VAN NUYS, Calif.--(BUSINESS WIRE)--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 |
|
