Trio-Tech International (NYSE MKT: TRT) today announced financial results for the third quarter and first nine months of fiscal 2022.

Third Quarter Results

Revenue for the third fiscal quarter increased 37% to $11,138,000 from $8,112,000 for the same quarter of fiscal 2021. Distribution revenue increased 147% to $3,620,000 from $1,467,000 last year. Testing services revenue increased 26% to $4,417,000 from $3,504,000 a year ago. Manufacturing revenue decreased 1% to $3,097,000 compared to $3,130,000 last year.

Gross margin increased 20% to $2,474,000 compared to $2,060,000 for last year’s third quarter, reflecting improved margins in the Company’s testing and distribution segments, offset by lower margins in manufacturing.

Total other income was $96,000, compared to $248,000 in the same quarter last year. In the third quarter this year, government grants to offset the negative impact of the COVID-19 pandemic were $Nil, compared to $107,000 in similar governmental grants in the same quarter last year.

The net loss attributable to Trio-Tech International Common Shareholders for the three months ended March 31, 2022 was $167,000, or $0.04 per share, which includes non-cash stock compensation expenses of $433,000. This compares to net income of $178,000, or $0.04 per diluted share, including non-cash stock compensation expenses of $129,000, for the same quarter last year.

Nine Months Results

For the first nine months of fiscal 2022, revenue increased 39% to $32,231,000 compared to $23,154,000 for the first nine months of fiscal 2021, reflecting a 40% increase in testing services revenue to $13,983,000 from $10,018,000, a 112% increase in distribution revenue to $8,038,000 from $3,790,000, and a 9% increase in manufacturing revenue to $10,187,000 from $9,324,000.

Gross margin for the first nine months of fiscal 2022 increased 57% to $8,543,000, or 27% of revenue, from $5,448,000, or 24% of revenue, for the first nine months last year.

General and administrative expenses increased to $6,305,000, or 20% of revenue, for the first nine months of fiscal 2022 from $5,245,000, or 23% of revenue, for the same period last year, while total operating expenses increased to $7,047,000, or 22% of revenue, from $5,877,000, or 25% of revenue.

Net income attributable to Trio-Tech International Common Shareholders for the first nine months of fiscal 2022 was $1,605,000, or $0.38 per diluted share, compared to $405,000, or $0.10 per diluted share, for the first nine months of fiscal 2021.

Shareholders' equity at March 31, 2022 was $28,120,000, or $6.98 per outstanding share, compared to $25,634,000, or $6.55 per outstanding share, at June 30, 2021. There were approximately 4,029,180 common shares outstanding at March 31, 2022.

CEO Comments

S.W. Yong, Trio-Tech's CEO, said, "We were required to close our facility in Tianjin, China for several days in January in compliance with the city government’s lockdown measures for mandatory testing of residents under China’s ZERO-COVID policy. We resumed full operations in Tianjin on January 21, 2022. This temporary shut-down resulted in lost revenue for the fiscal third quarter of approximately $260,000. Despite this, we posted sharp revenue gains in our testing services and distribution operations for the third quarter, typically the weakest quarter of our fiscal year, which is an encouraging sign of improving business conditions for our customers and their gradual recovery from the effects of the pandemic. We are cautiously optimistic about the business outlook for the fourth quarter.”

Yong added, “During the third quarter, we established our new joint venture company, Trio-Tech (Jiangsu) Co. Ltd. to provide sub-contract services to semiconductor and other electronics industries, primarily in Suzhou, China. While this joint venture has commenced operations and recently signed its first customer contract, it is not expected to contribute substantially to operating results in the current fiscal year.

“The Board of Directors would like to thank and congratulate our Chief Financial Officer, Mr. Victor Ting, upon his retirement next month, for his many years of service and innumerable contributions to the Company. His valuable knowledge will continue to benefit Trio-Tech as he serves on our Board of Directors. Taking over his duties as CFO beginning in Fiscal 2023 will be Ms. Srinivasan Anitha, a Chartered Accountant and Certified Internal Auditor who has worked closely with the Company and its management for the past 15 years. We believe her thorough knowledge and experience of our business and background will be a significant asset as we work to improve operating margins and drive increased shareholder value in the coming years,” he said.

About Trio‑Tech

Established in 1958, Trio-Tech International is located in Van Nuys, California, with its Principal Executive Office and regional headquarter in Singapore. Trio-Tech International is a diversified business group with interests in semiconductor testing services, manufacturing and distribution of semiconductor testing equipment, and real estate. Our subsidiary locations include Tianjin, Suzhou, Chongqing in China, as well as Kuala Lumpur Malaysia and Bangkok Thailand. Further information about Trio-Tech's semiconductor products and services can be obtained from the Company's Web site at triotech.com and www.universalfareast.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; trade tension between U.S. and China 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

2022

2021

2022

2021

Manufacturing

$

3,097

 

$

3,130

 

10,187

 

$

9,324

 

Testing Services

 

4,417

 

 

3,504

 

13,983

 

 

10,018

 

Distribution

 

3,620

 

 

1,467

 

8,038

 

 

3,790

 

Real Estate

 

4

 

 

11

 

23

 

 

22

 

 

 

11,138

 

 

8,112

 

32,231

 

 

23,154

 

Cost of Sales

 

 

 

 

Cost of manufactured products sold

 

2,530

 

 

2,148

 

7,838

 

 

6,855

 

Cost of testing services rendered

 

3,169

 

 

2,651

 

9,141

 

 

7,651

 

Cost of distribution

 

2,945

 

 

1,234

 

6,651

 

 

3,142

 

Cost of real estate

 

20

 

 

19

 

58

 

 

58

 

 

 

8,664

 

 

6,052

 

23,688

 

 

17,706

 

Gross Margin

 

2,474

 

 

2,060

 

8,543

 

 

5,448

 

Operating Expenses:

 

 

 

 

General and administrative

 

2,378

 

 

1,923

 

6,305

 

 

5,245

 

Selling

 

146

 

 

123

 

449

 

 

356

 

Research and development

 

80

 

 

79

 

293

 

 

277

 

Gain on disposal of property, plant and equipment

 

--

 

 

--

 

--

 

 

(1

)

Total operating expenses

 

2,604

 

 

2,125

 

7,047

 

 

5,877

 

(Loss) Income from Operations

 

(130

)

 

(65

)

1,496

 

 

(429

)

Other Income (Expenses)

 

 

 

 

Interest expense

 

(31

)

 

(25

)

(87

)

 

(96

)

Other income, net

 

127

 

 

273

 

669

 

 

627

 

Total other income

 

96

 

 

248

 

582

 

 

531

 

(Loss) Income from Continuing Operations before Income Taxes

 

(34

)

 

183

 

2,078

 

 

102

 

Income Tax Expenses

 

(170

)

 

(118

)

(503

)

 

(125

)

(Loss) Income from Continuing Operations

 

 

 

 

before Non-controlling Interest, net of tax

 

(204

)

 

65

 

1,575

 

 

(23

)

Income (loss) from Discontinued Operations, net of tax

 

--

 

 

1

 

5

 

 

(26

)

NET (LOSS) INCOME

 

(204

)

 

66

 

1,580

 

 

(49

)

Less: Net (loss) Attributable to Non-controlling Interest

 

(37

)

 

(112

)

(25

)

 

(454

)

Net (Loss) Income Attributable to Trio-Tech International

 

(167

)

 

178

 

1,605

 

 

405

 

Net Income Attributable to Trio-Tech International:

 

 

 

 

(Loss) Income from Continuing Operations, net of tax

 

(167

)

 

177

 

1,603

 

 

418

 

Income (loss) from Discontinued Operations, net of tax

 

--

 

 

1

 

2

 

 

(13

)

Net (Loss) Income Attributable to Trio-Tech International

$

(167

)

$

178

 

1,605

 

$

405

 

Basic (Loss) Earnings per Share

$

(0.04

)

$

0.05

 

0.40

 

$

0.11

 

Diluted (Loss) Earnings per Share

$

(0.04

)

$

0.04

 

0.38

 

$

0.10

 

Weighted Average Shares Outstanding - Basic

 

3,949

 

 

3,913

 

3,949

 

 

3,913

 

Weighted Average Shares Outstanding - Diluted

 

4,221

 

 

4,046

 

4,140

 

 

4,030

 

 

TRIO‑TECH INTERNATIONAL AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

UNAUDITED (IN THOUSANDS)

 

 

 

Three Months Ended

Nine Months Ended

March 31,

March 31,

2022

2021

2022

2021

Comprehensive (Loss) Income

 

 

 

 

Attributable to Trio-Tech International:

Net (loss) income

$

(204

)

$

66

 

$

1,580

 

$

(49

)

Foreign Currency Translation, net of tax

 

16

 

 

(468

)

 

(22

)

 

1,115

 

Comprehensive (Loss) Income

 

(188

)

 

(402

)

 

1,558

 

 

1,066

 

Less: Comprehensive Income (Loss)

 

 

 

 

Attributable to Non-controlling Interest

 

(46

)

 

(136

)

 

(40

)

 

(455

)

Comprehensive (Loss) Income

 

 

 

 

Attributable to Trio-Tech International

$

(142

)

$

(266

)

$

1,598

 

$

1,521

 

 

TRIO‑TECH INTERNATIONAL AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT NUMBER OF SHARES)

 

 

 

 

 

Mar. 31,

Jun. 30,

2022

2021

ASSETS

(unaudited)

 

CURRENT ASSETS:

 

 

Cash and cash equivalents

$

7,478

$

5,836

Short-term deposits

 

4,953

 

6,651

Trade accounts receivable, net

 

10,585

 

8,293

Other receivables

 

735

 

325

Contract assets

 

594

 

337

Inventories, net

 

2,272

 

2,080

Prepaid expenses and other current assets

 

732

 

418

Financed Sales Receivable

 

21

 

19

Total current assets

 

27,370

 

23,959

Deferred tax assets

 

189

 

217

Investment properties, net

 

636

 

681

Property, plant and equipment, net

 

9,107

 

9,531

Operating lease right-of-use assets

 

2,602

 

1,876

Other assets

 

141

 

262

Restricted term deposits

 

1,735

 

1,741

Financed Sales Receivable

 

23

 

39

Total non-current assets

 

14,433

 

14,347

TOTAL ASSETS

$

41,803

$

38,306

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

CURRENT LIABILITIES:

 

 

Lines of credit

$

523

$

72

Accounts payable

 

2,220

 

3,702

Accrued expenses

 

3,870

 

2,690

Contract Liabilities

 

1,172

 

673

Income taxes payable

 

476

 

314

Current portion of bank loans payable

 

493

 

439

Current portion of finance leases

 

136

 

197

Current portion of operating leases

 

758

 

672

Total current liabilities

 

9,648

 

8,759

Bank loans payable, net of current portion

 

1,470

 

1,621

Finance leases, net of current portion

 

152

 

253

Operating leases, net of current portion

 

1,844

 

1,204

Income taxes payable

 

281

 

385

Other non-current liabilities

 

31

 

31

Total non-current liabilities

 

3,778

 

3,494

TOTAL LIABILITIES

 

13,426

 

12,253

 

 

 

EQUITY

 

 

TRIO-TECH INTERNATIONAL'S SHAREHOLDERS' EQUITY:

 

 

Common stock, no par value, 15,000,000 shares authorized; 4,029,180 and 3,913,055

 

 

shares issued and outstanding at March 31, 2022 and June 30, 2021, respectively

 

12,607

 

12,178

Paid-in capital

 

4,692

 

4,233

Accumulated retained earnings

 

8,429

 

6,824

Accumulated other comprehensive gain-translation adjustments

 

2,392

 

2,399

Total Trio-Tech International shareholders' equity

 

28,120

 

25,634

Non-controlling interest

 

257

 

419

TOTAL EQUITY

 

28,377

 

26,053

TOTAL LIABILITIES AND EQUITY

$

41,803

$

38,306

 

Company Contact: A. Charles Wilson Chairman (818) 787-7000

Investor Contact: Berkman Associates (310) 927-3108 robert.jacobs@jacobscon.com

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