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Trio-Tech Reports Second Quarter Net Income of $0.11 Per Diluted Share
[February 13, 2020]

Trio-Tech Reports Second Quarter Net Income of $0.11 Per Diluted Share


Trio-Tech International (NYSE American: TRT) today announced financial results for the second quarter and first six months of fiscal 2020.

Fiscal 2020 Second Quarter Results

For the three months ended December 31, 2019, net income increased 23% to $426,000, or $0.11 per diluted share, compared to $348,000, or $0.09 per diluted share, for the second quarter of fiscal 2019. Net income for the second quarter of fiscal 2020 included a $1,172,000 gain on the sale of assets held for sale. There were no corresponding gains in the same period last year.

Revenue for the second quarter of fiscal 2020 decreased 8% to $8,962,000 compared to revenue of $9,690,000 for the same quarter last year. Manufacturing revenue was $3,045,000, a 9% decrease compared to $3,352,000 a year earlier. Semiconductor testing services revenue decreased 12% to $3,887,000 compared to $4,393,000 last year. Distribution revenue increased 5% to $2,014,000 compared to $1,916,000 for the comparable quarter of fiscal 2019.

Gross margin for the second quarter of fiscal 2020 was $1,905,000, or 21% of revenue. This compares to gross margin of $2,258,000, or 23% of revenue, for the same quarter last year, reflecting lower manufacturing and testing services sales.

Operating expenses increased 3% to $2,078,000, or 23% of revenue, for this year's second quarter compared to $2,031,000, or 21% of revenue, last year. Operating expenses increased primarily due to a doubtful debt provision in the Singapore manufacturing segment.

CEO Comments

S.W. Yong, Trio-Tech's CEO, said, "While we are pleased to report an increase in net income for the second quarter and first half of fiscal 2020 primarily driven by asset sales, our operating results continued to be affected by trade disputes as well as customer requests for delayed deliveries. As always, we are focused on delivering unparalleled customer service and the highest quality products to our customers as we strive to improve Trio-Tech's operating performance."

Fiscal 2020 First Half Results

For the six months ended December 31, 2019, net income increased 69% to $699,000, or $0.19 per diluted share, which included the $1,172,000 gain on the sale of assets held for sale. This compares to net income of $413,000, or $0.11 per diluted share, for the six months ended December 31, 2018.

Revenue decreased 5% to $18,785,000 compared to revenue of $19,735,000 for the first half of the last fiscal year. Manufacturing revenue decreased 9% to $6,362,000 compared to $6,989,000 for the same period in the last fiscal year. Semiconductor testing services revenue decreased 6% to $8,277,000 compared to $8,830,000 for the first six months of the prior fiscal year, while distribution revenue increased 7% to $4,113,000 compared to $3,860,000 for the first six months of the prior fiscal year.

Gross margin for the first six months of fiscal 2020 decreased 5% to $4,157,000, or 22% of revenue, compared to $4,359,000, or 22% of revenue, for last fiscal year's first six months.

Operating expenses for the first six months of fiscal 2020 increased 2% to $4,108,000, or 22% of revenue, compared to $4,009,000, or 20% of revenue for the same period of last fiscal year.

Shareholders' equity at December 31, 2019 was $24,330,000, or $6.62 per outstanding share, compared to $23,666,000, or $6.44 per outstanding share, at June 30, 2019. There were approximately 3,673,055 Trio-Tech International common shares outstanding at December 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; the trade tension between U.S. and China; public health issues related to the 2019-Novel Coronavirus 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

UNAUDITED (IN THOUSANDS, EXCEPT EARNINGS PER SHARE)

 

 

 

Three Months Ended

 

Six Months Ended

 

December 31,

 

December 31,

Revenue

 

2019

 

2018

 

2019

 

2018

Manufacturing

 

$

3,045

 

 

$

3,352

 

 

$

6,362

 

 

$

6,989

 

Testing services

 

 

3,887

 

 

 

4,393

 

 

 

8,277

 

 

 

8,830

 

Distribution

 

 

2,014

 

 

 

1,916

 

 

 

4,113

 

 

 

3,860

 

Real Estate

 

 

16

 

 

 

29

 

 

 

33

 

 

 

56

 

 

 

 

8,962

 

 

 

9,690

 

 

 

18,785

 

 

 

19,735

 

Cost of Sales

 

 

 

 

 

 

 

 

Cost of manufactured products sold

 

 

2,383

 

 

 

2,646

 

 

 

4,938

 

 

 

5,503

 

Cost of testing services rendered

 

 

2,918

 

 

 

3,106

 

 

 

6,109

 

 

 

6,489

 

Cost of distribution

 

 

1,738

 

 

 

1,662

 

 

 

3,545

 

 

 

3,348

 

Cost of real estate

 

 

18

 

 

 

18

 

 

 

36

 

 

 

36

 

 

 

 

7,057

 

 

 

7,432

 

 

 

14,628

 

 

 

15,376

 

Gross Margin

 

 

1,905

 

 

 

2,258

 

 

 

4,157

 

 

 

4,359

 

Operating Expenses:

 

 

 

 

 

 

 

 

General and administrative

 

 

1,777

 

 

 

1,722

 

 

 

3,565

 

 

 

3,481

 

Selling

 

 

176

 

 

 

187

 

 

 

366

 

 

 

334

 

Research and development

 

 

125

 

 

 

122

 

 

 

201

 

 

 

194

 

Gain on disposal of property, plant and equipment

 

 

--

 

 

 

--

 

 

 

(24

)

 

 

--

 

Total operating expenses

 

 

2,078

 

 

 

2,031

 

 

 

4,108

 

 

 

4,009

 

(Loss) Income from Operations

 

 

(173

)

 

 

227

 

 

 

49

 

 

 

350

 

Other Income (Expenses)

 

 

 

 

 

 

 

 

Interest expenses

 

 

(55

)

 

 

(98

)

 

 

(123

)

 

 

(176

)

Gain on sale of asset held for sale

 

 

1,172

 

 

 

--

 

 

 

1,172

 

 

 

--

 

Other income, net

 

 

40

 

 

 

49

 

 

 

150

 

 

 

92

 

Total other income (expenses)

 

 

1,157

 

 

 

(49

)

 

 

1,199

 

 

 

(84

)

Income from Continuing Operations before Income Taxes

 

 

984

 

 

 

178

 

 

 

1,248

 

 

 

266

 

Income Tax (Expenses) Benefits

 

 

(120

)

 

 

124

 

 

 

(120

)

 

 

50

 

Income from Continuing Operations before Non-controlling Interest, Net of Tax

 

 

864

 

 

 

302

 

 

 

1,128

 

 

 

316

 

Income (Loss) from Discontinued Operations, Net of Tax

 

 

1

 

 

 

4

 

 

 

--

 

 

 

(4

)

NET INCOME

 

 

865

 

 

 

306

 

 

 

1,128

 

 

 

312

 

Less: Income (Loss) Attributable to Non-controlling Interest

 

 

439

 

 

 

(42

)

 

 

429

 

 

 

(101

)

Net Income Attributable to Trio-Tech International

 

 

426

 

 

 

348

 

 

 

699

 

 

 

413

 

Net Income Attributable to Trio-Tech International:

 

 

 

 

 

 

 

 

Income from Continuing Operations, Net of Tax

 

 

425

 

 

 

346

 

 

 

699

 

 

 

415

 

Income (Loss) from Discontinued Operations, Net of Tax

 

 

1

 

 

 

2

 

 

 

--

 

 

 

(2

)

Net Income attributable to Trio-Tech International

 

$

426

 

 

$

348

 

 

$

699

 

 

$

413

 

Basic Earnings per Share

 

$

0.12

 

 

$

0.09

 

 

$

0.19

 

 

$

0.11

 

Diluted Earnings per share

 

$

0.11

 

 

$

0.09

 

 

$

0.19

 

 

$

0.11

 

 

 

 

 

 

 

 

 

 

Weighted Average Shares Outstanding B Basic

 

 

3,673

 

 

 

3,673

 

 

 

3,673

 

 

 

3,673

Weighted Average Shares Outstanding B Diluted

3,725

3,781

 

3,706

 

3,815


TRIO-TECH INTERNATIONAL AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

UNAUDITED (IN THOUSANDS, EXCEPT EARNINGS PER SHARE)

 

 

 

Three Months Ended

 

Six Months Ended

 

December 31,

 

December 31,

 

2019

 

2018

 

2019

 

2018

Comprehensive Income Attributable to Trio-Tech International Common Shareholders:

 

 

 

 

 

 

 

 

Net income

 

$

865

 

$

306

 

 

$

1,128

 

 

$

312

 

Foreign Currency Translation, Net of Tax

 

 

525

 

 

(51

)

 

 

(38

)

 

 

(590

)

Comprehensive Income (Loss)

 

 

1,390

 

 

255

 

 

 

1,090

 

 

 

(278

)

Less: Comprehensive Income (Loss) Attributable to Non-controlling Interest

 

 

431

 

 

(57

)

 

 

440

 

 

 

(192

)

Comprehensive Income (Loss) Attributable to Trio-Tech International Common Shareholders

 

$

959

 

$

312

 

 

$

650

 

 

$

(86

)

TRIO-TECH INTERNATIONAL AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT NUMBER OF SHARES)

 

 

 

Dec. 31,

 

Jun. 30,

 

2019

 

2019

ASSETS

 

(unaudited)

CURRENT ASSETS:

 

 

 

 

Cash and cash equivalents

 

$

4,743

 

$

4,863

Short-term deposits

 

 

6,888

 

 

4,144

Trade accounts receivable, net

 

 

6,937

 

 

7,113

Other receivables

 

 

752

 

 

817

Inventories, net

 

 

2,182

 

 

2,427

Prepaid expenses and other current assets

 

 

330

 

 

287

Assets held for sale

 

 

--

 

 

89

Total current assets

 

 

21,832

 

 

19,740

Deferred tax assets

 

 

421

 

 

390

Investment properties, net

 

 

734

 

 

782

Property, plant and equipment, net

 

 

11,651

 

 

12,159

Operating lease right-of-use assets

 

 

475

 

 

--

Other assets

 

 

1,626

 

 

1,750

Restricted term deposits

 

 

1,716

 

 

1,706

Total non-current assets

 

 

16,623

 

 

16,787

TOTAL ASSETS

 

$

38,455

 

$

36,527

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

Lines of credit

 

$

810

 

$

187

Accounts payable

 

 

3,565

 

 

3,272

Accrued expenses

 

 

3,176

 

 

3,486

Income taxes payable

 

 

395

 

 

417

Current portion of bank loans payable

 

 

422

 

 

488

Current portion of finance leases

 

 

286

 

 

283

Current portion of operating leases

 

 

343

 

 

--

Total current liabilities

 

 

8,997

 

 

8,133

Bank loans payable, net of current portion

 

 

2,127

 

 

2,292

Finance leases, net of current portion

 

 

570

 

 

442

Operating leases, net of current portion

 

 

134

 

 

--

Deferred tax liabilities

 

 

315

 

 

327

Income taxes payable

 

 

430

 

 

439

Other non-current liabilities

 

 

37

 

 

33

Total non-current liabilities

 

 

3,613

 

 

3,533

TOTAL LIABILITIES

 

 

12,610

 

 

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 December 31, 2019 and June 30, 2019

 

 

11,424

 

 

11,424

Paid-in capital

 

 

3,319

 

 

3,305

Accumulated retained earnings

 

 

7,769

 

 

7,070

Accumulated other comprehensive gain-translation adjustments

 

 

1,818

 

 

1,867

Total Trio-Tech International shareholders' equity

 

 

24,330

 

 

23,666

Non-controlling interest

 

 

1,515

 

 

1,195

TOTAL EQUITY

 

 

25,845

 

 

24,861

TOTAL LIABILITIES AND EQUITY

 

$

38,444

 

$

36,527

 


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