California
|
|
95-2086631
|
(State or other jurisdiction of
|
|
(I.R.S. Employer
|
incorporation or organization)
|
|
Identification Number)
|
|
|
|
16139 Wyandotte Street
|
|
|
Van Nuys, California
|
|
91406
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Large Accelerated Filer
|
☐
|
|
Accelerated Filer
|
☐
|
|
|
|
|
|
Non-Accelerated Filer
|
☐
|
|
Smaller reporting company
|
☒
|
|
|
|
Emerging growth company
|
☐
|
|
|
|
|
|
Title of each class of registered securities
|
|
Trading Symbol
|
|
Name of each exchange on which registered
|
Common Stock, no
par value
|
|
TRT
|
|
NYSE
MKT
|
|
|
Page
|
|
||
|
|
|
|
||
2
|
||
|
3
|
|
|
5
|
|
|
6
|
|
|
7
|
|
31
|
||
46
|
||
46
|
||
|
|
|
|
||
|
|
|
47
|
||
47
|
||
47
|
||
47
|
||
47
|
||
47
|
||
47
|
||
|
|
|
48
|
|
March
31,
2019
|
June
30,
2018
|
ASSETS
|
(Unaudited)
|
|
CURRENT
ASSETS:
|
|
|
Cash
and cash equivalents
|
$4,602
|
$6,539
|
Short-term
deposits
|
3,646
|
653
|
Trade
accounts receivable, less allowance for doubtful accounts of $256
and $259
|
7,120
|
7,747
|
Other
receivables
|
1,034
|
881
|
Inventories,
less provision for obsolete inventory of $660 and $695
|
2,918
|
2,930
|
Prepaid
expenses and other current assets
|
307
|
208
|
Assets
held for sale
|
90
|
91
|
Total current assets
|
19,717
|
19,049
|
NON-CURRENT
ASSETS:
|
|
|
Deferred
tax asset
|
335
|
400
|
Investment
properties, net
|
828
|
1,146
|
Property,
plant and equipment, net
|
12,687
|
11,935
|
Other
assets
|
1,728
|
2,249
|
Restricted
term deposits
|
1,705
|
1,695
|
Total
non-current assets
|
17,283
|
17,425
|
TOTAL ASSETS
|
$37,000
|
$36,474
|
|
|
|
LIABILITIES
|
|
|
CURRENT
LIABILITIES:
|
|
|
Lines
of credit
|
$622
|
$2,043
|
Accounts
payable
|
3,021
|
3,704
|
Accrued
expenses
|
3,882
|
3,172
|
Income
taxes payable
|
404
|
285
|
Current
portion of bank loans payable
|
492
|
367
|
Current
portion of capital leases
|
257
|
250
|
Total current liabilities
|
8,678
|
9,821
|
NON-CURRENT
LIABILITIES:
|
|
|
Bank
loans payable, net of current portion
|
2,442
|
1,437
|
Capital leases,
net of current portion
|
325
|
524
|
Deferred
tax liabilities
|
343
|
327
|
Income
taxes payable
|
613
|
828
|
Other
non-current liabilities
|
32
|
36
|
Total
non-current liabilities
|
3,755
|
3,152
|
TOTAL LIABILITIES
|
$12,433
|
$12,973
|
|
|
|
EQUITY
|
|
|
TRIO-TECH
INTERNATIONAL’S SHAREHOLDERS' EQUITY:
|
|
|
Common
stock, no par value, 15,000,000 shares authorized; 3,673,055 shares
issued and outstanding as at March 31, 2019, and 3,553,055 shares
as at June 30, 2018
|
$11,424
|
$11,023
|
Paid-in
capital
|
3,261
|
3,249
|
Accumulated
retained earnings
|
6,621
|
5,525
|
Accumulated
other comprehensive gain-translation adjustments
|
2,055
|
2,182
|
Total Trio-Tech International shareholders'
equity
|
23,361
|
21,979
|
Non-controlling
interest
|
1,206
|
1,522
|
TOTAL
EQUITY
|
$24,567
|
$23,501
|
TOTAL LIABILITIES AND EQUITY
|
$37,000
|
$36,474
|
|
Three
Months Ended
|
Nine
Months Ended
|
||
|
Mar.
31,
|
Mar.
31,
|
Mar.
31,
|
Mar.
31,
|
|
2019
|
2018
|
2019
|
2018
|
Revenue
|
|
|
|
|
Manufacturing
|
$3,097
|
$3,124
|
$10,086
|
$11,862
|
Testing
services
|
3,989
|
4,913
|
12,819
|
14,454
|
Distribution
|
1,727
|
2,033
|
5,587
|
5,175
|
Real
Estate
|
25
|
34
|
81
|
110
|
|
8,838
|
10,104
|
28,573
|
31,601
|
Cost of Sales
|
|
|
|
|
Cost
of manufactured products sold
|
2,303
|
2,530
|
7,806
|
9,247
|
Cost
of testing services rendered
|
2,862
|
3,491
|
9,351
|
9,881
|
Cost
of distribution
|
1,483
|
1,821
|
4,831
|
4,598
|
Cost
of real estate
|
16
|
30
|
52
|
88
|
|
6,664
|
7,872
|
22,040
|
23,814
|
|
|
|
|
|
Gross Margin
|
2,174
|
2,232
|
6,533
|
7,787
|
|
|
|
|
|
Operating Expenses:
|
|
|
|
|
General
and administrative
|
1,742
|
1,773
|
5,223
|
5,339
|
Selling
|
246
|
181
|
580
|
612
|
Research
and development
|
76
|
75
|
270
|
377
|
Gain on disposal of property, plant and equipment
|
(13)
|
(31)
|
(13)
|
(20)
|
Total
operating expenses
|
2,051
|
1,998
|
6,060
|
6,308
|
|
|
|
|
|
Income from Operations
|
123
|
234
|
473
|
1,479
|
|
|
|
|
|
Other Income / (Expenses)
|
|
|
|
|
Interest
expenses
|
(74)
|
(64)
|
(250)
|
(174)
|
Other income,
net
|
128
|
111
|
220
|
311
|
Gain
on sale of assets held for sale
|
685
|
-
|
685
|
-
|
Total
other income
|
739
|
47
|
655
|
137
|
|
|
|
|
|
Income from Continuing Operations before Income
Taxes
|
862
|
281
|
1,128
|
1,616
|
|
|
|
|
|
Income Tax Expenses
|
(209)
|
(980)
|
(159)
|
(1,035)
|
|
|
|
|
|
Income
/ (loss) from continuing operations before non-controlling
interest, net of tax
|
653
|
(699)
|
969
|
581
|
|
|
|
|
|
Discontinued Operations
|
|
|
|
|
Income
/ (loss) from discontinued operations, net of tax
|
2
|
(6)
|
(2)
|
(11)
|
NET INCOME / (LOSS)
|
655
|
(705)
|
967
|
570
|
|
|
|
|
|
Less:
net (loss) / income attributable to non-controlling
interest
|
(28)
|
34
|
(129)
|
61
|
Net Income / (Loss) Attributable to Trio-Tech International
Common Shareholders
|
$683
|
$(739)
|
$1,096
|
$509
|
|
|
|
|
|
Amounts Attributable to Trio-Tech International Common
Shareholders:
|
|
|
|
|
Income
/ (loss) from continuing operations, net of tax
|
682
|
(736)
|
1,097
|
520
|
Income
/ (loss) from discontinued operations, net of tax
|
1
|
(3)
|
(1)
|
(11)
|
Net Income / (Loss) Attributable to Trio-Tech International Common
Shareholders
|
$683
|
$(739)
|
$1,096
|
$509
|
|
|
|
|
|
Basic Earnings per Share:
|
|
|
|
|
Basic
per share from continuing operations attributable to Trio-Tech
International
|
$0.19
|
$(0.21)
|
$0.30
|
$0.15
|
Basic
earnings per share from discontinued operations attributable to
Trio-Tech International
|
$-
|
$-
|
$-
|
$-
|
Basic Earnings per Share from Net Income
|
|
|
|
|
Attributable to Trio-Tech International
|
$0.19
|
$(0.21)
|
$0.30
|
$0.15
|
|
|
|
|
|
Diluted Earnings per Share:
|
|
|
|
|
Diluted
earnings per share from continuing operations attributable to
Trio-Tech International
|
$0.19
|
$(0.20)
|
$0.29
|
$0.14
|
Diluted
earnings per share from discontinued operations attributable to
Trio-Tech International
|
$-
|
$-
|
$-
|
$-
|
Diluted Earnings per Share from Net Income
|
|
|
|
|
Attributable to Trio-Tech International
|
$0.19
|
$(0.20)
|
$0.29
|
$0.14
|
|
|
|
|
|
Weighted
average number of common shares outstanding
|
|
|
|
|
Basic
|
3,673
|
3,553
|
3,673
|
3,553
|
Dilutive
effect of stock options
|
12
|
219
|
73
|
225
|
Number
of shares used to compute earnings per share diluted
|
3,685
|
3,772
|
3,746
|
3,778
|
|
Three
Months Ended
|
Nine
Months Ended
|
||
|
Mar.
31,
|
Mar.
31,
|
Mar.
31,
|
Mar.
31,
|
|
2019
|
2018
|
2019
|
2018
|
Comprehensive Income Attributable to Trio-Tech
International Common Shareholders:
|
|
|
|
|
|
|
|
|
|
Net
income / (loss)
|
$655
|
$(705)
|
$967
|
$570
|
Foreign
currency translation, net of tax
|
401
|
849
|
(189)
|
1,809
|
Comprehensive Income
|
1,056
|
144
|
778
|
2,379
|
Less:
comprehensive income / (loss) attributable to non-controlling
interest
|
1
|
142
|
(191)
|
255
|
Comprehensive Income attributable to Trio-Tech International Common
Shareholders
|
$1,055
|
$2
|
$969
|
$2,124
|
|
|
|
|
|
|
Common
Stock
|
Additional Paid-in
|
Accumulated Retained
|
Accumulated Other
Comprehensive
|
Non- Controlling
|
|
|
|
Shares
|
Amount
|
Capital
|
Earnings
|
Income
|
Interest
|
Total
|
|
|
|
|
|
|
|
|
Balance
at June 30, 2018
|
3,553
|
$11,023
|
$3,249
|
$5,525
|
$2,182
|
$1,522
|
$23,501
|
Stock
option expenses
|
-
|
-
|
12
|
-
|
-
|
-
|
12
|
Net
income
|
-
|
-
|
-
|
1,096
|
-
|
(129)
|
967
|
Dividend
declared by subsidiary
|
-
|
-
|
-
|
-
|
-
|
(125)
|
(125)
|
Exercise of stock
options
|
120
|
401
|
-
|
-
|
-
|
-
|
401
|
Translation
adjustment
|
-
|
-
|
-
|
-
|
(127)
|
(62)
|
(189)
|
Balance
at Mar. 31, 2019
|
3,673
|
11,424
|
3,261
|
6,621
|
2,055
|
1,206
|
24,567
|
|
Common
Stock
|
Additional Paid-in
|
Accumulated Retained
|
Accumulated Other
Comprehensive
|
Non- Controlling
|
|
|
|
Shares
|
Amount
|
Capital
|
Earnings
|
Income
|
Interest
|
Total
|
|
|
|
|
|
|
|
|
Balance
at June 30, 2017
|
3,523
|
$10,921
|
$3,206
|
$4,341
|
$1,633
|
$1,426
|
$21,527
|
Stock
option expenses
|
-
|
-
|
40
|
-
|
-
|
-
|
40
|
Net
income
|
-
|
-
|
-
|
509
|
-
|
61
|
570
|
Dividend
declared by subsidiary
|
-
|
-
|
-
|
-
|
-
|
(125)
|
(125)
|
Exercise of
options
|
20
|
51
|
-
|
-
|
-
|
-
|
51
|
Issue of restricted
shares to service provider
|
10
|
51
|
-
|
-
|
-
|
-
|
51
|
Translation
adjustment
|
-
|
-
|
-
|
-
|
1,615
|
194
|
1,809
|
Balance
at Mar. 31, 2018
|
3,553
|
11,013
|
3,246
|
4,850
|
3,248
|
1,556
|
23,923
|
|
|
|
|
|
|
|
|
|
Nine
Months Ended
|
|
|
Mar.
31,
|
Mar.
31,
|
|
2019
|
2018
|
|
(Unaudited)
|
(Unaudited)
|
Cash Flow from Operating Activities
|
|
|
Net
income
|
$967
|
$570
|
Adjustments
to reconcile net income to net cash flow provided by operating
activities
|
|
|
Gain
on sale of assets held for sale
|
(685)
|
-
|
Depreciation
and amortization
|
1,777
|
1,594
|
Stock
compensation
|
12
|
40
|
Usage
of provision for obsolete inventory
|
(37)
|
(4)
|
Reversal
of income tax provision
|
(145)
|
-
|
Bad
debt recovery
|
1
|
-
|
Accrued
interest expense, net accrued interest income
|
34
|
148
|
Gain
on sale of property, plant and equipment – continued
operations
|
(13)
|
(20)
|
Issuance
of shares to service provider
|
-
|
51
|
Warranty
recovery, net
|
(35)
|
1
|
Fixed
assets written off
|
(33)
|
-
|
Deferred
tax benefit / (provision)
|
78
|
33
|
Changes
in operating assets and liabilities, net of acquisition
effects
|
|
|
Trade
accounts receivable
|
626
|
392
|
Other receivables
|
(153)
|
9
|
Other assets
|
489
|
(327)
|
Inventories
|
60
|
(506)
|
Prepaid expenses and other current assets
|
(99)
|
7
|
Accounts payable and accrued expenses
|
60
|
250
|
Income taxes payable
|
58
|
884
|
Net Cash Provided by Operating Activities
|
2,962
|
3,122
|
|
|
|
Cash Flow from Investing Activities
|
|
|
Proceeds
from sale of assets held for sale
|
943
|
-
|
Proceeds
from maturing of unrestricted term deposits and short-term
deposits, net
|
-
|
484
|
Proceeds
from disposal of property, plant and equipment
|
3
|
42
|
Investments
in restricted and unrestricted deposits
|
(2,939)
|
(281)
|
Addition
to property, plant and equipment
|
(2,576)
|
(2,050)
|
Net Cash Used in Investing Activities
|
(4,569)
|
(1,805)
|
|
|
|
Cash Flow from Financing Activities
|
|
|
Repayment
on lines of credit
|
(7,316)
|
(7,397)
|
Repayment
of bank loans and capital leases
|
(625)
|
(554)
|
Dividends
paid on non-controlling interest
|
(125)
|
(125)
|
Proceeds
from exercising stock options
|
401
|
51
|
Proceeds
from bank loans and capital leases
|
7,470
|
6,570
|
Net Cash Used in Financing Activities
|
(195)
|
(1,455)
|
|
|
|
Effect of Changes in Exchange Rate
|
(125)
|
742
|
|
|
|
Net (Decrease) / Increase in Cash, Cash Equivalents, and Restricted
Cash
|
(1,927)
|
604
|
Cash, Cash Equivalents, and Restricted Cash at Beginning of
Period
|
8,234
|
4,772
|
Cash, Cash Equivalents, and Restricted Cash at End of
Period
|
$6,307
|
$5,376
|
|
|
|
Supplementary Information of Cash Flows
|
|
|
Cash
paid during the period for:
|
|
|
Interest
|
$217
|
$138
|
Income
taxes
|
$114
|
$225
|
|
|
|
Non-Cash Transactions
|
|
|
Capital
lease of property, plant and equipment
|
$-
|
$228
|
Reconciliation of Cash, Cash Equivalents, and Restricted
Cash
|
|
|
Cash
|
4,602
|
6,539
|
Restricted Term-Deposits in Non-Current Assets
|
1,705
|
1,695
|
Total Cash, Cash Equivalents, and Restricted Cash Shown in
Statement of Cash Flows
|
$6,307
|
$8,234
|
|
Ownership
|
Location
|
Express Test
Corporation (Dormant)
|
100%
|
Van Nuys, California
|
Trio-Tech
Reliability Services (Dormant)
|
100%
|
Van Nuys, California
|
KTS
Incorporated, dba Universal Systems (Dormant)
|
100%
|
Van Nuys, California
|
European
Electronic Test Centre (Dormant)
|
100%
|
Dublin, Ireland
|
Trio-Tech
International Pte. Ltd.
|
100%
|
Singapore
|
Universal (Far
East) Pte. Ltd. *
|
100%
|
Singapore
|
Trio-Tech
International (Thailand) Co. Ltd. *
|
100%
|
Bangkok, Thailand
|
Trio-Tech
(Bangkok) Co. Ltd.
(49% owned by
Trio-Tech International Pte. Ltd. and 51% owned by Trio-Tech
International (Thailand) Co.
Ltd.)
|
100%
|
Bangkok, Thailand
|
Trio-Tech
(Malaysia) Sdn. Bhd.
(55% owned by
Trio-Tech International Pte. Ltd.)
|
55%
|
Penang and Selangor, Malaysia
|
Trio-Tech
(Kuala Lumpur) Sdn. Bhd.
(100% owned by
Trio-Tech Malaysia Sdn. Bhd.)
|
55%
|
Selangor, Malaysia
|
Prestal
Enterprise Sdn. Bhd.
(76% owned by
Trio-Tech International Pte. Ltd.)
|
76%
|
Selangor, Malaysia
|
Trio-Tech
(SIP) Co. Ltd. *
|
100%
|
Suzhou, China
|
Trio-Tech
(Chongqing) Co. Ltd. *
|
100%
|
Chongqing, China
|
SHI
International Pte. Ltd. (Dormant)
(55% owned by
Trio-Tech International Pte. Ltd.)
|
55%
|
Singapore
|
PT SHI
Indonesia (Dormant)
(100% owned by
SHI International Pte. Ltd.)
|
55%
|
Batam, Indonesia
|
Trio-Tech
(Tianjin) Co., Ltd. *
|
100%
|
Tianjin, China
|
|
Mar.
31,
2019
(Unaudited)
|
June
30,
2018
|
|
|
|
Short-term
deposits
|
$3,615
|
$606
|
Currency
translation effect on short-term deposits
|
31
|
47
|
Total short-term deposits
|
3,646
|
653
|
Restricted
term deposits
|
1,690
|
1,664
|
Currency
translation effect on restricted term deposits
|
15
|
31
|
Total restricted term deposits
|
1,705
|
1,695
|
Total term deposits
|
$5,351
|
$2,348
|
|
Mar.
31,
2019
(Unaudited)
|
June
30,
2018
|
Beginning
|
$259
|
$247
|
Additions charged
to expenses
|
85
|
8
|
Recovered
|
(84)
|
(1)
|
Currency
translation effect
|
(4)
|
5
|
Ending
|
$256
|
$259
|
|
Loan Expiry
Date
|
Loan Amount
(RMB)
|
Loan Amount
(U.S. Dollars)
|
Short-term loan receivables
|
|
|
|
JiangHuai
(Project – Yu Jin Jiang An)
|
May
31, 2013
|
2,000
|
325
|
Less:
allowance for doubtful receivables
|
|
(2,000)
|
(325)
|
Net loan receivables from property development
projects
|
|
-
|
-
|
|
|
|
|
Long-term loan receivables
|
|
|
|
Jun
Zhou Zhi Ye
|
Oct
31, 2016
|
5,000
|
814
|
Less:
transfer – down-payment for purchase of investment
property
|
|
(5,000)
|
(814)
|
Net loan receivables from property development
projects
|
|
-
|
-
|
|
Mar.
31,
2019
(Unaudited)
|
June
30,
2018
|
Raw
materials
|
$1,206
|
$1,153
|
Work
in progress
|
1,839
|
1,947
|
Finished
goods
|
520
|
505
|
Currency
translation effect
|
13
|
20
|
Less:
provision for obsolete inventory
|
(660)
|
(695)
|
|
$2,918
|
$2,930
|
|
Mar.
31,
2019
(Unaudited)
|
June
30,
2018
|
|
|
|
Beginning
|
$695
|
$686
|
Additions
charged to expenses
|
5
|
9
|
Usage
– disposition
|
(42)
|
(5)
|
Currency
translation effect
|
2
|
5
|
Ending
|
$660
|
$695
|
|
Investment
Date / Reclassification Date
|
Investment
Amount (RMB)
|
Investment Amount
(U.S. Dollars)
|
Purchase
of rental property – Property I – Mao Ye
Property
|
Jan
04, 2008
|
5,554
|
894
|
Currency
translation
|
|
-
|
(87)
|
Reclassification
as “Assets held for sale”
|
July
01, 2018
|
(5,554)
|
(807)
|
Reclassification
from “Assets held for sale”
|
Mar
31, 2019
|
2,024
|
301
|
|
2,024
|
301
|
|
Purchase
of rental property – Property II -
JiangHuai
|
Jan
06, 2010
|
3,600
|
580
|
Purchase
of rental property – Property III - Fu Li
|
Apr
08, 2010
|
4,025
|
648
|
Currency
translation
|
|
-
|
(93)
|
Gross
investment in rental property
|
|
9,649
|
1,436
|
Accumulated
depreciation on rental property
|
Mar
31, 2019
|
(5,879)
|
(875)
|
Reclassified
as “Assets held for sale”
|
July
01, 2018
|
2,822
|
410
|
Reclassification
from “Assets held for sale”
|
Mar
31, 2019
|
(1,029)
|
(143)
|
|
(4,086)
|
(608)
|
|
Net investment in property – China
|
|
5,563
|
828
|
|
Investment Date
|
Investment
Amount (RMB)
|
Investment Amount
(U.S. Dollars)
|
Purchase
of rental property – Property I - Mao Ye
Property
|
Jan
04, 2008
|
5,554
|
894
|
Purchase
of rental property – Property II -
JiangHuai
|
Jan
06, 2010
|
3,600
|
580
|
Purchase
of rental property – Property III - Fu Li
|
Apr
08, 2010
|
4,025
|
648
|
Currency
translation
|
|
-
|
(131)
|
Gross
investment in rental property
|
|
13,179
|
1,991
|
Accumulated
depreciation on rental property
|
June
30, 2018
|
(5,596)
|
(845)
|
Net investment in property – China
|
|
7,583
|
1,146
|
|
Investment
Date
|
Investment
Amount
|
Investment
Amount
|
|
|
(RM)
|
(U.S.
Dollars)
|
Purchase
of Penang Property
|
Dec
31, 2012
|
681
|
181
|
Currency
translation
|
|
-
|
(16)
|
Reclassification
as “Assets held for sale”
|
June
30, 2015
|
(681)
|
(165)
|
|
-
|
-
|
|
Accumulated
depreciation on rental property
|
June
30, 2015
|
(310)
|
(83)
|
Currency
translation
|
|
-
|
7
|
Reclassified
as “Assets held for sale”
|
June
30, 2015
|
(310)
|
(76)
|
Net
investment in rental property - Malaysia
|
|
-
|
-
|
|
Mar.
31, 2019
(Unaudited)
|
June
30,
2018
|
Down
payment for purchase of investment properties
|
$1,645
|
$1,645
|
Down
payment for purchase of property, plant and equipment
|
71
|
561
|
Deposits
for rental and utilities
|
140
|
140
|
Currency
translation effect
|
(128)
|
(97)
|
Total
|
$1,728
|
$2,249
|
Entity with
|
Type of
|
Interest
|
Expiration
|
Credit
|
Unused
|
Facility
|
Facility
|
Rate
|
Date
|
Limitation
|
Credit
|
Trio-Tech
International Pte. Ltd., Singapore
|
Lines
of Credit
|
Ranging
from 1.83% to 5.5%
|
-
|
$4,206
|
$4,072
|
Trio-Tech
(Tianjin) Co., Ltd.
|
Lines
of Credit
|
5.22% to
6.3%
|
-
|
$1,490
|
$1,250
|
Universal (Far
East) Pte. Ltd.
|
Lines
of Credit
|
Ranging from 1.83% to 5.5%
|
-
|
$369
|
$121
|
Entity with
|
Type of
|
Interest
|
Expiration
|
Credit
|
Unused
|
Facility
|
Facility
|
Rate
|
Date
|
Limitation
|
Credit
|
Trio-Tech
International Pte. Ltd., Singapore
|
Lines
of Credit
|
Ranging
from 1.6% to 5.5%
|
-
|
$4,183
|
$3,325
|
Trio-Tech
(Tianjin) Co., Ltd.
|
Lines
of Credit
|
5.22%
|
-
|
$1,511
|
$437
|
Universal (Far
East) Pte. Ltd.
|
Lines
of Credit
|
Ranging from 1.6% to 5.5%
|
-
|
$367
|
$256
|
|
Mar.
31,
2019
(Unaudited)
|
June
30,
2018
|
Payroll
and related costs
|
$1,129
|
$1,545
|
Commissions
|
135
|
89
|
Customer
deposits
|
1,117
|
17
|
Legal
and audit
|
300
|
265
|
Sales
tax
|
16
|
17
|
Utilities
|
117
|
130
|
Warranty
|
47
|
82
|
Accrued
purchase of materials and property, plant and
equipment
|
355
|
454
|
Provision
for re-instatement
|
302
|
289
|
Other
accrued expenses
|
363
|
203
|
Currency
translation effect
|
1
|
81
|
Total
|
$3,882
|
$3,172
|
|
Mar.
31,
2019
(Unaudited)
|
June
30,
2018
|
Beginning
|
$82
|
$48
|
Additions
charged to cost and expenses
|
11
|
64
|
Reversal
|
(46)
|
(30)
|
Currency
translation effect
|
-
|
-
|
Ending
|
$47
|
$82
|
|
Mar.
31, 2019
(Unaudited)
|
June
30, 2018
|
Note
payable denominated in RM for expansion plans in Malaysia, maturing
in August 2028, bearing interest at the bank’s prime rate
less 1.50% (5.00% at March 31, 2019 and June 30, 2018) per annum,
with monthly payments of principal plus interest through August
2028, collateralized by the acquired building with a carrying value
of $2,727 and $2,809, as at March 31, 2019 and June 30, 2018,
respectively.
|
2,779
|
1,615
|
|
|
|
Note
payable denominated in U.S. dollars for expansion plans in
Singapore and its subsidiaries, maturing in April 2020, bearing
interest at the bank’s lending rate (3.96% for March 31, 2019
and June 30, 2018) with monthly payments of principal plus interest
through June 2020. This note payable is secured by plant and
equipment with a carrying value of $158 and $187, as at March 31,
2019 and June 30, 2018, respectively.
|
180
|
293
|
|
|
|
Currency
translation effect on bank loan payable
|
(25)
|
(104)
|
|
|
|
Total bank loans payable
|
$2,934
|
$1,804
|
Current
portion of bank loan payable
|
495
|
380
|
Currency
translation effect on current portion of bank loan
|
(3)
|
(13)
|
Current portion of bank loan payable
|
492
|
367
|
Long
term portion of bank loan payable
|
2,465
|
1,528
|
Currency
translation effect on long-term portion of bank loan
|
(23)
|
(91)
|
Long term portion of bank loans payable
|
$2,442
|
$1,437
|
2019
|
$492
|
2020
|
383
|
2021
|
375
|
2022
|
394
|
2023
|
205
|
Thereafter
|
1,085
|
Total
obligations and commitments
|
$2,934
|
2019
|
$367
|
2020
|
372
|
2021
|
242
|
2022
|
254
|
2023
|
267
|
Thereafter
|
302
|
Total
obligations and commitments
|
$1,804
|
|
Business Segment
Information:
Nine
months
|
|
Operating
|
|
Depr.
|
|
|
Ended
|
Net
|
Income
/
|
Total
|
and
|
Capital
|
|
Mar.
31
|
Revenue
|
(Loss)
|
Assets
|
Amort.
|
Expenditures
|
|
|
|
|
|
|
|
Manufacturing
|
2019
|
$10,086
|
$175
|
$9,205
|
$88
|
$40
|
|
2018
|
$11,862
|
$188
|
$7,035
|
$86
|
$63
|
|
|
|
|
|
|
|
Testing
Services
|
2019
|
12,819
|
(134)
|
22,842
|
1,647
|
2,535
|
|
2018
|
14,454
|
1,281
|
24,790
|
1,432
|
1,987
|
|
|
|
|
|
|
|
Distribution
|
2019
|
5,587
|
492
|
780
|
-
|
-
|
|
2018
|
5,175
|
337
|
631
|
-
|
-
|
|
|
|
|
|
|
|
Real
Estate
|
2019
|
81
|
(30)
|
3,914
|
42
|
-
|
|
2018
|
110
|
(38)
|
3,732
|
76
|
-
|
|
|
|
|
|
|
|
Fabrication *
|
2019
|
-
|
-
|
26
|
-
|
-
|
Services
|
2018
|
-
|
-
|
28
|
-
|
-
|
|
|
|
|
|
|
|
Corporate
&
|
2019
|
-
|
(30)
|
233
|
-
|
-
|
Unallocated
|
2018
|
-
|
(289)
|
172
|
-
|
-
|
|
|
|
|
|
|
|
Total
|
2019
|
$28,573
|
$473
|
$37,000
|
$1,777
|
$2,575
|
|
2018
|
$31,601
|
$1,479
|
$36,388
|
$1,594
|
$2,050
|
|
Business Segment
Information:
Three
months
|
|
Operating
|
|
Depr.
|
|
|
Ended
|
Net
|
Income
/
|
Total
|
and
|
Capital
|
|
Mar.
31
|
Revenue
|
(Loss)
|
Assets
|
Amort.
|
Expenditures
|
|
|
|
|
|
|
|
Manufacturing
|
2019
|
$3,097
|
$(8)
|
$9,205
|
$30
|
$39
|
|
2018
|
$3,124
|
$(105)
|
$7,035
|
$30
|
$26
|
|
|
|
|
|
|
|
Testing
Services
|
2019
|
3,989
|
(17)
|
22,842
|
588
|
239
|
|
2018
|
4,913
|
428
|
24,790
|
519
|
429
|
|
|
|
|
|
|
|
Distribution
|
2019
|
1,727
|
150
|
780
|
-
|
-
|
|
2018
|
2,033
|
117
|
631
|
-
|
-
|
|
|
|
|
|
|
|
Real
Estate
|
2019
|
25
|
(13)
|
3,914
|
14
|
-
|
|
2018
|
34
|
(18)
|
3,732
|
26
|
-
|
|
|
|
|
|
|
|
Fabrication *
|
2019
|
-
|
-
|
26
|
-
|
-
|
Services
|
2018
|
-
|
-
|
28
|
-
|
-
|
|
|
|
|
|
|
|
Corporate
&
|
2019
|
-
|
11
|
233
|
-
|
-
|
Unallocated
|
2018
|
-
|
(188)
|
172
|
-
|
-
|
|
|
|
|
|
|
|
Total
|
2019
|
$8,838
|
$123
|
$37,000
|
$632
|
$278
|
|
2018
|
$10,104
|
$234
|
$36,388
|
$575
|
$455
|
|
Three
Months Ended
|
Nine
Months Ended
|
||
|
Mar.
31,
|
Mar.
31,
|
Mar.
31,
|
Mar.
31,
|
|
2019
|
2018
|
2019
|
2018
|
|
Unaudited
|
Unaudited
|
Unaudited
|
Unaudited
|
Interest
income
|
31
|
19
|
67
|
39
|
Other
rental income
|
28
|
28
|
84
|
81
|
Exchange
loss
|
(11)
|
(5)
|
(78)
|
(27)
|
Bad
debt recovery
|
-
|
-
|
2
|
-
|
Other
miscellaneous income
|
80
|
69
|
145
|
218
|
Total
|
$128
|
$111
|
$220
|
$311
|
|
Mar 31, 2019
(Unaudited)
$
|
July 1, 2018 (Unaudited)
$
|
Trade
Accounts Receivable
|
7,120
|
7,747
|
Trade
Accounts Payable
|
3,021
|
3,704
|
Contract
Assets
|
357
|
260
|
Contract
Liabilities
|
1,077
|
31
|
|
Three
Months Ended
|
Nine
Months Ended
|
||
|
Mar.
31,
|
Mar.
31,
|
Mar.
31,
|
Mar.
31,
|
|
2019
|
2018
|
2019
|
2018
|
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|
|
|
|
|
Income
attributable to Trio-Tech International common shareholders from
continuing operations, net of tax
|
$682
|
$(736)
|
$1,097
|
$520
|
Income
/ (loss) attributable to Trio-Tech International common
shareholders from discontinued operations, net of tax
|
1
|
(3)
|
(1)
|
(11)
|
Net Income Attributable to Trio-Tech International Common
Shareholders
|
$683
|
$739
|
$1,096
|
$509
|
|
|
|
|
|
Weighted
average number of common shares outstanding - basic
|
3,673
|
3,553
|
3,673
|
3,553
|
|
|
|
|
|
Dilutive
effect of stock options
|
12
|
219
|
73
|
225
|
Number
of shares used to compute earnings per share - diluted
|
3,685
|
3,772
|
3,746
|
3,778
|
|
|
|
|
|
Basic
earnings per share from continuing operations attributable to
Trio-Tech International
|
$0.19
|
(0.21)
|
0.30
|
0.15
|
Basic earnings
per share from discontinued operations attributable to Trio-Tech
International
|
-
|
-
|
-
|
-
|
Basic Earnings Per Share from Net Income Attributable to Trio-Tech
International
|
$0.19
|
$(0.21)
|
$0.30
|
$0.15
|
|
|
|
|
|
Diluted
earnings per share from continuing operations attributable to
Trio-Tech International
|
$0.19
|
(0.20)
|
0.29
|
0.14
|
Diluted
earnings per share from discontinued operations attributable to
Trio-Tech International
|
-
|
-
|
-
|
-
|
Diluted Earnings Per Share from Net Income Attributable to
Trio-Tech International
|
$0.19
|
$(0.20)
|
$0.29
|
$0.14
|
|
|
Nine Months
Ended
March
31,
|
||
|
|
2019
|
|
2018
|
|
|
|
|
|
Expected
volatility
|
|
47.29% to
97.48 %
|
|
47.29% to
104.94 %
|
Risk-free
interest rate
|
|
0.30% to 1.05
%
|
|
0.30% to 1.05
%
|
Expected life
(years)
|
|
2.50 –
3.25
|
|
2.50 –
3.25
|
|
Options
|
Weighted
Average
Exercise
Price
|
Weighted
Average Remaining
Contractual
Term
(Years)
|
Aggregate
Intrinsic
Value
|
|
|
|
|
|
Outstanding
at July 1, 2018
|
60,000
|
$5.98
|
4.73
|
$-
|
Granted
|
16,000
|
3.75
|
4.68
|
-
|
Exercised
|
-
|
-
|
-
|
-
|
Forfeited
or expired
|
-
|
-
|
-
|
-
|
Outstanding at March 31, 2019
|
76,000
|
5.51
|
4.13
|
-
|
Exercisable at March 31, 2019
|
34,000
|
5.72
|
4.06
|
-
|
|
Options
|
Weighted Average
Grant-Date
Fair
Value
|
|
|
|
Non-vested at July 1,
2018
|
45,000
|
$5.98
|
Granted
|
16,000
|
3.75
|
Vested
|
(19,000)
|
(5.72)
|
Forfeited
|
-
|
-
|
Non-vested at March 31,
2019
|
42,000
|
$5.34
|
|
Options
|
Weighted
Average
Exercise
Price
|
Weighted
Average Remaining
Contractual
Term
(Years)
|
Aggregate
Intrinsic
Value
|
|
|
|
|
|
Outstanding
at July 1, 2017
|
-
|
$-
|
-
|
$-
|
Granted
|
60,000
|
5.98
|
4.98
|
-
|
Exercised
|
-
|
-
|
-
|
-
|
Forfeited
or expired
|
-
|
-
|
-
|
-
|
Outstanding at March 31, 2018
|
60,000
|
5.98
|
4.98
|
-
|
Exercisable at March 31, 2018
|
60,000
|
5.98
|
4.98
|
-
|
|
Options
|
Weighted Average
Grant-Date
Fair
Value
|
|
|
|
Non-vested
at July 1,
2017
|
-
|
$-
|
Granted
|
60,000
|
5.98
|
Vested
|
(15,000)
|
5.98
|
Forfeited
|
-
|
-
|
Non-vested
at March 31, 2018
|
45,000
|
3.83
|
|
Options
|
Weighted
Average
Exercise
Price
|
Weighted
Average Remaining
Contractual
Term
(Years)
|
Aggregate
Intrinsic
Value
|
Outstanding
at July 1, 2018
|
127,500
|
$3.52
|
2.10
|
$121
|
Granted
|
-
|
-
|
-
|
-
|
Exercised
|
(50,000)
|
3.25
|
-
|
-
|
Forfeited
or expired
|
-
|
-
|
-
|
-
|
Outstanding at March 31, 2019
|
77,500
|
$3.69
|
2.47
|
$-
|
Exercisable
at March 31, 2019
|
68,125
|
$3.62
|
2.40
|
$-
|
|
Options
|
Weighted
Average Grant-Date
Fair
Value
|
Non-vested
at July 1, 2018
|
28,750
|
$3.83
|
Granted
|
-
|
-
|
Vested
|
(19,375)
|
4.14
|
Forfeited
|
-
|
-
|
Non-vested at March 31, 2019
|
9,375
|
$4.14
|
|
Options
|
Weighted
Average
Exercise
Price
|
Weighted
Average Remaining
Contractual
Term
(Years)
|
Aggregate
Intrinsic
Value
|
|
|
|
|
|
Outstanding
at July 1, 2017
|
127,500
|
$3.52
|
3.10
|
$187
|
Granted
|
-
|
-
|
-
|
-
|
Exercised
|
-
|
-
|
-
|
-
|
Forfeited
or expired
|
-
|
-
|
-
|
-
|
Outstanding at March 31, 2018
|
127,500
|
3.52
|
2.35
|
285
|
Exercisable at March 31, 2018
|
98,750
|
3.43
|
1.98
|
230
|
|
Options
|
Weighted Average
Grant-Date
Fair
Value
|
|
|
|
Non-vested at
July 1, 2017
|
48,125
|
$3.77
|
Granted
|
-
|
-
|
Vested
|
(19,375)
|
(3.43)
|
Forfeited
|
-
|
-
|
Non-vested at March
31, 2018
|
28,750
|
$3.83
|
|
Options
|
Weighted
Average
Exercise
Price
|
Weighted
Average Remaining
Contractual
Term
(Years)
|
Aggregate
Intrinsic
Value
|
|
|
|
|
|
Outstanding
at July 1, 2018
|
80,000
|
$5.98
|
4.73
|
$-
|
Granted
|
-
|
-
|
-
|
-
|
Exercised
|
-
|
-
|
-
|
-
|
Forfeited
or expired
|
-
|
-
|
-
|
-
|
Outstanding at March 31, 2019
|
80,000
|
5.98
|
3.98
|
-
|
Exercisable at March 31, 2019
|
80,000
|
5.98
|
3.98
|
-
|
|
Options
|
Weighted
Average
Exercise
Price
|
Weighted
Average Remaining
Contractual
Term
(Years)
|
Aggregate
Intrinsic
Value
|
|
|
|
|
|
Outstanding
at July 1, 2017
|
-
|
$-
|
-
|
$-
|
Granted
|
80,000
|
5.98
|
4.98
|
-
|
Exercised
|
-
|
-
|
-
|
-
|
Forfeited
or expired
|
-
|
-
|
-
|
-
|
Outstanding at March 31, 2018
|
80,000
|
5.98
|
4.98
|
-
|
Exercisable at March 31, 2018
|
80,000
|
5.98
|
4.98
|
-
|
|
Options
|
Weighted
Average
Exercise
Price
|
Weighted
Average
Remaining
Contractual
Term
(Years)
|
Aggregate
Intrinsic
Value
|
|
|
|
|
|
Outstanding
at July 1, 2018
|
390,000
|
$3.41
|
2.05
|
$412
|
Granted
|
-
|
-
|
-
|
-
|
Exercised
|
(70,000)
|
3.39
|
-
|
-
|
Forfeited
or expired
|
(20,000)
|
(3.62)
|
-
|
-
|
Outstanding
at March 31, 2019
|
300,000
|
$3.40
|
1.83
|
$-
|
Exercisable
at March 31, 2019
|
300,000
|
$3.40
|
1.83
|
$-
|
|
Options
|
Weighted
Average
Exercise
Price
|
Weighted
Average Remaining
Contractual
Term
(Years)
|
Aggregate
Intrinsic
Value
|
|
|
|
|
|
Outstanding
at July 1, 2017
|
415,000
|
$3.36
|
2.93
|
$673
|
Granted
|
-
|
-
|
-
|
-
|
Exercised
|
(20,000)
|
2.59
|
-
|
-
|
Forfeited
or expired
|
(5,000)
|
2.07
|
-
|
-
|
Outstanding at March 31, 2018
|
390,000
|
3.41
|
2.30
|
911
|
Exercisable at March 31, 2018
|
390,000
|
3.41
|
2.30
|
911
|
|
Three Months
Ended
|
Nine
Months Ended
|
||
|
Mar.
31,
|
Mar.
31,
|
Mar.
31,
|
Mar.
31,
|
|
2019
|
2018
|
2019
|
2018
|
|
|
|
|
|
Manufacturing
|
35.0%
|
30.9%
|
35.3%
|
37.5%
|
Testing
Services
|
45.1
|
48.7
|
44.9
|
45.7
|
Distribution
|
19.6
|
20.1
|
19.5
|
16.4
|
Real
Estate
|
0.3
|
0.3
|
0.3
|
0.4
|
|
|
|
|
|
Total
|
100.0%
|
100.0%
|
100.0%
|
100.0%
|
|
Three Months
Ended
|
|
|
Mar.
31,
2019
|
Mar.
31,
2018
|
|
|
|
Revenue
|
100.0%
|
100.0%
|
Cost
of sales
|
75.4
|
77.9
|
Gross Margin
|
24.6%
|
22.1%
|
Operating
expenses
|
|
|
General
and administrative
|
19.7%
|
17.5%
|
Selling
|
3.0
|
1.8
|
Research
and development
|
0.9
|
0.7
|
(Gain)/loss
on disposal of property, plant and equipment
|
(0.1)
|
(0.3)
|
Total
operating expenses
|
23.5%
|
19.7%
|
Income from Operations
|
1.4%
|
2.4%
|
|
Three Months
Ended
|
|
|
Mar.
31,
2019
|
Mar.
31,
2018
|
(Unaudited)
|
|
|
General
and administrative
|
$1,742
|
$1,773
|
Selling
|
246
|
181
|
Research
and development
|
76
|
75
|
Gain
on disposal of property, plant & equipment
|
(13)
|
(31)
|
Total
|
$2,051
|
$1,998
|
|
Three Months
Ended
|
|
|
Mar.
31,
2019
|
Mar.
31,
2018
|
(Unaudited)
|
|
|
Interest expense
|
$74
|
$64
|
|
Three Months
Ended
|
|
|
Mar.
31,
2019
|
Mar.
31,
2018
|
(Unaudited)
|
|
|
Interest
income
|
$31
|
$19
|
Other
rental income
|
28
|
28
|
Exchange
loss
|
(11)
|
(5)
|
Other
miscellaneous income
|
80
|
69
|
Total
|
$128
|
$111
|
|
Three Months
Ended
|
|
|
Mar.
31,
2019
|
Mar.
31,
2018
|
(Unaudited)
|
|
|
Revenue
|
$3,097
|
$3,124
|
Gross margin
|
25.6%
|
19.0%
|
Loss from operations
|
$(8)
|
$(105)
|
|
Three Months
Ended
|
|
|
Mar.
31,
2019
|
Mar.
31,
2018
|
(Unaudited)
|
|
|
Revenue
|
$3,989
|
$4,913
|
Gross margin
|
28.3%
|
28.9%
|
(Loss)/income from operations
|
$(17)
|
$428
|
|
Three Months
Ended
|
|
|
Mar.
31,
2019
|
Mar.
31,
2018
|
(Unaudited)
|
|
|
Revenue
|
$1,727
|
$2,033
|
Gross margin
|
14.1%
|
10.4%
|
Income from operations
|
$150
|
$117
|
|
Three Months
Ended
|
|
|
Mar.
31,
2019
|
Mar.
31,
2018
|
(Unaudited)
|
|
|
Revenue
|
$25
|
$34
|
Gross margin
|
36.0%
|
11.8%
|
Loss from operations
|
$(13)
|
$(18)
|
Gain
on sale of assets held for sale
|
$685
|
-
|
|
Three Months
Ended
|
|
|
Mar.
31,
2019
|
Mar.
31,
2018
|
(Unaudited)
|
|
|
Loss from operations
|
$(11)
|
$(188)
|
|
Nine Months
Ended
|
|
|
Mar.
31,
2019
|
Mar.
31,
2018
|
Revenue
|
100.0%
|
100.0%
|
Cost
of sales
|
77.1
|
75.4
|
Gross Margin
|
22.9%
|
24.6%
|
Operating
expenses:
|
|
|
General
and administrative
|
18.3%
|
16.9%
|
Selling
|
2.1
|
1.9
|
Research
and development
|
0.9
|
1.2
|
Total
operating expenses
|
21.3%
|
19.9%
|
Income from Operations
|
1.6%
|
4.7%
|
|
Nine
Months Ended
|
|
|
Mar.
31,
2019
|
Mar.
31,
2018
|
(Unaudited)
|
|
|
General and
administrative
|
$5,223
|
$5,339
|
Selling
|
580
|
612
|
Research and
development
|
270
|
377
|
Gain
on disposal of property, plant and equipment
|
(13)
|
(20)
|
Total
|
$6,060
|
$6,308
|
|
Nine
Months Ended
|
|
|
Mar.
31,
2019
|
Mar.
31,
2018
|
(Unaudited)
|
|
|
Interest expense
|
$250
|
$174
|
|
Nine Months
Ended
|
|
|
Mar.
31,
2019
|
Mar.
31,
2018
|
(Unaudited)
|
|
|
Interest
income
|
$67
|
$39
|
Other
rental income
|
84
|
81
|
Exchange
loss
|
(78)
|
(26)
|
Bad
debt recovery
|
2
|
-
|
Other
miscellaneous income
|
145
|
217
|
Total
|
$220
|
$311
|
|
Nine
Months Ended
|
|
|
Mar.
31,
2019
|
Mar.
31,
2018
|
(Unaudited)
|
|
|
Revenue
|
$10,086
|
$11,862
|
Gross margin
|
22.6%
|
22.1%
|
Income from operations
|
$175
|
$188
|
|
Nine
Months Ended
|
|
|
Mar.
31,
2019
|
Mar.
31,
2018
|
(Unaudited)
|
|
|
Revenue
|
$12,819
|
$14,454
|
Gross margin
|
27.1%
|
31.6%
|
(Loss) / Income from operations
|
$(134)
|
$1,281
|
|
Nine
Months Ended
|
|
|
Mar.
31,
2019
|
Mar.
31,
2018
|
(Unaudited)
|
|
|
Revenue
|
$5,587
|
$5,175
|
Gross margin
|
13.5%
|
11.1%
|
Income from operations
|
$492
|
$337
|
|
Nine
Months Ended
|
|
|
Mar.
31,
2019
|
Mar.
31,
2018
|
(Unaudited)
|
|
|
Revenue
|
$81
|
$110
|
Gross margin
|
35.8%
|
20.0%
|
Loss from operations
|
$(30)
|
$(37)
|
|
Nine
Months Ended
|
|
|
Mar.
31,
2019
|
Mar.
31,
2018
|
(Unaudited)
|
|
|
Loss from operations
|
$(30)
|
$(290)
|
|
Rule 13a-14(a) Certification of Principal Executive Officer of
Registrant
|
|
|
|
|
|
Rule 13a-14(a) Certification of Principal Financial Officer of
Registrant
|
|
|
|
|
|
Section 1350 Certification
|
|
|
|
|
|
TRIO-TECH INTERNATIONAL
|
|
|
By:
|
/s/ Victor H.M.
Ting
VICTOR
H.M. TING
Vice
President and Chief Financial Officer
(Principal
Financial Officer)
Dated:
May 14, 2019
|
Document and Entity Information - shares |
9 Months Ended | |
---|---|---|
Mar. 31, 2019 |
May 01, 2019 |
|
Document And Entity Information | ||
Entity Registrant Name | TRIO-TECH INTERNATIONAL | |
Entity Central Index Key | 0000732026 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --06-30 | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Common Stock, Shares Outstanding | 3,673,055 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2019 |
CONDENSED CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT NUMBER OF SHARES) (Parenthetical) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Jun. 30, 2018 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 256 | $ 259 |
Provision for obsolete inventory | $ 660 | $ 695 |
Common stock, authorized | 15,000,000 | 15,000,000 |
Common stock, issued | 3,673,055 | 3,553,055 |
Common stock, outstanding | 3,673,055 | 3,553,055 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Comprehensive Income Attributable to Trio-Tech International Common Shareholders: | ||||
Net income / (loss) | $ 655 | $ (705) | $ 967 | $ 570 |
Foreign currency translation, net of tax | 401 | 849 | (189) | 1,809 |
Comprehensive Income | 1,056 | 144 | 778 | 2,379 |
Less: comprehensive income / (loss) attributable to non-controlling interest | 1 | 142 | (191) | 255 |
Comprehensive Income attributable to Trio-Tech International Common Shareholders | $ 1,055 | $ 2 | $ 969 | $ 2,124 |
ORGANIZATION AND BASIS OF PRESENTATION |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes to Financial Statements | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ORGANIZATION AND BASIS OF PRESENTATION | Trio-Tech International (“the Company” or “TTI” hereafter) was incorporated in fiscal year 1958 under the laws of the State of California. TTI provides third-party semiconductor testing and burn-in services primarily through its laboratories in Southeast Asia. In addition, TTI operates testing facilities in the United States. The Company also designs, develops, manufactures and markets a broad range of equipment and systems used in the manufacturing and testing of semiconductor devices and electronic components. In the third quarter of fiscal year 2019, TTI conducted business in four business segments: Manufacturing, Testing Services, Distribution and Real Estate. TTI has subsidiaries in the U.S., Singapore, Malaysia, Thailand and China as follows:
* 100% owned by Trio-Tech International Pte. Ltd.
The accompanying un-audited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. All significant inter-company accounts and transactions have been eliminated in consolidation. The unaudited condensed consolidated financial statements are presented in U.S. dollars. The accompanying condensed consolidated financial statements do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for fair presentation have been included. Operating results for the three and nine months ended March 31, 2019 are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2019. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's annual report for the fiscal year ended June 30, 2018.
Except as otherwise specifically noted in this Form 10-Q, the Company’s operating results are presented based on the translation of foreign currencies using the respective quarter’s average exchange rate.
Certain reclassifications have been made to prior period amounts to conform to the current presentation.
|
NEW ACCOUNTING PRONOUNCEMENTS |
9 Months Ended |
---|---|
Mar. 31, 2019 | |
Notes to Financial Statements | |
NEW ACCOUNTING PRONOUNCEMENTS | The amendments in ASU 2018-19 ASC Topic 326: Codification Improvements to Financial Instruments – Credit Losses clarifies that receivables arising from operating leases are not within the scope of the credit losses standard, but rather, should be accounted for in accordance with the lease’s standard. The amendments are effective for all entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. While early application is permitted, including adoption in an interim period, the Company has not elected to early adopt. The Company is currently evaluating the impact of this accounting standard update on its consolidated financial statements.
The amendments in ASU 2018-18 ASC Topic 808: Collaborative Arrangements: Clarifying the Interaction between Topic 808 and Topic 606 provide more comparability in the presentation of revenue for certain transactions between collaborative arrangement participants. It allows organizations to only present units of account in collaborative arrangements that are within the scope of the revenue recognition standard together with revenue accounted for under the revenue recognition standard. The parts of the collaborative arrangement that are not in the scope of the revenue recognition standard should be presented separately from revenue accounted for under the revenue recognition standard. The amendments are effective for all entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. While early application is permitted, including adoption in an interim period, the Company has not elected to early adopt. The Company is currently evaluating the impact of this accounting standard update on its consolidated financial statements.
The amendments in ASU 2018-13 ASC Topic 820: Fair Value Measurement: Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement modify the disclosure requirements on fair value measurements based on the concepts in the Concepts Statement, including the consideration of costs and benefits. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. The amendments are effective for all entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. While early application is permitted, including adoption in an interim period, the Company has not elected to early adopt. The effectiveness of this update is not expected to have a significant effect on the Company’s consolidated financial position or results of operations.
The amendments in ASU 2018-09 Codification Improvements represent changes to clarify, correct errors in, or make minor improvements to the Codification, eliminating inconsistencies and providing clarifications in current guidance. The amendments in this ASU include those made to: Income Statement-Reporting Comprehensive Income-Overall; Debt-Modifications and Extinguishments; Distinguishing Liabilities from Equity-Overall; Compensation-Stock Compensation-Income Taxes; Business Combinations-Income Taxes; Derivatives and Hedging-Overall; Fair Value Measurement-Overall; Financial Services-Brokers and Dealers-Liabilities; and Plan Accounting-Defined Contribution Pension Plans-Investments-Other. The amendments are effective for all entities for annual periods beginning after December 15, 2018. The effectiveness of this update is not expected to have a significant effect on the Company’s consolidated financial position or results of operations.
The amendments in ASU 2018-02 ASC Topic 220: Income Statement – Reporting Comprehensive Income provide financial statement preparers with an option to reclassify stranded tax effects within Accumulated Other Comprehensive Income to retained earnings in each period in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act (or portion thereof) is recorded. The amendments in ASC Topic 220 are effective for public business entities for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. While early application is permitted, including adoption in an interim period, the Company has not elected to early adopt. The effectiveness of this update is not expected to have a significant effect on the Company’s consolidated financial position or results of operations.
The amendments in Accounting Standards Update (“ASU”) 2017-11: Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815) are effective for public companies for annual periods beginning after December 15, 2018, including interim periods within those periods. While early application is permitted, including adoption in an interim period, the Company has not elected to early adopt. The effectiveness of this update is not expected to have a significant effect on the Company’s presentation of consolidated financial position or results of operations.
The amendments in ASU 2017-04 ASC Topic 350 — 'Intangibles - Goodwill and Other (“ASC Topic 350”) simplify the test for goodwill impairment. For public companies, these amendments are effective for annual periods beginning after December 15, 2019, including interim periods within those periods. While early application is permitted, including adoption in an interim period, the Company has not elected to early adopt. The effectiveness of this update is not expected to have a significant effect on the Company’s presentation of consolidated financial position or results of operations.
The amendments in ASU 2016-13 ASC Topic 326: Financial Instruments — Credit losses (“ASC Topic 326”) are issued for the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. For public companies that are not SEC filers, ASC Topic 326 is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. While early application will be permitted for all organizations for fiscal years and interim periods within those fiscal years, beginning after December 15, 2018, the Company has not yet determined if it will early adopt. The effectiveness of this update is not expected to have a significant effect on the Company’s consolidated financial position or results of operations.
In February 2016, the FASB issued an ASU 2016-12 ASC Topic 842: Leases, which amends a number of aspects of the existing accounting standards for leases which require lessees to recognize operating leased assets and corresponding liabilities on the balance sheet for all leases with lease terms of more than 12 months. In July 2018, ASU 2018-10: Codification Improvements to Leases addressed stakeholders’ questions about how to apply certain aspects of the new guidance in Accounting Standards Codification (ASC) 842: Leases. The clarifications address the rate implicit in the lease, impairment of the net investment in the lease, lessee reassessment of lease classification, lessor reassessment of lease term and purchase options, variable payments that depend on an index or rate and certain transition adjustments. Besides, the amendments in ASU 2018-11 ASC Topic 842: Leases: Targeted Improvements related to transition relief on comparative reporting at adoption affect all entities with lease contracts that choose the additional transition method and separating components of a contract affect only lessors whose lease contracts qualify for the practical expedient. In July 2018, the amendments in ASU 2018-20 ASC Topic 842: Leases: Narrow-Scope Improvements for Lessors addressed the following issues facing lessors when applying this lease standard: (1) sales taxes and other similar taxes collected from lessees, (2) certain lessor costs and (3) recognition of variable payments for contracts with lease and non-lease components. On 5 March 2019, ASU 2019-01 issued to exempt both lessees and lessors from having to provide certain interim disclosures in the fiscal year in which a company adopts the new leases standard. The amendments are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. While early application is permitted and allows for either a modified retrospective adoption or a retrospective adoption by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption, the Company has not elected to early adopt at the beginning of the period through a cumulative-effect adjustment. The Company will adopt these standards starting in the first quarter of fiscal year 2020 on a modified retrospective approach at the beginning of the period through a cumulative-effect adjustment. The Company is currently evaluating the potential impact of this standard on its consolidated financial statements and expects that there will be an increase in assets and liabilities on the Consolidated Balance Sheets at adoption due to the recognition of right-of-use assets and related lease liabilities. Upon adoption, the Company expects that its financial statement disclosure will be expanded to present additional details of its leasing arrangements.
Other new pronouncements issued but not yet effective until after March 31, 2019 are not expected to have a significant effect on the Company’s consolidated financial position or results of operations.
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TERM DEPOSITS |
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TERM DEPOSITS |
Restricted deposits represent the amount of cash pledged to secure loans payable granted by financial institutions and serve as collateral for public utility agreements such as electricity and water. Restricted deposits are classified as non-current assets, as they relate to long-term obligations and will become unrestricted only upon discharge of the obligations. Short-term deposits represent bank deposits, which do not qualify as cash equivalents.
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TRADE ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS |
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TRADE ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS | Accounts receivable consists of customer obligations due under normal trade terms. Although management generally does not require collateral, letters of credit may be required from the customers in certain circumstances. Management periodically performs credit evaluations of customers’ financial conditions.
Senior management reviews accounts receivable on a periodic basis to determine if any receivables will potentially be uncollectible. Management includes any accounts receivable balances that are determined to be uncollectible in the allowance for doubtful accounts. After all reasonable attempts to collect a receivable have failed, the receivable is written off against the allowance. Based on the information available, management believed the allowance for doubtful accounts as of March 31, 2019 and June 30, 2018 was adequate.
The following table represents the changes in the allowance for doubtful accounts:
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LOANS RECEIVABLE FROM PROPERTY DEVELOPMENT PROJECTS |
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LOANS RECEIVABLE FROM PROPERTY DEVELOPMENT PROJECTS | The following table presents Trio-Tech (Chongqing) Co. Ltd. (“TTCQ”)’s loan receivable from property development projects in China as of March 31, 2019. The exchange rate is based on the date published by the Monetary Authority of Singapore as of March 31, 2015, since the net loan receivable was “nil” as of March 31, 2019.
On November 1, 2010, TTCQ entered into a Memorandum Agreement with JiangHuai Property Development Co. Ltd. (“JiangHuai”) to invest in their property development projects (Project - Yu Jin Jiang An) located in Chongqing City, China. Due to the short-term nature of the investment, the amount was classified as a loan based on ASC Topic 310-10-25 Receivables, amounting to renminbi (“RMB”) 2,000, or approximately $325. The loan was renewed, but expired on May 31, 2013. TTCQ is in the legal process of recovering the outstanding amount of $325. TTCQ did not generate other income from JiangHuai for the quarter ended March 31, 2019 or for the fiscal year ended June 30, 2018. Based on TTI’s financial policy, a provision for doubtful receivables of $325 on the investment in JiangHuai was recorded during the second quarter of fiscal 2014 based on TTI’s financial policy.
On November 1, 2010, TTCQ entered into a Memorandum Agreement with JiaSheng Property Development Co. Ltd. (“JiaSheng”) to invest in their property development projects (Project B-48 Phase 2) located in Chongqing City, China. Due to the short-term nature of the investment, the amount was classified as a loan based on ASC Topic 310, amounting to RMB 5,000, or approximately $814 based on the exchange rate as at March 31, 2015 published by the Monetary Authority of Singapore. The amount was unsecured and repayable at the end of the term. The loan was renewed in November 2011 for a period of one year, which expired on October 31, 2012 and was again renewed in November 2012 and expired in November 2013. On November 1, 2013 the loan was transferred by JiaSheng to, and is now payable by, Chong Qing Jun Zhou Zhi Ye Co. Ltd. (“Jun Zhou Zhi Ye”), and the transferred agreement expired on October 31, 2016. Prior to the second quarter of fiscal year 2015, the loan receivable was classified as a long-term receivable. The book value of the loan receivable approximates its fair value. In the second quarter of fiscal year 2015, the loan receivable was transferred to the down payment for the purchase of an investment property that is being developed in the Singapore Themed Resort Project (see Note 8).
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INVENTORIES |
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INVENTORIES | Inventories consisted of the following:
The following table represents the changes in provision for obsolete inventory:
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ASSETS HELD FOR SALE |
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ASSETS HELD FOR SALE | Penang Property
During the fourth quarter of 2015, the operations in Malaysia planned to sell its factory building in Penang, Malaysia. In accordance with ASC Topic 360, during fiscal year 2015 the property was reclassified from investment property, which had a net book value of RM 371, or approximately $98, to assets held for sale, since there was an intention to sell the factory building. In May 2015, Trio-Tech Malaysia was approached by a potential buyer to purchase the factory building. On September 14, 2015, application to sell the property was rejected by Penang Development Corporation (PDC). The rejection was because the business activity of the purchaser was not suitable to the industry that is being promoted on said property. PDC made an offer to purchase the property, which was not at the expected value and the offer expired on March 28, 2016 and no further conversations with PDC have occurred since. Management received an expression of interest from a potential buyer in acquiring the property during second quarter of fiscal year 2019 and the sale is still under negotiation with the potential buyer during third quarter of fiscal year 2019. The completion of the sale is also subject to the approval by Penang Development Corporation. The net book values of the building was RM371, or $90, as at March 31, 2019 and RM371, or $91, as at June 30, 2018.
Mao Ye Property
During the first quarter of 2019, management decided to sell Mao Ye Property, which is one of our earlier investment properties. In order to monetize the capital gain on property, TTCQ appointed a sole agent for 6 months as of September 1, 2018 to search for suitable buyers for this property. The Company has completed the sale of thirteen of the fifteen units constituting the Mao Ye Property as the end of the third quarter 2019 which contributed the gain of $685. During the third quarter 2019, considering the current market conditions in China, management has decided not to sell the remaining two units of Mao Ye properties and as of third quarter 2019, the properties were reclassified to investment property from assets held for sale. |
INVESTMENTS |
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INVESTMENTS | During the second quarter of fiscal year 2011, the Company entered into a joint venture agreement with JiaSheng to develop real estate projects in China. The Company invested RMB 10,000, or approximately $1,606 for a 10% interest in the newly formed joint venture, which was incorporated as a limited liability company, Chong Qing Jun Zhou Zhi Ye Co. Ltd. (the “joint venture”), in China. The Company would receive a fee of RMB 10,000, or approximately $1,606 for the services rendered in connection with bidding in certain real estate projects from the local government. Upon signing of the agreement, JiaSheng paid the Company RMB 5,000 in cash, or approximately $803. The remaining RMB 5,000, which was not recorded as a receivable as the Company considered the collectability uncertain, would be paid over 72 months commencing in 36 months from the date of the agreement when the joint venture secured a property development project stated inside the joint venture agreement. The Company considered the RMB 5,000, or approximately $803 received in cash from JiaSheng, the controlling venturer in the joint venture, as a partial return of the Company’s initial investment, resulting in a net investment of RMB 5,000 as of March 31, 2014. The Company further reduced its investments by RMB 137, or approximately $22, towards the losses from operations incurred by the joint venture, resulting in a net investment of RMB 4,863, or approximately $781. Transaction amounts in this paragraph were translated into US dollars based on the exchange rate as of March 31, 2014 published by the Monetary Authority of Singapore.
During the second quarter of fiscal year 2014, TTCQ decided to dispose of its 10% interest in the joint venture after TTCQ revalued certain monetary risks relating to the development of the project. On October 2, 2013, TTCQ entered into a share transfer agreement (the “Share Transfer Agreement”) with Zhu Shu. Based on the agreement, the purchase price was to be paid by (1) RMB 10,000 worth of commercial property in Chongqing China, or approximately $1,634 consisting of commercial units measuring 668 square meters to be delivered in June 2016, and (2) the remaining RMB 8,000, or approximately $1,307 by cash consideration to be paid in sixteen quarterly equal instalments of RMB 500 per quarter commencing from January 2014. Based on ASC Topic 845 Non-monetary Consideration, the Company deferred the recognition of the gain on disposal of the 10% interest in joint venture investment until such time that the consideration is paid, so that the gain can be ascertained. The recorded value of the disposed investment amounting to $783, based on exchange rates published by the Monetary Authority of Singapore as of June 30, 2014, is classified as “other assets” under non-current assets, because it is considered a down payment for the purchase of the commercial property in Chongqing. The first three instalments, amounting to RMB 500 each due in January 2014, April 2014 and July 2014, were all outstanding until the date of disposal of the investment in the joint venture. Out of the outstanding RMB 8,000, TTCQ received RMB 100 during May 2014. Except as otherwise noted, transaction amounts in this paragraph were translated into US dollars based on the exchange rate as of October 2, 2013 published by the Monetary Authority of Singapore
On October 14, 2014, TTCQ and Jun Zhou Zhi Ye entered into a memorandum of understanding. Based on the memorandum of understanding, both parties agreed to register a sales and purchase agreement upon Jun Zhou Zhi Ye obtaining the license to sell the commercial property (the Singapore Themed Resort Project) located in Chongqing, China. The proposed agreement is for the sale of shop lots with a total area of 1,484.55 square meters as consideration for the outstanding amounts owed to TTCQ by Jun Zhou Zhi Ye as follows:
a) Long term loan receivable RMB 5,000, or approximately $814, as disclosed in Note 5, plus the interest receivable on long term loan receivable of RMB 1,250; b) Commercial units measuring 668 square meters, as mentioned above; and c) RMB 5,900 for the part of the unrecognized cash consideration of RMB 8,000 relating to the disposal of the joint venture.
The consideration does not include the remaining outstanding amount of RMB 2,000, or approximately $326, which will be paid to TTCQ in cash.
The shop lots are to be delivered to TTCQ upon completion of the construction of the shop lots in the Singapore Themed Resort Project. The initial targeted date of completion was December 31, 2016. Based on discussions with the developers, the completion date is currently estimated to be December 31, 2021.
The Share Transfer Agreement (10% interest in the joint venture) was registered with the relevant authorities in China during October 2016.
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INVESTMENT PROPERTIES | The following table presents the Company’s investment in properties in China as of March 31, 2019. The exchange rate is based on the market rate as of March 31, 2019.
The following table presents the Company’s investment in properties in China as of June 30, 2018. The exchange rate is based on the market rate as of June 30, 2018.
The following table presents the Company’s investment properties in Malaysia as of March 31, 2019 and June 30, 2018. The exchange rate is based on the exchange rate as of June 30, 2015 published by the Monetary Authority of Singapore.
Rental Property I - Mao Ye Property
In fiscal 2008, TTCQ purchased an office in Chongqing, China from Mao Ye Property Ltd. (“Mao Ye”), for a total cash purchase price of RMB 5,554, or approximately $894. TTCQ identified a new tenant and signed a new rental agreement (653 square meters at a monthly rent of RMB 39, or approximately $6) on August 1, 2015 which expires on July 31, 2020. TTCQ signed a new rental agreement (451 square meters at a monthly rent of RMB 24, or approximately $4) on February 1, 2018 which expires on January 31, 2021.
During the first quarter of 2019, management decided to sell Mao Ye Property, which is one of our earlier investment properties. In order to monetize the capital gain on property, TTCQ appointed a sole agent for 6 months as of September 1, 2018 to search for suitable buyers for this property. The Company has completed the sale of thirteen of the fifteen units constituting the Mao Ye Property as the end of third quarter 2019 which contributed the gain of $685. During the third quarter 2019, considering the current market conditions in China, management has decided not to sell the remaining two units of Mao Ye properties and as of third quarter 2019, the properties were reclassified to investment property from assets held for sale.
Property purchased from Mao Ye generated a rental income of $15 and $58 during the three and nine months ended March 31, 2019, respectively, and $22 and $75 for the same periods in last fiscal year.
Rental Property II - JiangHuai
In fiscal year 2010, TTCQ purchased eight units of commercial property in Chongqing, China from Chongqing JiangHuai Real Estate Development Co. Ltd. (“JiangHuai”) for a total purchase price of RMB 3,600, or approximately $580. Although these units were rented in the past, all eight units are currently vacant and TTCQ is working with the developer to find a suitable buyer to purchase all the commercial units. TTCQ has yet to receive the title deed for these properties; however, TTCQ has the vacancies in possession with the exception of two units, which are in the process of clarification. TTCQ is in the legal process to obtain the title deed, which is dependent on JiangHuai completing the entire project.
Property purchased from JiangHuai did not generate any rental income during the three and nine months ended March 31, 2019 or during the same period in the prior fiscal year.
Rental Property III – FuLi
In fiscal 2010, TTCQ entered into a Memorandum Agreement with Chongqing FuLi Real Estate Development Co. Ltd. (“FuLi”) to purchase two commercial properties totalling 311.99 square meters (“office space”) located in Jiang Bei District Chongqing. Although TTCQ currently rents its office premises from a third party, it intends to use the office space as its office premises. The total purchase price committed and paid was RMB 4,025, or approximately $648. The development was completed and the property was handed over in April 2013 and the title deed was received during the third quarter of fiscal 2014.
The two commercial properties were leased to third parties under two separate rental agreements. One of such leases provides for a rent increase of 5% every year on May 1, commencing in 2017 until the rental agreement expires on April 30, 2019. The rental agreement of this lease has been extended for 3 years, commencing from May 01, 2019 to Apr 30, 2021 with a term of rent increase of 6% every year.
For the other lease expired on March 31, 2018, TTCQ identified a new tenant and signed a new rental agreement (161 square meters at a monthly rent of RMB 62, or approximately $9) on November 1, 2018 which expires on October 31, 2019.
Properties purchased from Fu Li generated a rental income of $10 and $23 for the three and nine months ended March 31, 2019, respectively, while it generated a rental income of $12 and $35 for the same periods in the last fiscal year.
Summary
Total rental income for all investment properties in China was $25 and $81 for the three and nine months ended March 31, 2019, respectively, and were $34 and $110 for the same periods in the last fiscal year.
Depreciation expenses for all investment properties in China were $14 and $42 and for the three and nine months ended March 31, 2019, respectively, and were $25 and $74 for the same periods in the last fiscal year.
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OTHER ASSETS | Other assets consisted of the following:
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LINES OF CREDIT | Carrying value of the Company’s lines of credit approximates its fair value because the interest rates associated with the lines of credit are adjustable in accordance with market situations when the Company borrowed funds with similar terms and remaining maturities.
The Company’s credit rating provides it with readily and adequate access to funds in global markets.
As of March 31, 2019, the Company had certain lines of credit that are collateralized by restricted deposits.
As of June 30, 2018, the Company had certain lines of credit that are collateralized by restricted deposits.
Trio-Tech International Pte. Ltd. signed an agreement with a bank to sub-allocate a portion of the facility thereunder to Universal (Far East) Pte. Ltd. for an Accounts Payable Financing facility for Singapore Dollar of 500, or approximately $369. Interest charged ranges between 1.83% and 5.5%. The financing facility was set up to facilitate the working capital in our operations in Singapore. The Company started to use this facility in fiscal year 2018.
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ACCRUED EXPENSES | Accrued expenses consisted of the following:
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WARRANTY ACCRUAL |
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WARRANTY ACCRUAL | The Company provides for the estimated costs that may be incurred under its warranty program at the time the sale is recorded. The warranty period of the products manufactured by the Company is generally one year or the warranty period agreed with the customer. The Company estimates the warranty costs based on the historical rates of warranty returns. The Company periodically assesses the adequacy of its recorded warranty liability and adjusts the amounts as necessary.
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BANK LOANS PAYABLE |
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BANK LOANS PAYABLE | Bank loans payable consisted of the following:
Future minimum payments (excluding interest) as at March 31, 2019 were as follows:
Future minimum payments (excluding interest) as at June 30, 2018 were as follows:
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COMMITMENTS AND CONTINGENCIES |
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Notes to Financial Statements | |
COMMITMENTS AND CONTINGENCIES | Trio-Tech (Malaysia) Sdn. Bhd. has capital commitments for the purchase of equipment and other related infrastructure costs amounting to RM 315, or approximately $77, based on the exchange rate as at March 31, 2019, as compared to the capital commitment as at June 30, 2018 amounting to RM 62, or approximately $16.
Trio-Tech (Tianjin) Co., Ltd. in China has capital commitments for the purchase of equipment and other related infrastructure costs amounting to RMB 265, or approximately $40, based on the exchange rate as at March 31, 2019, as compared to the capital commitment as at June 30, 2018 amounting to RMB 3,927, or approximately $593.
Trio-Tech (SIP) Co., Ltd. in China has capital commitments for the purchase of equipment and other related infrastructure costs amounting to RMB 632, or approximately $94, based on the exchange rate as at March 31, 2019 as compared to the capital commitment as at June 30, 2018 amounting to RMB 6,084, or approximately $919.
Deposits with banks in China are not insured by the local government or agency, and are consequently exposed to risk of loss. The Company believes the probability of a bank failure, causing loss to the Company, is remote.
The Company is, from time to time, the subject of litigation claims and assessments arising out of matters occurring in its normal business operations. In the opinion of management, resolution of these matters will not have a material adverse effect on the Company’s financial statements.
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BUSINESS SEGMENTS |
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BUSINESS SEGMENTS | In fiscal year 2019, the Company operates in four segments; the testing service industry (which performs structural and electronic tests of semiconductor devices), the designing and manufacturing of equipment (which equipment tests the structural integrity of integrated circuits and other products), distribution of various products from other manufacturers in Singapore and Southeast Asia, and the real estate segment in China.
The revenue allocated to individual countries was based on where the customers were located. The allocation of the cost of equipment, the current year investment in new equipment and depreciation expense have been made based on the primary purpose for which the equipment was acquired.
All inter-segment revenue was from the manufacturing segment to the testing and distribution segments. Total inter-segment revenue was $15 and $416 for the three and nine months ended March 31, 2019, as compared to $587 and $681 for the same periods in the last fiscal year. Corporate assets mainly consisted of cash and prepaid expenses. Corporate expenses mainly consisted of stock option expenses, salaries, insurance, professional expenses and directors' fees. Corporate expenses are allocated to the four segments. The following segment information table includes segment operating income or loss after including the corporate expenses allocated to the segments, which gets eliminated in the consolidation.
The following segment information is un-audited for the three and nine months ended March 31, 2019 and March 31, 2018:
The following segment information is unaudited for the period referenced below:
* Fabrication services is a discontinued operation.
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OTHER INCOME, NET |
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OTHER INCOME, NET | Other income / (expenses) consisted of the following:
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INCOME TAX |
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Notes to Financial Statements | |
INCOME TAX | The Company is subject to income taxes in the U.S. and numerous foreign jurisdictions. Significant judgment is required in determining the provision for income taxes and income tax assets and liabilities, including evaluating uncertainties in the application of accounting principles and complex tax laws. The statute of limitations, in general, is open for years 2014 to 2017 for tax authorities in those jurisdictions to audit or examine income tax returns. The Company is under annual review by the tax authorities of the respective jurisdiction to which the subsidiaries belong.
The U.S. Tax Cuts and Jobs Act (the “Tax Act”) was enacted on December 22, 2017. The Tax Act, among other things reduced the U.S. federal corporate tax rate from 35.0% to 21.0%, eliminated corporate Alternative Minimum Tax, modified rules for expensing capital investment, and limited the deduction of interest expense for certain companies. The Tax Act is a fundamental change to the taxation of multinational companies, including a shift from a system of worldwide taxation with some deferral elements to a territorial system, current taxation of certain foreign income, a minimum tax on low tax foreign earnings, and new measures to curtail base erosion and promote U.S. production.
As the Company has a June 30 fiscal year end, the lower corporate income tax rate will be phased in, resulting in a lower U.S. statutory federal rate. In accordance with Section 15 of the Internal Revenue Code, the Company applied a blended U.S. statutory federal income tax rate of 27.5% for the year ended June 30, 2018. Accounting Standard Codification (“ASC”) 740 requires filers to record the effect of tax law changes in the period enacted. During fiscal year 2018, the Company recognized income tax expenses of $900 related to the one-time deemed repatriation. No expenses have been recognized related to the deferred tax re-measurement and minimum tax on low tax foreign earnings. However, SEC issued Staff Accounting Bulletin No. 118 (“SAB 118”), that permits filers who may not have the necessary information available, prepared, or analyzed (including computations) for certain income tax effects of the Act in order to determine a reasonable estimate to be recorded as provisional amounts during a measurement period ending no later than one year from the date of enactment.
Certain material provisions affecting the Company is provided below.
One-Time Mandatory Repatriation
One of the effects of the Tax Act is to transition from a world-wide to a territorial tax system. The Tax Act requires a mandatory one-time repatriation of certain post-1986 earnings and profits that were deferred from U.S. taxation by the Company’s foreign subsidiaries. The basis of the tax is on cash held and specified assets which are taxed at 15.5% and 8%, respectively. The Company has elected to pay the repatriation tax over an 8-year period.
The Company recorded an estimated $900 charge in fiscal 2018 related to the one-time transition tax on the deemed repatriation of deferred foreign income, which was included in the provision for income taxes on our consolidated income statements and income taxes on our consolidated balance sheets, based on existing tax laws and the best information available as of the date of estimate.
As of second quarter of fiscal year 2019, the initial estimate for the one-time transition tax was adjusted to reflect final computation using all available data and tax legislation published post estimate. In the second quarter of fiscal 2019 upon finalization of our accounting analysis, we reversed $145 from the provision of income tax thus reducing the tax liability related to the one-time transition tax to $755. That adjustment materially impacts our provision for income taxes and effective tax rate. The significant change is due to the update of information from additional analysis performed on foreign tax pools and earnings and profits computations where the information is only available post-estimate. As at March 31, 2019, the U.S. Treasury Department and the Internal Revenue Services are still in the process of issuing various regulations related to the Tax Act. The transition tax may change in the future due to changes in tax law as enacted by the U.S. Government, new guidance from federal and state regulators and related interpretations of the Tax Act.
Minimum Tax on Low Tax Foreign Earnings
The Tax Act implemented the inclusion in gross income for the Global Intangible Low-Tax Income (GILTI) for any taxable year beginning on or after January 1, 2018. This provision significantly expands current taxation of foreign subsidiary corporate earnings. The Company must generally include in current income all earnings of the foreign subsidiaries in excess of the assumed deemed return on tangible assets of the foreign subsidiaries. The Company has elected to provide for the minimum tax as future income tax expense as a period expense. The Company recorded $19 of income tax expense related to GILTI for the nine months ended March 31, 2019.
Deferred Tax Re-Measurement
The re-measurement is based on the expected reversals of the deferred taxes at the estimated U.S. federal tax rates of 28.0% for the current fiscal year and 21.0% for future fiscal years. As the Company established a full valuation allowance on the U.S. deferred tax assets, the Company has not recognized any income tax effects for the deferred tax re-measurement under the Tax Act. The Company’s accounting for any possible income tax effects for the deferred tax re-measurement will be completed during the measurement period, which should not extend beyond one year from the enactment date.
The Company accrues penalties and interest related to unrecognized tax benefits when necessary as a component of penalties and interest expenses, respectively. The Company had not accrued any penalties or interest expenses relating to unrecognized benefits as of March 31, 2019.
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REVENUE |
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REVENUE | The Company generates revenue primarily from 3 different segments: Manufacturing, Testing and Distribution. The Company accounts for a contract with a customer when there is approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. The Company’s revenues are measured based on consideration stipulated in the arrangement with each customer, net of any sales incentives and amounts collected on behalf of third parties, such as sales taxes. The revenues are recognized as separate performance obligations that are satisfied by transferring control of the product or service to the customer.
Significant Judgments
The Company’s arrangements with its customers include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. A product or service is considered distinct if it is separately identifiable from other deliverables in the arrangement and if a customer can benefit from it on its own or with other resources that are readily available to the customer.
The Company allocates the transaction price to each performance obligation on a relative standalone selling price basis (SSP). Determining the SSP for each distinct performance obligation and allocation of consideration from an arrangement to the individual performance obligations and the appropriate timing of revenue recognition are significant judgments with respect to these arrangements. The Company typically establishes the SSP based on observable prices of products or services sold separately in comparable circumstances to similar clients. The Company may estimate SSP by considering internal costs, profit objectives and pricing practices in certain circumstances.
Warranties, discounts and allowances are estimated using historical and recent data trends. The Company includes estimates in the transaction price only to the extent that a significant reversal of revenue is not probable in subsequent periods. The Company’s products and services are generally not sold with a right of return, nor has the Company experienced significant returns from or refunds to its customers.
Manufacturing
The Company primarily derives revenue from the sale of both front-end and back-end semiconductor test equipment and related peripherals, maintenance and support of all these products, installation and training services and the sale of spare parts. The Company’s revenues are measured based on consideration stipulated in the arrangement with each customer, net of any sales incentives and amounts collected on behalf of third parties, such as sales taxes.
The Company recognizes revenue at a point in time when the Company has satisfied its performance obligation by transferring control of the product to the customer. The Company uses judgment to evaluate whether the control has transferred by considering several indicators, including:
Not all of the indicators need to be met for the Company to conclude that control has transferred to the customer. In circumstances in which revenue is recognized prior to the product acceptance, the portion of revenue associated with its performance obligations to install product is deferred and recognized upon acceptance.
The majority of sales under the Manufacturing segment include a standard 12-month warranty. The Company has concluded that the warranty provided for standard products are assurance type warranties and are not separate performance obligations. Warranty provided for customized products are service warranties and are separate performance obligations. Transaction prices are allocated to this performance obligation using cost plus method. The portion of revenue associated with warranty service is deferred and recognized as revenue over the warranty period, as the customer simultaneously receives and consumes the benefits of warranty services provided by the Company.
Testing
The Company rendered testing services to manufacturers and purchasers of semiconductors and other entities who either lack testing capabilities or whose in-house screening facilities are insufficient. The Company primarily derives testing revenue from burn-in services, manpower supply and other associated services. Standalone Selling price is directly observable from the sales orders. Revenue is allocated to performance obligations satisfied at a point in time depending upon terms of the sales order. Generally, there is no other performance obligation other than what has been stated inside the sales order for each of these sales.
Terms of contract that may indicate potential variable consideration included warranty, late delivery penalty and reimbursement to solve non-conformance issues for rejected products. Based on historical and recent data trends, it is concluded that these terms of the contract do not represent potential variable consideration. The transaction price is not contingent on the occurrence of any future event.
Distribution
The Company distributes complementary products particularly equipment, industrial products and components by manufacturers mainly from the U.S., Europe, Taiwan and Japan. The Company recognizes revenue from product sales at a point in time when the Company has satisfied its performance obligation by transferring control of the product to the customer. The Company uses judgment to evaluate whether the control has transferred by considering several indicators discussed above. The Company recognizes the revenue at a point in time, generally upon shipment or delivery of the products to the customer or distributors, depending upon terms of the sales order.
Method and Impact of Adoption
Effective as of July 1, 2018, the Company adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606), and its related amendments using the modified retrospective transition method. This method was applied to contracts that were not complete as of the date of adoption. Under the modified retrospective transition approach, periods prior to the adoption date were not adjusted and continue to be reported in accordance with ASC 605.
An assessment was made on the impact of all existing arrangements as at the date of adoption, under ASC 606, to identify the cumulative effect of applying ASC 606 on the beginning retained earnings. The Company quantified the impact of the adoption on its financial position, results of operations and cash flow. The impact amounted to 0.06% of fiscal 2018 revenue or $28, which is immaterial to the Company. Hence, based on materiality principle, the Company concluded that the cumulative adjustment is not required to be made to the Company’s Beginning Retained Earnings.
The impact is primarily driven by the changes related to the accounting of standard warranty. Prior to adoption of ASC 606, the Company accounted for the estimated warranty cost as a charge to costs of sales when revenue was recognized. Upon adoption of ASC 606, the standard warranty for customized products is recognized as a separate performance obligation.
The Company has completed its adoption and implemented policies, processes and controls to support the standard’s measurement and disclosure requirements. The Company recognizes net product revenue when it satisfies the obligations as evidenced by the transfer of control of its products and services to customers. The guidance did not have material impact on the Company’s consolidated financial results.
Contract Balances
The timing of revenue recognition, billings and cash collections may result in accounts receivable, contract assets, and contract liabilities (deferred revenue) on the Company’s condensed consolidated balance sheet. A receivable is recorded in the period the Company delivers products or provides services when the Company has an unconditional right to payment.
Contract assets primarily relate to the value of products and services transferred to the customer for which the right to payment is not just dependent on the passage of time. Contract assets are transferred to receivable when rights to payment become unconditional.
A contract liability is recognized when the Company receives payment or has an unconditional right to payment in advance of the satisfaction of performance. The contract liabilities represent (1) Deferred product revenue related to the value of products that have been shipped and billed to customers and for which the control has not been transferred to the customers, and (2) Deferred service revenue, which is recorded when the Company receives consideration, or such consideration is unconditionally due, from a customer prior to transferring services to the customer under the terms of a sales contract. Deferred service revenue typically results from warranty services, and maintenance and other service contracts.
As of July 1, 2018, deferred income amounting to $260 was reclassified from other receivables to contract assets and customer deposits amounting to $31 was reclassified from accrued expenses to contract liabilities in order to establish the new opening balance for contract assets and liabilities.
The Company’s payment terms and conditions vary by contract type, although terms generally include a requirement of payment of 70% to 90% of total contract consideration within 30 to 60 days of shipment, with the remainder payable within 30 days of acceptance. In instances where the timing of revenue recognition differs from the timing of invoicing, the Company has determined that its contracts generally do not include a significant financing component.
Contract assets were recorded under other receivable while contract liabilities were recorded under accrued expenses in the balance sheet.
The following table is the reconciliation of contract balances.
Remaining Performance Obligation
The remaining performance obligation (RPO) disclosure provides the aggregate amount of the transaction price yet to be recognized as of the end of the reporting period and an explanation as to when the company expects to recognize these amounts in revenue. It is intended to be a statement of overall work under contract that has not yet been performed and does not include contracts in which the customer is not committed. The customer is not considered committed when they are able to terminate for convenience without payment of a substantive penalty. The disclosure includes estimates of variable consideration, except when the variable consideration is a sale based or usage-based royalty promised in exchange for a license of intellectual property. Additionally, as a practical expedient, the Company does not include contracts that have an original duration of one year or less. Remaining performance obligation estimates are subject to change and are affected by several factors, including terminations, changes in the scope of contracts, periodic revalidations, and adjustment for revenue that has not materialized and adjustments for currency.
As at March 31, 2019, the aggregate amount of the transaction price allocated to RPO related to customer contracts that are unsatisfied or partially unsatisfied was $1,061. Given the profile of contract terms, approximately 23.5% percent of this amount is expected to be recognized as revenue over the next two years, approximately 76.5% percent between three and five years and the balance thereafter.
Practical Expedients
The Company applies the following practical expedients:
Costs to obtain a contract are not material, and the Company generally expenses such costs as incurred because the amortization period is one year or less.
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EARNINGS PER SHARE |
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EARNINGS PER SHARE | The Company adopted ASC Topic 260, Earnings Per Share. Basic Earnings Per Share (“EPS”) is computed by dividing net income available to common shareholders (numerator) by the weighted average number of common shares outstanding (denominator) during the period. Diluted EPS give effect to all dilutive potential common shares outstanding during a period. In computing diluted EPS, the average price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options and warrants.
The following table is a reconciliation of the weighted average shares used in the computation of basic and diluted EPS for the periods presented herein:
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STOCK OPTIONS | On September 24, 2007, the Company’s Board of Directors unanimously adopted the 2007 Employee Stock Option Plan (the “2007 Employee Plan”) and the 2007 Directors Equity Incentive Plan (the “2007 Directors Plan”), each of which was approved by the shareholders on December 3, 2007. Each of those plans was amended during the term of such plan to increase the number of shares covered thereby. As of the last amendment thereof, the 2007 Employee Plan covered an aggregate of 600,000 shares of the Company’s Common Stock and the 2007 Directors Plan covered an aggregate of 500,000 shares of the Company’s Common Stock. Each of those plans terminated by its respective terms on September 24, 2017. These two plans were administered by the Board, which also established the terms of the awards.
On September 14, 2017, the Company’s Board of Directors unanimously adopted the 2017 Employee Stock Option Plan (the “2017 Employee Plan”) and the 2017 Directors Equity Incentive Plan (the “2017 Directors Plan”) each of which was approved by the shareholders on December 4, 2017. Each of these plans is administered by the Board of Directors of the Company.
Assumptions
The fair value for the options granted were estimated using the Black-Scholes option pricing model with the following weighted average assumptions, assuming no expected dividends:
The expected volatilities are based on the historical volatility of the Company’s stock. Due to higher volatility, the observation is made on a daily basis for the three months ended March 31, 2019. The observation period covered is consistent with the expected life of options. The expected life of the options granted to employees has been determined utilizing the “simplified” method as prescribed by ASC Topic 718 Stock Based Compensation, which, among other provisions, allows companies without access to adequate historical data about employee exercise behavior to use a simplified approach for estimating the expected life of a "plain vanilla" option grant. The simplified rule for estimating the expected life of such an option is the average of the time to vesting and the full term of the option. The risk-free rate is consistent with the expected life of the stock options and is based on the United States Treasury yield curve in effect at the time of grant.
2017 Employee Stock Option Plan
The Company’s 2017 Employee Plan permits the grant of stock options to its employees covering up to an aggregate of 300,000 shares of Common Stock. Under the 2017 Employee Plan, all options must be granted with an exercise price of not less than fair value as of the grant date and the options granted must be exercisable within a maximum of ten years after the date of grant, or such lesser period of time as is set forth in the stock option agreements. The options may be exercisable (a) immediately as of the effective date of the stock option agreement granting the option, or (b) in accordance with a schedule related to the date of the grant of the option, the date of first employment, or such other date as may be set by the Compensation Committee. Generally, options granted under the 2017 Employee Plan are exercisable within five years after the date of grant, and vest over the period as follows: 25% vesting on the grant date and the remaining balance vesting in equal instalments on the next three succeeding anniversaries of the grant date. The share-based compensation will be recognized in terms of the grade method on a straight-line basis for each separately vesting portion of the award. Certain option awards provide for accelerated vesting if there is a change in control (as defined in the 2017 Employee Plan).
The Company granted options to purchase 16,000 shares of its Common Stock to employee pursuant to the 2017 Employee Plan during the nine months ended March 31, 2019. There were no stock options exercised during the nine months ended March 31, 2019. The Company recognized stock-based compensation expenses of $3 and $11 in the three and nine months ended March 31, 2019 under the 2017 Employee Plan. The balance of unamortized stock-based compensation of $14 based on fair value on the grant date related to options granted under the 2017 Employee Plan is to be recognized over a period of three years.
As of March 31, 2019, there were vested employee stock options granted under the Employee Plan 2017 covering a total of 34,000 shares of Common Stock. The weighted-average exercise price was $5.72, and the weighted average contractual term was 4.06 years.
On March 23, 2018, the Company granted options to purchase 60,000 shares of its Common Stock to employee directors pursuant to the 2017 Employee Plan during the nine-month ended March 31, 2018. The Company recognized stock-based compensation expenses of $4 in the nine months ended March 31, 2018 under the 2017 Employee Plan. The balance of unamortized stock-based compensation of $11 based on fair value on the grant date related to options granted under the 2017 Employee Plan is to be recognized over a period of three years.
As of March 31, 2018, there were vested employee stock options covering a total of 15,000 shares of Common Stock. The weighted-average exercise price was $5.98, and the weighted average contractual term was 4.98 years. The total fair value of vested employee stock options was $90 and remains outstanding as of March 31, 2018.
A summary of option activities under the 2017 Employee Plan during the nine months ended March 31, 2019 is presented as follows:
A summary of the status of the Company’s non-vested employee stock options during the nine months ended March 31, 2019 is presented below:
A summary of option activities under the 2017 Employee Plan during the nine-month period ended March 31, 2018 is presented as follows:
A summary of the status of the Company’s non-vested employee stock options during the nine months ended March 31, 2018 is presented below:
2007 Employee Stock Option Plan
The Company’s 2007 Employee Plan terminated by its terms on September 24, 2017 and no further options may be granted thereunder. However, the options outstanding thereunder continue to remain outstanding and in effect in accordance with their terms. The Employee Plan permitted the grant of stock options to its employees covering up to an aggregate of 600,000 shares of Common Stock. Under the 2007 Employee Plan, all options were required to be granted with an exercise price of not less than fair value as of the grant date and the options granted were required to be exercisable within a maximum of ten years after the date of grant, or such lesser period of time as is set forth in the stock option agreements. The options were permitted to be exercisable (a) immediately as of the effective date of the stock option agreement granting the option, or (b) in accordance with a schedule related to the date of the grant of the option, the date of first employment, or such other date as may be set by the Compensation Committee. Generally, options granted under the 2007 Employee Plan are exercisable within five years after the date of grant, and vest over the period as follows: 25% vesting on the grant date and the remaining balance vesting in equal instalments on the next three succeeding anniversaries of the grant date. The share-based compensation will be recognized in terms of the grade method on a straight-line basis for each separately vesting portion of the award. Certain option awards provide for accelerated vesting if there is a change in control (as defined in the 2007 Employee Plan).
The Company did not grant any options pursuant to the 2007 Employee Plan for nine months ended March 31, 2019. There were 50,000 options exercised during the nine months ended March 31, 2019. The Company recognized stock-based compensation expenses of $1 in the nine months ended March 31, 2019 under the 2007 Employee Plan.
The Company did not grant any options pursuant to the 2007 Employee Plan during the nine months ended March 31, 2018. There were no options exercised during the nine months ended March 31, 2018. The Company recognized stock-based compensation expenses of $3 in the nine months ended March 31, 2018 under the 2007 Employee Plan. The balance unamortized stock-based compensation of $2 based on fair value on the grant date related to options granted under the 2007 Employee Plan is to be recognized over a period of three years.
As of March 31, 2019, there were vested employee stock options covering a total of 68,125 shares of Common Stock. The weighted-average exercise price was $3.62, and the weighted average contractual term was 2.40 years.
As of March 31, 2018, there were vested employee stock options covering a total of 98,750 shares of Common Stock. The weighted-average exercise price was $3.43, and the weighted average contractual term was 1.98 years.
A summary of option activities under the 2007 Employee Plan during the nine months ended March 31, 2019 is presented as follows:
A summary of the status of the Company’s non-vested employee stock options during the nine months ended March 31, 2019 is presented below:
A summary of option activities under the 2007 Employee Plan during the nine-month period ended March 31, 2018 is presented as follows:
A summary of the status of the Company’s non-vested employee stock options during the nine months ended March 31, 2018 is presented below:
2017 Directors Equity Incentive Plan
The 2017 Directors Plan permits the grant of options covering up to an aggregate of 300,000 shares of Common Stock to its directors in the form of non-qualified options and restricted stock. The exercise price of the non-qualified options is 100% of the fair value of the underlying shares on the grant date. The options have five-year contractual terms and are generally exercisable immediately as of the grant date.
The Company did not grant any options pursuant to the 2017 Director Plan during the nine months ended March 31, 2019. There were no options exercised during the nine months ended March 31, 2019. The Company did not recognize any stock-based compensation expenses during the nine months ended March 31, 2019.
On March 23, 2018, the Company granted options to purchase 80,000 shares of its Common Stock to directors pursuant to the 2017 Directors Plan with an exercise price equal to the fair market value of Common Stock (as defined under the 2017 Directors Plan in conformity with Regulation 409A or the Internal Revenue Code of 1986, as amended) at the date of grant. The fair value of the options granted to purchase 80,000 shares of the Company’s Common Stock was approximately $478 based on the fair value of $5.98 per share determined by the Black Scholes option pricing model. As all of the stock options granted under the 2017 Directors Plan vest immediately at the date of grant, there were no unvested stock options granted under the 2017 Directors Plan as of March 31, 2018. The Company recognized stock-based compensation expenses of $33 in the nine months ended March 31, 2018 under the 2017 Directors Plan.
A summary of option activities under the 2017 Directors Plan during the nine months ended March 31, 2019 is presented as follows:
A summary of option activities under the 2017 Directors Plan during the nine months ended March 31, 2018 is presented as follows:
2007 Directors Equity Incentive Plan
The 2007 Directors Plan terminated by its terms on September 24, 2017 and no further options may be granted thereunder. However, the options outstanding thereunder continue to remain outstanding and in effect in accordance with their terms. The Directors Plan permitted the grant of options covering up to an aggregate of 500,000 shares of Common Stock to its directors in the form of non-qualified options and restricted stock. The exercise price of the non-qualified options is 100% of the fair value of the underlying shares on the grant date. The options have five-year contractual terms and are generally exercisable immediately as of the grant date.
The Company did not grant any options pursuant to the 2007 Director Plan during the nine months ended March 31, 2019. There were 70,000 stock options exercised during the nine months period ended March 31, 2019. The Company did not recognize any stock-based compensation expenses during the nine months ended March 31, 2019.
The Company did not grant any options pursuant to the 2007 Director Plan during the nine months ended March 31, 2018. There were 20,000 stock options exercised during the nine-month period ended March 31, 2018. The Company did not recognize any stock-based compensation expenses during the nine months ended March 31, 2018.
A summary of option activities under the 2007 Directors Plan during the nine months ended March 31, 2019 is presented as follows:
A summary of option activities under the 2007 Directors Plan during the nine months ended March 31, 2018 is presented as follows:
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FAIR VALUE OF FINANCIAL INSTRUMENTS APPROXIMATE CARRYING VALUE |
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Notes to Financial Statements | |
FAIR VALUE OF FINANCIAL INSTRUMENTS APPROXIMATE CARRYING VALUE | In accordance with ASC Topics 825 and 820, the following presents assets and liabilities measured and carried at fair value and classified by level of fair value measurement hierarchy:
There were no transfers between Levels 1 and 2 during the three and nine months ended March 31, 2019 and 2018.
Term deposits (Level 2) – The carrying amount approximates fair value because of the short maturity of these instruments.
Restricted term deposits (Level 2) – The carrying amount approximates fair value because of the short maturity of these instruments.
Lines of credit (Level 3) – The carrying value of the lines of credit approximates fair value due to the short-term nature of the obligations.
Bank loans payable (Level 3) – The carrying value of the Company’s bank loan payables approximates its fair value as the interest rates associated with long-term debt is adjustable in accordance with market situations when the Company borrowed funds with similar terms and remaining maturities.
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Changes in provision for obsolete inventory |
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INVESTMENT PROPERTIES (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment Properties Tables | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Companys investment in the property based on the exchange rate |
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OTHER ASSETS (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other assets |
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LINES OF CREDIT (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lines Of Credit Tables | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lines of credit | As of March 31, 2019, the Company had certain lines of credit that are collateralized by restricted deposits.
As of June 30, 2018, the Company had certain lines of credit that are collateralized by restricted deposits.
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ACCRUED EXPENSES (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Expenses Tables | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued expenses |
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WARRANTY ACCRUAL (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warranty Accrual Tables | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warranty liability |
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BANK LOANS PAYABLE (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Bank Loans Payable Tables | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Bank loans payable |
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Future minimum payments |
Future minimum payments (excluding interest) as at March 31, 2019 were as follows:
Future minimum payments (excluding interest) as at June 30, 2018 were as follows:
|
BUSINESS SEGMENTS (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Segments Tables | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BUSINESS SEGMENTS | Business Segment Information:
The following segment information is unaudited for the period referenced below:
* Fabrication services is a discontinued operation.
|
OTHER INCOME, NET (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other income / (expenses) |
|
REVENUE (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||
Revenue | ||||||||||||||||||||||||||||||||||||||||||||||
Contract assets and liabilities |
|
EARNINGS PER SHARE (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share Tables | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of the weighted average shares |
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STOCK OPTIONS (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value weighted average assumptions |
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2017 Employee Plan [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Option activities |
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Company's non-vested employee stock options |
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2007 Employee Plan [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Option activities |
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2007 Directors Equity Incentive Plan [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Option activities |
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TERM DEPOSITS (Details) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Jun. 30, 2018 |
---|---|---|
Term Deposits Details | ||
Short-term deposits | $ 3,615 | $ 606 |
Currency translation effect on short-term deposits | 31 | 47 |
Total short-term deposits | 3,646 | 653 |
Restricted term deposits | 1,690 | 1,664 |
Currency translation effect on restricted term deposits | 15 | 31 |
Total restricted term deposits | 1,705 | 1,695 |
Total Term deposits | $ 5,351 | $ 2,348 |
TRADE ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS (Details) - USD ($) $ in Thousands |
9 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2019 |
Jun. 30, 2018 |
|
Notes to Financial Statements | ||
Beginning | $ 259 | $ 247 |
Additions charged to expenses | 85 | 8 |
Recovered | (84) | (1) |
Currency translation effect | (4) | 5 |
Ending | $ 256 | $ 259 |
LOANS RECEIVABLE FROM PROPERTY DEVELOPMENT PROJECTS (Details) $ in Thousands |
Mar. 31, 2019
USD ($)
|
---|---|
Jiang Huai [Member] | |
Short-term loan receivables | |
Short-term | $ 325 |
Less: allowance for doubtful receivables | (325) |
Short-term loan receivables, net | 0 |
Jun Zhou Zhi Ye [Member] | |
Long-term loan receivables | |
Long-term | 814 |
Less: transfer - down-payment for purchase of property | (814) |
Long-term loan receivables, net | 0 |
Yuan RMB | Jiang Huai [Member] | |
Short-term loan receivables | |
Short-term | 2,000 |
Less: allowance for doubtful receivables | (2,000) |
Short-term loan receivables, net | 0 |
Yuan RMB | Jun Zhou Zhi Ye [Member] | |
Long-term loan receivables | |
Long-term | 5,000 |
Less: transfer - down-payment for purchase of property | (5,000) |
Long-term loan receivables, net | $ 0 |
INVENTORIES (Details) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Jun. 30, 2018 |
Jun. 30, 2017 |
---|---|---|---|
Notes to Financial Statements | |||
Raw materials | $ 1,206 | $ 1,153 | |
Work in progress | 1,839 | 1,947 | |
Finished goods | 520 | 505 | |
Currency translation effect | 13 | 20 | |
Less: provision for obsolete inventory | (660) | (695) | $ (686) |
Inventory net | $ 2,918 | $ 2,930 |
INVENTORIES (Details 1) - USD ($) $ in Thousands |
9 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2019 |
Jun. 30, 2018 |
|
Notes to Financial Statements | ||
Beginning | $ 695 | $ 686 |
Additions charged to expenses | 5 | 9 |
Usage - disposition | (42) | (5) |
Currency translation effect | 2 | 5 |
Ending | $ 660 | $ 695 |
ASSETS HELD FOR SALE (Details Narrative) - Property, Plant and Equipment [Member] - USD ($) $ in Thousands |
Mar. 31, 2019 |
Jun. 30, 2018 |
---|---|---|
Assets held for sale, net bok value | $ 89 | $ 89 |
Ringgit RM | ||
Assets held for sale, net bok value | $ 371 | $ 371 |
INVESTMENT PROPERTIES (Details Narrative) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
Mar. 31, 2019 |
Mar. 31, 2018 |
|
MaoYe [Member] | ||||
Rental income | $ 15 | $ 22 | $ 58 | $ 75 |
Jiang Huai [Member] | ||||
Rental income | 0 | 0 | 0 | 0 |
FuLi [Member] | ||||
Rental income | 10 | 12 | 23 | 35 |
China [Member] | ||||
Rental income | 25 | 34 | 81 | 110 |
Depreciation expense | $ 14 | $ 25 | $ 42 | $ 74 |
OTHER ASSETS (Details) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Jun. 30, 2018 |
---|---|---|
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Down payment for purchase of investment properties | $ 1,645 | $ 1,645 |
Down payment for purchase of property, plant and equipment | 71 | 561 |
Deposit for rental and utilities | 140 | 140 |
Currency translation effect | (128) | (97) |
Ending balance | $ 1,728 | $ 2,249 |
ACCRUED EXPENSES (Details) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Jun. 30, 2018 |
---|---|---|
Notes to Financial Statements | ||
Payroll and related costs | $ 1,129 | $ 1,545 |
Commissions | 135 | 89 |
Customer deposits | 1,117 | 17 |
Legal and audit | 300 | 265 |
Sales tax | 16 | 17 |
Utilities | 117 | 130 |
Warranty | 47 | 82 |
Accrued purchase of materials and property, plant and equipment | 355 | 454 |
Provision for re-instatement | 302 | 289 |
Other accrued expenses | 363 | 203 |
Currency translation effect | 1 | 81 |
Total | $ 3,882 | $ 3,172 |
WARRANTY ACCRUAL (Details) - USD ($) $ in Thousands |
9 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2019 |
Jun. 30, 2018 |
|
Notes to Financial Statements | ||
Beginning | $ 82 | $ 48 |
Additions charged to cost and expenses | 11 | 64 |
Reversal | (46) | (30) |
Currency translation effect | 0 | 0 |
Ending | $ 47 | $ 82 |
BANK LOANS PAYABLE (Details) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Jun. 30, 2018 |
---|---|---|
Bank loan payable | $ 2,934 | $ 1,804 |
Current portion of bank loan payable | 495 | 380 |
Currency translation effect on short-term portion of bank loan | (3) | (13) |
Current portion of bank loan payable | 492 | 367 |
Long term portion of bank loan payable | 2,465 | 1,528 |
Currency translation effect on long-term portion of bank loan | (23) | (91) |
Long term portion of bank loans payable | 2,442 | 1,437 |
Bank Note [Member] | ||
Bank loan payable | 2,779 | 1,615 |
Bank Note 2 [Member] | ||
Bank loan payable | 180 | 293 |
Currency Translation Effect [Member] | ||
Bank loan payable | $ (25) | $ (104) |
BANK LOANS PAYABLE (Details 1) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Jun. 30, 2018 |
---|---|---|
Notes to Financial Statements | ||
2019 | $ 492 | $ 367 |
2020 | 383 | 372 |
2021 | 375 | 242 |
2022 | 394 | 254 |
2023 | 205 | 267 |
Thereafter | 1,085 | 302 |
Total obligations and commitments | $ 2,934 | $ 1,804 |
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Jun. 30, 2018 |
---|---|---|
Malaysia [Member] | ||
Capital commitments for the purchase of equipment and other related infrastructure costs | $ 77 | $ 16 |
Tianjin [Member] | ||
Capital commitments for the purchase of equipment and other related infrastructure costs | 40 | 593 |
SIP [Member] | ||
Capital commitments for the purchase of equipment and other related infrastructure costs | 94 | 919 |
Ringgit RM | Malaysia [Member] | ||
Capital commitments for the purchase of equipment and other related infrastructure costs | 315 | 62 |
Ringgit RM | SIP [Member] | ||
Capital commitments for the purchase of equipment and other related infrastructure costs | 632 | 6,084 |
Yuan RMB | Tianjin [Member] | ||
Capital commitments for the purchase of equipment and other related infrastructure costs | $ 265 | $ 3,927 |
BUSINESS SEGMENTS (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
Mar. 31, 2019 |
Mar. 31, 2018 |
|||
Net revenue | $ 8,838 | $ 10,104 | $ 28,573 | $ 31,601 | ||
Operating Income (Loss) | 123 | 234 | 473 | 1,479 | ||
Total assets | 37,000 | 36,388 | 37,000 | 36,388 | ||
Depreciation and amortization | 632 | 575 | 1,777 | 1,594 | ||
Capital expenditures | 278 | 455 | 2,576 | 2,050 | ||
Manufacturing [Member] | ||||||
Net revenue | 3,097 | 3,124 | 10,086 | 11,862 | ||
Operating Income (Loss) | (8) | (105) | 175 | 188 | ||
Total assets | 9,205 | 7,035 | 9,205 | 7,035 | ||
Depreciation and amortization | 30 | 30 | 88 | 86 | ||
Capital expenditures | 39 | 26 | 40 | 63 | ||
Testing Services [Member] | ||||||
Net revenue | 3,989 | 4,913 | 12,819 | 14,454 | ||
Operating Income (Loss) | (17) | 428 | (134) | 1,281 | ||
Total assets | 22,842 | 24,790 | 22,842 | 24,790 | ||
Depreciation and amortization | 588 | 519 | 1,647 | 1,432 | ||
Capital expenditures | 239 | 429 | 2,535 | 1,987 | ||
Distribution [Member] | ||||||
Net revenue | 1,727 | 2,033 | 5,587 | 5,175 | ||
Operating Income (Loss) | 150 | 117 | 492 | 337 | ||
Total assets | 780 | 631 | 780 | 631 | ||
Depreciation and amortization | 0 | 0 | 0 | 0 | ||
Capital expenditures | 0 | 0 | 0 | 0 | ||
Real Estate [Member] | ||||||
Net revenue | 25 | 34 | 81 | 110 | ||
Operating Income (Loss) | (13) | (18) | (30) | (38) | ||
Total assets | 3,914 | 3,732 | 3,914 | 3,732 | ||
Depreciation and amortization | 14 | 26 | 42 | 76 | ||
Capital expenditures | 0 | 0 | 0 | 0 | ||
Fabrication Services [Member] | ||||||
Net revenue | 0 | 0 | 0 | 0 | ||
Operating Income (Loss) | 0 | 0 | 0 | 0 | ||
Total assets | [1] | 26 | 28 | 26 | 28 | |
Depreciation and amortization | 0 | 0 | 0 | 0 | ||
Capital expenditures | 0 | 0 | 0 | 0 | ||
Corporate And Unallocated [Member] | ||||||
Net revenue | 0 | 0 | 0 | 0 | ||
Operating Income (Loss) | 11 | (188) | (30) | (289) | ||
Total assets | 233 | 172 | 233 | 172 | ||
Depreciation and amortization | 0 | 0 | 0 | 0 | ||
Capital expenditures | $ 0 | $ 0 | $ 0 | $ 0 | ||
|
OTHER INCOME, NET (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Other Income Net Details | ||||
Interest income | $ 31 | $ 19 | $ 67 | $ 39 |
Other rental income | 28 | 28 | 84 | 81 |
Exchange loss | (11) | (5) | (78) | (27) |
Bad debt recovery | 0 | 0 | 2 | 0 |
Other miscellaneous income | 80 | 69 | 145 | 218 |
Total | $ 128 | $ 111 | $ 220 | $ 311 |
REVENUE (Details) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Jun. 30, 2018 |
---|---|---|
Revenue | ||
Trade Accounts Receivable | $ 7,120 | $ 7,747 |
Accounts Payable | 3,021 | 3,704 |
Contract Assets | 357 | 260 |
Contract Liabilities | $ 1,077 | $ 31 |
STOCK OPTIONS (Details) |
9 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Minimum [Member] | ||
Expected volatility | 47.29% | 47.29% |
Risk-free interest rate | 0.30% | 0.30% |
Expected life (years) | 2 years 6 months | 2 years 6 months |
Maximum [Member] | ||
Expected volatility | 97.48% | 104.94% |
Risk-free interest rate | 1.05% | 1.05% |
Expected life (years) | 3 years 3 months | 3 years 3 months |
STOCK OPTIONS (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | |
---|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Stock-based compensation expense | $ 12 | $ 40 | |
2017 Employee Plan [Member] | |||
Stock-based compensation expense | $ 3 | 11 | 4 |
Unamortized stock-based compensation | $ 14 | $ 14 | $ 11 |
Vested stock options | 34,000 | 34,000 | 60,000 |
Weighted-average exercise price, vested options | $ 5.72 | $ 5.72 | $ 5.98 |
Weighted average contractual term | 4 years 22 days | 4 years 11 months 23 days | |
Employee 2007 [Member] | |||
Stock-based compensation expense | $ 1 | $ 3 | |
Unamortized stock-based compensation | $ 2 | ||
Vested stock options | 68,125 | 68,125 | 98,750 |
Weighted-average exercise price, vested options | $ 3.62 | $ 3.62 | $ 3.43 |
Weighted average contractual term | 2 years 4 months 24 days | 1 year 11 months 23 days | |
2017 Directors Equity Incentive Plan [Member] | |||
Stock-based compensation expense | $ 33 |
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