Trio-Tech Reports Second Quarter Net Income of $0.06 Per Diluted Share

VAN NUYS, Calif.--()--Trio-Tech International (NYSE MKT: TRT) today announced financial results for the second quarter and first six months of fiscal 2021.

Fiscal 2021 Second Quarter Results

For the three months ended December 31, 2020, revenue decreased 9% to $8,201,000 compared to revenue of $8,962,000 for the second quarter of fiscal 2020. Manufacturing revenue increased 17% to $3,569,000 compared to $3,045,000 a year earlier. Semiconductor testing services revenue decreased 8% to $3,560,000 compared to $3,887,000 last year. Distribution revenue decreased 47% to $1,065,000 compared to $2,014,000 for the comparable quarter last year.

Higher margins in manufacturing and distribution increased overall gross margin to 23% of revenue, or $1,870,000, for the second quarter fiscal 2021 compared to 21% of revenue, or $1,905,000, for the same quarter last year.

Operating expenses decreased 8% to $1,907,000, or 23% of revenue, compared to $2,078,000, or 23% of revenue, for last year’s second quarter. The loss from operations for this year’s second quarter was $37,000, compared to a loss from operations a year earlier of $173,000.

Other income for the second quarter was $143,000, which included government assistance to Singapore and Malaysia operations totaling $101,000 to mitigate the adverse business impact of the pandemic. In the same quarter last year, other income was $40,000.

Net income for the second quarter of fiscal 2021 was $235,000, or $0.06 per diluted share. Net income for the second quarter of fiscal 2020 of $426,000, or $0.11 per diluted share, benefitted from a one-time gain of $1,172,000 related to the sale of assets held for sale.

Shareholders' equity at December 31, 2020 was $26,548,000, or $7.15 per outstanding share, compared to $25,146,000, or $6.84 per outstanding share, at June 30, 2020. There were approximately 3,710,555 Trio-Tech International common shares outstanding at December 31, 2020.

CEO Comments

S.W. Yong, Trio-Tech's CEO, said, "We delivered better gross margins and lower expenses in the second quarter, contributing to a sharp improvement in our operating performance compared to the same quarter last year. We also delivered a sequential improvement in top and bottom-line results compared to the first quarter of fiscal 2021 as our order rate trended higher, which is another encouraging sign. Despite our reassuring strong balance sheet and successful control of operating expenses, we continue to be cautious about our business, as the economic effects of the Covid pandemic continue."

Fiscal 2021 First Half Results

For the first six months of fiscal 2021, revenue decreased 20% to $15,042,000 compared to $18,785,000 for the same period last year. Manufacturing revenue decreased 3% to $6,194,000, compared to $6,362,000 last year. Semiconductor testing services revenue decreased 21% to $6,514,000 compared to $8,277,000, and distribution revenue decreased 44% to $2,323,000 compared to $4,113,000 a year ago.

Overall gross margin for the first six months of fiscal 2021 decreased 18% to $3,388,000, but improved, as a percent of revenue, to 23%. This compares to an overall gross margin of $4,157,000, or 22% of revenue, for the same period last year.

Operating expenses for the first six months of fiscal 2021 decreased 9% to $3,752,000, or 25% of revenue, compared to $4,108,000, or 22% of revenue, for the first six months of fiscal 2020.

Net income for the first half of fiscal 2021 was $227,000, or $0.06 per diluted share. This compares to net income of $699,000, or $0.19 per diluted share, for the first half of fiscal 2020. Net income for last year’s first half included a $1,172,000 gain on the sale of assets held for sale.

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; 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

 

2020

 

2019

 

2020

 

2019

Manufacturing

$

3,569

 

 

$

3,045

 

 

$

6,194

 

 

$

6,362

 

Testing services

 

3,560

 

 

 

3,887

 

 

 

6,514

 

 

 

8,277

 

Distribution

 

1,065

 

 

 

2,014

 

 

 

2,323

 

 

 

4,113

 

Real estate

 

7

 

 

 

16

 

 

 

11

 

 

 

33

 

 

 

8,201

 

 

 

8,962

 

 

 

15,042

 

 

 

18,785

 

Cost of Sales

 

 

 

 

 

 

 

Cost of manufactured products sold

 

2,770

 

 

 

2,383

 

 

 

4,707

 

 

 

4,938

 

Cost of testing services rendered

 

2,678

 

 

 

2,918

 

 

 

5,000

 

 

 

6,109

 

Cost of distribution

 

861

 

 

 

1,738

 

 

 

1,908

 

 

 

3,545

 

Cost of real estate

 

22

 

 

 

18

 

 

 

39

 

 

 

36

 

 

 

6,331

 

 

 

7,057

 

 

 

11,654

 

 

 

14,628

 

Gross Margin

 

1,870

 

 

 

1,905

 

 

 

3,388

 

 

 

4,157

 

Operating Expenses:

 

 

 

 

 

 

 

General and administrative

 

1,662

 

 

 

1,777

 

 

 

3,322

 

 

 

3,565

 

Selling

 

122

 

 

 

176

 

 

 

233

 

 

 

366

 

Research and development

 

123

 

 

 

125

 

 

 

198

 

 

 

201

 

Gain on disposal of property, plant and equipment

 

--

 

 

 

--

 

 

 

(1

)

 

 

(24

)

Total operating expenses

 

1,907

 

 

 

2,078

 

 

 

3,752

 

 

 

4,108

 

(Loss) Income from Operations

 

(37

)

 

 

(173

)

 

 

(364

)

 

 

49

 

Other Income (Expenses)

 

 

 

 

 

 

 

Interest expenses

 

(34

)

 

 

(55

)

 

 

(71

)

 

 

(123

)

Gain on sale of asset held for sale

 

--

 

 

 

1,172

 

 

 

--

 

 

 

1,172

 

Other income, net

 

143

 

 

 

40

 

 

 

354

 

 

 

150

 

Total other income

 

109

 

 

 

1,157

 

 

 

283

 

 

 

1,199

 

Income (loss) from Continuing Operations before Income Taxes

 

72

 

 

 

984

 

 

 

(81

)

 

 

1,248

 

Income Tax Expenses

 

--

 

 

 

120

 

 

 

7

 

 

 

120

 

Income (loss) from Continuing Operations before Non-controlling Interest, Net of Tax

 

72

 

 

 

864

 

 

 

(88

)

 

 

1,128

 

(Loss) Income from Discontinued Operations, Net of Tax

 

(21

)

 

 

1

 

 

 

(27

)

 

 

--

 

NET INCOME (LOSS)

 

51

 

 

 

865

 

 

 

(115

)

 

 

1,128

 

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

 

(184

)

 

 

439

 

 

 

(342

)

 

 

429

 

Net Income Attributable to Trio-Tech International

 

235

 

 

 

426

 

 

 

227

 

 

 

699

 

Net Income Attributable to Trio-Tech International:

 

 

 

 

 

 

 

Income from Continuing Operations, Net of Tax

 

246

 

 

 

425

 

 

 

241

 

 

 

699

 

(Loss) Income from Discontinued Operations, Net of Tax

 

(11

)

 

 

1

 

 

 

(14

)

 

 

--

 

Net Income attributable to Trio-Tech International

$

235

 

 

$

426

 

 

$

227

 

 

$

699

 

 

 

 

 

 

 

 

 

Basic Earnings per Share

$

0.06

 

 

$

0.12

 

 

$

0.06

 

 

$

0.19

 

Diluted Earnings per share

$

0.06

 

 

$

0.11

 

 

$

0.06

 

 

$

0.19

 

 

 

 

 

 

 

 

 

Weighted Average Shares Outstanding - Basic

 

3,710

 

 

 

3,673

 

 

 

3,710

 

 

 

3,673

 

Weighted Average Shares Outstanding - Diluted

3,800

 

 

3,725

 

 

3,793

 

 

3,706

 

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,

 

2020

 

2019

 

2020

 

2019

Comprehensive Income Attributable to Trio-Tech International Common Shareholders:

 

 

 

 

 

 

 

Net income (loss)

$

51

 

 

$

865

 

$

(115

)

 

$

1,128

 

Foreign Currency Translation, Net of Tax

 

943

 

 

 

525

 

 

1,583

 

 

 

(38

)

Comprehensive Income

 

994

 

 

 

1,390

 

 

1,468

 

 

 

1,090

 

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

 

(197

)

 

 

431

 

 

(319

)

 

 

440

 

Comprehensive Income Attributable to Trio-Tech International Common Shareholders

$

1,191

 

 

$

959

 

$

1,787

 

 

$

650

 

 

 

 

 

 

 

 

TRIO-TECH INTERNATIONAL AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT NUMBER OF SHARES)

 

 

 

Dec. 31,

 

Jun. 30,

 

2020

 

2020

ASSETS

 

(Unaudited)

 

 

CURRENT ASSETS:

 

 

 

Cash and cash equivalents

$

4,470

 

$

4,150

Short-term deposits

 

6,940

 

 

6,838

Trade accounts receivable, net

 

7,581

 

 

5,951

Other receivables

 

670

 

 

998

Inventories, net

 

2,147

 

 

1,922

Prepaid expenses and other current assets

 

342

 

 

341

Total current assets

 

22,150

 

 

20,200

Deferred tax assets

 

354

 

 

247

Investment properties, net

 

712

 

 

690

Property, plant and equipment, net

 

10,050

 

 

10,310

Operating lease right-of-use assets

 

1,514

 

 

944

Other assets

 

1,831

 

 

1,609

Restricted term deposits

 

1,752

 

 

1,660

Total non-current assets

 

16,213

 

 

15,460

TOTAL ASSETS

$

38,363

 

$

35,660

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

CURRENT LIABILITIES:

 

 

 

Lines of credit

$

--

 

$

172

Accounts payable

 

3,103

 

 

2,590

Accrued expenses

 

3,395

 

 

3,005

Income taxes payable

 

341

 

 

344

Current portion of bank loans payable

 

443

 

 

370

Current portion of finance leases

 

227

 

 

231

Current portion of operating leases

 

562

 

 

477

Current portion of PPP loan

 

121

 

 

54

Total current liabilities

 

8,192

 

 

7,243

Bank loans payable, net of current portion

 

1,899

 

 

1,836

Finance leases, net of current portion

 

353

 

 

435

Operating leases, net of current portion

 

952

 

 

467

Income taxes payable

 

385

 

 

430

PPP loan, net of current portion

 

--

 

 

67

Other non-current liabilities

 

34

 

 

36

Total non-current liabilities

 

3,623

 

 

3,271

TOTAL LIABILITIES

 

11,815

 

 

10,514

 

 

 

 

EQUITY

 

 

 

TRIO-TECH INTERNATIONAL'S SHAREHOLDERS' EQUITY:

 

 

 

Common stock, no par value, 15,000,000 shares authorized; 3,710,555 and 3,673,055
shares issued and outstanding at December 31, 2020 and June 30, 2020, respectively

 

11,525

 

 

11,424

Paid-in capital

 

3,378

 

 

3,363

Accumulated retained earnings

 

8,263

 

 

8,036

Accumulated other comprehensive gain-translation adjustments

 

2,703

 

 

1,143

Total Trio-Tech International shareholders' equity

 

25,869

 

 

23,966

Non-controlling interest

 

679

 

 

1,180

TOTAL EQUITY

 

26,548

 

 

25,146

TOTAL LIABILITIES AND EQUITY

$

38,363

 

$

35,660

 

 

 

 

 

Contacts

Company Contact:
A. Charles Wilson
Chairman
(818) 787-7000

Investor Contact:
Berkman Associates
(310) 927-3108
info@BerkmanAssociates.com

Contacts

Company Contact:
A. Charles Wilson
Chairman
(818) 787-7000

Investor Contact:
Berkman Associates
(310) 927-3108
info@BerkmanAssociates.com