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): November 13, 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)
 
Securities registered or to be registered pursuant to Section 12(b) of the Act:
 
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
  Common Stock, no par value
  TRT
  NYSE American
 
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 November 13, 2019, Trio-Tech International issued a press release announcing its financial results for the fiscal quarter ended September 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 November 13, 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:                       
November 14, 2019
 
 
By: /s/ VICTOR H.M. TING
Name: Victor H.M. Ting
Title:   Vice President and
            Chief Financial Officer
 
 

 
 
 
 
EXIBIT INDEX
 
 Exhibit Number
 
Description
 
Press Release of Trio-Tech International dated November 13, 2019
 
 
 
 
 
                                          
 
 
 
Blueprint
 
Exhibit 99.1

 
 
LOS ANGELES
SINGAPORE
KUALA LUMPUR
INDONESIA
BANGKOK
SUZHOU
TIANJIN
CHONGQING
 
 
 

 
 
Company Contact:                                       Investor Contact:
 A. Charles Wilson                                        Berkman Associates
 Chairman                                                      (310) 927-3108
 (818) 787-7000                                             info@BerkmanAssociates.com
 
 
Trio-Tech First Quarter Net Earnings
Per Diluted Share Increased to $0.07 versus $0.02
 
 
Van Nuys, CA -- November 13, 2019 – Trio-Tech International (NYSE MKT: TRT) announced today that net income for the first quarter of fiscal 2020 more than quadrupled to $273,000, or $0.07 per diluted share, compared to $65,000, or $0.02 per diluted share, for the first quarter of fiscal 2019.
 
Total revenue for the three months ended September 30, 2019 decreased 2% to $9,823,000 compared to revenue of $10,045,000 for the first quarter of fiscal 2019. Manufacturing revenue decreased 9% to $3,317,000 from $3,637,000 last year, primarily related to a decline in orders at Trio-Tech’s Singapore operations. Semiconductor testing services revenue decreased 1% to $4,390,000 compared to $4,437,000 last year, reflecting lower orders in Malaysia and China. Distribution revenue increased 8% to $2,099,000 compared to $1,944,000 in the first quarter last year, driven by an increase in orders from customers in Singapore.
 
Gross margin improved for all three of our major business segments for the first quarter of fiscal 2020 compared to the first quarter of fiscal 2019, increasing 7% to $2,252,000, or 23% of sales, compared to $2,101,000, or 21% of sales in the same quarter last year. As a percent of sales, an improved product mix raised manufacturing and distribution gross margin to 23%, from 21% and to 14% from 13%, respectively, while cost reductions contributed to an increase in testing services gross margin to 27% from 24% a year ago.
 
Operating expenses for the first quarter of fiscal 2020 increased 3% to $2,030,000, or 21% of sales, compared to $1,978,000, or 20% of sales, for the first quarter of fiscal 2019.
 
Operating income increased 80% to $222,000, or 2% of revenue, compared to $123,000, or 1% of revenue, in the same quarter last year.
 
Shareholders' equity at September 30, 2019 was $24,569,000, or $6.69 per outstanding share, compared to $24,861,000, or $6.77 per outstanding share, at June 30, 2019. There were approximately 3,673,055 common shares outstanding at September 30, 2019 and June 30, 2019.
 
CEO Comments
S.W. Yong, Trio-Tech's CEO, said, "By aggressively managing costs and implementing programs to improve operating efficiency, we achieved higher margins and increased profitability in the first quarter of fiscal 2020 despite the slight decline in revenue. A favorable product mix in our manufacturing and distribution operations also contributed to our bottom-line performance. Although our customers are likely to continue to be affected by uncertainty associated with ongoing trade disputes, we believe that the semiconductor industry remains robust with new products and technologies for communications, defense, automotive and a host of other applications that create many exciting opportunities for Trio-Tech’s long-term growth.”
 
 
 

-1-
  
 
Trio-Tech First Quarter Net Earnings Per Diluted Share Increased to $0.07 versus $0.02
November 13, 2019
Page Two


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; 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.
 
 
(tables attached)
 
 
-2-
 
 
TRIO-TECH INTERNATIONAL AND SUBSIDIARIES
 
 
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
 
 
UNAUDITED (IN THOUSANDS, EXCEPT EARNINGS PER SHARE)
 

 
 
 

 
Three Months Ended
 
 
 
September 30,
 
Revenue
 
2019
 
 
2018
 
 
 
 
 
 
 
 
Manufacturing
 $3,317 
 $3,637 
Testing services
  4,390 
  4,437 
Distribution
  2,099 
  1,944 
Real estate
  17 
  27 
 
    
    
 
  9,823 
  10,045 
Cost of Sales
    
    
Cost of manufactured products sold
  2,555 
  2,857 
Cost of testing services rendered
  3,191 
  3,383 
Cost of distribution
  1,807 
  1,686 
Cost of real estate
  18 
  18 
 
    
    
 
  7,571 
  7,944 
 
    
    
Gross Margin
  2,252 
  2,101 
 
    
    
Operating Expenses:
    
    
General and administrative
  1,788 
  1,759 
Selling
  190 
  147 
Research and development
  76 
  72 
Gain on disposal of property, plant and equipment
  (24)
  -- 
 
    
    
Total operating expenses
  2,030 
  1,978 
 
    
    
Income from Operations
  222 
  123 
 
    
    
Other Income (Expenses)
    
    
Interest expenses
  (68)
  (78)
Other income, net
  110 
  43 
 
    
    
Total other income (expenses)
  42 
  (35)
 
    
    
Income from Continuing Operations before Income Taxes
  264 
  88 
Income Tax Expense
  -- 
  (74)
 
    
    
Income from Continuing Operations before Non-controlling Interest, net of tax
  264 
  14 
 
    
    
Loss from discontinued operations, net of tax
  (1)
  (8)
 
    
    
NET INCOME
  263 
  6 
 
    
    
Less: Net loss attributable to the non-controlling interest
  (10)
  (59)
 
    
    
Net Income attributable to Trio-Tech International
  273 
 $65 
 
    
    
Net Income Attributable to Trio-Tech International:
    
    
Income from continuing operations, net of tax
  274 
  69 
Loss from discontinued operations, net of tax
  (1)
  (4)
 
    
    
Net Income Attributable to Trio-Tech International
 $273 
 $65 
 
    
    
Earnings per share
    
    
Basic earnings per share
 $0.07 
 $0.02 
 
    
    
Diluted earnings per share
 $0.07 
 $0.02 
 
    
    
Weighted Average Shares Outstanding - Basic
  3,673 
  3,608 
Weighted Average Shares Outstanding - Diluted
  3,690 
  3,732 
 
 
 
-3-
 
 
TRIO-TECH INTERNATIONAL AND SUBSIDIARIES
 
 
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
 
 
UNAUDITED (IN THOUSANDS, EXCEPT EARNINGS PER SHARE)
 
 
 
 
 
 
 
Three Months Ended
 
 
 
 September 30,
 
 
 
2019
 
 
2018
 
 
 
 
 
 
 
 
Comprehensive Income (Loss) Attributable to Trio-Tech International:
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
 $263 
 $6 
Foreign currency translation, net of tax
  (563)
  (539)
 
    
    
Comprehensive Loss
  (300)
  (533)
 
    
    
Less: comprehensive income (loss) attributable to non-controlling interests
  9 
  (135)
 
    
    
Comprehensive Loss Attributable to Trio-Tech International
 $(309)
 $(398)
 
 
 
-4-
 
 
TRIO-TECH INTERNATIONAL AND SUBSIDIARIES
 
 
CONDENSED CONSOLIDATED BALANCE SHEETS
 
 
(IN THOUSANDS, EXCEPT NUMBER OF SHARES)
 
 
 
 
 
 
Sep. 30,
 
 
Jun. 30,
 
 
 
2019
 
 
2019
 
ASSETS
 
(unaudited)
 
 
(audited)
 
 
 
 
 
 
 
 
CURRENT ASSETS:
 
 
 
 
 
 
  Cash and cash equivalents
 $3,710 
 $4,863 
  Short-term deposits
  5,222 
  4,144 
  Trade accounts receivable, net
  7,520 
  7,113 
  Other receivables
  756 
  817 
  Inventories, net
  1,688 
  2,427 
  Prepaid expenses and other current assets
  346 
  287 
  Assets held for sale
  88 
  89 
 
    
    
     Total current assets
  19,330 
  19,740 
 
    
    
Deferred tax assets
  383 
  390 
Investment properties, net
  736 
  782 
Property, plant and equipment, net
  11,787 
  12,159 
Operating lease right-of-use assets
  614 
  -- 
Other assets
  1,594 
  1,750 
Restricted term deposits
  1,674 
  1,706 
 
    
    
     Total non-current assets
  16,788 
  16,787 
 
    
    
TOTAL ASSETS
 $36,118 
 $36,527 
 
    
    
LIABILITIES AND SHAREHOLDERS’ EQUITY
    
    
 
    
    
CURRENT LIABILITIES:
    
    
  Lines of credit
 $-- 
 $187 
  Accounts payable
  3,170 
  3,272 
  Accrued expenses
  3,374 
  3,486 
  Income taxes payable
  333 
  417 
  Current portion of bank loans payable
  360 
  488 
  Current portion of finance leases
  206 
  283 
  Current portion of operating leases
  362 
  -- 
 
    
    
     Total current liabilities
  7,805 
  8,133 
 
    
    
  Bank loans payable, net of current portion
  2,259 
  2,292 
  Finance leases, net of current portion
  479 
  442 
  Operating leases, net of current portion 
  219 
  -- 
  Deferred tax liabilities
  321 
  327 
  Income taxes payable
  430 
  439 
  Other non-current liabilities
  36 
  33 
 
    
    
     Total non-current liabilities
  3,744 
  3,533 
 
    
    
TOTAL LIABILITIES
  11,549 
  11,666 
 
    
    
 
    
    
 
    
    
EQUITY
    
    
 
    
    
TRIO-TECH INTERNATIONAL'S SHAREHOLDERS' EQUITY:
    
    
  Common stock, no par value, 15,000,000 shares authorized; 3,673,055
    
    
   shares issued and outstanding at September 30, 2019 and June 30, 2019
  11.424 
  11,424 
  Paid-in capital
  3,313 
  3,305 
  Accumulated retained earnings
  7,343 
  7,070 
  Accumulated other comprehensive gain-translation adjustments
  1,285 
  1,867 
 
    
    
     Total Trio-Tech International shareholders' equity
  23,365 
  23,666 
 
    
    
Non-controlling interest
  1,204 
  1,195 
 
    
    
TOTAL EQUITY
  24,569 
  24,861 
 
    
    
TOTAL LIABILITIES AND EQUITY
 $36,118 
 $36,527 
 
    
    
 
 
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