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| 8-K - TRIO-TECH INTERNATIONAL | triotech8ksept262011.htm |
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LOS ANGELES
SINGAPORE
KUALA LUMPUR
INDONESIA
BANGKOK
SUZHOU
TIANJIN
CHONGQING
|
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FOR IMMEDIATE RELEASE
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Company Contact:
A. Charles Wilson
Chairman
(818) 787-7000
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Investor Contact:
Berkman Associates
(310) 477-3118
info@BerkmanAssociates.com
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Trio-Tech Reports Fiscal 2011 Results
Van Nuys, CA -- September 26, 2011 -- Trio-Tech International (AMEX:TRT) today announced financial results for the fourth quarter and fiscal 2011.
Fiscal 2011 Results
For the twelve months ended June 30, 2011, revenue decreased 3.8% to $35,535,000 for fiscal 2011 compared to $36,928,000 for fiscal 2010, primarily the result of lower sales of the Company's proprietary semiconductor test equipment products to a major customer, partially offset by higher testing, real estate and fabrication services revenue. The net loss attributable to Trio Tech International common shareholders for fiscal 2011 was $688,000, or $0.21 per share. This compares to a net loss of $373,000, or $0.12 per share, for fiscal 2010.
Revenue from product sales decreased to $20,447,000 for fiscal 2011 compared to $23,493,000 for fiscal 2010. Revenue from testing services increased to $13,126,000 for fiscal 2011 compared to $11,852,000 for fiscal 2010. Revenue for the Company's oil and gas equipment fabrication venture increased to $900,000 for fiscal 2011 compared to $883,000 for fiscal 2010. Revenue from the Company's real estate segment was $1,062,000 for fiscal 2011 compared to $700,000 for fiscal 2010.
Gross margin for fiscal 2011 improved to 23.4% compared to 19.0% for fiscal 2010, reflecting a volume-driven increase in gross margin in the Company's testing segment of 36.5% for fiscal 2011 compared to 27.6% for fiscal 2010. In addition, gross margin in the Company's fabrication services segment improved to negative 26.9% for fiscal 2011 compared to negative 89.7% for fiscal 2010.
General and administrative expenses increased to $8,219,000 for fiscal 2011 compared to $6,379,000 for fiscal 2010. This increase included an increase in non-cash stock option expense of $479,000 from fiscal 2011 compared to fiscal 2010, which was due to the issuance of stock options for employees and directors during fiscal 2011, an increase in payroll related expenses of $250,000 in fiscal 2011 due to restoration of paycuts in the Singapore operations, $275,000 of incremental general and administration expenses associated with the initiation of operations at the Company's new testing services operation in Tianjin, China in the third quarter of fiscal 2011,
and an increase in general and administrative expenses of $273,000 versus fiscal 2010 in the Company's Malaysia operations due to higher volume.
The loss from operations for fiscal 2011 was $586,000. This compares to a loss from operations of $368,000 for fiscal 2010.
CEO Comments
"During fiscal 2011 we laid the foundation for the next phase of Trio-Tech's growth, with investments to expand our core semiconductor test equipment and services businesses as well as our new business initiatives. We increased production capacity at our Malaysia semiconductor testing facility and launched operations at our newest test services facility, in Tianjin, China. At the same time, we won significant contracts in our Indonesia-based oil and gas equipment fabrication business, and moved forward in our property development program in China," said SW Yong, Trio-Tech's CEO.
16139 Wyandotte Street, Van Nuys, CA 91406, USA ● TEL: (818) 787-7000 ● FAX (818) 787-9130
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"While global business conditions remain unusually volatile and difficult to predict, we are encouraged as we enter the new fiscal year. At June 30, 2011, backlog in the Company's oil and gas equipment fabrication business was $1,935,000 compared to $9,000 a year earlier. In July 2011, this business entered into contracts valued at a total of $2,900,000 for mobile offshore production units and living quarters for customers involved in offshore oil exploration in Southeast Asia. Work under these contracts is expected to be completed in the second quarter of fiscal 2012. Encouragingly,
testing services backlog also increased, to $870,000 at June 30, 2011 compared to $618,000 at June 30, 2010. With our increasingly diversified customer base, well-established customer relationships, and strong balance sheet, we believe the Company is on the right track to build value for our shareholders in the years ahead," Yong said.
Balance Sheet Highlights
As of June 30, 2011, Trio-Tech reported cash and cash equivalents, restricted term deposits and short-term deposits of $6,872,000 ($2.07 per outstanding share). During fiscal 2011, collections from trade and other receivables were approximately $41,334,000. Balances under the Company's line of credit and accounts payable were reduced by approximately $1,199,000 and $6,094,000, respectively, during the year. Working capital was $7,256,000 and shareholders' equity was $24,977,000 ($7.52 per outstanding share) at the end of fiscal 2011. At June 30, 2010, cash and cash equivalents, restricted term deposits and short-term deposits
were $8,205,000 ($2.54 per outstanding share), working capital was $8,665,000, and shareholders' equity was $23,075,000 ($7.15 per outstanding share).
Fourth Quarter Results
For the three months ended June 30, 2011, revenue decreased to $7,128,000 compared to $12,874,000 for the fourth quarter of fiscal 2010, but reflected an increase from $5,829,000 for the third quarter of fiscal 2011.
The net loss for the fourth quarter of fiscal 2011 was $904,000, or $0.27 per share, which included a loss from operations of $1,101,000. This compares to net income for the fourth quarter of fiscal 2010 of $399,000, or $0.12 per diluted share, which included income from operations of $501,000.
Revenue from product sales decreased to $3,103,000 for the fourth quarter of fiscal 2011 compared to $8,865,000 for the fourth quarter of fiscal 2010, but reflected an increase compared to $2,650,000 for the third quarter of fiscal 2011. Revenue from testing services decreased to $3,467,000 for the fourth quarter of fiscal 2011 compared to $3,748,000 for the fourth quarter of fiscal 2010, but increased compared to $2,992,000 for the third quarter of fiscal 2011. Revenue for the Company's oil and gas equipment fabrication venture increased to $504,000 for the fourth quarter of fiscal 2011 compared to $78,000 for
the fourth quarter of fiscal 2010, and increased compared to $138,000 for the third quarter of fiscal 2011. Revenue from the Company's real estate segment was $54,000 for the fourth quarter of fiscal 2011 compared to $183,000 for the fourth quarter of fiscal 2010 and increased compared to $49,000 for the third quarter of fiscal 2011.
Gross margin for the fourth quarter of fiscal 2011 decreased to 18.0% compared to 21.7% for the fourth quarter of fiscal 2010, reflecting the mix of business. General and administrative expenses increased to $2,088,000 for the fourth quarter of fiscal 2011 compared to $1,718,000 for the fourth quarter of fiscal 2010.
About Trio-Tech
Established in 1958 and headquartered in Van Nuys, California, Trio-Tech International is a diversified business group pursuing aggressive interest in semiconductor test and manufacturing, oil and gas equipment fabrication, solar products 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, www.shi-international.com and
www.ttsolar.com.
(more)
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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 Southeast 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.
(tables attached)
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TRIO-TECH INTERNATIONAL AND SUBSIDIARIES
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CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
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(IN THOUSANDS, EXCEPT EARNINGS PER SHARE)
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Three Months Ended
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Twelve Months Ended
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June 30,
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June 30,
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Revenue
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2011
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2010
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2011
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2010
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Products
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$ | 3,103 | $ | 8,865 | $ | 20,447 | $ | 23,493 | ||||||||
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Testing Services
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3,467 | 3,748 | 13,126 | 11,852 | ||||||||||||
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Fabrication Services
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504 | 78 | 900 | 883 | ||||||||||||
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Others
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54 | 183 | 1,062 | 700 | ||||||||||||
| 7,128 | 12,874 | 35,535 | 36,928 | |||||||||||||
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Cost of Sales
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Cost of products sold
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2,758 | 6,913 | 17,542 | 19,459 | ||||||||||||
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Cost of testing services rendered
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2,516 | 2,861 | 8,339 | 8,579 | ||||||||||||
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Cost of fabrication services rendered
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548 | 228 | 1,142 | 1,675 | ||||||||||||
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Others
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26 | 80 | 193 | 197 | ||||||||||||
| 5,848 | 10,082 | 27,216 | 29,910 | |||||||||||||
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Gross Margin
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1,280 | 2,792 | 8,319 | 7,018 | ||||||||||||
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Operating Expenses (Gains) :
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General and administrative
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2,088 | 1,718 | 8,219 | 6,379 | ||||||||||||
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Selling
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147 | 125 | 511 | 535 | ||||||||||||
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Research and development
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75 | 10 | 250 | 39 | ||||||||||||
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Impairment loss
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72 | 438 | 72 | 438 | ||||||||||||
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(Gain) on disposal of property, plant and equipment
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(1 | ) | -- | (147 | ) | (5 | ) | |||||||||
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Total operating expenses
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2,381 | 2,291 | 8,905 | 7,386 | ||||||||||||
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Income (Loss) from Operations
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(1,101 | ) | 501 | (586 | ) | (368 | ) | |||||||||
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Other Income (Expenses)
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Interest expenses
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(70 | ) | (47 | ) | (243 | ) | (170 | ) | ||||||||
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Other income, net
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272 | 227 | 702 | 386 | ||||||||||||
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Total other income
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202 | 180 | 459 | 216 | ||||||||||||
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Income (Loss) from Continuing Operations before Income Taxes
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(899 | ) | 681 | (127 | ) | (152 | ) | |||||||||
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Income Tax (Expense)
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-- | (350 | ) | (195 | ) | (400 | ) | |||||||||
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Income (Loss) from Continuing Operations before Non-controlling interest, net of tax
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(899 | ) | 331 | (322 | ) | (552 | ) | |||||||||
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Equity in loss of unconsolidated joint venture, net of tax
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(2 | ) | -- | (9 | ) | -- | ||||||||||
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(Loss) from Discontinued operations, net of tax
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(2 | ) | (8 | ) | (4 | ) | (40 | ) | ||||||||
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NET INCOME (LOSS)
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$ | (903 | ) | $ | 323 | $ | (335 | ) | $ | (592 | ) | |||||
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Less: Net Income (Loss) Attributable to the Non-controlling Interest
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1 | (76 | ) | 353 | (219 | ) | ||||||||||
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Net Income (Loss) Attributable to Trio-Tech International
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(904 | ) | 399 | (688 | ) | (373 | ) | |||||||||
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Amounts Attributable to Trio-Tech International Common Shareholders:
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Income (Loss) from Continuing Operations, net of tax
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(902 | ) | 407 | (684 | ) | (333 | ) | |||||||||
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(Income) from Discontinued Operations, net of tax
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(2 | ) | (8 | ) | (4 | ) | (40 | ) | ||||||||
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Net Income (Loss) Attributable to Trio-Tech International Common Shareholders
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(904 | ) | 399 | (688 | ) | (373 | ) | |||||||||
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Comprehensive Income (Loss) Attributable to Trio-Tech Common Shareholders:
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Net Income (Loss)
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$ | (903 | ) | $ | 323 | $ | (335 | ) | $ | (592 | ) | |||||
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Foreign currency translation, net of tax
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78 | 61 | 1,448 | 734 | ||||||||||||
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Comprehensive Income (Loss)
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(825 | ) | 384 | 1,113 | 142 | |||||||||||
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Less: Comprehensive income (loss) attributable to non-controlling interest
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(151 | ) | (140 | ) | 160 | (109 | ) | |||||||||
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Comprehensive Income (Loss) Attributable to Trio-Tech International
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(674 | ) | 524 | 953 | 251 | |||||||||||
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Earnings (Loss) per Share Attributable to Trio-Tech International:
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From continuing operations - basic and diluted
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$ | (0.27 | ) | $ | 0.12 | $ | (0.21 | ) | $ | (0.11 | ) | |||||
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From discontinued operations - basic and diluted
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0.00 | 0.00 | 0.00 | (0.01 | ) | |||||||||||
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Net Income (Loss) Attributable to Trio-Tech International - basic and diluted
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$ | (0.27 | ) | $ | 0.12 | $ | (0.21 | ) | $ | (0.12 | ) | |||||
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Weighted average common shares outstanding -- basic and diluted
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3,308 | 3,227 | 3,288 | 3,227 | ||||||||||||
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TRIO-TECH INTERNATIONAL AND SUBSIDIARIES
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CONSOLIDATED BALANCE SHEETS
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(IN THOUSANDS, EXCEPT NUMBER OF SHARES)
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June 30,
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June 30,
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2011
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2010
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ASSETS
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CURRENT ASSETS:
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Cash & cash equivalents
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$ | 3,111 | $ | 3,244 | ||||
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Short-term deposits
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199 | 2,714 | ||||||
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Trade accounts receivable, net
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6,812 | 12,142 | ||||||
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Other receivables
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309 | 778 | ||||||
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Loan receivables from property development projects
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1,083 | -- | ||||||
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Inventories, net
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2,430 | 3,400 | ||||||
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Investment in property development
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-- | 887 | ||||||
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Prepaid expenses and other current assets
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348 | 296 | ||||||
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Assets held for sale
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137 | -- | ||||||
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Total current assets
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14,429 | 23,461 | ||||||
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INVESTMENT IN UNCONSOLIDATED JOINT VENTURE
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764 | -- | ||||||
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INVESTMENT PROPERTY IN CHINA, Net
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1,238 | 2,141 | ||||||
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PROPERTY, PLANT AND EQUIPMENT, Net
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14,951 | 12,695 | ||||||
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OTHER ASSETS
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1,412 | 1,180 | ||||||
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RESTRICTED TERM DEPOSITS
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3,562 | 2,247 | ||||||
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TOTAL ASSETS
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$ | 36,356 | $ | 41,724 | ||||
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LIABILITIES AND SHAREHOLDER'S EQUITY
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CURRENT LIABILITIES:
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Lines of credit
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$ | 1,333 | $ | 2,532 | ||||
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Accounts payable
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1,874 | 7,968 | ||||||
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Accrued expenses
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3,179 | 3,419 | ||||||
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Income taxes payable
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492 | 342 | ||||||
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Current portion of bank loans payable
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147 | 478 | ||||||
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Current portion of capital leases
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148 | 57 | ||||||
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Total current liabilities
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7,173 | 14,796 | ||||||
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BANK LOANS PAYABLE, net of current portion
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2,768 | 2,566 | ||||||
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CAPITAL LEASES, net of current portion
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271 | -- | ||||||
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DEFERRED TAX LIABILITIES
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677 | 718 | ||||||
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OTHER NON-CURRENT LIABILITIES
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490 | 569 | ||||||
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TOTAL LIABILITIES
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11,379 | 18,649 | ||||||
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COMMITMENTS AND CONTINGENCIES
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-- | -- | ||||||
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EQUITY
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TRIO-TECH INTERNATIONAL'S SHAREHOLDERS' EQUITY:
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Common stock, no par value, 15,000,000 shares authorized;
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3,321,555 and 3,227,430 shares issued and outstanding,
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at June 30, 2011, and June 30, 2010, respectively
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10,531 | 10,365 | ||||||
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Paid-in capital
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2,227 | 1,597 | ||||||
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Accumulated retained earnings
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5,791 | 6,486 | ||||||
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Accumulated other comprehensive gain-translation adjustments
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3,459 | 1,818 | ||||||
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Total Trio-Tech International shareholders' equity
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22,008 | 20,266 | ||||||
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NON-CONTROLLING INTEREST
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2,969 | 2,809 | ||||||
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TOTAL EQUITY
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24,977 | 23,075 | ||||||
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TOTAL LIABILITIES AND EQUITY
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$ | 36,356 | $ | 41,724 | ||||