Trio-Tech Reports Second Quarter Net Income of $0.06 Per Diluted Share

Rhea-AI Summary

Trio-Tech International (NYSE MKT: TRT) reported a 9% decline in revenue for Q2 fiscal 2021 to $8,201,000. Manufacturing revenue rose by 17% while semiconductor testing services dropped 8%. Distribution revenue saw a significant 47% decrease. Overall gross margin improved to 23% of revenue. Net income fell to $235,000 from $426,000 year-over-year. For the first half of fiscal 2021, total revenue dropped 20% to $15,042,000, with a net income of $227,000, compared to $699,000 in the previous year.

Positive

• Manufacturing revenue increased 17% to $3,569,000.
• Gross margins improved to 23% in Q2 fiscal 2021.
• Operating expenses decreased 8% to $1,907,000 in Q2 fiscal 2021.

Negative

• Overall revenue decreased 9% in Q2 fiscal 2021.
• Distribution revenue dropped 47% to $1,065,000.
• Net income decreased to $235,000 from $426,000 year-over-year.
• Total revenue fell 20% in the first half of fiscal 2021.

02/11/2021 - 08:30 AM

Trio-Tech International (NYSE MKT: TRT) today announced financial results for the second quarter and first six months of fiscal 2021.

Fiscal 2021 Second Quarter Results

For the three months ended December 31, 2020, revenue decreased 9% to $8,201,000 compared to revenue of $8,962,000 for the second quarter of fiscal 2020. Manufacturing revenue increased 17% to $3,569,000 compared to $3,045,000 a year earlier. Semiconductor testing services revenue decreased 8% to $3,560,000 compared to $3,887,000 last year. Distribution revenue decreased 47% to $1,065,000 compared to $2,014,000 for the comparable quarter last year.

Higher margins in manufacturing and distribution increased overall gross margin to 23% of revenue, or $1,870,000, for the second quarter fiscal 2021 compared to 21% of revenue, or $1,905,000, for the same quarter last year.

Operating expenses decreased 8% to $1,907,000, or 23% of revenue, compared to $2,078,000, or 23% of revenue, for last year’s second quarter. The loss from operations for this year’s second quarter was $37,000, compared to a loss from operations a year earlier of $173,000.

Other income for the second quarter was $143,000, which included government assistance to Singapore and Malaysia operations totaling $101,000 to mitigate the adverse business impact of the pandemic. In the same quarter last year, other income was $40,000.

Net income for the second quarter of fiscal 2021 was $235,000, or $0.06 per diluted share. Net income for the second quarter of fiscal 2020 of $426,000, or $0.11 per diluted share, benefitted from a one-time gain of $1,172,000 related to the sale of assets held for sale.

Shareholders' equity at December 31, 2020 was $26,548,000, or $7.15 per outstanding share, compared to $25,146,000, or $6.84 per outstanding share, at June 30, 2020. There were approximately 3,710,555 Trio-Tech International common shares outstanding at December 31, 2020.

CEO Comments

S.W. Yong, Trio-Tech's CEO, said, "We delivered better gross margins and lower expenses in the second quarter, contributing to a sharp improvement in our operating performance compared to the same quarter last year. We also delivered a sequential improvement in top and bottom-line results compared to the first quarter of fiscal 2021 as our order rate trended higher, which is another encouraging sign. Despite our reassuring strong balance sheet and successful control of operating expenses, we continue to be cautious about our business, as the economic effects of the Covid pandemic continue."

Fiscal 2021 First Half Results

For the first six months of fiscal 2021, revenue decreased 20% to $15,042,000 compared to $18,785,000 for the same period last year. Manufacturing revenue decreased 3% to $6,194,000, compared to $6,362,000 last year. Semiconductor testing services revenue decreased 21% to $6,514,000 compared to $8,277,000, and distribution revenue decreased 44% to $2,323,000 compared to $4,113,000 a year ago.

Overall gross margin for the first six months of fiscal 2021 decreased 18% to $3,388,000, but improved, as a percent of revenue, to 23%. This compares to an overall gross margin of $4,157,000, or 22% of revenue, for the same period last year.

Operating expenses for the first six months of fiscal 2021 decreased 9% to $3,752,000, or 25% of revenue, compared to $4,108,000, or 22% of revenue, for the first six months of fiscal 2020.

Net income for the first half of fiscal 2021 was $227,000, or $0.06 per diluted share. This compares to net income of $699,000, or $0.19 per diluted share, for the first half of fiscal 2020. Net income for last year’s first half included a $1,172,000 gain on the sale of assets held for sale.

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 www.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; the trade tension between U.S. and China; public health issues related to the 2019-Novel Coronavirus 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
UNAUDITED (IN THOUSANDS, EXCEPT EARNINGS PER SHARE)
		Three Months Ended								Six Months Ended
		December 31,								December 31,
Revenue		2020				2019				2020				2019
Manufacturing		$	3,569			$	3,045			$	6,194			$	6,362
Testing services			3,560				3,887				6,514				8,277
Distribution			1,065				2,014				2,323				4,113
Real estate			7				16				11				33
			8,201				8,962				15,042				18,785
Cost of Sales
Cost of manufactured products sold			2,770				2,383				4,707				4,938
Cost of testing services rendered			2,678				2,918				5,000				6,109
Cost of distribution			861				1,738				1,908				3,545
Cost of real estate			22				18				39				36
			6,331				7,057				11,654				14,628
Gross Margin			1,870				1,905				3,388				4,157
Operating Expenses:
General and administrative			1,662				1,777				3,322				3,565
Selling			122				176				233				366
Research and development			123				125				198				201
Gain on disposal of property, plant and equipment			--				--				(1	)			(24	)
Total operating expenses			1,907				2,078				3,752				4,108
(Loss) Income from Operations			(37	)			(173	)			(364	)			49
Other Income (Expenses)
Interest expenses			(34	)			(55	)			(71	)			(123	)
Gain on sale of asset held for sale			--				1,172				--				1,172
Other income, net			143				40				354				150
Total other income			109				1,157				283				1,199
Income (loss) from Continuing Operations before Income Taxes			72				984				(81	)			1,248
Income Tax Expenses			--				120				7				120
Income (loss) from Continuing Operations before Non-controlling Interest, Net of Tax			72				864				(88	)			1,128
(Loss) Income from Discontinued Operations, Net of Tax			(21	)			1				(27	)			--
NET INCOME (LOSS)			51				865				(115	)			1,128
Less: (Loss) Income Attributable to Non-controlling Interest			(184	)			439				(342	)			429
Net Income Attributable to Trio-Tech International			235				426				227				699
Net Income Attributable to Trio-Tech International:
Income from Continuing Operations, Net of Tax			246				425				241				699
(Loss) Income from Discontinued Operations, Net of Tax			(11	)			1				(14	)			--
Net Income attributable to Trio-Tech International		$	235			$	426			$	227			$	699
Basic Earnings per Share		$	0.06			$	0.12			$	0.06			$	0.19
Diluted Earnings per share		$	0.06			$	0.11			$	0.06			$	0.19
Weighted Average Shares Outstanding - Basic			3,710				3,673				3,710				3,673
Weighted Average Shares Outstanding - Diluted			3,800				3,725				3,793				3,706

TRIO-TECH INTERNATIONAL AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
UNAUDITED (IN THOUSANDS, EXCEPT EARNINGS PER SHARE)
		Three Months Ended							Six Months Ended
		December 31,							December 31,
		2020				2019			2020				2019
Comprehensive Income Attributable to Trio-Tech International Common Shareholders:
Net income (loss)		$	51			$	865		$	(115	)		$	1,128
Foreign Currency Translation, Net of Tax			943				525			1,583				(38	)
Comprehensive Income			994				1,390			1,468				1,090
Less: Comprehensive (Loss) Income Attributable To Non-controlling Interest			(197	)			431			(319	)			440
Comprehensive Income Attributable to Trio-Tech International Common Shareholders		$	1,191			$	959		$	1,787			$	650

TRIO-TECH INTERNATIONAL AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT NUMBER OF SHARES)
		Dec. 31,			Jun. 30,
		2020			2020
ASSETS		(Unaudited)
CURRENT ASSETS:
Cash and cash equivalents		$	4,470		$	4,150
Short-term deposits			6,940			6,838
Trade accounts receivable, net			7,581			5,951
Other receivables			670			998
Inventories, net			2,147			1,922
Prepaid expenses and other current assets			342			341
Total current assets			22,150			20,200
Deferred tax assets			354			247
Investment properties, net			712			690
Property, plant and equipment, net			10,050			10,310
Operating lease right-of-use assets			1,514			944
Other assets			1,831			1,609
Restricted term deposits			1,752			1,660
Total non-current assets			16,213			15,460
TOTAL ASSETS		$	38,363		$	35,660
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Lines of credit		$	--		$	172
Accounts payable			3,103			2,590
Accrued expenses			3,395			3,005
Income taxes payable			341			344
Current portion of bank loans payable			443			370
Current portion of finance leases			227			231
Current portion of operating leases			562			477
Current portion of PPP loan			121			54
Total current liabilities			8,192			7,243
Bank loans payable, net of current portion			1,899			1,836
Finance leases, net of current portion			353			435
Operating leases, net of current portion			952			467
Income taxes payable			385			430
PPP loan, net of current portion			--			67
Other non-current liabilities			34			36
Total non-current liabilities			3,623			3,271
TOTAL LIABILITIES			11,815			10,514
EQUITY
TRIO-TECH INTERNATIONAL'S SHAREHOLDERS' EQUITY:
Common stock, no par value, 15,000,000 shares authorized; 3,710,555 and 3,673,055 shares issued and outstanding at December 31, 2020 and June 30, 2020, respectively			11,525			11,424
Paid-in capital			3,378			3,363
Accumulated retained earnings			8,263			8,036
Accumulated other comprehensive gain-translation adjustments			2,703			1,143
Total Trio-Tech International shareholders' equity			25,869			23,966
Non-controlling interest			679			1,180
TOTAL EQUITY			26,548			25,146
TOTAL LIABILITIES AND EQUITY		$	38,363		$	35,660

 

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FAQ

What were Trio-Tech's second quarter results for fiscal 2021?

Trio-Tech reported a revenue decrease of 9% to $8,201,000 for Q2 fiscal 2021.

How did manufacturing revenue perform in Q2 fiscal 2021 for TRT?

Manufacturing revenue increased by 17% to $3,569,000 in Q2 fiscal 2021.

What was the net income for Trio-Tech in Q2 fiscal 2021?

The net income for Q2 fiscal 2021 was $235,000, or $0.06 per diluted share.

What were the overall revenue changes for Trio-Tech in the first half of fiscal 2021?

Total revenue decreased 20% to $15,042,000 in the first half of fiscal 2021.

What impact did Covid have on Trio-Tech's business as reported in the PR?

Trio-Tech's CEO noted continued caution due to the economic effects of the Covid pandemic.