May 14, 2012 at 07:45 AM EDT
Trio-Tech Reports Third Quarter Results

Trio-Tech International (AMEX:TRT) today announced unaudited financial results for the third quarter and first nine months of fiscal 2012.

Third Quarter Results

For the three months ended March 31, 2012, revenue increased 29.0% to $7,522,000 compared to $5,829,000 for the third quarter of fiscal 2011, and increased 13.6% sequentially $6,619,000 for the second quarter of fiscal 2012. The increase in revenue was primarily the result of higher sales of the Company's proprietary semiconductor test equipment products to a major customer, and higher semiconductor testing volume in China. These increases were partly offset by slightly lower revenue in the Company's fabrication services and real estate segments.

The net loss attributable to Trio-Tech International common shareholders for the third quarter of fiscal 2012 was $518,000, or $0.16 per share. This compares to a net loss of $462,000, or $0.14 per share, for the third quarter of fiscal 2011, and to a net loss of $1,203,000, or $0.36 per share, for the second quarter of fiscal 2012.

Revenue from product sales increased 61.0% to $4,268,000 for the third quarter of fiscal 2012 compared to $2,650,000 for the third quarter of fiscal 2011, primarily the result of higher sales of the Company's proprietary semiconductor test equipment products to a major customer. Revenue from testing services increased 5.0% to $3,141,000 for this year's third quarter compared to $2,992,000 for the same period last year, driven by an increase in testing orders from customers served by the Company's facilities in Tianjin and Suzhou, China. Revenue from the Company's oil and gas equipment fabrication business decreased to $83,000 for the third quarter of fiscal 2012 compared to $138,000 for the third quarter of fiscal 2011, primarily the result of differences in percentage of completion of projects between the two periods. Revenue from the Company's real estate segment was $30,000 for the third quarter of fiscal 2012 compared to $49,000 for the third quarter of fiscal 2011.

Gross margin as a percentage of revenue for the third quarter of fiscal 2012 decreased to 12.3% compared to 24.2% for the third quarter of fiscal 2011, but increased sequentially compared to 11.4% for the second quarter of fiscal 2012. The year-over-year decrease in gross margin was primarily due to a decrease in gross margin in the Company's volume-driven testing segment to 17.3% compared to 34.9% a year earlier, although gross margin in this segment increased sequentially compared to 8.8% for the second quarter of fiscal 2012. Product segment gross margin improved to 16.2% compared to 15.4% for last year's third quarter. Gross profit in the fabrication business was negative $320,000 compared to negative $53,000 for the third quarter of fiscal 2011. Real estate segment gross profit was 23.3% of revenue for this year's third quarter compared to 20.4% for the third quarter of fiscal 2011.

General and administrative expenses decreased 18.9% to $1,620,000 for the third quarter of fiscal 2012 compared to $1,997,000 for the third quarter of fiscal 2011, primarily attributable to reduced payroll expense in the Company's Singapore office.

The loss from operations for the third quarter of fiscal 2012 was $933,000 compared to a loss from operations of $609,000 for the third quarter of fiscal 2011 and a loss from operations of $1,606,000 for the second quarter of fiscal 2012.

Balance Sheet Highlights

As of March 31, 2012, Trio-Tech reported cash and cash equivalents, restricted term deposits and short-term deposits of $6,246,000, working capital of $5,533,000, short-term lines of credit and short-term and long-term loans payable of $7,264,000, and shareholders' equity of $21,859,000, or $6.58 per outstanding share. At June 30, 2011, Trio-Tech reported cash and cash equivalents, restricted term deposits and short-term deposits of $6,872,000, working capital of $7,256,000, short-term lines of credit and short-term and long-term loans payable of $4,248,000, and shareholders' equity of $24,977,000, or $7.52 per outstanding share.

CEO Comments

"Compared to this year's second quarter, revenue in the third quarter was higher, margins improved slightly, and the net loss was reduced significantly. Our core semiconductor test equipment and testing services businesses performed especially well in the quarter. We are encouraged by these improvements and are working hard to generate the consistent top-line growth that is critical to returning Trio-Tech to sustained profitability," said SW Yong, Trio-Tech's CEO.

Nine Month Results

For the nine months ended March 31, 2012, revenue decreased 19.2% to $22,940,000 compared to $28,407,000 for the first nine months of fiscal 2011. The net loss attributable to Trio-Tech International common shareholders for the first nine months of fiscal 2012 was $2,525,000, or $0.76 per share. This compares to net income for the first nine months of fiscal 2011 of $216,000, or $0.06 per diluted share.

About Trio-Tech

Established in 1958 and headquartered in Van Nuys, California, Trio-Tech International is a diversified business group with interests in semiconductor testing services, manufacturing and distribution of semiconductor testing equipment, oil and gas equipment fabrication and real estate. Further information about Trio-Tech's semiconductor products and services can be obtained from the Company's Web site at www.triotech.com, www.universalfareast.com, www.shi-international.com and www.ttsolar.com.

Forward-Looking Statements

This press release contains statements that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and assumptions regarding future activities and results of operations of the Company. In light of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, the following factors, among others, could cause actual results to differ materially from those reflected in any forward-looking statements made by or on behalf of the Company: market acceptance of Company products and services; changing business conditions or technologies and volatility in the semiconductor industry, which could affect demand for the Company's products and services; the impact of competition; problems with technology; product development schedules; delivery schedules; changes in military or commercial testing specifications which could affect the market for the Company's products and services; difficulties in profitably integrating acquired businesses, if any, into the Company; risks associated with conducting business internationally and especially in Southeast Asia, including currency fluctuations and devaluation, currency restrictions, local laws and restrictions and possible social, political and economic instability; changes in U.S. and global financial and equity markets, including market disruptions and significant interest rate fluctuations; and other economic, financial and regulatory factors beyond the Company's control. Other than statements of historical fact, all statements made in this Quarterly Report are forward-looking, including, but not limited to, statements regarding industry prospects, future results of operations or financial position, and statements of our intent, belief and current expectations about our strategic direction, prospective and future financial results and condition. In some cases, you can identify forward-looking statements by the use of terminology such as "may," "will," "expects," "plans," "anticipates," "estimates," "potential," "believes," "can impact," "continue," or the negative thereof or other comparable terminology. Forward-looking statements involve risks and uncertainties that are inherently difficult to predict, which could cause actual outcomes and results to differ materially from our expectations, forecasts and assumptions.

TRIO-TECH INTERNATIONAL AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
UNAUDITED (IN THOUSANDS, EXCEPT EARNINGS PER SHARE)
Three Months Ended Nine Months Ended
March 31, March 31,
Revenue 2012 2011 2012 2011
Products $ 4,268 $ 2,650 $ 10,685 $ 17,344
Testing Services 3,141 2,992 9,247 9,659
Fabrication Services 83 138 2,883 396
Other 30 49 125 1,008
7,522 5,829 22,940 28,407
Cost of Sales
Cost of products sold 3,575 2,242 8,925 14,784
Cost of testing services rendered 2,597 1,948 7,797 5,823
Cost of fabrication services rendered 403 191 3,063 594
Other 23 39 75 167
6,598 4,420 19,860 21,368
Gross Margin 924 1,409 3,080 7,039
Operating Expenses:
General and administrative 1,620 1,997 5,884 6,131
Selling 164 115 431 364
Research and development 73 59 221 175
Loss on disposal of property, plant and equipment -- (153 ) 4 (146 )
Total operating expenses 1,857 2,018 6,540 6,524
(Loss) Income from Operations (933 ) (609 ) (3,460 ) 515
Other (Expenses) Income
Interest expenses (83 ) (54 ) (215 ) (173 )
Other income 158 287 179 430
Total other (expenses) income 75 233 (36 ) 257
(Loss) Income from Continuing Operations before Income Taxes (858 ) (376 ) (3,496 ) 772
Income Tax Benefit (Expense) 14 (37 ) 114 (195 )
(Loss) Income from Continuing Operations before Non-controlling interest, net of tax (844 ) (413 ) (3,382 ) 577
Equity in earnings of unconsolidated joint venture, net of tax -- (7 ) (11 ) (7 )
Loss from discontinued operations, net of tax -- -- (2 ) (2 )
NET (LOSS) INCOME $ (844 ) $ (420 ) $ (3,395 ) $ 568
Less: Net (Loss) Income Attributable to the Non-controlling Interest (326 ) 42 (870 ) 352
Net (Loss) Income Attributable to Trio-Tech International (518 ) (462 ) (2,525 ) 216
Amounts Attributable to Trio-Tech International Common Shareholders:
(Loss) Income from Continuing Operations, net of tax (518 ) (462 ) (2,523 ) 218
Loss from Discontinued Operations, net of tax -- -- (2 ) (2 )
Net (Loss) Income Attributable to Trio-Tech International Common Shareholders: (518 ) (462 ) (2,525 ) 216
Comprehensive (Loss) Income Attributable to Trio-Tech Common Shareholders:
Net (Loss) Income $ (844 ) $ (420 ) $ (3,395 ) $ 568
Foreign currency translation, net of tax 193 299 84 1,370
Comprehensive (Loss) Income (651 ) (121 ) (3,311 ) 1,938
Less: Comprehensive (Loss) Income attributable to non-controlling interest (297 ) 211 (863 ) 311

Comprehensive (Loss) Income Attributable to Trio-Tech International

(354

)

(332

)

(2,448

)

1,627

Basic (Loss) Earnings per Share Attributable to Trio-Tech International:
From continuing operations $ (0.16 ) $ (0.14 ) $ (0.76 ) $ 0.07
From discontinued operations -- -- -- --
Net (Loss) Income Attributable to Trio-Tech International $ (0.16 ) $ (0.14 ) $ (0.76 ) $ 0.07
Diluted (Loss) Earnings per Share Attributable to Trio-Tech International:
From continuing operations $ (0.16 ) $ (0.14 ) $ (0.76 ) $ 0.06
From discontinued operations -- -- -- --
Net (Loss) Income Attributable to Trio-Tech International $ (0.16 ) $ (0.14 ) $ (0.76 ) $ 0.06
Weighted average common shares outstanding -- basic 3,322 3,301 3,322 3,277
Weighted average common shares outstanding -- diluted 3,322 3,301 3,322 3,391
TRIO-TECH INTERNATIONAL AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT NUMBER OF SHARES)

March 31, June 30,
2012 2011
ASSETS
CURRENT ASSETS:
Cash & cash equivalents $ 2,150 $ 3,111
Short-term deposits 602 199
Trade accounts receivable, net 7,884 6,812
Other receivables 508 309
Loan receivables from property development projects 1,111 1,083
Inventories, net 3,000 2,430
Prepaid expenses and other current assets 339 348
Assets held for sale 135 137
Total current assets 15,729 14,429
INVESTMENT IN UNCONSOLIDATED JOINT VENTURE 772 764
INVESTMENT PROPERTY IN CHINA, Net 1,215 1,238
PROPERTY, PLANT AND EQUIPMENT, Net 14,231 14,951
OTHER ASSETS 1,424 1,412
RESTRICTED TERM DEPOSITS 3,494 3,562
TOTAL ASSETS $ 36,865 $ 36,356
LIABILITIES AND SHAREHOLDER'S EQUITY
CURRENT LIABILITIES:
Lines of credit $ 2,831 $ 1,333
Accounts payable 3,271 1,874
Accrued expenses 2,700 3,179
Income taxes payable 480 492
Current portion of bank loans payable 761 147
Current portion of capital leases 153 148
Total current liabilities 10,196 7,173
BANK LOANS PAYABLE, net of current portion 3,672 2,768
CAPITAL LEASES, net of current portion 151 271
DEFERRED TAX LIABILITIES 478 677
OTHER NON-CURRENT LIABILITIES 509 490
TOTAL LIABILITIES 15,006 11,379
COMMITMENTS AND CONTINGENCIES -- --
EQUITY
TRIO-TECH INTERNATIONAL'S SHAREHOLDERS' EQUITY:
Common stock, no par value, 15,000,000 shares authorized; 3,321,555 shares
issued and outstanding at March 31, 2012 and June 30, 2011, respectively 10,531 10,531
Paid-in capital 2,420 2,227
Accumulated retained earnings 3,266 5,791
Accumulated other comprehensive gain-translation adjustments 3,536 3,459
Total Trio-Tech International shareholders' equity 19,753 22,008
NON-CONTROLLING INTEREST 2,106 2,969
TOTAL EQUITY 21,859 24,977
TOTAL LIABILITIES AND EQUITY $ 36,865 $ 36,356

Contacts:

Trio-Tech International
A. Charles Wilson
Chairman
(818) 787-7000
or
Investor Contact:
Berkman Associates
(310) 477-3118
info@BerkmanAssociates.com
Related Stocks:
Stock Market XML and JSON Data API provided by FinancialContent Services, Inc.
Nasdaq quotes delayed at least 15 minutes, all others at least 20 minutes.
Markets are closed on certain holidays. Stock Market Holiday List
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.
Press Release Service provided by PRConnect.
Stock quotes supplied by Six Financial
Postage Rates Bots go here