Trio-Tech Reports Fiscal 2013 Results

VAN NUYS, Calif.--(BUSINESS WIRE)-- Trio-Tech International (NYSE MKT:TRT) today announced financial results for the fourth quarter and fiscal 2013, highlighted by:

  • A profitable fourth quarter versus a year-earlier loss
  • A sharply narrower loss from continuing operations for fiscal 2013 versus prior year
  • Improved gross margin for the 2013 fourth quarter and year versus 2012
  • Lower operating expenses for the 2013 fourth quarter and year versus 2012
  • Increased cash flow from operations for fiscal 2013
  • Shareholders' equity increased to $6.20 per share

Fourth Quarter Results


For the three months ended June 30, 2013, revenue decreased 22.9% to $8,516,000, compared to $11,043,000 for the fourth quarter of fiscal 2012, primarily the result of lower product shipments during the quarter only partially offset by higher testing services volume. However, gross margin improved to 20.2% of revenue, compared to 17% of revenue for the prior year, and operating expenses decreased 18.2%. As a result, operating profit from continuing operations for the fourth quarter of fiscal 2013 improved to $97,000, compared to an operating loss from continuing operations for the fourth quarter of fiscal 2012 of $104,000.

Net income attributable to Trio-Tech common shareholders for the fourth quarter of fiscal 2013 was $46,000, or $0.01 per diluted share, after a net loss from the discontinued fabrication services business of $114,000, or $0.03 per share. For the fourth quarter of fiscal 2012, the net loss attributable to Trio-Tech common shareholders was $578,000, or $0.17 per share, after a net loss from the discontinued fabrication business of $446,000, or $0.13 per share. As previously announced, Trio-Tech terminated its fabrication facilities lease in December, 2012.

Fiscal Year Results

For the twelve months ended June 30, 2013, revenue increased 2.2% to $31,770,000, compared to $31,100,000 for fiscal 2012, driven by a 16.3% increase in testing services revenue which more than offset a 7.9% decrease in revenue from product sales. Gross margin improved to 20% of revenue for fiscal 2013, compared to 16.5% of revenue for the prior fiscal year, and operating expenses decreased 9.7%. The pre-tax loss from continuing operations for fiscal 2013 narrowed to $628,000, compared to $2,579,000 for fiscal 2012.

The net loss attributable to Trio-Tech common shareholders for fiscal 2013 of $1,019,000, or $0.31 per share, included a net loss from the discontinued fabrication services business of $348,000, or $0.11 per share, net of tax. For 2012, the net loss attributable to Trio-Tech common shareholders was $3,104,000, or $0.94 per share, after a net loss from the discontinued fabrication services business of $823,000, or $0.25 per share, net of tax.

Cash provided by operations for fiscal 2013 increased to $3,492,000, compared to cash used in operations for fiscal 2012 of $3,660,000. Shareholders' equity at June 30, 2013 was $20,606,000, or $6.20 per outstanding share, compared to $20,556,000, or $6.19 per outstanding share, at June 30, 2012.

CEO Comments

"The positive impact of our program to streamline our operations and control costs was clearly evident in our financial performance for the 2013 fourth quarter and fiscal year, as gross margin improved, operating costs decreased and operating earnings rose. The increase in testing services revenue accompanied by a decrease in product revenue for fiscal 2013 compared to prior year demonstrates yet again that rapid change is inevitable in the semiconductor industry, so operating efficiency and our ability to adjust quickly to changing business circumstances are critical to the success we have enjoyed over the years.

"Just as important is our commitment to delivering top-quality semiconductor testing equipment and testing services to our customers throughout Asia, which has helped us retain customers for the long term and attract new ones. Underscoring our commitment to quality, during fiscal 2013 our testing operations in Singapore, Malaysia, Suzhou, Thailand and Tianjin were re-certified to ISO 9001-2008 standards. In addition, our Singapore lab was re-certified to ISO 14001-2004 standards as well as biz SAFE Level 3 workplace safety and health standards, our lab in Malaysia achieved ISO/TS16949 LOC certification, and our Tianjin operations were re-certified to ISO/TS16949 LOC standards. We believe Trio-Tech is well positioned for the future.

"While we were disappointed by the results of our initiative in the fabrication business, our goal to deliver consistent growth and profitability remains the same. A growth company cannot be built through cost cutting alone, which is why we continue to search for opportunities to enhance Trio-Tech's potential by entering new markets directly or through acquisition. We continue to evaluate a range of growth opportunities that are available to us, ever mindful of the necessity to protect our existing businesses and Trio-Tech's strong and flexible balance sheet," said SW Yong, Trio-Tech's CEO.

About Trio-Tech

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

Forward-Looking Statements

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

 

TRIO-TECH INTERNATIONAL AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(IN THOUSANDS, EXCEPT EARNINGS PER SHARE)
   
 
Three Months Ended Twelve Months Ended
June 30, June 30,
Revenue   2013       2012     2013       2012  
Products $ 4,536 $ 7,345 $ 16,609 $ 18,030
Testing Services 3,944 3,675 15,029 12,922
Fabrication Services -- -- -- --
Others   36     23     132     148  
  8,516     11,043     31,770     31,100  
Cost of Sales
Cost of products sold 4,051 6,267 14,414 15,192
Cost of testing services rendered 2,734 2,862 10,874 10,659
Cost of fabrication services rendered (20 ) -- -- --
Others   34     35     131     110  
6,799 9,164 25,419 25,961
 
Gross Margin 1,717 1,879 6,351 5,139
 
Operating Expenses (Gains) :
General and administrative 1,468 1,741 6,450 7,105
Selling 137 168 537 582
Research and development 64 74 281 295
(Gain) Loss on disposal of property, plant and equipment   (49 )   --     (56 )   4  
Total operating expenses   1,620     1,983     7,212     7,986  
 
Income (Loss) from Operations 97 (104 ) (861 ) (2,847 )
 
Other Income (Expenses)
Interest expenses (61 ) (78 ) (287 ) (271 )
Other income, net   131     104     520     539  
Total other income   70     26     233     268  
 
Income (Loss) from continuing operations before Income Taxes 167 (78 ) (628 ) (2,579 )
Income Tax Benefit (Expense)   165     (49 )   260     65  
 
Income (Loss) from continuing operations before non-controlling interest, net of tax 332 (127 ) (368 ) (2,514 )
 
Equity in loss of unconsolidated joint venture, net of tax -- -- -- (11 )
 
Loss from discontinued operations, net of tax   (213 )   (852 )   (734 )   (1,850 )
 
NET INCOME (LOSS) $ 119   $ (979 ) $ (1,102 ) $ (4,375 )
 
Less: Net (Loss) income attributable to the non-controlling Interest   (73 )   401     83     1,271  
Net Income (Loss) Attributable to Trio-Tech International Common Shareholders 46 (578 ) (1,019 ) (3,104 )
 
Amounts Attributable to Trio-Tech International Common Shareholders:
Income (Loss) from continuing operations, net of tax 160 (132 ) (671 ) (2,281 )
Loss from discontinued operations, net of tax   (114 )   (446 )   (348 )   (823 )
 
Net (Loss) Attributable to Trio-Tech International Common Shareholders 46 (578 ) (1,019 ) (3,104 )
 
Comprehensive Loss Attributable to Trio-Tech International Common Shareholders:
 
Net Income (Loss) $ 120 $ (979 ) $ (1,102 ) $ (4,375 )
 
Foreign currency translation, net of tax   (30 )   (334 )   634     (250 )
Comprehensive Loss 90

(1,313

)

(468 ) (4,625 )
 
Less: Comprehensive loss (income) attributable to non-controlling interest   (67 )   386     (58 )   1,249  
 
Comprehensive (Loss) Attributable to Trio-Tech International Common Shareholders 23 (927 ) (526 ) (3,376 )
 
Loss per Share Attributable to Trio-Tech International Common Shareholders:
From continuing operations - basic and diluted $ 0.04 $ (0.04 ) $ (0.20 ) $ (0.69 )
From discontinued operations - basic and diluted   (0.03 )   (0.13 )   (0.11 )   (0.25 )
 

Net Loss Attributable to Trio-Tech International Common Shareholders - basic and diluted

$

0.01

 

 

$

(0.17

)

 

$

(0.31

)

 

$

(0.94

)

 
Weighted average common shares outstanding - basic and diluted 3,322 3,322 3,322 3,322
 
 
TRIO-TECH INTERNATIONAL AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT NUMBER OF SHARES)
 
   
Year ended
June 30,
  2013   2012
ASSETS
 
CURRENT ASSETS:
  Cash and cash equivalents $ 2,793 $ 1,572
Short-term deposits 104 250
Trade accounts receivable, net 8,728 11,311
Other receivables 993 962
Loans receivable from property development projects 1,139 1,101
Inventories, net 2,463 2,324
Prepaid expenses and other current assets 358 406
Assets held for sale   --   130
   

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