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): September 24, 2020
TRIO-TECH INTERNATIONAL
(Exact Name of Registrant as Specified in Its Charter)
California
(State or Other Jurisdiction of Incorporation)
| 1-14523<br><br><br>(Commission File<br>Number) | 95-2086631<br><br><br>(IRS Employer Identification<br>No.) |
|---|---|
| Block<br>1008 Toa Payoh North, Unit 03-09 Singapore<br><br>(Address of Principal Executive<br>Offices) | 318996<br><br><br>(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<br>of each class | Trading<br>Symbol(s) | Name of<br>each exchange on which registered |
|---|---|---|
| Common<br>Stock, no par value | TRT | NYSE<br>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 September 23, 2020, Trio-Tech International issued a press release announcing its financial results for the fiscal year ended June 30, 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 September 23, 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.
| Date:<br><br><br>September 24,<br>2020 | TRIO-TECH<br>INTERNATIONAL<br><br><br><br><br><br>By: /s/ VICTOR H.M.<br>TING<br><br><br><br><br><br>Name: Victor H.M.<br>Ting,<br><br><br>Title:<br>Vice President and<br><br><br>Chief<br>Financial Officer |
|---|
EXHIBIT INDEX
Exhibit Number Description
99.1 Press Release of Trio-Tech International dated September 23, 2020
ex99-1
| LOS<br>ANGELES<br><br><br>SINGAPORE<br><br><br>KUALA<br>LUMPUR<br><br><br>BANGKOK<br><br><br>SUZHOU<br><br><br>TIANJIN<br><br><br>CHONGQING | |
|---|---|
| FOR IMMEDIATE RELEASE | Company<br>Contact: <br>Investor Contact:<br><br><br>A.<br>Charles<br>Wilson <br>Berkman Associates<br><br><br>Chairman <br>(310) 927-3108<br><br><br>(818)<br>787-7000 <br>info@BerkmanAssociates.com |
| --- | --- |
Trio-Tech Reports Fourth Quarter and Fiscal 2020 Results
Van Nuys, CA – September 23, 2020 – Trio-Tech International (NYSE MKT: TRT) today announced financial results for the fourth quarter and fiscal year ended June 30, 2020.
Fourth Quarter Results
Revenue for the fourth quarter of fiscal 2020 decreased 32% to $7,179,000 compared to $10,625,000 for the fourth quarter of fiscal 2019, primarily due to the global Covid-19 pandemic which affected demand for Trio-Tech’s semiconductor manufacturing products and testing services. Manufacturing revenue decreased 43% to $2,724,000 compared to $4,803,000 in the same quarter last year, testing services revenue decreased 28% to $2,822,000 compared to $3,941,000, and distribution revenue decreased 13% to $1,620,000 compared to $1,864,000 in the same quarter last year.
The pandemic contributed to a decline in revenue, which, coupled with a change in product mix, reduced gross margin to $1,323,000 for the fourth quarter of fiscal 2020 from $2,468,000 for last year’s fourth quarter. As a percentage of revenue, gross margin declined to 18% compared to 23% of revenue for the same quarter last fiscal year.
The decline in sales, triggered primarily by the effect of the pandemic, resulted in a fourth quarter loss from operations of $541,000, compared to income from operations of $321,000 in the same quarter last fiscal year.
Net income for the fourth quarter of fiscal 2020 was $197,000, or $0.05 per diluted share, compared to net income of $449,000, or $0.12 per diluted share, in the same quarter last year. Net income for the fourth quarter of fiscal 2020 benefitted from $455,000 in other income which is included in financial assistance received from local government in Singapore, Malaysia and China to mitigate the negative impact of the Covid-19 pandemic.
Shareholders' equity at June 30, 2020 increased to $25,146,000, or $6.84 per outstanding share, compared to $24,861,000, or $6.77 per outstanding share, at June 30, 2019. There were 3,673,055 common shares outstanding at June 30, 2020.
CEO Comments
S.W. Yong, Trio-Tech's CEO, said, “There is no doubt that Trio-Tech was hit hard in the past few months by the Covid-19 pandemic. Under these difficult circumstances we are proud to report that Trio-Tech remained profitable for the fiscal year and fourth quarter, posting profits from sales of properties held for sale in our Malaysia operation. Additionally, backlog at the close of fiscal 2020 was $9,340,000, a solid figure which compares favorably to our backlog of $10,149,000 at the end of fiscal 2019. While the continuing pandemic presents obstacles to the Company’s short-term outlook, we are taking significant steps to trim operations, cutting operating and overhead expenses to deal with the financial effects of the pandemic.
(more)
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, 2020
Page Two
Fiscal 2020 Results
For the fiscal year ended June 30, 2020, revenue decreased 12% to $34,465,000 compared to $39,198,000 in fiscal 2019, primarily related to the effects of the Covid-19 pandemic. Manufacturing revenue decreased 22% to $11,605,000 compared to $14,889,000 and testing services revenue decreased 11% to $14,840,000 compared to $16,760,000 for fiscal 2019. Distribution revenue increased 7% to $7,958,000 compared to $7,451,000 for fiscal 2019.
Fiscal 2020 gross margin decreased to $7,266,000, or 21% of revenue, compared to $9,001,000, or 23% of revenue for fiscal 2019.
The revenue decline, primarily brought about by the pandemic contributed to an operating loss for fiscal 2020 of $859,000, compared to income from operations of $794,000 for fiscal 2019.
Net income for fiscal 2020 was $966,000, or $0.26 per diluted share, compared to net income of $1,545,000, or $0.41 per diluted share, for fiscal 2019.
Net income for fiscal 2020 benefited from other income of $2,054,000, which included a pre-tax gain of $1,172,000 from the sale of real estate properties and an additional $718,000 in governmental grants to mitigate the negative impacts on our businesses from the pandemic. In fiscal 2019, other income amounting to $615,000 included a pre-tax gain of $685,000 from the sale of properties.
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; 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<br>Months Ended | |||
| --- | --- | --- | --- | --- |
| June 30, | June 30, | |||
| Revenue | 2020 | 2019 | 2020 | 2019 |
| Manufacturing | $2,724 | $4,803 | $11,605 | $14,889 |
| Testing services | 2,822 | 3,941 | 14,840 | 16,760 |
| Distribution | 1,620 | 1,864 | 7,958 | 7,451 |
| Real<br>estate | 13 | 17 | 62 | 98 |
| 7,179 | 10,625 | 34,465 | 39,198 | |
| Cost of Sales | ||||
| Cost of manufactured<br>products sold | 2,138 | 3,587 | 8,927 | 11,393 |
| Cost of testing services rendered | 2,307 | 2,851 | 11,353 | 12,202 |
| Cost of<br>distribution | 1,393 | 1,674 | 6,847 | 6,505 |
| Cost of real<br>estate | 18 | 45 | 72 | 97 |
| 5,856 | 8,157 | 27,199 | 30,197 | |
| Gross Margin | 1,323 | 2,468 | 7,266 | 9,001 |
| Operating Expenses: | ||||
| General and administrative | 1,657 | 1,826 | 6,976 | 7,049 |
| Selling | 132 | 246 | 679 | 826 |
| Research and development | 75 | 75 | 355 | 345 |
| Impairment loss on<br>long-lived assets | -- | -- | 139 | -- |
| Gain<br>on disposal of property, plant and equipment | -- | -- | (24) | (13) |
| Total operating expenses | 1,864 | 2,147 | 8,125 | 8,207 |
| (Loss) Income<br>from Operations | (541) | 321 | (859) | 794 |
| Other (Expenses)<br>Income | ||||
| Interest expense | (44) | (69) | (230) | (319) |
| Other income, net | 522 | 29 | 1,112 | 249 |
| Gain on sale of<br>properties | -- | -- | 1,172 | 685 |
| Total other<br>Income (Expenses) | 478 | (40) | 2,054 | 615 |
| (Loss)<br>Income from Continuing Operations before Income Taxes | (63) | 281 | 1,195 | 1,409 |
| Income Tax<br>Benefit | 124 | 201 | 12 | 42 |
| Income from Continuing Operations<br>before Non-controlling Interest, net of tax | 61 | 482 | 1,207 | 1,451 |
| Gain (Loss)<br>from discontinued operations, net of tax | 18 | (1) | (3) | (3) |
| NET INCOME | 79 | 481 | 1,204 | 1,448 |
| Less: Net income<br>(loss) attributable to the non-controlling interest | (118) | 32 | 238 | (97) |
| Net Income attributable to Trio-Tech International | 197 | 449 | 966 | 1,545 |
| Net Income Attributable to Trio-Tech International: | ||||
| Income from continuing operations, net of tax | 187 | 451 | 967 | 1,548 |
| Gain (Loss)<br>from discontinued operations, net of tax | 10 | (2) | (1) | (3) |
| Net Income Attributable to Trio-Tech International | 197 | 449 | 966 | 1,545 |
| Basic Earnings per<br>Share - Continuing Operations | $0.05 | $0.12 | $0.26 | $0.42 |
| Basic Loss per<br>Share - Discontinued Operations | -- | -- | -- | -- |
| Basic<br>Earnings per Share | $0.05 | $0.12 | $0.26 | $0.42 |
| Diluted Earnings per Share<br>– Continuing Operations | $0.05 | $0.12 | $0.26 | $0.41 |
| Diluted Loss per<br>Share – Discontinued Operations | -- | -- | -- | -- |
| Diluted<br>Earnings per Share | $0.05 | $0.12 | $0.26 | $0.41 |
| Weighted Average Shares Outstanding - Basic | 3,673 | 3,673 | 3,673 | 3,673 |
| Weighted Average Shares Outstanding - Diluted | 3,688 | 3,681 | 3,722 | 3,762 |
| TRIO-TECH INTERNATIONAL AND SUBSIDIARIES | ||||
| --- | ||||
| CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME | ||||
| AUDITED (IN THOUSANDS, EXCEPT EARNINGS PER SHARE) | ||||
| Three Months Ended | Twelve<br>Months Ended | |||
| --- | --- | --- | --- | |
| June 30, | June 30, | |||
| 2020 | 2019 | 2020 | 2019 | |
| Comprehensive Income | ||||
| --- | --- | --- | --- | --- |
| Attributable to Trio-Tech International | ||||
| Common<br>Shareholders: | ||||
| Net income | $79 | $481 | $1,204 | $1,448 |
| Foreign currency translation, net of tax | 309 | (231) | (742) | (420) |
| Comprehensive Income | 388 | 250 | 462 | 1,028 |
| Less: Comprehensive<br>(Loss) Income | ||||
| attributable to non-controlling interests | (156) | (11) | 220 | (202) |
| Comprehensive Income | ||||
| Attributable to Trio-Tech International | $544 | $261 | $242 | $1,230 |
| TRIO-TECH INTERNATIONAL AND SUBSIDIARIES | ||||
| --- | ||||
| CONDENSED<br>CONSOLIDATED BALANCE SHEETS | ||||
| (IN THOUSANDS, EXCEPT NUMBER OF SHARES) | ||||
| June<br>30, | ||||
| --- | --- | --- | ||
| 2020 | 2019 | |||
| ASSETS | (Audited) | |||
| CURRENT ASSETS: | ||||
| Cash and cash equivalents | $4,150 | $4,863 | ||
| Short-term deposits | 6,697 | 4,144 | ||
| Short-term advances | 141 | -- | ||
| Trade accounts receivable, net | 5,951 | 7,113 | ||
| Other receivables | 998 | 817 | ||
| Inventories, net | 1,922 | 2,427 | ||
| Prepaid expenses and other current assets | 341 | 287 | ||
| Assets held for sale | -- | 89 | ||
| Total current assets | 20,200 | 19,740 | ||
| Deferred tax assets | 247 | 390 | ||
| Investment properties, net | 690 | 782 | ||
| Property, plant and equipment, net | 10,310 | 12,159 | ||
| Operating lease<br>right-of-use assets | 944 | -- | ||
| Other assets | 1,609 | 1,750 | ||
| Restricted term deposits | 1,660 | 1,706 | ||
| Total non-current assets | 15,460 | 16,787 | ||
| TOTAL ASSETS | $35,660 | $36,527 | ||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||
| CURRENT LIABILITIES: | ||||
| Lines of credit | $172 | $187 | ||
| Accounts payable | 2,590 | 3,272 | ||
| Accrued expenses | 3,005 | 3,486 | ||
| Income taxes payable | 344 | 417 | ||
| Current portion of bank loans payable | 370 | 488 | ||
| Current portion of finance leases | 231 | 283 | ||
| Current portion of operating leases | 477 | -- | ||
| Current portion of PPP loan | 54 | -- | ||
| Total current liabilities | 7,243 | 8,133 | ||
| Bank loans payable, net of current portion | 1,836 | 2,292 | ||
| Finance leases, net of current portion | 435 | 442 | ||
| Operating leases, net of current portion | 467 | -- | ||
| Deferred tax liabilities | -- | 327 | ||
| Income taxes payable | 430 | 439 | ||
| PPP<br>loan, net of current portion | 67 | -- | ||
| Other non-current liabilities | 36 | 33 | ||
| Total non-current liabilities | 3,271 | 3,533 | ||
| TOTAL LIABILITIES | 10,514 | 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 June<br>30, 2020 and June 30, 2019,<br>respectively | 11,424 | 11,424 | ||
| Paid-in capital | 3,363 | 3,305 | ||
| Accumulated retained earnings | 8,036 | 7,070 | ||
| Accumulated other comprehensive gain-translation adjustments | 1,143 | 1,867 | ||
| Total Trio-Tech International shareholders' equity | 23,966 | 23,666 | ||
| Non-controlling interest | 1,180 | 1,195 | ||
| TOTAL EQUITY | 25,146 | 24,861 | ||
| TOTAL LIABILITIES AND EQUITY | $35,660 | $36,527 |