EX-99.1 2 a05452exv99w1.htm EXHIBIT 99.1 exv99w1
 

EXHIBIT 99.1

     
(TRIO-TECH LOGO)
  LOS ANGELES
SINGAPORE
DUBLIN
PENANG
KUALA LUMPUR
BANGKOK
         
FOR IMMEDIATE RELEASE
  Company Contact:   Investor Contact:
  A. Charles Wilson   Berkman Associates
  Chairman   (310) 277-5162
  (818) 787-7000   info@BerkmanAssociates.com

Trio-Tech Reports Fiscal 2005 Second Quarter
and First Half Results

     Van Nuys, CA, — February 4, 2005 — Trio-Tech International (AMEX:TRT) today announced financial results for the second quarter and first half of fiscal 2005.

     “Revenue increased by 12% for the second quarter compared to the same period last year, but certain timing issues prevented our profitability from keeping pace,” said President and Chief Executive Officer S.W. Yong. “The recognition of revenue for a large equipment order in our Distribution segment was deferred into the third quarter. In addition, during the second quarter we increased headcount in our Testing segment in anticipation of a new project for an automotive industry customer, which reduced gross margin in this segment. This project launched in the third quarter.

     “We are making progress in our plan to use our technologies, manufacturing and service capabilities, and customer relationships to expand our growth potential. We currently expect Trio-Tech to report a profitable third quarter.”

Financial Results

     Revenue for the three months ended December 31, 2004 increased to $5,682,000 from $5,056,000 for the second quarter of fiscal 2004. The net loss for this year’s second quarter was $100,000, or $0.03 per share. This compares to net income of $218,000, or $0.07 per diluted share, for the same period a year earlier.

     For the six months ended December 31, 2004, revenue increased 52% to $13,533,000 from $8,906,000 for the first half of fiscal 2004. Net income increased to $137,000, or $0.05 per diluted share. This compares to a net loss for last year’s first half of $47,000, or $0.02 per share.

     Total backlog at December 31, 2004 nearly doubled to $7,988,000 from $3,620,000 at December 31, 2003. Testing Service backlog increased to $5,027,000 from $2,589,000, Manufacturing backlog increased to $1,896,000 from $751,000, and Distribution backlog increased to $1,065,000 from $280,000.

     Inventories rose to $1,819,000 at December 31, 2004 from $1,409,000 at June 30, 2004, primarily because of higher raw materials and work-in-progress in the Company’s Singapore manufacturing operation to meet orders anticipated in the third and four quarters. In addition, finished goods inventories increased due to the deferred revenue mentioned above.

     Shareholders’ equity rose to $9,444,000 at December 31, 2004 from $9,024,000 at June 30, 2004. Cash and short-term deposits decreased to $4,853,000 at December 31, 2004 from $7,006,000 at June 30, 2004, primarily because of scheduled payments for the company’s previously announced acquisition of the semiconductor burn-in division in Malaysia.

Operations Review

     Testing segment revenue for the second quarter increased 19% to $2,803,000, primarily reflecting the Malaysia acquisition. Gross margin for this segment declined by 4.1% as changing customer requirements led to lower average unit selling prices. Higher sales of burn-in systems and boards boosted Manufacturing segment revenue for the second quarter by 41% to $2,425,000. Gross margin in this segment declined by 4.5% due to a shift in the mix of sales. Distribution segment revenue declined to $454,000 from $992,000 for the prior year. Gross margin in the Distribution segment declined by 3.8%, also due to a shift in the sales mix.

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Trio-Tech Reports Fiscal 2005 Second Quarter and First Half Results
February 4, 2005
Page Two

     “Unit volumes in the Asian market were relatively strong for both our Manufacturing and Testing segments in the second quarter as they were in the first, but lead times remain short, competition remains intense, and we have yet to see meaningful relief from the pricing pressures that we have faced for some time,” Yong said. “The increase in backlog suggests that our efforts to protect our market position and continue to grow our business are meeting with success, and we continue to manage our costs aggressively.”

About Trio-Tech

     Founded in 1958, Trio-Tech International provides third-party semiconductor testing and burn-in services primarily through its laboratories in Southeast Asia. Headquartered in Van Nuys, California, the Company also designs, manufactures and markets equipment and systems used in the testing and production of semiconductors, and distributes semiconductor processing and testing equipment manufactured by others. For further information or to request quotations for any of Trio-Tech’s complete line of semiconductor test equipment, please visit the Company’s Web site at www.triotech.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. These statements are based on current expectations, estimates and projections about the Company’s business based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors, including those described above and the following: the effectiveness of the cost reduction initiatives undertaken by the Company, changes in demand for the Company’s products, product mix, the timing of customer orders and deliveries, the impact of competitive products and pricing, excess or shortage of production capacity, and other risks discussed from time to time in the Company’s Securities and Exchange Commission filings and reports. In addition, such statements could be affected by general industry and market conditions and growth rates, and general domestic and international economic conditions. Such forward-looking statements speak only as of the date on which they are made, and the Company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release.

(tables attached)

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TRIO-TECH INTERNATIONAL AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME
(Unaudited, in Thousands, Except Earnings (Loss) per Share)

                                 
    Six Months Ended     Three Months Ended  
    December 31,     December 31,  
    2004     2003     2004     2003  
NET SALES
                               
PRODUCT SALES
  $ 7,836     $ 4,273     $ 2,879     $ 2,707  
SERVICES
    5,697       4,633       2,803       2,349  
 
                       
 
    13,533       8,906       5,682       5,056  
 
                       
 
COST OF SALES
                               
COST OF GOODS SOLD
    6,848       3,390       2,782       2,048  
COSTS OF SERVICE RENDERED
    3,462       3,169       1,586       1,586  
 
                       
 
    10,310       6,559       4,368       3,634  
 
                       
GROSS PROFIT
    3,223       2,347       1,314       1,422  
 
OPERATING EXPENSES:
                               
General and administrative
    2,463       1,953       1,168       970  
Selling
    550       417       281       212  
Research and development
    56       59       23       27  
Impairment Loss
    1                    
Loss on disposal of property, plant and equipment
          4              
 
                       
Total
    3,070       2,433       1,472       1,209  
 
                       
 
INCOME (LOSS) FROM OPERATIONS
    153       (86 )     (158 )     213  
 
OTHER INCOME (EXPENSE)
                               
Interest expense
    (92 )     (66 )     (57 )     (31 )
Other income
    106       196       21       58  
Total
    14       130       (36 )     27  
 
                       
 
INCOME (LOSS) BEFORE
                               
INCOME TAXES AND MINORITY INTEREST
    167       44       (194 )     240  
INCOME TAXES
    51       33       (60 )     18  
 
                       
INCOME (LOSS) BEFORE MINORITY INTEREST
    116       11       (134 )     222  
MINORITY INTEREST
    21       (58 )     34       (4 )
 
                       
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHARES
    137       (47 )     (100 )     218  
 
                       
EARNINGS (LOSS) PER SHARE:
                               
Basic
  $ 0.05     $ (0.02 )   $ (0.03 )   $ 0.07  
 
                       
Diluted
  $ 0.05     $ (0.02 )   $ (0.03 )   $ 0.07  
 
                       
WEIGHTED AVERAGE NUMBER OF COMMON AND POTENTIAL COMMON SHARES OUTSTANDING
                               
Basic
    2,965       2,930       2,966       2,933  
Diluted
    2,987       2,930       2,966       2,985  
 
OTHER COMPREHENSIVE (LOSS) INCOME:
                               
Net income (loss)
    137       (47 )     (100 )     218  
Unrealized loss on investment
          (45 )            
Foreign currency translation adjustment
    278       223       240       92  
 
                       
 
COMPREHENSIVE INCOME
  $ 415     $ 131     $ 140     $ 310  
 
                       

 


 

TRIO-TECH INTERNATIONAL AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands Except Number of Shares)

                 
    (Unaudited)        
    December 31,     June 30,  
    2004     2004  
ASSETS
               
CURRENT ASSETS:
               
Cash
  $ 1,126     $ 1,357  
Short-term deposits
    3,727       5,649  
Trade accounts receivable, net
    3,478       3,695  
Other receivables
    927       583  
Inventories, net
    1,819       1,409  
Prepaid expenses and other current assets
    159       105  
 
           
Total current assets
    11,236       12,798  
 
PROPERTY, PLANT AND EQUIPMENT, Net
    6,416       5,202  
OTHER INTANGIBLE ASSETS, Net
    434        
 
           
TOTAL ASSETS
  $ 18,086     $ 18,000  
 
           
 
               
LIABILITIES AND SHAREHOLDERS’ EQUITY
               
CURRENT LIABILITIES:
               
Lines of credit
  $ 336     $ 146  
Accounts payable
    1,176       2,316  
Accrued expenses
    2,752       2,166  
Income taxes payable
    58       49  
Current portion of notes payable
    563       506  
Current portion of capitalized leases
    221       246  
 
           
Total current liabilities
    5,106       5,429  
 
           
 
NOTES PAYABLE, net of current portion
    676       583  
CAPITALIZED LEASES, net of current portion
    130       210  
DEFERRED INCOME TAXES
    689       644  
 
           
TOTAL LIABILITIES
    6,601       6,866  
 
           
 
MINORITY INTEREST
    2,041       2,110  
 
SHAREHOLDERS’ EQUITY:
               
Common stock; no par value, 15,000,000 shares authorized; 2,966,042 and 2,964,542 shares issued and outstanding
    9,532       9,527  
Paid-in capital
    284       284  
Accumulated deficit
    (382 )     (519 )
Accumulated other comprehensive loss-translation adjustments
    10       (268 )
Total shareholders’ equity
    9,444       9,024  
 
           
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
  $ 18,086     $ 18,000