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 December 29, 1995
Commission File Number 0-13914
TRIO-TECH INTERNATIONAL
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(Exact name of Registrant as specified in its Charter)
California 95-2086631
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
355 Parkside Drive, San Fernando, California 91340
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(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
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As of January 22, 1996, the Registrant had outstanding approximately 1,196,749
Shares of Common Stock.
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)
Dec. 29, Jun. 30,
1995 1995
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<S> <C> <C>
ASSETS
Current assets:
Cash $ 985 $ 674
Certificates of deposit 1,906 553
Accounts receivable - net 5,190 4,140
Notes & other receivables 163 186
Inventories 1,476 1,192
Prepaid expenses 142 103
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Total current assets 9,862 6,848
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Property, equipment and capitalized leases - net 5,222 5,265
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Other assets - net 459 533
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TOTAL ASSETS $ 15,543 $ 12,646
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable $ 40 $ 219
Accounts payable 2,340 1,643
Accrued expenses 2,908 2,246
Income taxes payable 1,267 592
Current portion of long-term debt and capitalized
leases
389 459
-------- --------
Total current liabilities 6,944 5,159
Long-term debt and capitalized leases 670 597
Deferred taxes 851 870
Minority interest 2,424 1,601
Shareholders' equity:
Common stock; authorized, 2,500,000 shares; issued and
outstanding, 1,196,749 shares at December 29, 1995
and 1,181,002 shares at June 30, 1995 stated at 4,848 4,822
Accumulated deficit (1,824) (2,142)
Cumulative currency translation 1,620 1,739
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Total shareholders' equity 4,654 4,419
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 15,543 $ 12,646
========= =========
</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
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<TABLE>
<CAPTION>
TRIO-TECH INTERNATIONAL
(Condensed Consolidated Statements of Income)
(unaudited)
(In Thousands, except Earnings per Share Data)
SIX MONTHS ENDED THREE MONTHS ENDED
-------------------- ------------------
DEC. 29, DEC. 30, DEC. 29, DEC. 30,
1995 1994 1995 1994
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<S> <C> <C> <C> <C>
Revenues $ 11,322 $ 9,892 $ 5,591 $ 5,784
Cost of revenues 7,084 6,801 3,365 4,009
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Gross profit 4,238 3,091 2,226 1,775
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Selling, general & administrative 2,761 2,562 1,486 1,332
---------- ---------- ---------- ----------
expenses
Income from operations 1,477 529 740 443
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Other income (expense):
Interest expense (76) (90) (35) (45)
Other income (expense) 449 297 265 82
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Total 373 207 230 37
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Income before income taxes and minority
interest 1,850 736 970 480
Income taxes 743 331 383 192
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Income before minority interest 1,107 405 587 288
Minority interest 789 182 389 100
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Net income $ 318 $ 223 $ 198 $ 188
========== ========== ========== ==========
Earnings per share:
Primary $ 0.25 $ 0.19 $ 0.16 $ 0.16
Fully diluted $ 0.25 $ 0.19 $ 0.16 $ 0.16
Weighted average number of shares
outstanding
Primary 1,268,091 1,175,462 1,262,453 1,185,636
Fully diluted 1,276,255 1,175,462 1,248,377 1,185,636
</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
<PAGE>
<TABLE>
<CAPTION>
TRIO-TECH INTERNATIONAL
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(In Thousands)
SIX MONTHS ENDED
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DEC. 29, DEC. 30,
1995 1994
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<S> <C> <C>
Net income $ 318 $ 223
Cash flows from operating activities:
Adjustments to reconcile net income to
Cash provided by operations:
Depreciation and amortization 282 308
Effect of exchange rate changes on
Operating assets (234) 29
Changes in assets and liabilities:
Accounts receivable, net (1,050) (1,054)
Notes and other receivables 23 (182)
Inventories (284) (22)
Prepaid expenses & other current assets (39) 31
Other assets 39 (3)
Accounts payable and accrued expenses 2,034 777
Deferred taxes (19) 46
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Net cash provided by operating activities 1,070 153
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Cash flows from investing activities:
Certificates of deposit (1,353) 109
Capital expenditures, net (486) (696)
Minority interest 922 162
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Net cash used in investing activiti (917) (425)
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Cash flows from financing activities:
Payments on notes payable and lines of credit (219) 25
Proceeds from long-term debt and
capitalized leases 159 14
Principal payments of long-term debt
capitalized leases (116) (321)
Issuance of common stock 36 3
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Net cash used in financing activities (140) (279)
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Effect of exchange rate on cash 298 337
Net increase (decrease) in cash 311 (214)
Cash, beginning of the period 674 521
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Cash , end of the period $ 985 $ 307
========= =========
Supplemental disclosure of cash flow information
Cash paid during the period for:
Interest paid $ 57 $ 67
Taxes paid $ 76 $ 31
</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
<PAGE>
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 three month period ended December 29, 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):
Dec. 29, June 30,
1995 1995
------------ -----------
Raw Materials $ 584 $ 559
Work in Process 320 403
Finished Goods 572 230
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Total $ 1,476 $ 1,192
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NOTE 3. Other Assets
The composition of other assets is as follows (in thousands):
Dec. 29, June 30,
1995 1995
------------ ------------
Goodwill (net of amortization) $ 264 $ 301
Other Assets 195 232
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Total $ 459 $ 533
=========== =============
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 increased from $1,689,000 at June 30, 1995 to
$2,918,000 at December 29, 1995 an improvement of $1,229,000 for the first two
quarters. 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 December 29, 1995. There is no current financing available to fund
operations outside of the far east region.
On December 21, 1995, the Company extended it's 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 December 29,1995)
plus 3%.
2. Material Changes in Financial Position
There were no material changes in the financial position of the Company during
the six month period ending December 29, 1995.
3. Material Changes in Results of Operations
(a) Comparison of the Six Month Period Ending December 29, 1995
and December 30, 1994.
Sales have increased 14% in the six month period ending December 29, 1995 as
compared to the corresponding period in the previous year. Gross margin has
improved 6%, from 31% for the period ended December 30, 1994, to 37% for the
period ended December 29,1995. This is mainly due to high gross margins from
the test labs in Singapore and Malaysia. Selling, general and administrative
expenses have increased $ 199,000 (8%) as a result of the increase in sales
activity and have decreased as a percentage of sales to 24% for the six months
ended December 29,1995 as compared to 26% for the six months ended December 30,
1994. Interest expense has declined as a result of reduced borrowings. Other
income increased $ 152,000 due to currency exchange gains. Minority interest
has increased $607,000 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 1-for-4
reverse stock split whereby each outstanding share of existing common stock was
automatically converted into one-fourth of a share of common stock.
<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
undersigned thereunto duly authorized.
TRIO-TECH INTERNATIONAL
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Registrant
By
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A. Charles Wilson
Chairman
Dated: February 2, 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)
SIX MONTHS ENDED THREE MONTHS ENDED
------------------- ------------------
DEC. 29, DEC. 30, DEC. 29, DEC. 30,
1995 1994 1995 1994
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<S> <C> <C> <C> <C>
Net income $ 318 $ 223 $ 198 $ 188
Primary earnings per share:
Weighted average number of
common shares
outstanding 1,186 1,153 1,190 1,154
Dilutive effect of stock
options and warrants after
application of treasury
stock method
82 22 72 32
-------- -------- -------- --------
Number of shares used to compute
primary earnings
per share 1,268 1,175 1,262 1,186
======== ======== ======== ========
Primary earnings per share:
Earnings per share $ 0.25 $ 0.19 $ 0.16 $ 0.16
======== ======== ======== ========
Fully diluted earnings per share:
Weighted average number of
common shares
outstanding 1,186 1,153 1,190 1,154
Dilutive effect of stock
options and warrants after
application of treasury
stock method
90 22 58 32
-------- -------- -------- --------
Number of shares used to compute
fully diluted
earnings per share 1,276 1,175 1,248 1,186
======== ======== ======== ========
Fully diluted earnings per share:
Earnings per share $ 0.25 $ 0.19 $ 0.16 $ 0.16
======== ======== ======== ========
</TABLE>
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000732026
<NAME> TRIO-TECH INTERNATIONAL
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-29-1996
<PERIOD-START> JUN-30-1995
<PERIOD-END> DEC-29-1995
<CASH> 985
<SECURITIES> 1906
<RECEIVABLES> 5190
<ALLOWANCES> 0
<INVENTORY> 1476
<CURRENT-ASSETS> 9862
<PP&E> 17538
<DEPRECIATION> 12315
<TOTAL-ASSETS> 15543
<CURRENT-LIABILITIES> 6944
<BONDS> 0
<COMMON> 4848
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 15543
<SALES> 11322
<TOTAL-REVENUES> 11322
<CGS> 7084
<TOTAL-COSTS> 2761
<OTHER-EXPENSES> (449)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 76
<INCOME-PRETAX> 1850
<INCOME-TAX> 743
<INCOME-CONTINUING> 1107
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> (789)
<NET-INCOME> 318
<EPS-PRIMARY> .25
<EPS-DILUTED> .25
</TABLE>
