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Trio-Tech Reports Third Quarter Results and Announces Initial Contract for Its Dynamic HTOL Electric Vehicle Power Module Test System

Trio-Tech International (NYSE MKT: TRT) today announced financial results for the third quarter and first nine months of fiscal 2023, and announced its initial contract for its Dynamic HTOL Electric Vehicle Power Module Test System

Third Quarter Results

Revenue for the third fiscal quarter declined 12% to $9,842,000, compared to $11,138,000 in the same quarter of fiscal 2022. Testing services revenue increased 29% to $5,697,000 from $4,417,000 a year ago, while manufacturing revenue decreased 4% to $2,963,000, from $3,097,000 and distribution revenue declined 67% to $1,179,000 compared to $3,620,000 in the same quarter last year.

Overall gross margin was $2,458,000 compared to $2,474,000 a year ago, and improved to 25% of revenue compared to 22% last year. The increase in gross margin reflects improved operations at testing services segment, partially offset by lower gross margin in the manufacturing and distribution segments.

Total operating expenses declined to $2,495,000 from $2,604,000 in the same quarter last year, leading to $57,000 in operating income versus an operating loss of $34,000 a year earlier.

The net loss attributable to Trio-Tech International Common Shareholders for the three months ended March 31, 2023 was $7,000, or $0.00 per share after non-cash stock compensation expenses of $283,000. This compares to a net loss of $167,000, or $0.04 per share, which included non-cash stock compensation expenses of $433,000, for the third quarter of fiscal 2022.

Trio-Tech Launches Dynamic HTOL Test System for Electric Vehicles

S.W. Yong, Trio-Tech's CEO, said, "Continued strength in our testing services business and effective control over operating costs enabled Trio-Tech to deliver improved third quarter gross margin and generate free cash flow despite the decrease in revenue in a very challenging environment in our industry.

“We are encouraged by improving demand trends for electronic products in automotive applications. A key reason for our optimism is the development and launch, in the current fiscal year, of our new Dynamic High Temperature Operating Life Test (HTOL) System for Silicon Carbide (SiC) / Gallium Nitride (GaN) Power Modules used in the electric vehicle market. Designed to comply with AQG 324 automotive guidelines, Trio-Tech’s Dynamic HTOL System won an initial $1,000,000 order from a lead customer with which we are working closely to achieve their test requirements and validation of our systems. We expect to deliver these systems within the next two quarters and are also actively engaging several new potential customers for similar applications. In light of the strong global growth projections for the GaN & SiC power semiconductor market, we believe this new test system has the potential to significantly contribute to Trio-Tech’s long-term growth and profitability.”

Nine Months Results

For the first nine months of fiscal 2023, revenue increased 6% to $34,171,000 compared to $32,231,000 for the first nine months of fiscal 2022, reflecting a 27% increase in testing services revenue to $17,709,000 from $13,983,000, a 14% increase in manufacturing revenue to $11,592,000 from $10,187,000 and a 40% decline in distribution revenue to $4,855,000 from $8,038,000 in the same period last year.

Gross margin for the first nine months of fiscal 2023 increased to $9,415,000, or 28% of revenue, from $8,543,000, or 27% of revenue, for the same period last year.

Operating expenses increased to $7,316,000 compared to $7,047,000, but declined to 21% of revenue, compared to 22% of revenue in the same period of fiscal 2022.

Net income attributable to Trio-Tech International Common Shareholders for the first nine months of fiscal 2023 was $1,382,000, or $0.33 per diluted share, compared to $1,605,000, or $0.38 per diluted share, for the first nine months of fiscal 2022.

Shareholders’ equity at March 31, 2023 was $30,476,000, or $7.48 per outstanding share, compared to $28,002,000, or $6.88 per outstanding share, at June 30, 2022. There were approximately 4,076,680 common shares outstanding at March 31,2023.

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 and Jiangsu 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; public health issues related to the COVID-19 pandemic; 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.

TRIO‑TECH INTERNATIONAL AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

UNAUDITED (IN THOUSANDS, EXCEPT EARNINGS PER SHARE)

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

March 31,

 

March 31,

Revenue

 

2023

 

2022

 

2023

 

2022

 

 

 

 

 

 

 

 

 

Manufacturing

 

$

2,963

 

 

$

3,097

 

 

$

11,592

 

 

$

10,187

 

Testing Services

 

 

5,697

 

 

 

4,417

 

 

 

17,709

 

 

 

13,983

 

Distribution

 

 

1,179

 

 

 

3,620

 

 

 

4,855

 

 

 

8,038

 

Real Estate

 

 

3

 

 

 

4

 

 

 

15

 

 

 

23

 

 

 

 

9,842

 

 

 

11,138

 

 

 

34,171

 

 

 

32,231

 

Cost of Sales

 

 

 

 

 

 

 

 

Cost of manufactured products sold

 

 

2,451

 

 

 

2,530

 

 

 

8,825

 

 

 

7,838

 

Cost of testing services rendered

 

 

3,940

 

 

 

3,169

 

 

 

11,813

 

 

 

9,141

 

Cost of distribution

 

 

975

 

 

 

2,945

 

 

 

4,064

 

 

 

6,651

 

Cost of real estate

 

 

18

 

 

 

20

 

 

 

54

 

 

 

58

 

 

 

 

7,384

 

 

 

8,664

 

 

 

24,756

 

 

 

23,688

 

Gross Margin

 

 

2,458

 

 

 

2,474

 

 

 

9,415

 

 

 

8,543

 

 

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

 

General and administrative

 

 

2,248

 

 

 

2,378

 

 

 

6,472

 

 

 

6,305

 

Selling

 

 

160

 

 

 

146

 

 

 

526

 

 

 

449

 

Research and development

 

 

87

 

 

 

80

 

 

 

311

 

 

 

293

 

Loss on disposal of property, plant and equipment

 

 

--

 

 

 

--

 

 

 

7

 

 

 

--

 

Total operating expenses

 

 

2,495

 

 

 

2,604

 

 

 

7,316

 

 

 

7,047

 

(Loss) Income from Operations

 

 

(37

)

 

 

(130

)

 

 

2,099

 

 

 

1,496

 

Other Income (Expenses)

 

 

 

 

 

 

 

 

Interest expenses

 

 

(29

)

 

 

(31

)

 

 

(83

)

 

 

(87

)

Other income, net

 

 

123

 

 

 

127

 

 

 

59

 

 

 

669

 

Total other income (expenses)

 

 

94

 

 

 

96

 

 

 

(24

)

 

 

582

 

Income (Loss) from Continuing Operations before Income Taxes

 

 

57

 

 

 

(34

)

 

 

2,075

 

 

 

2,078

 

Income Tax Expenses

 

 

(8

)

 

 

(170

)

 

 

(474

)

 

 

(503

)

Income (Loss) from Continuing Operations before Non-controlling Interest, net of tax

 

 

49

 

 

 

(204

)

 

 

1,601

 

 

 

1,575

 

Income (loss) from Discontinued Operations, net of tax

 

 

5

 

 

 

--

 

 

 

(4

)

 

 

5

 

NET INCOME (LOSS)

 

 

54

 

 

 

(204

)

 

 

1,597

 

 

 

1,580

 

Less: Net income (loss) Attributable to Non-controlling Interest

 

 

61

 

 

 

(37

)

 

 

215

 

 

 

(25

)

Net (Loss) Income Attributable to Trio-Tech International

 

 

(7

)

 

 

(167

)

 

 

1,382

 

 

 

1,605

 

Net Income Attributable to Trio-Tech International:

 

 

 

 

 

 

 

 

(Loss) Income from Continuing Operations, net of tax

 

 

(10

)

 

 

(167

)

 

 

1,384

 

 

 

1,603

 

Income (loss) from Discontinued Operations, net of tax

 

 

3

 

 

 

--

 

 

 

(2

)

 

 

2

 

Net (Loss) Income Attributable to Trio-Tech International

 

$

(7

)

 

$

(167

)

 

$

1,382

 

 

$

1,605

 

 

 

 

 

 

 

 

 

 

Basic (Loss) Earnings per Share

 

$

(0.00

)

 

$

(0.04

)

 

$

0.34

 

 

$

0.40

 

Diluted (Loss) Earnings per Share

 

$

(0.00

)

 

$

(0.04

)

 

$

0.33

 

 

$

0.38

 

 

 

 

 

 

 

 

 

 

Weighted Average Shares Outstanding - Basic

 

 

4,075

 

 

 

3,949

 

 

 

4,075

 

 

 

3,949

 

Weighted Average Shares Outstanding - Diluted

 

 

4,159

 

 

 

4,221

 

 

 

4,161

 

 

 

4,140

 

TRIO‑TECH INTERNATIONAL AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

UNAUDITED (IN THOUSANDS)

 

 

 

Three Months Ended

 

Nine Months Ended

 

March 31,

 

March 31,

 

2023

 

2022

2023

 

2022

Comprehensive Income (Loss) Attributable to Trio-Tech International:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

54

 

 

$

(204

)

 

$

1,597

 

$

1,580

 

 

 

 

 

 

 

 

 

 

Foreign Currency Translation, net of tax

 

 

166

 

 

 

16

 

 

 

521

 

 

(22

)

 

 

 

 

 

 

 

 

 

Comprehensive Income (Loss)

 

 

220

 

 

 

(188

)

 

 

2,118

 

 

1,558

 

 

 

 

 

 

 

 

 

 

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

 

 

(85

)

 

 

(46

)

 

 

127

 

 

(40

)

 

 

 

 

 

 

 

 

 

Comprehensive Income (Loss) Attributable to Trio-Tech International

 

$

305

 

 

$

(142

)

 

$

1,991

 

$

1,598

 

TRIO‑TECH INTERNATIONAL AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT NUMBER OF SHARES)

 

   

Mar. 31,

 

Jun. 30,

 

2023

 

2022

ASSETS

 

(Unaudited)

 

(Audited)

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

Cash and cash equivalents

 

$

8,430

 

$

7,698

Short-term deposits

 

 

5,703

 

 

5,420

Trade account receivables, net

 

 

11,004

 

 

11,592

Other receivables

 

 

757

 

 

998

Inventories, net

 

 

2,324

 

 

2,258

Prepaid expenses and other current assets

 

 

731

 

 

1,215

Financed sales receivable

 

 

22

 

 

21

Restricted term deposit

 

 

755

 

 

--

Total current assets

 

 

29,726

 

 

29,202

 

 

 

 

 

NON-CURRENT ASSETS:

 

 

 

 

Deferred tax assets

 

 

91

 

 

169

Investment properties, net

 

 

517

 

 

585

Property, plant and equipment, net

 

 

9,987

 

 

8,481

Operating lease right-of-use assets

 

 

3,059

 

 

3,152

Other assets

 

 

232

 

 

137

Financed sales receivable

 

 

--

 

 

17

Restricted term deposits

 

 

1,762

 

 

1,678

Total non-current assets

 

 

15,648

 

 

14,219

TOTAL ASSETS

 

$

45,374

 

$

43,421

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

Lines of credit

 

$

107

 

$

929

Accounts payable

 

 

1,835

 

 

2,401

Accrued expense

 

 

6,570

 

 

6,004

Income taxes payable

 

 

390

 

 

787

Current portion of bank loans payable

 

 

513

 

 

472

Current portion of finance leases

 

 

103

 

 

118

Current portion of operating leases

 

 

1,361

 

 

1,218

Total current liabilities

 

 

10,879

 

 

11,929

 

NON-CURRENT LIABILITIES:

 

 

 

 

Bank loans payable, net of current portion

 

 

1,054

 

 

1,272

Finance leases, net of current portion

 

 

43

 

 

119

Operating leases, net of current portion

 

 

1,698

 

 

1,934

Income taxes payable, net of current portion

 

 

255

 

 

137

Deferred tax liabilities

 

 

17

 

 

--

Other non-current liabilities

 

 

952

 

 

28

Total non-current liabilities

 

 

4,019

 

 

3,490

TOTAL LIABILITIES

 

$

14,898

 

$

15,419

 

 

 

 

EQUITY

 

 

 

 

TRIO-TECH INTERNATIONAL'S SHAREHOLDERS' EQUITY:

 

 

 

 

Common stock, no par value, 15,000,000 shares authorized; 4,076,680 and 4,071,680 shares issued and outstanding at March 31, 2023 and June 30, 2022, respectively

 

 

12,769

 

 

12,750

Paid-in capital

 

 

5,045

 

 

4,708

Accumulated retained earnings

 

 

10,601

 

 

9,219

Accumulated other comprehensive gain-translation adjustments

 

 

1,806

 

 

1,197

Total Trio-Tech International shareholders' equity

 

 

30,221

 

 

27,874

Non-controlling interest

 

 

255

 

 

128

TOTAL EQUITY

 

 

30,476

 

 

28,002

TOTAL LIABILITIES AND EQUITY

 

$

45,374

 

$

43,421

 

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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