| LOS ANGELES SINGAPORE KUALA LUMPUR INDONESIA BANGKOK SUZHOU TIANJIN CHONGQING | |
FOR IMMEDIATE RELEASE | Company Contact: Investor Contact: A. Charles Wilson Berkman Associates Chairman (310) 477-3118 (818) 787-7000 info@BerkmanAssociates.com | |
Trio-Tech Reports Fiscal 2011 Third Quarter Results
Van Nuys, CA -- May 16, 2011 -- Trio-Tech International (AMEX:TRT) today announced financial results for the third quarter and first nine months of fiscal 2011.
Third Quarter Results
For the three months ended March 31, 2011, revenue decreased to $5,829,000 compared to $10,771,000 for the third quarter of fiscal 2010. This decrease was primarily the result of lower sales of the Company's proprietary semiconductor test equipment products to a major customer, partially offset by higher testing services revenue attributable to this and other customers.
The net loss for the third quarter of fiscal 2011 was $462,000, or $0.14 per share, which included a loss from operations of $609,000. This compares to net income for the third quarter of fiscal 2010 of $19,000, or $0.01 per diluted share, which included income from operations of $206,000.
Revenue from product sales decreased to $2,650,000 for the third quarter of fiscal 2011 compared to $7,627,000 for the third quarter of the prior year. Revenue from testing services increased to $2,992,000 for the third quarter of fiscal 2011 compared to $2,854,000 for the third quarter of fiscal 2010. Revenue for the Company's oil and gas equipment fabrication venture was $138,000 for this year's third quarter compared to $101,000 for the third quarter of fiscal 2010. Revenue from the Company's real estate segment was $49,000 for this year's third quarter and $189,000 for the third quarter of fiscal 2010.
Gross margin for the third quarter of fiscal 2011 improved to 24.2% compared to 19.0% for the third quarter of fiscal 2010, reflecting the mix of business. General and administrative expenses increased to $1,997,000 for this year's third quarter compared to $1,657,000 for the third quarter of fiscal 2010, reflecting higher payroll expenses attributed to the launch of operations at Trio-Tech's new testing facility in Tianjin, China and restoration of salary in Singapore operations, which is dependent on demand and supply in the labor market, with effect from first quarter of fiscal 2011.
Nine Month Results
For the nine months ended March 31, 2011, revenue increased 18% to $28,407,000 compared to $24,054,000 for the first nine months of fiscal 2010. Net income for this year's first nine months was $216,000, or $0.06 per diluted share. This compares to a net loss for the first nine months of fiscal 2010 of $772,000, or $0.24 per share.
Balance Sheet Highlights
As of March 31, 2011, Trio-Tech reported cash and cash equivalents, restricted term deposits and short-term deposits of $8,714,000 ($2.63 per outstanding share). During the nine month period ending March 31, 2011, collections of outstanding receivables of approximately $7,200,000 were applied to reduce the line of credit and accounts payable by approximately $1,300,000 and $5,800,000, respectively. Working capital was $8,371,000 and shareholders' equity was $25,761,000 ($7.76 per outstanding share) at the end of the quarter. 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).
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16139 Wyandotte Street, Van Nuys, CA 91406, USA ● TEL: (818) 787-7000 ● FAX (818) 787-9130
Trio-Tech Reports Fiscal 2011 Third Quarter Results
May 16, 2011
Page Two
CEO Comments
"As previously reported, we completed the expansion of our Malaysia testing operation in the second fiscal quarter, including the purchase of additional plant and equipment, to expand our production capacity in anticipation of capturing increased order volume from a major customer. In the third quarter, we commenced testing operations at our newest semiconductor test services facility, in Tianjin, China. We absorbed significant costs at these facilities in the third quarter, prior to achieving higher testing revenue which we anticipate over the next few quarters," said SW Yong, Trio-Tech's CEO.
"Even as we continue to invest in our core semiconductor test equipment and services businesses, we remain committed to the new business initiatives we are developing to support our long-term growth objectives," Yong said.
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.
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 | |||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME | |||||||
UNAUDITED (IN THOUSANDS, EXCEPT EARNINGS PER SHARE) | |||||||
|
|
|
| ||||
| Three Months Ended |
| Nine Months Ended | ||||
| Mar. 31, |
| Dec. 31, | ||||
Revenue | 2011 |
| 2010 |
| 2011 |
| 2010 |
Products | $ 2,650 |
| $ 7,627 |
| $ 17,344 |
| $ 14,628 |
Testing Services | 2,992 |
| 2,854 |
| 9,659 |
| 8,104 |
Fabrication Services | 138 |
| 101 |
| 396 |
| 805 |
Others | 49 |
| 189 |
| 1,008 |
| 517 |
| 5,829 |
| 10,771 |
| 28,407 |
| 24,054 |
Cost of Sales |
|
|
|
|
|
|
|
Cost of products sold | 2,242 |
| 6,475 |
| 14,784 |
| 12,546 |
Cost of testing services rendered | 1,948 |
| 1,945 |
| 5,823 |
| 5,718 |
Cost of fabrication services rendered | 191 |
| 254 |
| 594 |
| 1,447 |
Others | 39 |
| 46 |
| 167 |
| 117 |
| 4,420 |
| 8,720 |
| 21,368 |
| 19,828 |
|
|
|
|
|
|
|
|
Gross Margin | 1,409 |
| 2,051 |
| 7,039 |
| 4,226 |
|
|
|
|
|
|
|
|
Operating Expenses (Gains) : |
|
|
|
|
|
|
|
General and administrative | 1,997 |
| 1,657 |
| 6,131 |
| 4,661 |
Selling | 115 |
| 183 |
| 364 |
| 410 |
Research and development | 59 |
| 9 |
| 175 |
| 29 |
Gain on disposal of property, plant and equipment | (153) |
| (4) |
| (146) |
| (5) |
Total operating expenses | 2,018 |
| 1,845 |
| 6,524 |
| 5,095 |
|
|
|
|
|
|
|
|
Income (Loss) from Operations | (609) |
| 206 |
| 515 |
| (869) |
|
|
|
|
|
|
|
|
Other Income (Expenses) |
|
|
|
|
|
|
|
Interest expenses | (54) |
| (49) |
| (173) |
| (123) |
Other income, net | 287 |
| 24 |
| 430 |
| 159 |
Total other income (expenses) | 233 |
| (25) |
| 257 |
| 36 |
|
|
|
|
|
|
|
|
Income (Loss) from Continuing Operations before Income Taxes | (376) |
| 181 |
| 772 |
| (833) |
Income Tax Expenses | (37) |
| (78) |
| (195) |
| (50) |
|
|
|
|
|
|
|
|
Income (Loss) from Continuing Operations before Non-controlling interest, net of tax | (413) |
| 103 |
| 577 |
| (883) |
|
|
|
|
|
|
|
|
Equity in loss of unconsolidated joint venture, net of tax | (7) |
| -- |
| (7) |
| -- |
|
|
|
|
|
|
|
|
(Loss) Income from Discontinued operations, net of tax | -- |
| 14 |
| (2) |
| (32) |
|
|
|
|
|
|
|
|
NET INCOME (LOSS) | $ (420) |
| $ 117 |
| $ 568 |
| $ (915) |
|
|
|
|
|
|
|
|
Less: Net Income (Loss) Attributable to the Non-controlling Interest | 42 |
| 98 |
| 352 |
| (143) |
Net Income (Loss) Attributable to Trio-Tech International | (462) |
| 19 |
| 216 |
| (772) |
|
|
|
|
|
|
|
|
Amounts Attributable to Trio-Tech International Common Shareholders: |
|
|
|
|
|
|
|
Income (Loss) from Continuing Operations, net of tax | (462) |
| 5 |
| 218 |
| (740) |
Loss (Income) from Discontinued Operations, net of tax | -- |
| 14 |
| (2) |
| (32) |
Net Income (Loss) Attributable to Trio-Tech International Common Shareholders | (462) |
| 19 |
| 216 |
| (772) |
|
|
|
|
|
|
|
|
Comprehensive Income (Loss) Attributable to Trio-Tech Common Shareholders: |
|
|
|
|
|
|
|
Net Income (Loss) | $ (420) |
| $ 117 |
| $ 568 |
| $ (915) |
Foreign currency translation, net of tax | 299 |
| 335 |
| 1,370 |
| 673 |
Comprehensive Income (Loss) | (121) |
| 452 |
| 1,938 |
| (242) |
Less: Comprehensive income (loss) attributable to non-controlling interest | 211 |
| 229 |
| 311 |
| 31 |
Comprehensive Income (Loss) Attributable to Trio-Tech International | (332) |
| 223 |
| 1,627 |
| (273) |
|
|
|
|
|
|
|
|
Basic Earnings (Loss) per Share Attributable to Trio-Tech International: |
|
|
|
|
|
|
|
From continuing operations | $ (0.14) |
| $ -- |
| $ 0.07 |
| $ (0.23) |
From discontinued operations | -- |
| 0.01 |
| -- |
| (0.01) |
Net Income (Loss) Attributable to Trio-Tech International | $ (0.14) |
| $ 0.01 |
| $ 0.07 |
| $ (0.24) |
|
|
|
|
|
|
|
|
Diluted Earnings (Loss) per Share Attributable to Trio-Tech International: |
|
|
|
|
|
|
|
From continuing operations | $ (0.14) |
| $ -- |
| $ 0.06 |
| $ (0.23) |
From discontinued operations | -- |
| 0.01 |
| -- |
| (0.01) |
Net Income (Loss) Attributable to Trio-Tech International | $ (0.14) |
| $ 0.01 |
| $ 0.06 |
| $ (0.24) |
|
|
|
|
|
|
|
|
Weighted average common shares outstanding -- basic | 3,301 |
| 3,227 |
| 3,277 |
| 3,227 |
Weighted average common shares outstanding -- diluted | 3,301 |
| 3,227 |
| 3,391 |
| 3,227 |
TRIO-TECH INTERNATIONAL AND SUBSIDIARIES | ||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||
(IN THOUSANDS, EXCEPT NUMBER OF SHARES) | ||||||
| March 31, |
| June 30, | |||
| 2011 |
| 2010 | |||
ASSETS | (Unaudited) |
|
| |||
|
|
|
| |||
CURRENT ASSETS: |
|
|
| |||
| Cash & cash equivalents | $ 4,645 |
| $ 3,244 | ||
| Short-term deposits | 597 |
| 2,714 | ||
| Trade accounts receivable, net | 5,914 |
| 12,142 | ||
| Other receivables | 275 |
| 778 | ||
| Loan receivables from property development projects | 1,068 |
| -- | ||
| Inventories, net | 2,469 |
| 3,400 | ||
| Investment in property development | -- |
| 887 | ||
| Prepaid expenses and other current assets | 421 |
| 296 | ||
| Assets held for sale | 137 |
| -- | ||
|
|
|
| |||
|
|
| Total current assets | 15,526 |
| 23,461 |
|
|
|
| |||
INVESTMENT IN UNCONSOLIDATED JOINT VENTURE | 755 |
| -- | |||
INVESTMENT PROPERTY IN CHINA, Net | 1,238 |
| 2,141 | |||
PROPERTY, PLANT AND EQUIPMENT, Net | 14,277 |
| 12,695 | |||
OTHER ASSETS | 1,848 |
| 1,180 | |||
RESTRICTED TERM DEPOSITS | 3,472 |
| 2,247 | |||
|
|
|
| |||
TOTAL ASSETS | $ 37,116 |
| $ 41,724 | |||
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDER'S EQUITY |
|
|
| |||
|
|
|
| |||
CURRENT LIABILITIES: |
|
|
| |||
| Lines of credit | $ 1,245 |
| $ 2,532 | ||
| Accounts payable | 2,136 |
| 7,968 | ||
| Accrued expenses | 2,735 |
| 3,419 | ||
| Income taxes payable | 678 |
| 342 | ||
| Current portion of bank loans payable | 217 |
| 478 | ||
| Current portion of capital leases | 144 |
| 57 | ||
|
|
|
| |||
|
|
| Total current liabilities | 7,155 |
| 14,796 |
|
|
|
| |||
BANK LOANS PAYABLE, net of current portion | 2,726 |
| 2,566 | |||
CAPITAL LEASES, net of current portion | 309 |
| -- | |||
DEFERRED TAX LIABILITIES | 681 |
| 718 | |||
OTHER NON-CURRENT LIABILITIES | 484 |
| 569 | |||
|
|
|
| |||
TOTAL LIABILITIES | 11,355 |
| 18,649 | |||
|
|
|
| |||
COMMITMENTS AND CONTINGENCIES | -- |
| -- | |||
|
|
|
|
|
|
|
EQUITY |
|
|
| |||
|
|
|
| |||
TRIO-TECH INTERNATIONAL'S SHAREHOLDERS' EQUITY: |
|
|
| |||
| Common stock, no par value, 15,000,000 shares authorized; |
|
|
| ||
|
| 3,318,805 and 3,227,430 shares issued and outstanding, |
|
|
| |
|
| at March 31, 2011, and June 30, 2010, respectively | 10,527 |
| 10,365 | |
| Paid-in capital | 2,183 |
| 1,597 | ||
| Accumulated retained earnings | 6,702 |
| 6,486 | ||
| Accumulated other comprehensive gain-translation adjustments | 3,229 |
| 1,818 | ||
|
|
|
| |||
|
|
| Total Trio-Tech International shareholders' equity | 22,641 |
| 20,266 |
|
|
|
| |||
NON-CONTROLLING INTEREST | 3,120 |
| 2,809 | |||
|
|
|
| |||
TOTAL EQUITY | 25,761 |
| 23,075 | |||
|
|
|
| |||
TOTAL LIABILITIES AND EQUITY | $ 37,116 |
| $ 41,724 | |||