Trio-Tech Third Quarter Net Income Increased to $0.04 Per Share Versus $0.02

Rhea-AI Summary

Trio-Tech International (NYSE MKT: TRT) reported its financial results for Q3 and the first nine months of fiscal 2021. Q3 revenue rose 24% to $3,130,000 driven by increased orders at its Singapore facility, while semiconductor testing services revenue fell 6% to $3,504,000, and distribution revenue dropped 34% to $1,467,000. Overall Q3 revenue decreased 5% to $8,112,000, but gross margin improved to 25%. For the nine months, total revenue decreased 15% to $23,154,000 with net income falling to $405,000. Shareholders' equity increased to $26,921,000.

Positive

• Q3 revenue from semiconductor testing equipment increased 24% to $3,130,000.
• Improved gross margin in Q3 at 25%, up from 21% last year.
• Net income for Q3 increased to $178,000 from $70,000.

Negative

• Overall revenue for Q3 decreased 5% year-over-year.
• Testing services revenue declined 6% to $3,504,000.
• Distribution revenue down 34% to $1,467,000.
• Net income for the first nine months dropped to $405,000 from $769,000.

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

Third Quarter Results
Revenue from the sale of Trio-Tech’s proprietary semiconductor testing and manufacturing equipment increased 24% to $3,130,000 for the third quarter of fiscal 2021 compared to $2,519,000 for the same quarter last year, driven by higher orders from a number of customers at the Company’s Singapore facility. Third quarter revenue from semiconductor testing services decreased 6% to $3,504,000 from $3,741,000 for the same quarter last year, primarily due to a decrease in demand from major customers. Revenue from the distribution of semiconductor manufacturing and testing equipment decreased 34% to $1,467,000 from $2,225,000 for the third quarter last year, reflecting generally lower customer demand. Total revenue for the three months ended March 31, 2021 decreased 5% to $8,112,000 compared to $8,501,000 for the same quarter last year.

Despite the decline in overall revenue, an improved product mix helped to increase the overall gross margin to $2,060,000, or 25% of revenue, compared to $1,786,000, or 21% of revenue, for the same quarter last year.

General and administrative expenses increased 10% to $1,923,000 from $1,754,000 in the same quarter last year, primarily related to a higher stock compensation recorded, due to the increased volatility in our share price.

The loss from operations for the third quarter of fiscal 2021 was $65,000, compared to $367,000 for the same quarter last year.

Other income of $273,000 for this year’s third quarter included $107,000 in governmental grants to offset the negative impact of the COVID-19 pandemic. Other income of $440,000 for last year’s third quarter included similar grants of $263,000.

Net income attributable to Trio-Tech International Common Shareholders for the three months ended March 31, 2021 increased to $178,000, or $0.04 per diluted share, compared to $70,000, or $0.02 per diluted share, for the third quarter of fiscal 2020.

CEO Comments
S.W. Yong, Trio-Tech's CEO, said, "While the COVID-19 pandemic was primarily responsible for a very difficult first half of fiscal 2021 for Trio-Tech, and continued to affect our performance in the third quarter, the improvement in orders and gross margin in our manufacturing segment is an encouraging sign for the future. We are maintaining tight control over operating costs throughout the Company, but operating profitability will be largely dependent upon improvements in business conditions, which continue to remain uncertain. As we are monitoring the situation closely, we remain prepared to take further actions as required by local governments, or which we deem necessary, in the best interests of our employees, customers and stockholders."

Nine Months Results
For the first nine months of fiscal 2021, overall revenue decreased 15% to $23,154,000 compared to $27,286,000 for the same period last year. Manufacturing revenue increased 4% to $9,324,000 from $8,881,000, while testing services revenue declined 17% to $10,018,000 from $12,018,000. Distribution revenue decreased 40% to $3,790,000 compared to $6,338,000 for the same period of fiscal 2020.

Overall gross margin for the first nine months of fiscal 2021 decreased 8% to $5,448,000 from $5,943,000 last year, but increased as a percentage of revenue to 24% from 22% for the same period of fiscal 2020.

For the first nine months of fiscal 2021, general and administrative expenses decreased $74,000 to $5,245,000 from $5,319,000 for the same period of fiscal 2020, primarily due to the decrease in staff benefit cost related expenses as part of our cost-saving measures.

Selling expenses for the first nine months of fiscal 2021 decreased $191,000 to $356,000, as compared to $547,000 in the same period of fiscal 2020, primarily due to the decline in traveling expenses incurred as a result of worldwide travel restrictions amid the pandemic.

For the first nine months of fiscal 2021, other income decreased to $531,000 from $1,576,000 for the same period of fiscal 2020. The decrease was primarily due to a non-recurring gain on the sale of assets of $1,172,000 in the same period last year.

Net income attributable to Trio-Tech International Common Shareholders for the first nine months of fiscal 2021 was $405,000, or $0.10 per diluted share, compared to $769,000, or $0.21 per diluted share, for the first nine months of fiscal 2020.

Shareholders' equity at March 31, 2021 was $26,921,000, or $6.88 per outstanding share, compared to $25,146,000, or $6.84 per outstanding share, at June 30, 2020. There were approximately 3,913,055 common shares outstanding at March 31, 2021.

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; 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		2021				2020				2021				2020
Manufacturing		$	3,130			$	2,519			$	9,324			$	8,881
Testing Services			3,504				3,741				10,018				12,018
Distribution			1,467				2,225				3,790				6,338
Real Estate			11				16				22				49
			8,112				8,501				23,154				27,286
Cost of Sales
Cost of manufactured products sold			2,148				1,851				6,855				6,789
Cost of testing services rendered			2,651				2,937				7,651				9,046
Cost of distribution			1,234				1,909				3,142				5,454
Cost of real estate			19				18				58				54
			6,052				6,715				17,706				21,343
Gross Margin			2,060				1,786				5,448				5,943
Operating Expenses:
General and administrative			1,923				1,754				5,245				5,319
Selling			123				181				356				547
Research and development			79				79				277				280
Impairment loss on long-lived assets			--				139				--				139
Gain on disposal of property, plant and equipment			--				--				(1	)			(24	)
Total operating expenses			2,125				2,153				5,877				6,261
(Loss) from Operations			(65	)			(367	)			(429	)			(318	)
Other Income (Expenses)
Interest expense			(25	)			(63	)			(96	)			(186	)
Gain on sale of assets held for sale			--				--				--				1,172
Other income, net			273				440				627				590
Total other income			248				377				531				1,576
Income from Continuing Operations before Income Taxes			183				10				102				1,258
Income Tax (Expenses) Benefit			(118	)			8				(125	)			(112	)
Income (loss) from Continuing Operations before Non-controlling Interest, net of tax			65				18				(23	)			1,146
Income (loss) from Discontinued Operations, net of tax			1				(21	)			(26	)			(21	)
NET INCOME (LOSS)			66				(3	)			(49	)			1,125
Less: Net (loss) income Attributable to Non-controlling Interest			(112	)			(73	)			(454	)			356
Net Income Attributable to Trio-Tech International			178				70				405				769
Net Income Attributable to Trio-Tech International:
Income from Continuing Operations, net of tax			177				81				418				780
Income (loss) from Discontinued Operations, net of tax			1				(11	)			(13	)			(11	)
Net Income Attributable to Trio-Tech International		$	178			$	70			$	405			$	769
Basic Earnings per Share		$	0.05			$	0.02			$	0.11			$	0.21
Diluted Earnings per Share		$	0.04			$	0.02			$	0.10			$	0.21
Weighted Average Shares Outstanding - Basic			3,913				3,673				3,913				3,673
Weighted Average Shares Outstanding - Diluted			4,046				3,759				4,030				3,734

TRIO-TECH INTERNATIONAL AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
UNAUDITED (IN THOUSANDS)
		Three Months Ended								Nine Months Ended
		March 31,								March 31,
		2021				2020				2021				2020
Comprehensive (Loss) Income Attributable to Trio-Tech International:
Net income (loss)		$	66			$	(3	)		$	(49	)		$	1,125
Foreign Currency Translation, net of tax			(468	)			(1,013	)			1,115				(1,051	)
Comprehensive (Loss) Income			(402	)			(1,016	)			1,066				74
Less: Comprehensive (Loss) Income Attributable to Non-controlling Interest			(136	)			(64	)			(455	)			376
Comprehensive (Loss) Income Attributable to Trio-Tech International		$	(266	)		$	(952	)		$	1,521			$	(302	)

TRIO-TECH INTERNATIONAL AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT NUMBER OF SHARES)
		Mar. 31,			Jun. 30,
		2021			2020
ASSETS		(Unaudited)
CURRENT ASSETS:
Cash and cash equivalents		$	5,178		$	4,150
Short-term deposits			7,146			6,838
Trade accounts receivable, net			6,997			5,951
Other receivables			678			998
Inventories, net			2,602			1,922
Prepaid expenses and other current assets			367			341
Total current assets			22,968			20,200
Deferred tax assets			337			247
Investment properties, net			688			690
Property, plant and equipment, net			9,690			10,310
Operating lease right-of-use assets			1,994			944
Other assets			1,709			1,609
Restricted term deposits			1,739			1,660
Total non-current assets			16,157			15,460
TOTAL ASSETS		$	39,125		$	35,660
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Lines of credit		$	184		$	172
Accounts payable			2,997			2,590
Accrued expenses			3,467			3,005
Income taxes payable			348			344
Current portion of bank loans payable			435			370
Current portion of finance leases			216			231
Current portion of operating leases			659			477
Current portion of PPP loan			121			54
Total current liabilities			8,427			7,243
Bank loans payable, net of current portion			1,732			1,836
Finance leases, net of current portion			291			435
Operating leases, net of current portion			1,335			467
Income taxes payable			385			430
PPP loan, net of current portion			--			67
Other non-current liabilities			34			36
Total non-current liabilities			3,777			3,271
TOTAL LIABILITIES			12,204			10,514
EQUITY
TRIO-TECH INTERNATIONAL'S SHAREHOLDERS' EQUITY:
Common stock, no par value, 15,000,000 shares authorized; 3,913,055 and 3,673,055 shares issued and outstanding at March 31, 2021 and June 30, 2020, respectively			12,178			11,424
Paid-in capital			3,507			3,363
Accumulated retained earnings			8,441			8,036
Accumulated other comprehensive gain-translation adjustments			2,259			1,143
Total Trio-Tech International shareholders' equity			26,385			23,966
Non-controlling interest			536			1,180
TOTAL EQUITY			26,921			25,146
TOTAL LIABILITIES AND EQUITY		$	39,125		$	35,660

 

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FAQ

What were Trio-Tech's revenue results for Q3 2021?

Trio-Tech's revenue for Q3 2021 was $8,112,000, a 5% decrease compared to $8,501,000 in Q3 2020.

How did semiconductor testing revenue perform in Q3 2021?

Revenue from semiconductor testing services decreased 6% to $3,504,000 in Q3 2021.

What is Trio-Tech's net income for the first nine months of fiscal 2021?

Net income for the first nine months of fiscal 2021 was $405,000, compared to $769,000 for the same period in fiscal 2020.

What were the positive financial metrics for Trio-Tech in Q3 2021?

Trio-Tech reported a 24% increase in revenue from semiconductor testing equipment and improved gross margins of 25%.

What challenges did Trio-Tech face in Q3 2021?

Trio-Tech faced a decline in overall revenue and significant drops in distribution and testing services revenue.