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LOS
ANGELES
SINGAPORE
KUALA
LUMPUR
BANGKOK
SUZHOU
TIANJIN
CHONGQING
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FOR IMMEDIATE RELEASE
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Company
Contact: Investor
Contact:
A. Charles
Wilson
Berkman Associates
Chairman
(310) 477-3118
(818)
787-7000 info@BerkmanAssociates.com
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Trio-Tech
Third Quarter Net Income is $0.19 Per Share Versus
Loss
Van Nuys, CA – May 14, 2019
– Trio-Tech International
(NYSE MKT: TRT) today announced financial results for the
third quarter and first nine months of fiscal 2019.
Third
Quarter Results
Net
income for the third quarter of fiscal 2019 ended March 31, 2019
was $683,000, or $0.19 per diluted share. This compares to a net
loss of $739,000, or $0.20 per share, for the third quarter of
fiscal 2018.
Net
income for the fiscal 2019 third quarter benefitted from $739,000
in other income, which included a gain of $685,000 on the sale of
assets previously held for sale. In comparison, other income
contributed a gain of $47,000 for last year’s third quarter.
Net income for the third quarter of fiscal 2018 also was affected
by a one-time, non-cash income tax expense of $900,000 related to
the 2017 United States Tax Cuts and Jobs Act, which requires a
mandatory one-time repatriation of certain earnings and profits of
the Company’s foreign subsidiaries previously deferred from
U.S. taxation. In the recent second quarter of fiscal 2019, there
was a reversal of $145,000 as this tax was finalized to
$755,000.
Revenue
for the third quarter of fiscal 2019 decreased 12% to $8,838,000
from $10,104,000 for the same quarter last fiscal year.
Manufacturing revenue decreased 1% to $3,097,000 compared to
$3,124,000 in the third quarter of last fiscal year. Testing
services revenue declined 19% to $3,989,000 from $4,913,000 in the
third quarter of fiscal 2018, primarily due to reduced demand from
a major customer during the quarter. Distribution revenue decreased
15% to $1,727,000 from $2,033,000 for the third quarter of last
fiscal year.
Reflecting the
decrease in revenue, gross margin declined by 3%, to $2,174,000
from $2,232,000 for the third quarter of fiscal 2018, but improved
as a percentage of revenue to 25% compared to 22% of revenue for
the third quarter of last fiscal year, due to aggressive cost
saving efforts at the Company’s Malaysia and China
operations.
Income
from operations for the third quarter of fiscal 2019 was $123,000
compared to $234,000 for the third quarter of fiscal
2018.
CEO
Comments
S.W.
Yong, Trio-Tech's CEO, said, "We delivered substantial net income
and improved gross margin as a percentage of revenue despite lower
sales for this year’s third quarter compared to the third
quarter last year. Our fiscal third quarter results are typically
affected by a slowdown in business activity partially related to
the Chinese New Year and festivities. We are working to increase
revenue and strive for better performance in the current
quarter."
Nine
Months Results
For the
first nine months of fiscal 2019 ended March 31, 2019, revenue
decreased 10% to $28,573,000 compared to $31,601,000 for the same
period last year. Manufacturing revenue declined 15% to $10,086,000
from $11,862,000, and testing services revenue declined 11% to
$12,819,000 from $14,454,000 in the same period last year. Revenue
for both business segments was affected by reduced demand from a
major customer. Distribution revenue increased 8% in the first nine
months of this fiscal year to $5,587,000 from $5,175,000 in the
same period in the last fiscal year.
Trio-Tech
Reports Third Quarter and Nine Months Results
May 14,
2019
Page
Two
Gross
margin for the first nine months of fiscal 2019 decreased 16% to
$6,533,000, or 23% of revenue, to $7,787,000, or 25% of revenue,
for the first nine months of fiscal 2018.
Net
income for first nine months of fiscal 2019 was $1,096,000, or
$0.29 per diluted share. This compares to net income of $509,000,
or $0.14 per diluted share, for the same period last
year.
Shareholders'
equity at March 31, 2019 was $24,567,000, or $6.69 per outstanding
share, compared to $23,501,000, or $6.61 per outstanding share, at
June 30, 2018. There were approximately 3,673,055 common shares
outstanding at March 31, 2019.
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.
(tables
attached)
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TRIO-TECH INTERNATIONAL AND SUBSIDIARIES
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CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
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UNAUDITED (IN THOUSANDS, EXCEPT EARNINGS PER SHARE)
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Three Months Ended
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Nine Months Ended
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March 31,
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March 31,
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Revenue
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2019
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2018
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2019
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2018
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Manufacturing
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$3,097
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$3,124
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$10,086
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$11,862
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Testing Services
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3,989
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4,913
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12,819
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14,454
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Distribution
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1,727
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2,033
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5,587
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5,175
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Real
Estate
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25
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34
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81
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110
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8,838
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10,104
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28,573
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31,601
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Costs of Sales
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Cost of manufactured
products sold
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2,303
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2,530
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7,806
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9,247
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Cost of testing services rendered
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2,862
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3,491
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9,351
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9,881
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Cost of
distribution
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1,483
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1,821
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4,831
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4,598
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Cost of real
estate
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16
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30
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52
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88
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6,664
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7,872
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22,040
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23,814
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Gross Margin
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2,174
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2,232
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6,533
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7,787
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Operating Expenses:
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General and administrative
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1,742
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1,773
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5,223
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5,339
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Selling
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246
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181
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580
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612
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Research and development
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76
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75
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270
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377
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(Gain) Loss
on disposal of property, plant and equipment
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(13)
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(31)
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(13)
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(20)
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Total operating expenses
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2,051
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1,998
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6,060
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6,308
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Income
from Operations
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123
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234
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473
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1,479
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Other (Expenses)
Income
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Interest expense
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(74)
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(64)
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(250)
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(174)
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Other income, net
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128
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111
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220
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311
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Gain on sale of
assets held for sale
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685
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--
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685
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--
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Total other income
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739
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47
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655
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137
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Income from Continuing Operations before Income Taxes
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862
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281
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1,128
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1,616
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Income Tax Expenses
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(209)
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(980)
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(159)
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(1,035)
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Income (Loss)
from Continuing Operations
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before Non-controlling
Interest, net of tax
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653
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(699)
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969
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581
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Income (Loss) from
Discontinued Operations, net of tax
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2
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(6)
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(2)
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(11)
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NET INCOME
(LOSS)
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655
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(705)
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967
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570
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Less: Net (loss)
income Attributable to Non-controlling Interest
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(28)
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34
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(129)
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61
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Net Income (Loss)
Attributable to Trio-Tech International
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683
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(739)
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1,096
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509
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Net Income (Loss)
Attributable to Trio-Tech International:
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Income (loss)
from Continuing Operations, net of tax
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682
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(736)
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1,097
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520
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Income
(loss) from Discontinued Operations, net of tax
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1
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(3)
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(1)
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(11)
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Net Income (Loss)
Attributable to Trio-Tech International
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$683
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$(739)
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$1,096
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$509
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Basic Earnings
(Loss) per Share
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$0.19
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$(0.21)
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$0.30
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$0.15
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Diluted Earnings
(Loss) per Share
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$0.19
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$(0.20)
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$0.29
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$0.14
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Weighted Average Shares Outstanding - Basic
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3,673
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3,553
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3,673
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3,553
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Weighted Average Shares Outstanding - Diluted
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3,685
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3,772
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3,746
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3,778
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TRIO-TECH INTERNATIONAL AND SUBSIDIARIES
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CONDENSED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
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UNAUDITED (IN THOUSANDS)
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Three Months Ended
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Nine Months Ended
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March 31,
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March 31,
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2019
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2018
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2019
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2018
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Comprehensive (Loss)
Income
Attributable to Trio-Tech
International:
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Net income
(loss)
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$655
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$(705)
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$967
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$570
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Foreign Currency Translation, net of tax
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401
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849
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(189)
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1,809
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Comprehensive Income
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1,056
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144
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778
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2,379
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Less: Comprehensive Income (loss)
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Attributable to Non-controlling Interest
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1
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142
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(191)
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255
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Comprehensive Income
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Attributable to Trio-Tech International
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$1,055
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$2
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$969
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$2,124
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TRIO-TECH INTERNATIONAL AND SUBSIDIARIES
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CONDENSED
CONSOLIDATED BALANCE SHEETS
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(IN THOUSANDS, EXCEPT NUMBER OF SHARES)
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Mar. 31,
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Jun. 30,
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2019
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2018
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ASSETS
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(unaudited)
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CURRENT ASSETS:
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Cash and cash equivalents
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$4,602
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$6,539
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Short-term deposits
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3,646
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653
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Trade accounts receivable, net
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7,120
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7,747
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Other receivables
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1,034
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881
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Inventories, net
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2,918
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2,930
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Prepaid expenses and other current assets
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307
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208
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Assets held for sale
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90
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91
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Total current assets
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19,717
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19,049
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Deferred tax asset
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335
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400
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Investment properties, net
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828
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1,146
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Property, plant and equipment, net
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12,687
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11,935
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Other assets
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1,728
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2,249
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Restricted term deposits
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1,705
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1,695
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Total non-current assets
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17,283
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17,425
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TOTAL ASSETS
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$37,000
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$36,474
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LIABILITIES AND SHAREHOLDERS’ EQUITY
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CURRENT LIABILITIES:
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Lines of credit
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$622
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$2,043
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Accounts payable
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3,021
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3,704
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Accrued expenses
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3,882
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3,172
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Income taxes payable
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404
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285
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Current portion of bank loans payable
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492
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367
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Current portion of capital leases
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257
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250
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Total current liabilities
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8,678
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9,821
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Bank loans payable, net of current portion
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2,442
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1,437
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Capital leases, net of current portion
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325
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524
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Deferred tax liabilities
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343
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327
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Income
taxes payable
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613
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828
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Other non-current liabilities
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32
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36
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Total non-current liabilities
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3,755
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3,152
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TOTAL LIABILITIES
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$12,433
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$12,973
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EQUITY
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|
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TRIO-TECH INTERNATIONAL'S SHAREHOLDERS' EQUITY:
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Common stock, no par value, 15,000,000
shares authorized;
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3,673,055 and
3,553,055 shares issued and outstanding at
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March
31, 2019 and June 30, 2018,
respectively
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11,424
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$11,023
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Paid-in capital
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3,261
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3,249
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Accumulated retained earnings
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6,621
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5,525
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Accumulated other comprehensive gain-translation adjustments
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2,055
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2,182
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Total Trio-Tech International shareholders' equity
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23,361
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21,979
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Non-controlling interest
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1,206
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1,522
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TOTAL EQUITY
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$24,567
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$23,501
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TOTAL LIABILITIES AND EQUITY
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$37,000
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$36,474
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