Trio-Tech Reports Profitable Fourth Quarter and Fiscal 2014

VAN NUYS, Calif.--()--Trio-Tech International (NYSE MKT:TRT) today announced financial results for the fourth quarter and fiscal 2014. For the fourth quarter, revenue increased 10.2% compared to the same fiscal period last year, and net income increased to $0.07 per share compared to $0.01 per share in the same fiscal period last year. For the year, revenue increased 14.1% compared to the prior year, and net income increased to $0.01 per share compared to a loss of $0.31 per share for fiscal 2013

"We believe that Trio-Tech is on the right path. Revenue increased for the fourth quarter and fiscal 2014 compared to the same periods of the prior fiscal year, as did gross margin and net income. Cash from operations also increased in fiscal 2014 compared to fiscal 2013. By focusing on our core businesses and working diligently to improve our operations, Trio-Tech's semiconductor manufacturing equipment and semiconductor testing services business are running efficiently, generating solid margins, and offering the broad menu of products and services that our international customers demand. We are working to take advantage of opportunities we see for additional revenue growth and operational enhancements. We believe these achievements will continue serving us well in the years to come, and we look forward to the future with confidence," said S.W. Yong, Trio-Tech's CEO.

Fourth Quarter Results

For the three months ended June 30, 2014, revenue increased 10.2% to $9,387,000, compared to revenue of $8,516,000 for the fourth quarter of fiscal 2013. Products revenue increased 21% to $4,573,000 compared to $4,536,000 for the fourth quarter of fiscal 2013, and semiconductor testing services revenue increased 21.0% to $4,773,000 compared to $3,944,000 for the fourth quarter of fiscal 2013.

Gross margin for the fourth quarter of fiscal 2014 increased 31.3% to $2,254,000, or 24.0% of revenue, compared to $1,717,000, or 20.2% of revenue, for the fourth quarter of fiscal 2013.

Operating expenses for the fourth quarter of fiscal 2014 of $2,158,000, or 23.0% of revenue, included non cash stock option expenses of $8,000. For the fourth quarter of fiscal 2013, operating expenses of $1,620,000, or 19.0% of revenue, included non-cash stock option expenses of $2,000.

Income from operations for the fourth quarter of fiscal 2014 was $96,000 compared to $97,000 for the fourth quarter of the prior fiscal year.

Net income attributable to Trio-Tech common shareholders for the fourth quarter of fiscal 2014 increased to $282,000, or $0.07 per diluted share, which included a loss from the discontinued fabrication services business of $3,000, or $0.01 per share. In comparison, for the fourth quarter of fiscal 2013, net income attributable to Trio-Tech common shareholders was $46,000, or $0.01 per share, which included a loss from the discontinued fabrication business of $114,000, or $0.03 per share. Trio-Tech terminated its fabrication facilities lease in December 2012 and discontinued this segment in the fourth quarter of fiscal 2013.

Twelve Months Results

For the twelve months ended June 30, 2014, revenue increased 14.1% to $36,262,000 compared to revenue of $31,770,000 for fiscal 2013. Products revenue increased 8.8% to $18,068,000 compared to $16,609,000 for fiscal 2013, and semiconductor testing services revenue increased 19.9% to $18,017,000 compared to $15,029,000 for the prior year.

Gross margin for fiscal 2014 increased 30.7% to $8,299,000, or 22.9% of revenue, compared to $6,351,000, or 20.0% of revenue, for fiscal 2013.

Operating expenses for fiscal 2014 increased 15.1% to $8,301,000, or 22.9% of revenue, including non-cash stock option expense of $216,000. For fiscal 2013, operating expenses of $7,212,000, or 22.7% of revenue, included non-cash stock option expense of $42,000.

The operating loss for fiscal 2014 narrowed to just $2,000, compared to an operating loss of $861,000 for fiscal 2013.

Net income attributable to Trio-Tech common shareholders for fiscal 2014 was $57,000, or $0.01 per share, which included a loss from the discontinued fabrication services business of $24,000, or $0.01 per share. In comparison, for fiscal 2013, the net loss attributable to Trio-Tech common shareholders was $1,019,000, or $0.31 per share, including a loss from the discontinued fabrication business of $348,000, or $0.11 per share.

Cash provided by operations for fiscal 2014 was $3,861,000. This compares to cash provided by operations for fiscal 2013 of $3,491,000.

Shareholders' equity at June 30, 2014 was $20,833,000, or $5.93 per outstanding share, compared to $20,606,000, or $6.20 per outstanding share, at June 30, 2013. There were approximately 3,513,000 common shares outstanding for fiscal 2014, compared to approximately 3,322,000 common shares outstanding for the fiscal 2013.

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, oil and gas equipment fabrication 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 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)

TRIO-TECH INTERNATIONAL AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(IN THOUSANDS, EXCEPT EARNINGS PER SHARE)
   
 
Three Months Ended Twelve Months Ended
June 30, June 30,
Revenue   2014       2013     2014       2013  
Products $ 4,573 $ 4,536 $ 18,068 $ 16,609
Testing Services 4,773 3,944 18,017 15,029
Others   41     36     177     132  
  9,387     8,516     36,262     31,770  
Cost of Sales
Cost of products sold 3,918 4,051 15,223 14,414
Cost of testing services rendered 3,181 2,734 12,601 10,874
Others   34     14     139     131  
7,133 6,799 27,963 25,419
 
Gross Margin 2,254 1,717 8,299 6,351
 
Operating Expenses:
General and administrative 1,934 1,468 7,363 6,450
Selling 179 137 732 537
Research and development 46 64 196 281
(Gain) Loss on disposal of property, plant and equipment   (1 )   (49 )   10     (56 )
Total operating expenses   2,158     1,620     8,301     7,212  
 
Income (Loss) from Operations 96 97 (2 ) (861 )
 
Other Income (Expenses)
Interest expenses (67 ) (61 ) (263 ) (287 )
Other income, net   127     131     163     520  
Total other income (expenses)   60     70     (100 )   233  
 
Income (Loss) from continuing operations before Income Taxes 156 167 (102 ) (628 )
Income Tax Benefits   78     165     344     260  
 
Income (Loss) from continuing operations before non-controlling interest, net of tax 234 332 242 (368 )
 
Loss from discontinued operations, net of tax   (3 )   (213 )   (41 )   (734 )
 
NET INCOME (LOSS) $ 231   $ 119   $ 201   $ (1,102 )
 
Less: Net income (loss) attributable to the non-controlling Interest   51     (73 )   (144 )   83  
Net Income (Loss) Attributable to Trio-Tech International Common Shareholders 282 46 57 (1,019 )
 
Amounts Attributable to Trio-Tech International Common Shareholders:
Income (Loss) from continuing operations, net of tax 285 160 81 (671 )
Loss from discontinued operations, net of tax   (3 )   (114 )   (24 )   (348 )
 
Net Income (Loss) Attributable to Trio-Tech International Common Shareholders 282 46 57 (1,019 )
 
Comprehensive Income (Loss) Attributable to Trio-Tech International Shareholders:
 
Net Income (Loss) $ 231 $ 120 $ 201 $ (1,102 )
 
Foreign currency translation, net of tax   166     (30 )   (228 )   634  
Comprehensive Income (Loss) 397 90 (27 ) (468 )
 
Less: Comprehensive loss (income) attributable to non-controlling interest   8     (67 )   74     (58 )
 
Comprehensive Income (Loss) Attributable to Trio-Tech International Shareholders 405 23 (101 ) (526 )
 
Income (Loss) per Share Attributable to Trio-Tech International Shareholders:
From continuing operations - basic and diluted $ 0.08 $ 0.04 $ 0.02 $ (0.20 )
From discontinued operations - basic and diluted   (0.01 )   (0.03 )   (0.01 )   (0.11 )
 

Net Income (Loss) Attributable to Trio-Tech International Shareholders - basic and diluted

$

0.07

 

 

$

0.01

 

 

$

0.01

 

 

$

(0.31

)

 
Weighted average common shares outstanding - basic 3,513 3,322 3,513 3,322
Weighted average common shares outstanding - diluted 3,549 3,322 3,549 3,322
 
TRIO-TECH INTERNATIONAL AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT NUMBER OF SHARES)
 
   
Year ended
June 30,
2014 2013
ASSETS
 
CURRENT ASSETS:
Cash and cash equivalents $ 2,938 $ 2,793
Short-term deposits 102 104
Trade accounts receivable, net 8,625 8,728
Other receivables 311 993
Loans receivable from property development projects -- 1,139
Inventories, net 1,106 2,463
Prepaid expenses and other current assets   205   358
 
Total current assets 13,287 16,578
 
DEFERRED TAX ASSETS 388 203
INVESTMENTS -- 791
INVESTMENT PROPERTIES, Net 1,765 1,893
PROPERTY, PLANT AND EQUIPMENT, Net 13,541 12,851
LOAN RECEIVABLES FROM PROPERTY DEVELOPMENT PROJECTS 805 --
OTHER ASSETS 1,263 234
RESTRICTED TERM DEPOSITS   3,541   3,494
 
TOTAL ASSETS $ 34,590 $ 36,044
 
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
CURRENT LIABILITIES:
Lines of credit $ 3,767 $ 3,864
Accounts payable 3,162 4,136
Accrued expenses 3,046 3,060
Income taxes payable 214 459
Current portion of bank loans payable 448 770
Current portion of capital leases   81   105
 
Total current liabilities 10,718 12,394
 
BANK LOANS PAYABLE, net of current portion 2,598 2,613
CAPITAL LEASES, net of current portion 200 228
DEFERRED TAX LIABILITIES 202 191
OTHER NON-CURRENT LIABILITIES   39   12
 
TOTAL LIABILITIES   13,757   15,438
 
COMMITMENTS AND CONTINGENCIES --
 
EQUITY
 
TRIO-TECH INTERNATIONAL'S SHAREHOLDERS' EQUITY:

Common stock, no par value, 15,000,000 shares authorized; 3,513,055 and 3,321,555 shares issued and outstanding at June 30, 2014, and June 30, 2013, respectively

10,882 10,531
Paid-in capital 2,972 2,756
Accumulated retained earnings 1,725 1,668
Accumulated other comprehensive gain-translation adjustments   3,522   3,680
 
Total Trio-Tech International shareholders' equity   19,101   18,635
 
NON-CONTROLLING INTEREST   1,732   1,971
 
TOTAL EQUITY   20,833   20,606
 
TOTAL LIABILITIES AND EQUITY $ 34,590 $ 36,044

Contacts

Company Contact:
Trio-Tech International
A. Charles Wilson
Chairman
818-787-7000
or
Investor Contact:
Berkman Associates
310-477-3118
info@BerkmanAssociates.com

Release Summary

Trio-Tech 4Q revenue up 10.2% vs 4Q last year, net income $0.07 vs $0.01/share in 4Q last year. Fiscal 2014 revenue up 14.1% vs 2013, net income $0.01 vs a loss of $0.31/share in fiscal 2013

Contacts

Company Contact:
Trio-Tech International
A. Charles Wilson
Chairman
818-787-7000
or
Investor Contact:
Berkman Associates
310-477-3118
info@BerkmanAssociates.com