BusinessWire

Trio-Tech Reports Third Quarter Results

VAN NUYS, Calif.--(BUSINESS WIRE)--Trio-Tech International (NYSE MKT: TRT) today announced financial results for the third quarter and first nine months of fiscal 2020.

Third Quarter Results

Revenue for the three months ended March 31, 2020 decreased 4% to $8,501,000 compared to $8,838,000 for the third quarter of fiscal 2019. Manufacturing revenue decreased 19% to $2,519,000 compared to $3,097,000 last year, as customers’ uncertainties relating to the COVID-19 pandemic appear to have delayed certain orders. Testing services revenue decreased 6% to $3,741,000 from $3,989,000 for the same quarter last year, primarily reflecting the Malaysian government’s effort to reduce the spread of COVID-19 by restricting the transportation of workers. Distribution revenue increased 29% to $2,225,000 from $1,727,000 for the third quarter last year.

Reflecting lower revenue and unusually high labor costs in China due to the extension of the Lunar New Year holiday associated with the COVID-19 pandemic, gross margin decreased to $1,786,000, or 21% of revenue, for this year’s third quarter from $2,174,000, or 25% of revenue, for the third quarter a year ago.

Operating expenses increased 5% to $2,153,000 from $2,051,000 for the third quarter last year, primarily due to a one-time impairment charge of $139,000 on obsolete testing services equipment.

The loss from operations for the third quarter of fiscal 2020 was $367,000. This compares to an operating profit of $123,000 for the third quarter of fiscal 2019.

Net income attributable to Trio-Tech International Common Shareholders for the three months ended March 31, 2020 was $70,000, or $0.02 per diluted share, compared to $683,000, or $0.19 per diluted share, for the third quarter of fiscal 2019. Net income for the third quarter of 2020 benefitted from $263,000 in other income, which included financial assistance received from local governments in Singapore and China to mitigate the negative impact of the COVID-19 pandemic.

CEO Comments

S.W. Yong, Trio-Tech's CEO, said, "In response to the COVID-19 pandemic, we have implemented new operating procedures to enhance the safety of our employees and customers. Our Singapore and Malaysia operations have been classified as part of the global supply chain, but both are subject to social distancing requirements and manpower restriction that affect productivity and revenue. No one knows how long today’s stringent safety measures will last. Accordingly, we continue to closely monitor developments everywhere we operate, and will take additional precautionary steps if necessary to protect the interests of all Trio-Tech stakeholders and to protect the safety of our employees.”

Nine Months Results

For the first nine months of fiscal 2020 ended March 31, 2020, revenue decreased 5% to $27,286,000 compared to $28,573,000 for the same period last year. Manufacturing revenue declined 12% to $8,881,000 from $10,086,000, while testing services revenue declined 6% to $12,018,000 from $12,819,000. Distribution revenue increased 13% to $6,338,000 compared to $5,587,000 for the first nine months of fiscal 2019.

Overall gross margin for the first nine months of fiscal 2020 decreased 9% to $5,943,000, or 22% of revenue, from $6,533,000, or 23% of revenue, for the same period of fiscal 2019.

Operating expenses increased 3% to $6,261,000 from $6,060,000 for last year’s first nine months, primarily the result of the impairment charge mentioned above. The operating loss for the first nine months of fiscal 2020 was $318,000, compared to an operating profit of $473,000 for the same period last year.

For the first nine months of fiscal 2020, other income increased to $1,576,000 from $655,000 for the first nine months of fiscal 2019. This increase was mainly due to a non-recurring gain on the sale of assets of $1,172,000 compared to $685,000 for the same period last year, coupled with the government grants mentioned above.

Net income attributable to Trio-Tech International Common Shareholders for the first nine months of fiscal 2020 was $769,000, or $0.21 per diluted share, compared to $1,096,000, or $0.29 per diluted share for the first nine months of fiscal 2019.

Shareholders' equity at March 31, 2020 was $24,867,000, or $6.77 per outstanding share, compared to $24,861,000, or $6.77 per outstanding share, at June 30, 2019. There were approximately 3,673,055 common shares outstanding at March 31, 2020.

About Trio‑Tech

Established in 1958 and headquartered in Van Nuys, California, Trio-Tech International is a diversified business group with interests in semiconductor testing services, manufacturing and distribution of semiconductor testing equipment, and real estate. Further information about Trio-Tech's semiconductor products and services can be obtained from the Company's Web site at www.triotech.com, www.universalfareast.com, and www.ttsolar.com.

Forward Looking Statements

This press release contains statements that are forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and may contain forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and assumptions regarding future activities and results of operations of the Company. In light of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, the following factors, among others, could cause actual results to differ materially from those reflected in any forward looking statements made by or on behalf of the Company: market acceptance of Company products and services; changing business conditions or technologies and volatility in the semiconductor industry, which could affect demand for the Company's products and services; the impact of competition; problems with technology; product development schedules; delivery schedules; changes in military or commercial testing specifications which could affect the market for the Company's products and services; difficulties in profitably integrating acquired businesses, if any, into the Company; risks associated with conducting business internationally and especially in Asia, including currency fluctuations and devaluation, currency restrictions, local laws and restrictions and possible social, political and economic instability; changes in U.S. and global financial and equity markets, including market disruptions and significant interest rate fluctuations; public health issues related to the COVID-19 pandemic; and other economic, financial and regulatory factors beyond the Company's control. Other than statements of historical fact, all statements made in this Quarterly Report are forward looking, including, but not limited to, statements regarding industry prospects, future results of operations or financial position, and statements of our intent, belief and current expectations about our strategic direction, prospective and future financial results and condition. In some cases, you can identify forward looking statements by the use of terminology such as "may," "will," "expects," "plans," "anticipates," "estimates," "potential," "believes," "can impact," "continue," or the negative thereof or other comparable terminology. Forward looking statements involve risks and uncertainties that are inherently difficult to predict, which could cause actual outcomes and results to differ materially from our expectations, forecasts and assumptions.

TRIO‑TECH INTERNATIONAL AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

UNAUDITED (IN THOUSANDS, EXCEPT EARNINGS PER SHARE)

 

 

 

 

 

Three Months Ended

Nine Months Ended

March 31,

March 31,

Revenue

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Manufacturing

$

2,519

 

$

3,097

 

$

8,881

 

$

10,086

 

Testing Services

 

3,741

 

 

3,989

 

 

12,018

 

 

12,819

 

Distribution

 

2,225

 

 

1,727

 

 

6,338

 

 

5,587

 

Real Estate

 

16

 

 

25

 

 

49

 

 

81

 

 

 

8,501

 

 

8,838

 

 

27,286

 

 

28,573

 

Costs of Sales

 

 

 

 

Cost of manufactured products sold

 

1,851

 

 

2,303

 

 

6,789

 

 

7,806

 

Cost of testing services rendered

 

2,937

 

 

2,862

 

 

9,046

 

 

9,351

 

Cost of distribution

 

1,909

 

 

1,483

 

 

5,454

 

 

4,831

 

Cost of real estate

 

18

 

 

16

 

 

54

 

 

52

 

 

 

6,715

 

 

6,664

 

 

21,343

 

 

22,040

 

Gross Margin

 

1,786

 

 

2,174

 

 

5,943

 

 

6,533

 

Operating Expenses:

 

 

 

 

General and administrative

 

1,754

 

 

1,742

 

 

5,319

 

 

5,223

 

Selling

 

181

 

 

246

 

 

547

 

 

580

 

Research and development

 

79

 

 

76

 

 

280

 

 

270

 

Impairment loss on long-lived assets

 

139

 

 

--

 

 

139

 

 

--

 

Gain on disposal of property, plant and equipment

 

--

 

 

(13

)

 

(24

)

 

(13

)

Total operating expenses

 

2,153

 

 

2,051

 

 

6,261

 

 

6,060

 

(Loss) income from Operations

 

(367

)

 

123

 

 

(318

)

 

473

 

Other Income

 

 

 

 

Interest expense

 

(63

)

 

(74

)

 

(186

)

 

(250

)

Gain on sale of assets held for sale

 

--

 

 

685

 

 

1,172

 

 

685

 

Other income, net

 

440

 

 

128

 

 

590

 

 

220

 

Total other income

 

377

 

 

739

 

 

1,576

 

 

655

 

Income from Continuing Operations before Income Taxes

 

10

 

 

862

 

 

1,258

 

 

1,128

 

Income Tax Benefit (Expenses)

 

8

 

 

(209

)

 

(112

)

 

(159

)

Income from Continuing Operations before Non-controlling Interest, net of tax

 

18

 

 

653

 

 

1,146

 

 

969

 

(Loss) income from Discontinued Operations, net of tax

 

(21

)

 

2

 

 

(21

)

 

(2

)

NET (LOSS) INCOME

 

(3

)

 

655

 

 

1,125

 

 

967

 

Less: Net (loss) income Attributable to Non-controlling Interest

 

(73

)

 

(28

)

 

356

 

 

(129

)

Net Income Attributable to Trio-Tech International

 

70

 

 

683

 

 

769

 

 

1,096

 

Net Income Attributable to Trio-Tech International:

 

 

 

 

Income from Continuing Operations, net of tax

 

81

 

 

682

 

 

780

 

 

1,097

 

(Loss) Income from Discontinued Operations, net of tax

 

(11

)

 

1

 

 

(11

)

 

(1

)

Net Income Attributable to Trio-Tech International

$

70

 

$

683

 

$

769

 

$

1,096

 

Basic Earnings per Share

$

0.02

 

$

0.19

 

$

0.21

 

$

0.30

 

Diluted Earnings per Share

$

0.02

 

$

0.19

 

$

0.21

 

$

0.29

 

Weighted Average Shares Outstanding - Basic

 

3,673

 

 

3,673

 

 

3,673

 

 

3,673

 

Weighted Average Shares Outstanding - Diluted

 

3,759

 

 

3,685

 

 

3,734

 

 

3,746

 

TRIO‑TECH INTERNATIONAL AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

UNAUDITED (IN THOUSANDS)

 

 

Three Months Ended

 

Nine Months Ended

March 31,

 

March 31,

 

2020

 

 

 

2019

 

 

2020

 

 

 

2019

 

Comprehensive (Loss) Income Attributable to Trio-Tech International:

 

 

 

 

 

 

 

Net (loss) income

$

(3

)

 

$

655

 

$

1,125

 

 

$

967

 

Foreign Currency Translation, net of tax

 

(1,013

)

 

 

401

 

 

(1,051

)

 

 

(189

)

Comprehensive (Loss) Income

 

(1,016

)

 

 

1,056

 

 

74

 

 

 

778

 

Less: Comprehensive (Loss) Income Attributable to Non-controlling Interest

 

(64

)

 

 

1

 

 

376

 

 

 

(191

)

Comprehensive (Loss) Income Attributable to Trio-Tech International

$

(952

)

 

$

1,055

 

$

(302

)

 

$

969

 

TRIO‑TECH INTERNATIONAL AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT NUMBER OF SHARES)

 

 

Mar. 31,

 

Jun. 30,

2020

 

2019

ASSETS

(unaudited)

 

 

CURRENT ASSETS:

 

 

 

Cash and cash equivalents

$

4,370

 

$

4,863

Short-term deposits

 

6,309

 

 

4,144

Trade accounts receivable, net

 

6,397

 

 

7,113

Other receivables

 

1,065

 

 

817

Inventories, net

 

2,226

 

 

2,427

Prepaid expenses and other current assets

 

267

 

 

287

Assets held for sale

 

--

 

 

89

Total current assets

 

20,634

 

 

19,740

Deferred tax assets

 

565

 

 

390

Investment properties, net

 

705

 

 

782

Property, plant and equipment, net

 

10,597

 

 

12,159

Operating lease right-of-use assets

 

1,073

 

 

--

Other assets

 

1,595

 

 

1,750

Restricted term deposits

 

1,627

 

 

1,706

Total non-current assets

 

16,162

 

 

16,787

TOTAL ASSETS

$

36,796

 

$

36,527

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

CURRENT LIABILITIES:

 

 

 

Lines of credit

$

398

 

$

187

Accounts payable

 

3,129

 

 

3,272

Accrued expenses

 

3,065

 

 

3,486

Income taxes payable

 

396

 

 

417

Current portion of bank loans payable

 

378

 

 

488

Current portion of finance leases

 

246

 

 

283

Current portion of operating leases

 

541

 

 

--

Total current liabilities

 

8,153

 

 

8,133

Bank loans payable, net of current portion

 

1,919

 

 

2,292

Finance leases, net of current portion

 

486

 

 

442

Operating leases, net of current portion

 

532

 

 

--

Deferred tax liabilities

 

375

 

 

327

Income taxes payable

 

430

 

 

439

Other non-current liabilities

 

34

 

 

33

Total non-current liabilities

 

3,776

 

 

3,533

TOTAL LIABILITIES

 

11,929

 

 

11,666

 

EQUITY

 

 

 

TRIO-TECH INTERNATIONAL'S SHAREHOLDERS' EQUITY:

 

 

 

Common stock, no par value, 15,000,000 shares authorized; 3,673,055 issued and outstanding at March 31, 2020 and June 30, 2019, respectively

 

11,424

 

 

11,424

Paid-in capital

 

3,357

 

 

3,305

Accumulated retained earnings

 

7,839

 

 

7,070

Accumulated other comprehensive gain-translation adjustments

 

796

 

 

1,867

Total Trio-Tech International shareholders' equity

 

23,416

 

 

23,666

Non-controlling interest

 

1,451

 

 

1,195

TOTAL EQUITY

 

24,867

 

 

24,861

TOTAL LIABILITIES AND EQUITY

$

36,796

 

$

36,527

 


Contacts

Company Contact:
A. Charles Wilson
Chairman
(818) 787-7000

Investor Contact:
Berkman Associates
(310) 927-3108
info@BerkmanAssociates.com