SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of September 1999
Electrocon International Inc.
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(Translation of Registrant's name into English)
8/F Blk 8, Prosperity Centre, 77 Container Port Road,
Kwai Chung, N.T. Hong Kong
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(Address of principal executive offices)
[Indicate by check mark whether the Registrant files or will file annual reports
under cover of Form 20-F or Form 40-F.]
Form 20-F X Form 40-F ______
[Indicate by check mark whether the Registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.]
Yes _____ No X
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Electrocon International Inc. NEWS RELEASE
8/F, Block B, Prosperity Center 77, For further information,
Container Port Road contact (303)380-2177
Kwai Chung, N. T. Hong Kong
ELECTROCON INTERNATIONAL, INC.
ANNOUNCES FINANCIAL RESULTS FOR THE
6 MONTH PERIOD ENDED JUNE 30, 1999
HONG KONG...September 2, 1999...Electrocon International, Inc. (NASDAQ: EPLFE),
a leading distributor of semiconductor components, agricultural equipment, golf
course irrigation systems and related golf equipment products in Hong Kong,
Macau, and China, announced financial results for the 6 month period ended June
30, 1999.
Net sales for the six month period ended June 30, 1999 were US$9,579,538, a
decrease of 17.2% from net sales of US$11,573,677 for the comparable six months
ended June 30, 1998.
The Company's gross profit on sales for the six month period ended June 30, 1999
was US$1,670,162 compared to US$1,992,310 for the comparable period in 1998, a
decline of 16.2%. Operating expenses decreased 13.1% to US$1,527,485 for the six
month period ended June 30,1999 from US$1,757,176 for the comparable six month
period in 1998. Operating income decreased 39.3% from US$235,134 for the six
month period ended June 30, 1998 to US$142,677 for the six month period ended
June 30, 1999. Net income increased 15.8% from US$82,281 for the six months
ended June 30, 1998 to US$95,326 for the six months ended June 30, 1999.
Edward Ting, Chairman and Chief Executive Officer of Electrocon stated, "the
financial performance for the first half of 1999 reflects the very significant
changes being made by our semiconductor division in the way it conducts its
business. During this period, we aggressively pursued marketing those products
that provide for larger gross margins and we produced more "rep" business on a
commission basis to reduce our exposure to rapid inventory depreciation. By
reducing our sales of low margin commodity products we expect to have a
reduction in total revenue but generate more gross profit per sale. As we have
for the last two years, we intend to continue to pursue our strategy of
diversifying our product offerings to include higher margin products and use our
design-in capabilities that adds value for our customers and distinguishes us
from our competition. Bothgreat Technologies, Inc., our wholly owned
agricultural, turf and irrigation equipment division, produced admirable results
for the first half of the year under severe conditions of less than adequate
working capital and Asian economic turmoil."
Electrocon International, Inc. has established itself as a significant
distributor of semiconductor products in Hong Kong and China for such companies
as Texas Instruments, Silicon Systems and TDK and as a distributor of
agricultural equipment, golf course turf and irrigation systems and related golf
equipment products in China for such companies as John Deere, Rainbird, Club Car
and J.R. Simplot.
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Electrocon International, Inc. and subsidiaries
Consolidated Statement of Operations (Unaudited) for
(Amounts stated in U.S. Dollars)
Six months ended June 30
1999 1998
---- ----
Net revenues $ 9,579,538 $ 11,573,677
Cost of sales 7,909,376 9,581,367
------------ ------------
Gross profit 1,670,162 1,992,310
Operating expenses 1,527,485 1,757,176
------------ ------------
Income from operations 142,677 235,134
Interest income 122,604 106,086
Interest expense (254,009) (260,253)
Share of losses of an affiliated company (261) (35,464)
Other income 84,315 58,484
------------ ------------
Income before taxes 95,326 103,987
Provision tor taxes -- 21,706
------------ ------------
Net income $ 95,326 $ 82,281
============ ============
Earnings per common share $ 0.0128 $ 0.0121
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<TABLE>
<CAPTION>
Electrocon International, Inc. and subsidiares
Consolidated Balance Sheet (Unaudited) as at
(Amounts stated in U.S. Dollars)
6/30/99 6/30/98
------- -------
Assets
Current Assets
<S> <C> <C>
Cash and cash equivalents $ 3,752,156 $ 4,118,836
Accounts receivable
- Trade 3,925,590 4,355,488
- Affiliated company 255,517 165,610
- Others 224,317 105,301
Inventories 2,550,531 3,046,796
Prepaid expenses and deposits 125,165 94,744
------------ ------------
Total current assets $ 10,833,275 $ 11,886,775
Property and Equipment, net 594,652 677,936
Intangible assets 98,773 --
Investment in affiliated companies 1,973 447,031
Other 338,890 83,846
Total assets $ 11,867,562 $ 13,095,588
============ ============
Liabilities and stockholders' equity
Current liabilities
Short-term borrowings $ 4,739,601 $ 1,029,257
Loan from related company 500,000 --
Accounts payable and accrued expenses
- Trade 3,747,228 9,380,889
- Others 196,335 21,706
Billings in excess of costs on construction contracts 150,061 --
Amount due to a director 277,795 52,241
------------ ------------
Total current liabilities $ 9,611,021 $ 10,484,093
Deferred tax liability 45,472 21,566
Total liabilities 9,656,493 10,505,659
Stockholders' equity
Common stock 746 716
Additional paid-in capital 6,223,997 5,942,627
Accumulated deficits (3,976,329) (3,316,070)
Foreign currency translation (37,344) (37,344)
------------ ------------
Total stockholders' equity 2,211,070 2,589,929
Total liabilities and stockholders' equity $ 11,867,563 $ 13,095,588
============ ============
</TABLE>
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Electrocon International, Inc. and subsidiaries
Business Segment Information (Unaudited) for the period ended
(Amounts stated in U.S. dollars)
GEOGRAPHIC SEGMENT
Hong Kong USA PRC TOTAL
--------- --- --- -----
Net revenues $ 7,440,499 $ -- $ 2,139,040 $ 9,579,539
Operating income (loss) 64,102 -- 78,575 142,677
Total assets $11,379,459 $ 3,799 $ 484,304 $11,867,562
INDUSTRIAL SEGMENT
Semi- Golf
conductors equipment Other TOTAL
---------- --------- ----- -----
Net revenues $ 7,421,206 $ 2,158,333 $ -- $ 9,579,539
Operating income (loss) 38,061 104,616 -- 142,677
Total assets $ 8,696,320 $ 3,167,444 $ 3,799 $11,867,562
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
ELECTROCON INTERNATIONAL INC.
(Registrant)
Date: September 1, 1999 By: /s/ Henry F. Schlueter
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Henry F. Schlueter, Assistant Secretary
