Trio-Tech Reports Sharply Narrower Second Quarter Net Loss As Revenue Increases 11.1%

Trio-Tech International (NYSE MKT:TRT) today announced financial results for the second quarter and first half of fiscal 2013.

For the three months ended December 31, 2012, revenue increased 11.1% to $7,351,000, compared to $6,619,000 for last year's second quarter. The net loss attributable to Trio-Tech common shareholders for the second quarter of fiscal 2013 decreased to $506,000, or $0.15 per share. This compares to a net loss for the second quarter of fiscal 2012 of $1,203,000, or $0.36 per share.

For the six months ended December 31, 2012, revenue increased 10.9% to $17,098,000, compared to $15,418,000 for last year's first half. The net loss attributable to Trio-Tech common shareholders for the first six months of fiscal 2013 narrowed to $523,000, or $0.16 per share, compared to a net loss for the first six months of fiscal 2012 of $2,007,000, or $0.60 per share.

Cash provided by operations for the first six months of fiscal 2013 was $3,646,000, compared to cash used by operations for the first six months of fiscal 2012 of $1,754,000. Shareholders' equity at December 31, 2012 was $21,132,000, or $6.36 per outstanding share, compared to $20,556,000, or $6.25 per outstanding share, at June 30, 2012.

"Our core operations performed well in the second quarter, and our cash position is improving. Revenue from semiconductor testing services was up 33.9%, driven by higher testing volume in our Malaysia, Thailand and China operations, while sales of semiconductor test products increased 3.6%. Benefitting from the growth in revenue, gross margin for this year's second quarter improved to 18.3% compared to 11.4% a year ago, while operating expenses decreased 18.2%, reflecting our commitment to control costs. We are optimistic about the outlook for our testing business, especially in China," said SW Yong, Trio-Tech's CEO.

As previously announced, effective on December 31, 2012, the Company terminated the lease on the yard in Batam, Indonesia used for its oil and gas equipment fabrication business. Yong noted that this will contribute to further cost reductions beginning in the current quarter.

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, oil and gas equipment fabrication 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, www.shi-international.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 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
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 2012     2011 2012     2011
Products $ 3,419 $ 3,301 $ 9,055 $ 6,417
Testing Services 3,769 2,815 7,678 6,106
Fabrication Services 130 455 302 2,800
Other   33     48     63     95  
  7,351     6,619     17,098     15,418  
Costs of Sales
Cost of products sold 2,799 2,743 7,825 5,350
Cost of testing services rendered 2,842 2,566 5,519 5,200
Cost of fabrication services rendered 331 528 578 2,660
Other   32     26     65     52  
  6,004     5,863     13,987     13,262  
Gross Margin 1,347 756 3,111 2,156
Operating Expenses:
General and administrative 1,731 2,166 3,555 4,264
Selling 129 123 262 267
Research and development 72 73 145 148
(Gain) Loss on disposal of property, plant and equipment   --     --     (3 )   4  
Total operating expenses   1,932     2,362     3,959     4,683  
Loss from Operations (585 ) (1,606 ) (848 ) (2,527 )
Other Income (Expenses)
Interest expense (82 ) (70 ) (167 ) (131 )
Other income, net   75     (23 )   257     21  
Total other (expenses) income   (7 )   (93 )   90     (110 )
Loss from Continuing Operations before Income Taxes (592 ) (1,699 ) (758 ) (2,637 )
Income Tax Benefit (Expense)   (2 )   136     123     99  
Loss from Continuing Operations before Non-controlling Interest, net of tax (594 ) (1,563 ) (635 ) (2,538 )
Equity in earnings of unconsolidated joint venture, net of tax -- -- -- (11 )
LOSS FROM DISCONTINUED OPERATIONS, net of tax   --     (1 )   --     (2 )
NET LOSS $ (594 ) $ (1,564 ) $ (635 ) $ (2,551 )
Less: Net loss attributable to the non-controlling interest   (88 )   (361 )   (112 )   (544 )
Net Loss attributable to Trio-Tech International (506 ) (1,203 ) (523 ) (2,007 )
Net Loss Attributable to Trio-Tech International:
Loss from continuing operations, net of tax (506 ) (1,202 ) (523 ) (2,005 )
Loss from discontinued operations, net of tax   --     (1 )   --     (2 )

Net Loss Attributable to Trio-Tech International
$ (506 ) $ (1,203 ) $ (523 ) $ (2,007 )
 
Comprehensive Income (Loss) Attributable to Trio-Tech:
Net loss $ (594 ) $ (1,564 ) $ (635 ) $ (2,551 )
Foreign currency translation, net of tax   161     425     716     (109 )
Comprehensive Income (Loss) (433 ) (1,139 ) 81 (2,660 )
Less: Comprehensive (loss) income attributable to non-controlling Interest   (46 )   (348 )   52     (566 )
Comprehensive (Loss) Income Attributable to Trio-Tech   (387 )   (791 )   29     (2,094 )
Basic and diluted loss per share from continuing operations $ (0.15 ) $ (0.36 ) $ (0.16 ) $ (0.60 )
Basic and diluted loss per share from discontinued operations   --     --     --     --  
Basic and diluted Loss per Share $ (0.15 ) $ (0.36 ) $ (0.16 ) $ (0.60 )
Weighted Average Shares Outstanding - Basic and Diluted 3322 3,322 3,322 3,322
 
 
TRIO-TECH INTERNATIONAL AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT NUMBER OF SHARES)
 
        Dec. 31,     June 30,
2012 2012
ASSETS (unaudited)
 
CURRENT ASSETS:
Cash & cash equivalents $ 2,790 $ 1,572
Short-term deposits 105 250
Trade accounts receivable, net 6,869 11,311
Other receivables 560 962
Loan receivables from property development projects 1,123 1,101
Inventories, net 2,138 2,324
Prepaid expenses and other current assets 287 406
Assets held for sale   --   130
Total current assets 13,872 18,056
 
INVESTMENT IN UNCONSOLIDATED JOINT VENTURE 781 765
INVESTMENT PROPERTIES, Net 1,933 1,815
PROPERTY, PLANT AND EQUIPMENT, Net 13,233 13,193
OTHER ASSETS 599 776
RESTRICTED TERM DEPOSITS   3,615   3,445
TOTAL ASSETS $ 34,033 $ 38,050
 
 
LIABILITIES AND SHAREHOLDER'S EQUITY
 
CURRENT LIABILITIES:
Lines of credit $ 2,626 $ 3,605
Accounts payable 2,631 4,834
Accrued expenses 2,611 3,011
Income taxes payable 471 469
Current portion of bank loans payable 734 766
Current portion of capital leases   151   175
Total current liabilities 9,224 12,860
 
BANK LOANS PAYABLE, net of current portion 3,136 3,373
CAPITAL LEASES, net of current portion 172 221
DEFERRED TAX LIABILITIES 356 497
OTHER NON-CURRENT LIABILITIES   13   543
TOTAL LIABILITIES 12,901 17,494
 
COMMITMENTS AND CONTINGENCIES -- --
 
EQUITY
 
TRIO-TECH INTERNATIONAL'S SHAREHOLDERS' EQUITY:

Common stock, no par value, 15,000,000 shares authorized; 3,321,555 shares issued and outstanding at December 31, 2012, and June 30, 2012, respectively
10,531 10,531
Paid-in capital 2,733 2,431
Accumulated retained earnings 2,164 2,687
Accumulated other comprehensive gain-translation adjustments   3,739   3,187
Total Trio-Tech International shareholders' equity   19,167   18,836
 
NON-CONTROLLING INTEREST   1,965   1,720
TOTAL EQUITY   21,132   20,556
TOTAL LIABILITIES AND EQUITY $ 34,033 $ 38,050

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