UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1994 *
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period N/A
Commission file number: 0-10877
TCI INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Delaware 94-3026925
(State of other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
222 Caspian Drive, Sunnyvale, California 94089-1014
(Address of principal executive offices) (Zip Code)
(408)747-6100
(Registrant's telephone number, including area code)
* The Company is on a 52/53 week fiscal year. The quarter ended on January
1, 1995. For presentation purposes, the Company has indicated its quarter end
as December 31, 1994.
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed 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 January 31, 1995, 3,150,311 shares of Common Stock were outstanding.
TCI INTERNATIONAL, INC.
PART I FINANCIAL INFORMATION
Condensed Consolidated Financial Statements
(Unaudited)
The unaudited condensed consolidated financial statements included herein have
been prepared by the Company pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations, although the Company believes the
information included herein, when read in conjunction with the financial
statements and related notes included in the Company's Annual Report on Form
10-K for the year ended September 30, 1994, filed with the Securities and
Exchange Commission, to be not misleading. Further, the following financial
statements reflect, in the opinion of management, all adjustments necessary to
present fairly the financial position and results of operations as of and for
the periods indicated.
The results of operations for the three months ended December 31, 1994, are
not necessarily indicative of results to be expected for the entire year
ending September 30, 1995.
TCI INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except per share amounts)
Three Months Ended
December 31,
1994 1993
Revenues $ 6,839 $ 5,981
Operating Costs and Expenses:
Cost of revenues 3,923 3,735
Marketing, general and administrative 2,678 2,186
6,601 5,921
Income from operations 238 60
Investment income, net 188 124
Income before provision for income taxes 426 184
Provision for income taxes 26 6
Income before change in accounting for
income taxes and extraordinary item 400 178
Change in accounting for income taxes
(SFAS 109) 0 1,511
Net Income $ 400 $ 1,689
Per Share:
Income before change in accounting
for income taxes and extraordinary
item $ 0.12 $ 0.05
Net income $ 0.12 $ 0.49
Shares used in per share computations 3,237 3,439
See accompanying Notes to Condensed Consolidated Financial Statements.
TCI INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In Thousands)
December 31, September 30,
1994 1994
ASSETS
Current Assets
Cash and cash equivalents $ 5,579 $ 7,578
Short-term investments 14,348 11,938
Accounts receivable -
Billed 1,566 2,686
Unbilled 3,178 2,935
Refundable income taxes 172 739
Inventories 4,868 4,901
Prepaid expenses 497 490
Total current assets 30,208 31,267
Property and Equipment, net 1,805 1,889
Other Assets 89 85
Total Assets $32,102 $33,241
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 1,890 $ 2,168
Customer deposits and billings on
uncompleted contracts in excess of
revenue recognized 1,964 2,477
Accrued liabilities 4,063 4,524
Total current liabilities 7,917 9,169
Stockholders' Equity:
Common Stock:
Authorized - 5,000 shares, $.01 par value
Issued - 3,341 shares 11,993 11,993
Shares held in treasury at cost:
142 Shares in Dec. 1994 (590) (311)
78 Shares in Sept. 1994 0 0
Retained earnings 12,884 12,483
Valuation allowance - short-term
investments (102) (93)
Total stockholders' equity 24,185 24,072
Total Liabilities and
Stockholders Equity $32,102 $33,241
See accompanying Notes to Condensed Consolidated Financial Statements.
TCI INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
Three Months Ended
December 31,
1994 1993
Cash provided by (used in):
Operations:
Net income $ 400 $ 1,689
Reconciliation to cash provided by
(used in) operations:
Depreciation 153 206
Gain on sale of investments 0 (82)
Effect of change in accounting for
income taxes (SFAS 109) 0 (1,511)
Changes in assets and liabilities:
Accounts receivable 877 (2,051)
Refundable income taxes 567 0
Inventories 34 577
Prepaid expenses (11) (67)
Accounts payable (133) 282
Customer deposits (514) (746)
Accrued liabilities (606) (441)
Cash provided by (used in) operations 767 (2,144)
Investing activities:
Purchases of property and equipment (69) (4)
Purchases of short-term investments (2,419) (9,065)
Proceeds from sale of short-term investments 0 11,154
Other 0 38
Cash provided by (used in) investing activities (2,488) 2,123
Financing activities:
Repurchase of common stock for treasury stock (278) (24)
Cash used in financing activities (278) (24)
Net decrease in cash and cash equivalents (1,999) (45)
Cash and cash equivalents at beginning of year 7,578 5,739
Cash and cash equivalents at end of year $ 5,579 $ 5,694
See accompanying Notes to Condensed Consolidated Financial Statements
TCI INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1
Inventories included in the consolidated balance sheet consist of the
following:
December 31, September 30,
1994 1994
(In thousands)
[S] [C] [C]
Material and component parts $ 3,182 $ 3,235
Work-in-Process 1,686 1,666
$ 4,868 $ 4,901
Note 2
At December 31, 1994, there were outstanding standby letters of credit of
approximately $3,100,000 serving as performance and payment bonds. The
standby letters of credit expire at various dates through 1996; however,
certain performance bonds are automatically renewable until canceled by the
beneficiary. These outstanding standby letters of credit are fully secured by
the Company's short term investments.
TCI INTERNATIONAL, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
First Fiscal Quarter of 1995
Compared to First Fiscal Quarter of 1994
Revenues for the first three months of fiscal year 1995 were $6,839,000, an
increase of 14% over revenues of $5,981,000 for the same period in fiscal year
1994. The increase in revenues is due to increased material flows on various
fixed price contracts. Gross profit as a percentage of revenue for the first
quarter increased from 38% in fiscal year 1994 to 42% in fiscal year 1995
principally due to the recent completion of a significantly sized, long-term
contract which contributed little or no gross profit over each of the
respective reporting periods during the last four years.
Marketing, general and administrative expenses increased 23% from $2,186,000
in the first quarter of fiscal year 1994 to $2,678,000 in the first quarter of
fiscal year 1995. This increase is due to intensified marketing efforts as
well as an increase in independent research and development expenditures, a
portion of which are targeted to position the Company's products for sale into
related commercial markets.
Investment income, net for the first three months of fiscal year 1995 was
$188,000, an increase of 52% from investment income, net of $124,000 for the
same period in fiscal year 1994. This increase is due to the higher balance
of cash, cash equivalents and short-term investments as well as the benefit of
comparatively higher interest rates.
Net income for the first three months of fiscal year 1995 was $400,000, or
$0.12 per share, compared to net income of $1,689,000, or $0.49 per share for
the same period in fiscal year 1994. The net income for fiscal year 1994
included the benefit of $1,511,000, or $0.44 per share, to reflect the
cumulative effect of adopting SFAS No. 109 "Accounting for Income Taxes." The
average number of shares outstanding was 3,236,698 for the first three months
of fiscal year 1995, and 3,439,451 for the same period in fiscal year 1994.
The decline in the number of outstanding shares is a reflection of the
Company's continuing efforts to repurchase its stock under a stock repurchase
program initially authorized by its Board of Directors in December of 1993.
The results of operations for the first three months in fiscal year 1995 are
not necessarily indicative of future quarterly or annual performance
expectations.
FINANCIAL CONDITION
December 31, 1994 Compared to September 30, 1994
Consolidated cash, cash equivalents and marketable securities totaled
$19,927,000 on December 31, 1994, compared to $19,516,000 on September 30,
1994. The Company currently believes that its cash, cash equivalents and
short-term investments, together with expected revenues from operations, will
be sufficient to fund its operations through fiscal 1995.
As of December 31, 1994 , the Company has standby letters of credit
outstanding of approximately $3,100,000. The standby letters of credit are
collateralizedby the Company's short-term investments.
TCI INTERNATIONAL, INC.
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits:
10.6 First Amendment to Credit agreement between the Company and Wells
Fargo Bank, National Association
b. Reports on Form 8-K: None
No other applicable items.
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.
TCI INTERNATIONAL, INC.
(Registrant)
Date: February 14, 1995
John W. Ballard III
Vice President,
Chief Financial Officer
(Duly authorized officer of the
registrant and principal
financial officer of the
registrant)