8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): February 17, 2006

TRIO-TECH INTERNATIONAL

(Exact Name of Registrant as Specified in Its Charter)

California

(State or Other Jurisdiction of Incorporation)

1-14523	95-2086631
(Commission File Number)	(IRS Employer Identification No.)
14731 Califa Street, Van Nuys, California	91411
(Address of Principal Executive Offices)	(Zip Code)

(818) 787-7000

(Registrant’s Telephone Number, Including Area Code)

(Former Name or Former Address, if Changed Since Last Report)

     Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

On February 17, 2006, Trio-Tech International issued a press release announcing its financial results for the fiscal quarter ended December 31, 2005. A copy of the press release is attached as Exhibit 99.1.

The information in this Current Report, including the exhibit hereto, is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section. The information in this Current Report, including the exhibit hereto, shall not be incorporated by reference into any filings under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.

Item 9.01 Financial Statements and Exhibits.

(c) Exhibits

99.1 Press release of Trio Tech International dated February 17, 2006

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: February 21, 2006

TRIO-TECH INTERNATIONAL
By:	/s/ VICTOR H.M. TING
	Victor H.M. Ting,
	Vice President and Chief Financial Officer (Principal Financial Officer)

EXHIBIT INDEX

Exhibit Number	Description
99.1	Press release

EX-99.1

EXHIBIT 99.1

LOS ANGELES
SINGAPORE
PENANG
KUALA LUMPUR
BANGKOK

FOR IMMEDIATE RELEASE	Company Contact:	Investor Contact:
	A. Charles Wilson	Berkman Associates
	Chairman	(310) 826-5051
	(818) 787-7000	info@BerkmanAssociates.com

Trio-Tech Fiscal 2006 Second Quarter
Net Income of $2.76 Per Share
Includes $8.9 Million Net Gain on Sale of Ireland Property

Semiconductor Testing Segment Revenue
Increased 40% In Second Quarter and 33% In First Half

     Van Nuys, CA, — February 17, 2006 — Trio-Tech International (AMEX:TRT) announced today that net income for the second quarter of 2006 was $2.76 per diluted share, which included an after-tax gain of $8.9 million from the previously announced sale of its property in Dublin, Ireland. Revenue in the Company’s semiconductor testing services segment increased 40% for the second quarter and 33% for this year’s first half.

Second Quarter Results

     For the three months ended December 31, 2005, revenue increased 34% to $7,425,000 from $5,533,000 for the second quarter of fiscal 2005. Testing service revenue rose 40% to $3,715,000 versus $2,654,000 for the second quarter of the prior fiscal year; manufacturing segment revenue increased 28% to $3,111,000 from $2,425,000; and distribution segment revenue increased 32% to $599,000 from $454,000.

     Overall gross margin for the second quarter improved to 25% of revenue for the second quarter of fiscal 2006 from 23% for the same quarter last fiscal year. Gross margin in the testing services segment improved to 37% from 29% for the second quarter of the prior fiscal year, reflecting improved overhead absorption and higher capacity utilization. The gross profit margin in the manufacturing segment dropped to 13% for the second quarter of fiscal 2006 from 18% for the same period last fiscal year due to price competition and an increased in the cost of materials. Gross profit margin in the distribution segment dropped to 15% for this second quarter from 16% in the same period last fiscal year due to an increase in demand for lower margin front-end products.

     The loss from continuing operations, net of income taxes and minority interest, for this year’s second quarter was $446,000, or a loss per share of $0.15. This compares to a loss from continuing operations, net of income taxes and minority interest, for the second quarter of fiscal 2005 of $111,000, or a loss per share of $0.03. This year’s second quarter results included earnings-based bonuses of $705,000 paid and payable to officers and directors under pre-existing employment contracts in connection with the sale of the property in Dublin, Ireland.

     Including discontinued operations, net income for the second quarter of 2006 was $8,391,000, or diluted earnings per share of $2.76. This compares to a net loss for the second quarter of fiscal 2005 of $100,000, or a diluted loss per share of $0.03.

     At December 31, 2005, cash and short-term deposits were $13,661,000, versus $4,650,000 at June 30, 2005. Shareholder’s equity at December 31, 2005 was $15,396,000 compared to $9,297,000 at June 30, 2005. Shareholders’ equity at December 31, 2005 was net of the dividend of $0.50 per share declared on December 2, 2005 and paid on January 25, 2006.

(more)

Trio-Tech Fiscal 2006 Second Quarter Net Income of $2.76 Per Share Includes $8.9 Million Net Gain
on Sale of Ireland Property
February 17, 2006
Page Two

Six Month Results

     Revenue for the six months ended December 31, 2005 was $13,130,000. This compares to revenue for the first six months of the prior year of $13,276,000. Testing services segment revenue for the first six months of this fiscal year increased 33% to $7,260,000 versus $5,440,000 for the first six months of fiscal 2005; manufacturing segment revenue declined 30% to $4,466,000 from $6,403,000; and distribution segment revenue declined 2% to $1,404,000 from $1,433,000.

     Overall gross margin for the six months ended December 31, 2005 improved to 28% of revenue of fiscal 2006 from 24% in the same period last fiscal year. Gross profit margin in the testing segment improved to 38% from 33% for the six months of this fiscal year, reflecting improved overhead absorption and higher capacity utilization. The gross profit margin in the manufacturing segment dropped to 15% for the six months ended December 31, 2005 from 17% compared to the same period last fiscal year due to price competition and an increased in the cost of materials. Gross profit margin in the distribution segment dropped to 22% for the six months ended December 31, 2005 from 23% compared to the same period last fiscal year due to an increase in demand for lower-margin front-end products.

     The loss from continuing operations, net of income taxes and minority interest, for the first six months of fiscal 2006 was $282,000, or a loss per share of $0.09. This compares to net income from continuing operations, net of income taxes and minority interest, for the first six months of fiscal 2005 of $135,000, or diluted earnings per share of $0.04.

     Including discontinued operations, net income for the six months ended December 31, 2005 was $8,177,000, or diluted earnings per share of $2.71. This compares to net income for the six months ended December 31, 2004 of $137,000, or diluted earnings per share of $0.04.

Operations Review

     “Rising demand for personal computers, notebooks and server chips continues to drive growth in our semiconductor testing services business. We are benefiting from last year’s acquisition of the semiconductor burn-in business in Malaysia and a steady ramp-up of volume for the newest microprocessor chips at our plant in Singapore.” said Chief Executive Officer S.W. Yong. “We expect the acquisition we completed on January 3, 2006 of all of the outstanding shares of Globetronics Shanghai Inc. (GSI), a semiconductor testing and burn-in business based in Shanghai, China which we are in the process of changing its name to Trio-Tech (Shanghai) Co., Ltd. to contribute to our results beginning in the current quarter. We are encouraged by our progress in implementing our growth strategy, and optimistic about the outlook for this year’s second half.”

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)

#4078

TRIO-TECH INTERNATIONAL AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(UNAUDITED, IN THOUSANDS, EXCEPT EARNINGS (LOSS) PER SHARE)

	Six Months Ended						Three Months Ended
	December 31,						December 31,
	2005			2004			2005			2004
NET SALES
PRODUCT SALES	$	5,870		$	7,836		$	3,710		$	2,879
SERVICES		7,260			5,440			3,715			2,654
		13,130			13,276			7,425			5,533
COST OF SALES
COST OF GOODS SOLD		4,915			6,428			3,220			2,362
COSTS OF SERVICES RENDERED		4,525			3,655			2,339			1,885
		9,440			10,083			5,559			4,247
GROSS PROFIT		3,690			3,193			1,866			1,286
OPERATING EXPENSES
General and administrative		2,577			2,368			1,288			1,130
Director and officer bonuses		705			9			705			(10	)
Selling		515			550			230			281
Research and development		33			56			16			23
Impairment Loss		15			1			—			—
Total		3,845			2,984			2,239			1,424
(LOSS) INCOME FROM OPERATIONS		(155	)		209			(373	)		(138	)
OTHER INCOME (EXPENSE)
Interest expense		(74	)		(86	)		(38	)		(55	)
Other income		112			42			82			(12	)
Total		38			(44	)		44			(67	)
(LOSS) INCOME FROM CONTINUING
OPERATIONS BEFORE INCOME TAXES		(117	)		165			(329	)		(205	)
INCOME TAXES		184			51			112			(60	)
(LOSS) INCOME FROM CONTINUING OPERATIONS BEFORE MINORITY INTEREST		(301	)		114			(441	)		(145	)
MINORITY INTEREST		19			21			(5	)		34
(LOSS) INCOME FROM CONTINUING OPERATIONS		(282	)		135			(446	)		(111	)
INCOME FROM DISCONTINUED OPERATION		8,459			2			8,837			11
NET INCOME (LOSS)	$	8,177		$	137		$	8,391		$	(100	)
EARNINGS (LOSS) PER SHARE
Basic (loss) earnings per share from Continuing operations	$	(0.09	)	$	0.05		$	(0.15	)	$	(0.03	)
Basic earnings per share from Discontinued operation		2.80			0.00			2.91			0.00
Basic earnings (loss) per share from Net income (loss)	$	2.71		$	0.05		$	2.76		$	(0.03	)
Diluted (loss) earnings per share from Continuing operations	$	(0.09	)	$	0.04		$	(0.15	)	$	(0.03	)
Diluted earnings per share from Discontinued operation		2.80			0.00			2.91			0.00
Diluted earnings (loss) per share from Net income (loss)	$	2.71		$	0.04		$	2.76		$	(0.03	)
WEIGHTED AVERAGE NUMBER OF COMMON AND POTENTIAL COMMON SHARES OUTSTANDING
Basic		3,016			2,965			3,038			2,966
Diluted		3,016			3,065			3,038			2,966
COMPREHENSIVE INCOME (LOSS):
Net income (loss)	$	8,177		$	137		$	8,391		$	(100	)
Foreign currency translation adjustment		(746	)		278			(766	)		240
COMPREHENSIVE INCOME	$	7,431		$	415		$	7,625		$	140

TRIO-TECH INTERNATIONAL AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS EXCEPT NUMBER OF SHARES)

	Dec. 31,			Jun. 30,
	2005			2005
	(unaudited)
ASSETS
CURRENT ASSETS:
Cash	$	7,034		$	1,439
Short-term deposits		6,627			3,211
Trade accounts receivable, net		3,853			4,178
Other receivables		327			142
Inventories, net		1,253			1,584
Prepaid expenses and other current assets		258			76
Total current assets		19,352			10,630
PROPERTY, PLANT AND EQUIPMENT, Net		6,912			7,176
OTHER INTANGIBLE ASSETS, Net		339			386
OTHER ASSETS		139			138
ADVANCES TO SELLER		153			15
TOTAL ASSETS	$	26,895		$	18,345
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Lines of credit	$	259		$	336
Accounts payable		1,343			1,681
Dividends payable		1,608			—
Accrued expenses		3,286			2,598
Income tax payable		239			168
Current portion of notes payable		882			655
Current portion of capital leases		110			123
Current portion of deferred tax liabilities		278			275
Total current liabilities		8,005			5,836
NOTES PAYABLE, net of current portion		899			634
CAPITAL LEASES, net of current portion		155			110
DEFERRED TAX LIABILITIES		413			407
TOTAL LIABILITIES		9,472			6,987
MINORITY INTEREST		2,027			2,061
SHAREHOLDERS’ EQUITY:
Common stock; no par value, 15,000,000 shares authorized;
3,051,242 shares issued and outstanding as at Dec. 31, 2005,and
2,976,042 shares issued and outstanding as at Jun. 30, 2005, and		9,786			9,554
Paid-in capital		328			284
Accumulated retained earnings (deficit)		6,271			(298	)
Accumulated other comprehensive loss-translation adjustments		(989	)		(243	)
Total shareholders’ equity		15,396			9,297
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	26,895		$	18,345