Fiscal 2012 Net Loss Widens to $0.94 Per Share As Revenue Decreased 3.7% to $34.2 Million
VAN NUYS, Calif.--(BUSINESS WIRE)-- Trio-Tech International (NYSE MKT:TRT) today announced audited financial results for the fourth quarter and fiscal 2012 ended June 30, 2012.
For fiscal 2012, Trio-Tech reported revenue of $34,211,000, a decrease of 3.7% compared to revenue of $35,535,000 for fiscal 2011. The net loss attributable to Trio-Tech common shareholders for fiscal 2012 was $3,104,000, or $0.94 per share. This compares to a net loss for fiscal 2011 of $688,000, or $0.21 per diluted share.
For the fourth quarter of fiscal 2012, revenue increased 58.1% to $11,271,000 compared to $7,128,000 for the fourth quarter of fiscal 2011. The net loss attributable to Trio-Tech common shareholders for the fourth quarter of fiscal 2012 narrowed 33% to $579,000, or $0.18 per share, compared to a net loss of $904,000, or $0.27 per share, for the fourth quarter of fiscal 2011.
"Trio-Tech had some notable successes in fiscal 2012 as well as a few disappointments. A reduction in business at our Malaysian facility affected testing services operating margins.
"In addition, the performance of our oil and gas equipment fabrication business did not meet our expectations for revenue or profitability. We are taking a hard look at this business, with a view to eliminating operating losses as rapidly as possible. We recently communicated the notice of termination of the lease on the fabrication yard in Batam Indonesia. Going forward, fabrication projects will be subcontracted to other local service providers," said SW Yong, Trio-Tech's CEO.
"The annual results also mask an encouraging improvement in the pace of activity in our core semiconductor test equipment manufacturing and testing services businesses beginning in the third quarter of fiscal 2012. These more robust conditions continued in the fourth quarter and backlogs in both segments increased. As we enter the new fiscal year, we are looking forward for a better outlook for our testing and manufacturing operations," Yong said.
Fiscal 2012 Results
The decrease in revenue for fiscal 2012 was primarily the result of lower sales of the Company's proprietary semiconductor test equipment products and lower semiconductor testing volume in Malaysia. Revenue in the real estate segment also declined for the year. These decreases were partly offset by higher revenue in the Company's fabrication services segment.
Revenue from product sales decreased to $18,030,000 for fiscal 2012 compared to $20,447,000 for fiscal 2011. Revenue from testing services decreased to $12,922,000 for fiscal 2012 compared to $13,126,000 for the prior fiscal year. Revenue in the real estate segment decreased to $148,000 for fiscal 2012 compared to $1,062,000 for fiscal 2011. Revenue from the Company's oil and gas equipment fabrication business increased to $3,111,000 for fiscal 2012 compared to $900,000 for fiscal 2011.
Gross margin as a percentage of revenue for fiscal 2012 decreased to 13.4% compared to 23.4% for fiscal 2011. Product segment gross margin improved to 15.7% compared to 14.2% for fiscal 2011. Gross margin in the real estate segment decreased to 25.7% compared to 81.8% for fiscal 2011. Gross margin in fabrication services was negative 17.8% for fiscal 2012 compared to negative 26.9% for fiscal 2011.
General and administrative expenses decreased 5.9% to $7,737,000 for fiscal 2012 compared to $8,219,000 for fiscal 2011, primarily due to reduced payroll expense in the Company's Singapore office.
The loss from operations for fiscal 2012 was $4,300,000 compared to a loss from operations of $586,000 for fiscal 2011.
Fourth Quarter Results
The increase in revenue for the fourth quarter of fiscal 2012 was primarily the result of higher sales of the Company's proprietary semiconductor test equipment products and higher semiconductor testing volume in Singapore, Tianjin and Suzhou in China. These increases were partly offset by lower revenue in the Company's fabrication services and real estate segments.
Revenue from product sales more than doubled to $7,345,000 for the fourth quarter of fiscal 2012 compared to $3,103,000 for the fourth quarter of fiscal 2011. Backlog in the manufacturing segment at June 30, 2012 increased to $4,321,000 compared to $2,079,000 at June 30, 2011.
Revenue from testing services increased 6.0% to $3,675,000 for the fourth quarter of fiscal 2012 compared to $3,467,000 for the same period of the prior fiscal year. Testing services backlog increased to $2,292,000 at June 30, 2012 compared to $870,000 at June 30, 2011.
Revenue from the Company's oil and gas equipment fabrication business decreased to $228,000 for the fourth quarter of fiscal 2012 compared to $504,000 for the fourth quarter of fiscal 2011. Trio-Tech booked an asset impairment loss of $216,000 in the fourth quarter of fiscal 2012 related to the fabrication business. This compares to an impairment loss of $72,000 in the fourth quarter of fiscal 2011.
Revenue from the Company's real estate segment was $23,000 for the fourth quarter of fiscal 2012 compared to $54,000 for the fourth quarter of fiscal 2011.
Gross margin as a percentage of revenue for the fourth quarter of fiscal 2012 decreased to 13.4% compared to 18.0% for the fourth quarter of fiscal 2011. Product segment gross margin improved to 14.7% compared to 11.1% for last year's fourth quarter. Gross margin in the Company's testing segment decreased to 22.1% compared to 27.4% for the fourth quarter of fiscal 2011. Gross margins also deteriorated in both the fabrication and real estate segments.
General and administrative expenses decreased 11.3% to $1,853,000 for the fourth quarter of fiscal 2012 compared to $2,088,000 for the fourth quarter of fiscal 2011, primarily due to reduced payroll expense in the Company's Singapore office.
The loss from operations for the fourth quarter of fiscal 2012 was $840,000 compared to a loss from operations of $1,101,000 for the fourth quarter of fiscal 2011.
Balance Sheet Highlights
As of June 30, 2012, Trio-Tech reported cash and cash equivalents, restricted term deposits and short-term deposits of $5,267,000, working capital of $5,196,000, short-term lines of credit and short-term and long-term loans payable of $7,744,000, and shareholders' equity of $20,556,000, or $6.25 per outstanding share.
"Due to the increase in revenue in the fourth quarter of fiscal 2012, trade receivables increased to $11,311,000 at June 30, 2012 compared to $6,812,000 at June 30, 2011. Given our normal collection cycles, we expect receivables to decrease beginning in the current quarter," Yong said.
At June 30, 2011, Trio-Tech reported cash and cash equivalents, restricted term deposits and short-term deposits of $6,872,000, working capital of $7,256,000, short-term lines of credit and short-term and long-term loans payable of $4,248,000, and shareholders' equity of $24,977,000, or $7.60 per outstanding share.
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, oil and gas equipment fabrication 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, www.shi-international.com and www.ttsolar.com.
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 Southeast 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; 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|
|CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME|
|(IN THOUSANDS, EXCEPT EARNINGS PER SHARE)|
|Three Months Ended||Twelve Months Ended|
|June 30,||June 30,|
|Cost of Sales|
|Cost of products sold||6,267||2,758||15,192||17,542|
|Cost of testing services rendered||2,862||2,516||10,659||8,339|
|Cost of fabrication services rendered||602||548||3,665||1,142|
|Operating Expenses (Gains) :|
|General and administrative||1,853||2,088||7,737||8,219|
|Research and development||74||75||295||250|
|(Gain) Loss on disposal of property, plant and equipment||--||(1||)||4||(147||)|
|Total operating expenses||2,345||2,381||8,885||8,905|
|Loss from Operations||(840||)||(1,101||)||(4,300||)||(586||)|
|Other Income (Expenses)|
|Other income, net||(3||)||272||176||702|
|Total other income (expenses)||)||202||(125||)||459|
|Loss from Continuing Operations before Income Taxes||(929||)||(899||)||(4,425||)||(127||)|
|Income Tax (Expense) Benefit||49||--||(65||)||195|
|Loss from Continuing Operations before Non-controlling interest, net of tax||(978||)||(899||)||(4,360||)||(322||)|
|Equity in loss of unconsolidated joint venture, net of tax||--||(2||)||(11||)||(9||)|
|Loss from Discontinued operations, net of tax||(2||)||(2||)||(4||)||(4||)|
|Less: Net (Loss) Income Attributable to the Non-controlling Interest||(401||)||1||(1,271||)||353|
|Net Loss Attributable to Trio-Tech International||(579||)||(904||)||(3,104||)||(688||)|
|Amounts Attributable to Trio-Tech International Common Shareholders:|
|Loss from Continuing Operations, net of tax||(577||)||(902||)||(3,100||)||(684||)|
|Loss from Discontinued Operations, net of tax||(2||)||(2||)||(4||)||(4||)|
|Net Loss Attributable to Trio-Tech International Common Shareholders||(579||)||(904||)||(3,104||)||(688||)|
|Comprehensive Loss Attributable to Trio-Tech Common Shareholders:|
|Foreign currency translation, net of tax||(334||)||78||(250||)||1,448|
|Comprehensive (Loss) Income||(1,314||)||(825||)||(4,625||)||1,113|
|Less: Comprehensive (loss) income attributable to non-controlling interest||(386||)||(151||)||(1,249||)||160|
|Comprehensive (Loss) Income Attributable to Trio-Tech International||(928||)||(674||)||(3,376||)||953|
|Loss per Share Attributable to Trio-Tech International:|
|From continuing operations - basic and diluted||$||(0.18||)||$||(0.27||)||$||(0.94||)||$||(0.21||)|
|From discontinued operations - basic and diluted||0.00||0.00||0.00||0.00|
|Weighted average common shares outstanding -- basic and diluted||3,288||3,308||3,288||3,288|
|TRIO-TECH INTERNATIONAL AND SUBSIDIARIES|
|CONSOLIDATED BALANCE SHEETS|
|(IN THOUSANDS, EXCEPT NUMBER OF SHARES)|
|June 30,||June 30,|
|Cash & cash equivalents||$||1,572||$||3,111|
|Trade accounts receivable, net||11,311||6,812|
|Loan receivables from property development projects||1,101||1,083|
|Prepaid expenses and other current assets||406||348|
|Assets held for sale||130||137|
|Total current assets||18,056||14,429|
|INVESTMENT IN UNCONSOLIDATED JOINT VENTURE||765||764|
|INVESTMENT PROPERTY IN CHINA, Net||1,815||1,238|
|PROPERTY, PLANT AND EQUIPMENT, Net||13,193||14,951|
|RESTRICTED TERM DEPOSITS||3,445||3,562|
|LIABILITIES AND SHAREHOLDER'S EQUITY|
|Lines of credit||$||3,605||$||1,333|
|Income taxes payable||469||492|
|Current portion of bank loans payable||766||147|
|Current portion of capital leases||175||148|
|Total current liabilities||12,860||7,173|
|BANK LOANS PAYABLE, net of current portion||3,373||2,768|
|CAPITAL LEASES, net of current portion||221||271|
|DEFERRED TAX LIABILITIES||497||677|
|OTHER NON-CURRENT LIABILITIES||543||490|
|COMMITMENTS AND CONTINGENCIES||--||--|
|TRIO-TECH INTERNATIONAL'S SHAREHOLDERS' EQUITY:|
|Accumulated retained earnings||2,687||5,791|
|Accumulated other comprehensive gain-translation adjustments||3,187||3,459|
|Total Trio-Tech International shareholders' equity||18,836||22,008|
|TOTAL LIABILITIES AND EQUITY||$||38,050||$||36,356|
Net Loss Attributable to Trio-Tech International - basic and diluted
Common stock, no par value, 15,000,000 shares
authorized; 3,321,555 shares issued and
outstanding at June 30, 2012, and June 30, 2011
A. Charles Wilson
Berkman Associates, 310-477-3118