Trio-Tech International (NYSE MKT: TRT) today announced
financial results for the third quarter and first nine months of
fiscal 2018.
Nine Months Results
For the first nine months of fiscal 2018 ended March 31, 2018,
revenue increased 13% to $31,601,000 compared to $27,900,000 for
the first nine months of fiscal 2017, reflecting higher revenue in
each of the Company's business segments. Gross margin for the first
nine months of fiscal 2018 increased 10% to $7,787,000, or 25% of
revenue, compared to $7,099,000, or 25% of revenue, for the first
nine months of fiscal 2017.
Income from operations for this year's first nine months
increased 30% to $1,479,000, or 5% of revenue, compared to
$1,140,000, or 4% of revenue, for the same period last year.
Trio-Tech recognized 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. 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. After this one-time non-cash tax effect, net income
attributable to Trio-Tech common shareholders for the first nine
months of fiscal 2018 was $509,000, or $0.14 per diluted share.
Shareholders' equity at March 31, 2018 was $23,923,000, or $6.73
per outstanding share, compared to $21,527,000, or $6.11 per
outstanding share, at June 30, 2017. Shareholder’s equity benefited
from a foreign currency translation gain of $1,809,000, compared to
a loss of $1,087,000 for the first nine months last year. There
were approximately 3,553,055 common shares outstanding at March 31,
2018.
Third Quarter Results
For the third quarter of fiscal 2018 ended March 31, 2018,
revenue increased 3% to $10,104,000 compared to revenue of
$9,825,000 for the third quarter last year. A 24% increase in
testing services revenue and a 29% increase in distribution revenue
offset a 26% decrease in manufacturing revenue attributable to a
decrease in orders from a large customer. A change in product mix
in both manufacturing and testing services reduced overall gross
margin to 22% of sales for this year's third quarter, compared to
25% of sales for the third quarter of fiscal 2017.
After the one-time non-cash income tax expense mentioned above,
the net loss for the third quarter of fiscal 2018 was $739,000, or
$0.20 per diluted share.
CEO Comments
S.W. Yong, Trio-Tech's CEO, said, "It’s important to emphasize
that income from operations increased 30% for the first nine months
of fiscal 2018, compared to the same period last year and that the
Company would have posted a strong increase in net income, after
excluding the one-time effect of the new U.S. tax act.
"We are encouraged that demand for Trio-Tech's testing and
distribution services remained as robust in the third quarter as it
was in the year's first half. We are working diligently to take
advantage of opportunities for growth. While our fiscal third
quarter results are typically affected by a slowdown in business
activity related to the Chinese New Year and its festivities, we
expect improving business operations in the fourth quarter of
fiscal 2018.
"As always, we are focused on improving operating efficiencies
and reducing costs wherever possible, even as we deliver the
highest standard of service and value to our customers. This
time-tested strategy is viewed as the foundation for Trio-Tech's
continued success in the years ahead."
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 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 2018 2017
2018 2017 Manufacturing $ 3,124 $ 4,230
$ 11,862 $ 11,221 Testing Services 4,913 3,977 14,454 12,204
Distribution 2,033 1,581 5,175 4,360 Others 34
37 110 115 10,104
9,825 31,601 27,900 Costs
of Sales Cost of manufactured products sold 2,530 3,345 9,246 8,762
Cost of testing services rendered 3,491 2,597 9,881 8,069 Cost of
distribution 1,821 1,407 4,598 3,899 Others 30
29 89 71 7,872
7,378 23,814 20,801 Gross
Margin 2,232 2,447 7,787 7,099 Operating Expenses: General and
administrative 1,773 1,659 5,339 5,178 Selling 181 222 612 587
Research and development 75 51 377 156 (Gain) Loss on disposal of
property, plant and equipment (31 ) 30
(20 ) 38 Total operating expenses 1,998
1,962 6,308 5,959 Income
from Operations 234 485 1,479 1,140 Other (Expenses) Income
Interest expense (64 ) (43 ) (174 ) (149 ) Other income, net
111 45 311 358
Total other income 47 2 137
209 Income from Continuing Operations before
Income Taxes 281 487 1,616 1,349 Income Tax Expenses (980 )
(106 ) (1,035 ) (256 ) (Loss) Income from
Continuing Operations before Non-controlling Interest, net of tax
(699 ) 381 581 1,093 Loss from Discontinued Operations, net of tax
(6 ) (1 ) (11 ) (4 ) NET (LOSS) INCOME
(705 ) 380 570 1,089 Less: Net Income Attributable to
Non-controlling Interest 34 30
61 126 Net (Loss) Income Attributable to
Trio-Tech International (739 ) 350 509 963 Net (Loss) Income
Attributable to Trio-Tech International: (Loss) Income from
Continuing Operations, net of tax (736 ) 351 520 970 Loss from
Discontinued Operations, net of tax (3 ) (1 )
(11 ) (7 ) Net (Loss) Income Attributable to Trio-Tech
International $ (739 ) $ 350 $ 509 $ 963 Basic
(Loss) Earnings per Share $ (0.21 ) $ 0.10 $ 0.15 $
0.28 Diluted (Loss) Earnings per Share $ (0.20 ) $ 0.10
$ 0.14 $ 0.27 Weighted Average Shares
Outstanding - Basic 3,553 3,523 3,553 3,523 Weighted Average Shares
Outstanding - Diluted 3,772 3,639 3,778 3,577
TRIO-TECH
INTERNATIONAL AND SUBSIDIARIES CONDENSED CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME UNAUDITED (IN THOUSANDS)
Three Months Ended Nine Months Ended
March 31, March 31, 2018 2017
2018 2017 Comprehensive (Loss)
Income Attributable to Trio-Tech International: Net (loss)
income $ (705 ) $ 380 $ 570 $ 1,089 Foreign Currency Translation,
net of tax 849 290 1,809
(1,087 ) Comprehensive (Loss) Income 144 670 2,379 2 Less:
Comprehensive Income (loss) Attributable to Non-controlling
Interest 142 (38 ) 255
(75 ) Comprehensive Income Attributable to Trio-Tech International
$ 2 $ 708 $ 2,124 $ 77
TRIO-TECH INTERNATIONAL AND SUBSIDIARIES CONDENSED
CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT NUMBER OF SHARES)
Mar. 31, Jun. 30, 2018 2017
ASSETS (unaudited) CURRENT ASSETS: Cash and cash equivalents
$ 5,376 $ 4,772 Short-term deposits 678 787 Trade accounts
receivable, net 8,617 9,009 Other receivables 392 401 Inventories,
net 2,369 1,756 Prepaid expenses and other current assets 219 226
Asset held for sale 96 86 Total current assets 17,747
17,037 Deferred tax assets 453 375 Investment properties,
net 1,231 1,216 Property, plant and equipment, net 12,881 11,291
Other assets 2,315 1,922 Restricted term deposits 1,761
1,657 Total non-current assets 18,641 16,461
TOTAL ASSETS $ 36,388 $ 33,498
LIABILITIES AND
SHAREHOLDER'S EQUITY CURRENT LIABILITIES: Lines of credit $
1,311 $ 2,556 Accounts payable 2,099 3,229 Accrued expenses 4,648
3,043 Income taxes payable 1,117 233 Current portion of bank loans
payable 376 260 Current portion of capital leases 260
228 Total current liabilities 9,811 9,549 Bank loans
payable, net of current portion 1,593 1,552 Capital leases, net of
current portion 614 531 Deferred tax liabilities 404 295 Other
non-current liabilities 43 44 Total non-current
liabilities 2,654 2,422 TOTAL LIABILITIES
12,465 11,971 EQUITY TRIO-TECH INTERNATIONAL'S SHAREHOLDERS'
EQUITY: Common stock, no par value, 15,000,000 shares authorized;
3,553,055 and 3,523,055 shares issued and outstanding at March 31,
2018 and June 30, 2017, respectively 11,023 10,921 Paid-in capital
3,246 3,206 Accumulated retained earnings 4,850 4,341 Accumulated
other comprehensive gain-translation adjustments 3,248
1,633 Total Trio-Tech International shareholders' equity
22,367 20,101 Non-controlling interest 1,556 1,426
TOTAL EQUITY 23,923 21,527 TOTAL LIABILITIES AND
EQUITY $ 36,388 $ 33,498
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version on businesswire.com: https://www.businesswire.com/news/home/20180518005010/en/
Company Contact:Trio-Tech InternationalA. Charles
WilsonChairman(818) 787-7000orInvestor Contact:Berkman
Associates(310) 477-3118info@BerkmanAssociates.com
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