-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Cib5UYTg2qqeTEyJc/WuwrqarHyNAbwSNaH2UBfeltCuY1XfGTmfGxqOIXiN0Scg qVtOakaymWyB2UdGlTQ8Pw== 0000732026-97-000008.txt : 19971111 0000732026-97-000008.hdr.sgml : 19971111 ACCESSION NUMBER: 0000732026-97-000008 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971110 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRIO TECH INTERNATIONAL CENTRAL INDEX KEY: 0000732026 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-TESTING LABORATORIES [8734] IRS NUMBER: 952086631 STATE OF INCORPORATION: CA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-13914 FILM NUMBER: 97711984 BUSINESS ADDRESS: STREET 1: 355 PARKSIDE DR CITY: SAN FERNANDO STATE: CA ZIP: 91340 BUSINESS PHONE: 8183659200 MAIL ADDRESS: STREET 1: 355 PARKSIDE DRIVE CITY: SAN FERNANDO STATE: CA ZIP: 91340 10-Q 1 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 September 26, 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 October 24, 1997, the Registrant had outstanding approximately 1,962,662* Shares of Common Stock. * See PART II. OTHER INFORMATION, ITEM 2 in connection with a 3-for-2 stock split, effective October 7, 1997. This document contains a total of 9 pages. PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS
TRIO-TECH INTERNATIONAL CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (In Thousands) Sep. 26, Jun. 27, 1997 1997 (a) ASSETS CURRENT ASSETS Cash $ 603 $ 868 Cash deposits 6,545 7,104 Accounts receivable - net 3,259 3,646 Notes and other receivables 690 161 Inventories 1,786 1,784 Prepaid expenses and other current assets 373 280 --------- --------- Total current assets 13,256 13,843 PROPERTY, EQUIPMENT AND CAPITALIZED LEASES, net 3,870 4,421 OTHER ASSETS 166 264 --------- --------- TOTAL ASSETS $ 17,292 $ 18,528 ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Notes payable $ 250 $ 150 Accounts payable 1,250 1,121 Accrued expenses 3,155 3,605 Income taxes payable 2,117 1,965 Current portion of long-term debt and capitalized lease 182 198 -------- --------- Total current liabilities 6,954 7,039 LONG-TERM DEBT AND CAPITALIZED LEASES, net of current portion 621 723 DEFERRED TAXES 723 776 MINORITY INTEREST 3,816 3,527 SHAREHOLDERS' EQUITY: Common stock; authorized, 15,000,000 shares; issued and outstanding, 1,290,500 shares at September 26, 1997 and 1,291,064 shares at June 27, 1997 stated at 5,075 5,075 Accumulated deficit (123) (334) Cumulative currency translation 226 1,722 -------- ------- Total shareholders' equity 5,178 6,463 -------- ------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 17,292 $ 18,528 ======== ======== (a) (b) DERIVED FROM AUDITED CONSOLIDATED FINANCIAL STATEMENTS INCLUDED IN THE FORM 10K FOR THE FISCAL YEAR ENDED JUNE 27, 1997. SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
TRIO-TECH INTERNATIONAL CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited) (In Thousands, except Earnings per Share Data) THREE MONTHS ENDED ------------------ SEP. 26, SEP. 27, 1997 1996 ---------- ---------- NET SALES $ 5,095 $ 5,616 COST OF SALES 3,314 3,322 ------------ -------- GROSS PROFIT 1,781 2,294 OPERATING EXPENSES Selling, general and administrative expenses 1,449 1,416 ------------ ------- INCOME FROM OPERATIONS 332 878 OTHER INCOME (EXPENSE) Interest expense (24) (35) Other income 113 126 ----------- -------- Total 89 91 ----------- -------- INCOME BEFORE INCOME TAXES AND MINORITY INTEREST 421 969 INCOME TAXES 162 421 ----------- -------- INCOME BEFORE MINORITY INTEREST 259 548 ----------- -------- MINORITY INTEREST (48) (379) ----------- -------- NET INCOME $ 211 $ 169 =========== ======== EARNINGS PER SHARE: Primary $ 0.16 $ 0.13 Pro forma (see Note 3) $ 0.11 $ 0.09 Fully diluted $ 0.16 $ 0.13 Pro forma (see Note 3) $ 0.11 $ 0.09 WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: Primary 1,339 1,280 Fully diluted 1,364 1,289 SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
TRIO-TECH INTERNATIONAL CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (In Thousands) THREE MONTHS ENDED ------------------ SEP. 26, SEP. 27, 1997 1996 -------- --------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 211 $ 169 Adjustments to reconcile net income to cash provided by operations: Depreciation and amortization 294 370 Loss on disposal of property and equipment 37 Effect of exchange rate changes on operating assets (1,586) (29) Changes in assets and liabilities: Accounts receivable, net 387 (125) Notes and other receivables (529) (224) Inventories (2) (383) Prepaid expenses and other current assets (93) (131) Other assets 87 3 Accounts payable and accrued expenses (169) 402 Deferred taxes (53) (1) ---------- -------- Total adjustment (1,664) (81) ---------- -------- Net cash (used in) provided by operating activities (1,453) 88 ---------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Maturity (purchase) of cash deposits 559 (1,551) Capital expenditures, net (484) (17) Minority interest 30 305 --------- -------- Net cash provided by (used in) investing activities 105 (1,263) --------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: Payments on notes payable and lines of credit 100 (104) Borrowings under notes payable 30 Repayment of long-term obligations (118) (126) Issuance of common stock 0 6 --------- -------- Net cash used in financing activities (18) (194) --------- -------- EFFECT OF EXCHANGE RATE CHANGES ON CASH 1,101 (2) NET DECREASE IN CASH (265) (1,371) CASH, BEGINNING OF THE PERIOD 868 2,114 --------- -------- CASH , END OF THE PERIOD $ 603 $ 743 ========= ======== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for: Interest $ 24 $ 29 Income taxes $ 0 $ 25 SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
TRIO-TECH INTERNATIONAL NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1. Basis of Presentation The interim consolidated financial statements as of September 26, 1997, and for the three-months ended September 27, 1996, are unaudited. In the opinion of management, the unaudited consolidated 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 interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's Annual Report for fiscal year ended June 27, 1997. The consolidated results of operations for the three-month periods ending September 26, 1997 and September 27, 1996, are not necessarily indicative of the results expected for a full year. Earnings per Share - Earnings per share is based upon the weighted average number of shares outstanding and common stock equivalents (consisting of stock options), excluding those common stock equivalents which would be anti-dilutive. The following amounts would have been presented had the Company computed earnings per share under Statement of Financial Accounting Standards No. 128, Earnings per Share: [/TABLE] [CAPTION] Sept. 26, Sept. 27, 1997 1996 --------- -------- [S] [C] [C] Basic $ 0.16 $ 0.14 Diluted $ 0.16 $ 0.13 [/TABLE] NOTE 2. Inventories The composition of inventories is as follows (in thousands):
Sept. 26, June 27, 1997 1997 --------- --------- Raw materials $ 502 $ 551 Work in process 742 526 Finished goods 542 707 ---------- --------- $ 1,786 $ 1,784
NOTE 3. Shareholders' Equity In September, 1997 the Board of Directors approved a three-for-two stock split. The date of distribution of the stock split was October 7, 1997. The pro forma earnings per share amounts show the effect of the stock split. NOTE 4. Stock Options The Company applies Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations in accounting for its Plan. Accordingly, no compensation expense has been recognized. Had compensation cost for the Company's Plan been determined based upon the fair value at the grant date for awards under this Plan consistent with the methodology prescribed under Statement of Financial Accounting Standards No. 123, Accounting for Stock Based Compensation, the Company's net income and earnings per share would have been reduced to the pro forma amounts indicated below: (in thousands) Quarter Ended Sept. 26, 1997 Sept. 27, 1996 -------------- -------------- Net Income (Loss): As Reported $ 210 $ 169 Pro forma ($ 313) ($ 257) Earnings (Loss) per Share: As Reported $ 0.16 $ 0.13 Pro forma ($ 0.23) ($ 0.20) Using the Black Scholes option-pricing model with the assumptions listed below. Quarter Ended Sept. 26, 1997 Sept. 27, 1996 -------------- -------------- Volatility 40.5% 45.0% Expected Life 2.0 1.4 Discount rate 6.1% 5.9% NOTE 5. Subsequent Event On October 31, 1997 and November 4, 1997, the Company completed a $3,800,000 private placement consisting of 699,200 shares of common stock together with redeemable 3 year warrants to purchase 3649,600 shares of additional common stock. The sale resulted in net proceeds to the Company of $3,351,000. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 1. Liquidity and Capital Resources Due to the devaluation of currencies in Southeast Asia relative to the U.S. dollar, the Company's working capital decreased by $502,000 to $6,302,000 during the quarter ended September 26, 1997 as compared to the fiscal year ended June 27, 1997. 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. Borrowings under these lines amounted to $100,000 as of September 26, 1997. The interest rate on borrowings is at the bank's prime rate (6.5% at September 26, 1997) plus 2%. Borrowings under this agreement are collateralized by substantially all of TTI Pte's assets. The Company's subsidiary, TTM, has obtained a line of credit from a bank which provides for borrowings of $76,000. There were no borrowings under the line as of September 26, 1997. 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. There were no borrowings under the line as of September 26, 1997. The Company's subsidiary, EETC, has a credit agreement with a bank which provides a term loan of $400,000. Borrowings under these lines amounted to $327,000 as of September 26, 1997. Interest is at the bank's prime rate (5.84% at September 27,1996) plus 3.5%. The Company has a revolving line of credit of $150,000 from a bank bearing interest at 1.8% above the bank's reference rate (10.0% at September 26, 1997). Borrowings under the line amounted to $150,000 as of September 26, 1997. 2. Material Changes in Financial Position Total shareholders' equity was $5,178,000 at September 26,1997 as compared to $6,463,000 at June 27, 1997, a decrease of 19.9%, due to a currency devaluation in Thailand and weaknesses in currency exchange rates in Southeast Asia relative to the U.S. dollar. 3. Material Changes in Results of Operations There were no material changes in the results of operations of the Company during the three month period ending September 26, 1997. 4.Subsequent Equity Financing Subsequent to the end of the fiscal quarter ended September 27, 1997, the Company raised net proceeds of $3,351,000 from a private sale of 699,200 shares of common stock and warrants to purchase 349,600 additional shares of common stock (see Item 5 of Part II below). PART II. OTHER INFORMATION Item 2. Changes in securities. On September 30, 1997, the Company declared a three-for-two stock split of its Common Stock, effective October 7, 1997. In connection therewith, the authorized Common Stock of the Company was increased from 10,000,000 to 15,000,000 shares by means of an amendment to the Company's Articles of Incorporation. The stock split took the form of a 50% stock dividend. Fractional interests resulting from the stock split were rounded down to the nearest whole share, with the balance being paid in cash. As a result of the stock split, the number of outstanding shares of Common Stock increased to approximately 1,962,662. Item 5. Other Information. Subsequent to the end of fiscal quarter, on October 31 and November 4, 1997, the Company completed a $3,800,000 private placement consisting of 699,200 shares of common stock together with redeemable 3 year warrants to purchase 349,600 shares of additional common stock. This private offering was placed through Paragon Capital Corporation. The net proceeds of the private placement will be used to expand the Company's U.S. Operations, including those of Universal Systems following the anticipated acquisition of Universal Systems; and for working capital and general corporate purposes. 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: November 10, 1997 EX-11 2
TRIO-TECH INTERNATIONAL EXHIBIT 11.1 STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS (unaudited) (in thousands, except Earnings per Share Data) THREE MONTHS ENDED SEP. 26, SEP. 27, 1997 1996 Net income $ 211 $ 169 Primary earnings per share: Weighted average number of common shares outstanding 1,291 1,206 Dilutive effect of stock options and warrants after application of treasury stock method 48 74 ------------ ------- Number of shares used to compute primary earnings per share 1,339 1,280 ============ ======= Primary earnings per share $ 0.16 $ 0.13 Pro forma (see Note 3) $ 0.11 $ 0.09 Fully diluted earnings per share: Weighted average number of common shares outstanding 1,291 1,206 Dilutive effect of stock options and warrants after application of treasury stock method 73 83 ------------ ------- Number of shares used to compute fully diluted earnings per share 1,364 1,289 ============ ======= Primary earnings per share $ 0.16 $ 0.13 Pro forma (see Note 3) $ 0.11 $ 0.09
EX-27 3
5 0000732026 TRIO-TECH INTERNATIONAL 1000 U.S. DOLLARS 3-MOS JUN-26-1998 JUN-28-1997 SEP-26-1997 1 7148 0 3949 0 1786 13256 15114 (11244) 17292 6954 0 0 0 5075 103 17292 5095 5095 3314 1384 0 0 24 373 162 211 0 0 0 211 0.16 0.16
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