Document and Entity Information
Document and Entity Information - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Sep. 01, 2018 | Dec. 31, 2017 | |
Document And Entity Information | |||
Entity Registrant Name | TRIO-TECH INTERNATIONAL | ||
Entity Central Index Key | 732,026 | ||
Document Type | 10-K | ||
Document Period End Date | Jun. 30, 2018 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --06-30 | ||
Is Entity a Well-known Seasoned Issuer? | No | ||
Is Entity a Voluntary Filer? | No | ||
Is Entity's Reporting Status Current? | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 12,052,000 | ||
Entity Common Stock, Shares Outstanding | 3,553,055 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,018 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2018 | Jun. 30, 2017 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 6,539 | $ 4,772 |
Short-term deposits | 653 | 787 |
Trade accounts receivable, less allowance for doubtful accounts of $259 and $247 | 8,007 | 9,009 |
Other receivables | 621 | 401 |
Inventories, less provision for obsolete inventory of $695 and $686 | 2,930 | 1,756 |
Prepaid expenses and other current assets | 208 | 226 |
Assets held for sale | 91 | 86 |
Total current assets | 19,049 | 17,037 |
NON-CURRENT ASSETS | ||
Deferred tax assets | 400 | 375 |
Investment properties, net | 1,146 | 1,216 |
Property, plant and equipment, net | 11,935 | 11,291 |
Other assets | 2,249 | 1,922 |
Restricted term deposits | 1,695 | 1,657 |
Total non-current assets | 17,425 | 16,461 |
TOTAL ASSETS | 36,474 | 33,498 |
CURRENT LIABILITIES: | ||
Lines of credit | 2,043 | 2,556 |
Accounts payable | 3,704 | 3,229 |
Accrued expenses | 3,172 | 3,043 |
Income taxes payable | 285 | 233 |
Current portion of bank loans payable | 367 | 260 |
Current portion of capital leases | 250 | 228 |
Total current liabilities | 9,821 | 9,549 |
NON-CURRENT LIABILITIES: | ||
Bank loans payable, net of current portion | 1,437 | 1,552 |
Capital leases, net of current portion | 524 | 531 |
Deferred tax liabilities | 327 | 295 |
Income taxes payable | 828 | 0 |
Other non-current liabilities | 36 | 44 |
Total non-current liabilities | 3,152 | 2,422 |
TOTAL LIABILITIES | 12,973 | 11,971 |
TRIO-TECH INTERNATIONAL'S SHAREHOLDERS' EQUITY: | ||
Common stock, no par value, 15,000,000 shares authorized; 3,553,055 shares issued and outstanding as of June 30, 2018 and 3,523,055 shares issued and outstanding as of June 30, 2017 | 11,023 | 10,921 |
Paid-in capital | 3,249 | 3,206 |
Accumulated retained earnings | 5,525 | 4,341 |
Accumulated other comprehensive gain-translation adjustments | 2,182 | 1,633 |
Total Trio-Tech International shareholders' equity | 21,979 | 20,101 |
Non-controlling interests | 1,522 | 1,426 |
TOTAL EQUITY | 23,501 | 21,527 |
TOTAL LIABILITIES AND EQUITY | $ 36,474 | $ 33,498 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2018 | Jun. 30, 2017 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 259 | $ 247 |
Provision for obsolete inventory | $ 695 | $ 686 |
Common stock, Authorized | 15,000,000 | 15,000,000 |
Common stock, Issued | 3,553,055 | 3,523,055 |
Common stock, outstanding | 3,553,055 | 3,523,055 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Revenue | ||
Manufacturing | $ 15,978 | $ 15,289 |
Testing services | 19,391 | 16,586 |
Distribution | 6,853 | 6,511 |
Others | 139 | 152 |
Total | 42,361 | 38,538 |
Cost of Sales | ||
Cost of manufactured products sold | 12,213 | 12,091 |
Cost of testing services rendered | 13,323 | 11,057 |
Cost of distribution | 6,068 | 5,828 |
Others | 119 | 100 |
Total | 31,723 | 29,076 |
Gross Margin | 10,638 | 9,462 |
Operating Expenses | ||
General and administrative | 7,250 | 6,911 |
Selling | 826 | 807 |
Research and development | 451 | 208 |
(Gain) / loss on disposal of property, plant and equipment | (77) | 47 |
Total operating expenses | 8,450 | 7,973 |
Income from Operations | 2,188 | 1,489 |
Other Income / (Expenses) | ||
Interest expenses | (233) | (202) |
Other income, net | 335 | 514 |
Total other income / (expenses) | 102 | 312 |
Income from Continuing Operations before Income Taxes | 2,290 | 1,801 |
Income Tax Expenses | (987) | (341) |
Income from continuing operations before non-controlling interests, net of tax | 1,303 | 1,460 |
Discontinued Operations (Note 24) | ||
Loss from discontinued operations, net of tax | (13) | (5) |
NET INCOME | 1,290 | 1,455 |
Less: net income attributable to non-controlling interests | 106 | 139 |
Net Income Attributable to Trio-Tech International Common Shareholders | 1,184 | 1,316 |
Amounts Attributable to Trio-Tech International Common Shareholders: | ||
Income from continuing operations, net of tax | 1,197 | 1,325 |
Loss from discontinued operations, net of tax | (13) | (9) |
Net Income Attributable to Trio-Tech International Common Shareholders | $ 1,184 | $ 1,316 |
Basic Earnings per Share: | ||
Basic earnings per share from continuing operations attributable to Trio-Tech International | $ 0.34 | $ 0.38 |
Basic earnings per share from discontinued operations attributable to Trio-Tech International | (0.01) | .00 |
Basic Earnings per Share from Net Income Attributable to Trio-Tech International | 0.33 | 0.38 |
Diluted Earnings per Share: | ||
Diluted earnings per share from continuing operations attributable to Trio-Tech International | 0.32 | 0.36 |
Diluted earnings per share from discontinued operations attributable to Trio-Tech International | (0.01) | .00 |
Diluted Earnings per Share from Net Income Attributable to Trio-Tech International | $ 0.31 | $ 0.36 |
Weighted average number of common shares outstanding Basic | 3,553,000 | 3,523,000 |
Dilutive effect of stock options | 218,000 | 121,000 |
Number of shares used to compute earnings per share diluted | 3,771,000 | 3,644,000 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Comprehensive Loss Attributable to Trio-Tech International Common Shareholders: | ||
Net income | $ 1,290 | $ 1,455 |
Foreign currency translation, net of tax | 728 | (679) |
Comprehensive Income | 2,018 | 776 |
Less: comprehensive (loss) / income attributable to the non-controlling interests | 285 | (11) |
Comprehensive Income Attributable to Trio-Tech International Common Shareholders | $ 1,733 | $ 787 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Additional Paid-In Capital | Accumulated Retained Earnings | Accumulated Other Comprehensive Income | Noncontrolling Interest | Total |
Beginning Balance, Amount at Jun. 30, 2016 | $ 10,882 | $ 3,188 | $ 3,025 | $ 2,162 | $ 1,614 | $ 20,871 |
Beginning Balance, Shares at Jun. 30, 2016 | 3,513,000 | |||||
Stock option expenses | 18 | 18 | ||||
Net income | 1,316 | 139 | 1,455 | |||
Dividend declared by subsidiary | (177) | (177) | ||||
Issue of restricted shares to consultant, Amount | $ 39 | 39 | ||||
Issue of restricted shares to consultant, Shares | 10,000 | |||||
Translation adjustment | (529) | (150) | (679) | |||
Ending Balance, Amount at Jun. 30, 2017 | $ 10,921 | 3,206 | 4,341 | 1,633 | 1,426 | 21,527 |
Ending Balance, Shares at Jun. 30, 2017 | 3,523,000 | |||||
Stock option expenses | 43 | 43 | ||||
Net income | 1,184 | 106 | 1,290 | |||
Dividend declared by subsidiary | (189) | (189) | ||||
Exercise of options, Amount | $ 51 | 121 | ||||
Exercise of options, Shares | 20,000 | |||||
Issue of restricted shares to consultant, Amount | $ 51 | 51 | ||||
Issue of restricted shares to consultant, Shares | 10,000 | |||||
Translation adjustment | 549 | 179 | 728 | |||
Ending Balance, Amount at Jun. 30, 2018 | $ 11,023 | $ 3,249 | $ 5,525 | $ 2,182 | $ 1,522 | $ 23,501 |
Ending Balance, Shares at Jun. 30, 2018 | 3,553,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Cash Flow from Operating Activities | ||
Net income | $ 1,290 | $ 1,455 |
Adjustments to reconcile net income to net cash flow provided by operating activities | ||
Depreciation and amortization | 2,214 | 1,836 |
Bad debt expenses / (recovery), net | 7 | (15) |
Inventory recovery | 4 | 0 |
Warranty provision / (recovery), net | 34 | (27) |
Accrued interest expense, net accrued interest income | 194 | 180 |
Fixed assets written off | 0 | 30 |
Issuance of shares to service provider | 51 | 39 |
Loss on disposal of property, plant and equipment | 15 | 17 |
Stock compensation expenses | 43 | 18 |
Deferred tax / provision | 5 | 104 |
Changes in operating assets and liabilities | ||
Trade accounts receivables | 995 | (168) |
Other receivables | (220) | 191 |
Other assets | (377) | (235) |
Inventories | (1,162) | (300) |
Prepaid expenses and other current assets | 18 | 38 |
Accounts payable and accrued liabilities | 488 | 787 |
Income tax payable | 880 | 3 |
Other non-current liabilities | 0 | 0 |
Net Cash Provided by Operating Activities | 4,479 | 3,953 |
Cash Flow from Investing Activities | ||
Proceeds from maturing of unrestricted and restricted term deposits, net | 484 | 488 |
Additions to property, plant and equipment | (2,309) | (2,285) |
Investments in restricted and un-restricted deposits | (281) | (651) |
Proceeds from disposal of property and equipment | 42 | 86 |
Net Cash used in Investing Activities | (2,064) | (2,362) |
Cash Flow from Financing Activities | ||
Repayment on lines of credit | (8,883) | (8,915) |
Dividends paid on non-controlling interest | (189) | (177) |
Repayment of bank loans and capital leases | (733) | (721) |
Proceeds from bank loans and capital leases | 8,747 | 9,464 |
Proceeds from exercising stock options | 51 | 0 |
Net Cash Used in Financing Activities | (1,007) | (349) |
Effect of Changes in Exchange Rate | 359 | (277) |
NET INCREASE IN CASH AND CASH EQUIVALENTS | 1,767 | 965 |
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | 4,772 | 3,807 |
CASH AND CASH EQUIVALENTS, END OF YEAR | 6,539 | 4,772 |
Supplementary Information of Cash Flows | ||
Cash paid during the period for Interest | 181 | 185 |
Cash paid during the period for Income taxes | 245 | 170 |
Non-Cash Transactions | ||
Capital lease of property, plant and equipment | $ 228 | $ 295 |
1. BASIS OF PRESENTATION AND SU
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Jun. 30, 2018 | |
Notes to Financial Statements | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Basis of Presentation and Principles of Consolidation - Ownership Location Express Test Corporation (Dormant) 100% Van Nuys, California Trio-Tech Reliability Services (Dormant) 100% Van Nuys, California KTS Incorporated, dba Universal Systems (Dormant) 100% Van Nuys, California European Electronic Test Centre (Dormant) 100% Dublin, Ireland Trio-Tech International Pte. Ltd. 100% Singapore Universal (Far East) Pte. Ltd. * 100% Singapore Trio-Tech International (Thailand) Co. Ltd. * 100% Bangkok, Thailand Trio-Tech (Bangkok) Co. Ltd. 100% Bangkok, Thailand (49% owned by Trio-Tech International Pte. Ltd. and 51% owned by Trio-Tech International (Thailand) Co. Ltd.) Trio-Tech (Malaysia) Sdn. Bhd. (55% owned by Trio-Tech International Pte. Ltd.) 55% Penang and Selangor, Malaysia Trio-Tech (Kuala Lumpur) Sdn. Bhd. 55% Selangor, Malaysia (100% owned by Trio-Tech Malaysia Sdn. Bhd.) Prestal Enterprise Sdn. Bhd. 76% Selangor, Malaysia (76% owned by Trio-Tech International Pte. Ltd.) Trio-Tech (SIP) Co., Ltd. * 100% Suzhou, China Trio-Tech (Chongqing) Co. Ltd. * 100% Chongqing, China SHI International Pte. Ltd. (Dormant) (55% owned by Trio-Tech International Pte. Ltd) 55% Singapore PT SHI Indonesia (Dormant) (100% owned by SHI International Pte. Ltd.) 55% Batam, Indonesia Trio-Tech (Tianjin) Co., Ltd. * 100% Tianjin, China * 100% owned by Trio-Tech International Pte. Ltd. The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (‘‘U.S. GAAP’’). The basis of accounting differs from that used in the statutory financial statements of the Company’s subsidiaries and equity investee companies, which are prepared in accordance with the accounting principles generally accepted in their respective countries of incorporation. In the opinion of management, the consolidated financial statements have reflected all costs incurred by the Company and its subsidiaries in operating the business. All dollar amounts in the financial statements and in the notes herein are presented in thousands of United States dollars (US$’000) unless otherwise designated. Liquidity The Company’s core businesses - testing services, manufacturing (assembly) and distribution - operate in a volatile industry, whereby its average selling prices and product costs are influenced by competitive factors. These factors create pressures on sales, costs, earnings and cash flows, which will impact liquidity. Foreign Currency Translation and Transactions The Company translates assets and liabilities of its subsidiaries outside the U.S. into U.S. dollars using the rate of exchange prevailing at the fiscal year end, and the consolidated statements of operations and comprehensive income or loss is translated at average rates during the reporting period. Adjustments resulting from the translation of the subsidiaries’ financial statements from foreign currencies into U.S. dollars are recorded in shareholders' equity as part of accumulated other comprehensive gain - translation adjustments. Gains or losses resulting from transactions denominated in currencies other than functional currencies of the Company’s subsidiaries are reflected in income for the reporting period. Use of Estimates — Revenue Recognition Revenue from product sales is also recorded in accordance with the provisions of ASC Topic 605 and Staff Accounting Bulletin (“SAB”) 104 Revenue Recognition in Financial Statements, In the real estate segment: (1) revenue from property development is earned and recognized on the earlier of the dates when the underlying property is sold or upon the maturity of the agreement; if this amount is uncollectible, the agreement empowers the repossession of the property, and (2) rental revenue is recognized on a straight-line basis over the terms of the respective leases. This means that, with respect to a particular lease, actual amounts billed in accordance with the lease during any given period may be higher or lower than the amount of rental revenue recognized for the period. Straight-line rental revenue is commenced when the tenant assumes possession of the leased premises. Accrued straight-line rents receivable represents the amount by which straight-line rental revenue exceeds rents currently billed in accordance with lease agreements. GST / Indirect Taxes Accounts Receivable and Allowance for Doubtful Accounts — The Company’s management considers the following factors when determining the collectability of specific customer accounts: customer credit-worthiness, past transaction history with the customer, current economic industry trends, and changes in customer payment terms. The Company includes any account balances that are determined to be uncollectible, along with a general reserve, in the overall allowance for doubtful accounts. After all attempts to collect a receivable have failed, the receivable is written off against the allowance. Based on the information available to management, the Company believed that its allowance for doubtful accounts was adequate as of June 30, 2018 and 2017. Warranty Costs — Cash and Cash Equivalents — Term Deposits — Restricted Term Deposits — Inventories Property, Plant and Equipment & Investment Property Maintenance, repairs and minor renewals are charged directly to expense as incurred. Additions and improvements to the assets are capitalized. When assets are disposed of, the related cost and accumulated depreciation thereon are removed from the accounts and any resulting gain or loss is included in the consolidated statements of operations and comprehensive income or loss. Long-Lived Assets and Impairment – The Company evaluates the long-lived assets, including property, plant and equipment and investment property, for impairment whenever events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Factors considered important that could result in an impairment review include significant underperformance relative to expected historical or projected future operating results, significant changes in the manner of use of the assets or the strategy for our business, significant negative industry or economic trends, and a significant decline in the stock price for a sustained period of time. Impairment is recognized based on the difference between the fair value of the asset and its carrying value, and fair value is generally measured based on discounted cash flow analysis, if there is significant adverse change. The Company applies the provisions of ASC Topic 360, Accounting for the Impairment or Disposal of Long-Lived Assets Leases Accounting for Leases The Company’s management expects that in the normal course of business, operating leases will be renewed or replaced by other leases. The future minimum operating lease payments, for which the Company is contractually obligated as of June 30, 2018, are disclosed in these notes to the consolidated financial statements. Assets under capital leases are capitalized using interest rates appropriate at the inception of each lease and are depreciated over either the estimated useful life of the asset or the lease term on a straight-line basis. The present value of the related lease payments is recorded as a contractual obligation. The future minimum annual capital lease payments are included in the total future contractual obligations as disclosed in the notes to the consolidated financial statements. Comprehensive Income or Loss — Reporting Comprehensive Income, Income Taxes — Accounting for Income Taxes . The calculation of tax liabilities involves dealing with uncertainties in the application of complex global tax regulations. The Company recognizes potential liabilities for anticipated tax audit issues in the U.S. and other tax jurisdictions based on its estimate of whether, and the extent to which, additional taxes will be due. If payment of these amounts ultimately proves to be unnecessary, the reversal of the liabilities would result in tax benefits being recognized in the period when the Company determines the liabilities are no longer necessary. If the estimate of tax liabilities proves to be less than the ultimate assessment, a further charge to expense would result. Retained Earnings — Research and Development Costs — Stock Based Compensation Share Based Payments Earnings per Share — Fair Values of Financial Instruments ASC Topic 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The financial assets and financial liabilities that require recognition under the guidance include available-for-sale investments, employee deferred compensation plan and foreign currency derivatives. The guidance establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of us. Unobservable inputs are inputs that reflect our assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available under the circumstances. As such, fair value is a market-based measure considered from the perspective of a market participant who holds the asset or owes the liability rather than an entity-specific measure. The hierarchy is broken down into three levels based on the reliability of inputs as follows: ● Level 1—Valuations based on quoted prices in active markets for identical assets or liabilities that we have the ability to access. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment. Financial assets utilizing Level 1 inputs include U.S. treasuries, most money market funds, marketable equity securities and our employee deferred compensation plan; ● Level 2—Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, directly or indirectly. Financial assets and liabilities utilizing Level 2 inputs include foreign currency forward exchange contracts, most commercial paper and corporate notes and bonds; and ● Level 3—Valuations based on inputs that are unobservable and significant to the overall fair value measurement. Financial assets utilizing Level 3 inputs primarily include auction rate securities. We use an income approach valuation model to estimate the exit price of the auction rate securities, which is derived as the weighted-average present value of expected cash flows over various periods of illiquidity, using a risk adjusted discount rate that is based on the credit risk and liquidity risk of the securities. Concentration of Credit Risk Investments Equity Method Cost Method - Loan Receivables from Property Development Projects Interest income on the loan receivables from property development projects are recognized on an accrual basis. Discounts and premiums on loans are amortized to income using the interest method over the remaining period to contractual maturity. The amortization of discounts into income is discontinued on loans that are contractually 90 days past due or when collection of interest appears doubtful. Contingent Liabilities If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed. |
2. NEW ACCOUNTING PRONOUNCEMENT
2. NEW ACCOUNTING PRONOUNCEMENTS | 12 Months Ended |
Jun. 30, 2018 | |
Notes to Financial Statements | |
NEW ACCOUNTING PRONOUNCEMENTS | The amendments in ASU 2018-13 ASC Topic 820: Fair Value Measurement: Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement The amendments in ASU 2018-11 ASC Topic 842: Leases: Targeted Improvements The amendments in ASU 2018-10 ASC Topic 842: Codification Improvements to Leases The amendments in ASU 2018-09 Codification Improvements The amendments in ASU 2018-03 Technical Corrections and Improvements to Financial Instruments The amendments in ASU 2018-02 ASC Topic 220: Income Statement – Reporting Comprehensive Income The amendments in Accounting Standards Update (“ASU”) 2017-11: Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging The amendments in ASU 2017-09 — Compensation — Stock Compensation The amendments in ASU 2017-07 ASC Topic 715 — 'Compensation — Retirement Benefits The amendments in ASU 2017-05 ASC Subtopic 610-20 — 'Other Income – Gains and Losses from the Derecognition of Nonfinancial Assets The amendments in ASU 2017-04 ASC Topic 350 — ' Intangibles - Goodwill and Other The amendments in ASU 2017-01 ASC Topic 805 — ' Business Combinations The amendments in ASU 2016-18 ASC Topic 230 — 'Statement of Cash Flows The amendments in ASU 2016-17 ASC Topic 810 — Consolidation The amendments in ASU 2016-15 ASC Topic 230 — Statement of Cash Flows The amendments in ASU 2016-13 ASC Topic 326: Financial Instruments — Credit losses The amendments in ASU 2016-02 ASC Topic 842: Leases require companies to recognize the following for all leases (with the exception of short-term leases) at the commencement date of the applicable lease: (a) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (b) a right-of-use asset, which is as an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. These amendments become effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, for a variety of entities including a public company. While early adoption is permitted, the Company has not elected to early adopt. The Company is currently evaluating the impact of this accounting standard update on its consolidated financial statements. The Financial Accounting Standards Board (“FASB”) has issued converged standards on revenue recognition. Specifically, the Board has issued ASU 2014-09, ASC Topic 606 (“ASU 2014-09”). ASU 2014-09 affects any entity using U.S. GAAP that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of non-financial assets unless those contracts are within the scope of other standards (e.g., insurance contracts or lease contracts). ASU 2014-09 will supersede the revenue recognition requirements in ASC Topic 605, Revenue Recognition (“ASC Topic 605”), and most industry-specific guidance. ASU 2014-09 also supersedes some cost guidance included in Subtopic 605-35, Revenue Recognition—Construction-Type and Production-Type Contracts. In addition, the existing requirements for the recognition of a gain or loss on the transfer of non-financial assets that are not in a contract with a customer (e.g., assets within the scope of ASC Topic 360, Property, Plant, and Equipment, (“ASC Topic 360”), and intangible assets within the scope of Topic 350, Intangibles—Goodwill and Other) are amended to be consistent with the guidance on recognition and measurement (including the constraint on revenue) in ASU 2014-09. For a public entity, the amendments in ASU 2014-09 would be effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. However, ASU 2015-14 ASC Topic 606: Deferral of the Effective Date Other new pronouncements issued but not yet effective until after June 30, 2018 are not expected to have a significant effect on the Company’s consolidated financial position or results of operations. |
3. TERM DEPOSITS
3. TERM DEPOSITS | 12 Months Ended |
Jun. 30, 2018 | |
Term Deposits | |
TERM DEPOSITS | June 30, 2018 June 30, 2017 Short-term deposits $ 606 $ 824 Currency translation effect on short-term deposits 47 (37 ) Total short-term deposits 653 787 Restricted term deposits 1,664 1,722 Currency translation effect on restricted term deposits 31 (65 ) Total restricted term deposits 1,695 1,657 Total Term deposits $ 2,348 $ 2,444 Restricted deposits represent the amount of cash pledged to secure loans payable granted by financial institutions and serve as collateral for public utility agreements such as electricity and water and performance bonds related to customs duty payable. Restricted deposits are classified as non-current assets, as they relate to long-term obligations and will become unrestricted only upon discharge of the obligations. Short-term deposits represent bank deposits, which do not qualify as cash equivalents. |
4. TRADE ACCOUNTS RECEIVABLE AN
4. TRADE ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS | 12 Months Ended |
Jun. 30, 2018 | |
Notes to Financial Statements | |
TRADE ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS | Accounts receivable are customer obligations due under normal trade terms. The Company performs continuing credit evaluations of its customers’ financial conditions, and although management generally does not require collateral, letters of credit may be required from its customers in certain circumstances. Senior management reviews trade accounts receivable on a periodic basis to determine if any receivables will potentially be uncollectible. Management includes any trade accounts receivable balances that are determined to be uncollectible in the allowance for doubtful accounts. After all attempts to collect a receivable have failed, the receivable is written off against the allowance. Based on the information available to us, management believed the allowance for doubtful accounts as of June 30, 2018 and June 30, 2017 was adequate. The following table represents the changes in the allowance for doubtful accounts: For the Year Ended June 30, 2018 2017 Beginning $ 247 $ 270 Additions charged to expenses 8 65 Recovered (1 ) (78 ) Write-off - (2 ) Currency translation effect 5 (8 ) Ending $ 259 $ 247 |
5. LOANS RECEIVABLE FROM PROPER
5. LOANS RECEIVABLE FROM PROPERTY DEVELOPMENT PROJECTS | 12 Months Ended |
Jun. 30, 2018 | |
Notes to Financial Statements | |
LOANS RECEIVABLE FROM PROPERTY DEVELOPMENT PROJECTS | The following table presents TTCQ’s loans receivable from property development projects in China as of June 30, 2018 and as of June 30, 2017. The exchange rate is based on the historical rate published by the Monetary Authority of Singapore as on March 31, 2015, since the net loan receivable was “nil” as of June 30, 2018 and as of June 30, 2017. Loan Expiry Date Loan Amount (RMB) Loan Amount (U.S. Dollars) Short-term loan receivables JiangHuai (Project - Yu Jin Jiang An) May 31, 2013 2,000 325 Less: allowance for doubtful receivables (2,000 ) (325 ) Net loan receivable from property development projects — — Long-term loan receivables Jun Zhou Zhi Ye Oct 31, 2016 5,000 814 Less: transfer – down-payment for purchase of investment property (5,000 ) (814 ) Net loan receivable from property development projects — — On November 1, 2010, TTCQ entered into a Memorandum Agreement with JiangHuai Property Development Co. Ltd. (“JiangHuai”) to invest in their property development projects (Project - Yu Jin Jiang An) located in Chongqing City, China. Due to the short-term nature of the investment, the amount was classified as a loan based on ASC Topic 310-10-25 Receivables On November 1, 2010, TTCQ entered into a Memorandum Agreement with JiaSheng Property Development Co. Ltd. (“JiaSheng”) to invest in their property development projects (Project B-48 Phase 2) located in Chongqing City, China. Due to the short-term nature of the investment, the amount was classified as a loan based on ASC Topic 310, amounting to RMB 5,000, or approximately $814 based on the exchange rate as of March 31, 2015 published by the Monetary Authority of Singapore. The amount was unsecured and repayable at the end of the term. The loan was renewed in November 2011 for a period of one year, which expired on October 31, 2012 and was again renewed in November 2012 and expired in November 2013. On November 1, 2013, the loan was transferred by JiaSheng to, and is now payable by, Chong Qing Jun Zhou Zhi Ye Co. Ltd. (“Jun Zhou Zhi Ye”), and the transferred agreement expired on October 31, 2016. Prior to the second quarter of fiscal year 2015, the loan receivable was classified as a long-term receivable. The book value of the loan receivable approximates its fair value. In the second quarter of fiscal year 2015, the loan receivable was transferred to down payment for purchase of investment property that is being developed in the Singapore Themed Resort Project (see Note 8). |
6. INVENTORIES
6. INVENTORIES | 12 Months Ended |
Jun. 30, 2018 | |
Notes to Financial Statements | |
INVENTORIES | Inventories consisted of the following: For the Year Ended June 30, 2018 2017 Raw materials $ 1,153 $ 1,047 Work in progress 1,947 1,045 Finished goods 505 365 Less: provision for obsolete inventory (695 ) (686 ) Currency translation effect 20 (15 ) $ 2,930 $ 1,756 The following table represents the changes in provision for obsolete inventory: For the Year Ended June 30, 2018 2017 Beginning $ 686 $ 697 Additions charged to expenses 9 6 Usage - disposition (5 ) (6 ) Currency translation effect 5 (11 ) Ending $ 695 $ 686 |
7. ASSETS HELD FOR SALE
7. ASSETS HELD FOR SALE | 12 Months Ended |
Jun. 30, 2018 | |
Assets Held For Sale | |
ASSETS HELD FOR SALE | During the fourth quarter of 2015, the operations in Malaysia planned to sell its factory building in Penang, Malaysia. In accordance with ASC Topic 360, during fiscal year 2015 the property was reclassified from investment property, which had a net book value of RM 371, or approximately $98, to assets held for sale, since there was an intention to sell the factory building. In May 2015, Trio-Tech Malaysia was approached by a potential buyer to purchase the factory building. On September 14, 2015, application to sell the property was rejected by Penang Development Corporation (PDC). The rejection was based on the business activity of the purchaser not suitable to the industry that is being promoted on the said property. PDC made an offer to purchase the property, which was not at the expected value and the offer expired on March 28, 2016. As of the end of fiscal year 2018, management is still working closely with PDC to confirm their interest on buying the factory while actively looking for a suitable buyer. The net book values of the building were RM371, or $91, for fiscal year 2018 and RM 371, or approximately $86, for fiscal year 2017. |
8. INVESTMENTS
8. INVESTMENTS | 12 Months Ended |
Jun. 30, 2018 | |
Notes to Financial Statements | |
INVESTMENTS | Investments were nil as of June 30, 2018 and as of June 30, 2017. During the second quarter of fiscal year 2011, the Company entered into a joint venture agreement with JiaSheng to develop real estate projects in China. The Company invested RMB 10,000, or approximately $1,606 based on the exchange rate as of March 31, 2014 published by the Monetary Authority of Singapore, for a 10% interest in the newly formed joint venture, which was incorporated as a limited liability company, Chong Qing Jun Zhou Zhi Ye Co. Ltd. (the “joint venture”), in China. The agreement stipulated that the Company would nominate two of the five members of the Board of Directors of the joint venture and had the ability to assign two members of management to the joint venture. The agreement also stipulated that the Company would receive a fee of RMB 10,000, or approximately $1,606 based on the exchange rate as of March 31, 2014, published by the Monetary Authority of Singapore, for the services rendered in connection with bidding in certain real estate projects from the local government. Upon signing of the agreement, JiaSheng paid the Company RMB 5,000 in cash, or approximately $803 based on the exchange rate published by the Monetary Authority of Singapore as of March 31, 2014. The remaining RMB 5,000, which was not recorded as a receivable as the Company considered the collectability uncertain, would be paid over 72 months commencing in 36 months from the date of the agreement when the joint venture secured a property development project stated inside the joint venture agreement. The Company considered the RMB 5,000, or approximately $803 based on the exchange rate as of March 31, 2014 published by the Monetary Authority of Singapore, received in cash from JiaSheng, the controlling venturer in the joint venture, as a partial return of the Company’s initial investment of RMB 10,000, or approximately $1,606 based on the exchange rate as of March 31, 2014 published by the Monetary Authority of Singapore. Therefore, the RMB 5,000 received in cash was offset against the initial investment of RMB 10,000, resulting in a net investment of RMB 5,000 as of March 31, 2014. The Company further reduced its investments by RMB 137, or approximately $22, towards the losses from operations incurred by the joint venture, resulting in a net investment of RMB 4,863, or approximately $781 based on exchange rates published by the Monetary Authority of Singapore as of March 31, 2014. “Investments” in the real estate segment were the cost of an investment in a joint venture in which we had a 10% interest. During the second quarter of fiscal year 2014, TTCQ disposed of its 10% interest in the joint venture. The joint venture had to raise funds for the development of the project. As a joint-venture partner, TTCQ was required to stand guarantee for the funds to be borrowed; considering the amount of borrowing, the risk involved was higher than the investment made, hence TTCQ decided to dispose of the 10% interest in the joint venture investment. On October 2, 2013, TTCQ entered into a share transfer agreement (the “Share Transfer Agreement”) with Zhu Shu. Based on the agreement, the purchase price was to be paid by (1) RMB 10,000 worth of commercial property in Chongqing China, or approximately $1,634 based on exchange rates published by the Monetary Authority of Singapore as of October 2, 2013, by non-monetary consideration and (2) the remaining RMB 8,000, or approximately $1,307 based on exchange rates published by the Monetary Authority of Singapore as of October 2, 2013, by cash consideration. The consideration consisted of (1) commercial units measuring 668 square meters to be delivered in June 2016 and (2) sixteen quarterly equal installments of RMB 500 per quarter commencing from January 2014. Based on ASC Topic 845 Non-monetary Consideration On October 14, 2014, TTCQ and Jun Zhou Zhi Ye entered into a memorandum of understanding. Based on the memorandum of understanding, both parties have agreed to register a sales and purchase agreement upon Jun Zhou Zhi Ye obtaining the license to sell the commercial property (the Singapore Themed Resort Project) located in Chongqing, China. The proposed agreement is for the sale of shop lots with a total area of 1,484.55 square meters as consideration for the outstanding amounts owed to TTCQ by Jun Zhou Zhi Ye as follows: a) Long term loan receivable RMB 5,000, or approximately $814, as disclosed in Note 5, plus the interest receivable on long term loan receivable of RMB 1,250; b) Commercial units measuring 668 square meters, as mentioned above; and c) RMB 5,900 for the part of the unrecognized cash consideration of RMB 8,000 relating to the disposal of the joint venture. The consideration does not include the remaining outstanding amount of RMB 2,000, or approximately $326, which will be paid to TTCQ in cash. The shop lots are to be delivered to TTCQ upon completion of the construction of the shop lots in the Singapore Themed Resort Project. The initial targeted date of completion was December 31, 2016. Based on discussions with the developers, the completion date is estimated to be December 31, 2019. The Share Transfer Agreement (10% interest in the joint venture) was registered with the relevant authorities in China during October 2016. |
9. INVESTMENT PROPERTIES
9. INVESTMENT PROPERTIES | 12 Months Ended |
Jun. 30, 2018 | |
Notes to Financial Statements | |
INVESTMENT PROPERTIES | The following table presents the Company’s investment properties in China as of June 30, 2018. The exchange rate is based on the market rate as of June 30, 2018. Investment Investment Amount Amount Investment Date (RMB) (U.S. Dollars) Purchase of Property I – MaoYe 4-Jan-08 5,554 894 Purchase of Property II – JiangHuai 6-Jan-10 3,600 580 Purchase of Property III – FuLi 8-Apr-10 4,025 648 Currency translation — (131 ) Gross investment in rental properties 13,179 1,991 Accumulated depreciation on rental properties 30-Jun-18 (5,596 ) (845 ) Net investment in properties – China 7,583 1,146 The following table presents the Company’s investment properties in China as of June 30, 2017. The exchange rate is based on the exchange rate as of June 30, 2017 published by the Monetary Authority of Singapore. Investment Investment Amount Amount Investment Date (RMB) (U.S. Dollars) Purchase of Property I – MaoYe 4-Jan-08 5,554 894 Purchase of Property II – JiangHuai 6-Jan-10 3,600 580 Purchase of Property III – FuLi 8-Apr-10 4,025 648 Currency translation — (178 ) Gross investment in rental properties 13,179 1,944 Accumulated depreciation on rental properties 30-Jun-17 (4,937 ) (728 ) Net investment in properties – China 8,242 1,216 The following table presents the Company’s investment properties in Malaysia as of June 30, 2018 and June 30, 2017. The exchange rate is based on the exchange rate as of June 30, 2015 published by the Monetary Authority of Singapore. Investment Investment Amount Amount Investment Date (RM) (U.S. Dollars) Reclassification of Penang Property I 31-Dec-12 681 181 Gross investment in rental property 681 181 Accumulated depreciation on rental property 30-Jun-15 (310 ) (83 ) Reclassified as “Assets held for sale” 30-Jun-15 (371 ) (98 ) Net investment in rental property - Malaysia — — Rental Property I - MaoYe In fiscal 2008, TTCQ purchased an office in Chongqing, China from MaoYe Property Ltd. (“MaoYe”), for a total cash purchase price of RMB 5,554, or approximately $894. TTCQ identified a new tenant and signed a new rental agreement (653 square meters at a monthly rental of RMB 39, or approximately $6) on August 1, 2015. This rental agreement provides for a rent increase of 5% every year on January 31, commencing with 2017 until the rental agreement expires on July 31, 2020. TTCQ signed a new rental agreement (451 square meters at a monthly rental of RMB 24, or approximately $4) on February 1, 2018. This rental agreement provides for a rent increase of 6% from the second year of the contract onwards until the rental agreement expires on January 31, 2021. Property purchased from MaoYe generated a rental income of $99 and $102 for the years ended June 30, 2018 and 2017, respectively. Rental Property II - JiangHuai In fiscal year 2010, TTCQ purchased eight units of commercial property in Chongqing, China from Chongqing JiangHuai Real Estate Development Co. Ltd. (“JiangHuai”) for a total purchase price of RMB 3,600, or approximately $580. TTCQ rented all of these commercial units to a third party until the agreement expired in January 2012. TTCQ then rented three of the eight commercial units to another party during the fourth quarter of fiscal year 2013 under a rental agreement that expired on March 31, 2014. Currently all the units are vacant and TTCQ is working with the developer to find a suitable buyer to purchase all the commercial units. TTCQ has yet to receive the title deed for these properties; however, TTCQ has the vacancies in possession with the exception of two units, which are in the process of clarification. TTCQ is in the legal process to obtain the title deed, which is dependent on JiangHuai completing the entire project. In August 2016, TTCQ performed a valuation on one of the commercial units and its market value was higher than the carrying amount. Property purchased from JiangHuai generated a rental income of nil for both the years ended June 30, 2018 and 2017. Rental Property III – FuLi In fiscal 2010, TTCQ entered into a Memorandum Agreement with Chongqing FuLi Real Estate Development Co. Ltd. (“FuLi”) to purchase two commercial properties totaling 311.99 square meters (“office space”) located in Jiang Bei District Chongqing. Although TTCQ currently rents its office premises from a third party, it intends to use the office space as its office premises. The total purchase price committed and paid was RMB 4,025, or approximately $648. The development was completed, and the property was handed over during April 2013 and the title deed was received during the third quarter of fiscal 2014. The two commercial properties were leased to third parties under two separate rental agreements, one of which expires in April 2019 and provides for a rent increase of 5% every year on May 1, commencing in 2017 until the rental agreement expires on April 30, 2019 and the other of which expired in March 31, 2018 and provides for a rent increase of 5% every year on April 1, commencing in 2016 until the rental agreement expires on March 31, 2018. Management is actively looking for a suitable tenant. Property purchased from FuLi generated a rental income of $40 and $50 for the years ended June 30, 2018 and 2017, respectively. Summary Total rental income for all investment properties (Property I, II and III) in China was $139 for the year ended June 30, 2018, and $152 for the same period in the prior fiscal year. Depreciation expenses for all investment properties in China were $102 and $98 for the years ended June 30, 2018 and 2017, respectively. |
10. PROPERTY, PLANT AND EQUIPME
10. PROPERTY, PLANT AND EQUIPMENT | 12 Months Ended |
Jun. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT | Property, plant and equipment consisted of the following: Estimated Useful For the Year Ended June 30, Life in Years 2018 2017 Building and improvements 3-20 $ 5,070 $ 5,070 Leasehold improvements 3-27 6,093 5,614 Machinery and equipment 3-7 24,138 22,858 Furniture and fixtures 3-5 1,029 941 Equipment under capital leases 3-5 928 928 Property, plant and equipment, gross $ 37,258 $ 35,411 Less: accumulated depreciation (23,440 ) (21,751) Accumulated amortization on equipment under capital leases (795 ) (776 ) Total accumulated depreciation $ (24,235 ) $ (22,527 ) Property, plant and equipment before currency translation effect, net 13,023 12,884 Currency translation effect (1,088 ) (1,593 ) Property, plant and equipment, net $ 11,935 11,291 Depreciation and amortization expenses for property, plant and equipment during fiscal years 2018 and 2017 were $2,112 and $1,738, respectively. |
11. OTHER ASSETS
11. OTHER ASSETS | 12 Months Ended |
Jun. 30, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
OTHER ASSETS | For the Year Ended June 30, 2018 2017 Down payment for purchase of investment properties $ 1,645 $ 1,645 Down payment for purchase of property, plant and equipment 561 280 Deposits for rental and utilities 140 139 Currency translation effect (97 ) (142 ) Total $ 2,249 $ 1,922 |
12. LINES OF CREDIT
12. LINES OF CREDIT | 12 Months Ended |
Jun. 30, 2018 | |
Notes to Financial Statements | |
LINES OF CREDIT | The carrying value of the Company’s lines of credit approximates its fair value, because the interest rates associated with the lines of credit are adjustable in accordance with market situations when the Company borrowed funds with similar terms and remaining maturities. The Company’s credit rating provides it with readily and adequate access to funds in global markets. A Entity with Type of Interest Expiration Credit Unused Facility Facility Rate Date Limitation Credit Trio-Tech International Pte. Ltd., Singapore Lines of Credit - $ 4,183 3,325 Trio-Tech (Tianjin) Co., Ltd. Lines of Credit 5.22% - $ 1,511 437 Universal (Far East) Pte Ltd Lines of Credit Ranging from 1.6% to 5.5% - $ 367 256 On 4 January 2018, Trio-Tech International Pte. Ltd. signed an agreement with a bank to sub-allocate a portion of the facility thereunder to its subsidiary - Universal (Far East) Pte Ltd for an Accounts Payable Financing facility with the bank for SGD 500, or approximately $367 based on the market exchange rate. Interest is charged at 1.85% to 5.5%. The financing facility was set up to facilitate the working capital in our operations in Singapore. The Company started to use this facility in fiscal year 2018. As of June 30, 2017, the Company had certain lines of credit that are collateralized by restricted deposits. Entity with Type of Interest Expiration Credit Unused Facility Facility Rate Date Limitation Credit Trio-Tech International Pte. Ltd., Singapore Lines of Credit Ranging from 1.6% to 5.5% - $ 4,496 $ 2,815 Trio-Tech (Tianjin) Co., Ltd. Lines of Credit 5.22% - $ 885 $ 10 On January 20, 2017, Trio-Tech Tianjin signed an agreement with a bank for an Accounts Receivable Financing facility for RMB 6,000, or approximately $871 based on the market rate. Interest is charged at the bank’s lending rate plus a floating interest rate. The effective interest rate is 120% of the bank’s lending rate. The financing facility was set up to facilitate the growing testing operations in our Tianjin operations in China. The bank account for this facility was set up on January 20, 2017 and has started use in fiscal year 2017. |
13. ACCRUED EXPENSES
13. ACCRUED EXPENSES | 12 Months Ended |
Jun. 30, 2018 | |
Accrued Expenses | |
ACCRUED EXPENSES | Accrued expenses consisted of the following: For the Year Ended June 30, 2018 2017 Payroll and related costs 1,545 1,568 Commissions 89 107 Customer deposits 17 218 Legal and audit 265 283 Sales tax 17 80 Utilities 130 142 Warranty 82 49 Accrued purchase of materials and property, plant and equipment 454 33 Provision for re-instatement 289 295 Other accrued expenses 203 319 Currency translation effect 81 (51 ) Total $ 3,172 $ 3,043 |
14. WARRANTY ACCRUAL
14. WARRANTY ACCRUAL | 12 Months Ended |
Jun. 30, 2018 | |
Notes to Financial Statements | |
WARRANTY ACCRUAL | The Company provides for the estimated costs that may be incurred under its warranty program at the time the sale is recorded. The warranty period for products manufactured by the Company is generally one year or the warranty period agreed with the customer. The Company estimates the warranty costs based on the historical rates of warranty returns. The Company periodically assesses the adequacy of its recorded warranty liability and adjusts the amounts as necessary. For the Year Ended June 30, 2018 2017 Beginning $ 48 $ 76 Additions charged to cost and expenses 64 46 Utilization / reversal (30 ) (73 ) Currency translation effect - (1 ) Ending $ 82 $ 48 |
15. BANK LOANS PAYABLE
15. BANK LOANS PAYABLE | 12 Months Ended |
Jun. 30, 2018 | |
Notes to Financial Statements | |
BANK LOANS PAYABLE | Bank loans payable consisted of the following: June 30, 2018 June 30, 2017 Note payable denominated in RM for expansion plans in Malaysia, maturing in August 2024, bearing interest rate of 5.00% and 5.25% at June 30, 2018 and June 30, 2017 per annum, with monthly payments of principal plus interest through August 2024, collateralized by the acquired building with a carrying value of $2,809 and $2,671, as of June 30, 2018 and June 30, 2017, respectively. 1,615 1,735 Note payable denominated in U.S. dollars for expansion plans in Singapore and its subsidiaries, maturing in April 2020, bearing interest at the bank’s lending rate (3.96% for June 30, 2018 and June 30, 2017, respectively) with monthly payments of principal plus interest through April 2017. This note payable is secured by plant and equipment with a carrying value of $187 and $224 as of June 30, 2018 and June 30, 2017, respectively. 293 196 Total bank loans payable 1,908 1,931 Current portion of bank loan payable 380 271 Currency translation effect on current portion of bank loan (13 ) (11 ) Current portion of bank loan payable 367 260 Long term portion of bank loan payable 1,528 1,660 Currency translation effect on long-term portion of bank loan (91 ) (108 ) Long term portion of bank loans payable $ 1,437 $ 1,552 Future minimum payments (excluding interest) as of June 30, 2018 were as follows: 2019 $ 367 2020 372 2021 242 2022 254 2023 267 Thereafter 302 Total obligations and commitments $ 1,804 Future minimum payments (excluding interest) as of June 30, 2017 were as follows: 2018 $ 260 2019 273 2020 274 2021 225 2022 236 Thereafter 544 Total obligations and commitments $ 1,812 |
16. COMMITMENTS AND CONTINGENCI
16. COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Jun. 30, 2018 | |
Notes to Financial Statements | |
COMMITMENTS AND CONTINGENCIES | The Company leases certain facilities and equipment under long-term agreements expiring at various dates through fiscal year 2018 and thereafter. Certain leases require the Company to pay real estate taxes and insurance and provide for escalation of lease costs based on certain indices. Future minimum payments under capital leases and non-cancelable operating leases and net rental income under non-cancelable sub-leased properties as of June 30, 2018 were as follows: Sub-lease Net For the Year Ending June 30, Capital Leases Operating Leases Rental (Income) Operating Leases 2019 $ 250 $ 717 $ (26) $ 691 2020 249 531 (26) 505 2021 150 44 - 44 2022 102 - - - 2023 23 - - - Total future minimum lease payments $ 774 $ 1,292 $ (52) $ 1,240 Less: amount representing interest - Present value of net minimum lease payments 774 Less: current portion of capital lease obligations 250 Long-term obligations under capital leases 524 Future minimum payments under capital leases and non-cancelable operating leases and net rental income under non-cancelable sub-leased properties as of June 30, 2017 were as follows: Sub-lease Net For the Year Ending June 30, Capital Leases Operating Leases Rental (Income) Operating Leases 2018 $ 228 $ 536 $ (33) $ 503 2019 197 423 (25) 398 2020 193 224 (26) 198 2021 95 - - - 2022 46 - - - Total future minimum lease payments $ 759 $ 1,183 $ (84 ) $ 1,099 Less: amount representing interest - Present value of net minimum lease payments 759 Less: current portion of capital lease obligations 228 Long-term obligations under capital leases 531 The Company purchased equipment under the capital lease agreements with rates ranging from 1.88% to 7.50% for fiscal years 2018 and 2017. These agreements mature ranging from July 2018 to May 2021. Total rental expense on all operating leases, cancelable and non-cancelable, amounted to $703 and $747 in fiscal years 2018 and 2017, respectively. Trio-Tech (Malaysia) Sdn. Bhd. has a capital lease for the purchase of equipment and other related infrastructure costs amounting to RM 62, or approximately $16 based on the exchange rate on June 30, 2018 as compared to RM 684, or approximately $159 for the last fiscal year. Trio-Tech Tianjin Co. Ltd has a capital lease for the purchase of equipment and other related infrastructure costs amounting to RMB 3,927, or approximately $593 based on the exchange rate on June 30, 2018 as compared to RMB 1,260, or approximately $186 based on the exchange rate on June 30, 2017. Deposits with banks in China are not insured by the local government or agency, and are consequently exposed to risk of loss. The Company believes the probability of a bank failure, causing loss to the Company, is remote. The Company is, from time to time, the subject of litigation claims and assessments arising out of matters occurring in its normal business operations. In the opinion of management, resolution of these matters will not have a material adverse effect on the Company’s financial statements. |
17. FAIR VALUE OF FINANCIAL INS
17. FAIR VALUE OF FINANCIAL INSTRUMENTS APPROXIMATE CARRYING VALUE | 12 Months Ended |
Jun. 30, 2018 | |
Notes to Financial Statements | |
FAIR VALUE OF FINANCIAL INSTRUMENTS APPROXIMATE CARRYING VALUE | In accordance with ASC Topic 825 and 820, the following presents assets and liabilities measured and carried at fair value and classified by level of fair value measurement hierarchy: There were no transfers between Levels 1 and 2 during the fiscal year ended June 30, 2018 or for the same period in the prior fiscal year. Term deposits (Level 2) – The carrying amount approximates fair value because of the short maturity of these instruments. Restricted term deposits (Level 2) – The carrying amount approximates fair value because of the short maturity of these instruments. Lines of credit (Level 3) – The carrying value of the lines of credit approximates fair value due to the short-term nature of the obligations. Bank loans payable (Level 3) – The carrying value of the Company’s bank loan payables approximates its fair value as the interest rates associated with long-term debt is adjustable in accordance with market situations when the Company borrowed funds with similar terms and remaining maturities. |
18. CONCENTRATION OF CUSTOMERS
18. CONCENTRATION OF CUSTOMERS | 12 Months Ended |
Jun. 30, 2018 | |
Concentration Of Customers | |
CONCENTRATION OF CUSTOMERS | The Company had one major customer that accounted for the following revenue and trade accounts receivable: For the Year Ended June 30, 2018 2017 Revenue - Customer A 51.4 % 54.8 % Trade Accounts Receivable - Customer A 57.9 % 60.6 % |
19. BUSINESS SEGMENTS
19. BUSINESS SEGMENTS | 12 Months Ended |
Jun. 30, 2018 | |
Notes to Financial Statements | |
BUSINESS SEGMENTS | In fiscal year 2018, the Company operated in four segments; the testing service industry (which performs structural and electronic tests of semiconductor devices), the designing and manufacturing of equipment (assembly of equipment tests the structural integrity of integrated circuits and other products), distribution of various products from other manufacturers in Singapore and Asia and the real estate segment in China. The revenue allocated to individual countries was based on where the customers were located. The allocation of the cost of equipment, the current year investment in new equipment and depreciation expense have been made on the basis of the primary purpose for which the equipment was acquired. All inter-segment sales were sales from the manufacturing segment to the testing and distribution segment. Total inter-segment sales were $1,127 in fiscal year 2018 and $725 in fiscal year 2017. Corporate assets mainly consisted of cash and prepaid expenses. Corporate expenses mainly consisted of stock option expenses, salaries, insurance, professional expenses and directors' fees. Corporate expenses are allocated to the four segments on a pre-determined fixed amount calculated based on the annual budgeted sales, except the Malaysia operation, which is calculated based on actual sales. The following segment information table includes segment operating income or loss after including corporate expenses allocated to the segments, which gets eliminated in the consolidation. Business Segment Information: Year Operating Depr. Ended Net Income Total and Capital June 30, Revenue (Loss) Assets Amort. Expenditures Manufacturing 2018 $ 15,978 $ 548 $ 8,549 $ 115 $143 2017 $ 15,289 $ 75 $ 8,229 $ 186 $99 Testing Services 2018 19,391 1,522 23,480 1,997 2,166 2017 16,586 1,112 20,871 1,550 2,186 Distribution 2018 6,853 475 789 — - 2017 6,511 345 617 2 - Real Estate 2018 139 (56 ) 3,521 102 - 2017 152 (38 ) 3,511 98 - Fabrication Services* 2018 — — 27 — - 2017 — — 29 — - Corporate & Unallocated 2018 — (301 ) 108 — - 2017 — (5 ) 241 — - Total Company 2018 $ 42,361 $ 2,188 $ 36,474 $ 2,214 $2,309 2017 $ 38,538 $ 1,489 $ 33,498 $ 1,836 $2,285 * Fabrication services is a discontinued operation (Note 24). |
20. OPERATING LEASES
20. OPERATING LEASES | 12 Months Ended |
Jun. 30, 2018 | |
Operating Leases | |
OPERATING LEASES | Operating leases arise from the leasing of the Company’s commercial and residential real estate investment property. Initial lease terms generally range from 12 to 60 months. Depreciation expense for assets subject to operating leases is taken into account primarily on the straight-line method over a period of twenty years in amounts necessary to reduce the carrying amount of the asset to its estimated residual value. Depreciation expenses relating to the property held as investments in operating leases was $99 and $97 for fiscal years 2018 and 2017, respectively. Future minimum rental income in China to be received from fiscal year 2019 to fiscal year 2022 on non-cancellable operating leases is contractually due as follows as of June 30, 2018: 2019 $ 137 2020 121 2021 35 2022 - $ 293 Future minimum rental income in China to be received from fiscal year 2018 to fiscal year 2021 on non-cancellable operating leases is contractually due as follows as of June 30, 2017: 2018 $ 157 2019 107 2020 67 2021 6 $ 337 |
21. OTHER INCOME, NET
21. OTHER INCOME, NET | 12 Months Ended |
Jun. 30, 2018 | |
Other Income and Expenses [Abstract] | |
OTHER INCOME, NET | Other income, net consisted of the following: For the Year Ended June 30, 2018 2017 Interest income 50 33 Other rental income 110 99 Exchange gain / (loss) (160 ) 96 Government grant 126 56 Other miscellaneous income 209 230 Total $ 335 $ 514 |
22. INCOME TAXES
22. INCOME TAXES | 12 Months Ended |
Jun. 30, 2018 | |
Notes to Financial Statements | |
INCOME TAXES | The Company is subject to income taxes in the U.S. and numerous foreign jurisdictions. Significant judgment is required in determining the provision for income taxes and income tax assets and liabilities, including evaluating uncertainties in the application of accounting principles and complex tax laws. The statute of limitations, in general, is open for years 2014 to 2017 for tax authorities in those jurisdictions to audit or examine income tax returns. The Company is under annual review by the tax authorities of the respective jurisdiction to which the subsidiaries belong. The Tax Cuts and Jobs Act (the “Tax Act”) was enacted on December 22, 2017, and permanently reduces the U.S. federal corporate tax rate from 35% to 21%, eliminated corporate Alternative Minimum Tax, modified rules for expensing capital investment, and limits the deduction of interest expense for certain companies. The Act is a fundamental change to the taxation of multinational companies, including a shift from a system of worldwide taxation with some deferral elements to a territorial system, current taxation of certain foreign income, a minimum tax on low tax foreign earnings, and new measures to curtail base erosion and promote U.S. production. As the Company has a June 30 fiscal year end, the lower corporate income tax rate will be phased in, resulting in a lower U.S. statutory federal rate. In accordance with Section 15 of the Internal Revenue Code, the Company applied a blended U.S. statutory federal income tax rate of 27.55% for the year ended June 30, 2018. Accounting Standard Codification (“ASC”) 740 requires filers to record the effect of tax law changes in the period enacted. The Company recognized income tax expenses of $900 related to the one-time deemed repatriation. No expenses have been recognized related to the deferred tax re-measurement and minimum tax on low tax foreign earnings. However, the SEC issued Staff Accounting Bulletin No. 118 (“SAB 118”), that permits filers who may not have the necessary information available, prepared, or analyzed (including computations) for certain income tax effects of the Act in order to determine a reasonable estimate to be recorded as provisional amounts during a measurement period ending no later than one year from the date of enactment. Accordingly, the Company has recorded an estimate $900 and will finalize the accounting for the tax impact of the Tax Act no later than the end of the permitted measurement period under the SAB 118. Discussion of the certain material provisions affecting the Company is provided below. One-Time Mandatory Repatriation One of the effects of the Tax Act is to transition from a world-wide to a territorial tax system. The Tax Act requires a mandatory one-time repatriation of certain post-1986 earnings and profits that were deferred from U.S. taxation by the Company’s foreign subsidiaries. The Company recognized an income tax expense and payable of $900 for the twelve months ended June 30, 2018. The basis of the tax is on cash held and specified assets which are taxed at 15.5% and 8%, respectively. The Company may elect to pay the Repatriation Tax over an 8-year period. The computation of the post-1986 earning and profits used estimates and are preliminary amounts which will be finalized during the measurement period. Minimum Tax on Low Tax Foreign Earnings The Tax Act implemented the inclusion in gross income for the Global Intangible Low-Tax Income (GILTI) for any taxable year beginning on or after January 1, 2018. This provision significantly expands current taxation of foreign subsidiary corporate earnings. The Company must generally include in current income all earnings of the foreign subsidiaries in excess of the assumed deemed return on tangible assets of the foreign subsidiaries. Given the complexity of GILTI provision, the company is still assessing the effects of the provisions to determine whether to elect to either provide for the minimum tax as future income tax expense as a period expense or as a deferred tax on the related investment in foreign subsidiaries. Deferred Tax Re-Measurement The re-measurement is based on the expected reversals of the deferred taxes at the estimated U.S. federal tax rates of 28% for the current fiscal year and 21% for future fiscal years. As the Company established a full valuation allowance on the U.S. deferred tax assets, the Company has not recognized any income tax effects for the deferred tax re-measurement under the Tax Act. However, the Company is still considering any future impacts on any additional U.S. federal or U.S. state and local deferred tax assets and liabilities. Effective Tax Rate Effects For the Year Ended June 30, 2018 2017 Income before Income Taxes 2,290 1,801 Income Taxes Expenses 987 341 Effective Tax Rate 43.1 % 18.9 % The Act impacted the Company’s effective tax rate which recorded at 43.1% for fiscal 2018 compared to 18.9% for fiscal 2017. This effects of this tax were primarily due to estimated charge of $900 recorded as a component of provision for income taxes from continuing operations. The Company had an income tax expense of $987 for the year ended June 30, 2018, as compared to income tax expense of $341 for the year ended June 30, 2017. Without the impact of $900 in one-time tax expenses, the decrease in income tax expenses was mainly due to a lower corporate tax rate enjoyed by the Tianjin, China operation in calendar year 2018 which qualified as a National Advanced Tech Corporation and a decrease in deferred tax for timing differences recorded by the Malaysia operation. The Company accrues penalties and interest related to unrecognized tax benefits when necessary as a component of penalties and interest expenses, respectively. The Company had not accrued any penalties or interest expenses relating to unrecognized benefits at June 30, 2018. Undistributed Foreign Earnings The Company has asserted in prior years that all of its undistributed offshore earnings were permanently reinvested and had not recorded any deferred taxes related to any basis difference regarding the foreign subsidiaries. The estimated remaining net undistributed earnings at June 30, 2018 was $12,392. (This items is the Retained Earnings of the Non-U.S. subs less eliminations less Retained Earnings used for transition tax.) The Company has computed and recorded a preliminary estimate of the mandatory deemed repatriation tax on the such earnings. The Company, however, is currently evaluating the 2017 Tax Act on how the Tax Act will affect the Company’s current assertion of permanent reinvestment. As such, the Company has made no changes with respect to the permanent reinvestment assertion for remaining non-U.S. subsidiary basis, foreign withholding taxes, and state and local income taxes, during the measurement period. On a consolidated basis, the Company’s net income tax provisions were as follows: For the Year Ended June 30, 2018 2017 Current: Federal $ 900 $ - State 2 2 Foreign 79 235 $ 981 $ 237 Deferred: Federal $ - $ - State - - Foreign 6 104 6 104 Total provisions $ 987 $ 341 The reconciliation between the U.S. federal tax rate and the effective income tax rate was as follows: For the Year Ended June 30, 2018 2017 Statutory federal tax rate (27.55 )% (34.00 )% State taxes, net of federal benefit (6.00 ) (6.00 ) Foreign tax related to profits making subsidiaries 35.93 20.23 NOL Expiration - (0.03 ) Other (3.50 ) (0.86 ) Changes in valuation allowance 13.63 1.54 Tax reform related to one-time repatriation tax (153.31 ) - Effective rate (140.80 )% (19.12 )% At June 30, 2018, the Company had net operating loss carry-forward of approximately $232 and $314 for U.S. federal and state tax purposes, respectively, expiring through 2037. The Company also had tax credit carry-forward of approximately $200 for U.S. federal income tax purposes expiring through 2020. Management of the Company is uncertain whether it is more likely than not that these future benefits will be realized. Accordingly, a full valuation allowance was established. At June 30, 2017, the Company had net operating loss carry-forward of approximately $nil and $148 for U.S. federal and state tax purposes, respectively, expiring through 2033. The Company also had tax credit carry-forward of approximately $211 for U.S. federal income tax purposes expiring through 2020. Management of the Company is uncertain whether it is more likely than not that these future benefits will be realized. Accordingly, a full valuation allowance was established. The components of deferred income tax assets (liabilities) were as follows: For the Year Ended June 30, 2018 2017 Deferred tax assets: Net operating losses and credits $ 633 $ 710 Inventory valuation 69 99 Provision for bad debts 112 107 Accrued vacation 3 35 Accrued expenses 629 751 Investment in subsidiaries 61 60 Unrealized gain 4 23 Other 3 - Total deferred tax assets $ 1,514 $ 1,785 Deferred tax liabilities: Unrealized loss - (29 ) Depreciation (324 ) (266 ) Total deferred income tax liabilities $ (324 ) $ (295 ) Subtotal 1,190 1,490 Valuation allowance (1,117 ) (1,410 ) Net deferred tax assets $ 73 $ 80 Presented as follows in the balance sheets: Deferred tax assets 400 375 Deferred tax liabilities (327 ) (295 ) Net deferred tax assets $ 73 $ 80 The valuation allowance decreased by $293 |
23. UNRECOGNIZED TAX BENEFITS
23. UNRECOGNIZED TAX BENEFITS | 12 Months Ended |
Jun. 30, 2018 | |
Adoption Of Asc Topic 740 | |
UNRECOGNIZED TAX BENEFITS | The Company adopted ASC Topic 740, Accounting for Income Taxes A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: Balance at June 30, 2017 and June 30, 2018 $ (250 ) The Company accrues penalties and interest on unrecognized tax benefits as a component of penalties and interest expenses, respectively. The Company has not accrued any penalties or interest expense relating to the unrecognized benefits at June 30, 2018 and June 30, 2017. The major tax jurisdictions in which the Company files income tax returns are the U.S., Singapore, China and Malaysia. The statute of limitations, in general, is open for years 2011 to 2017 for tax authorities in those jurisdictions to audit or examine income tax returns. The Company is under annual review by the governments of Singapore, Malaysia, China, and Thailand. However, the Company is not currently under tax examination in any other jurisdiction including United States. |
24. DISCONTINUED OPERATION AND
24. DISCONTINUED OPERATION AND CORRESPONDING RESTRUCTURING PLAN | 12 Months Ended |
Jun. 30, 2018 | |
Notes to Financial Statements | |
DISCONTINUED OPERATION AND CORRESPONDING RESTRUCTURING PLAN | The Company’s Indonesia operation and the Indonesia operation’s immediate holding company, which comprise the fabrication services segment, suffered continued operating losses from fiscal year 2010 to 2014, and the cash flow was minimal from fiscal year 2009 to 2014. The Company established a restructuring plan to close the fabrication services operation, and in accordance with ASC Topic 205, Presentation of Financial Statement Discontinued Operations In accordance with the restructuring plan, the Company’s Indonesia operation is negotiating with its suppliers to settle the outstanding balance of accounts payable of $56 and has no collection for accounts receivable. The Company’s fabrication operation in Batam, Indonesia is in the process of winding down the operations. The Company anticipates that it may incur costs and expenses when the winding down of the subsidiary in Indonesia takes place. The discontinued operations in Shanghai and Indonesia incurred general and administrative expenses of $1 and $1 for the years ended June 30, 2018 and 2017, respectively. Income / (loss) from discontinued operations was as follows: For the Year Ended June 30, 2018 2017 Revenue $ - $ - Cost of sales - - Gross loss - - Operating expenses General and administrative 1 1 Selling - - Impairment - - Total 1 1 Loss from discontinued operation (1 ) (1 ) Other charges (12 ) (4 ) Net loss from discontinued operation $ (13 ) $ (5 ) The Company does not provide a separate cash flow statement for the discontinued operation, as the impact of this discontinued operation is immaterial. |
25. EARNINGS PER SHARE
25. EARNINGS PER SHARE | 12 Months Ended |
Jun. 30, 2018 | |
Notes to Financial Statements | |
EARNINGS PER SHARE | The Company adopted ASC Topic 260, Earnings Per Share. Options to purchase 657,500 shares of Common Stock at exercise prices ranging from $3.41 to $5.98 per share were outstanding as of June 30, 2018. No outstanding options were excluded in the computation of diluted EPS for fiscal year 2018 since all options were dilutive. Options to purchase 542,500 shares of Common Stock at exercise prices ranging from $2.07 to $4.14 per share were outstanding as of June 30, 2017. No outstanding options were excluded in the computation of diluted EPS for fiscal year 2017 since all options were dilutive The following table is a reconciliation of the weighted average shares used in the computation of basic and diluted EPS for the years presented herein: For the Year Ended June 30, 2018 2017 Income attributable to Trio-Tech International common shareholders from continuing operations, net of tax $ 1,197 $ 1,325 Loss attributable to Trio-Tech International common shareholders from discontinued operations, net of tax $ (13 ) $ (9 ) Net income attributable to Trio-Tech International common shareholders $ 1,184 $ 1,316 Weighted average number of common shares outstanding - basic 3,553 3,523 Dilutive effect of stock options 218 121 Number of shares used to compute earnings per share - diluted 3,771 3,644 Basic Earnings per Share: Basic earnings per share from continuing operations attributable to Trio-Tech International $ 0.34 $ 0.38 Basic loss per share from discontinued operations attributable to Trio-Tech International $ (0.01 ) $ - Basic Earnings per Share from Net Income Attributable to Trio-Tech International $ 0.33 $ 0.38 Diluted Earnings per Share: Diluted earnings per share from continuing operations attributable to Trio-Tech International $ 0.32 $ 0.36 Diluted loss per share from discontinued operations attributable to Trio-Tech International (0.01 ) - Diluted Earnings per Share from Net Income Attributable to Trio-Tech International $ 0.31 $ 0.36 |
26. STOCK OPTIONS
26. STOCK OPTIONS | 12 Months Ended |
Jun. 30, 2018 | |
Notes to Financial Statements | |
STOCK OPTIONS | On September 24, 2007, the Company’s Board of Directors unanimously adopted the 2007 Employee Stock Option Plan (the “2007 Employee Plan”) and the 2007 Directors Equity Incentive Plan (the “2007 Directors Plan”) each of which was approved by the shareholders on December 3, 2007. Each of those plans was amended by the Board in 2010 to increase the number of shares covered thereby, which amendments were approved by the shareholders on December 14, 2010. At present, the 2007 Employee Plan provides for awards of up to 600,000 shares of the Company’s Common Stock to employees, consultants and advisors. The Board also amended the 2007 Directors Plan in November 2013 to further increase the number of shares covered thereby from 400,000 shares to 500,000 shares, which amendment was approved by the shareholders on December 9, 2013. The 2007 Directors Plan provides for awards of up to 500,000 shares of the Company’s Common Stock to the members of the Board of Directors in the form of non-qualified options and restricted stock. These two plans are administered by the Board, which also establishes the terms of the awards. Assumptions The fair value for the options granted were estimated using the Black-Scholes option pricing model with the following weighted average assumptions, assuming no expected dividends: For the Year Ended June 30, 2018 2017 Expected volatility 47.29%to 104.94% 47.29%to 104.94% Risk-free interest rate 0.30% to 0.78% 0.30% to 0.78% Expected life (years) 2.50 2.50 The expected volatilities are based on the historical volatility of the Company’s stock. Due to higher volatility, the observation is made on a daily basis for the twelve months ended June 30, 2018. The observation period covered is consistent with the expected life of options. The expected life of the options granted to employees has been determined utilizing the “simplified” method as prescribed by ASC Topic 718 Stock Based Compensation 2017 Employee Stock Option Plan The Company’s 2017 Employee Plan permits the grant of stock options to its employees covering up to an aggregate of 300,000 shares of Common Stock. Under the 2017 Employee Plan, all options must be granted with an exercise price of not less than fair value as of the grant date and the options granted must be exercisable within a maximum of ten years after the date of grant, or such lesser period of time as is set forth in the stock option agreements. The options may be exercisable (a) immediately as of the effective date of the stock option agreement granting the option, or (b) in accordance with a schedule related to the date of the grant of the option, the date of first employment, or such other date as may be set by the Compensation Committee. Generally, options granted under the 2017 Employee Plan are exercisable within five years after the date of grant, and vest over the period as follows: 25% vesting on the grant date and the remaining balance vesting in equal installments on the next three succeeding anniversaries of the grant date. The share-based compensation will be recognized in terms of the grade method on a straight-line basis for each separately vesting portion of the award. Certain option awards provide for accelerated vesting if there is a change in control (as defined in the 2017 Employee Plan). On March 23, 2018, the Company granted options to purchase 60,000 shares of its Common Stock to employee directors pursuant to the 2017 Employee Plan during the twelve months ended June 30, 2018. The Company recognized stock-based compensation expenses of $6 in the twelve months ended June 30, 2018 under the 2017 Employee Plan. The balance of unamortized stock-based compensation of $9 based on fair value on the grant date related to options granted under the 2017 Employee Plan is to be recognized over a period of three years. No stock options were exercised during the twelve months ended June 30, 2018. The weighted-average remaining contractual term for non-vested options was 5.98 years. As of June 30, 2018 there were vested employee stock options that were exercisable covering a total of 15,000 shares of Common Stock. The weighted-average exercise price was $5.98 and the weighted average contractual term was 4.73 years. The total fair value of vested and outstanding employee stock options was $90. A summary of option activities under the 2017 Employee Plan during the twelve-months period ended June 30, 2018 is presented as follows: Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding at July 1, 2017 - $ - - $ - Granted 60,000 5.98 4.98 - Exercised - - - - Forfeited or expired - - - - Outstanding at June 30, 2018 60,000 5.98 4.73 - Exercisable at June 30, 2018 15,000 5.98 4.73 - A summary of the status of the Company’s non-vested employee stock options during the twelve months ended June 30, 2018 is presented below: Options Weighted Average Grant Date Fair Value Non-vested at July 1, 2017 - $ - Granted 60,000 $ 5.98 Vested (15,000 ) $ 5.98 Forfeited - - Non-vested at June 30, 2018 45,000 $ 5.98 2007 Employee Stock Option Plan The Company’s 2007 Employee Plan permits the grant of stock options to its employees covering up to an aggregate of 600,000 shares of Common Stock. Under the 2007 Employee Plan, all options must be granted with an exercise price of not less than fair value as of the grant date and the options granted must be exercisable within a maximum of ten years after the date of grant, or such lesser period of time as is set forth in the stock option agreements. The options may be exercisable (a) immediately as of the effective date of the stock option agreement granting the option, or (b) in accordance with a schedule related to the date of the grant of the option, the date of first employment, or such other date as may be set by the Compensation Committee. Generally, options granted under the 2007 Employee Plan are exercisable within five years after the date of grant, and vest over the period as follows: 25% vesting on the grant date and the remaining balance vesting in equal installments on the next three succeeding anniversaries of the grant date. The share-based compensation will be recognized in terms of the grade method on a straight-line basis for each separately vesting portion of the award. Certain option awards provide for accelerated vesting if there is a change in control (as defined in the 2007 Employee Plan). The Company did not grant any options pursuant to the 2007 Employee Plan during the twelve months ended June 30, 2018. There were no options exercised during the twelve months ended June 30, 2018. The Company recognized stock-based compensation expenses of $4 in the twelve months ended June 30, 2018 under the 2007 Employee Plan. The balance of unamortized stock-based compensation of $1 based on fair value on the grant date related to options granted under the 2007 Employee Plan is to be recognized over a period of three years. On March 30, 2017, the Company granted options to purchase 37,500 shares of its Common Stock to employee directors pursuant to the 2007 Employee Plan during the twelve months ended June 30, 2017. The Company recognized stock-based compensation expenses of $6 in the twelve months ended June 30, 2017 under the 2007 Employee Plan. The balance of unamortized stock-based compensation of $5 based on fair value on the grant date related to options granted under the 2007 Employee Plan is to be recognized over a period of three years. No stock options were exercised during the twelve months ended June 30, 2017. The weighted-average remaining contractual term for non-vested options was 4.22 years. As of June 30, 2018, there were vested employee stock options that were exercisable covering a total of 98,750 shares of Common Stock. The weighted-average exercise price was $3.43 and the weighted average contractual term was 1.73 years. The total fair value of vested and outstanding employee stock options as of June 30, 2018 was $338. As of June 30, 2017, there were vested employee stock options that were exercisable covering a total of 79,375 shares of Common Stock. The weighted-average exercise price was $3.36 and the weighted average contractual term was 2.36 years. The total fair value of vested and outstanding employee stock options as of June 30, 2017 was $267. A summary of option activities under the 2007 Employee Plan during the twelve-month period ended June 30, 2018 is presented as follows: Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding at July 1, 2017 127,500 $ 3.52 3.10 $ 187 Granted - - - - Exercised - - - - Forfeited or expired - - - - Outstanding at June 30, 2018 127,500 $ 3.52 2.10 $ 121 Exercisable at June 30, 2018 98,750 $ 3.43 1.73 $ 103 The aggregate intrinsic value of the 127,500 shares of common stock upon exercise of options was $121. A summary of option activities under the 2007 Employee Plan during the twelve-month period ended June 30, 2017 is presented as follows: Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding at July 1, 2016 90,000 $ 3.26 3.42 $ 30 Granted 37,500 4.14 - - Exercised - - - - Forfeited or expired - - - - Outstanding at June 30, 2017 127,500 $ 3.52 3.10 $ 187 Exercisable at June 30, 2017 79,375 $ 3.36 2.36 $ 129 The aggregate intrinsic value of the 127,500 shares of common stock upon exercise of options was $187. A summary of the status of the Company’s non-vested employee stock options during the twelve months ended June 30, 2018 is presented below: Weighted Average Grant-Date Options Fair Value Non-vested at July 1, 2017 48,125 $ 3.77 Granted - - Vested (19,375 ) (3.43 ) Forfeited - - Non-vested at June 30, 2018 28,750 $ 3.83 A summary of the status of the Company’s non-vested employee stock options during the twelve months ended June 30, 2017 is presented below: Weighted Average Grant-Date Options Fair Value Non-vested at July 1, 2016 38,750 $ 3.22 Granted 37,500 4.14 Vested (28,125 ) 3.19 Forfeited - - Non-vested at June 30, 2017 48,125 $ 3.77 2017 Directors Equity Incentive Plan The 2017 Directors Plan permits the grant of options covering up to an aggregate of 300,000 shares of Common Stock to its directors in the form of non-qualified options and restricted stock. The exercise price of the non-qualified options is 100% of the fair value of the underlying shares on the grant date. The options have five-year contractual terms and are generally exercisable immediately as of the grant date. On March 23, 2018 the Company granted options to purchase 80,000 shares of its Common Stock to directors pursuant to the 2017 Directors Plan with an exercise price equal to the fair market value of Common Stock (as defined under the 2017 Directors Plan in conformity with Regulation 409A or the Internal Revenue Code of 1986, as amended) at the date of grant. The fair value of the options granted to purchase 80,000 shares of the Company’s Common Stock was approximately $478 based on the fair value of $5.98 per share determined by the Black Scholes option pricing model. As all of the stock options granted under the 2017 Directors Plan vest immediately at the date of grant, there were no unvested stock options granted under the 2017 Directors Plan as of June 30, 2018. The Company recognized stock-based compensation expenses of $33 in the twelve months ended June 30, 2018 under the 2017 Directors Plan. A summary of option activities under the 2017 Directors Plan during the twelve months ended June 30, 2018 is presented as follows: Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding at July 1, 2017 - $ - - $ - Granted 80,000 5.98 4.98 - Exercised - - - - Forfeited or expired - - - - Outstanding at June 30, 2018 80,000 5.98 4.73 - Exercisable at June 30, 2018 80,000 5.98 4.73 - 2007 Directors Equity Incentive Plan The 2007 Directors Plan permits the grant of options covering up to an aggregate of 500,000 shares of Common Stock to its non-employee directors in the form of non-qualified options and restricted stock. The exercise price of the non-qualified options is 100% of the fair value of the underlying shares on the grant date. The options have five-year contractual terms and are generally exercisable immediately as of the grant date. The Company did not grant any options pursuant to the 2007 Director Plan during the twleve months ended June 30, 2018. There were 20,000 worth of stock options exercised during the twelve months period ended June 30, 2018. The Company did not recognize any stock based compensation expenses during the twelve months ended June 30, 2018. On March 30, 2017 the Company granted options to purchase 50,000 shares of its Common Stock to directors pursuant to the 2007 Directors Plan with an exercise price equal to the fair market value of Common Stock (as defined under the 2007 Directors Plan in conformity with Regulation 409A or the Internal Revenue Code of 1986, as amended) at the date of grant. The fair value of the options granted to purchase 50,000 shares of the Company’s Common Stock was approximately $207 based on the fair value of $4.14 per share determined by the Black Scholes option pricing model. As all of the stock options granted under the 2007 Directors Plan vest immediately at the date of grant, there were no unvested stock options granted under the 2007 Directors Plan as of June 30, 2017. The Company recognized stock-based compensation expenses of $12 in fiscal year 2017 under the 2007 Directors Plan. No stock options were exercised during the twelve months ended June 30, 2017. There were 80,000 shares of Common Stock available for grant under the 2007 Directors Plan. There were no stock options exercised during the twelve months ended June 30, 2017, hence there were no proceeds from the exercise of stock options during fiscal year 2017. The Company recognized stock-based compensation expenses of $12 in the twelve-month period ended June 30, 2017 under the 2007 Directors Plan. As of June 30, 2018, there were vested director stock options covering a total of 390,000 shares of Common Stock. The weighted-average exercise price was $3.41 and the weighted average remaining contractual term was 2.05 years. The total fair value of vested directors' stock options as of June 30, 2018 was $1,331. All of our director stock options vest immediately at the date of grant. There were no unvested director stock options as of June 30, 2018. As of June 30, 2017, there were vested director stock options covering a total of 415,000 shares of Common Stock. The weighted-average exercise price was $3.36 and the weighted average remaining contractual term was 2.93 years. The total fair value of vested directors' stock options as of June 30, 2017 was $1,393. All of our director stock options vest immediately at the date of grant. There were no unvested director stock options as of June 30, 2017. A summary of option activities under the 2007 Directors Plan during the twelve months ended June 30, 2018 is presented as follows: Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding at July 1, 2017 415,000 3.36 2.93 673 Granted - - - - Exercised (20,000 ) 2.59 - - Forfeited or expired (5,000 ) 2.07 - - Outstanding at June 30, 2018 390,000 3.41 2.05 412 Exercisable at June 30, 2018 390,000 3.41 2.05 412 A summary of option activities under the 2007 Directors Plan during the twelve months ended June 30, 2017 is presented as follows: Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding at July 1, 2016 415,000 3.14 3.29 198 Granted 50,000 4.14 - - Exercised - - - - Forfeited or expired (50,000 ) 2.30 - - Outstanding at June 30, 2017 415,000 3.36 2.93 673 Exercisable at June 30, 2017 415,000 3.36 2.93 673 |
27. NON-CONTROLLING INTEREST
27. NON-CONTROLLING INTEREST | 12 Months Ended |
Jun. 30, 2018 | |
Notes to Financial Statements | |
NON-CONTROLLING INTEREST | In accordance with the provisions of ASC Topic 810, the Company has classified the non-controlling interest as a component of stockholders’ equity in the accompanying consolidated balance sheets. Additionally, the Company has presented the net income attributable to the Company and the non-controlling ownership interests separately in the accompanying consolidated financial statements. Non-controlling interest represents the minority stockholders’ share of 45% of the equity of Trio-Tech Malaysia Sdn. Bhd., 45% interest in SHI International Pte. Ltd., and 24% interest in Prestal Enterprise Sdn. Bhd., which are subsidiaries of the Company. The table below reflects a reconciliation of the equity attributable to non-controlling interest: For the Year Ended June 30, Non-controlling interest 2018 2017 Beginning balance $ 1,426 $ 1,614 Net income 106 139 Dividend declared by a subsidiary (189 ) (177 ) Translation adjustment 179 (150 ) Ending balance $ 1,522 $ 1,426 |
28. RELATED PARTY TRANSACTION
28. RELATED PARTY TRANSACTION | 12 Months Ended |
Jun. 30, 2018 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTION | Other than those disclosed in this report, there were no related party transactions in fiscal years 2018 and 2017. |
29. SUBSEQUENT EVENT
29. SUBSEQUENT EVENT | 12 Months Ended |
Jun. 30, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENT | Subsequent to 30 June 2018, management expressed its intention to sell one of its investment properties in China, Chongqing with net book value of RMB 2,729, approximately $412. The decision will not change the financial reporting. The investment shall be continue to be dealt with as investment property until it is derecognized. |
1. BASIS OF PRESENTATION AND 37
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Jun. 30, 2018 | |
Basis Of Presentation And Summary Of Significant Accounting Policies Policies | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation - Ownership Location Express Test Corporation (Dormant) 100% Van Nuys, California Trio-Tech Reliability Services (Dormant) 100% Van Nuys, California KTS Incorporated, dba Universal Systems (Dormant) 100% Van Nuys, California European Electronic Test Centre (Dormant) 100% Dublin, Ireland Trio-Tech International Pte. Ltd. 100% Singapore Universal (Far East) Pte. Ltd. * 100% Singapore Trio-Tech International (Thailand) Co. Ltd. * 100% Bangkok, Thailand Trio-Tech (Bangkok) Co. Ltd. 100% Bangkok, Thailand (49% owned by Trio-Tech International Pte. Ltd. and 51% owned by Trio-Tech International (Thailand) Co. Ltd.) Trio-Tech (Malaysia) Sdn. Bhd. (55% owned by Trio-Tech International Pte. Ltd.) 55% Penang and Selangor, Malaysia Trio-Tech (Kuala Lumpur) Sdn. Bhd. 55% Selangor, Malaysia (100% owned by Trio-Tech Malaysia Sdn. Bhd.) Prestal Enterprise Sdn. Bhd. 76% Selangor, Malaysia (76% owned by Trio-Tech International Pte. Ltd.) Trio-Tech (SIP) Co., Ltd. * 100% Suzhou, China Trio-Tech (Chongqing) Co. Ltd. * 100% Chongqing, China SHI International Pte. Ltd. (Dormant) (55% owned by Trio-Tech International Pte. Ltd) 55% Singapore PT SHI Indonesia (Dormant) (100% owned by SHI International Pte. Ltd.) 55% Batam, Indonesia Trio-Tech (Tianjin) Co., Ltd. * 100% Tianjin, China * 100% owned by Trio-Tech International Pte. Ltd. The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (‘‘U.S. GAAP’’). The basis of accounting differs from that used in the statutory financial statements of the Company’s subsidiaries and equity investee companies, which are prepared in accordance with the accounting principles generally accepted in their respective countries of incorporation. In the opinion of management, the consolidated financial statements have reflected all costs incurred by the Company and its subsidiaries in operating the business. All dollar amounts in the financial statements and in the notes herein are presented in thousands of United States dollars (US$’000) unless otherwise designated. |
Liquidity | Liquidity The Company’s core businesses - testing services, manufacturing (assembly) and distribution - operate in a volatile industry, whereby its average selling prices and product costs are influenced by competitive factors. These factors create pressures on sales, costs, earnings and cash flows, which will impact liquidity. |
Foreign Currency Translation and Transactions | Foreign Currency Translation and Transactions The Company translates assets and liabilities of its subsidiaries outside the U.S. into U.S. dollars using the rate of exchange prevailing at the fiscal year end, and the consolidated statements of operations and comprehensive income or loss is translated at average rates during the reporting period. Adjustments resulting from the translation of the subsidiaries’ financial statements from foreign currencies into U.S. dollars are recorded in shareholders' equity as part of accumulated other comprehensive gain - translation adjustments. Gains or losses resulting from transactions denominated in currencies other than functional currencies of the Company’s subsidiaries are reflected in income for the reporting period. |
Use of Estimates | Use of Estimates — |
Revenue Recognition | Revenue Recognition Revenue from product sales is also recorded in accordance with the provisions of ASC Topic 605 and Staff Accounting Bulletin (“SAB”) 104 Revenue Recognition in Financial Statements, In the real estate segment: (1) revenue from property development is earned and recognized on the earlier of the dates when the underlying property is sold or upon the maturity of the agreement; if this amount is uncollectible, the agreement empowers the repossession of the property, and (2) rental revenue is recognized on a straight-line basis over the terms of the respective leases. This means that, with respect to a particular lease, actual amounts billed in accordance with the lease during any given period may be higher or lower than the amount of rental revenue recognized for the period. Straight-line rental revenue is commenced when the tenant assumes possession of the leased premises. Accrued straight-line rents receivable represents the amount by which straight-line rental revenue exceeds rents currently billed in accordance with lease agreements. |
GST / Indirect Taxes | GST / Indirect Taxes |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts — The Company’s management considers the following factors when determining the collectability of specific customer accounts: customer credit-worthiness, past transaction history with the customer, current economic industry trends, and changes in customer payment terms. The Company includes any account balances that are determined to be uncollectible, along with a general reserve, in the overall allowance for doubtful accounts. After all attempts to collect a receivable have failed, the receivable is written off against the allowance. Based on the information available to management, the Company believed that its allowance for doubtful accounts was adequate as of June 30, 2018 and 2017. |
Warranty Costs | Warranty Costs — |
Cash and Cash Equivalents | Cash and Cash Equivalents — |
Term Deposits and Restricted Term Deposits | Term Deposits — Restricted Term Deposits — |
Inventories | Inventories |
Property, Plant and Equipment & Investment Property | Property, Plant and Equipment & Investment Property Maintenance, repairs and minor renewals are charged directly to expense as incurred. Additions and improvements to the assets are capitalized. When assets are disposed of, the related cost and accumulated depreciation thereon are removed from the accounts and any resulting gain or loss is included in the consolidated statements of operations and comprehensive income or loss. |
Long-Lived Assets and Impairment | Long-Lived Assets and Impairment – The Company evaluates the long-lived assets, including property, plant and equipment and investment property, for impairment whenever events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Factors considered important that could result in an impairment review include significant underperformance relative to expected historical or projected future operating results, significant changes in the manner of use of the assets or the strategy for our business, significant negative industry or economic trends, and a significant decline in the stock price for a sustained period of time. Impairment is recognized based on the difference between the fair value of the asset and its carrying value, and fair value is generally measured based on discounted cash flow analysis, if there is significant adverse change. The Company applies the provisions of ASC Topic 360, Accounting for the Impairment or Disposal of Long-Lived Assets |
Leases | Leases Accounting for Leases The Company’s management expects that in the normal course of business, operating leases will be renewed or replaced by other leases. The future minimum operating lease payments, for which the Company is contractually obligated as of June 30, 2018, are disclosed in these notes to the consolidated financial statements. Assets under capital leases are capitalized using interest rates appropriate at the inception of each lease and are depreciated over either the estimated useful life of the asset or the lease term on a straight-line basis. The present value of the related lease payments is recorded as a contractual obligation. The future minimum annual capital lease payments are included in the total future contractual obligations as disclosed in the notes to the consolidated financial statements. |
Comprehensive Income or Loss | Comprehensive Income or Loss — Reporting Comprehensive Income, |
Income Taxes | Income Taxes — Accounting for Income Taxes . The calculation of tax liabilities involves dealing with uncertainties in the application of complex global tax regulations. The Company recognizes potential liabilities for anticipated tax audit issues in the U.S. and other tax jurisdictions based on its estimate of whether, and the extent to which, additional taxes will be due. If payment of these amounts ultimately proves to be unnecessary, the reversal of the liabilities would result in tax benefits being recognized in the period when the Company determines the liabilities are no longer necessary. If the estimate of tax liabilities proves to be less than the ultimate assessment, a further charge to expense would result. |
Retained Earnings | Retained Earnings — |
Research and Development Costs | Research and Development Costs — |
Stock Based Compensation | Stock Based Compensation Share Based Payments |
Earnings per Share | Earnings per Share — |
Fair Values of Financial Instruments | Fair Values of Financial Instruments ASC Topic 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The financial assets and financial liabilities that require recognition under the guidance include available-for-sale investments, employee deferred compensation plan and foreign currency derivatives. The guidance establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of us. Unobservable inputs are inputs that reflect our assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available under the circumstances. As such, fair value is a market-based measure considered from the perspective of a market participant who holds the asset or owes the liability rather than an entity-specific measure. The hierarchy is broken down into three levels based on the reliability of inputs as follows: ● Level 1—Valuations based on quoted prices in active markets for identical assets or liabilities that we have the ability to access. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment. Financial assets utilizing Level 1 inputs include U.S. treasuries, most money market funds, marketable equity securities and our employee deferred compensation plan; ● Level 2—Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, directly or indirectly. Financial assets and liabilities utilizing Level 2 inputs include foreign currency forward exchange contracts, most commercial paper and corporate notes and bonds; and ● Level 3—Valuations based on inputs that are unobservable and significant to the overall fair value measurement. Financial assets utilizing Level 3 inputs primarily include auction rate securities. We use an income approach valuation model to estimate the exit price of the auction rate securities, which is derived as the weighted-average present value of expected cash flows over various periods of illiquidity, using a risk adjusted discount rate that is based on the credit risk and liquidity risk of the securities. |
Concentration of Credit Risk | Concentration of Credit Risk |
Investments | Investments |
Equity Method | Equity Method |
Cost Method | Cost Method - |
Loan Receivables from Property Development Projects | Loan Receivables from Property Development Projects Interest income on the loan receivables from property development projects are recognized on an accrual basis. Discounts and premiums on loans are amortized to income using the interest method over the remaining period to contractual maturity. The amortization of discounts into income is discontinued on loans that are contractually 90 days past due or when collection of interest appears doubtful. |
Contingent liabilities | Contingent Liabilities If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed. |
1. BASIS OF PRESENTATION AND 38
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Basis Of Presentation And Summary Of Significant Accounting Policies Tables | |
Subsidiaries | Ownership Location Express Test Corporation (Dormant) 100% Van Nuys, California Trio-Tech Reliability Services (Dormant) 100% Van Nuys, California KTS Incorporated, dba Universal Systems (Dormant) 100% Van Nuys, California European Electronic Test Centre (Dormant) 100% Dublin, Ireland Trio-Tech International Pte. Ltd. 100% Singapore Universal (Far East) Pte. Ltd. * 100% Singapore Trio-Tech International (Thailand) Co. Ltd. * 100% Bangkok, Thailand Trio-Tech (Bangkok) Co. Ltd. 100% Bangkok, Thailand (49% owned by Trio-Tech International Pte. Ltd. and 51% owned by Trio-Tech International (Thailand) Co. Ltd.) Trio-Tech (Malaysia) Sdn. Bhd. (55% owned by Trio-Tech International Pte. Ltd.) 55% Penang and Selangor, Malaysia Trio-Tech (Kuala Lumpur) Sdn. Bhd. 55% Selangor, Malaysia (100% owned by Trio-Tech Malaysia Sdn. Bhd.) Prestal Enterprise Sdn. Bhd. 76% Selangor, Malaysia (76% owned by Trio-Tech International Pte. Ltd.) Trio-Tech (SIP) Co., Ltd. * 100% Suzhou, China Trio-Tech (Chongqing) Co. Ltd. * 100% Chongqing, China SHI International Pte. Ltd. (Dormant) (55% owned by Trio-Tech International Pte. Ltd) 55% Singapore PT SHI Indonesia (Dormant) (100% owned by SHI International Pte. Ltd.) 55% Batam, Indonesia Trio-Tech (Tianjin) Co., Ltd. * 100% Tianjin, China * 100% owned by Trio-Tech International Pte. Ltd. |
3. TERM DEPOSITS (Tables)
3. TERM DEPOSITS (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Term Deposits Tables | |
Term deposits | June 30, 2018 June 30, 2017 Short-term deposits $ 606 $ 824 Currency translation effect on short-term deposits 47 (37 ) Total short-term deposits 653 787 Restricted term deposits 1,664 1,722 Currency translation effect on restricted term deposits 31 (65 ) Total restricted term deposits 1,695 1,657 Total Term deposits $ 2,348 $ 2,444 |
4. TRADE ACCOUNTS RECEIVABLE 40
4. TRADE ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Trade Accounts Receivable And Allowance For Doubtful Accounts Tables | |
Changes in the allowance for doubtful accounts | For the Year Ended June 30, 2018 2017 Beginning $ 247 $ 270 Additions charged to expenses 8 65 Recovered (1 ) (78 ) Write-off - (2 ) Currency translation effect 5 (8 ) Ending $ 259 $ 247 |
5. LOAN RECEIVABLE FROM PROPERT
5. LOAN RECEIVABLE FROM PROPERTY DEVELOPMENT PROJECTS (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Loan Receivable From Property Development Projects Tables | |
Companys loans receivable from property development projects | Loan Expiry Date Loan Amount (RMB) Loan Amount (U.S. Dollars) Short-term loan receivables JiangHuai (Project - Yu Jin Jiang An) May 31, 2013 2,000 325 Less: allowance for doubtful receivables (2,000 ) (325 ) Net loan receivable from property development projects — — Long-term loan receivables Jun Zhou Zhi Ye Oct 31, 2016 5,000 814 Less: transfer – down-payment for purchase of investment property (5,000 ) (814 ) Net loan receivable from property development projects — — |
6. INVENTORIES (Tables)
6. INVENTORIES (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Inventories Tables | |
Inventories | For the Year Ended June 30, 2018 2017 Raw materials $ 1,153 $ 1,047 Work in progress 1,947 1,045 Finished goods 505 365 Less: provision for obsolete inventory (695 ) (686 ) Currency translation effect 20 (15 ) $ 2,930 $ 1,756 |
Changes in provision for obsolete inventory | For the Year Ended June 30, 2018 2017 Beginning $ 686 $ 697 Additions charged to expenses 9 6 Usage - disposition (5 ) (6 ) Currency translation effect 5 (11 ) Ending $ 695 $ 686 |
9. INVESTMENT PROPERTIES (Table
9. INVESTMENT PROPERTIES (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Investment Properties Tables | |
Companys investment in the property based on the exchange rate | The following table presents the Company’s investment properties in China as of June 30, 2018. The exchange rate is based on the market rate as of June 30, 2018. Investment Investment Amount Amount Investment Date (RMB) (U.S. Dollars) Purchase of Property I – MaoYe 4-Jan-08 5,554 894 Purchase of Property II – JiangHuai 6-Jan-10 3,600 580 Purchase of Property III – FuLi 8-Apr-10 4,025 648 Currency translation — (131 ) Gross investment in rental properties 13,179 1,991 Accumulated depreciation on rental properties 30-Jun-18 (5,596 ) (845 ) Net investment in properties – China 7,583 1,146 The following table presents the Company’s investment properties in China as of June 30, 2017. The exchange rate is based on the exchange rate as of June 30, 2017 published by the Monetary Authority of Singapore. Investment Investment Amount Amount Investment Date (RMB) (U.S. Dollars) Purchase of Property I – MaoYe 4-Jan-08 5,554 894 Purchase of Property II – JiangHuai 6-Jan-10 3,600 580 Purchase of Property III – FuLi 8-Apr-10 4,025 648 Currency translation — (178 ) Gross investment in rental properties 13,179 1,944 Accumulated depreciation on rental properties 30-Jun-17 (4,937 ) (728 ) Net investment in properties – China 8,242 1,216 The following table presents the Company’s investment properties in Malaysia as of June 30, 2018 and June 30, 2017. The exchange rate is based on the exchange rate as of June 30, 2015 published by the Monetary Authority of Singapore. Investment Investment Amount Amount Investment Date (RM) (U.S. Dollars) Reclassification of Penang Property I 31-Dec-12 681 181 Gross investment in rental property 681 181 Accumulated depreciation on rental property 30-Jun-15 (310 ) (83 ) Reclassified as “Assets held for sale” 30-Jun-15 (371 ) (98 ) Net investment in rental property - Malaysia — — |
10. PROPERTY, PLANT AND EQUIP44
10. PROPERTY, PLANT AND EQUIPMENT (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Property Plant And Equipment Tables | |
Schedule of property, plant and equipment | Estimated Useful For the Year Ended June 30, Life in Years 2018 2017 Building and improvements 3-20 $ 5,070 $ 5,070 Leasehold improvements 3-27 6,093 5,614 Machinery and equipment 3-7 24,138 22,858 Furniture and fixtures 3-5 1,029 941 Equipment under capital leases 3-5 928 928 Property, plant and equipment, gross $ 37,258 $ 35,411 Less: accumulated depreciation (23,440 ) (21,751) Accumulated amortization on equipment under capital leases (795 ) (776 ) Total accumulated depreciation $ (24,235 ) $ (22,527 ) Property, plant and equipment before currency translation effect, net 13,023 12,884 Currency translation effect (1,088 ) (1,593 ) Property, plant and equipment, net $ 11,935 11,291 |
11. OTHER ASSETS (Tables)
11. OTHER ASSETS (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other assets | For the Year Ended June 30, 2018 2017 Down payment for purchase of investment properties $ 1,645 $ 1,645 Down payment for purchase of property, plant and equipment 561 280 Deposits for rental and utilities 140 139 Currency translation effect (97 ) (142 ) Total $ 2,249 $ 1,922 |
12. LINES OF CREDIT (Tables)
12. LINES OF CREDIT (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Lines Of Credit Tables | |
Lines of credit | As of June 30, 2018, the Company had certain lines of credit that are collateralized by restricted deposits. Entity with Type of Interest Expiration Credit Unused Facility Facility Rate Date Limitation Credit Trio-Tech International Pte. Ltd., Singapore Lines of Credit - $ 4,183 3,325 Trio-Tech (Tianjin) Co., Ltd. Lines of Credit 5.22% - $ 1,511 437 Universal (Far East) Pte Ltd Lines of Credit Ranging from 1.6% to 5.5% - $ 367 256 As of June 30, 2017, the Company had certain lines of credit that are collateralized by restricted deposits. Entity with Type of Interest Expiration Credit Unused Facility Facility Rate Date Limitation Credit Trio-Tech International Pte. Ltd., Singapore Lines of Credit Ranging from 1.6% to 5.5% - $ 4,496 $ 2,815 Trio-Tech (Tianjin) Co., Ltd. Lines of Credit 5.22% - $ 885 $ 10 |
13. ACCRUED EXPENSES (Tables)
13. ACCRUED EXPENSES (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Accrued Expenses Tables | |
Accrued expenses | For the Year Ended June 30, 2018 2017 Payroll and related costs 1,545 1,568 Commissions 89 107 Customer deposits 17 218 Legal and audit 265 283 Sales tax 17 80 Utilities 130 142 Warranty 82 49 Accrued purchase of materials and property, plant and equipment 454 33 Provision for re-instatement 289 295 Other accrued expenses 203 319 Currency translation effect 81 (51 ) Total $ 3,172 $ 3,043 |
14. WARRANTY ACCRUAL (Tables)
14. WARRANTY ACCRUAL (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Warranty Accrual Tables | |
Warranty liability | For the Year Ended June 30, 2018 2017 Beginning $ 48 $ 76 Additions charged to cost and expenses 64 46 Utilization / reversal (30 ) (73 ) Currency translation effect - (1 ) Ending $ 82 $ 48 |
15. BANK LOANS PAYABLE (Tables)
15. BANK LOANS PAYABLE (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Bank Loans Payable Tables | |
Bank loans payable | June 30, 2018 June 30, 2017 Note payable denominated in RM for expansion plans in Malaysia, maturing in August 2024, bearing interest rate of 5.00% and 5.25% at June 30, 2018 and June 30, 2017 per annum, with monthly payments of principal plus interest through August 2024, collateralized by the acquired building with a carrying value of $2,809 and $2,671, as of June 30, 2018 and June 30, 2017, respectively. 1,615 1,735 Note payable denominated in U.S. dollars for expansion plans in Singapore and its subsidiaries, maturing in April 2020, bearing interest at the bank’s lending rate (3.96% for June 30, 2018 and June 30, 2017, respectively) with monthly payments of principal plus interest through April 2017. This note payable is secured by plant and equipment with a carrying value of $187 and $224 as of June 30, 2018 and June 30, 2017, respectively. 293 196 Total bank loans payable 1,908 1,931 Current portion of bank loan payable 380 271 Currency translation effect on current portion of bank loan (13 ) (11 ) Current portion of bank loan payable 367 260 Long term portion of bank loan payable 1,528 1,660 Currency translation effect on long-term portion of bank loan (91 ) (108 ) Long term portion of bank loans payable $ 1,437 $ 1,552 |
Future minimum payments | Future minimum payments (excluding interest) as of June 30, 2018 were as follows: 2019 $ 367 2020 372 2021 242 2022 254 2023 267 Thereafter 302 Total obligations and commitments $ 1,804 Future minimum payments (excluding interest) as of June 30, 2017 were as follows: 2018 $ 260 2019 273 2020 274 2021 225 2022 236 Thereafter 544 Total obligations and commitments $ 1,812 |
16. COMMITMENTS AND CONTINGEN50
16. COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Commitments And Contingencies Tables | |
Future minimum payments under leases | Future minimum payments under capital leases and non-cancelable operating leases and net rental income under non-cancelable sub-leased properties as of June 30, 2018 were as follows: Sub-lease Net For the Year Ending June 30, Capital Leases Operating Leases Rental (Income) Operating Leases 2019 $ 250 $ 717 $ (26) $ 691 2020 249 531 (26) 505 2021 150 44 - 44 2022 102 - - - 2023 23 - - - Total future minimum lease payments $ 774 $ 1,292 $ (52) $ 1,240 Less: amount representing interest - Present value of net minimum lease payments 774 Less: current portion of capital lease obligations 250 Long-term obligations under capital leases 524 Future minimum payments under capital leases and non-cancelable operating leases and net rental income under non-cancelable sub-leased properties as of June 30, 2017 were as follows: Sub-lease Net For the Year Ending June 30, Capital Leases Operating Leases Rental (Income) Operating Leases 2018 $ 228 $ 536 $ (33) $ 503 2019 197 423 (25) 398 2020 193 224 (26) 198 2021 95 - - - 2022 46 - - - Total future minimum lease payments $ 759 $ 1,183 $ (84 ) $ 1,099 Less: amount representing interest - Present value of net minimum lease payments 759 Less: current portion of capital lease obligations 228 Long-term obligations under capital leases 531 |
18. CONCENTRATION OF CUSTOMERS
18. CONCENTRATION OF CUSTOMERS (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Concentration Of Customers Tables | |
Concentration of customers | For the Year Ended June 30, 2018 2017 Revenue - Customer A 51.4 % 54.8 % Trade Accounts Receivable - Customer A 57.9 % 60.6 % |
19. BUSINESS SEGMENTS (Tables)
19. BUSINESS SEGMENTS (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Business Segments Tables | |
BUSINESS SEGMENTS | Year Operating Depr. Ended Net Income Total and Capital June 30, Revenue (Loss) Assets Amort. Expenditures Manufacturing 2018 $ 15,978 $ 548 $ 8,549 $ 115 $143 2017 $ 15,289 $ 75 $ 8,229 $ 186 $99 Testing Services 2018 19,391 1,522 23,480 1,997 2,166 2017 16,586 1,112 20,871 1,550 2,186 Distribution 2018 6,853 475 789 — - 2017 6,511 345 617 2 - Real Estate 2018 139 (56 ) 3,521 102 - 2017 152 (38 ) 3,511 98 - Fabrication Services* 2018 — — 27 — - 2017 — — 29 — - Corporate & Unallocated 2018 — (301 ) 108 — - 2017 — (5 ) 241 — - Total Company 2018 $ 42,361 $ 2,188 $ 36,474 $ 2,214 $2,309 2017 $ 38,538 $ 1,489 $ 33,498 $ 1,836 $2,285 * Fabrication services is a discontinued operation (Note 24). |
20. OPERATING LEASES (Tables)
20. OPERATING LEASES (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Operating Leases Tables | |
Future minimum rental income | Future minimum rental income in China to be received from fiscal year 2019 to fiscal year 2022 on non-cancellable operating leases is contractually due as follows as of June 30, 2018: 2019 $ 137 2020 121 2021 35 2022 - $ 293 Future minimum rental income in China to be received from fiscal year 2018 to fiscal year 2021 on non-cancellable operating leases is contractually due as follows as of June 30, 2017: 2018 $ 157 2019 107 2020 67 2021 6 $ 337 |
21. OTHER INCOME, NET (Tables)
21. OTHER INCOME, NET (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Other Income and Expenses [Abstract] | |
Other income | For the Year Ended June 30, 2018 2017 Interest income 50 33 Other rental income 110 99 Exchange gain / (loss) (160 ) 96 Government grant 126 56 Other miscellaneous income 209 230 Total $ 335 $ 514 |
22. INCOME TAXES (Tables)
22. INCOME TAXES (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Income Taxes Tables | |
Components of income tax provision (benefits) | For the Year Ended June 30, 2018 2017 Current: Federal $ 900 $ - State 2 2 Foreign 79 235 $ 981 $ 237 Deferred: Federal $ - $ - State - - Foreign 6 104 6 104 Total provisions $ 987 $ 341 |
Reconciliation of income tax rate | For the Year Ended June 30, 2018 2017 Income before Income Taxes 2,290 1,801 Income Taxes Expenses 987 341 Effective Tax Rate 43.1 % 18.9 % For the Year Ended June 30, 2018 2017 Statutory federal tax rate (27.55 )% (34.00 )% State taxes, net of federal benefit (6.00 ) (6.00 ) Foreign tax related to profits making subsidiaries 35.93 20.23 NOL Expiration - (0.03 ) Other (3.50 ) (0.86 ) Changes in valuation allowance 13.63 1.54 Tax reform related to one-time repatriation tax (153.31 ) - Effective rate (140.80 )% (19.12 )% |
Deferred income tax assets (liabilities) | For the Year Ended June 30, 2018 2017 Deferred tax assets: Net operating losses and credits $ 633 $ 710 Inventory valuation 69 99 Provision for bad debts 112 107 Accrued vacation 3 35 Accrued expenses 629 751 Investment in subsidiaries 61 60 Unrealized gain 4 23 Other 3 - Total deferred tax assets $ 1,514 $ 1,785 Deferred tax liabilities: Unrealized loss - (29 ) Depreciation (324 ) (266 ) Total deferred income tax liabilities $ (324 ) $ (295 ) Subtotal 1,190 1,490 Valuation allowance (1,117 ) (1,410 ) Net deferred tax assets $ 73 $ 80 Presented as follows in the balance sheets: Deferred tax assets 400 375 Deferred tax liabilities (327 ) (295 ) Net deferred tax assets $ 73 $ 80 |
23.UNRECOGNIZED TAX BENEFITS (T
23.UNRECOGNIZED TAX BENEFITS (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Adoption Of Asc Topic 740 Tables | |
Unrecognized tax benefits | Balance at June 30, 2017 and June 30, 2018 $ (250 ) |
24. DISCONTINUED OPERATION AN57
24. DISCONTINUED OPERATION AND CORRESPONDING RESTRUCTURING PLAN (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Discontinued Operation And Corresponding Restructuring Plan Tables | |
Loss from discontinued operations | For the Year Ended June 30, 2018 2017 Revenue $ - $ - Cost of sales - - Gross loss - - Operating expenses General and administrative 1 1 Selling - - Impairment - - Total 1 1 Loss from discontinued operation (1 ) (1 ) Other charges (12 ) (4 ) Net loss from discontinued operation $ (13 ) $ (5 ) |
25. EARNINGS PER SHARE (Tables)
25. EARNINGS PER SHARE (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share Tables | |
Reconciliation of the weighted average shares | For the Year Ended June 30, 2018 2017 Income attributable to Trio-Tech International common shareholders from continuing operations, net of tax $ 1,197 $ 1,325 Loss attributable to Trio-Tech International common shareholders from discontinued operations, net of tax $ (13 ) $ (9 ) Net income attributable to Trio-Tech International common shareholders $ 1,184 $ 1,316 Weighted average number of common shares outstanding - basic 3,553 3,523 Dilutive effect of stock options 218 121 Number of shares used to compute earnings per share - diluted 3,771 3,644 Basic Earnings per Share: Basic earnings per share from continuing operations attributable to Trio-Tech International $ 0.34 $ 0.38 Basic loss per share from discontinued operations attributable to Trio-Tech International $ (0.01 ) $ - Basic Earnings per Share from Net Income Attributable to Trio-Tech International $ 0.33 $ 0.38 Diluted Earnings per Share: Diluted earnings per share from continuing operations attributable to Trio-Tech International $ 0.32 $ 0.36 Diluted loss per share from discontinued operations attributable to Trio-Tech International (0.01 ) - Diluted Earnings per Share from Net Income Attributable to Trio-Tech International $ 0.31 $ 0.36 |
26. STOCK OPTIONS (Tables)
26. STOCK OPTIONS (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Fair value weighted average assumptions | For the Year Ended June 30, 2018 2017 Expected volatility 47.29%to 104.94% 47.29%to 104.94% Risk-free interest rate 0.30% to 0.78% 0.30% to 0.78% Expected life (years) 2.50 2.50 |
2017 Employee Plan [Member] | |
Option activities | Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding at July 1, 2017 - $ - - $ - Granted 60,000 5.98 4.98 - Exercised - - - - Forfeited or expired - - - - Outstanding at June 30, 2018 60,000 5.98 4.73 - Exercisable at June 30, 2018 15,000 5.98 4.73 - |
Company's non-vested employee stock options | Options Weighted Average Grant Date Fair Value Non-vested at July 1, 2017 - $ - Granted 60,000 $ 5.98 Vested (15,000 ) $ 5.98 Forfeited - - 45,000 $ 5.98 |
2007 Employee Plan [Member] | |
Option activities | A summary of option activities under the 2007 Employee Plan during the twelve-month period ended June 30, 2018 is presented as follows: Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding at July 1, 2017 127,500 $ 3.52 3.10 $ 187 Granted - - - - Exercised - - - - Forfeited or expired - - - - Outstanding at June 30, 2018 127,500 $ 3.52 2.10 $ 121 Exercisable at June 30, 2018 98,750 $ 3.43 1.73 $ 103 A summary of option activities under the 2007 Employee Plan during the twelve-month period ended June 30, 2017 is presented as follows: Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding at July 1, 2016 90,000 $ 3.26 3.42 $ 30 Granted 37,500 4.14 - - Exercised - - - - Forfeited or expired - - - - Outstanding at June 30, 2017 127,500 $ 3.52 3.10 $ 187 Exercisable at June 30, 2017 79,375 $ 3.36 2.36 $ 129 |
Company's non-vested employee stock options | A summary of the status of the Company’s non-vested employee stock options during the twelve months ended June 30, 2018 is presented below: Weighted Average Grant-Date Options Fair Value Non-vested at July 1, 2017 48,125 $ 3.77 Granted - - Vested (19,375 ) (3.43 ) Forfeited - - Non-vested at June 30, 2018 28,750 $ 3.83 A summary of the status of the Company’s non-vested employee stock options during the twelve months ended June 30, 2017 is presented below: Weighted Average Grant-Date Options Fair Value Non-vested at July 1, 2016 38,750 $ 3.22 Granted 37,500 4.14 Vested (28,125 ) 3.19 Forfeited - - Non-vested at June 30, 2017 48,125 $ 3.77 |
2017 Directors Equity Incentive Plan [Member] | |
Option activities | Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding at July 1, 2017 - $ - - $ - Granted 80,000 5.98 4.98 - Exercised - - - - Forfeited or expired - - - - Outstanding at June 30, 2018 80,000 5.98 4.73 - Exercisable at June 30, 2018 80,000 5.98 4.73 - |
2007 Directors Equity Incentive Plan [Member] | |
Option activities | A summary of option activities under the 2007 Directors Plan during the twelve months ended June 30, 2018 is presented as follows: Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding at July 1, 2017 415,000 3.36 2.93 673 Granted - - - - Exercised (20,000 ) 2.59 - - Forfeited or expired (5,000 ) 2.07 - - Outstanding at June 30, 2018 390,000 3.41 2.05 412 Exercisable at June 30, 2018 390,000 3.41 2.05 412 A summary of option activities under the 2007 Directors Plan during the twelve months ended June 30, 2017 is presented as follows: Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding at July 1, 2016 415,000 3.14 3.29 198 Granted 50,000 4.14 - - Exercised - - - - Forfeited or expired (50,000 ) 2.30 - - Outstanding at June 30, 2017 415,000 3.36 2.93 673 Exercisable at June 30, 2017 415,000 3.36 2.93 673 |
27. NON-CONTROLLING INTEREST (T
27. NON-CONTROLLING INTEREST (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Non-controlling Interest Tables | |
Noncontrolling interest | For the Year Ended June 30, Non-controlling interest 2018 2017 Beginning balance $ 1,426 $ 1,614 Net income 106 139 Dividend declared by a subsidiary (189 ) (177 ) Translation adjustment 179 (150 ) Ending balance $ 1,522 $ 1,426 |
1. BASIS OF PRESENTATION AND 61
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | Jun. 30, 2018 | |
Express Test Corporation (Dormant) | ||
Ownership | 100.00% | |
Trio-Tech Reliability Services (Dormant) | ||
Ownership | 100.00% | |
KTS Incorporated, dba Universal Systems (Dormant) | ||
Ownership | 100.00% | |
European Electronic Test Centre (Dormant) | ||
Ownership | 100.00% | |
Trio-Tech International Pte. Ltd | ||
Ownership | 100.00% | |
Universal (Far East) Pte. Ltd | ||
Ownership | 100.00% | [1] |
Trio-Tech International (Thailand) Co. Ltd | ||
Ownership | 100.00% | [1] |
Trio-Tech (Bangkok) Co. Ltd. (49% owned by Trio-Tech International Pte. Ltd. and 51% owned by Trio-Tech International (Thailand) Co. Ltd.) | ||
Ownership | 100.00% | |
Trio-Tech (Malaysia) Sdn. Bhd. (55% owned by Trio-Tech International Pte. Ltd.) | ||
Ownership | 55.00% | |
Trio-Tech (Kuala Lumpur) Sdn. Bhd. (100% owned by Trio-Tech Malaysia Sdn. Bhd.) | ||
Ownership | 55.00% | |
Prestal Enterprise Sdn. Bhd. (76% owned by Trio-Tech International Pte. Ltd.) | ||
Ownership | 76.00% | |
Trio-Tech (SIP) Co. Ltd. | ||
Ownership | 100.00% | [1] |
Trio-Tech (Shanghai) Co. Ltd. | ||
Ownership | 100.00% | [2] |
Trio-Tech (Chongqing) Co. Ltd. SHI International Pte. Ltd. | ||
Ownership | 100.00% | [1] |
SHI International Pte. Ltd. (55% owned by Trio-Tech International Pte. Ltd.) | ||
Ownership | 55.00% | |
PT SHI Indonesia (100% owned by SHI International Pte. Ltd) | ||
Ownership | 55.00% | |
Trio-Tech (Tianjin) Co. Ltd. | ||
Ownership | 100.00% | [1] |
[1] | 100% owned by Trio-Tech International Pte. Ltd. | |
[2] | Windup in March 30, 2017 |
1. BASIS OF PRESENTATION AND 62
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Net Income Attributable to Trio-Tech International Common Shareholders | $ 1,184 | $ 1,316 |
Earnings retained in subsidiaries | 12,392 | 10,126 |
Research and development costs | 451 | 208 |
55% owned Malaysian subsidiary | ||
Restricted term deposits | 227 | 207 |
Short-term deposits | 548 | 687 |
Trio-Tech Thailand | ||
Short-term deposits | 105 | 100 |
Trio-Tech International [Member] | ||
Restricted term deposits | $ 1,468 | $ 1,450 |
3. TERM DEPOSITS (Details)
3. TERM DEPOSITS (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Jun. 30, 2017 |
Term Deposits Details | ||
Short-term deposits | $ 606 | $ 824 |
Currency translation effect on short-term deposits | 47 | (37) |
Total short-term deposits | 653 | 787 |
Restricted term deposits | 1,664 | 1,722 |
Currency translation effect on restricted term deposits | 31 | (65) |
Total restricted term deposits | 1,695 | 1,657 |
Total Term deposits | $ 2,348 | $ 2,444 |
4. TRADE ACCOUNTS RECEIVABLE 64
4. TRADE ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Notes to Financial Statements | ||
Beginning | $ 247 | $ 270 |
Additions charged to expenses | 8 | 65 |
Recovered | (1) | (78) |
Write-off | 0 | (2) |
Currency translation effect | 5 | (8) |
Ending | $ 259 | $ 247 |
5. LOANS RECEIVABLE FROM PROP65
5. LOANS RECEIVABLE FROM PROPERTY DEVELOPMENT PROJECTS (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Jun. 30, 2017 |
Jiang Huai [Member] | ||
Short-term loan receivables | ||
Short-term | $ 325 | $ 325 |
Less: allowance for doubtful receivables | (325) | (325) |
Short-term loan receivables, net | 0 | 0 |
Yuan RMB | Jun Zhou Zhi Ye [Member] | ||
Long-term loan receivables | ||
Long-term | 5,000 | 5,000 |
Less: transfer - down-payment for purchase of property | (5,000) | (5,000) |
Long-term loan receivables, net | 0 | 0 |
Yuan RMB | Jiang Huai [Member] | ||
Short-term loan receivables | ||
Short-term | 2,000 | 2,000 |
Less: allowance for doubtful receivables | (2,000) | (2,000) |
Short-term loan receivables, net | 0 | 0 |
USD | Jun Zhou Zhi Ye [Member] | ||
Long-term loan receivables | ||
Long-term | 814 | 814 |
Less: transfer - down-payment for purchase of property | (814) | (814) |
Long-term loan receivables, net | $ 0 | $ 0 |
6. INVENTORIES (Details)
6. INVENTORIES (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Jun. 30, 2017 |
Notes to Financial Statements | ||
Raw materials | $ 1,153 | $ 1,047 |
Work in progress | 1,947 | 1,045 |
Finished goods | 505 | 365 |
Less: provision for obsolete inventory | (695) | (686) |
Currency translation effect | 20 | (15) |
Inventory net | $ 2,930 | $ 1,756 |
6. INVENTORIES (Details 1)
6. INVENTORIES (Details 1) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Notes to Financial Statements | ||
Beginning | $ 686 | $ 697 |
Additions charged to expenses | 9 | 6 |
Usage - disposition | (5) | (6) |
Currency translation effect | 5 | (11) |
Ending | $ 695 | $ 686 |
7. ASSETS HELD FOR SALE (Detail
7. ASSETS HELD FOR SALE (Details Narrative) - Property, Plant and Equipment [Member] - USD ($) $ in Thousands | Jun. 30, 2018 | Jun. 30, 2017 |
Assets held for sale, net book value | $ 91 | $ 86 |
Ringgit RM | ||
Assets held for sale, net book value | $ 371 | $ 371 |
9. INVESTMENT PROPERTIES (Detai
9. INVESTMENT PROPERTIES (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Jun. 30, 2017 |
MaoYe [Member] | ||
Investment Amount | $ 894 | $ 894 |
Jiang Huai [Member] | ||
Investment Amount | 580 | 580 |
Fu Li [Member] | ||
Investment Amount | 648 | 648 |
China [Member] | ||
Currency translation | (131) | (178) |
Gross investment in rental property | 1,991 | 1,944 |
Accumulated depreciation on rental property | (845) | (728) |
Net investment in property | 1,146 | 1,216 |
Penang-Malaysia RM [Member] | ||
Investment Amount | 681 | 681 |
Gross investment in rental property | 681 | 681 |
Accumulated depreciation on rental property | (310) | (310) |
Reclassified as "Assets held for sale" | (371) | (371) |
Net investment in property | 0 | 0 |
Penang-Malaysia [Member] | ||
Investment Amount | 181 | 181 |
Gross investment in rental property | 181 | 181 |
Accumulated depreciation on rental property | (83) | (83) |
Reclassified as "Assets held for sale" | (98) | (98) |
Net investment in property | 0 | 0 |
Yuan RMB | MaoYe [Member] | ||
Investment Amount | 5,554 | 5,554 |
Yuan RMB | Jiang Huai [Member] | ||
Investment Amount | 3,600 | 3,600 |
Yuan RMB | Fu Li [Member] | ||
Investment Amount | 4,025 | 4,025 |
Yuan RMB | China [Member] | ||
Currency translation | 0 | 0 |
Gross investment in rental property | 13,179 | 13,179 |
Accumulated depreciation on rental property | (5,596) | (4,973) |
Net investment in property | $ 7,583 | $ 8,242 |
9. INVESTMENT PROPERTIES (Det70
9. INVESTMENT PROPERTIES (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Depreciation expenses | $ 102 | $ 98 |
MaoYe [Member] | ||
Investment Amount | 894 | 894 |
Rental income | 99 | 102 |
Jiang Huai [Member] | ||
Investment Amount | 580 | 580 |
Fu Li [Member] | ||
Investment Amount | 648 | 648 |
Rental income | 40 | 50 |
Penang-Malaysia [Member] | ||
Investment Amount | 181 | 181 |
Penang-Malaysia RM [Member] | ||
Investment Amount | 681 | 681 |
China [Member] | ||
Rental income | 138 | 152 |
Yuan RMB | MaoYe [Member] | ||
Investment Amount | 5,554 | 5,554 |
Yuan RMB | Jiang Huai [Member] | ||
Investment Amount | 3,600 | 3,600 |
Rental income | 0 | 0 |
Yuan RMB | Fu Li [Member] | ||
Investment Amount | $ 4,025 | $ 4,025 |
10. PROPERTY, PLANT AND EQUIP71
10. PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Property, plant and equipment, Gross | $ 37,258 | $ 35,411 |
Accumulated depreciation | (23,440) | (21,751) |
Accumulated amortization on equipment under capital leases | (795) | (776) |
Total accumulated amortization depreciation | (24,235) | (22,527) |
Property, plant and equipment before currency translation effect | 13,023 | 12,884 |
Currency translation effect | (1,088) | (1,593) |
Property, plant and equipment, net | 11,935 | 11,291 |
Building and improvements | ||
Property, plant and equipment, Gross | $ 5,070 | 5,070 |
Building and improvements | Minimum Member | ||
Estimated Useful Life in Years | 3 years | |
Building and improvements | Maximum Member | ||
Estimated Useful Life in Years | 20 years | |
Leasehold improvements | ||
Property, plant and equipment, Gross | $ 6,093 | 5,614 |
Leasehold improvements | Minimum Member | ||
Estimated Useful Life in Years | 3 years | |
Leasehold improvements | Maximum Member | ||
Estimated Useful Life in Years | 27 years | |
Machinery and equipment | ||
Property, plant and equipment, Gross | $ 1,029 | 941 |
Machinery and equipment | Minimum Member | ||
Estimated Useful Life in Years | 3 years | |
Machinery and equipment | Maximum Member | ||
Estimated Useful Life in Years | 7 years | |
Furniture and fixtures | ||
Property, plant and equipment, Gross | $ 24,138 | 22,858 |
Furniture and fixtures | Minimum Member | ||
Estimated Useful Life in Years | 3 years | |
Furniture and fixtures | Maximum Member | ||
Estimated Useful Life in Years | 5 years | |
Equipment under capital leases | ||
Property, plant and equipment, Gross | $ 928 | $ 928 |
Equipment under capital leases | Minimum Member | ||
Estimated Useful Life in Years | 3 years | |
Equipment under capital leases | Maximum Member | ||
Estimated Useful Life in Years | 5 years |
10. PROPERTY, PLANT AND EQUIP72
10. PROPERTY, PLANT AND EQUIPMENT (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation and amortization expenses | $ 2,112 | $ 1,738 |
11. OTHER ASSETS - Other assets
11. OTHER ASSETS - Other assets (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Jun. 30, 2017 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Down payment for purchase of investment properties | $ 1,645 | $ 1,645 |
Down payment for purchase of property, plant and equipment | 561 | 280 |
Deposit for rental and utilities | 140 | 139 |
Currency translation effect | (97) | (142) |
Ending balance | $ 2,249 | $ 1,922 |
12. LINES OF CREDIT (Details)
12. LINES OF CREDIT (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
TrioTech Intl Credit Facility [Member] | ||
Type of facility | Lines of Credit | Lines of Credit |
Credit limitation | $ 4,183 | $ 4,496 |
Unused credit | $ 3,325 | $ 2,815 |
TrioTech Intl Credit Facility [Member] | Minimum Member | ||
Interest rate | 1.60% | 1.60% |
TrioTech Intl Credit Facility [Member] | Maximum Member | ||
Interest rate | 5.50% | 5.50% |
TrioTech Tianjin Credit Facility [Member] | ||
Type of facility | Lines of Credit | Lines of Credit |
Interest rate | ||
Credit limitation | $ 1,511 | $ 885 |
Unused credit | $ 437 | $ 10 |
Universal (Far East) Pte. Ltd | ||
Type of facility | Lines of Credit | |
Credit limitation | $ 367 | |
Unused credit | $ 256 | |
Universal (Far East) Pte. Ltd | Minimum Member | ||
Interest rate | 1.60% | |
Universal (Far East) Pte. Ltd | Maximum Member | ||
Interest rate | 5.50% |
13. ACCRUED EXPENSES (Details)
13. ACCRUED EXPENSES (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Jun. 30, 2017 |
Notes to Financial Statements | ||
Payroll and related costs | $ 1,545 | $ 1,568 |
Commissions | 89 | 107 |
Customer deposits | 17 | 218 |
Legal and audit | 265 | 283 |
Sales tax | 17 | 80 |
Utilities | 130 | 142 |
Warranty | 82 | 49 |
Accrued purchase of materials and property, plant and equipment | 454 | 33 |
Provision for re-instatement | 289 | 295 |
Other accrued expenses | 203 | 319 |
Currency translation effect | 81 | (51) |
Total | $ 3,172 | $ 3,043 |
14. WARRANTY ACCRUAL (Details)
14. WARRANTY ACCRUAL (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Notes to Financial Statements | ||
Beginning | $ 48 | $ 76 |
Additions charged to cost and expenses | 64 | 46 |
Utilization / reversal | (30) | (73) |
Currency translation effect | 0 | (1) |
Ending | $ 82 | $ 48 |
15. BANK LOANS PAYABLE (Details
15. BANK LOANS PAYABLE (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Jun. 30, 2017 |
Bank loan payable | $ 1,908 | $ 1,931 |
Current portion of bank loan payable | 380 | 271 |
Currency translation effect on short-term portion of bank loan | (13) | (11) |
Current portion of bank loan payable | 367 | 260 |
Long term portion of bank loan payable | 1,528 | 1,660 |
Currency translation effect on long-term portion of bank loan | (91) | (108) |
Long term portion of bank loans payable | 1,437 | 1,552 |
Commercial Bank Note 1 [Member] | ||
Bank loan payable | 1,615 | 1,735 |
Commercial Bank Note 2 [Member] | ||
Bank loan payable | $ 293 | $ 196 |
15. BANK LOANS PAYABLE (Detai78
15. BANK LOANS PAYABLE (Details 1) - USD ($) $ in Thousands | Jun. 30, 2018 | Jun. 30, 2017 |
Notes to Financial Statements | ||
Current | $ 367 | $ 260 |
Year 1 | 372 | 273 |
Year 2 | 242 | 274 |
Year 3 | 254 | 225 |
Year 4 | 267 | 236 |
Thereafter | 302 | 544 |
Total obligations and commitments | $ 1,804 | $ 1,812 |
16. COMMITMENTS AND CONTINGEN79
16. COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Jun. 30, 2017 |
Leases | ||
Current | $ 691 | $ 503 |
Year 1 | 505 | 398 |
Year 2 | 44 | 198 |
Year 3 | 0 | 0 |
Year 4 | 0 | 0 |
Total future minimum lease payments, Capital Leases | 1,240 | 1,099 |
Capital Lease [Member] | ||
Leases | ||
Current | 250 | 228 |
Year 1 | 249 | 197 |
Year 2 | 150 | 193 |
Year 3 | 102 | 95 |
Year 4 | 23 | 46 |
Total future minimum lease payments, Capital Leases | 774 | 759 |
Less amount representing interest | 0 | 0 |
Present value of net minimum lease payments | 774 | 759 |
Less current portion of capital lease obligations | 250 | 228 |
Long-term obligations under capital leases | 524 | 531 |
Operating Lease [Member] | ||
Leases | ||
Current | 717 | 536 |
Year 1 | 531 | 423 |
Year 2 | 44 | 224 |
Year 3 | 0 | 0 |
Year 4 | 0 | 0 |
Total future minimum lease payments, Capital Leases | 1,292 | 1,183 |
Sub-lease (Income) [Member] | ||
Leases | ||
Current | (26) | (33) |
Year 1 | (26) | (25) |
Year 2 | 0 | (26) |
Year 3 | 0 | 0 |
Year 4 | 0 | 0 |
Total future minimum lease payments, Capital Leases | $ (52) | $ (84) |
16. COMMITMENTS AND CONTINGEN80
16. COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Total rental expense on operating leases | $ 703 | $ 747 |
TianjnUS [Member] | ||
Capital commitments for the purchase of equipment and other related infrastructure costs | $ 190 | 186 |
Minimum Member | ||
Lease rates | 1.88% | |
Maximum Member | ||
Lease rates | 7.50% | |
Malaysia US [Member] | ||
Capital commitments for the purchase of equipment and other related infrastructure costs | $ 16 | 159 |
Ringgit RM | Malaysia [Member] | ||
Capital commitments for the purchase of equipment and other related infrastructure costs | 62 | 684 |
Yuan RMB | Tianjin [Member] | ||
Capital commitments for the purchase of equipment and other related infrastructure costs | $ 1,260 | $ 1,260 |
18. CONCENTRATION OF CUSTOMER81
18. CONCENTRATION OF CUSTOMERS (Details) | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Sales [Member] | ||
Customer A | 51.40% | 54.80% |
Account Receivable [Member] | ||
Customer A | 57.90% | 60.60% |
19. BUSINESS SEGMENTS (Details)
19. BUSINESS SEGMENTS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | ||
Net revenue | $ 42,361 | $ 38,538 | |
Operating Income (Loss) | 2,188 | 1,489 | |
Total assets | 36,474 | 33,498 | |
Depreciation and amortization | 2,214 | 1,836 | |
Capital expenditures | 2,309 | 2,285 | |
Manufacturing [Member] | |||
Net revenue | 15,978 | 15,289 | |
Operating Income (Loss) | 548 | 75 | |
Total assets | 8,549 | 8,229 | |
Depreciation and amortization | 115 | 186 | |
Capital expenditures | 143 | 99 | |
Testing Services [Member] | |||
Net revenue | 19,391 | 16,586 | |
Operating Income (Loss) | 1,522 | 1,112 | |
Total assets | 23,480 | 20,871 | |
Depreciation and amortization | 1,997 | 1,550 | |
Capital expenditures | 2,166 | 2,186 | |
Distribution [Member] | |||
Net revenue | 6,853 | 6,511 | |
Operating Income (Loss) | 475 | 345 | |
Total assets | 789 | 617 | |
Depreciation and amortization | 0 | 2 | |
Capital expenditures | 0 | 0 | |
RealEstate [Member] | |||
Net revenue | 139 | 152 | |
Operating Income (Loss) | (56) | (38) | |
Total assets | 3,521 | 3,511 | |
Depreciation and amortization | 102 | 98 | |
Capital expenditures | 0 | 0 | |
Fabrication Services [Member] | |||
Net revenue | [1] | 0 | 0 |
Operating Income (Loss) | [1] | 0 | 0 |
Total assets | [1] | 27 | 29 |
Depreciation and amortization | [1] | 0 | 0 |
Capital expenditures | [1] | 0 | 0 |
CorporateAndUnallocated [Member] | |||
Net revenue | 0 | 0 | |
Operating Income (Loss) | (301) | (5) | |
Total assets | 108 | 241 | |
Depreciation and amortization | 0 | 0 | |
Capital expenditures | $ 0 | $ 0 | |
[1] | Fabrication services is a discontinued operation (Note 24). |
20. OPERATING LEASES (Details)
20. OPERATING LEASES (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Jun. 30, 2017 |
Leases [Abstract] | ||
Current | $ 137 | $ 157 |
Year 1 | 121 | 107 |
Year 2 | 35 | 67 |
Year 3 | 0 | 6 |
Total | $ 293 | $ 337 |
20. OPERATING LEASES (Details N
20. OPERATING LEASES (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Depreciation expense | $ 99 | $ 97 |
Minimum Member | ||
Initial lease term | 12 months | 12 months |
Maximum Member | ||
Initial lease term | 60 months | 60 months |
21. OTHER INCOME, NET (Details)
21. OTHER INCOME, NET (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Other Income Net Details | ||
Interest income | $ 50 | $ 33 |
Other rental income | 110 | 99 |
Exchange gain / (loss) | (160) | 96 |
Government grant | 126 | 56 |
Other miscellaneous income | 209 | 230 |
Total | $ 335 | $ 514 |
22. INCOME TAXES (Details)
22. INCOME TAXES (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Current | ||
Federal | $ 900 | $ 0 |
State | 2 | 2 |
Foreign | 79 | 235 |
Total | 981 | 237 |
Deferred | ||
Federal | 0 | 0 |
State | 0 | 0 |
Foreign | 6 | 104 |
Total | 6 | 104 |
Total provision | $ 987 | $ 341 |
22. INCOME TAXES (Details 1)
22. INCOME TAXES (Details 1) | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | ||
Statutory federal tax rate | (27.55%) | (34.00%) |
State taxes, net of federal benefit | (6.00%) | (6.00%) |
Foreign tax related to profits making subsidiaries | 35.93% | 20.23% |
NOL Expiration | 0.00% | (0.03%) |
Other | (3.50%) | (0.86%) |
Changes in valuation allowance | 13.63% | 1.54% |
Tax reform | (153.31%) | 0.00% |
Effective rate | (140.80%) | (19.12%) |
22. INCOME TAXES (Details 2)
22. INCOME TAXES (Details 2) - USD ($) $ in Thousands | Jun. 30, 2018 | Jun. 30, 2017 |
Deferred tax assets: | ||
Net operating losses and credits | $ 633 | $ 710 |
Inventory valuation | 69 | 99 |
Provision for bad debts | 112 | 107 |
Accrued vacation | 3 | 35 |
Accrued expenses | 629 | 751 |
Investment in subsidiaries | 61 | 60 |
Unrealized gain | 4 | 23 |
Other | 3 | 0 |
Total deferred tax assets | 1,514 | 1,785 |
Deferred tax liabilities: | ||
Unrealized loss | 0 | (29) |
Depreciation | (324) | (266) |
Total deferred income tax liabilities | (324) | (295) |
Subtotal | 1,190 | 1,490 |
Valuation allowance | (1,117) | (1,410) |
Net deferred tax assets | 73 | 80 |
Presented as follows in the balance sheets: | ||
Deferred tax assets | 400 | 375 |
Deferred tax liabilities | (327) | (295) |
Net deferred tax assets / (liability) | $ 73 | $ 80 |
22. INCOME TAXES (Details Narra
22. INCOME TAXES (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Increase (decrease) in valuation allowance | $ (293) | $ (1,396) |
Federal [Member] | ||
Net operating loss carryforwards | 232 | 0 |
Federal tax credit carryforwards | 200 | 211 |
State [Member] | ||
Net operating loss carryforwards | $ 314 | $ 148 |
23. UNRECOGNIZED TAX BENEFITS (
23. UNRECOGNIZED TAX BENEFITS (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Jun. 30, 2017 |
Reconciliation of the beginning and ending amount of unrecognized tax benefits | ||
Beginning and Ending Balance | $ (250) | $ (250) |
24. DISCONTINUED OPERATION AN91
24. DISCONTINUED OPERATION AND CORRESPONDING RESTRUCTURING PLAN (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Notes to Financial Statements | ||
Revenue | $ 0 | $ 0 |
Cost of sales | 0 | 0 |
Gross loss | 0 | 0 |
Operating expenses | ||
General and administrative | 1 | 1 |
Selling | 0 | 0 |
Impairment | 0 | 0 |
Total | 1 | 1 |
Loss from discontinued operation | (1) | (1) |
Other charges | (12) | (4) |
Net loss from discontinued operation | $ (13) | $ (5) |
24. DISCONTINUED OPERATION AN92
24. DISCONTINUED OPERATION AND CORRESPONDING RESTRUCTURING PLAN (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Trio-Tech (Shanghai) Co. Ltd. | ||
General and administrative expenses, discontinued operations | $ 1 | $ 1 |
25. EARNINGS PER SHARE (Details
25. EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Notes to Financial Statements | ||
Income attributable to Trio-Tech International common shareholders from continuing operations, net of tax | $ 1,197 | $ 1,325 |
Income / (loss) attributable to Trio-Tech International common shareholders from discontinued operations, net of tax | (13) | (9) |
Net income attributable to Trio-Tech International common shareholders | $ 1,184 | $ 1,316 |
Weighted average number of common shares outstanding - basic | 3,553,000 | 3,523,000 |
Dilutive effect of stock options | 218,000 | 121,000 |
Number of shares used to compute earnings per share - diluted | 3,771,000 | 3,644,000 |
Basic Earnings per Share: | ||
Basic earnings per share from continuing operations attributable to Trio-Tech International | $ 0.34 | $ 0.38 |
Basic earnings per share from discontinued operations attributable to Trio-Tech International | (0.01) | .00 |
Basic Earnings per Share from Net Income Attributable to Trio-Tech International | 0.33 | 0.38 |
Diluted Earnings per Share: | ||
Diluted earnings per share from continuing operations attributable to Trio-Tech International | 0.32 | 0.36 |
Diluted earnings per share from discontinued operations attributable to Trio-Tech International | (0.01) | .00 |
Diluted Earnings per Share from Net Income Attributable to Trio-Tech International | $ 0.31 | $ 0.36 |
26. STOCK OPTIONS (Details)
26. STOCK OPTIONS (Details) | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Expected life (years) | 2 years 6 months | 2 years 6 months |
Minimum Member | ||
Expected volatility | 47.29% | 47.29% |
Risk-free interest rate | 0.30% | 0.30% |
Maximum Member | ||
Expected volatility | 104.94% | 104.94% |
Risk-free interest rate | 0.78% | 0.78% |
26. STOCK OPTIONS (Details 1)
26. STOCK OPTIONS (Details 1) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
2017 Employee Plan [Member] | ||
Outstanding at beginning of period | 0 | |
Granted, Options | 60,000 | |
Exercised, Options | 0 | |
Forfeited or expired, Options | 0 | |
Options outstanding | 60,000 | 0 |
Exercisable at end of period | 15,000 | |
Outstanding at beginning of period, Weighted- Average Exercise Price | $ .00 | |
Granted, Weighted- Average Exercise Price | 5.98 | |
Exercised, Weighted- Average Exercise Price | (.00) | |
Forfeited or expired, Weighted- Average Exercise Price | .00 | |
Outstanding at end of period, Weighted- Average Exercise Price | 5.98 | $ .00 |
Exercisable at end of period, Weighted- Average Exercise Price | $ 5.98 | |
Outstanding at beginning of period, Weighted - Average Remaining Contractual Term (Years) | 0 years | |
Granted, Weighted - Average Remaining Contractual Term (Years) | 4 years 11 months 23 days | |
Outstanding at end of period, Weighted - Average Remaining Contractual Term (Years) | 4 years 8 months 23 days | |
Exercisable at end of period, Weighted - Average Remaining Contractual Term (Years) | 4 years 8 months 23 days | |
Outstanding at beginning of period | $ 0 | |
Granted, Aggregate Intrinsic Value | 0 | |
Exercised, Aggregate Intrinsic Value | 0 | |
Forfeited or expired, Aggregate Intrinsic Value | 0 | |
Outstanding at end of period | 0 | $ 0 |
Exercisable at end of period, Aggregate Intrinsic Value | $ 0 | |
2007 Employee Plan [Member] | ||
Outstanding at beginning of period | 127,500 | 90,000 |
Granted, Options | 0 | 37,500 |
Exercised, Options | 0 | 0 |
Forfeited or expired, Options | 0 | 0 |
Options outstanding | 127,500 | 127,500 |
Exercisable at end of period | 98,750 | 79,375 |
Outstanding at beginning of period, Weighted- Average Exercise Price | $ 3.52 | $ 3.26 |
Granted, Weighted- Average Exercise Price | .00 | 4.14 |
Exercised, Weighted- Average Exercise Price | (.00) | (.00) |
Forfeited or expired, Weighted- Average Exercise Price | .00 | .00 |
Outstanding at end of period, Weighted- Average Exercise Price | 3.52 | 3.52 |
Exercisable at end of period, Weighted- Average Exercise Price | $ 3.43 | $ 3.36 |
Outstanding at beginning of period, Weighted - Average Remaining Contractual Term (Years) | 3 years 1 month 6 days | 3 years 5 months 1 day |
Outstanding at end of period, Weighted - Average Remaining Contractual Term (Years) | 2 years 1 month 6 days | 3 years 1 month 6 days |
Exercisable at end of period, Weighted - Average Remaining Contractual Term (Years) | 1 year 8 months 23 days | 2 years 4 months 10 days |
Outstanding at beginning of period | $ 187 | $ 30 |
Granted, Aggregate Intrinsic Value | 0 | 0 |
Exercised, Aggregate Intrinsic Value | 0 | 0 |
Forfeited or expired, Aggregate Intrinsic Value | 0 | 0 |
Outstanding at end of period | 121 | 187 |
Exercisable at end of period, Aggregate Intrinsic Value | $ 103 | $ 129 |
2017 Directors Equity Incentive Plan [Member] | ||
Outstanding at beginning of period | 0 | |
Granted, Options | 80,000 | |
Exercised, Options | 0 | |
Forfeited or expired, Options | 0 | |
Options outstanding | 80,000 | 0 |
Exercisable at end of period | 80,000 | |
Outstanding at beginning of period, Weighted- Average Exercise Price | $ .00 | |
Granted, Weighted- Average Exercise Price | 5.98 | |
Exercised, Weighted- Average Exercise Price | (.00) | |
Forfeited or expired, Weighted- Average Exercise Price | .00 | |
Outstanding at end of period, Weighted- Average Exercise Price | 5.98 | $ .00 |
Exercisable at end of period, Weighted- Average Exercise Price | $ 5.98 | |
Outstanding at beginning of period, Weighted - Average Remaining Contractual Term (Years) | 0 years | |
Granted, Weighted - Average Remaining Contractual Term (Years) | 4 years 11 months 23 days | |
Outstanding at end of period, Weighted - Average Remaining Contractual Term (Years) | 4 years 8 months 23 days | |
Exercisable at end of period, Weighted - Average Remaining Contractual Term (Years) | 4 years 8 months 23 days | |
Outstanding at beginning of period | $ 0 | |
Granted, Aggregate Intrinsic Value | 0 | |
Exercised, Aggregate Intrinsic Value | 0 | |
Forfeited or expired, Aggregate Intrinsic Value | 0 | |
Outstanding at end of period | 0 | $ 0 |
Exercisable at end of period, Aggregate Intrinsic Value | $ 0 | |
2007 Directors Equity Incentive Plan [Member] | ||
Outstanding at beginning of period | 415,000 | 415,000 |
Granted, Options | 0 | 50,000 |
Exercised, Options | (20,000) | 0 |
Forfeited or expired, Options | (5,000) | (50,000) |
Options outstanding | 390,000 | 415,000 |
Exercisable at end of period | 390,000 | 415,000 |
Outstanding at beginning of period, Weighted- Average Exercise Price | $ 3.36 | $ 3.14 |
Granted, Weighted- Average Exercise Price | .00 | 4.14 |
Exercised, Weighted- Average Exercise Price | 2.59 | (.00) |
Forfeited or expired, Weighted- Average Exercise Price | 2.07 | 2.30 |
Outstanding at end of period, Weighted- Average Exercise Price | 3.41 | 3.36 |
Exercisable at end of period, Weighted- Average Exercise Price | $ 3.41 | $ 3.36 |
Outstanding at beginning of period, Weighted - Average Remaining Contractual Term (Years) | 2 years 11 months 5 days | 3 years 3 months 14 days |
Outstanding at end of period, Weighted - Average Remaining Contractual Term (Years) | 2 years 18 days | 2 years 11 months 5 days |
Exercisable at end of period, Weighted - Average Remaining Contractual Term (Years) | 2 years 18 days | 2 years 11 months 5 days |
Outstanding at beginning of period | $ 673 | $ 198 |
Granted, Aggregate Intrinsic Value | 0 | 0 |
Exercised, Aggregate Intrinsic Value | 0 | 0 |
Forfeited or expired, Aggregate Intrinsic Value | 0 | 0 |
Outstanding at end of period | 412 | 673 |
Exercisable at end of period, Aggregate Intrinsic Value | $ 412 | $ 673 |
26. STOCK OPTIONS (Details 2)
26. STOCK OPTIONS (Details 2) - $ / shares | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
2017 Employee Plan [Member] | ||
Non-vested at beginning of period, Options | 0 | |
Granted, Options | 60,000 | |
Vested, Options | (15,000) | |
Forfeited, Options | 0 | |
Non-vested at end of period, Options | 45,000 | 0 |
Non-vested at beginning of period, Weighted-Average Grant-Date Fair Value | $ .00 | |
Granted, Options, Weighted-Average Grant-Date Fair Value | 5.98 | |
Vested, Options, Weighted-Average Grant-Date Fair Value | 5.98 | |
Forfeited, Options, Weighted-Average Grant-Date Fair Value | .00 | |
Non-vested at end of period, Options , Weighted-Average Grant-Date Fair Value | $ 5.98 | $ .00 |
2007 Employee Plan [Member] | ||
Non-vested at beginning of period, Options | 48,125 | 38,750 |
Granted, Options | 0 | 37,500 |
Vested, Options | (19,375) | (28,125) |
Forfeited, Options | 0 | 0 |
Non-vested at end of period, Options | 28,750 | 48,125 |
Non-vested at beginning of period, Weighted-Average Grant-Date Fair Value | $ 3.77 | $ 3.22 |
Granted, Options, Weighted-Average Grant-Date Fair Value | .00 | 4.14 |
Vested, Options, Weighted-Average Grant-Date Fair Value | (3.43) | 3.19 |
Forfeited, Options, Weighted-Average Grant-Date Fair Value | .00 | .00 |
Non-vested at end of period, Options , Weighted-Average Grant-Date Fair Value | $ 3.83 | $ 3.77 |
26. STOCK OPTIONS (Details Narr
26. STOCK OPTIONS (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Stock-based compensation expense | $ 43 | $ 18 |
Aggregate intrinsic value options exercised | $ 121 | |
Employee 2017 [Member] | ||
Options granted | 60,000 | |
Exercised during period | 0 | |
Stock-based compensation expense | $ 6 | |
Unamortized stock-based compensation | $ 9 | |
Weighted average remaining term, nonvested | 3 years | |
Vested stock options | 15,000 | |
Weighted-average exercise price, vested options | $ 5.98 | |
Weighted average contractual term | 4 years 8 months 23 days | |
Fair value of stock options, vested and outstanding | $ 90 | |
Employee 2007 [Member] | ||
Shares authorized | 600,000 | |
Options granted | 0 | 37,500 |
Exercised during period | 0 | |
Stock-based compensation expense | $ 4 | $ 6 |
Unamortized stock-based compensation | $ 1 | $ 5 |
Weighted average remaining term, nonvested | 3 years | 4 years 2 months 19 days |
Vested stock options | 98,750 | 79,375 |
Weighted-average exercise price, vested options | $ 3.43 | $ 3.36 |
Weighted average contractual term | 1 year 8 months 23 days | 2 years 4 months 10 days |
Fair value of stock options, vested and outstanding | $ 338 | $ 267 |
Aggregate intrinsic value options exercised | $ 121 | $ 187 |
Director 2017 [Member] | ||
Shares authorized | 300,000 | |
Stock-based compensation expense | $ 33 | |
Director 2007 [Member] | ||
Shares authorized | 500,000 | |
Exercised during period | 0 | 0 |
Stock-based compensation expense | $ 0 | $ 12 |
Vested stock options | 390,000 | 415,000 |
Weighted-average exercise price, vested options | $ 3.41 | $ 3.36 |
Weighted average contractual term | 2 years 18 days | 2 years 11 months 5 days |
Fair value of stock options, vested and outstanding | $ 1,331 | $ 1,393 |
27. NON-CONTROLLING INTEREST (D
27. NON-CONTROLLING INTEREST (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Non-controlling interest | ||
Net income | $ 1,290 | $ 1,455 |
Dividend declared by subsidiary | (189) | (177) |
Translation adjustment | 728 | (679) |
Noncontrolling Interest | ||
Non-controlling interest | ||
Beginning balance | 1,426 | 1,614 |
Net income | 106 | 139 |
Dividend declared by subsidiary | (189) | (177) |
Translation adjustment | 179 | (150) |
Ending balance | $ 1,522 | $ 1,426 |
27. NON-CONTROLLING INTEREST 99
27. NON-CONTROLLING INTEREST (Details Narrative) | Jun. 30, 2018 |
Controlling Interest 1 [Member] | |
Non controlling interest | 45.00% |
Controlling Interest 2 [Member] | |
Non controlling interest | 45.00% |
Controlling Interest 3 [Member] | |
Non controlling interest | 24.00% |