U. S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1998
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER: 0-25844
TAITRON COMPONENTS INCORPORATED
(Exact Name of Registrant as Specified in Its Charter)
CALIFORNIA 95-4249240
(State Or Other Jurisdiction of (I.R.S. Employer
Incorporation Or Organization) Identification No.)
25202 ANZA DRIVE
SANTA CLARITA, CALIFORNIA 91355
(Address Of Principal Executive Offices)
(805) 257-6060
(Registrant's Telephone Number, Including Area Code)
NONE
(Former Name, Address and Fiscal Year, if Changed Since Last Report)
Check 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
----- -----
State the number of shares outstanding of each of the issuer's classes
of common equity as of the latest practicable date:
Class A Common Stock, $.001 par value, 5,462,696 shares outstanding as of
July 15, 1998
Class B Common Stock, $.001 par value, 762,612 shares outstanding as of
July 15, 1998
TABLE OF CONTENTS
ITEM PAGE NO.
- ----- --------
PART I. FINANCIAL INFORMATION 3
Item 1. Financial Statements 3
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9
PART II. OTHER INFORMATION 13
Item 6. 13
Page 2 of 14
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
TAITRON COMPONENTS INCORPORATED
Balance Sheets
(Dollars in Thousands)
ASSETS June 30, December 31,
1998 1997
---------- ------------
(Unaudited)
Current assets:
Cash and cash equivalents $ 141 163
Trade accounts receivable, net 4,700 5,398
Inventory 37,940 35,757
Prepaid expenses 155 169
Other current assets 232 436
------- -------
Total current assets 43,168 41,923
Property and equipment, net 2,795 2,309
Deferred income taxes 716 716
Other assets 35 37
------- -------
Total assets $ 46,714 44,985
------- -------
------- -------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt 14,619 12,969
Trade accounts payable 3,347 3,235
Accrued liabilities 632 935
------- -------
Total current liabilities 18,598 17,139
------- -------
Long-term debt, less current portion 3,465 3,475
------- -------
Shareholders' equity:
Preferred stock, $.001 par value. Authorized 5,000,000
shares; none issued or outstanding -- --
Class A common stock, $.001 par value. Authorized
20,000,000 shares; issued and outstanding
6,318,374 shares 5 5
Class B common stock, $.001 par value. Authorized,
issued and outstanding 762,612 shares 1 1
Additional paid-in capital 12,358 12,997
Foreign currency translation adjustment (69) (57)
Retained earnings 12,356 11,425
------- -------
Total shareholders' equity 24,651 24,371
------- -------
Total liabilities and shareholders' equity $ 46,714 44,985
------- -------
------- -------
See accompanying notes to financial statements
Page 3 of 14
TAITRON COMPONENTS INCORPORATED
Statements of Earnings
(Dollars in thousands, except per share amounts)
Three months ended June 30, Six months ended June 30,
1998 1997 1998 1997
(Unaudited) (Unaudited)
Net sales $ 7,646 $ 8,502 $ 16,219 $ 16,518
Cost of goods sold 5,392 5,983 11,465 11,554
-------- -------- --------- ---------
Gross profit 2,254 2,519 4,754 4,964
Selling, general and administrative expenses 1,213 1,337 2,577 2,527
-------- -------- --------- ---------
Operating earnings 1,041 1,182 2,177 2,437
Interest expense, net 318 219 608 456
Other expense (income), net 7 (10) 15 (9)
-------- -------- --------- ---------
Earnings before income taxes 716 973 1,554 1,990
Income tax expense 288 392 623 800
-------- -------- --------- ---------
Net earnings $ 428 $ 581 $ 931 $ 1,190
-------- -------- --------- ---------
-------- -------- --------- ---------
Basic earnings per share $ .07 $ .09 $ .15 $ .18
-------- -------- --------- ---------
-------- -------- --------- ---------
Diluted earnings per share $ .07 $ .09 $ .15 $ .18
-------- -------- --------- ---------
-------- -------- --------- ---------
Basic weighted average shares outstanding 6,244,000 6,670,000 6,244,000 6,670,000
--------- --------- --------- ---------
--------- --------- --------- ---------
Diluted weighted average shares outstanding 6,290,000 6,752,000 6,290,000 6,752,000
--------- --------- --------- ---------
--------- --------- --------- ---------
See accompanying notes to financial statements
Page 4 of 14
TAITRON COMPONENTS INCORPORATED
Statements of Shareholders' Equity
Six Months Ended June 30, 1998 and 1997
(Dollars in Thousands)
(Unaudited)
Class A Class B Additional Foreign Total
Common Common Paid-in Retained Currency Shareholders'
Stock Stock Capital Earnings Translation Equity
-------- -------- --------- ---------- ----------- ------------
Balance at January 1, 1998 $5 $1 $12,997 $11,425 $(57) $24,371
Repurchase of Class A Common (350) (350)
Foreign currency translation - -
Net earnings 503 503
----- ----- ------- ------- ---- -------
Balance at March 31, 1998 $5 $1 $12,647 $11,928 $(57) $24,524
Options exercised 12 12
Repurchase of Class A Common (301) (301)
Comprehensive income (12) (12)
Net earnings 428 428
----- ----- ------- ------- ---- -------
Balance at June 30, 1998 $5 $1 $12,358 $12,356 $(69) $24,651
----- ----- ------- ------- ---- -------
----- ----- ------- ------- ---- -------
Balance at January 1, 1997 $6 $1 $14,531 $9,575 - $24,113
Repurchase of Class A Common (404) (404)
Net earnings 609 609
----- ----- ------- ------- ---- -------
Balance at March 31, 1997 $6 $1 $14,127 $10,184 - $24,318
Repurchase of Class A Common (622) (622)
Net earnings 581 581
----- ----- ------- ------- ---- -------
Balance at June 30, 1997 $6 $1 $13,505 $10,765 - $24,277
----- ----- ------- ------- ---- -------
----- ----- ------- ------- ---- -------
Page 5 of 14
Taitron Components Incorporated
Statements of Cash Flows
(Dollars in thousands)
Six months ended June 30,
----------------------------
1998 1997
------------- -----------
(Unaudited)
Cash flows from operating activities:
Net earnings $ 931 $ 1,190
Adjustments to reconcile net earnings to net cash used in
operating activities:
Depreciation and amortization 91 108
Changes in:
Trade accounts receivable 698 (1,568)
Inventory (2,183) 1,647
Prepaid expenses and other current assets 218 55
Other assets 2 (20)
Trade accounts payable 112 1,233
Accrued liabilities (303) (52)
Income taxes payable - 12
------- ------
Total adjustments (1,365) 1,415
------- ------
Net cash provided by (used in) operating activities (434) 2,605
------- ------
Cash flows from investing activities - acquisitions of property
and equipment (577) (354)
------- ------
Cash flows from financing activities:
Net borrowings (repayments) of notes payable 1,650 (1,350)
Repurchase of Class A Common Stock (651) (1,026)
Exercise of stock options 12 -
Change in foreign currency translation (12) -
Payments on long-term debt (10) (8)
------- ------
Net cash provided by (used in) financing activities 989 (2,384)
------- ------
Net increase (decrease) in cash and cash equivalents (22) (133)
Cash and cash equivalents, beginning of period 163 300
------- ------
Cash and cash equivalents, end of period $ 141 $ 167
------- ------
------- ------
Supplemental disclosure of cash flow information:
Cash paid for interest $ 667 $ 517
------- ------
------- ------
Cash paid for income taxes $ 522 $ 750
------- ------
------- ------
See accompanying notes to financial statements
Page 6 of 14
TAITRON COMPONENTS INCORPORATED
Notes to Financial Statements
(All amounts are unaudited except the balance sheet as of December 31, 1997)
(1) BASIS OF PRESENTATION
The financial information furnished herein is unaudited, but, in the
opinion of the management of Taitron Components Incorporated, includes all
adjustments (all of which are normal, recurring adjustments) in conformity
with the accounting principles reflected in the financial statements
included in the Annual Report on Form 10-K filed with the Securities and
Exchange Commission for the year ended December 31, 1997. The results of
operations for interim periods are not necessarily indicative of results to
be achieved for full fiscal years.
The accompanying unaudited financial statements have been prepared in
accordance with the instructions to Form 10-Q and, therefore, do not
include all information and footnotes necessary for a fair presentation of
financial position, results of operations and cash flows in conformity with
generally accepted accounting principles. The financial statements and
notes should, therefore, be read in conjunction with the financial
statements and notes thereto in the Annual Report on Form 10-K for the year
ended December 31, 1997.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REVENUE RECOGNITION
Revenue is recognized upon shipment of the merchandise. Reserves for sales
allowances and customer returns are established based upon historical
experience and management's estimates as shipments are made. Sales returns
for the quarters ended June 30, 1998 and 1997 aggregated $220,000 and
$282,000, respectively and for the six months ended June 30, 1998 and 1997
aggregated $505,000 and $501,000, respectively.
ALLOWANCE FOR SALES RETURNS AND DOUBTFUL ACCOUNTS
The allowance for sales returns and doubtful accounts at June 30, 1998 and
December 31, 1997 aggregated $150,000 and $135,000, respectively.
INVENTORY
Inventory, consisting principally of products for resale, is stated at the
lower of cost or market, using the first-in, first-out method. The value
presented is net of valuation allowances of $1,485,000 and $1,291,000 at
June 30, 1998 and December 31, 1997, respectively.
(3) NET EARNINGS PER SHARE
On December 31, 1997, the Company adopted the provisions of SFAS No. 128,
"Earnings Per Share" which replaces the presentation of primary earnings
per share with a presentation of basic earnings per share and replaces the
presentation of fully diluted earnings per share with diluted earnings per
share. Basic earnings per share is computed by dividing net income
available to common shareholders by the weighted-average number of common
shares outstanding during the period. Diluted earnings per share reflects
the potential dilution that could occur if securities or other contracts to
issue common stock that then were exercised or converted into common stock
or resulted in the issuance of common stock that then shared in earnings of
the Company. Diluted earnings per share is computed similarly to fully
diluted earnings per share pursuant to APB Opinion No. 15. Earnings per
share for the three months and the six months ended June 30, 1998 and 1997
have been restated to comply with SFAS No. 128.
Page 7 of 14
(4) SHAREHOLDERS' EQUITY
On April 19, 1995, the Company sold 2,530,000 shares of Class A Common
Stock at $5.25 per share in connection with its initial public offering.
The net proceeds from this offering aggregated approximately $11.3 million,
net of approximately $2 million of issuance costs, which proceeds were used
to pay off the previous bank line of credit, to retire long-term debt, to
expand inventory and for general corporate purposes.
(5) BORROWINGS
Long-term debt consists of the following:
June 30, December 31,
1998 1997
---- ----
Second trust deed loan payable, bearing interest at 6.359%,
due December 1, 2013 $ 484,000 $ 494,000
Revolving line of credit, maximum of $16 million,
expires June, 2000 14,600,000 12,950,000
8% convertible subordinated debentures, due May 18, 2001 3,000,000 3,000,000
------------ -------------
18,084,000 16,444,000
Less current portion 14,619,000 12,969,000
------------ -------------
$ 3,465,000 $ 3,475,000
------------ -------------
------------ -------------
On May 6, 1997, the Company replaced its $15 million revolving line of
credit with a new revolving line of credit facility which provides the
Company with up to $16 million for operating purposes and up to an
additional $4 million for business acquisition purposes, which matures on
June 2, 2000. The agreement governing these credit facilities contains
covenants that require the Company to be in compliance with certain
financial ratios. Borrowings on the line of credit are secured by
substantially all of the Company's assets.
Both the old and new revolving lines of credit contain security agreements
which essentially cover all assets of the Company and bear interest at the
bank's prime rate (8.5% at June 30, 1998 and 1997) or at the option of the
Company, at LIBOR plus 1.35 % after May 6, 1997 and 1.5% prior to that date.
(6) COMPREHENSIVE INCOME
On January 1, 1998, the Company adopted the provisions of Statement of
Financial Accounting Standards (SFAS) No. 130, "Reporting Comprehensive
Income". SFAS No. 130 establishes standards for reporting comprehensive
income and its components in the financial statements. The adoption of SFAS
No. 130 has no material impact on the Company's balance sheets, statements
of earnings or statements of cash flows for the three months or the six
months ended June 30, 1998 and 1997.
(7) CONTINGENT LIABILITY
In April, 1998 the Company was notified by the Internal Revenue Service
(IRS) that they are conducting an audit of the Company concerning excise
taxes imposed on chemicals that deplete the ozone layer. This tax is
imposed on imported products containing or manufactured with certain
chemicals. The Company believes that most of the products it imports do not
contain and are not manufactured with ozone depleting chemicals. However,
the Company must prove this to the satisfaction of the IRS. The Company is
in the process of obtaining the necessary information from its suppliers.
If the Company is unable to prove to the IRS that its products are free of
ozone depleting chemicals, the liability may be substantial and no provision
has been made in the accompanying financial statements for this tax.
Page 8 of 14
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The Company distributes a wide variety of transistors, diodes and other
semiconductors and optoelectronic devices and beginning in 1997 passive
components to other electronic distributors, original equipment manufacturers
and to contract manufacturers who incorporate them in their products.
The following table sets forth, for the periods indicated, certain operating
amounts and ratios as a percentage of net sales.
Three Month Period Ended Six Month Period Ended
June 30, June 30,
-------------------------- ---------------------------
(Dollars in thousands) 1998 1997 1998 1997
- ---------------------- ---- ---- ---- ----
Net sales $ 7,646 $ 8,502 $ 16,219 $ 16,518
Cost of goods sold 5,392 5,983 11,465 11,554
Gross profit 2,254 2,519 4,754 4,964
% of net sales 29.5% 29.6% 29.3% 30.1%
Selling, general and administrative expenses 1,213 1,337 2,577 2,527
% of net sales 15.8% 15.7% 15.9% 15.3%
Operating earnings 1,041 1,182 2,177 2,437
% of net sales 13.6% 13.9% 13.4% 14.8%
Interest expense, net 318 219 608 456
% of net sales 4.2% 2.6% 3.8% 2.8%
Net earnings $ 428 $ 581 $ 931 $ 1,190
% of net sales 5.6% 6.8% 5.7% 7.2%
Page 9 of 14
THREE MONTH PERIOD ENDED JUNE 30, 1998 COMPARED TO THE THREE MONTH PERIOD ENDED
JUNE 30, 1997
Net sales for the three months ended June 30, 1998 were $7,646,000,
compared with net sales for the three months ended June 30, 1997 of $8,502,000,
a decrease of $856,000 or 10.1%. This sales decrease was attributable to a
decrease in the per unit price on domestic sales, partially offset by an
increase in the volume of units sold to new and existing customers and a
reduction in sales returns and allowances. Export sales also decreased by
$196,000 over the three months ended June 30, 1997. For the three months
ended June 30, 1998, the average unit selling price was approximately 13.3%
less than for the three months ended June 30, 1997. The Company believes the
decrease in the per unit price is a result of industry wide market pressure on
selling prices resulting principally from the Asian economic crises.
Cost of goods sold decreased by $591,000 to $5,392,000 for the three month
period ended June 30, 1998, a decrease of 9.9% from the three month period
ended June 30, 1997. Cost of goods sold decreased principally as a result of
lower per unit costs, partially offset by an increase in the number of units
sold. Gross profits decreased by $265,000 to $2,254,000 for the three months
ended June 30, 1998 from $2,519,000 for the same period in 1997. Gross profit
as a percentage of net sales was 29.5% for the three months ended June 30,
1998, a decrease from 29.6% for the same period in 1997.
The Company is currently undergoing an audit by the IRS concerning excise
taxes imposed on chemicals that deplete the ozone layer. This tax may be
imposed on products imported by the Company to the extent that products that it
imports contain or are manufactured with such chemicals. Should the Company
not be successful in proving to the IRS that the products it imports do not
contain ozone depleting chemicals, cost of goods sold may increase causing both
gross profit and net earnings to decrease. See Note 7 to the financial
statements for further description.
Selling, general and administrative expenses decreased by $124,000 or 9.3%
for the three months ended June 30, 1998 compared to the same period of 1997.
The decrease was attributable to decreased commissions paid to outside
representative firms and advertising expenses offset by increased payroll costs
principally as a result of the geographic expansion of the Company's direct
sales force. These costs, as a percentage of net sales, increased to 15.8% for
the three months ended June 30, 1998 from 15.7% for the three months ended June
30, 1997.
Operating earnings decreased by $141,000 or 11.9% between the three month
period ended June 30, 1998 and 1997, and decreased as a percentage of net sales
to 13.6% from 13.9%. Operating earnings decreased principally as a result of
the lower per unit sales prices discussed above.
Interest expense, net of interest income for the three months ended June
30, 1998 increased $100,000 compared to the three months ended June 30, 1997.
This increase is due to increased borrowings made to purchase inventory, to
implement the Oracle Applications System and to repurchase shares of the
Company's Class A Common Stock.
Income taxes were $288,000 in the three months ended June 30, 1998,
representing an effective tax rate of 40.2%, compared to $392,000 for the same
period in 1997, an effective tax rate of 40.3%.
The Company had net earnings of $428,000 for the three months ended June
30, 1998 as compared with net earnings of $581,000 for the three months ended
June 30, 1997, a decrease of $153,000 or 26.4% for the reasons discussed above.
Net earnings as a percentage of net sales decreased to 5.6% from 6.8%.
SIX MONTH PERIOD ENDED JUNE 30, 1998 COMPARED TO THE SIX MONTH PERIOD ENDED
JUNE 30, 1997
Net sales for the six months ended June 30, 1998 were $16,219,000, compared
with the six months ended June 30, 1997 of $16,518,000, a decrease of $299,000
or 1.8%. This sales decrease was attributable to a decrease in the per unit
price on domestic sales partially offset by an increase in the volume of units
sold. Export sales increased by $352,000 over the six months ended June 30,
1997. For the three months ended June 30, 1998, the average unit selling
price was approximately 15.2% less than for the six months ended June 30, 1997.
The Company believes the decrease in the per unit price is a result of industry
wide market pressure on selling prices resulting principally from the Asian
economic crises.
Page 10 of 14
Cost of goods sold decreased by $89,000 to $11,466,000 for the six months
ended June 30, 1998, a decrease of .8% from the six month period ended June 30,
1997. Gross profits decreased by $210,000 to $4,754,000 for the six months
ended June 30, 1998 from $4,964,000 for the same period in 1997 and decreased
as a percentage of net sales to 29.3% from 30.1%.
The Company is currently undergoing an audit by the IRS concerning excise
taxes imposed on chemicals that deplete the ozone layer. This tax may be
imposed on products imported by the Company to the extent that products that it
imports contain or are manufactured with such chemicals. Should the Company
not be successful in proving to the IRS that the products it imports do not
contain ozone depleting chemicals, cost of goods sold may increase causing both
gross profit and net earnings to decrease. See Note 7 to the financial
statements for further description.
Selling, general and administrative expenses increased by $50,000 or 2.0%
for the six months ended June 30, 1998 compared to the same period of 1997.
These costs, as a percentage of net sales, were 15.9% for the six months ended
June 30, 1998 and 15.3% for the six months ended June 30, 1997. The increase
in selling, general and administrative expenses was principally a result of
increased expenses associated with geographically expanding its sales force,
partially offset by lower commissions and advertising expenses.
Earnings from operations decreased by $260,000 or 10.7% for the period
ended June 30, 1998 compared to the same period of 1997 and decreased as a
percentage of net sales to 13.4% from 14.8% due principally to lower margins as
a result of lower gross selling prices of the Company's products.
Interest expense, net of interest income, for the six months
ended June 30, 1998 increased $152,000 compared to the six months ended June
30, 1997. This increase is due to increased borrowings made to purchase
inventory, to implement the Oracle Applications System and to repurchase shares
of the Company's Class A Common Stock.
Income taxes were $623,000 for the six months ended June 30, 1998,
representing an effective tax rate of 40.1% compared to $800,000 for the six
months ended June 30, 1997, an effective tax rate of 40.2%.
The Company had net earnings of $931,000 for the six months ended June
30, 1998 compared to net earnings of $1,190,000 for the same period in 1997, a
decrease of $259,000 or 21.8% for the reasons discussed above. Net earnings as
a percentage of net sales decreased to 5.7% for the six months ended June 30,
1998 compared to 7.2% for the same period in 1997.
SUPPLY AND DEMAND ISSUES
Beginning in 1996 and continuing through June 30, 1998 the supply of most
products distributed by the Company has been more than sufficient to meet
customers demand for these products. The weak demand left suppliers with large
amounts of uncommitted production capacity. During the last several years the
Company has taken advantage of this situation by intensifying its long standing
purchasing strategy by making opportunistic purchases of suppliers' uncommitted
capacity, at favorable pricing. The Company believes this strategy of
opportunistic purchasing will posture the Company to be price competitive,
while still maintaining acceptable profit margins. The Company's competitive
edge is its ability to fill customer orders immediately from stock held in
inventory. Thus, management believes it has structured inventory levels in
such a way as to poise the Company to take advantage of a recovery in the
discrete semiconductor market. At the same time, if the market recovery is
slow in taking place, and management deems such action prudent the Company may
reduce inventory levels in order to avoid an unwarranted financial burden on
the Company's earnings.
Readers are cautioned that the foregoing statements are forward looking
and are necessarily speculative. There can be no guarantee that a recovery in
the discrete semiconductor market will take place. Also, if prices of
components held in inventory by the Company decline or if new technology is
developed that displaces products distributed by the Company and held in
inventory, the Company's business could be materially adversely affected. See
"Cautionary Statement Regarding Forward Looking Information".
Page 11 of 14
LIQUIDITY AND CAPITAL RESOURCES
Since 1993, the Company has satisfied its liquidity requirements
principally through cash generated from operations, short-term commercial loans
and the sale of equity securities, including its initial public offering in
April 1995. A summary of the Company's cash flows provided by (used in)
operating, investing and financing activities for the six months ended June 30,
1998 and 1997 were as follows:
Six months ended June 30,
-------------------------
1998 1997
---- ----
(In thousands)
Operating activities..........................................$ (434) $ 2,605
Investing activities.......................................... (577) (354)
Financing activities.......................................... 989 (2,384)
In positioning itself as a "Discrete Components Superstore", the Company
has been required to significantly increase its inventory levels over the past
several years. Inventory levels may increase as the Company adds new lines of
product, such as passive components, and new suppliers such as Siliconix. The
use of cash in operating activities is principally a result of increasing
inventory levels.
The discrete semiconductor products distributed by the Company are mature
products, used in a wide range of commercial and industrial applications. As a
result, the Company has never experienced any material amounts of product
obsolescence. The Company also attempts to control its inventory risks by
matching large customer orders with simultaneous orders to suppliers.
Nonetheless, the high levels of inventory carried by the Company increase the
risks of price fluctuations and product obsolescence.
The use of cash in investing activities is principally a result of
implementing Oracle Applications Software and purchasing of computer equipment.
In May 1997, the Company replaced its $15 million revolving line of
credit that had been in place since March 1996. The new revolving line of
credit provides the Company with up to $16 million for operating purposes and
up to an additional $4 million for business acquisition purposes. Both
facilities mature on June 2, 2000. The agreement governing these credit
facilities contains covenants that require the Company to be in compliance with
certain financial ratios. The increase in cash provided by financing
activities is the result of additional bank borrowings.
The Company believes that funds generated from operations and the amended
bank revolving lines of credit will be sufficient to finance its working
capital and capital expenditure requirements for the foreseeable future.
CAUTIONARY STATEMENT REGARDING FORWARD LOOKING INFORMATION
Several of the matters discussed in this document contain forward looking
statements that involve risks and uncertainties. Such forward looking
statements are usually denoted by words or phrases such as "believes,"
"expects," "projects," "estimates," "anticipates," "will likely result,"
"Plans," or similar expressions. The Company wishes to caution readers that
all forward looking statements are necessarily speculative and not to place
undue reliance on such forward looking statements, which speak only as of the
date made, and to advise readers that actual results could vary due to a
variety of risks and uncertainties. Factors that could cause the forward
looking statements to be inaccurate and could otherwise impact the Company's
future results are set forth in detail in the Company's most recent annual
report on Form 10-K. In addition to the other information contained in this
document, readers should carefully consider the information contained in the
Company's Form 10-K for the year ended December 31, 1997 under the heading
"Cautionary Statements and Risk Factors."
Page 12 of 14
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
10.2 Taitron Components Incorporated 1995 Stock Incentive Plan, As
Amended
27 Financial Data Schedule
(b) Reports on Form 8-K:
None
Page 13 of 14
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of
1934, the registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
TAITRON COMPONENTS INCORPORATED
Date: August 12, 1998 By: /s/ David M. Batt
---------------------------
David M. Batt
Chief Financial Officer
(Principal Financial Officer)
(Chief Accounting Officer)
Page 14 of 14