EX-99.1 2 exhibit99_1.htm EXHIBIT 99.1 exhibit99_1.htm
Exhibit 99.1
 
 
LOS ANGELES
SINGAPORE
SELANGOR
PENANG
BANGKOK
SUZHOU
SHANGHAI
 
FOR IMMEDIATE RELEASE
Company Contact:
Investor Contact:
A. Charles Wilson
Berkman Associates
Chairman
(310) 826-5051
(818) 787-7000
info@BerkmanAssociates.com
 
Trio-Tech Reports Second Quarter Results

Van Nuys, CA -- February 23, 2009 -- Trio-Tech International (AMEX:TRT) today announced financial results for the second quarter and first half of fiscal 2009.
 
Second Quarter Results
 
    For the three months ended December 31, 2008, total revenue decreased to $5,562,000 compared to $12,871,000 for the second quarter of fiscal 2008.  The net loss for this year's second quarter was $426,000, or $0.13 per share, which included a non-cash impairment loss of $520,000, or 0.16 per diluted share, for the write-off of some fixed assets located in the Company's Suzhou and Shanghai, China facilities.  For the three months ended December 31, 2007, net income was $165,000, or $0.05 per diluted share, which included an impairment loss of $16,000 related to the disposal of certain fixed assets in Suzhou and Malaysia.
 
    "Excluding the non-cash impairment expense for the write-off of some of our Suzhou and Shanghai assets, Trio-Tech's operating profitability would have improved in the second quarter compared to the first quarter of fiscal 2009.  Given the historically weak conditions we face in the global semiconductor and electronics industries, we believe that this is a creditable performance.  We remain focused on winning as much business as we can in this difficult environment, while keeping our costs down, conserving our cash, and protecting our outstanding balance sheet," said Chief Executive Officer S.W. Yong.
 
    "We lowered costs further in the second quarter by consolidating all of our manufacturing and test and burn-in operations into our Singapore and Malaysia facilities, reducing headcount and executive salaries.  As a result of these efforts, general and administrative expenses decreased significantly compared to the same quarter last year."
 
    On January 8, 2009, the Company agreed to purchase for approximately $3,608,000 the property it previously leased for its testing operations in Malaysia.  The Company made a down payment of approximately $361,000, and expects to finance the balance of the purchase price using the proceeds of a bank loan of approximately $2,790,000 and internally generated funds.
 
    Revenue from the Company's products sales for the second quarter of fiscal 2009 decreased to $2,834,000 compared to $7,201,000 for the second quarter of fiscal 2008.  Gross margin increased to 21.3% from 17.5%, reflecting an improved product mix and reduced employee expenses.
 
    Revenue from testing services for the second quarter of fiscal 2009 decreased to $2,728,000 compared to $5,670,000 for the same quarter last year.  Gross margin in testing decreased to 26.3% from 34.1% a year earlier, due to lower volume and prices and excess capacity associated, in part, with the Singapore and China facilities.
 
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    General and administrative expenses for this year's second quarter decreased by $1,065,000, compared to the second quarter of fiscal 2008.  This reflects cost cutting efforts to reduce personnel and payroll expenses, reductions in officer and executive compensation, and, due to employee count reductions, a reversal of $159,000 related to bonuses and annual leave provisions.
 
At December 31, 2008, cash and cash equivalents were $12,294,000 ($3.81 per outstanding share), working capital was $13,214,000, and shareholders' equity was $20,596,000 ($6.38 per outstanding share).

Six Months Results
 
Total revenue for the six months ended December 31, 2008, was $11,792,000 compared to $24,921,000 for the first six months of fiscal 2008.   The net loss for this year's first half was $1,145,000, or $0.35 per share.  This compares to net income for the first half of fiscal 2008 of $916,000, or $0.28 per diluted share.  Overall gross margin for the first half of fiscal 2009 was 22.2% of sales, compared to 25.0% of sales in the first half of fiscal 2008.
 
Revenue from the Company's product sales for the first half of fiscal 2009 decreased to $5,966,000 compared to $13,708,000 for the first half of fiscal 2008.  Gross margin improved to 17.9%, compared to 16.3% for the first half of fiscal 2008, reflecting an improved product mix and reductions in employee expenses.
 
Testing segment revenue for the first half of fiscal 2009 decreased to $5,826,000 compared to $11,213,000 for the first six months of fiscal 2008.  Gross margin on testing sales decreased to 26.7% from 35.6%, reflecting lower volume and absorption of fixed capacity.
 
General and administrative expenses for the first six months of fiscal 2009 decreased by $670,000 compared to the first half of fiscal 2008, reflecting continuing efforts to reduce personnel and overhead expenses.

About Trio-Tech
 
Founded in 1958, Trio-Tech International provides third-party semiconductor testing and burn-in services primarily through its laboratories in Southeast Asia.  Headquartered in Van Nuys, California, the Company also designs, manufactures and markets equipment and systems used in the testing and production of semiconductors, and distributes semiconductor processing and testing equipment manufactured by others.  For further information or to request quotations for any of Trio-Tech's complete line of semiconductor test equipment, please visit the Company's Web site at www.triotech.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.  These statements are based on current expectations, estimates and projections about the Company's business based, in part, on assumptions made by management.  These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict.  Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors, including those described above and the following:  the effectiveness of the cost reduction initiatives undertaken by the Company, changes in demand for the Company's products, product mix, the timing of customer orders and deliveries, the impact of competitive products and pricing, excess or shortage of production capacity, and other risks discussed from time to time in the Company's Securities and Exchange Commission filings and reports.  In addition, such statements could be affected by general industry and market conditions and growth rates, and general domestic and international economic conditions.  Such forward-looking statements speak only as of the date on which they are made, and the Company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release.
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TRIO-TECH INTERNATIONAL AND SUBSIDIARIES
 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
 
UNAUDITED (IN THOUSANDS, EXCEPT EARNINGS PER SHARE)
 
 
                         
   
Three Months Ended
   
Six Months Ended
 
   
Dec. 31,
    Dec. 31,    
Dec. 31,
   
Dec. 31,
 
    2008     2007    
2008
   
2007
 
    (Unaudited)     (Unaudited)    
(Unaudited)
   
(Unaudited)
 
Revenue
                       
   Products
$ 2,834   $ 7,201     $ 5,966     $ 13,708  
   Services
  2,728     5,670       5,826       11,213  
    5,562     12,871       11,792       24,921  
Cost of Sales
                           
   Cost of products sold
  2,230     5,939       4,897       11,468  
   Cost of services rendered
  2,011     3,737       4,272       7,216  
    4,241     9,676       9,169       18,684  
                             
Gross Margin
  1,321     3,195       2,623       6,237  
                             
Operating Expenses
                           
General and administrative
  1,324     2,389       3,339       4,009  
Selling
  83     153       206       277  
Research and development
  10     19       20       38  
Impairment loss
  520     16       520       16  
(Gain)/loss on sales of PP&E
  5     --        (154 )     --  
Total operating expenses
   1,942     2,577       3,931       4,340  
                           
Income(Loss)  from Operations
  (621   618       (1,308 )     1,897  
                             
Other Income (Expenses)
                           
Interest expense
  (46   (79     (104 )     (164 )
Other (expense) income
  355     (176     570       (251 )
Total other (expense) income
  309     (255     466       (415 )
                             
Income (Loss) Before Income Taxes
  (312   363       (842 )     1,482  
                             
Income Tax Provision (Benefits)
  (62   142       36       314  
                             
                             
Income (Loss) Before Minority Interest
  (250   221       (878 )     1,168  
  Minority interest
  176     56       267       252  
Net Income (Loss)Attributed to Common Shares
  (426   165       (1,145 )     916  
                             
EARNINGS (LOSS) PER SHARE:
                         
Basic earnings (loss) per share
$  (0.13 $ 0.05     $ (0.35 )   $ 0.28  
Diluted earnings (loss) per share
$ (0.13 $ 0.05     $ (0.35 )   $ 0.28  
                             
Weighted Average Shares Outstanding:
                           
Basic
  3,227     3,226       3,227       3,226  
Diluted
  3,227     3,228       3,227       3,259  
                             
Comprehensive Income (Loss):
                           
Net income (loss)
$ (426 $ 165     $ (1,145 )   $ 916  
Foreign currency translation adjustment
  (8     702       (678 )     918  
                             
Comprehensive Income (Loss)
$ (434 $ 867     $ (1,823 )   $ 1,834  
 
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TRIO-TECH INTERNATIONAL AND SUBSIDIARIES
 
CONDENSED CONSOLIDATED BALANCE SHEETS
 
(IN THOUSANDS, EXCEPT NUMBER OF SHARES)
 
             
   
Dec. 31,
   
Jun. 30,
 
ASSETS
 
2008
   
2008
 
 
 
(Unaudited)
 
CURRENT ASSETS:
           
Cash
  $ 6,741     $ 6,600  
Short-term deposits
    5,553       7,746  
Trade accounts receivable, net
    3,938       5,702  
Inventories, net
    1,671       2,449  
Prepaid expenses and other current assets
    514       934  
                 
Total current assets
    18,417       23,431  
                 
INVESTMENT IN CHINA
    3,020       2,267  
PROPERTY, PLANT AND EQUIPMENT, Net
    7,231       8,136  
OTHER INTANGIBLE ASSETS, Net
    53       112  
OTHER ASSETS
    758       813  
                 
TOTAL ASSETS
  $ 29,479     $ 34,759  
                 
LIABILITIES AND SHAREHOLDERS' EQUITY
               
                 
CURRENT LIABILITIES:
               
Line of credit
  $ 5       --  
Accounts payable
    572       2,586  
Accrued expenses
    1,989       3,036  
Income taxes payable
    346       397  
Current portion of bank loans payable
    2,175       1,403  
Current portion of capital leases
    116       106  
                 
Total current liabilities
    5,203       7,528  
                 
NOTES PAYABLE, net of current portion
    --       1,620  
CAPITAL LEASES, net of current portion
    57       143  
DEFERRED TAX LIABILITIES
    539       510  
      9       9  
                 
TOTAL LIABILITIES
    5,808       9,810  
                 
MINORITY INTEREST
    3,075       2,808  
                 
SHAREHOLDERS' EQUITY:
               
Common stock; no par value, 15,000,000 shares authorized; 
  3,227,430 and 3,226,430 shares issued and outstanding as
  at December 31, 2008, and at June 30, 2008, respectively
    10,365       10,362  
Paid-in capital
    1,203       928  
Accumulated retained earnings 
    7,680       8,825  
Accumulated other comprehensive loss-translation adjustments
    1,348       2,026  
                 
Total shareholders' equity
    20,596       22,141  
                 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
  $ 29,479     $ 34,759