Trio-Tech Reports Nine Month Net Income of $0.38 Per Share Versus $0.10 on 39% Increase in Revenue; Third Quarter Revenue Increased 37%

Rhea-AI Summary

Trio-Tech International (NYSE MKT: TRT) reported a 37% revenue increase to $11.14 million for Q3 fiscal 2022, up from $8.11 million year-over-year. Distribution revenue soared 147% to $3.62 million, while testing services rose 26% to $4.42 million. However, manufacturing revenue dipped 1% to $3.10 million. The net loss was $167,000 for Q3, compared to net income of $178,000 last year. For the first nine months, revenue jumped 39% to $32.23 million. The company established a joint venture in Suzhou, China, aimed at semiconductor services.

Positive

• Q3 revenue increased 37% to $11.14 million.
• Distribution revenue rose 147% to $3.62 million.
• Testing services revenue increased 26% to $4.42 million.
• Nine-month revenue up 39% to $32.23 million.
• Gross margin increased to 27% of revenue for the first nine months.
• Net income for nine months increased to $1.61 million.

Negative

• Net loss of $167,000 in Q3 compared to net income last year.
• Manufacturing revenue decreased by 1%.
• Temporary shutdown in Tianjin resulted in $260,000 lost revenue.

VAN NUYS, Calif.--(BUSINESS WIRE)-- Trio-Tech International (NYSE MKT: TRT) today announced financial results for the third quarter and first nine months of fiscal 2022.

Third Quarter Results

Revenue for the third fiscal quarter increased 37% to $11,138,000 from $8,112,000 for the same quarter of fiscal 2021. Distribution revenue increased 147% to $3,620,000 from $1,467,000 last year. Testing services revenue increased 26% to $4,417,000 from $3,504,000 a year ago. Manufacturing revenue decreased 1% to $3,097,000 compared to $3,130,000 last year.

Gross margin increased 20% to $2,474,000 compared to $2,060,000 for last year’s third quarter, reflecting improved margins in the Company’s testing and distribution segments, offset by lower margins in manufacturing.

Total other income was $96,000, compared to $248,000 in the same quarter last year. In the third quarter this year, government grants to offset the negative impact of the COVID-19 pandemic were $Nil, compared to $107,000 in similar governmental grants in the same quarter last year.

The net loss attributable to Trio-Tech International Common Shareholders for the three months ended March 31, 2022 was $167,000, or $0.04 per share, which includes non-cash stock compensation expenses of $433,000. This compares to net income of $178,000, or $0.04 per diluted share, including non-cash stock compensation expenses of $129,000, for the same quarter last year.

Nine Months Results

For the first nine months of fiscal 2022, revenue increased 39% to $32,231,000 compared to $23,154,000 for the first nine months of fiscal 2021, reflecting a 40% increase in testing services revenue to $13,983,000 from $10,018,000, a 112% increase in distribution revenue to $8,038,000 from $3,790,000, and a 9% increase in manufacturing revenue to $10,187,000 from $9,324,000.

Gross margin for the first nine months of fiscal 2022 increased 57% to $8,543,000, or 27% of revenue, from $5,448,000, or 24% of revenue, for the first nine months last year.

General and administrative expenses increased to $6,305,000, or 20% of revenue, for the first nine months of fiscal 2022 from $5,245,000, or 23% of revenue, for the same period last year, while total operating expenses increased to $7,047,000, or 22% of revenue, from $5,877,000, or 25% of revenue.

Net income attributable to Trio-Tech International Common Shareholders for the first nine months of fiscal 2022 was $1,605,000, or $0.38 per diluted share, compared to $405,000, or $0.10 per diluted share, for the first nine months of fiscal 2021.

Shareholders' equity at March 31, 2022 was $28,120,000, or $6.98 per outstanding share, compared to $25,634,000, or $6.55 per outstanding share, at June 30, 2021. There were approximately 4,029,180 common shares outstanding at March 31, 2022.

CEO Comments

S.W. Yong, Trio-Tech's CEO, said, "We were required to close our facility in Tianjin, China for several days in January in compliance with the city government’s lockdown measures for mandatory testing of residents under China’s ZERO-COVID policy. We resumed full operations in Tianjin on January 21, 2022. This temporary shut-down resulted in lost revenue for the fiscal third quarter of approximately $260,000. Despite this, we posted sharp revenue gains in our testing services and distribution operations for the third quarter, typically the weakest quarter of our fiscal year, which is an encouraging sign of improving business conditions for our customers and their gradual recovery from the effects of the pandemic. We are cautiously optimistic about the business outlook for the fourth quarter.”

Yong added, “During the third quarter, we established our new joint venture company, Trio-Tech (Jiangsu) Co. Ltd. to provide sub-contract services to semiconductor and other electronics industries, primarily in Suzhou, China. While this joint venture has commenced operations and recently signed its first customer contract, it is not expected to contribute substantially to operating results in the current fiscal year.

“The Board of Directors would like to thank and congratulate our Chief Financial Officer, Mr. Victor Ting, upon his retirement next month, for his many years of service and innumerable contributions to the Company. His valuable knowledge will continue to benefit Trio-Tech as he serves on our Board of Directors. Taking over his duties as CFO beginning in Fiscal 2023 will be Ms. Srinivasan Anitha, a Chartered Accountant and Certified Internal Auditor who has worked closely with the Company and its management for the past 15 years. We believe her thorough knowledge and experience of our business and background will be a significant asset as we work to improve operating margins and drive increased shareholder value in the coming years,” he said.

About Trio‑Tech

Established in 1958, Trio-Tech International is located in Van Nuys, California, with its Principal Executive Office and regional headquarter in Singapore. Trio-Tech International is a diversified business group with interests in semiconductor testing services, manufacturing and distribution of semiconductor testing equipment, and real estate. Our subsidiary locations include Tianjin, Suzhou, Chongqing in China, as well as Kuala Lumpur Malaysia and Bangkok Thailand. Further information about Trio-Tech's semiconductor products and services can be obtained from the Company's Web site at triotech.com and www.universalfareast.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 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; public health issues related to the COVID-19 pandemic; trade tension between U.S. and China 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		2022				2021				2022			2021
Manufacturing		$	3,097			$	3,130			10,187			$	9,324
Testing Services			4,417				3,504			13,983				10,018
Distribution			3,620				1,467			8,038				3,790
Real Estate			4				11			23				22
			11,138				8,112			32,231				23,154
Cost of Sales
Cost of manufactured products sold			2,530				2,148			7,838				6,855
Cost of testing services rendered			3,169				2,651			9,141				7,651
Cost of distribution			2,945				1,234			6,651				3,142
Cost of real estate			20				19			58				58
			8,664				6,052			23,688				17,706
Gross Margin			2,474				2,060			8,543				5,448
Operating Expenses:
General and administrative			2,378				1,923			6,305				5,245
Selling			146				123			449				356
Research and development			80				79			293				277
Gain on disposal of property, plant and equipment			--				--			--				(1	)
Total operating expenses			2,604				2,125			7,047				5,877
(Loss) Income from Operations			(130	)			(65	)		1,496				(429	)
Other Income (Expenses)
Interest expense			(31	)			(25	)		(87	)			(96	)
Other income, net			127				273			669				627
Total other income			96				248			582				531
(Loss) Income from Continuing Operations before Income Taxes			(34	)			183			2,078				102
Income Tax Expenses			(170	)			(118	)		(503	)			(125	)
(Loss) Income from Continuing Operations
before Non-controlling Interest, net of tax			(204	)			65			1,575				(23	)
Income (loss) from Discontinued Operations, net of tax			--				1			5				(26	)
NET (LOSS) INCOME			(204	)			66			1,580				(49	)
Less: Net (loss) Attributable to Non-controlling Interest			(37	)			(112	)		(25	)			(454	)
Net (Loss) Income Attributable to Trio-Tech International			(167	)			178			1,605				405
Net Income Attributable to Trio-Tech International:
(Loss) Income from Continuing Operations, net of tax			(167	)			177			1,603				418
Income (loss) from Discontinued Operations, net of tax			--				1			2				(13	)
Net (Loss) Income Attributable to Trio-Tech International		$	(167	)		$	178			1,605			$	405
Basic (Loss) Earnings per Share		$	(0.04	)		$	0.05			0.40			$	0.11
Diluted (Loss) Earnings per Share		$	(0.04	)		$	0.04			0.38			$	0.10
Weighted Average Shares Outstanding - Basic			3,949				3,913			3,949				3,913
Weighted Average Shares Outstanding - Diluted			4,221				4,046			4,140				4,030

TRIO‑TECH INTERNATIONAL AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
UNAUDITED (IN THOUSANDS)
		Three Months Ended								Nine Months Ended
		March 31,								March 31,
		2022				2021				2022				2021
Comprehensive (Loss) Income
Attributable to Trio-Tech International:
Net (loss) income		$	(204	)		$	66			$	1,580			$	(49	)
Foreign Currency Translation, net of tax			16				(468	)			(22	)			1,115
Comprehensive (Loss) Income			(188	)			(402	)			1,558				1,066
Less: Comprehensive Income (Loss)
Attributable to Non-controlling Interest			(46	)			(136	)			(40	)			(455	)
Comprehensive (Loss) Income
Attributable to Trio-Tech International		$	(142	)		$	(266	)		$	1,598			$	1,521

TRIO‑TECH INTERNATIONAL AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT NUMBER OF SHARES)
		Mar. 31,			Jun. 30,
		2022			2021
ASSETS		(unaudited)
CURRENT ASSETS:
Cash and cash equivalents		$	7,478		$	5,836
Short-term deposits			4,953			6,651
Trade accounts receivable, net			10,585			8,293
Other receivables			735			325
Contract assets			594			337
Inventories, net			2,272			2,080
Prepaid expenses and other current assets			732			418
Financed Sales Receivable			21			19
Total current assets			27,370			23,959
Deferred tax assets			189			217
Investment properties, net			636			681
Property, plant and equipment, net			9,107			9,531
Operating lease right-of-use assets			2,602			1,876
Other assets			141			262
Restricted term deposits			1,735			1,741
Financed Sales Receivable			23			39
Total non-current assets			14,433			14,347
TOTAL ASSETS		$	41,803		$	38,306
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Lines of credit		$	523		$	72
Accounts payable			2,220			3,702
Accrued expenses			3,870			2,690
Contract Liabilities			1,172			673
Income taxes payable			476			314
Current portion of bank loans payable			493			439
Current portion of finance leases			136			197
Current portion of operating leases			758			672
Total current liabilities			9,648			8,759
Bank loans payable, net of current portion			1,470			1,621
Finance leases, net of current portion			152			253
Operating leases, net of current portion			1,844			1,204
Income taxes payable			281			385
Other non-current liabilities			31			31
Total non-current liabilities			3,778			3,494
TOTAL LIABILITIES			13,426			12,253
EQUITY
TRIO-TECH INTERNATIONAL'S SHAREHOLDERS' EQUITY:
Common stock, no par value, 15,000,000 shares authorized; 4,029,180 and 3,913,055
shares issued and outstanding at March 31, 2022 and June 30, 2021, respectively			12,607			12,178
Paid-in capital			4,692			4,233
Accumulated retained earnings			8,429			6,824
Accumulated other comprehensive gain-translation adjustments			2,392			2,399
Total Trio-Tech International shareholders' equity			28,120			25,634
Non-controlling interest			257			419
TOTAL EQUITY			28,377			26,053
TOTAL LIABILITIES AND EQUITY		$	41,803		$	38,306

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220516005414/en/

Company Contact:

A. Charles Wilson

Chairman

(818) 787-7000

Investor Contact:

Berkman Associates

(310) 927-3108

robert.jacobs@jacobscon.com

Source: Trio-Tech International

FAQ

What were the Q3 2022 financial results for Trio-Tech (TRT)?

Trio-Tech reported a 37% revenue increase to $11.14 million for Q3 2022. However, there was a net loss of $167,000.

How did distribution revenue perform for Trio-Tech in Q3 2022?

Distribution revenue surged 147% to $3.62 million compared to the same quarter last year.

What is the joint venture announced by Trio-Tech (TRT)?

Trio-Tech established a joint venture in Suzhou, China, aimed at providing subcontract services primarily to the semiconductor industry.

What was Trio-Tech's net income for the first nine months of fiscal 2022?

The net income was $1.61 million for the first nine months of fiscal 2022.

How did COVID-19 impact Trio-Tech's Q3 results?

A mandatory shutdown in Tianjin due to COVID-19 led to an estimated loss of $260,000 in revenue.