Category: Semiconductors

Trio-Tech Fiscal 2017 Second Quarter Net Income Increased to $0.09 Per Share Versus $0.05 Per Share Last Year On 9.0% Revenue Gain

VAN NUYS, Calif. --  Trio-Tech International (NYSE MKT: TRT) today announced financial results for the second quarter and first six months of fiscal 2017:
 
Revenue increased 9.0% to $9.1 million for this year's second quarter compared to $8.4 million for the second quarter of fiscal 2016.
Second quarter net income attributable to Trio-Tech common shareholders increased 63.2%.
EPS increased to $0.09 per diluted share, compared to $0.05 per share, in the second quarter of fiscal 2017.
Revenue increased 11.0% to $18.1 million compared to $16.3 million for the first six months of fiscal 2016.
Six months net income attributable to Trio-Tech common shareholders increased 36.5%.
EPS increased to $0.17 per diluted share, compared to $0.13 per share, in the first six months of fiscal 2016.
CEO Comments
S.W. Yong, Trio-Tech's CEO, said, "Revenue increased for each of Trio-Tech's businesses in the second quarter of fiscal 2017, compared to the second quarter of fiscal 2016. Semiconductor testing services delivered double digit revenue growth, compared to the second quarter of fiscal 2016, increasing in all regions except for our China operations. This strength was also reflected in our distribution segment, which continues to achieve strong double digit sales gains, primarily due to higher demand from our Asia customer base.
 
"Selling, general and administrative expenses increased during the quarter compared to the second quarter of fiscal 2016, reflecting the Company’s efforts to expand sales of manufactured products and testing services." Yong added that net income for this year's second quarter benefitted from a foreign exchange gain, compared to a foreign exchange loss in the second quarter of fiscal 2016.
 
"We remain cautiously optimistic for the remainder of the fiscal year," Yong concluded.
 
Fiscal 2017 Second Quarter Results
For the three months ended December 31, 2016, revenue increased 9% to $9,104,000 compared to revenue of $8,354,000 for the same quarter last fiscal year. Manufacturing revenue increased 1.3% to $3,320,000 for second quarter of 2017 compared to $3,276,000 in the same quarter last fiscal year. Revenue from semiconductor testing services increased 10.0% to $4,070,000 in second quarter of 2017, compared to $3,701,000 for last year's second quarter. Distribution revenue increased 23.3% to $1,675,000 from $1,359,000 for the second quarter of fiscal 2016.
 
Gross margin for the second quarter of fiscal 2017 was 25.2% compared to 25.3% in the same quarter last year. Increased sales of lower margin products, compared to the same quarter last year, affected gross margins at the manufacturing segment, while higher volume and increased capacity utilization, compared to the same quarter last year, improved gross margins at the testing segment. Distribution gross margin benefitted from an improved product mix at this segment, compared to the same quarter last year.
 
Operating expenses for the second quarter of fiscal 2017 increased to $2,016,000, or 22.1% of revenue, from $1,787,000, or 21.4% of revenue in the same quarter last year. The increase in operating expenses is attributable to higher selling and overhead expenses for manufacturing and testing services segments, compared to the second quarter last year.
 
Other income, related to foreign exchange gains, contributed to a 63.2% increase in second quarter net income attributable to Trio-Tech common shareholders to $310,000, or $0.09 per diluted share, compared to net income attributable to Trio-Tech common shareholders of $190,000, or $0.05 per diluted share, in the second quarter of fiscal 2016.
 
Fiscal 2017 Six Months Results
For the six months ended December 31, 2016, revenue increased 11% to $18,075,000 compared to revenue of $16,284,000 for the same period last fiscal year. Manufacturing revenue increased 9.0% to $6,991,000 for the six months compared to $6,416,000 in the first six months of fiscal 2017. Revenue from semiconductor testing services increased 9.9% to $8,227,000 for the six months compared to $7,484,000 for in the same period last year. Distribution revenue increased 19.1% to $2,779,000 from $2,334,000 for the first six months of fiscal 2016.
 
Gross margin for the first six months of fiscal 2017 was 25.7% compared to 26.4% in the same period in fiscal 2016. The manufacturing segment margin was 22.5% compared to 28.6% in the same period last year and testing services margin was 33.5% compared to 29.8% for the same period last year. Distribution gross margin for the first six months of both fiscal 2016 and 2017 was 10.3%.
 
Operating expenses for the first six months of fiscal 2017 were 22.1% of revenue compared to 22.5% of revenue in the same period of fiscal 2016. Net income attributable to Trio-Tech common shareholders increased 36.5% to $613,000, or $0.17 per diluted share, compared to net income attributable to Trio-Tech common shareholders of $449,000, or $0.13 per diluted share, for the same period in fiscal 2016.
 
Shareholders' equity at December 31, 2016 was $20,087,000, or $5.72 per outstanding share, compared to $20,871,000, or $5.94 per outstanding share, at June 30, 2016. There were approximately 3,513,000 common shares outstanding at December 31, 2016 and June 30, 2016.
 
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, 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, 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 to government policies, potential legislative 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   Six Months Ended
December 31,   December 31,
Revenue   2016       2015       2016       2015  
Manufacturing $ 3,320     $ 3,276     $ 6,991     $ 6,416  
Testing services   4,070       3,701       8,227       7,484  
Distribution   1,675       1,359       2,779       2,334  
Others   39       18       78       50  
    9,104       8,354       18,075       16,284  
Cost of Sales              
Cost of manufactured products sold   2,622       2,471       5,417       4,580  
Cost of testing services rendered   2,658       2,499       5,472       5,257  
Cost of distribution   1,501       1,240       2,492       2,093  
Others   29       29       42       61  
    6,810       6,239       13,423       11,991  
Gross Margin   2,294       2,115       4,652       4,293  
               
Operating Expenses:              
General and administrative   1,776       1,599       3,519       3,261  
Selling   180       141       365       312  
Research and development   52       51       105       97  
Loss (gain) on disposal of property, plant and equipment   8       (4 )     8       (4 )
Total operating expenses   2,016       1,787       3,997       3,666  
Income from Operations   278       328       655       627  
               
Other (Expenses) Income              
Interest expenses   (48 )     (51 )     (106 )     (104 )
Other income, net   203       18       313       226  
Total other income (expenses)   155       (33 )     207       122  
               
Income from Continuing Operations before Income Taxes   433       295       862       749  
Income Tax Expenses   (67 )     (86 )     (150 )     (153 )
Income from Continuing Operations              
before Non-controlling Interest, Net of Tax   366       209       712       596  
(Loss) income from Discontinued Operations, Net of Tax   (4 )     6       (3 )     (4 )
NET INCOME   362       215       709       592  
               
Less: Income Attributable to Non-controlling Interest   52       25       96       143  
Net Income Attributable to Trio-Tech International $ 310     $ 190     $ 613     $ 449  
               
Net Income Attributable to Trio-Tech International:              
               
Income from Continuing Operations, Net of Tax   316       188       619       452  
(Loss) income from Discontinued Operations, Net of Tax   (6 )     2       (6 )     (3 )
Net Income attributable to Trio-Tech International $ 310     $ 190     $ 613     $ 449  
               
Net income per share - basic $ 0.09     $ 0.05     $ 0.18     $ 0.13  
Net income per share - diluted   0.09       0.05       0.17       0.13  
                               
Weighted Average Shares Outstanding - Basic   3,513       3,513       3,513       3,513  
Weighted Average Shares Outstanding - Diluted   3,569       3,529       3,552       3,525  
                               
TRIO-TECH INTERNATIONAL AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
UNAUDITED (IN THOUSANDS, EXCEPT EARNINGS PER SHARE)
 
 
  Three Months Ended   Six Months Ended
December 31,   December 31,
2016   2015   2016   2015
               
Comprehensive (Loss) Income              
Attributable to Trio-Tech International:              
               
Net income $ 362     $ 215   $ 709     $ 592  
               
Foreign Currency Translation, Net of Tax   (1,094 )     22     (1,377 )     (1,403 )
Comprehensive (Loss) Income   (732 )     237     (668 )     (811 )
               
Less: Comprehensive (Loss) Income              
Attributable to Non-controlling Interest   (16 )     114     (37 )     (138 )
Comprehensive (Loss) Income              
Attributable to Trio-Tech International $ (716 )   $ 123   $ (631 )   $ (673 )
                             

TRIO-TECH INTERNATIONAL AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT NUMBER OF SHARES)
 
  Dec. 31,   Jun. 30,
2016   2016
ASSETS (unaudited)    
       
CURRENT ASSETS:      
Cash and cash equivalents $ 4,336   $ 3,807
Short-term deposits   658     295
Trade accounts receivable, net   7,577     8,826
Other receivables   316     596
Inventories, net   1,666     1,460
Prepaid expenses and other current assets   363     264
Assets held for sale   82     92
Total current assets   14,998     15,340
       
Deferred tax assets   371     401
Investment properties, net   1,234     1,340
Property, plant and equipment, net   10,290     11,283
Other assets   1,882     1,788
Restricted term deposits   1,921     2,067
Total non-current assets   15,698     16,879
TOTAL ASSETS $ 30,696   $ 32,219
       
LIABILITIES AND SHAREHOLDER'S EQUITY      
       
CURRENT LIABILITIES:      
Lines of credit $ 1,419   $ 2,491
Accounts payable   3,730     2,921
Accrued expenses   2,681     2,642
Income taxes payable   204     230
Current portion of bank loans payable   235     342
Current portion of capital leases   209     235
Total current liabilities   8,478     8,861
       
Bank loans payable, net of current portion   1,454     1,725
Capital leases, net of current portion   398     503
Deferred tax liabilities   237     216
Other non-current liabilities   42     43
Total non-current liabilities   2,131     2,487
TOTAL LIABILITIES   10,609     11,348
COMMITMENTS AND CONTINGENCIES   --     --
       
EQUITY      
       
TRIO-TECH INTERNATIONAL'S SHAREHOLDERS' EQUITY:      
Common stock, no par value, 15,000,000 shares authorized; 3,513,055 shares      
issued and outstanding at December 31, 2016 and June 30, 2016, respectively   10,882     10,882
Paid-in capital   3,189     3,188
Accumulated retained earnings   3,638     3,025
Accumulated other comprehensive gain-translation adjustments   918     2,162
Total Trio-Tech International shareholders' equity   18,627     19,257
       
Non-controlling interest   1,460     1,614
TOTAL EQUITY   20,087     20,871
TOTAL LIABILITIES AND EQUITY $ 31,696   $ 32,219

 

 

Contacts:

Company Contact:
Trio-Tech International
A. Charles Wilson
Chairman
(818) 787-7000
or
Investor Contact:
Berkman Associates
(310) 477-3118
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