Trio-Tech International (NYSE MKT: TRT) today announced
financial results for the third quarter and first nine months of
fiscal 2020.
Third Quarter Results
Revenue for the three months ended March 31, 2020 decreased 4%
to $8,501,000 compared to $8,838,000 for the third quarter of
fiscal 2019. Manufacturing revenue decreased 19% to $2,519,000
compared to $3,097,000 last year, as customers’ uncertainties
relating to the COVID-19 pandemic appear to have delayed certain
orders. Testing services revenue decreased 6% to $3,741,000 from
$3,989,000 for the same quarter last year, primarily reflecting the
Malaysian government’s effort to reduce the spread of COVID-19 by
restricting the transportation of workers. Distribution revenue
increased 29% to $2,225,000 from $1,727,000 for the third quarter
last year.
Reflecting lower revenue and unusually high labor costs in China
due to the extension of the Lunar New Year holiday associated with
the COVID-19 pandemic, gross margin decreased to $1,786,000, or 21%
of revenue, for this year’s third quarter from $2,174,000, or 25%
of revenue, for the third quarter a year ago.
Operating expenses increased 5% to $2,153,000 from $2,051,000
for the third quarter last year, primarily due to a one-time
impairment charge of $139,000 on obsolete testing services
equipment.
The loss from operations for the third quarter of fiscal 2020
was $367,000. This compares to an operating profit of $123,000 for
the third quarter of fiscal 2019.
Net income attributable to Trio-Tech International Common
Shareholders for the three months ended March 31, 2020 was $70,000,
or $0.02 per diluted share, compared to $683,000, or $0.19 per
diluted share, for the third quarter of fiscal 2019. Net income for
the third quarter of 2020 benefitted from $263,000 in other income,
which included financial assistance received from local governments
in Singapore and China to mitigate the negative impact of the
COVID-19 pandemic.
CEO Comments
S.W. Yong, Trio-Tech's CEO, said, "In response to the COVID-19
pandemic, we have implemented new operating procedures to enhance
the safety of our employees and customers. Our Singapore and
Malaysia operations have been classified as part of the global
supply chain, but both are subject to social distancing
requirements and manpower restriction that affect productivity and
revenue. No one knows how long today’s stringent safety measures
will last. Accordingly, we continue to closely monitor developments
everywhere we operate, and will take additional precautionary steps
if necessary to protect the interests of all Trio-Tech stakeholders
and to protect the safety of our employees.”
Nine Months Results
For the first nine months of fiscal 2020 ended March 31, 2020,
revenue decreased 5% to $27,286,000 compared to $28,573,000 for the
same period last year. Manufacturing revenue declined 12% to
$8,881,000 from $10,086,000, while testing services revenue
declined 6% to $12,018,000 from $12,819,000. Distribution revenue
increased 13% to $6,338,000 compared to $5,587,000 for the first
nine months of fiscal 2019.
Overall gross margin for the first nine months of fiscal 2020
decreased 9% to $5,943,000, or 22% of revenue, from $6,533,000, or
23% of revenue, for the same period of fiscal 2019.
Operating expenses increased 3% to $6,261,000 from $6,060,000
for last year’s first nine months, primarily the result of the
impairment charge mentioned above. The operating loss for the first
nine months of fiscal 2020 was $318,000, compared to an operating
profit of $473,000 for the same period last year.
For the first nine months of fiscal 2020, other income increased
to $1,576,000 from $655,000 for the first nine months of fiscal
2019. This increase was mainly due to a non-recurring gain on the
sale of assets of $1,172,000 compared to $685,000 for the same
period last year, coupled with the government grants mentioned
above.
Net income attributable to Trio-Tech International Common
Shareholders for the first nine months of fiscal 2020 was $769,000,
or $0.21 per diluted share, compared to $1,096,000, or $0.29 per
diluted share for the first nine months of fiscal 2019.
Shareholders' equity at March 31, 2020 was $24,867,000, or $6.77
per outstanding share, compared to $24,861,000, or $6.77 per
outstanding share, at June 30, 2019. There were approximately
3,673,055 common shares outstanding at March 31, 2020.
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; public health issues
related to the COVID-19 pandemic; 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
CONDENSED CONSOLIDATED STATEMENTS
OF OPERATIONS AND COMPREHENSIVE INCOME
UNAUDITED (IN THOUSANDS, EXCEPT
EARNINGS PER SHARE)
Three Months Ended
Nine Months Ended
March 31,
March 31,
Revenue
2020
2019
2020
2019
Manufacturing
$
2,519
$
3,097
$
8,881
$
10,086
Testing Services
3,741
3,989
12,018
12,819
Distribution
2,225
1,727
6,338
5,587
Real Estate
16
25
49
81
8,501
8,838
27,286
28,573
Costs of Sales
Cost of manufactured products sold
1,851
2,303
6,789
7,806
Cost of testing services rendered
2,937
2,862
9,046
9,351
Cost of distribution
1,909
1,483
5,454
4,831
Cost of real estate
18
16
54
52
6,715
6,664
21,343
22,040
Gross Margin
1,786
2,174
5,943
6,533
Operating Expenses:
General and administrative
1,754
1,742
5,319
5,223
Selling
181
246
547
580
Research and development
79
76
280
270
Impairment loss on long-lived assets
139
--
139
--
Gain on disposal of property, plant and
equipment
--
(13
)
(24
)
(13
)
Total operating expenses
2,153
2,051
6,261
6,060
(Loss) income from Operations
(367
)
123
(318
)
473
Other Income
Interest expense
(63
)
(74
)
(186
)
(250
)
Gain on sale of assets held for sale
--
685
1,172
685
Other income, net
440
128
590
220
Total other income
377
739
1,576
655
Income from Continuing Operations before
Income Taxes
10
862
1,258
1,128
Income Tax Benefit (Expenses)
8
(209
)
(112
)
(159
)
Income from Continuing Operations before
Non-controlling Interest, net of tax
18
653
1,146
969
(Loss) income from Discontinued
Operations, net of tax
(21
)
2
(21
)
(2
)
NET (LOSS) INCOME
(3
)
655
1,125
967
Less: Net (loss) income Attributable to
Non-controlling Interest
(73
)
(28
)
356
(129
)
Net Income Attributable to Trio-Tech
International
70
683
769
1,096
Net Income Attributable to Trio-Tech
International:
Income from Continuing Operations, net of
tax
81
682
780
1,097
(Loss) Income from Discontinued
Operations, net of tax
(11
)
1
(11
)
(1
)
Net Income Attributable to Trio-Tech
International
$
70
$
683
$
769
$
1,096
Basic Earnings per Share
$
0.02
$
0.19
$
0.21
$
0.30
Diluted Earnings per Share
$
0.02
$
0.19
$
0.21
$
0.29
Weighted Average Shares Outstanding -
Basic
3,673
3,673
3,673
3,673
Weighted Average Shares Outstanding -
Diluted
3,759
3,685
3,734
3,746
TRIO‑TECH INTERNATIONAL AND
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS
OF COMPREHENSIVE INCOME
UNAUDITED (IN THOUSANDS)
Three Months Ended
Nine Months Ended
March 31,
March 31,
2020
2019
2020
2019
Comprehensive (Loss) Income Attributable
to Trio-Tech International:
Net (loss) income
$
(3
)
$
655
$
1,125
$
967
Foreign Currency Translation, net of
tax
(1,013
)
401
(1,051
)
(189
)
Comprehensive (Loss) Income
(1,016
)
1,056
74
778
Less: Comprehensive (Loss) Income
Attributable to Non-controlling Interest
(64
)
1
376
(191
)
Comprehensive (Loss) Income Attributable
to Trio-Tech International
$
(952
)
$
1,055
$
(302
)
$
969
TRIO‑TECH INTERNATIONAL AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
(IN THOUSANDS, EXCEPT NUMBER OF
SHARES)
Mar. 31,
Jun. 30,
2020
2019
ASSETS
(unaudited)
CURRENT ASSETS:
Cash and cash equivalents
$
4,370
$
4,863
Short-term deposits
6,309
4,144
Trade accounts receivable, net
6,397
7,113
Other receivables
1,065
817
Inventories, net
2,226
2,427
Prepaid expenses and other current
assets
267
287
Assets held for sale
--
89
Total current assets
20,634
19,740
Deferred tax assets
565
390
Investment properties, net
705
782
Property, plant and equipment, net
10,597
12,159
Operating lease right-of-use assets
1,073
--
Other assets
1,595
1,750
Restricted term deposits
1,627
1,706
Total non-current assets
16,162
16,787
TOTAL ASSETS
$
36,796
$
36,527
LIABILITIES AND SHAREHOLDERS’
EQUITY
CURRENT LIABILITIES:
Lines of credit
$
398
$
187
Accounts payable
3,129
3,272
Accrued expenses
3,065
3,486
Income taxes payable
396
417
Current portion of bank loans payable
378
488
Current portion of finance leases
246
283
Current portion of operating leases
541
--
Total current liabilities
8,153
8,133
Bank loans payable, net of current
portion
1,919
2,292
Finance leases, net of current portion
486
442
Operating leases, net of current
portion
532
--
Deferred tax liabilities
375
327
Income taxes payable
430
439
Other non-current liabilities
34
33
Total non-current liabilities
3,776
3,533
TOTAL LIABILITIES
11,929
11,666
EQUITY
TRIO-TECH INTERNATIONAL'S SHAREHOLDERS'
EQUITY:
Common stock, no par value, 15,000,000
shares authorized; 3,673,055 issued and outstanding at March 31,
2020 and June 30, 2019, respectively
11,424
11,424
Paid-in capital
3,357
3,305
Accumulated retained earnings
7,839
7,070
Accumulated other comprehensive
gain-translation adjustments
796
1,867
Total Trio-Tech International
shareholders' equity
23,416
23,666
Non-controlling interest
1,451
1,195
TOTAL EQUITY
24,867
24,861
TOTAL LIABILITIES AND EQUITY
$
36,796
$
36,527
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200521005254/en/
Company Contact: A. Charles Wilson Chairman (818)
787-7000
Investor Contact: Berkman Associates (310) 927-3108
info@BerkmanAssociates.com
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