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): May 21, 2020
 
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)
 
 
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))
 
 
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
 
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 May 21, 2020, Trio-Tech International issued a press release announcing its financial results for the fiscal quarter ended March 31, 2020. 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 May 21, 2020
 
 
 
 
 
 
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:                       
May 22, 2020
 
 
By: /s/ VICTOR H.M. TING
Name: Victor H.M. Ting
Title:   Vice President and
            Chief Financial Officer
 
 
 
 
 
EXHIBIT INDEX
 
 
 Exhibit Number
 
Description
 
Press Release of Trio-Tech International dated May 21, 2020
 
 
 
 

 
ex99-1
  Exhibit 99.1
 
LOS ANGELES
SINGAPORE
KUALA LUMPUR
BANGKOK
SUZHOU
TIANJIN
CHONGQING
 
 
 FOR IMMEDIATE RELEASE
 
Company Contact:                        Investor Contact:
A. Charles Wilson                          Berkman Associates
Chairman                                        (310) 927-3108
(818) 787-7000                               info@BerkmanAssociates.com
 
Trio-Tech Reports Third Quarter Results
 
Van Nuys, CA – May 21, 2020 – Trio-Tech International (NYSE MKT: TRT) today announced financial results for the third quarter and first nine months of fiscal 2020.
 
Third Quarter Results
 
Revenue for the three months ended March 31, 2020 decreased 4% to $8,501,000 compared to $8,838,000 for the third quarter of fiscal 2019. Manufacturing revenue decreased 19% to $2,519,000 compared to $3,097,000 last year, as customers’ uncertainties relating to the COVID-19 pandemic appear to have delayed certain orders. Testing services revenue decreased 6% to $3,741,000 from $3,989,000 for the same quarter last year, primarily reflecting the Malaysian government’s effort to reduce the spread of COVID-19 by restricting the transportation of workers. Distribution revenue increased 29% to $2,225,000 from $1,727,000 for the third quarter last year.
 
Reflecting lower revenue and unusually high labor costs in China due to the extension of the Lunar New Year holiday associated with the COVID-19 pandemic, gross margin decreased to $1,786,000, or 21% of revenue, for this year’s third quarter from $2,174,000, or 25% of revenue, for the third quarter a year ago.
 
Operating expenses increased 5% to $2,153,000 from $2,051,000 for the third quarter last year, primarily due to a one-time impairment charge of $139,000 on obsolete testing services equipment.
 
The loss from operations for the third quarter of fiscal 2020 was $367,000. This compares to an operating profit of $123,000 for the third quarter of fiscal 2019.
 
Net income attributable to Trio-Tech International Common Shareholders for the three months ended March 31, 2020 was $70,000, or $0.02 per diluted share, compared to $683,000, or $0.19 per diluted share, for the third quarter of fiscal 2019. Net income for the third quarter of 2020 benefitted from $263,000 in other income, which included financial assistance received from local governments in Singapore and China to mitigate the negative impact of the COVID-19 pandemic.
 
CEO Comments
 
S.W. Yong, Trio-Tech's CEO, said, "In response to the COVID-19 pandemic, we have implemented new operating procedures to enhance the safety of our employees and customers. Our Singapore and Malaysia operations have been classified as part of the global supply chain, but both are subject to social distancing requirements and manpower restriction that affect productivity and revenue. No one knows how long today’s stringent safety measures will last. Accordingly, we continue to closely monitor developments everywhere we operate, and will take additional precautionary steps if necessary to protect the interests of all Trio-Tech stakeholders and to protect the safety of our employees.”
 
Nine Months Results
 
For the first nine months of fiscal 2020 ended March 31, 2020, revenue decreased 5% to $27,286,000 compared to $28,573,000 for the same period last year. Manufacturing revenue declined 12% to $8,881,000 from $10,086,000, while testing services revenue declined 6% to $12,018,000 from $12,819,000. Distribution revenue increased 13% to $6,338,000 compared to $5,587,000 for the first nine months of fiscal 2019.
 
Overall gross margin for the first nine months of fiscal 2020 decreased 9% to $5,943,000, or 22% of revenue, from $6,533,000, or 23% of revenue, for the same period of fiscal 2019.
 
 
(more)
 
16139 Wyandotte Street, Van Nuys, CA 91406, USA ● TEL: (818) 787-7000 ● FAX (818) 787-9130
 
Trio-Tech Reports Third Quarter and Nine Months Results
May 21, 2020
Page Two
   
Operating expenses increased 3% to $6,261,000 from $6,060,000 for last year’s first nine months, primarily the result of the impairment charge mentioned above. The operating loss for the first nine months of fiscal 2020 was $318,000, compared to an operating profit of $473,000 for the same period last year.
 
For the first nine months of fiscal 2020, other income increased to $1,576,000 from $655,000 for the first nine months of fiscal 2019. This increase was mainly due to a non-recurring gain on the sale of assets of $1,172,000 compared to $685,000 for the same period last year, coupled with the government grants mentioned above.
 
Net income attributable to Trio-Tech International Common Shareholders for the first nine months of fiscal 2020 was $769,000, or $0.21 per diluted share, compared to $1,096,000, or $0.29 per diluted share for the first nine months of fiscal 2019.
 
Shareholders' equity at March 31, 2020 was $24,867,000, or $6.77 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 March 31, 2020.
 
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; public health issues related to the COVID-19 pandemic; 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
 
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
 
2020
 
 
2019
 
 
2020
 
 
2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Manufacturing
 $2,519 
 $3,097 
 $8,881 
 $10,086 
Testing Services
  3,741 
  3,989 
  12,018 
  12,819 
Distribution
  2,225 
  1,727 
  6,338 
  5,587 
Real Estate
  16 
  25 
  49 
  81 
 
    
    
    
    
 
  8,501 
  8,838 
  27,286 
  28,573 
Costs of Sales
    
    
    
    
Cost of manufactured products sold
  1,851 
  2,303 
  6,789 
  7,806 
Cost of testing services rendered
  2,937 
  2,862 
  9,046 
  9,351 
Cost of distribution
  1,909 
  1,483 
  5,454 
  4,831 
Cost of real estate
  18 
  16 
  54 
  52 
 
    
    
    
    
 
  6,715 
  6,664 
  21,343 
  22,040 
 
    
    
    
    
Gross Margin
  1,786 
  2,174 
  5,943 
  6,533 
 
    
    
    
    
Operating Expenses:
    
    
    
    
General and administrative
  1,754 
  1,742 
  5,319 
  5,223 
Selling
  181 
  246 
  547 
  580 
Research and development
  79 
  76 
  280 
  270 
Impairment loss on long-lived assets
  139 
  -- 
  139 
  -- 
Gain on disposal of property, plant and equipment
  -- 
  (13)
  (24)
  (13)
 
    
    
    
    
Total operating expenses
  2,153 
  2,051 
  6,261 
  6,060 
 
    
    
    
    
(Loss) income from Operations
  (367)
  123 
  (318)
  473 
 
    
    
    
    
Other Income
    
    
    
    
Interest expense
  (63)
  (74)
  (186)
  (250)
Gain on sale of assets held for sale
  -- 
  685 
  1,172 
  685 
Other income, net
  440 
  128 
  590 
  220 
 
    
    
    
    
Total other income
  377 
  739 
  1,576 
  655 
 
    
    
    
    
Income from Continuing Operations before Income Taxes
  10 
  862 
  1,258 
  1,128 
 
    
    
    
    
Income Tax Benefit (Expenses)
  8 
  (209)
  (112)
  (159)
 
    
    
    
    
income from Continuing Operations
    
    
    
    
before Non-controlling Interest, net of tax
  18 
  653 
  1,146 
  969 
 
    
    
    
    
(Loss) income from Discontinued Operations, net of tax
  (21)
  2 
  (21)
  (2)
 
    
    
    
    
NET (LOSS) INCOME
  (3)
  655 
  1,125 
  967 
 
    
    
    
    
Less: Net (loss) income Attributable to Non-controlling Interest
  (73)
  (28)
  356 
  (129)
 
    
    
    
    
Net Income Attributable to Trio-Tech International
  70 
  683 
  769 
  1,096 
 
    
    
    
    
Net Income Attributable to Trio-Tech International:
    
    
    
    
Income from Continuing Operations, net of tax
  81 
  682 
  780 
  1,097 
(Loss) Income from Discontinued Operations, net of tax
  (11)
  1 
  (11)
  (1)
 
    
    
    
    
Net Income Attributable to Trio-Tech International
 $70 
 $683 
 $769 
 $1,096 
 
    
    
    
    
Basic Earnings per Share
 $0.02 
 $0.19 
 $0.21 
 $0.30 
 
    
    
    
    
Diluted Earnings per Share
 $0.02 
 $0.19 
 $0.21 
 $0.29 
 
    
    
    
    
Weighted Average Shares Outstanding - Basic
  3,673 
  3,673 
  3,673 
  3,673 
Weighted Average Shares Outstanding - Diluted
  3,759 
  3,685 
  3,734 
  3,746 
 
 
 
 
TRIO-TECH INTERNATIONAL AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
UNAUDITED (IN THOUSANDS)
 
 
 

 
Three Months Ended
 
 
Nine Months Ended
 

 
March 31,
 
 
March 31,
 

 
2020
 
 
2019
 
 
2020
 
 
2019
 
Comprehensive (Loss) Income Attributable to Trio-Tech International:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net (loss) income
 $(3)
 $655 
 $1,125 
 $967 
 
    
    
    
    
Foreign Currency Translation, net of tax 
  (1,013)
  401 
  (1,051)
  (189)
 
    
    
    
    
Comprehensive (Loss) Income
  (1,016)
  1,056 
  74 
  778 
 
    
    
    
    
Less: Comprehensive (Loss) Income
    
    
    
    
  Attributable to Non-controlling Interest
  (64)
  1 
  376 
  (191)
 
    
    
    
    
Comprehensive (Loss) Income
    
    
    
    
  Attributable to Trio-Tech International
 $(952)
 $1,055 
 $(302)
 $969 
 
    
    
    
    
 
 
 
TRIO-TECH INTERNATIONAL AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT NUMBER OF SHARES)
 
 

 
Mar. 31,
 
 
Jun. 30,
 
 
 
2020
 
 
2019
 
ASSETS
 
(unaudited) 
 
 
 
 
CURRENT ASSETS:
 
 
 
 
 
 
  Cash and cash equivalents
 $4,370 
 $4,863 
  Short-term deposits
  6,309 
  4,144 
  Trade accounts receivable, net
  6,397 
  7,113 
  Other receivables
  1,065 
  817 
  Inventories, net
  2,226 
  2,427 
  Prepaid expenses and other current assets
  267 
  287 
  Assets held for sale
  -- 
  89 
     Total current assets
  20,634 
  19,740 
Deferred tax assets
  565 
  390 
Investment properties, net
  705 
  782 
Property, plant and equipment, net
  10,597 
  12,159 
Operating lease right-of-use assets
  1,073 
  -- 
Other assets
  1,595 
  1,750 
Restricted term deposits
  1,627 
  1,706 
     Total non-current assets
  16,162 
  16,787 
 
    
    
TOTAL ASSETS
 $36,796 
 $36,527 
 
    
    
LIABILITIES AND SHAREHOLDERS’ EQUITY
    
    
CURRENT LIABILITIES:
    
    
  Lines of credit
 $398 
 $187 
  Accounts payable
  3,129 
  3,272 
  Accrued expenses
  3,065 
  3,486 
  Income taxes payable
  396 
  417 
  Current portion of bank loans payable
  378 
  488 
  Current portion of finance leases
  246 
  283 
  Current portion of operating leases
  541 
  -- 
     Total current liabilities
  8,153 
  8,133 
 
    
    
  Bank loans payable, net of current portion
  1,919 
  2,292 
  Finance leases, net of current portion 
  486 
  442 
  Operating leases, net of current portion
  532 
  -- 
  Deferred tax liabilities
  375 
  327 
  Income taxes payable
  430 
  439 
  Other non-current liabilities
  34 
  33 
     Total non-current liabilities
  3,776 
  3,533 
TOTAL LIABILITIES
  11,929 
  11,666 
 
    
    
 
    
    
 
    
    
EQUITY
    
    
 
    
    
TRIO-TECH INTERNATIONAL'S SHAREHOLDERS' EQUITY:
    
    
  Common stock, no par value, 15,000,000 shares authorized; 3,673,055 
    
    
    issued and outstanding at March 31, 2020 and June 30, 2019, respectively
  11,424 
  11,424 
  Paid-in capital
  3,357 
  3,305 
  Accumulated retained earnings
  7,839 
  7,070 
  Accumulated other comprehensive gain-translation adjustments
  796 
  1,867 
     Total Trio-Tech International shareholders' equity
  23,416 
  23,666 
Non-controlling interest
  1,451 
  1,195 
TOTAL EQUITY
  24,867 
  24,861 
TOTAL LIABILITIES AND EQUITY
 $36,796 
 $36,527