
NET CASH PROVIDED BY INVESTING ACTIVITIES (1,028) 647
CASH FLOWS FROM FINANCING ACTIVITIES:
CHANGE IN SHORT-TERM NOTES PAYABLE (114) (1,649)
PROCEEDS FROM LONG-TERM DEBT AND
CAPITAL LEASES 18 590
PRINCIPLE PAYMENTS OF LONG-TERM DEBT AND
CAPITAL LEASES (455) (742)
PURCHASE OF COMMON STOCK 6 789
NET CASH USED IN FINANCING ACTIVITIES (545) (1,012)
NET DECREASE IN CASH (229) (167)
CASH AT THE BEGINNING OF THE PERIOD 521 615
CASH AT THE END OF THE PERIOD $ 292 $ 448
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
CASH PAID DURING THE PERIOD FOR:
INTEREST PAID $ 131 $ 210
TAXES PAID $ 40 $ 114
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TRIO-TECH INTERNATIONAL
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. Basis of Presentation
The financial information included herein is unaudited; however, such
information reflects all adjustments (consisting solely of normal recurring
adjustments) which are, in the opinion of management, necessary for the fair
statement of results for the interim periods.
The results of operations for the nine month period ended March 31, 1995 is
not necessarily indicative of the results expected for the full year.
NOTE 2. Inventories
The composition of inventories is as follows (in thousands):
Mar. 31, June 24,
1995 1994
Raw Material $ 449 $ 541
Work in Process 303 402
Finished Goods 393 122
$ 1,145 $ 1,065
NOTE 3. Other Assets
The composition of other assets is as follows (in thousands):
Mar. 31, June 24,
1995 1994
Goodwill (net of amortization) $ 318 $ 367
Other Assets 222 219
Other Assets $ 540 $ 586
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 respectively 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 $ 552,000 during the first three
quarters, despite financing the purchase of land and building in Batang Kali,
Malaysia with cash and certificates of deposits in the first quarter. The
improvement in working capital is attributable to the significant increase in
sales and profitability in the third quarter.
The Company has a secured credit agreement with Standard Charter Bank which
provides for a total line-of-credit of approximately $ 655,000 which can be
used to finance the company's far east operations. Borrowings under the line
were $ 176,000 as of March 31, 1995. There is no current financing available
to fund operations outside of the Far East region.
2. Material Changes in Financial Position
There were no material changes in the financial position of the Company during
the three month period ending March 31, 1995.
3. Material Changes in results of Operations
(a) Comparison of the Nine Month Period Ending March 31, 1995 and
March 25, 1994.
The Company posted an additional $ 193,000 in profit during the third quarter
($ 416,000 for the nine months ended March 31, 1995). Sales have increased
29% in the nine month period ending March 31, 1995, as compared to the
corresponding period in the previous year. Gross margins have improved to
33% for the nine month period ended March 31, 1995, as compared to 32% for the
corresponding period in the previous year. Selling, general and
administrative expenses have increased $ 708,000 (23%) in the nine month
period ending March 31, 1995, as a direct result of the increase in sales
activity and have decreased as a percentage of sales to 27% for the nine
months ended March 31, 1995, as compared to 28% for the nine months ended
March 25, 1994. Interest expenses have continued to decline as a result of
refinancing and restructuring of bank borrowings. Other income increased
$ 317,000 due to an increase in realized gains and a reduction in unrealized
losses. Minority interest has increased significantly mainly due to the
improved performance from the Malaysia operations.
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 March 31, 19954, 4,282,674 shares had been
delivered to the Transfer Agent for the new stock certificates. The Company
approximates the number of currently outstanding shares to be 1,171,534.
<PAGE>
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 under-
signed thereunto duly authorized.
TRIO-TECH INTERNATIONAL
Registrant
A. Charles Wilson
A. Charles Wilson, Chairman
Dated: May 12, 1995
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EXHIBIT 11.1
TRIO-TECH INTERNATIONAL
COMPUTATION OF EARNINGS PER SHARE
(in thousands, except Earnings per Share Data)
<CAPTION>
NINE MONTHS ENDED THREE MONTHS ENDED
MAR. 31, MAR. 25, MAR. 31, MAR. 25,
1995 1994 1995 1994
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
Net Income (loss) before
extraordinary Item $ 416 $ (186) $ 193 $ (54)
Extraordinary item 1,737 (47)
Net Income (loss) $ 416 $ 1,551 $ 193 $ (101)
Primary Earnings per share:
Weighted average number
of common shares
outstanding 1,155 898 1,158 898
Dilutive effect of
stock options and
warrants after
application of
treasury stock
method 36 65
Number of shares used
to compute primary
earnings per share 1,191 898 1,223 898
Primary earnings per share:
Net income (loss) before
extraordinary item $ 0.35 $ (0.21) $ 0.16 $ (0.06)
Extraordinary item 1.93 (0.05)
Net income (loss) per share $ 0.35 $ 1.72 $ 0.16 $ (0.11)
Fully diluted earnings per share:
Weighted average number
of common shares
outstanding 1,155 898 1,158 898
Dilutive effect of stock
options and warrants
after application of
treasury stock method 43 84
Number of shares used to
compute primary earnings
per share 1,198 898 1,242 898
Primary earnings per share:
Net income (loss) before
extraordinary item $ 0.35 $ (0.21) $ 0.16 $ (0.06)
Extraordinary item 1.93 (0.05)
Net income (loss) per share $ 0.35 $ 1.72 $ 0.16 $ (0.11)
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1995
<PERIOD-START> JUN-25-1994
<PERIOD-END> MAR-31-1995
<CASH> 292
<SECURITIES> 658
<RECEIVABLES> 3,684
<ALLOWANCES> 0
<INVENTORY> 1145
<CURRENT-ASSETS> 181
<PP&E> 5273
<DEPRECIATION> 0
<TOTAL-ASSETS> 11,773
<CURRENT-LIABILITIES> 4,896
<BONDS> 0
<COMMON> 4,759
0
0
<OTHER-SE> 3,993
<TOTAL-LIABILITY-AND-EQUITY> 11,773
<SALES> 14,010
<TOTAL-REVENUES> 14,010
<CGS> 9,412
<TOTAL-COSTS> 3,791
<OTHER-EXPENSES> (132)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 139
<INCOME-PRETAX> 800
<INCOME-TAX> 384
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 416
<EPS-PRIMARY> 0.35
<EPS-DILUTED> 0.35
</TABLE>
