UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
 
 
FORM 8-K
 
 
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 
 
Date of report (Date of earliest event reported): September 23, 2019
 
TRIO-TECH INTERNATIONAL
(Exact Name of Registrant as Specified in Its Charter)
 
California
(State or Other Jurisdiction of Incorporation)
 
1-14523
 
95-2086631
(Commission File Number)
 
(IRS Employer Identification No.)
 
 
 
Block 1008 Toa Payoh North, Unit 03-09 Singapore
 
318996
(Address of Principal Executive Offices)
 
(Zip Code)
 
(65) 6265 3300
(Registrant’s Telephone Number, Including Area Code)
 
(Former Name or Former Address, if Changed Since Last Report)
Title of each class
 
Trading Symbol
 
Name of each exchange on which registered
 
Common Stock, no par value
 
TRT
 
NYSE MKT
 
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
☐                 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
☐                 
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
☐                 
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
☐                 
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR 230.405) or Rule 12b2 of the Securities Exchange Act of 1934 (17 CFR 240.12b2) Emerging growth company ☐
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐
 
 

 
 
 
Item 2.02 Results of Operations and Financial Conditions
 
On September 23, 2019, Trio-Tech International issued a press release announcing its financial results for the fiscal year ended June 30, 2019. A copy of the press release is attached as Exhibit 99.1.
 
The information in this Current Report, including the exhibit hereto, is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section. The information in this Current Report, including the exhibit hereto, shall not be incorporated by reference into any filings under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.
 
Item 9.01 Financial Statements and Exhibits
 
(d) Exhibits
 
99.1 Press Release of Trio-Tech International dated September 23, 2019
 
 
 
 
 
 SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 TRIO-TECH INTERNATIONAL
Date:                       
September 24, 2019
 
 
By: /s/ VICTOR H.M. TING
Name: Victor H.M. Ting
Title:   Vice President and
            Chief Financial Officer
 
 
 
 
 
 
EXHIBIT INDEX
 
Exhibit
Number    Description
 
99.1         Press Release of Trio-Tech International dated September 23, 2019
 
 
 
Blueprint
 
LOS ANGELES
SINGAPORE
KUALA LUMPUR
BANGKOK
SUZHOU
TIANJIN
CHONGQING
 
 FOR IMMEDIATE RELEASE
 
 
Company Contact:                Investor Contact:
 A. Charles Wilson                 Berkman Associates
 Chairman                               (310) 477-3118
 (818) 787-7000                      info@BerkmanAssociates.com
 
Trio-Tech Reports Fourth Quarter and Fiscal 2019 Results
 
Van Nuys, CA – September 23, 2019 – Trio-Tech International (NYSE MKT: TRT) today announced financial results for the fourth quarter and fiscal year ended June 30, 2019.
 
Fourth Quarter Results
Overall revenue for the fourth quarter of fiscal 2019 decreased 1% to $10,625,000 from $10,760,000 for the fourth quarter of fiscal 2018. While manufacturing revenue increased 17% to $4,803,000 compared to $4,116,000 last year, reflecting increased demand in the Company’s Singapore operations, and distribution revenue increased 11% to $1,864,000 from $1,678,000, lower demand in Trio-Tech’s Malaysia and Tianjin, China operations led to a 20% decrease in testing services revenue to $3,941,000 from $4,937,000 last year.
The decline in overall revenue, coupled with a change in product mix, reduced gross margin to $2,468,000 for the fourth quarter of fiscal 2019 from $2,851,000 for last year’s fourth quarter. As a percentage of revenue, gross margin declined to 23% compared to 27% of revenue for the same quarter last fiscal year.
Income from operations was $321,000 for the fourth quarter of fiscal 2019 compared to $709,000 for the fourth quarter of fiscal 2018.
Net income for the fourth quarter of fiscal 2019 was $449,000, or $0.12 per diluted share. This compares to net income for the fourth quarter of fiscal 2018 $675,000, or $0.17 per diluted share.
Shareholders' equity at June 30, 2019 was $24,861,000, or $6.77 per outstanding share, compared to $23,501,000, or $6.61 per outstanding share, at June 30, 2018. There were 3,673,055 common shares outstanding at June 30, 2019.
 
CEO Comments
S.W. Yong, Trio-Tech's CEO, said, “Despite the decrease in Trio-Tech’s fiscal 2019 revenue, we achieved a 31% increase in net income to $1,545,000, or $0.41 per diluted share, compared to $1,184,000, or $0.31 per diluted in fiscal 2018. Net income benefitted from a one-off gain on the sale of properties in our Chongqing real-estate operation and lower tax expenses for fiscal 2019. We remain convinced of the quality of our business and our opportunities for long term growth despite the headwinds created by the ongoing trade tension between the United States and China.
"We are encouraged by the sharp increase in fourth quarter revenue in our manufacturing and distribution segments, compared to the fourth quarter of fiscal 2018. We continued to invest in the business in fiscal 2019, including increased capital expenditures to address opportunities for growth in specific markets. We also were able to present Trio-Tech’s world-class capabilities in introductory and follow-up meetings with our counterparts at several potentially large new accounts, an effort we believe will benefit the Company over time."
 
16139 Wyandotte Street, Van Nuys, CA 91406, USA ● TEL: (818) 787-7000 ● FAX (818) 787-9130
 
 
Trio-Tech Reports Fourth Quarter and Twelve Months Results
September 23, 2019
Page Two
 
Fiscal 2019 Results
For the fiscal year ended June 30, 2019, revenue decreased 7% to $39,198,000 compared to $42,361,000 in fiscal 2018. Manufacturing revenue decreased 7% to $14,889,000 from $15,978,000, and testing services revenue decreased 14% to $16,760,000 from $19,391,000 for fiscal 2018. Distribution revenue increased 9% to $7,451,000 from $6,853,000 for fiscal 2018.
Gross margin for fiscal 2019 decreased to $9,001,000, or 23% of revenue, compared to $10,638,000, or 25% of revenue, for fiscal 2018.
Income from operations decreased 64% to $794,000 for fiscal 2019 compared to $2,188,000 for fiscal 2018.
Net income for fiscal 2019 was $1,545,000, or $0.41 per diluted share. This compares to net income for fiscal 2018 of $1,184,000, or $0.31 per diluted share.
Net income for fiscal 2019 benefited from $615,000 in other income, which included a gain of $685,000 on the sale of properties. In comparison, other income contributed a gain of $102,000 for fiscal 2018. Net income for fiscal 2018 also was affected by a one-time, non-cash income tax expense of $900,000 related to the 2017 United States Tax Cuts and Jobs Act. As of December 31, 2018, the Company’s accounting for the Tax Act was complete. The provision for income taxes for the year ended June 30, 2019 includes a $145,000 decrease from the completion of our provisional accounting for the effects of the Tax Act under SAB 118. The decrease is associated with the one-time mandatory repatriation tax related to certain post-1986 earnings and profits that were deferred from U.S. taxation by the Company’s foreign subsidiaries. The US federal income tax return was filed during Q4, which included the $755,000 one-time repatriation tax as well as utilization of net operating losses and tax credits amounting to $192,000 which was not finalized until the filing of return.
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, 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, 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 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.
 
(tables attached)
 
 
 
 
 
 
TRIO-TECH INTERNATIONAL AND SUBSIDIARIES
 
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
 
AUDITED (IN THOUSANDS, EXCEPT EARNINGS PER SHARE)
 
 
   
 
 Three Months Ended
 
 
 Twelve Months Ended
 
 
 
June 30,
 
 
 June 30, 
 
Revenue
 
2019
 
 
2018
 
 
2019
 
 
2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Manufacturing
 $4,803 
 $4,116 
 $14,889 
 $15,978 
Testing services
  3,941 
  4,937 
  16,760 
  19,391 
Distribution
  1,864 
  1,678 
  7,451 
  6,853 
Real estate
  17 
  29 
  98 
  139 
 
  
    
    
    
 
  10,625 
  10,760 
  39,198 
  42,361 
Cost of Sales
    
    
    
    
Cost of manufactured products sold
  3,587 
  2,967 
  11,393 
  12,213 
Cost of testing services rendered
  2,851 
  3,442 
  12,202 
  13,323 
Cost of distribution
  1,674 
  1,470 
  6,505 
  6,068 
Cost of real estate
  45 
  30 
  97 
  119 
 
    
    
    
    
 
  8,157 
  7,909 
  30,197 
  31,723 
 
    
    
    
    
Gross Margin
  2,468 
  2,851 
  9,001 
  10,638 
 
    
    
    
    
Operating Expenses:
    
    
    
    
General and administrative
  1,826 
  1,911 
  7,049 
  7,250 
Selling
  246 
  214 
  826 
  826 
Research and development
  75 
  74 
  345 
  451 
Gain on disposal of property, plant and equipment
  -- 
  (57)
  (13)
  (77)
 
    
    
    
    
Total operating expenses
  2,147 
  2,142 
  8,207 
  8,450 
 
    
    
    
    
Income from Operations
  321 
  709 
  794 
  2,188 
 
    
    
    
    
Other (Expenses) Income
    
    
    
    
Interest expense
  (69)
  (59)
  (319)
  (233)
Other income, net
  29 
  24 
  249 
  335 
Gain on sale of properties
  -- 
  -- 
  685 
  -- 
 
    
    
    
    
Total other (Expenses) Income
  (40)
  (35)
  615 
  102 
 
    
    
    
    
Income from Continuing Operations before Income Taxes
  281 
  674 
  1,409 
  2,290 
Income Tax Benefit (Expense)
  201 
  48 
  42 
  (987)
 
    
    
    
    
Income from Continuing Operations
    
    
    
    
before Non-controlling Interest, net of tax
  482 
  722 
  1,451 
  1,303 
 
    
    
    
    
Loss from discontinued operations, net of tax
  (1)
  (2)
  (3)
  (13)
 
    
    
    
    
NET INCOME
  481 
  720 
  1,448 
  1,290 
 
    
    
    
    
Less: Net income (loss) attributable to the non-controlling interest
  32 
  45 
  (97)
  106 
 
    
    
    
    
Net Income attributable to Trio-Tech International
  449 
  675 
  1,545 
  1,184 
 
    
    
    
    
Net Income Attributable to Trio-Tech International:
    
    
    
    
Income from continuing operations, net of tax
  451 
  677 
  1,548 
  1,197 
Loss from discontinued operations, net of tax
  (2)
  (2)
  (3)
  (13)
 
    
    
    
    
Net Income Attributable to Trio-Tech International
  449 
 $675 
  1,545 
 $1,184 
 
    
    
    
    
Basic Earnings per Share - Continuing Operations
 $0.12 
 $0.19 
 $0.42 
 $0.34 
Basic Loss per Share - Discontinued Operations
  -- 
  (0.01)
  -- 
  (0.01)
     Basic Earnings per Share
 $0.12 
 $0.18 
 $0.42 
 $0.33 
 
    
    
    
    
Diluted Earnings per Share – Continuing Operations
 $0.12 
 $0.18 
 $0.41 
 $0.32 
Diluted Loss per Share – Discontinued Operations
  -- 
  (0.01)
  -- 
  (0.01)
     Diluted Earnings per Share
 $0.12 
 $0.17 
 $0.41 
 $0.31 
 
    
    
    
    
 
    
    
    
    
Weighted Average Shares Outstanding - Basic
  3,673 
  3,553 
  3,673 
  3,553 
Weighted Average Shares Outstanding - Diluted
  3,681 
  3,714 
  3,762 
  3,771 
 
 
 
 
 
 
TRIO-TECH INTERNATIONAL AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
AUDITED (IN THOUSANDS, EXCEPT EARNINGS PER SHARE)
 
 
 
Three Months Ended
June 30,
 
 
Twelve Months Ended
June 30,
 
 
 
2019
 
 
2018
 
 
2019
 
 
2018
 
Comprehensive Income Attributable to
 
 
 
 
 
 
 
 
 
 
 
 
   Trio-Tech International Common Shareholders:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
 $481 
 $720 
 $1,448 
 $1,290 
Foreign currency translation, net of tax
  (231)
  (1,081)
  (420)
  728 
Comprehensive Income (Loss)
  250 
  (361)
  1,028 
  2,018 
Less: Comprehensive (Loss) Income
    
    
    
    
attributable to non-controlling interests
  (11)
  30 
  (202)
  285 
 
    
    
    
    
Comprehensive Income (Loss)
    
    
    
    
   Attributable to Trio-Tech International
 $261 
 $(391)
 $1,230 
 $1,733 
 
 
 
 
 
 
TRIO-TECH INTERNATIONAL AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT NUMBER OF SHARES)
 

 
June 30,
 
 
 
2019
 
 
2018
 
ASSETS
 
(Audited)
 
 
 
 
 
 
 
 
CURRENT ASSETS:
 
 
 
 
 
 
  Cash and cash equivalents
 $4,863 
 $6,539 
  Short-term deposits
  4,144 
  653 
  Trade accounts receivable, net
  7,113 
  7,747 
  Other receivables
  817 
  881 
  Inventories, net
  2,427 
  2,930 
  Prepaid expenses and other current assets
  287 
  208 
  Assets held for sale
  89 
  91 
 
    
    
     Total current assets
  19,740 
  19,049 
 
    
    
Deferred tax assets
  390 
  400 
Investment properties, net
  782 
  1,146 
Property, plant and equipment, net
  12,159 
  11,935 
Other assets
  1,750 
  2,249 
Restricted term deposits
  1,706 
  1,695 
 
    
    
     Total non-current assets
  16,787 
  17,425 
 
    
    
TOTAL ASSETS
 $36,527 
 $36,474 
 
    
    
LIABILITIES AND SHAREHOLDERS’ EQUITY
    
    
 
    
    
CURRENT LIABILITIES:
    
    
  Lines of credit
 $187 
 $2,043 
  Accounts payable
  3,272 
  3,704 
  Accrued expenses
  3,486 
  3,172 
  Income taxes payable
  417 
  285 
  Current portion of bank loans payable
  488 
  367 
  Current portion of capital leases
  283 
  250 
 
    
    
     Total current liabilities
  8,133 
  9,821 
 
    
    
  Bank loans payable, net of current portion
  2,292 
  1,437 
  Capital leases, net of current portion 
  442 
  524 
  Deferred tax liabilities
  327 
  327 
  Income taxes payable
  439 
  828 
  Other non-current liabilities
  33 
  36 
 
    
    
     Total non-current liabilities
  3,533 
  3,152 
 
    
    
TOTAL LIABILITIES
  11,666 
  12,973 
 
    
    
 
    
    
 
    
    
EQUITY
    
    
 
    
    
TRIO-TECH INTERNATIONAL'S SHAREHOLDERS' EQUITY:
    
    
  Common stock, no par value, 15,000,000 shares authorized; 3,673,055 and
    
    
   3,553,055 issued and outstanding at June 30, 2019 and June 30, 2018, respectively
  11,424 
  11,023 
  Paid-in capital
  3,305 
  3,249 
  Accumulated retained earnings
  7,070 
  5,525 
  Accumulated other comprehensive gain-translation adjustments
  1,867 
  2,182 
 
    
    
     Total Trio-Tech International shareholders' equity
  23,666 
  21,979 
 
    
    
Non-controlling interest
  1,195 
  1,522 
 
    
    
TOTAL EQUITY
  24,861 
  23,501 
 
    
    
TOTAL LIABILITIES AND EQUITY
 $36,527 
 $36,474