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 28, 1997
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 17, 1997, the Registrant had outstanding approximately 1,285,850
Shares of Common Stock.
This document contains a total of 7 pages.
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
TRIO-TECH INTERNATIONAL
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
Mar. 27 Jun. 28,
1996 1996
(unaudited)
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ASSETS
CURRENT ASSETS
Cash $ 1,049 $ 2,114
Certificates of deposit 5,520 3,114
Accounts receivable - net 4,236 4,783
Notes & other receivables 177 179
Inventories 2,025 1,430
Prepaid expenses 278 140
Total current assets 13,285 11,760
PROPERTY, EQUIPMENT AND CAPITALIZED LEASES, NET 4,484 5,330
OTHER ASSETS 286 326
TOTAL ASSETS $ 18,055 $ 17,416
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable $ 162 $ 245
Accounts payable 1,553 1,813
Accrued expenses 3,583 4,032
Income taxes payable 1,817 1,598
Current portion of long-term debt and
capitalized leases 151 481
Total current liabilities 7,266 8,169
LONG-TERM DEBT AND CAPITALIZED LEASES,
Net of current portion 624 688
DEFERRED TAXES 760 771
MINORITY INTEREST 3,291 2,581
SHAREHOLDERS' EQUITY:
Common stock; authorized, 2,500,000 shares;
issued and outstanding, 1,285,850 shares at
March 28, 1997, and 1,205,804 shares at
June 28, 1996 stated at 5,063 4,878
Accumulated deficit (667) (1,336)
Cumulative currency translation 1,718 1,665
Total shareholders' equity 6,114 5,207
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 18,055 $ 17,416
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[FN]
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. 28, MAR. 29, MAR. 28, MAR. 29,
1996 1995 1996 1995
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Revenues $ 16,066 $ 16,269 $ 5,031 $ 4,947
Cost of revenues 9,782 9,869 2,968 2,785
Gross profit 6,284 6,400 2,063 2,162
Selling, general &
administrative expenses 4,305 4,148 1,527 1,387
Income from operations 1,979 2,252 536 775
Other income (expense):
Interest expense (92) (113) (30) (37)
Other income (expense) 492 306 177 (143)
Total 400 193 147 (180)
Income before income taxes and
minority interest 2,379 2,445 683 595
Income taxes 900 947 228 204
Income before minority interest 1,479 1,498 455 391
Minority interest (810) (977) (157) (188)
Net income $ 669 $ 521 $ 298 $ 203
Earnings per share:
Primary $ 0.52 $ 0.41 $ 0.23 $ 0.16
Fully diluted $ 0.51 $ 0.41 $ 0.23 $ 0.16
Weighted average number of
shares outstanding:
Primary 1,294 1,267 1,310 1,269
Fully diluted 1,301 1,277 1,321 1,269
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[FN]
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. 28, Mar. 29,
1997 1996
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Cash flows from operating activities:
Net income $ 669 $ 521
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 1,030 1,149
Loss on disposal of property and equipment 54
Effect of exchange rate changes on
Operating assets 8 (196)
Increase (decrease) in cash from changes
in assets and liabilities:
Accounts receivable, net 547 473
Notes and other receivables 2 16
Inventories (595) (449)
Prepaid expenses & other current assets (138) (33)
Other assets 10 20
Accounts payable and accrued expenses (490) 1,282
Deferred taxes (11) (6)
Net cash provided by operating activities 1,086 2,777
Cash flows from investing activities:
Certificates of deposit (2,406) (2,674)
Capital expenditures, net (513) (603)
Minority interest 651 1,114
Net cash used in investing activities (2,268) (2163)
Cash flows from financing activities:
Payments on notes payable and lines of
credit (227) (215)
Borrowings under notes payable 104 0
Proceeds from long-term borrowings (133) 340
Payments for long-term debt (210) (94)
Issuance of common stock 185 56
Net cash (used in) provided by
financing activities (281) 80
Effect of exchange rate changes on cash 398 (326)
Net (decrease) increase in cash (1,065) 375
Cash, beginning of the period 2,114 674
Cash , end of the period $ 1,049 $ 1,049
Supplemental disclosure of cash flow information
Cash paid during the period for:
Interest $ 93 $ 112
Income taxes $ 667 $ 153
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[FN]
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 28, 1997, and for the nine-month
period ending March 28, 1997, 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 nine-month periods ending March
28, 1997 and March 29, 1997, are not necessarily indicative of the results
expected for a full year.
NOTE 2. Inventories
The composition of inventories is as follows (in thousands):
Mar. 28, June 28,
1997 1996
(unaudited)
Raw materials $ 764 $ 640
Work in process 607 294
Finished goods 654 496
$ 2,025 $ 1,430
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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 improved $ 2,428,000 during the first three
quarters. This is due to increases in cash and cash equivalents, inventories
and decreases in accounts payable and accrued expenses.
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. There
were no borrowings under this line as of March 28, 1997. The interest rate
on borrowings is at the bank's prime rate 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. Borrowings under the line
amounted to $ 2,000 as of March 28, 1997. Interest is at the bank's prime
rate (13.25% atMarch 28, 1997) plus 4.75%.
The Company's subsidiary, EETC, has a credit agreement with a bank which
provides a term loan of $555,000. Borrowings under this agreement amounted to
$356,000 as of March 28, 1997. Interest is at the bank's prime rate (5.75% at
March 28, 1997) plus 3%.
The Company has a revolving line of credit of $150,000 from a bank bearing
interest at 1.5% above the bank's reference rate (9.75% at March, 28 1997).
Borrowings under the line amounted to $120,000 as of March 28, 1997.
2. Material Changes in Financial Condition
There were no material changes in the financial condition of the Company as of
March 28, 1997.
3. Material Changes in Results of Operations
There were no material changes in the results of operations of the Company
during the nine-month period ending March 28, 1997.
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 8, 1997
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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. 28, MAR. 29, MAR. 28, MAR. 29,
1997 1996 1997 1996
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Net income $ 669 $ 521 $ 298 $ 203
Primary earnings per share:
Weighted average number of
common shares outstanding 1,228 1,186 1,256 1,191
Dilutive effect of stock
options after application
of treasury stock method 66 81 54 78
Number of shares used to compute
primary earnings per share 1,294 1,267 1,310 1,269
Primary earnings per share $ 0.52 $ 0.41 $ 0.23 $ 0.16
Fully diluted earnings per share:
Weighted average number of
common shares outstanding 1,294 1,186 1,256 1,191
Dilutive effect of stock
options after application
of treasury stock method 73 91 65 78
Number of shares used to compute
fully diluted earnings per share 1,301 1,277 1,321 1,269
Fully diluted earnings per share $ 0.51 $ 0.41 $ 0.23 $ 0.16
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<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000732026
<NAME> TRIO-TECH INTERNATIONAL
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-27-1997
<PERIOD-END> MAR-28-1997
<CASH> 1049
<SECURITIES> 5520
<RECEIVABLES> 4413
<ALLOWANCES> 0
<INVENTORY> 2025
<CURRENT-ASSETS> 13285
<PP&E> 16647
<DEPRECIATION> 12163
<TOTAL-ASSETS> 18055
<CURRENT-LIABILITIES> 7266
<BONDS> 0
<COMMON> 5063
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 18055
<SALES> 16066
<TOTAL-REVENUES> 16066
<CGS> 9782
<TOTAL-COSTS> 9782
<OTHER-EXPENSES> 6699
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 92
<INCOME-PRETAX> 1569
<INCOME-TAX> 900
<INCOME-CONTINUING> 669
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 669
<EPS-PRIMARY> .52
<EPS-DILUTED> .51
</TABLE>
