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Trio-Tech Reports Second Quarter Net Income of $0.20 Per Share Versus $0.06 on 33% Increase in Revenue

Trio-Tech International (NYSE MKT: TRT) today announced financial results for the second quarter and first six months of fiscal 2022.

Fiscal 2022 Second Quarter Results

Revenue for the three months ended December 31, 2021 increased 33% to $10,922,000 compared to $8,201,000 for the same quarter last year, driven by a 39% increase in testing services revenue and a 127% increase in distribution revenue.

Overall gross margin for the second quarter increased to 26% of revenue compared to 23% of revenue for the same quarter last year. Operating income increased to $656,000 compared to an operating loss of $37,000 for last year’s second quarter.

Net income for the second quarter of fiscal 2022 increased 264% to $855,000, or $0.20 per diluted share, compared to net income of $235,000, or $0.06 per diluted share, for the second quarter of fiscal 2021.

Shareholders' equity at December 31, 2021 increased to $27,820,000, or $7.06 per outstanding share, compared to $26,053,000, or $6.66 per outstanding share, at June 30, 2021. There were approximately 3,939,180 and 3,913,055 shares of common stock outstanding at December 31, 2021 and June 30, 2021, respectively.

CEO Comments

S.W. Yong, Trio-Tech's CEO, said, “Compared to the same quarter last year, the significant increase in net income primarily reflects the strong second quarter performance of our testing services and distribution operations. While backlog remains strong and the Company is focused on expanding our service offerings, we remain cautiously optimistic regarding the current fiscal third quarter ending March 31, 2022, typically the weakest quarter of our fiscal year, due to holidays and vacations related to the celebration of the Chinese New Year.”

Yong added, “We have successfully established our joint-venture company and installed the first burn-in system at the new facilities of Trio-Tech (Jiangsu) Co., Ltd. They are now ready for qualification and we anticipate commencing volume production in the coming fourth quarter of fiscal 2022.”

Fiscal 2022 First Half Results

For the first six months of fiscal 2022, revenue increased 40% to $21,093,000 compared to $15,042,000 for the same period last year.

Overall gross margin for the first six months of fiscal 2022 increased to $6,069,000, compared to $3,388,000 for the same period last year and increased to 29% of revenue compared to 23% in the same period last year.

Net income for the first half of fiscal 2022 increased 681% to $1,772,000, or $0.43 per diluted share, compared to $227,000, or $0.06 per diluted share, for the same period last year.

About Trio‑Tech

Established in 1958, Trio-Tech International is located in Van Nuys, California, with its Principal Executive Office and regional headquarters 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; on-going public health issues related to the COVID-19 pandemic; political and trade tension between U.S and China, other economic, financial and regulatory factors beyond the Company's control and, uncertainties relating to our ability to operate our business in China; uncertainties regarding the enforcement of laws and the fact that rules and regulation in China can change quickly with little advance notice, along with the risk that the Chinese government may intervene or influence our operation at any time, or may exert more control over offerings conducted overseas and/or foreign investment in China-based issuers could result in a material change in our operations, financial performance and/or the value of our common stock or impair our ability to raise money. 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)

UNAUDITED (IN THOUSANDS, EXCEPT EARNINGS PER SHARE)

 

 

Three Months Ended

 

Six Months Ended

December 31,

 

December 31,

Revenue

2021

 

2020

 

2021

 

2020

Manufacturing

$ 3,528

 

 

$ 3,569

 

 

$ 7,090

 

 

$ 6,194

 

Testing services

4,966

 

 

3,560

 

 

9,566

 

 

6,514

 

Distribution

2,420

 

 

1,065

 

 

4,418

 

 

2,323

 

Real estate

8

 

 

7

 

 

19

 

 

11

 

 

10,922

 

 

8,201

 

 

21,093

 

 

15,042

 

Cost of Sales

 

 

 

 

 

 

 

Cost of manufactured products sold

2,874

 

 

2,770

 

 

5,308

 

 

4,707

 

Cost of testing services rendered

3,089

 

 

2,678

 

 

5,972

 

 

5,000

 

Cost of distribution

2,050

 

 

861

 

 

3,706

 

 

1,908

 

Cost of real estate

19

 

 

22

 

 

38

 

 

39

 

 

8,032

 

 

6,331

 

 

15,024

 

 

11,654

 

Gross Margin

2,890

 

 

1,870

 

 

6,069

 

 

3,388

 

Operating Expenses:

 

 

 

 

 

 

 

General and administrative

1,947

 

 

1,662

 

 

3,927

 

 

3,322

 

Selling

156

 

 

122

 

 

303

 

 

233

 

Research and development

131

 

 

123

 

 

213

 

 

198

 

Gain on disposal of property, plant and equipment

--

 

 

--

 

 

--

 

 

(1

)

Total operating expenses

2,234

 

 

1,907

 

 

4,443

 

 

3,752

 

 

 

 

 

 

 

 

 

Income (Loss) from Operations

656

 

 

(37

)

 

1,626

 

 

(364

)

 

 

 

 

 

 

 

 

Other Income (Expenses)

 

 

 

 

 

 

 

Interest expenses

(28

)

 

(34

)

 

(56

)

 

(71

)

Other income, net

381

 

 

143

 

 

542

 

 

354

 

Total other income

353

 

 

109

 

 

486

 

 

283

 

 

 

 

 

 

 

 

 

Income (loss) from Continuing Operations before Income Taxes

1,009

 

 

72

 

 

2,112

 

 

(81

)

Income Tax Expenses

(153

)

 

--

 

 

(333

)

 

(7

)

Income (loss) from Continuing Operations

 

 

 

 

 

 

 

before Non-controlling Interest, Net of Tax

856

 

 

72

 

 

1,779

 

 

(88

)

(Loss) Income from Discontinued Operations, Net of Tax

--

 

 

(21

)

 

5

 

 

(27

)

NET INCOME (LOSS)

856

 

 

51

 

 

1,784

 

 

(115

)

Less: Income (Loss) Attributable to Non-controlling Interest

1

 

 

(184

)

 

12

 

 

(342

)

 

 

 

 

 

 

 

 

Net Income Attributable to Trio-Tech International

855

 

 

235

 

 

1,772

 

 

227

 

Net Income Attributable to Trio-Tech International:

 

 

 

 

 

 

 

Income from Continuing Operations, Net of Tax

856

 

 

246

 

 

1,770

 

 

241

 

(Loss) Income from Discontinued Operations, Net of Tax

(1

)

 

(11

)

 

2

 

 

(14

)

Net Income attributable to Trio-Tech International

$ 855

 

 

$ 235

 

 

$ 1,772

 

 

$ 227

 

Basic Earnings per Share

$ 0.22

 

 

$ 0.06

 

 

$ 0.46

 

 

$ 0.06

 

Diluted Earnings per share

$ 0.20

 

 

$ 0.06

 

 

$ 0.43

 

 

$ 0.06

 

 

 

 

 

 

 

 

 

Weighted Average Shares Outstanding - Basic

3,923

 

 

3,710

 

 

3,923

 

 

3,710

Weighted Average Shares Outstanding - Diluted

4,242

 

 

3,800

 

4,129

 

 

3,793

 

TRIO‑TECH INTERNATIONAL AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

UNAUDITED (IN THOUSANDS, EXCEPT EARNINGS PER SHARE)

 

 

Three Months Ended

 

Six Months Ended

December 31,

 

December 31,

2021

 

2020

 

2021

 

2020

Comprehensive Income Attributable to Trio-Tech International Common Shareholders:

 

 

 

 

 

 

 

Net income (loss)

$ 856

 

$ 51

 

$ 1,784

 

 

$ (115

)

Foreign Currency Translation, Net of Tax

251

 

943

 

(38

)

 

1,583

 

Comprehensive Income

1,107

 

994

 

1,746

 

 

1,468

 

Less: Comprehensive income (loss) Attributable To Non-controlling Interest

2

 

(197)

 

6

 

 

(319

)

Comprehensive Income Attributable to Trio-Tech International Common Shareholders

$ 1,105

 

$ 1,191

 

$ 1,740

 

 

$ 1,787

 

 

TRIO‑TECH INTERNATIONAL AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT NUMBER OF SHARES)

 

 

 

 

 

Dec. 31,

 

Jun. 30,

2021

 

2021

ASSETS

(unaudited)

 

 

CURRENT ASSETS:

 

 

 

Cash and cash equivalents

$ 7,526

 

$ 5,836

Short-term deposits

4,997

 

6,651

Trade accounts receivable, net

9,839

 

8,293

Other receivables

2,387

 

662

Inventories, net

2,572

 

2,080

Prepaid expenses and other current assets

511

 

418

Financed Sales Receivable

21

 

19

Total current assets

27,853

 

23,959

 

 

 

 

Deferred tax assets

169

 

217

Investment properties, net

653

 

681

Property, plant and equipment, net

9,267

 

9,531

Operating lease right-of-use assets

2,699

 

1,876

Other assets

147

 

262

Restricted term deposits

1,735

 

1,741

Financed Sales Receivable

29

 

39

Total non-current assets

14,699

 

14,347

TOTAL ASSETS

$ 42,552

 

$ 38,306

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

CURRENT LIABILITIES:

 

 

 

Lines of credit

$ 477

 

$ 72

Accounts payable

3,961

 

3,702

Accrued expenses

4,744

 

3,363

Income taxes payable

351

 

314

Current portion of bank loans payable

445

 

439

Current portion of finance leases

163

 

197

Current portion of operating leases

845

 

672

Total current liabilities

10,986

 

8,759

Bank loans payable, net of current portion

1,386

 

1,621

Finance leases, net of current portion

178

 

253

Operating leases, net of current portion

1,857

 

1,204

Income taxes payable

281

 

385

Deferred tax liabilities

15

 

--

Other non-current liabilities

29

 

31

Total non-current liabilities

3,746

 

3,494

TOTAL LIABILITIES

14,732

 

12,253

 

 

 

 

EQUITY

 

 

 

TRIO-TECH INTERNATIONAL'S SHAREHOLDERS' EQUITY:

 

 

 

Common stock, no par value, 15,000,000 shares authorized; 3,939,180 and 3,913,055

 

 

 

shares issued and outstanding at December 31, 2021 and June 30, 2021, respectively

12,178

 

12,178

Paid-in capital

4,373

 

4,233

Accumulated retained earnings

8,596

 

6,824

Accumulated other comprehensive gain-translation adjustments

2,367

 

2,399

Total Trio-Tech International shareholders' equity

27,514

 

25,634

Non-controlling interest

306

 

419

TOTAL EQUITY

27,820

 

26,053

TOTAL LIABILITIES AND EQUITY

$ 42,552

 

$ 38,306

 

Contacts

Company Contact:

A. Charles Wilson

Chairman

(818) 787-7000

Investor Contact:

Berkman Associates

(310) 927-3108

robert.jacobs@jacobscon.com

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