Trio-Tech Third Quarter Net Income Increased to $0.04 Per Share Versus $0.02

Trio-Tech International (NYSE MKT: TRT) today announced financial results for the third quarter and first nine months of fiscal 2021.

Third Quarter Results
Revenue from the sale of Trio-Tech’s proprietary semiconductor testing and manufacturing equipment increased 24% to $3,130,000 for the third quarter of fiscal 2021 compared to $2,519,000 for the same quarter last year, driven by higher orders from a number of customers at the Company’s Singapore facility. Third quarter revenue from semiconductor testing services decreased 6% to $3,504,000 from $3,741,000 for the same quarter last year, primarily due to a decrease in demand from major customers. Revenue from the distribution of semiconductor manufacturing and testing equipment decreased 34% to $1,467,000 from $2,225,000 for the third quarter last year, reflecting generally lower customer demand. Total revenue for the three months ended March 31, 2021 decreased 5% to $8,112,000 compared to $8,501,000 for the same quarter last year.

Despite the decline in overall revenue, an improved product mix helped to increase the overall gross margin to $2,060,000, or 25% of revenue, compared to $1,786,000, or 21% of revenue, for the same quarter last year.

General and administrative expenses increased 10% to $1,923,000 from $1,754,000 in the same quarter last year, primarily related to a higher stock compensation recorded, due to the increased volatility in our share price.

The loss from operations for the third quarter of fiscal 2021 was $65,000, compared to $367,000 for the same quarter last year.

Other income of $273,000 for this year’s third quarter included $107,000 in governmental grants to offset the negative impact of the COVID-19 pandemic. Other income of $440,000 for last year’s third quarter included similar grants of $263,000.

Net income attributable to Trio-Tech International Common Shareholders for the three months ended March 31, 2021 increased to $178,000, or $0.04 per diluted share, compared to $70,000, or $0.02 per diluted share, for the third quarter of fiscal 2020.

CEO Comments
S.W. Yong, Trio-Tech's CEO, said, "While the COVID-19 pandemic was primarily responsible for a very difficult first half of fiscal 2021 for Trio-Tech, and continued to affect our performance in the third quarter, the improvement in orders and gross margin in our manufacturing segment is an encouraging sign for the future. We are maintaining tight control over operating costs throughout the Company, but operating profitability will be largely dependent upon improvements in business conditions, which continue to remain uncertain. As we are monitoring the situation closely, we remain prepared to take further actions as required by local governments, or which we deem necessary, in the best interests of our employees, customers and stockholders."

Nine Months Results
For the first nine months of fiscal 2021, overall revenue decreased 15% to $23,154,000 compared to $27,286,000 for the same period last year. Manufacturing revenue increased 4% to $9,324,000 from $8,881,000, while testing services revenue declined 17% to $10,018,000 from $12,018,000. Distribution revenue decreased 40% to $3,790,000 compared to $6,338,000 for the same period of fiscal 2020.

Overall gross margin for the first nine months of fiscal 2021 decreased 8% to $5,448,000 from $5,943,000 last year, but increased as a percentage of revenue to 24% from 22% for the same period of fiscal 2020.

For the first nine months of fiscal 2021, general and administrative expenses decreased $74,000 to $5,245,000 from $5,319,000 for the same period of fiscal 2020, primarily due to the decrease in staff benefit cost related expenses as part of our cost-saving measures.

Selling expenses for the first nine months of fiscal 2021 decreased $191,000 to $356,000, as compared to $547,000 in the same period of fiscal 2020, primarily due to the decline in traveling expenses incurred as a result of worldwide travel restrictions amid the pandemic.

For the first nine months of fiscal 2021, other income decreased to $531,000 from $1,576,000 for the same period of fiscal 2020. The decrease was primarily due to a non-recurring gain on the sale of assets of $1,172,000 in the same period last year.

Net income attributable to Trio-Tech International Common Shareholders for the first nine months of fiscal 2021 was $405,000, or $0.10 per diluted share, compared to $769,000, or $0.21 per diluted share, for the first nine months of fiscal 2020.

Shareholders' equity at March 31, 2021 was $26,921,000, or $6.88 per outstanding share, compared to $25,146,000, or $6.84 per outstanding share, at June 30, 2020. There were approximately 3,913,055 common shares outstanding at March 31, 2021.

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 www.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

2021

 

2020

 

2021

 

2020

Manufacturing

$

3,130

 

$

2,519

 

$

9,324

 

$

8,881

 

Testing Services

 

3,504

 

 

3,741

 

 

10,018

 

 

12,018

 

Distribution

 

1,467

 

 

2,225

 

 

3,790

 

 

6,338

 

Real Estate

 

11

 

 

16

 

 

22

 

 

49

 

 

 

8,112

 

 

8,501

 

 

23,154

 

 

27,286

 

Cost of Sales

 

 

 

 

Cost of manufactured products sold

 

2,148

 

 

1,851

 

 

6,855

 

 

6,789

 

Cost of testing services rendered

 

2,651

 

 

2,937

 

 

7,651

 

 

9,046

 

Cost of distribution

 

1,234

 

 

1,909

 

 

3,142

 

 

5,454

 

Cost of real estate

 

19

 

 

18

 

 

58

 

 

54

 

 

 

6,052

 

 

6,715

 

 

17,706

 

 

21,343

 

Gross Margin

 

2,060

 

 

1,786

 

 

5,448

 

 

5,943

 

Operating Expenses:

 

 

 

 

General and administrative

 

1,923

 

 

1,754

 

 

5,245

 

 

5,319

 

Selling

 

123

 

 

181

 

 

356

 

 

547

 

Research and development

 

79

 

 

79

 

 

277

 

 

280

 

Impairment loss on long-lived assets

 

--

 

 

139

 

 

--

 

 

139

 

Gain on disposal of property, plant and equipment

 

--

 

 

--

 

 

(1

)

 

(24

)

Total operating expenses

 

2,125

 

 

2,153

 

 

5,877

 

 

6,261

 

(Loss) from Operations

 

(65

)

 

(367

)

 

(429

)

 

(318

)

Other Income (Expenses)

 

 

 

 

Interest expense

 

(25

)

 

(63

)

 

(96

)

 

(186

)

Gain on sale of assets held for sale

 

--

 

 

--

 

 

--

 

 

1,172

 

Other income, net

 

273

 

 

440

 

 

627

 

 

590

 

Total other income

 

248

 

 

377

 

 

531

 

 

1,576

 

Income from Continuing Operations before Income Taxes

 

183

 

 

10

 

 

102

 

 

1,258

 

Income Tax (Expenses) Benefit

 

(118

)

 

8

 

 

(125

)

 

(112

)

Income (loss) from Continuing Operations before Non-controlling Interest, net of tax

 

65

 

 

18

 

 

(23

)

 

1,146

 

Income (loss) from Discontinued Operations, net of tax

 

1

 

 

(21

)

 

(26

)

 

(21

)

NET INCOME (LOSS)

 

66

 

 

(3

)

 

(49

)

 

1,125

 

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

 

(112

)

 

(73

)

 

(454

)

 

356

 

Net Income Attributable to Trio-Tech International

 

178

 

 

70

 

 

405

 

 

769

 

Net Income Attributable to Trio-Tech International:

 

 

 

 

Income from Continuing Operations, net of tax

 

177

 

 

81

 

 

418

 

 

780

 

Income (loss) from Discontinued Operations, net of tax

 

1

 

 

(11

)

 

(13

)

 

(11

)

Net Income Attributable to Trio-Tech International

$

178

 

$

70

 

$

405

 

$

769

 

Basic Earnings per Share

$

0.05

 

$

0.02

 

$

0.11

 

$

0.21

 

Diluted Earnings per Share

$

0.04

 

$

0.02

 

$

0.10

 

$

0.21

 

Weighted Average Shares Outstanding - Basic

 

3,913

 

 

3,673

 

 

3,913

 

 

3,673

 

Weighted Average Shares Outstanding - Diluted

 

4,046

 

 

3,759

 

 

4,030

 

 

3,734

 

 

TRIO-TECH INTERNATIONAL AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

UNAUDITED (IN THOUSANDS)

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

March 31,

 

March 31,

 

2021

 

2020

 

2021

 

2020

Comprehensive (Loss) Income Attributable to Trio-Tech International:

 

 

 

 

Net income (loss)

$

66

 

$

(3

)

$

(49

)

$

1,125

 

Foreign Currency Translation, net of tax

 

(468

)

 

(1,013

)

 

1,115

 

 

(1,051

)

Comprehensive (Loss) Income

 

(402

)

 

(1,016

)

 

1,066

 

 

74

 

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

 

(136

)

 

(64

)

 

(455

)

 

376

 

Comprehensive (Loss) Income Attributable to Trio-Tech International

$

(266

)

$

(952

)

$

1,521

 

$

(302

)

 

TRIO-TECH INTERNATIONAL AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT NUMBER OF SHARES)

 

 

 

 

 

 

 

Mar. 31,

 

Jun. 30,

 

2021

 

2020

ASSETS

 

(Unaudited)

 

 

CURRENT ASSETS:

 

 

Cash and cash equivalents

$

5,178

$

4,150

Short-term deposits

 

7,146

 

6,838

Trade accounts receivable, net

 

6,997

 

5,951

Other receivables

 

678

 

998

Inventories, net

 

2,602

 

1,922

Prepaid expenses and other current assets

 

367

 

341

Total current assets

 

22,968

 

20,200

Deferred tax assets

 

337

 

247

Investment properties, net

 

688

 

690

Property, plant and equipment, net

 

9,690

 

10,310

Operating lease right-of-use assets

 

1,994

 

944

Other assets

 

1,709

 

1,609

Restricted term deposits

 

1,739

 

1,660

Total non-current assets

 

16,157

 

15,460

TOTAL ASSETS

$

39,125

$

35,660

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

CURRENT LIABILITIES:

 

 

Lines of credit

$

184

$

172

Accounts payable

 

2,997

 

2,590

Accrued expenses

 

3,467

 

3,005

Income taxes payable

 

348

 

344

Current portion of bank loans payable

 

435

 

370

Current portion of finance leases

 

216

 

231

Current portion of operating leases

 

659

 

477

Current portion of PPP loan

 

121

 

54

Total current liabilities

 

8,427

 

7,243

Bank loans payable, net of current portion

 

1,732

 

1,836

Finance leases, net of current portion

 

291

 

435

Operating leases, net of current portion

 

1,335

 

467

Income taxes payable

 

385

 

430

PPP loan, net of current portion

 

--

 

67

Other non-current liabilities

 

34

 

36

Total non-current liabilities

 

3,777

 

3,271

TOTAL LIABILITIES

 

12,204

 

10,514

 

 

 

EQUITY

 

 

TRIO-TECH INTERNATIONAL'S SHAREHOLDERS' EQUITY:

 

 

Common stock, no par value, 15,000,000 shares authorized; 3,913,055 and 3,673,055 shares issued and outstanding at March 31, 2021 and June 30, 2020, respectively

 

12,178

 

11,424

Paid-in capital

 

3,507

 

3,363

Accumulated retained earnings

 

8,441

 

8,036

Accumulated other comprehensive gain-translation adjustments

 

2,259

 

1,143

Total Trio-Tech International shareholders' equity

 

26,385

 

23,966

Non-controlling interest

 

536

 

1,180

TOTAL EQUITY

 

26,921

 

25,146

TOTAL LIABILITIES AND EQUITY

$

39,125

$

35,660