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 June 30, 1995 *
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 Number)
incorporation or organization)
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
July 2, 1995. For presentation purposes, the Company has indicated
its quarter end as June 30, 1995.
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 June 30, 1995, 3,115,934 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.
E
The results of operations for the nine months ended June 30, 1995,
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 Nine
Months Ended
June 30 June 30
1995 1994 1995 1994
Revenues $ 8,364 $ 8,612 $22,084 $20,299
Operating costs and expenses:
Cost of revenues 5,710 6,034 14,087 12,860
MG&A 2,627 2,525 7,725 7,317
8,337 8,559 21,812 20,177
Income from operations 27 53 272 122
Investment income, net 284 226 787 442
Income before provision
for income taxes 311 279 1,059 564
Provision for income taxes 34 17 79 28
Income before change in accounting for
income taxes 277 262 980 536
Change in accounting for income taxes
(SFAS No. 109) 0 0 0 1,511
Net income $ 277 $ 262 $ 980 $ 2,047
Per share:
Income before change in accounting for
income taxes $ .08 $ .08 $ .29 $ .16
Net income $ .08 $ .08 $ .29 $ .61
Shares used in per share
computations 3,316 3,282 3,366 3,359
See accompanying Notes to Condensed Consolidated Financial
Statements.
TCI INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
June 30, September 30,
1995 1994
(Unaudited)
ASSETS
Current assets
Cash and cash equivalents $ 2,120 $ 7,578
Short-term investments 16,629 11,938
Accounts receivable -
Billed 1,962 2,686
Unbilled 4,484 2,935
Refundable income taxes 0 739
Inventories 5,003 4,901
Prepaid expenses 406 490
Total current assets 30,604 31,267
Property and equipment, net 1,667 1,889
Other assets 90 85
Total assets $32,361 $33,241
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,906 $ 2,168
Customer deposits and billings on uncompleted
contracts in excess of revenue recognized
2,009 2,478
Accrued liabilities 4,013 4,523
Total current liabilities 7,928 9,169
Stockholders' equity:
Common stock:
Authorized - 5,000 shares, $.01 par value
Issued - 3,281 shares 11,780 11,993
Shares held in treasury at cost:
165 Shares in June 1995 (739) 0
78 Shares in Sept. 1994 0 (311)
Retained earnings 13,397 12,483
Valuation allowance-
short-term investments (5) (93)
Total stockholders' equity 24,433 24,072
Total liabilities and stockholders' equity
$32,361 $33,241
See accompanying Notes to Condensed Consolidated Financial
Statements.
TCI INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended June 30,
(In thousands)
1995 1994
Cash provided by (used in):
Operations:
Net income $ 980 $2,047
Reconciliation to cash provided by (used in) operations:
Depreciation 474 566
Gain on sale of investments 0 (226)
Effect of change in accounting for income taxes
(SFAS 109) 0 (1,511)
Changes in assets and liabilities:
Accounts receivable (825) 5,855
Refundable income taxes 739 0
Inventories (102) 1,136
Prepaid expenses 79 51
Accounts payable (262) 1,147
Customer deposits/billing
in excess of revenue (469) (2,671)
Accrued liabilities (511) (529)
Cash provided by (used in) operations 103 5,865
Investing activities:
Purchases of property and equipment (251) (104)
Purchases of short-term investments (5,963) (69,219)
Proceeds from sale of short-term
investments 1,360 63,319
Proceed from sale of building 0 703
Other 0 7
Cash used in investing activities (4,854) (5,294)
Financing activities:
Repurchase of common stock
for treasury stock (707) (695)
Cash used in financing activities (707) (695)
Net increase (decrease) in cash
and cash equivalents (5,458) (124)
Cash and cash equivalents
at beginning of period 7,578 5,739
Cash and cash equivalents
at end of period $ 2,120 $ 5,615
See accompanying Notes to Condensed Consolidated Financial
Statements
TCI INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 1
Inventories consist of the following (in thousands):
June 30, September 30,
1995 1994
(Unaudited)
Material and component parts $3,684 $3,235
Work-in-Process 1,319 1,666
$5,003 $4,901
Note 2
At June 30, 1995 there were outstanding standby letters of credit
of approximately $4,166,000 serving as performance and payment
bonds. The standby letters of credit expire at various dates
through 1997; 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 investment portfolio.
TCI INTERNATIONAL, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Third Fiscal Quarter of 1995
Compared to Third Fiscal Quarter of 1994
Revenues for the first nine months of fiscal year 1995 were
$22,084,000, an increase of 9% over revenues of $20,299,000 for the
same period a year ago. Revenues for the third quarter decreased
3% from $8,612,000 in fiscal year 1994 to $8,364,000 in fiscal year
1995. While the general business activity for the year has
increased compared to that of a year ago, variances in material
flows and the timing of completion of some fixed priced, long-term
contracts continue to contribute to quarter to quarter revenue and
gross profit fluctuations.
Gross profit as a percentage of revenue for the nine month period
decreased from 37% to 36% but increased from 30% to 32% for the
third quarter. The increase in gross profit as a percentage of
revenue is primarily due to the timing of completion of various
foreign and domestic contracts which have a range of gross profit
margins associated with them. Gross profit as a percentage of
revenue may decline further during the remaining three months of
the fiscal year due to competitive bidding pressures the Company
has recently experienced in its pursuit of its broadcast related
contracts.
Marketing, general and administrative expenses increased by 4% in
the third quarter and 6% for the nine month period ending June 30,
1995 compared with prior year periods. This variance is primarily
the result of increased marketing efforts.
Net investment income for the first nine months of fiscal year 1995
was $787,000, an increase of 78% over net investment income of
$442,000 for the same period in fiscal year 1994. This increase is
due to the benefit of comparatively higher interest rates.
Net income for the first nine months of fiscal year 1995 was
$980,000 or $0.29 per share, compared to net income of $2,047,000
or $0.61 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 $0.45 per share, to reflect the cumulative effect of adopting
SFAS No. 109 "Accounting for Income Taxes."
The Company's total backlog at June 30, 1995 was $34 million
compared to $28 million at September 30, 1994. The total funded
portion of the Company's backlog at June 30, 1995 was $20 million
compared to $21 million at September 30, 1994. The Company's
funded backlog excludes unfunded and unexercised options which the
Company believes are likely to be exercised
The results of operations for the first nine months in fiscal year
1995 are not necessarily indicative of future quarterly or annual
performance expectations.
TCI INTERNATIONAL, INC.
LIQUIDITY AND CAPITAL RESOURCES
June 30, 1995 Compared to September 30, 1994
Consolidated cash, cash equivalents and marketable securities
totaled $18,749,000 at June 30, 1995, compared to $19,516,000 at
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.
At June 30, 1995 , the Company has standby letters of credit
outstanding of approximately $4,166,000. The standby letters of
credit are collateralized by the Company's short-term investments.
The Company purchased 146,303 shares of its stock and retired
59,501 shares during the first nine months of the fiscal year. The
Company held 165,414 shares of treasury stock at June 30, 1995.
TCI INTERNATIONAL, INC.
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits: None
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)
Signature on File
John W. Ballard III
Vice President, Chief Financial Officer
(Duly authorized officer of the
registrant and principal
financial officer of the registrant)
Date: August 14, 1995