Trio-Tech International (NYSE MKT:TRT) today announced financial results for the first quarter of fiscal 2014.
First Quarter Highlights
● Revenue essentially flat versus first quarter 2013, up 11.5% over fourth quarter 2013.
● Profit before stock option expense versus a loss in the same quarter last year.
● Higher gross margin versus first quarter 2013.
● Improved first quarter 2014 cash flow from operations versus first quarter 2013.
First Quarter Results
For the three months ended September 30, 2013, revenue was essentially flat at $9,497,000, a 0.8% decrease compared to revenue of $9,575,000 for the first quarter of fiscal 2013. First quarter revenue was 11.5% higher than revenue of $8,516,000 reported for the fourth quarter of fiscal 2013.
Gross margin for this year's fiscal first quarter increased to 22.0% of revenue, compared to 19.2% of revenue in the same quarter last year, primarily reflecting lower costs in the Company's manufacturing segment.
Operating expenses for this year's fiscal first quarter were $2,104,000, which included a non-cash stock option expense of $114,000. This compares to operating expenses of $1,949,000 for the first quarter of fiscal 2013. Pre-tax income from continuing operations increased to $83,000 compared to $66,000 in the first quarter of 2013.
Income from continuing operations attributable to Trio-Tech common shareholders for the first quarter of fiscal 2014 was $6,000, or $0.00 per diluted share, after a loss from the discontinued fabrication services business of $23,000, or $0.01 per diluted share. The net loss for the quarter was $17,000, or $0.01 per diluted share. Excluding stock option expense, net income for the first quarter of fiscal 2014 was $97,000, or $0.03 per diluted share. In comparison, for the first quarter of fiscal 2013, the loss from continuing operations attributable to Trio-Tech common shareholders was $93,000, or $0.03 per diluted share, after a loss from the discontinued fabrication business of $110,000, or $0.04 per diluted share. The net loss for the first quarter of fiscal 2013 was $17,000, or $0.01 per diluted share. As previously announced, Trio-Tech terminated its fabrication facilities lease in December, 2012 and discontinued this segment in the fourth quarter of fiscal 2013.
Cash provided by operations for the first quarter of fiscal 2014 increased to $1,213,000, compared to cash used in operations for the first quarter of fiscal 2013 of $135,000. Shareholders' equity at September 30, 2013 was $20,755,000, or $6.11 per outstanding share, compared to $20,606,000, or $6.20 per outstanding share, at June 30, 2013.
CEO Comments
"We delivered higher margins and net income before stock option expense for this year's first quarter compared to the same period last year in what remains a difficult operating environment in the semiconductor industry. That's why first-class customer service and tight control over operating costs remain our watchwords, even as we continue developing our technical capabilities and flexible semiconductor testing and test equipment manufacturing platforms to take advantage of opportunities to enhance growth and profitability in our core businesses. We believe we are well-positioned for the future because of these efforts," said SW Yong, Trio-Tech's CEO.
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, www.shi-international.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.
| TRIO-TECH INTERNATIONAL AND SUBSIDIARIES | ||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME | ||||||||||||
| UNAUDITED (IN THOUSANDS, EXCEPT EARNINGS PER SHARE) | ||||||||||||
| Three Months Ended | ||||||||||||
| September 30, | ||||||||||||
| Revenue | 2013 | 2012 | ||||||||||
| Products | $ | 5,405 | $ | 5,636 | ||||||||
| Testing Services | 4,048 | 3,909 | ||||||||||
Other | 44 | 30 | ||||||||||
| 9,497 | 9,575 | |||||||||||
| Costs of Sales | ||||||||||||
| Cost of products sold | 4,346 | 5,026 | ||||||||||
| Cost of testing services rendered | 3,025 | 2,677 | ||||||||||
| Other | 35 | 33 | ||||||||||
| 7,406 | 7,736 | |||||||||||
| Gross Margin | 2,091 | 1,839 | ||||||||||
| Operating Expenses: | ||||||||||||
| General and administrative | 1,834 | 1,751 | ||||||||||
| Selling | 205 | 128 | ||||||||||
| Research and development | 52 | 73 | ||||||||||
| Gain (Loss) on disposal of property, plant and equipment | 13 | (3 | ) | |||||||||
| Total operating expenses | 2,104 | 1,949 | ||||||||||
| Loss from Operations | (13 | ) | (110 | ) | ||||||||
| Other (Expenses) Income | ||||||||||||
| Interest expense | (68 | ) | (78 | ) | ||||||||
| Other income, net | 164 | 254 | ||||||||||
| Total other (expenses) income | 96 | 176 | ||||||||||
| Income from Continuing Operations before Income Taxes | 83 | 66 | ||||||||||
| Income Tax Benefit | 43 | 124 | ||||||||||
| Income from Continuing Operations before Non-controlling Interest, net of tax | 126 | 190 | ||||||||||
| LOSS FROM DISCONTINUED OPERATIONS, net of tax | (42 | ) | (231 | ) | ||||||||
| NET INCOME (LOSS) | $ | 84 | $ | (41 | ) | |||||||
| Less: Net income attributable to the non-controlling interest | 101 | (24 | ) | |||||||||
| Net Loss attributable to Trio-Tech International | (17 | ) | (17 | ) | ||||||||
| Net Loss Attributable to Trio-Tech International: | ||||||||||||
| Loss from continuing operations, net of tax | 6 | 93 | ||||||||||
| Loss from discontinued operations, net of tax | (23 | ) | (110 | ) | ||||||||
| Net Loss Attributable to Trio-Tech International | $ | (17 | ) | $ | (17 | ) | ||||||
| Comprehensive Income (Loss) Attributable to Trio-Tech International: | ||||||||||||
| Net income (loss) | $ | 84 | $ | (41 | ) | |||||||
| Foreign currency translation, net of tax | (183 | ) | 555 | |||||||||
| Comprehensive (Loss) Income | (99 | ) | 514 | |||||||||
| Less: Comprehensive income (loss) attributable to non-controlling Interest | (4 | ) | 98 | |||||||||
| Comprehensive (Loss) Income Attributable to Trio-Tech International | (95 | ) | 416 | |||||||||
| Basic and Diluted earnings per share from continuing operations | $ | -- | $ | 0.03 | ||||||||
| Basic and Diluted loss per share from discontinued operations | (0.01 | ) | (0.04 | ) | ||||||||
| Basic and Diluted Loss per Share | $ | (0.01 | ) | $ | (0.01 | ) | ||||||
| Weighted Average Shares Outstanding - Basic and Diluted | 3,399 | 3,322 | ||||||||||
| TRIO-TECH INTERNATIONAL AND SUBSIDIARIES | ||||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||||
| (IN THOUSANDS, EXCEPT NUMBER OF SHARES) | ||||||||||
| Sep. 30, | Jun. 30, | |||||||||
| 2013 | 2013 | |||||||||
| (unaudited) | ||||||||||
| ASSETS | ||||||||||
| CURRENT ASSETS: | ||||||||||
| Cash & cash equivalents | $ | 2,521 | $ | 2,793 | ||||||
| Short-term deposits | 103 | 104 | ||||||||
| Trade accounts receivable, net | 8,996 | 8,728 | ||||||||
| Other receivables | 394 | 993 | ||||||||
| Loan receivables from property development projects | 1,144 | 1,139 | ||||||||
| Inventories, net | 1,952 | 2,463 | ||||||||
| Prepaid expenses and other current assets | 408 | 358 | ||||||||
| Total current assets | 15,518 | 16,578 | ||||||||
| INVESTMENT IN UNCONSOLIDATED JOINT VENTURE | 795 | 791 | ||||||||
| INVESTMENT PROPERTY, Net | 1,870 | 1,893 | ||||||||
| PROPERTY, PLANT AND EQUIPMENT, Net | 12,540 | 12,851 | ||||||||
| OTHER ASSETS | 801 | 437 | ||||||||
| RESTRICTED TERM DEPOSITS | 3,511 | 3,494 | ||||||||
| TOTAL ASSETS | $ | 35,035 | $ | 36,044 | ||||||
| LIABILITIES AND SHAREHOLDER'S EQUITY | ||||||||||
| CURRENT LIABILITIES: | ||||||||||
| Lines of credit | $ | 2,953 | $ | 3,864 | ||||||
| Accounts payable | 4,208 | 4,136 | ||||||||
| Accrued expenses | 3,002 | 3,060 | ||||||||
| Income taxes payable | 469 | 459 | ||||||||
| Current portion of bank loans payable | 769 | 770 | ||||||||
| Current portion of capital leases | 92 | 105 | ||||||||
| Total current liabilities | 11,493 | 12,394 | ||||||||
| BANK LOANS PAYABLE, net of current portion | 2,364 | 2,613 | ||||||||
| CAPITAL LEASES, net of current portion | 259 | 228 | ||||||||
| DEFERRED TAX LIABILITIES | 127 | 191 | ||||||||
| OTHER NON-CURRENT LIABILITIES | 37 | 12 | ||||||||
| TOTAL LIABILITIES | 14,280 | 15,438 | ||||||||
| COMMITMENTS AND CONTINGENCIES | -- | -- | ||||||||
| EQUITY | ||||||||||
| TRIO-TECH INTERNATIONAL'S SHAREHOLDERS' EQUITY: | ||||||||||
Common stock, no par value, 15,000,000 shares authorized; 3,399,555 shares issued and outstanding at September 30, 2013, and June 30, 2013, respectively | 10,665 | 10,531 | ||||||||
| Paid-in capital | 2,870 | 2,756 | ||||||||
| Accumulated retained earnings | 1,651 | 1,668 | ||||||||
| Accumulated other comprehensive gain-translation adjustments | 3,602 | 3,680 | ||||||||
| Total Trio-Tech International shareholders' equity | 18,788 | 18,635 | ||||||||
| NON-CONTROLLING INTEREST | 1,967 | 1,971 | ||||||||
| TOTAL EQUITY | 20,755 | 20,606 | ||||||||
| TOTAL LIABILITIES AND EQUITY | $ | 35,035 | $ | 36,044 | ||||||
Contacts:
Trio-Tech International
A. Charles
Wilson
Chairman
818-787-7000
or
Investor Contact:
Berkman
Associates
310-477-3118
info@BerkmanAssociates.com
