Trio-Tech International (NYSE MKT: TRT) today announced
financial results for the fourth quarter and fiscal year ended June
30, 2019.
Fourth Quarter Results
Overall revenue for the fourth quarter of fiscal 2019 decreased
1% to $10,625,000 from $10,760,000 for the fourth quarter of fiscal
2018. While manufacturing revenue increased 17% to $4,803,000
compared to $4,116,000 last year, reflecting increased demand in
the Company’s Singapore operations, and distribution revenue
increased 11% to $1,864,000 from $1,678,000, lower demand in
Trio-Tech’s Malaysia and Tianjin, China operations led to a 20%
decrease in testing services revenue to $3,941,000 from $4,937,000
last year.
The decline in overall revenue, coupled with a change in product
mix, reduced gross margin to $2,468,000 for the fourth quarter of
fiscal 2019 from $2,851,000 for last year’s fourth quarter. As a
percentage of revenue, gross margin declined to 23% compared to 27%
of revenue for the same quarter last fiscal year.
Income from operations was $321,000 for the fourth quarter of
fiscal 2019 compared to $709,000 for the fourth quarter of fiscal
2018.
Net income for the fourth quarter of fiscal 2019 was $449,000,
or $0.12 per diluted share. This compares to net income for the
fourth quarter of fiscal 2018 $675,000, or $0.17 per diluted
share.
Shareholders' equity at June 30, 2019 was $24,861,000, or $6.77
per outstanding share, compared to $23,501,000, or $6.61 per
outstanding share, at June 30, 2018. There were 3,673,055 common
shares outstanding at June 30, 2019.
CEO Comments
S.W. Yong, Trio-Tech's CEO, said, “Despite the decrease in
Trio-Tech’s fiscal 2019 revenue, we achieved a 31% increase in net
income to $1,545,000, or $0.41 per diluted share, compared to
$1,184,000, or $0.31 per diluted in fiscal 2018. Net income
benefitted from a one-off gain on the sale of properties in our
Chongqing real-estate operation and lower tax expenses for fiscal
2019. We remain convinced of the quality of our business and our
opportunities for long term growth despite the headwinds created by
the ongoing trade tension between the United States and China.
"We are encouraged by the sharp increase in fourth quarter
revenue in our manufacturing and distribution segments, compared to
the fourth quarter of fiscal 2018. We continued to invest in the
business in fiscal 2019, including increased capital expenditures
to address opportunities for growth in specific markets. We also
were able to present Trio-Tech’s world-class capabilities in
introductory and follow-up meetings with our counterparts at
several potentially large new accounts, an effort we believe will
benefit the Company over time."
Fiscal 2019 Results
For the fiscal year ended June 30, 2019, revenue decreased 7% to
$39,198,000 compared to $42,361,000 in fiscal 2018. Manufacturing
revenue decreased 7% to $14,889,000 from $15,978,000, and testing
services revenue decreased 14% to $16,760,000 from $19,391,000 for
fiscal 2018. Distribution revenue increased 9% to $7,451,000 from
$6,853,000 for fiscal 2018.
Gross margin for fiscal 2019 decreased to $9,001,000, or 23% of
revenue, compared to $10,638,000, or 25% of revenue, for fiscal
2018.
Income from operations decreased 64% to $794,000 for fiscal 2019
compared to $2,188,000 for fiscal 2018.
Net income for fiscal 2019 was $1,545,000, or $0.41 per diluted
share. This compares to net income for fiscal 2018 of $1,184,000,
or $0.31 per diluted share.
Net income for fiscal 2019 benefited from $615,000 in other
income, which included a gain of $685,000 on the sale of
properties. In comparison, other income contributed a gain of
$102,000 for fiscal 2018. Net income for 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. As of
December 31, 2018, the Company’s accounting for the Tax Act was
complete. The provision for income taxes for the year ended June
30, 2019 includes a $145,000 decrease from the completion of our
provisional accounting for the effects of the Tax Act under SAB
118. The decrease is associated with the one-time mandatory
repatriation tax related to certain post-1986 earnings and profits
that were deferred from U.S. taxation by the Company’s foreign
subsidiaries. The US federal income tax return was filed during Q4,
which included the $755,000 one-time repatriation tax as well as
utilization of net operating losses and tax credits amounting to
$192,000 which was not finalized until the filing of return.
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
AUDITED (IN THOUSANDS, EXCEPT
EARNINGS PER SHARE)
Three Months Ended
Twelve Months Ended
June 30,
June 30,
Revenue
2019
2018
2019
2018
Manufacturing
$
4,803
$
4,116
$
14,889
$
15,978
Testing services
3,941
4,937
16,760
19,391
Distribution
1,864
1,678
7,451
6,853
Real estate
17
29
98
139
10,625
10,760
39,198
42,361
Cost of Sales
Cost of manufactured products sold
3,587
2,967
11,393
12,213
Cost of testing services rendered
2,851
3,442
12,202
13,323
Cost of distribution
1,674
1,470
6,505
6,068
Cost of real estate
45
30
97
119
8,157
7,909
30,197
31,723
Gross Margin
2,468
2,851
9,001
10,638
Operating Expenses:
General and administrative
1,826
1,911
7,049
7,250
Selling
246
214
826
826
Research and development
75
74
345
451
Gain on disposal of property, plant and
equipment
--
(57
)
(13
)
(77
)
Total operating expenses
2,147
2,142
8,207
8,450
Income from Operations
321
709
794
2,188
Other (Expenses) Income
Interest expense
(69
)
(59
)
(319
)
(233
)
Other income, net
29
24
249
335
Gain on sale of properties
--
--
685
--
Total other (Expenses) Income
(40
)
(35
)
615
102
Income from Continuing Operations before
Income Taxes
281
674
1,409
2,290
Income Tax Benefit (Expense)
201
48
42
(987
)
Income from Continuing Operations before
Non-controlling Interest, net of tax
482
722
1,451
1,303
Loss from discontinued operations, net of
tax
(1
)
(2
)
(3
)
(13
)
NET INCOME
481
720
1,448
1,290
Less: Net income (loss) attributable to
the non-controlling interest
32
45
(97
)
106
Net Income attributable to Trio-Tech
International
449
675
1,545
1,184
Net Income Attributable to Trio-Tech
International:
Income from continuing operations, net of
tax
451
677
1,548
1,197
Loss from discontinued operations, net of
tax
(2
)
(2
)
(3
)
(13
)
Net Income Attributable to Trio-Tech
International
449
$
675
1,545
$
1,184
Basic Earnings per Share - Continuing
Operations
$
0.12
$
0.19
$
0.42
$
0.34
Basic Loss per Share - Discontinued
Operations
--
(0.01
)
--
(0.01
)
Basic Earnings per Share
$
0.12
$
0.18
$
0.42
$
0.33
Diluted Earnings per Share – Continuing
Operations
$
0.12
$
0.18
$
0.41
$
0.32
Diluted Loss per Share – Discontinued
Operations
--
(0.01
)
--
(0.01
)
Diluted Earnings per Share
$
0.12
$
0.17
$
0.41
$
0.31
Weighted Average Shares Outstanding -
Basic
3,673
3,553
3,673
3,553
Weighted Average Shares Outstanding -
Diluted
3,681
3,714
3,762
3,771
TRIO‑TECH INTERNATIONAL AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
OPERATIONS AND COMPREHENSIVE INCOME
AUDITED (IN THOUSANDS, EXCEPT
EARNINGS PER SHARE)
Three Months Ended
Twelve Months Ended
June 30,
June 30,
2019
2019
2019
2018
Comprehensive Income Attributable to
Trio-Tech International Common Shareholders:
Net income
$
481
$
720
$
1,448
$
1,290
Foreign currency translation, net of
tax
(231
)
(1,081
)
(420
)
728
Comprehensive Income (Loss)
250
(361
)
1,028
2,018
Less: Comprehensive (Loss) Income
attributable to non-controlling interests
(11
)
30
(202
)
285
Comprehensive Income (Loss) Attributable
to Trio-Tech International
$
261
$
(391
)
$
1,230
$
1,733
TRIO‑TECH INTERNATIONAL AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
(IN THOUSANDS, EXCEPT NUMBER OF
SHARES)
June 30,
2019
2018
ASSETS
(Audited)
CURRENT ASSETS:
Cash and cash equivalents
$
4,863
$
6,539
Short-term deposits
4,144
653
Trade accounts receivable, net
7,113
7,747
Other receivables
817
881
Inventories, net
2,427
2,930
Prepaid expenses and other current
assets
287
208
Assets held for sale
89
91
Total current assets
19,740
19,049
Deferred tax assets
390
400
Investment properties, net
782
1,146
Property, plant and equipment, net
12,159
11,935
Other assets
1,750
2,249
Restricted term deposits
1,706
1,695
Total non-current assets
16,787
17,425
TOTAL ASSETS
$
36,527
$
36,474
LIABILITIES AND SHAREHOLDERS’
EQUITY
CURRENT LIABILITIES:
Lines of credit
$
187
$
2,043
Accounts payable
3,272
3,704
Accrued expenses
3,486
3,172
Income taxes payable
417
285
Current portion of bank loans payable
488
367
Current portion of capital leases
283
250
Total current liabilities
8,133
9,821
Bank loans payable, net of current
portion
2,292
1,437
Capital leases, net of current portion
442
524
Deferred tax liabilities
327
327
Income taxes payable
439
828
Other non-current liabilities
33
36
Total non-current liabilities
3,533
3,152
TOTAL LIABILITIES
11,666
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 June 30, 2019 and June 30, 2018, respectively
11,424
11,023
Paid-in capital
3,305
3,249
Accumulated retained earnings
7,070
5,525
Accumulated other comprehensive
gain-translation adjustments
1,867
2,182
Total Trio-Tech International
shareholders' equity
23,666
21,979
Non-controlling interest
1,195
1,522
TOTAL EQUITY
24,861
23,501
TOTAL LIABILITIES AND EQUITY
$
36,527
$
36,474
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190923005655/en/
Company Contact: A. Charles Wilson Chairman (818)
787-7000
Investor Contact: Berkman Associates (310) 477-3118
info@BerkmanAssociates.com
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