EX-99.1 2 tti_ex991.htm 99.1 Blueprint
Exhibit 99.1 
 
 
LOS ANGELES
SINGAPORE
KUALA LUMPUR
INDONESIA
BANGKOK
SUZHOU
TIANJIN
CHONGQING
 FOR IMMEDIATE RELEASE
 
 
Company Contact:                                       Investor Contact:
 A. Charles Wilson                                        Berkman Associates
 Chairman                                        (310) 477-3118
 (818) 787-7000                                             info@BerkmanAssociates.com
 
 
Trio-Tech Second Quarter Net Income $0.09 Per Diluted Share
 
First Half Net Income $0.11 Per Diluted Share
 
 
Van Nuys, CA – February 13, 2019 – Trio-Tech International (NYSE MKT: TRT) today announced financial results for the second quarter and first six months of fiscal 2019.
 
Fiscal 2019 Second Quarter Results
For the three months ended December 31, 2018, revenue decreased 8% to $9,690,000 compared to revenue of $10,552,000 for the same quarter last year. Manufacturing revenue was $3,352,000, a 16% decline compared to $3,973,000 for the same quarter last year. Semiconductor testing services revenue was $4,393,000, an 11% decline compared to $4,936,000 in the same quarter last year. Distribution revenue was $1,916,000, a 19% increase compared to $1,606,000 for the same quarter last year.
 
Gross margin for the second quarter of fiscal 2019 was $2,258,000, or 23% of revenue, compared to $2,795,000, or 26% of revenue, for the same quarter last year, reflecting lower sales and a less favorable product mix in manufacturing and testing services.
Operating expenses declined 3% to $2,031,000, or 21% of revenue, from $2,097,000, or 20% of revenue, primarily due to reduced selling expenses.
 
Net income attributable to Trio-Tech common shareholders for the fiscal 2019 second quarter was $348,000, or $0.09 per diluted share. This compares to net income attributable to Trio-Tech common shareholders for the second quarter of fiscal 2018 of $673,000, or $0.18 per diluted share.
 
Net income for the second quarter of fiscal 2019 benefitted from adjustments related to the finalization of the One-Time Mandatory Repatriation Tax expense of $900,000 which was recognized in the third quarter of fiscal 2018. Upon finalization of the accounting analysis, Trio-Tech recorded a reversal of $145,000 from provision of income tax to reduce the tax liability related to the one-time transition tax to $755,000. This estimated tax is payable over a period of eight years at no interest and is not expected to have a material effect on the Company’s working capital position.
 
CEO Comments
S.W. Yong, Trio-Tech's CEO, said, "We are glad to report higher profitability for the second quarter of fiscal 2019 compared to the year’s first quarter and are working diligently to improve the Company’s financial performance in the second half of fiscal 2019. Our state-of-the-art products and services, in many cases, are available only from Trio-Tech. Based on customer inquiries and follow-up meetings, we believe Trio-Tech has a competitive advantage in today’s complex and increasingly competitive semiconductor manufacturing and testing environment."
 
 

16139 Wyandotte Street, Van Nuys, CA 91406, USA ● TEL: (818) 787-7000 ● FAX (818) 787-9130
 
Trio-Tech Fiscal 2019 Second Quarter Net Income $0.09 Per Diluted Share
February 13, 2019
Page Two
 
 
 
Fiscal 2019 First Half Results
For the six months ended December 31, 2018, revenue decreased 8% to $19,735,000 compared to revenue of $21,497,000 for the first half of fiscal 2018. Manufacturing revenue decreased 20% to $6,989,000 compared to $8,738,000 last year. Semiconductor testing services revenue was down 7% to $8,830,000 compared to $9,541,000 a year ago, while distribution revenue increased 23% to $3,860,000 compared to $3,142,000.
 
Gross margin for the first six months of fiscal 2019 decreased 22% to $4,359,000, or 22% of revenue, compared to $5,555,000, or 26% of revenue, for last year’s first six months.
 
Operating expenses for the first six months of fiscal 2019 decreased 7% to $4,009,000 compared to $4,310,000 for the same period last year. Operating expenses were 20% of revenue in both periods.
 
Net income attributable to Trio-Tech common shareholders for the first six months of fiscal 2019 was $413,000, or $0.11 per diluted share, compared to $1,248,000, or $0.34 per diluted share, for the first six months of fiscal 2018.
 
Shareholders' equity at December 31, 2018 was $23,511,000, or $6.40 per outstanding share, compared to $23,501,000, or $6.61 per outstanding share, at June 30, 2018. There were approximately 3,673,055 Trio-Tech International common shares outstanding at December 31, 2018.
 
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; 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
 
 
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
 
 
UNAUDITED (IN THOUSANDS, EXCEPT EARNINGS PER SHARE)
 
 
 
 
 
 
 
 
 
Three Months Ended
 
 
Six Months Ended
 
 
 
December 31,
 
 
December 31,
 
Revenue
 
2018
 
 
2017
 
 
2018
 
 
2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Manufacturing 
 $3,352 
 $3,973 
 $6,989 
 $8,738 
  Testing services
  4,393 
  4,936 
  8,830 
  9,541 
  Distribution
  1,916 
  1,606 
  3,860 
  3,142 
  Others
  29 
  37 
  56 
  76 
 
    
    
    
    
 
  9,690 
  10,552 
  19,735 
  21,497 
Cost of Sales
    
    
    
    
   Cost of manufactured products sold
  2,646 
  3,068 
  5,503 
  6,717 
   Cost of testing services rendered
  3,106 
  3,251 
  6,489 
  6,390 
   Cost of distribution
  1,662 
  1,409 
  3,348 
  2,777 
   Others
  18 
  29 
  36 
  58 
 
    
    
    
    
 
  7,432 
  7,757 
  15,376 
  15,942 
 
    
    
    
    
Gross Margin
  2,258 
  2,795 
  4,359 
  5,555 
 
    
    
    
    
Operating Expenses:
    
    
    
    
  General and administrative
  1,722 
  1,727 
  3,481 
  3,566 
  Selling
  187 
  252 
  334 
  431 
  Research and development
  122 
  118 
  194 
  302 
  Loss on disposal of property, plant and equipment
  -- 
  -- 
  -- 
  11 
 
    
    
    
    
     Total operating expenses
  2,031 
  2,097 
  4,009 
  4,310 
 
    
    
    
    
Income from Operations
  227 
  698 
  350 
  1,245 
 
    
    
    
    
Other (Expenses) Income 
    
    
    
    
  Interest expenses
  (98)
  (52)
  (176)
  (110)
  Other income, net
  49 
  42 
  92 
  200 
 
    
    
    
    
     Total other (expenses) income
  (49)
  (10)
  (84)
  90 
 
    
    
    
    
Income from Continuing Operations before Income Taxes
  178 
  688 
  266 
  1,335 
Income Tax Benefit (expenses)
  124 
  (13)
  50 
  (55)
 
    
    
    
    
Income from Continuing Operations
    
    
    
    
  before Non-controlling Interest, Net of Tax
  302 
  675 
  316 
  1,280 
Income (Loss) from Discontinued Operations, Net of Tax
  4 
  (2)
  (4)
  (5)
 
    
    
    
    
NET INCOME
  306 
  673 
  312 
  1,275 
 
    
    
    
    
Less: Income Attributable to Non-controlling Interest
  (42)
  -- 
  (101)
  27 
 
    
    
    
    
Net Income Attributable to Trio-Tech International
  348 
 $673 
  413 
 $1,248 
 
    
    
    
    
Net Income Attributable to Trio-Tech International:
    
    
    
    
 
    
    
    
    
Income from Continuing Operations, Net of Tax
  346 
  678 
  415 
  1,254 
Income (Loss) from Discontinued Operations, Net of Tax
  2 
  (5)
  (2)
  (6)
 
    
    
    
    
Net Income attributable to Trio-Tech International
 $348 
 $673 
 $413 
 $1,248 
 
    
    
    
    
Basic Earnings per Share
 $0.09 
 $0.19 
 $0.11 
 $0.35 
 
    
    
    
    
Diluted Earnings per share
 $0.09 
 $0.18 
 $0.11 
 $0.34 
 
    
    
    
    
Weighted Average Shares Outstanding B Basic
  3,673 
  3,548 
  3,673 
  3,548 
Weighted Average Shares Outstanding B Diluted
  3,781 
  3,793 
  3,815 
  3,770 
 
 
TRIO-TECH INTERNATIONAL AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
UNAUDITED (IN THOUSANDS, EXCEPT EARNINGS PER SHARE)
 
 

 
Three Months Ended
December 31,
 
 
Six Months Ended
December 31,
 

 
2018
 
 
2017
 
 
2018
 
 
2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Comprehensive Income Attributable to
   Trio-Tech International Common Shareholders:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
 $306 
 $673 
 $312 
 $1,275 
 
    
    
    
    
Foreign Currency Translation, Net of Tax
  (51)
  588 
  (590)
  963 
 
    
    
    
    
Comprehensive Income (Loss)
  255 
  1,261 
  (278)
  2,238 
 
    
    
    
    
Less: Comprehensive Income (Loss)
          Attributable To Non-controlling Interest
  (57)
  88 
  (192)
  115 
 
    
    
    
    
Comprehensive Income (Loss) Attributable to
   Trio-Tech International Common Shareholders
 $312 
 $1,173 
 $(86)
 $2,123 
 
    
    
    
    
 
 
TRIO-TECH INTERNATIONAL AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT NUMBER OF SHARES)
 

 
Dec. 31,
 
 
Jun. 30,
 
 
 
2018
 
 
2018
 
ASSETS
  (unaudited) 
 
 
 
 
 
 
 
 
 
 
CURRENT ASSETS:
 
 
 
 
 
 
  Cash and cash equivalents
 $6,192 
 $6,539 
  Short-term deposits
  2,121 
  653 
  Trade accounts receivable, net
  6,996 
  7,747 
  Other receivables
  991 
  881 
  Inventories, net
  2,630 
  2,930 
  Prepaid expenses and other current assets
  279 
  208 
  Assets held for sale
  486 
  91 
 
    
    
     Total current assets
  19,695 
  19,049 
 
    
    
Deferred tax asset
  335 
  400 
Investment properties, net
  678 
  1,146 
Property, plant and equipment, net
  12,749 
  11,935 
Other assets
  1,750 
  2,249 
Restricted term deposits
  1,688 
  1,695 
 
    
    
     Total non-current assets
  17,200 
  17,425 
 
    
    
TOTAL ASSETS
 $36,895 
 $36,474 
 
    
    
LIABILITIES AND SHAREHOLDERS’ EQUITY
    
    
 
    
    
CURRENT LIABILITIES:
    
    
  Lines of credit
 $2,033 
 $2,043 
  Accounts payable
  2,532 
  3,704 
  Accrued expenses
  3,978 
  3,172 
  Income taxes payable
  256 
  285 
  Current portion of bank loans payable
  480 
  367 
  Current portion of capital leases
  252 
  250 
 
    
    
     Total current liabilities
  9,531 
  9,821 
 
    
    
  Bank loans payable, net of current portion
  2,525 
  1,437 
  Capital leases, net of current portion 
  382 
  524 
  Deferred tax liabilities
  296 
  327 
  Income taxes payable
  613 
  828 
  Other non-current liabilities
  37 
  36 
 
    
    
     Total non-current liabilities
  3,853 
  3,152 
 
    
    
TOTAL LIABILITIES
 $13,384 
 $12,973 
 
    
    
 
    
    
 
    
    
EQUITY
    
    
 
    
    
TRIO-TECH INTERNATIONAL'S SHAREHOLDERS' EQUITY:
    
    
  Common stock, no par value, 15,000,000 shares authorized; 
    
    
   3,673,055 and 3,553,055 issued and outstanding at 
    
    
   December 31, 2018 and June 30, 2018, respectively
  11,424 
 $11,023 
  Paid-in capital
  3,258 
  3,249 
  Accumulated retained earnings
  5,938 
  5,525 
  Accumulated other comprehensive gain-translation adjustments
  1,683 
  2,182 
 
    
    
     Total Trio-Tech International shareholders' equity
  22,303 
  21,979 
 
    
    
Non-controlling interest
  1,208 
  1,522 
 
    
    
TOTAL EQUITY
 $23,511 
 $23,501 
 
    
    
TOTAL LIABILITIES AND EQUITY
 $36,895 
 $36,474