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| 8-K - CURRENT REPORT - TRIO-TECH INTERNATIONAL | triotech_8k.htm |
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LOS
ANGELES
SINGAPORE
KUALA
LUMPUR
BANGKOK
SUZHOU
TIANJIN
CHONGQING
|
|
FOR IMMEDIATE
RELEASE
|
Company Contact:
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Investor Contact:
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A. Charles Wilson
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Berkman
Associates
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|
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Chairman
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(310) 477-3118
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(818) 787-7000
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info@BerkmanAssociates.com
|
Trio-Tech
Reports Third Quarter and Nine Months Results
Van Nuys, CA – May 18, 2018
– Trio-Tech International
(NYSE MKT: TRT) today announced financial results for the
third quarter and first nine months of fiscal 2018.
Nine
Months Results
For the
first nine months of fiscal 2018 ended March 31, 2018, revenue
increased 13% to $31,601,000 compared to $27,900,000 for the first
nine months of fiscal 2017, reflecting higher revenue in each of
the Company's business segments. Gross margin for the first nine
months of fiscal 2018 increased 10% to $7,787,000, or 25% of
revenue, compared to $7,099,000, or 25% of revenue, for the first
nine months of fiscal 2017.
Income
from operations for this year's first nine months increased 30% to
$1,479,000, or 5% of revenue, compared to $1,140,000, or 4% of
revenue, for the same period last year.
Trio-Tech
recognized a one-time, non-cash income tax expense of $900,000,
related to the 2017 United States Tax Cuts and Jobs Act, which
requires a mandatory one-time repatriation of certain earnings and
profits of the Company’s foreign subsidiaries previously
deferred from U.S. taxation. This estimated tax is payable over a
period of eight years at no interest and is not expected to have a
material effect on the Company’s working capital position.
After this one-time non-cash tax effect, net income attributable to
Trio-Tech common shareholders for the first nine months of fiscal
2018 was $509,000, or $0.14 per diluted share.
Shareholders'
equity at March 31, 2018 was $23,923,000, or $6.73 per outstanding
share, compared to $21,527,000, or $6.11 per outstanding share, at
June 30, 2017. Shareholder’s equity benefited from a foreign
currency translation gain of $1,809,000, compared to a loss of
$1,087,000 for the first nine months last year. There were
approximately 3,553,055 common shares outstanding at March 31,
2018.
Third
Quarter Results
For the
third quarter of fiscal 2018 ended March 31, 2018, revenue
increased 3% to $10,104,000 compared to revenue of $9,825,000 for
the third quarter last year. A 24% increase in testing services
revenue and a 29% increase in distribution revenue offset a 26%
decrease in manufacturing revenue attributable to a decrease in
orders from a large customer. A change in product mix in both
manufacturing and testing services reduced overall gross margin to
22% of sales for this year's third quarter, compared to 25% of
sales for the third quarter of fiscal 2017.
After
the one-time non-cash income tax expense mentioned above, the net
loss for the third quarter of fiscal 2018 was $739,000, or $0.20
per diluted share.
CEO
Comments
S.W.
Yong, Trio-Tech's CEO, said, "It’s important to emphasize
that income from operations increased 30% for the first nine months
of fiscal 2018, compared to the same period last year and that the
Company would have posted a strong increase in net income, after
excluding the one-time effect of the new U.S. tax act.
"We are
encouraged that demand for Trio-Tech's testing and distribution
services remained as robust in the third quarter as it was in the
year's first half. We are working diligently to take advantage of
opportunities for growth. While our fiscal third quarter results
are typically affected by a slowdown in business activity related
to the Chinese New Year and its festivities, we expect improving
business operations in the fourth quarter of fiscal
2018.
(more)
-1-
Trio-Tech
Reports Third Quarter and Nine Months Results
May 18,
2018
Page
Two
"As
always, we are focused on improving operating efficiencies and
reducing costs wherever possible, even as we deliver the highest
standard of service and value to our customers. This time-tested
strategy is viewed as the foundation for Trio-Tech's continued
success in the years ahead."
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; 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)
-2-
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TRIO-TECH INTERNATIONAL AND SUBSIDIARIES
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|||||||||
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CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
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|||||||||
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UNAUDITED (IN THOUSANDS, EXCEPT EARNINGS PER SHARE)
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Three Months Ended
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Nine Months Ended
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March 31,
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March 31,
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Revenue
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2018
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2017
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2018
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2017
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|
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Manufacturing
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$3,124
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$4,230
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$11,862
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$11,221
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Testing Services
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4,913
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3,977
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14,454
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12,204
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Distribution
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2,033
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1,581
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5,175
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4,360
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Others
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34
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37
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110
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115
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10,104
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9,825
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31,601
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27,900
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Costs of Sales
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|
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Cost of manufactured
products sold
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2,530
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3,345
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9,246
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8,762
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Cost of testing services rendered
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3,491
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2,597
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9,881
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8,069
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Cost of
distribution
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1,821
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1,407
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4,598
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3,899
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Others
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30
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29
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89
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71
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|
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7,872
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7,378
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23,814
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20,801
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Gross Margin
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2,232
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2,447
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7,787
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7,099
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Operating Expenses:
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General and administrative
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1,773
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1,659
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5,339
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5,178
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Selling
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181
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222
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612
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587
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Research and development
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75
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51
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377
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156
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(Gain) Loss
on disposal of property, plant and equipment
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(31)
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30
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(20)
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38
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Total operating expenses
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1,998
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1,962
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6,308
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5,959
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|
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Income
from Operations
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234
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485
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1,479
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1,140
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|
|
|
|
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Other (Expenses)
Income
|
|
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Interest expense
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(64)
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(43)
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(174)
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(149)
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Other income, net
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111
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45
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311
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358
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Total other income
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47
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2
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137
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209
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|
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Income from Continuing Operations before Income Taxes
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281
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487
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1,616
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1,349
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Income Tax Expenses
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(980)
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(106)
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(1,035)
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(256)
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(Loss)
Income from Continuing Operations
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|
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before Non-controlling
Interest, net of tax
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(699)
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381
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581
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1,093
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Loss from
Discontinued Operations, net of tax
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(6)
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(1)
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(11)
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(4)
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NET (LOSS)
INCOME
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(705)
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380
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570
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1,089
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Less: Net Income Attributable to Non-controlling Interest
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34
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30
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61
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126
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Net (Loss)
Income Attributable to Trio-Tech International
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(739)
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350
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509
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963
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Net Amount
Attributable to Trio-Tech International common
shareholder:
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(Loss)
Income from Continuing Operations, net of tax
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(736)
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351
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520
|
970
|
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Loss from Discontinued Operations, net of tax
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(3)
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(1)
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(11)
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(7)
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Net (Loss)
Income Attributable to Trio-Tech International
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$(739)
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$350
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$509
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$963
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Basic (Loss)
Earnings per Share
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$(0.21)
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$0.10
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$0.15
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$0.28
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Diluted (Loss)
Earnings per Share
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$(0.20)
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$0.10
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$0.14
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$0.27
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Weighted Average Shares Outstanding - Basic
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3,553
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3,523
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3,553
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3,523
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Weighted Average Shares Outstanding - Diluted
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3,772
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3,639
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3,778
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3,577
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-3-
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TRIO-TECH INTERNATIONAL AND SUBSIDIARIES
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|||||||
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CONDENSED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
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|||||||
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UNAUDITED (IN THOUSANDS)
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|||||||
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|||||||
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Three Months Ended
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Nine Months Ended
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||
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March 31,
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March 31,
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||
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2018
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2017
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2018
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2017
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Comprehensive
Income
Attributable to Trio-Tech
International:
|
|
|
|
|
|
|
|
|
|
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Net (loss)
income
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$(705)
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$380
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$570
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$1,089
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|
|
|
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Foreign Currency Translation, net of tax
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849
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290
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1,809
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(1,087)
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|
|
|
|
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Comprehensive
Income
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144
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670
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2,379
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2
|
|
|
|
|
|
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Less: Comprehensive Income (Loss)
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|
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Attributable to Non-controlling Interest
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142
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(38)
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255
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(75)
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|
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|
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Comprehensive Income
|
|
|
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Attributable to Trio-Tech International
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$2
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$708
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$2,124
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$77
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-4-
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TRIO-TECH INTERNATIONAL AND SUBSIDIARIES
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CONDENSED CONSOLIDATED BALANCE SHEETS
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(IN THOUSANDS, EXCEPT NUMBER OF SHARES)
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Mar. 31,
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Jun. 30,
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2018
|
2017
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|
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ASSETS
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(unaudited)
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|
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CURRENT ASSETS:
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Cash and cash equivalents
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$5,376
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$4,772
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Short-term deposits
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678
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787
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Trade accounts receivable, net
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8,617
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9,009
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Other receivables
|
392
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401
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Inventories, net
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2,369
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1,756
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Prepaid expenses and other current assets
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219
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226
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Asset held for sale
|
96
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86
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|
|
|
|
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Total current assets
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17,747
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17,037
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|
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Deferred tax assets
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453
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375
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Investment properties, net
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1,231
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1,216
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Property, plant and equipment, net
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12,881
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11,291
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Other assets
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2,315
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1,922
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Restricted term deposits
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1,761
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1,657
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|
|
|
|
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Total non-current assets
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18,641
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16,461
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|
|
|
|
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TOTAL ASSETS
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$36,388
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$33,498
|
|
|
|
|
|
|
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LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
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CURRENT LIABILITIES:
|
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Lines of credit
|
$1,311
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$2,556
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Accounts payable
|
2,099
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3,229
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Accrued expenses
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4,648
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3,043
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Income taxes payable
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1,117
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233
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Current portion of bank loans payable
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376
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260
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Current portion of capital leases
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260
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228
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|
|
|
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Total current liabilities
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9,811
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9,549
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|
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|
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Bank loans payable, net of current portion
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1,593
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1,552
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Capital leases, net of current portion
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614
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531
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Deferred tax liabilities
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404
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295
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|
Other non-current liabilities
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43
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44
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|
|
|
|
|
Total non-current liabilities
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2,654
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2,422
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|
|
|
|
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TOTAL LIABILITIES
|
12,465
|
11,971
|
|
|
|
|
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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; 3,553,055 and 3,523,055
|
|
|
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shares issued and outstanding at March 31, 2018 and June 30, 2017, respectively
|
11,023
|
10,921
|
|
Paid-in capital
|
3,246
|
3,206
|
|
Accumulated retained earnings
|
4,850
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4,341
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Accumulated other comprehensive gain-translation adjustments
|
3,248
|
1,633
|
|
|
|
|
|
Total Trio-Tech International shareholders' equity
|
22,367
|
20,101
|
|
|
|
|
|
Non-controlling interest
|
1,556
|
1,426
|
|
|
|
|
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TOTAL EQUITY
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23,923
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21,527
|
|
|
|
|
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TOTAL LIABILITIES AND EQUITY
|
$36,388
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$33,498
|
|
|
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-5-