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 29, 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 April 22, 1996, the Registrant had outstanding approximately 1,205,249
Shares of Common Stock.
This document contains a total of 8 pages.
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
TRIO-TECH INTERNATIONAL
(Condensed Consolidated Balance Sheets)
(unaudited)
(In Thousands)
Mar. 29, Jun. 30,
1996 1995
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ASSETS
Current assets:
Cash $ 1,049 $ 674
Certificates of deposit 3,227 553
Accounts receivable - net 3,667 4,140
Notes & other receivables 170 186
Inventories 1,641 1,192
Prepaid expenses
136 103
Total current assets
9,890 6,848
Property, equipment and capitalized leases - net 5,110 5,265
Other assets - net 460 533
TOTAL ASSETS $ 15,460 $ 12,646
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable $ 44 $ 219
Accounts payable 1,508 1,643
Accrued expenses 2,868 2,246
Income taxes payable 1,387 592
Current portion of long-term debt and
capitalized leases 571 459
Total current liabilities 6,378 5,159
Long-term debt and capitalized leases 691 597
Deferred taxes 864 870
Minority interest
2,688 1,601
Shareholders' equity:
Common stock; authorized, 2,500,000 shares;
issued and outstanding, 1,205,249 shares
at March 29, 1996 and 1,181,002 shares
at June 30, 1995 stated at 4,878 4,822
Accumulated deficit (1,621) (2,142)
Cumulative currency translation 1,582 1,739
Total shareholders' equity 4,839 4,419
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 15,460 $ 12,646
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SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
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TRIO-TECH INTERNATIONAL
(Condensed Consolidated Statements of Income)
(unaudited)
(In Thousands, except Earnings per Share Data)
NINE MONTHS ENDED THREE MONTHS ENDED
MAR. 29, MAR. 31, MAR. 29, MAR. 31,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Revenues $ 16,269 $ 14,010 $ 4,947 $ 4,118
Cost of revenues 9,869 9,412 2,785 2,611
Gross profit 6,400 4,598 2,162 1,507
Selling, general &
administrative expenses 4,148 3,791 1,387 1,229
Income from operations 2,252 807 775 278
Other income (expense):
Interest expense (113) (139) (37) (49)
Other income (expense) 306 439 (143) 142
Total 193 300 (180) 93
Income before income taxes and 2,445 1,107 595 371
minority interest
Income taxes 947 384 204 53
Income before minority interest 1,498 723 391 318
Minority interest 977 307 188 125
Net income $ 521 $ 416 $ 203 $ 193
Earnings per share:
Primary $ 0.41 $ 0.35 $ 0.16 $ 0.16
Fully diluted $ 0.41 $ 0.35 $ 0.16 $ 0.15
Weighted average number of
shares outstanding
Primary 1,267 1,195 1,269 1,239
Fully diluted 1,277 1,201 1,269 1,253
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SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
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TRIO-TECH INTERNATIONAL
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(In Thousands)
NINE MONTHS ENDED
MAR. 29, MAR. 31,
1996 1995
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Net income $ 521 $ 416
Cash flows from operating activities:
Adjustments to reconcile net income to
Cash provided by operations:
Depreciation and amortization 583 911
Effect of exchange rate changes on
Operating assets (196) (253)
Changes in assets and liabilities:
Accounts receivable, net 473 (248)
Notes and other receivables 16 17
Inventories (449) (80)
Prepaid expenses & other current assets (33) 18
Other assets 20 (10)
Accounts payable and accrued expenses 1,282 191
Deferred taxes (6) 49
Net cash provided by operating activities 2,211 1,011
Cash flows from investing activities:
Certificates of deposit (2,674) (371)
Capital expenditures, net (603) (941)
Minority interest 1,114 284
Net cash used in investing activities (2,163) (1,028)
Cash flows from financing activities:
Payments on notes payable and lines of
credit (215) (114)
Proceeds from long-term debt and
capitalized leases 340 18
Principal payments of long-term debt
capitalized leases (94) (455)
Issuance of common stock 56 6
Net cash used in financing activities 87 (545)
Effect of exchange rate on cash 240 333
Net increase (decrease) in cash 375 (229)
Cash, beginning of the period 674 521
Cash , end of the period $ 1,049 $ 292
Supplemental disclosure of cash flow information
Cash paid during the period for:
Interest paid $ 112 $ 131
Taxes paid $ 112 $ 40
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SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
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TRIO-TECH INTERNATIONAL
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. Basis of Presentation
The interim financial statements as of March 29, 1996 and for the nine-month
periods ended March 29, 1996 and March 31, 1995 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. The consolidated results of operations for the nine-month
periods ended March 29, 1996 and March 31, 1995 are not necessarily indicative
of the results that would be expected for a full year.
NOTE 2. Inventories
The composition of inventories is as follows (in thousands):
Mar. 29, Jun. 30,
1996 1995
Raw Materials $ 773 $ 559
Work in Process 282 403
Finished Goods 586 230
Total $ 1,641 $ 1,192
NOTE 3. Other Assets
The composition of other assets is as follows (in thousands):
Mar. 29, Jun. 30,
1996 1995
Goodwill (net of amortization) $ 246 $ 301
Other Assets 214 232
Total $ 460 $ 533
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
1. Liquidity and Capital Resources
The Company's working capital increased from $1,689,000 at June 30, 1995 to
$3,512,000 at March 29, 1996 an improvement of $1,823,000 for the nine-month
period ended March 29, 1996. This is attributable to an improvement in sales
and profitability.
The Company's subsidiary, TTI Pte, has a secured credit agreement with a bank
which provides for a total line of credit of $ 655,000. The Company's
subsidiary, TTM, has a secured credit agreement with a bank which provides for
a total line of credit of $234,000. There were no borrowings under these lines
as of March 29,1996.
On December 21, 1995, the Company extended its credit agreement with ICC Bank
plc. The additional term loan of 100,000 Irish Pounds was advanced for a
period of 12 years. Interest is at the bank's prime rate (5.618% at March 29,
1996) plus 3%.
On February 9, 1996, the Company obtained a revolving line of credit of
$125,000 from First Interstate Bank bearing interest at 1.5% above the banks
reference rate (8.25% at March 29, 1996). Borrowings under the line amounted
to $66,000 as of March 29, 1996.
2. Material Changes in Financial Position
There were no material changes in the financial position of the Company as of
March 29, 1996.
3. Material Changes in Results of Operations
(a) Comparison of the nine-month periods ended March 29, 1996
and March 31, 1995.
Sales have increased 16% in the nine-month period ended March 29, 1996 as
compared to the corresponding period in the previous year. Gross margin has
improved 6%, from 33% for the nine-month period ended March 31, 1995, to 39%
for the nine-month period ended March 29,1996. This improvement is mainly
attributable to higher gross margins realized from test lab work performed in
Singapore and Malaysia. Selling, general and administrative expenses have
increased $ 357,000 or 9% as a result of increased sales activity and have
decreased as a percentage of sales to 25% for the nine months ended March
29,1996 as compared to 27% for the corresponding period in the previous year.
Interest expense has declined as a result of reduced borrowings. Other income
decreased $ 133,000 due to currency exchange losses. Minority interest has
increased $670,000 due to the improved performance from the Malaysia
operations.
PART II. OTHER INFORMATION
Not applicable
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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: May 9, 1996
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TRIO-TECH INTERNATIONAL
EXHIBIT 11.1
STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS
(unaudited)
(In Thousands, except Earnings per Share Data)
NINE MONTHS ENDED THREE MONTHS ENDED
MAR. 29, MAR. 31, MAR. 29, MAR. 31,
1996 1995 1996 1995
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Net income $ 521 $ 416 $ 203 $ 193
Primary earnings per share:
Weighted average number of
common shares
outstanding 1,186 1,158 1,191 1,168
Dilutive effect of stock
options and warrants after
application of treasury
stock method 81 37 78 65
Number of shares used to compute
primary earnings
per share 1,267 1,195 1,269 1,233
Primary earnings per share:
Earnings per share $ 0.41 $ 0.35 $ 0.16 $ 0.16
Fully diluted earnings per share:
Weighted average number of
common shares
outstanding 1,186 1,158 1,191 1,168
Dilutive effect of stock
options and warrants after
application of treasury
stock method 91 43 78 85
Number of shares used to compute
fully diluted
earnings per share 1,277 1,201 1,269 1,253
Fully diluted earnings per share:
Earnings per share $ 0.41 $ 0.35 $ 0.16 $ 0.15
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000732026
<NAME> TRIO-TECH INTERNATIONAL
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-29-1996
<PERIOD-END> MAR-29-1996
<CASH> 1049
<SECURITIES> 3227
<RECEIVABLES> 3667
<ALLOWANCES> 0
<INVENTORY> 1641
<CURRENT-ASSETS> 9890
<PP&E> 17708
<DEPRECIATION> 12598
<TOTAL-ASSETS> 15460
<CURRENT-LIABILITIES> 6378
<BONDS> 0
<COMMON> 4878
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 15460
<SALES> 16269
<TOTAL-REVENUES> 16269
<CGS> 9869
<TOTAL-COSTS> 4148
<OTHER-EXPENSES> (306)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 113
<INCOME-PRETAX> 2445
<INCOME-TAX> 947
<INCOME-CONTINUING> 1498
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> (977)
<NET-INCOME> 521
<EPS-PRIMARY> .41
<EPS-DILUTED> .41
</TABLE>
