8-K
TRIO-TECH INTERNATIONAL (TRT)
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 16, 2022
| 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 16, 2022, Trio-Tech International (“the Company”) issued a press release announcing its financial results for the fiscal quarter ended December 31, 2021. A copy of the press release is attached as Exhibit 99.1.
The information under this item 2.02 of this Current Report, including the exhibit hereto to the extent the same relates to this item 2.02, 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 under this item 2.02 of this Current Report, including the exhibit hereto to the extent the same relates to this item 2.02, 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 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangement of Certain Officers.
On May 16, 2022, the Company announced the appointment of Ms. Srinivasan Anitha as Chief Financial Officer (CFO) effective July 1, 2022. Ms. Anitha, 42, a Chartered Accountant and a Certified Internal Auditor, has over twenty years of diversified experience in areas of audit, finance and corporate consulting. Ms Anitha has been a consultant to the Company for more than the past 5 years and is currently serving as the Internal Audit Team Leader of the Company. She had been employed by the Company from 2006 to 2012. She holds a Bachelor’s Degree in Commerce from the University of Madras, India. She is a member of The Institute of Singapore Chartered Accountants, The Institute of Chartered Accountants of India and The Institute of Internal Auditors.
Ms. Anitha will succeed Mr Victor Ting Hock Ming, who will step down as Chief Financial Officer, effective July 1, 2022, as reported in the Form 10-Q for the third quarter of fiscal 2022. Ms Anitha has signed a standard offer letter with the Company upon this appointment.
A copy of the press release is attached as Exhibit 99.1.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
99.1 Press Release of Trio-Tech International dated May 16, 2022
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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.
Date: May 16, 2022
| TRIO-TECH INTERNATIONAL |
|---|
| By: /s/ VICTOR H.M. TING |
| Name: Victor H.M. Ting,<br><br> <br>Title: Vice President and<br><br> <br>Chief Financial Officer |
EXIBIT INDEX
| Exhibit Number | Description |
|---|---|
| 99.1 | Press Release of Trio-Tech International dated May 16, 2022 |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
ex_376136.htm
Exhibit 99.1
| LOS ANGELES<br><br> <br>SINGAPORE<br><br> <br>KUALA LUMPUR<br><br> <br>BANGKOK<br><br> <br>SUZHOU<br><br> <br>TIANJIN<br><br> <br>CHONGQING<br><br> <br>JIANGSU | ||
|---|---|---|
| FOR IMMEDIATE RELEASE | Company Contact:<br><br> <br>A. Charles Wilson<br><br> <br>Chairman<br><br> <br>(818) 787-7000 | Investor Contact:<br><br> <br>Berkman Associates<br><br> <br>(310) 927-3108<br><br> <br>robert.jacobs@jacobscon.com |
| --- | --- | --- |
Trio-Tech Reports Nine Month Net Income of $0.38 Per Share
Versus $0.10 on 39% Increase in Revenue;
Third Quarter Revenue Increased 37%
Van Nuys, CA – May 16, 2022 – Trio-Tech International (NYSE MKT: TRT) today announced financial results for the third quarter and first nine months of fiscal 2022.
Third Quarter Results
Revenue for the third fiscal quarter increased 37% to $11,138,000 from $8,112,000 for the same quarter of fiscal 2021. Distribution revenue increased 147% to $3,620,000 from $1,467,000 last year. Testing services revenue increased 26% to $4,417,000 from $3,504,000 a year ago. Manufacturing revenue decreased 1% to $3,097,000 compared to $3,130,000 last year.
Gross margin increased 20% to $2,474,000 compared to $2,060,000 for last year’s third quarter, reflecting improved margins in the Company’s testing and distribution segments, offset by lower margins in manufacturing.
Total other income was $96,000, compared to $248,000 in the same quarter last year. In the third quarter this year, government grants to offset the negative impact of the COVID-19 pandemic were $Nil, compared to $107,000 in similar governmental grants in the same quarter last year.
The net loss attributable to Trio-Tech International Common Shareholders for the three months ended March 31, 2022 was $167,000, or $0.04 per share, which includes non-cash stock compensation expenses of $433,000. This compares to net income of $178,000, or $0.04 per diluted share, including non-cash stock compensation expenses of $129,000, for the same quarter last year.
Nine Months Results
For the first nine months of fiscal 2022, revenue increased 39% to $32,231,000 compared to $23,154,000 for the first nine months of fiscal 2021, reflecting a 40% increase in testing services revenue to $13,983,000 from $10,018,000, a 112% increase in distribution revenue to $8,038,000 from $3,790,000, and a 9% increase in manufacturing revenue to $10,187,000 from $9,324,000.
Gross margin for the first nine months of fiscal 2022 increased 57% to $8,543,000, or 27% of revenue, from $5,448,000, or 24% of revenue, for the first nine months last year.
General and administrative expenses increased to $6,305,000, or 20% of revenue, for the first nine months of fiscal 2022 from $5,245,000, or 23% of revenue, for the same period last year, while total operating expenses increased to $7,047,000, or 22% of revenue, from $5,877,000, or 25% of revenue.
Net income attributable to Trio-Tech International Common Shareholders for the first nine months of fiscal 2022 was $1,605,000, or $0.38 per diluted share, compared to $405,000, or $0.10 per diluted share, for the first nine months of fiscal 2021
Shareholders' equity at March 31, 2022 was $28,120,000, or $6.98 per outstanding share, compared to $25,634,000, or $6.55 per outstanding share, at June 30, 2021. There were approximately 4,029,180 common shares outstanding at March 31,2022.
(more)
16139 Wyandotte Street, Van Nuys, CA 91406, USA ● TEL: (818) 787-7000 ● FAX (818) 787-9130
Trio-Tech Reports Nine Month Net Income of $0.38 Per Share
May 16, 2022
Page Two
CEO Comments
S.W. Yong, Trio-Tech's CEO, said, "We were required to close our facility in Tianjin, China for several days in January in compliance with the city government’s lockdown measures for mandatory testing of residents under China’s ZERO-COVID policy. We resumed full operations in Tianjin on January 21, 2022. This temporary shut-down resulted in lost revenue for the fiscal third quarter of approximately $260,000. Despite this, we posted sharp revenue gains in our testing services and distribution operations for the third quarter, typically the weakest quarter of our fiscal year, which is an encouraging sign of improving business conditions for our customers and their gradual recovery from the effects of the pandemic. We are cautiously optimistic about the business outlook for the fourth quarter.”
Yong added, “During the third quarter, we established our new joint venture company, Trio-Tech (Jiangsu) Co. Ltd. to provide sub-contract services to semiconductor and other electronics industries, primarily in Suzhou, China. While this joint venture has commenced operations and recently signed its first customer contract, it is not expected to contribute substantially to operating results in the current fiscal year.
“The Board of Directors would like to thank and congratulate our Chief Financial Officer, Mr. Victor Ting, upon his retirement next month, for his many years of service and innumerable contributions to the Company. His valuable knowledge will continue to benefit Trio-Tech as he serves on our Board of Directors. Taking over his duties as CFO beginning in Fiscal 2023 will be Ms. Srinivasan Anitha, a Chartered Accountant and Certified Internal Auditor who has worked closely with the Company and its management for the past 15 years. We believe her thorough knowledge and experience of our business and background will be a significant asset as we work to improve operating margins and drive increased shareholder value in the coming years”, he said.
About Trio‑Tech
Established in 1958, Trio-Tech International is located in Van Nuys, California, with its Principal Executive Office and regional headquarter 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 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.
(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, | |||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||
| Revenue | ||||||||||||
| Manufacturing | $ | 3,097 | $ | 3,130 | 10,187 | $ | 9,324 | |||||
| Testing Services | 4,417 | 3,504 | 13,983 | 10,018 | ||||||||
| Distribution | 3,620 | 1,467 | 8,038 | 3,790 | ||||||||
| Real Estate | 4 | 11 | 23 | 22 | ||||||||
| 11,138 | 8,112 | 32,231 | 23,154 | |||||||||
| Cost of Sales | ||||||||||||
| Cost of manufactured products sold | 2,530 | 2,148 | 7,838 | 6,855 | ||||||||
| Cost of testing services rendered | 3,169 | 2,651 | 9,141 | 7,651 | ||||||||
| Cost of distribution | 2,945 | 1,234 | 6,651 | 3,142 | ||||||||
| Cost of real estate | 20 | 19 | 58 | 58 | ||||||||
| 8,664 | 6,052 | 23,688 | 17,706 | |||||||||
| Gross Margin | 2,474 | 2,060 | 8,543 | 5,448 | ||||||||
| Operating Expenses: | ||||||||||||
| General and administrative | 2,378 | 1,923 | 6,305 | 5,245 | ||||||||
| Selling | 146 | 123 | 449 | 356 | ||||||||
| Research and development | 80 | 79 | 293 | 277 | ||||||||
| Gain on disposal of property, plant and equipment | -- | -- | -- | (1 | ) | |||||||
| Total operating expenses | 2,604 | 2,125 | 7,047 | 5,877 | ||||||||
| (Loss) Income from Operations | (130 | ) | (65 | ) | 1,496 | (429 | ) | |||||
| Other Income (Expenses) | ||||||||||||
| Interest expense | (31 | ) | (25 | ) | (87 | ) | (96 | ) | ||||
| Other income, net | 127 | 273 | 669 | 627 | ||||||||
| Total other income | 96 | 248 | 582 | 531 | ||||||||
| (Loss) Income from Continuing Operations before Income Taxes | (34 | ) | 183 | 2,078 | 102 | |||||||
| Income Tax Expenses | (170 | ) | (118 | ) | (503 | ) | (125 | ) | ||||
| (Loss) Income from Continuing Operations before Non-controlling Interest, net of tax | (204 | ) | 65 | 1,575 | (23 | ) | ||||||
| Income (loss) from Discontinued Operations, net of tax | -- | 1 | 5 | (26 | ) | |||||||
| NET (LOSS) INCOME | (204 | ) | 66 | 1,580 | (49 | ) | ||||||
| Less: Net (loss) Attributable to Non-controlling Interest | (37 | ) | (112 | ) | (25 | ) | (454 | ) | ||||
| Net (Loss) Income Attributable to Trio-Tech International | (167 | ) | 178 | 1,605 | 405 | |||||||
| Net Income Attributable to Trio-Tech International: | ||||||||||||
| (Loss) Income from Continuing Operations, net of tax | (167 | ) | 177 | 1,603 | 418 | |||||||
| Income (loss) from Discontinued Operations, net of tax | -- | 1 | 2 | (13 | ) | |||||||
| Net (Loss) Income Attributable to Trio-Tech International | $ | (167 | ) | $ | 178 | 1,605 | $ | 405 | ||||
| Basic (Loss) Earnings per Share | $ | (0.04 | ) | $ | 0.05 | 0.40 | $ | 0.11 | ||||
| Diluted (Loss) Earnings per Share | $ | (0.04 | ) | $ | 0.04 | 0.38 | $ | 0.10 | ||||
| Weighted Average Shares Outstanding - Basic | 3,949 | 3,913 | 3,949 | 3,913 | ||||||||
| Weighted Average Shares Outstanding - Diluted | 4,221 | 4,046 | 4,140 | 4,030 |
TRIO‑TECH INTERNATIONAL AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
UNAUDITED (IN THOUSANDS)
| Three Months Ended | Nine Months Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| March 31, | March 31, | |||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||
| Comprehensive (Loss) Income Attributable to Trio-Tech International: | ||||||||||||
| Net (loss) income | $ | (204 | ) | $ | 66 | $ | 1,580 | $ | (49 | ) | ||
| Foreign Currency Translation, net of tax | 16 | (468 | ) | (22 | ) | 1,115 | ||||||
| Comprehensive (Loss) Income | (188 | ) | (402 | ) | 1,558 | 1,066 | ||||||
| Less: Comprehensive Income (Loss) Attributable to Non-controlling Interest | (46 | ) | (136 | ) | (40 | ) | (455 | ) | ||||
| Comprehensive (Loss) Income Attributable to Trio-Tech International | $ | (142 | ) | $ | (266 | ) | $ | 1,598 | $ | 1,521 |
TRIO‑TECH INTERNATIONAL AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT NUMBER OF SHARES)
| Mar. 31, | Jun. 30, | |||
|---|---|---|---|---|
| 2022 | 2021 | |||
| (unaudited) | ||||
| ASSETS | ||||
| CURRENT ASSETS: | **** | **** | **** | **** |
| Cash and cash equivalents | $ | 7,478 | $ | 5,836 |
| Short-term deposits | 4,953 | 6,651 | ||
| Trade accounts receivable, net | 10,585 | 8,293 | ||
| Other receivables | 735 | 325 | ||
| Contract assets | 594 | 337 | ||
| Inventories, net | 2,272 | 2,080 | ||
| Prepaid expenses and other current assets | 732 | 418 | ||
| Financed Sales Receivable | 21 | 19 | ||
| Total current assets | 27,370 | 23,959 | ||
| Deferred tax assets | 189 | 217 | ||
| Investment properties, net | 636 | 681 | ||
| Property, plant and equipment, net | 9,107 | 9,531 | ||
| Operating lease right-of-use assets | 2,602 | 1,876 | ||
| Other assets | 141 | 262 | ||
| Restricted term deposits | 1,735 | 1,741 | ||
| Financed Sales Receivable | 23 | 39 | ||
| Total non-current assets | 14,433 | 14,347 | ||
| TOTAL ASSETS | $ | 41,803 | $ | 38,306 |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | **** | **** | **** | **** |
| CURRENT LIABILITIES: | ||||
| Lines of credit | $ | 523 | $ | 72 |
| Accounts payable | 2,220 | 3,702 | ||
| Accrued expenses | 3,870 | 2,690 | ||
| Contract Liabilities | 1,172 | 673 | ||
| Income taxes payable | 476 | 314 | ||
| Current portion of bank loans payable | 493 | 439 | ||
| Current portion of finance leases | 136 | 197 | ||
| Current portion of operating leases | 758 | 672 | ||
| Total current liabilities | 9,648 | 8,759 | ||
| Bank loans payable, net of current portion | 1,470 | 1,621 | ||
| Finance leases, net of current portion | 152 | 253 | ||
| Operating leases, net of current portion | 1,844 | 1,204 | ||
| Income taxes payable | 281 | 385 | ||
| Other non-current liabilities | 31 | 31 | ||
| Total non-current liabilities | 3,778 | 3,494 | ||
| TOTAL LIABILITIES | 13,426 | 12,253 | ||
| EQUITY | ||||
| TRIO-TECH INTERNATIONAL'S SHAREHOLDERS' EQUITY: | ||||
| Common stock, no par value, 15,000,000 shares authorized; 4,029,180 and 3,913,055 shares issued and outstanding at March 31, 2022 and June 30, 2021, respectively | 12,607 | 12,178 | ||
| Paid-in capital | 4,692 | 4,233 | ||
| Accumulated retained earnings | 8,429 | 6,824 | ||
| Accumulated other comprehensive gain-translation adjustments | 2,392 | 2,399 | ||
| Total Trio-Tech International shareholders' equity | 28,120 | 25,634 | ||
| Non-controlling interest | 257 | 419 | ||
| TOTAL EQUITY | 28,377 | 26,053 | ||
| TOTAL LIABILITIES AND EQUITY | $ | 41,803 | $ | 38,306 |