Trio-Tech Third Quarter Net Income is $0.19 Per Share Versus Loss

Trio-Tech International TRT today announced financial results for the third quarter and first nine months of fiscal 2019.

Third Quarter Results

Net income for the third quarter of fiscal 2019 ended March 31, 2019 was $683,000, or $0.19 per diluted share. This compares to a net loss of $739,000, or $0.20 per share, for the third quarter of fiscal 2018.

Net income for the fiscal 2019 third quarter benefitted from $739,000 in other income, which included a gain of $685,000 on the sale of assets previously held for sale. In comparison, other income contributed a gain of $47,000 for last year's third quarter. Net income for the third quarter of fiscal 2018 also was affected by a one-time, non-cash income tax expense of $900,000 related to the 2017 United States Tax Cuts and Jobs Act, which requires a mandatory one-time repatriation of certain earnings and profits of the Company's foreign subsidiaries previously deferred from U.S. taxation. In the recent second quarter of fiscal 2019, there was a reversal of $145,000 as this tax was finalized to $755,000.

Revenue for the third quarter of fiscal 2019 decreased 12% to $8,838,000 from $10,104,000 for the same quarter last fiscal year. Manufacturing revenue decreased 1% to $3,097,000 compared to $3,124,000 in the third quarter of last fiscal year. Testing services revenue declined 19% to $3,989,000 from $4,913,000 in the third quarter of fiscal 2018, primarily due to reduced demand from a major customer during the quarter. Distribution revenue decreased 15% to $1,727,000 from $2,033,000 for the third quarter of last fiscal year.

Reflecting the decrease in revenue, gross margin declined by 3%, to $2,174,000 from $2,232,000 for the third quarter of fiscal 2018, but improved as a percentage of revenue to 25% compared to 22% of revenue for the third quarter of last fiscal year, due to aggressive cost saving efforts at the Company's Malaysia and China operations.

Income from operations for the third quarter of fiscal 2019 was $123,000 compared to $234,000 for the third quarter of fiscal 2018.

CEO Comments

S.W. Yong, Trio-Tech's CEO, said, "We delivered substantial net income and improved gross margin as a percentage of revenue despite lower sales for this year's third quarter compared to the third quarter last year. Our fiscal third quarter results are typically affected by a slowdown in business activity partially related to the Chinese New Year and festivities. We are working to increase revenue and strive for better performance in the current quarter."

Nine Months Results

For the first nine months of fiscal 2019 ended March 31, 2019, revenue decreased 10% to $28,573,000 compared to $31,601,000 for the same period last year. Manufacturing revenue declined 15% to $10,086,000 from $11,862,000, and testing services revenue declined 11% to $12,819,000 from $14,454,000 in the same period last year. Revenue for both business segments was affected by reduced demand from a major customer. Distribution revenue increased 8% in the first nine months of this fiscal year to $5,587,000 from $5,175,000 in the same period in the last fiscal year.

Gross margin for the first nine months of fiscal 2019 decreased 16% to $6,533,000, or 23% of revenue, to $7,787,000, or 25% of revenue, for the first nine months of fiscal 2018.

Net income for first nine months of fiscal 2019 was $1,096,000, or $0.29 per diluted share. This compares to net income of $509,000, or $0.14 per diluted share, for the same period last year.

Shareholders' equity at March 31, 2019 was $24,567,000, or $6.69 per outstanding share, compared to $23,501,000, or $6.61 per outstanding share, at June 30, 2018. There were approximately 3,673,055 common shares outstanding at March 31, 2019.

About Trio-Tech

Established in 1958 and headquartered in Van Nuys, California, Trio-Tech International is a diversified business group with interests in semiconductor testing services, manufacturing and distribution of semiconductor testing equipment, and real estate. Further information about Trio-Tech's semiconductor products and services can be obtained from the Company's Web site at www.triotech.com, www.universalfareast.com, and www.ttsolar.com.

Forward Looking Statements

This press release contains statements that are forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and may contain forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and assumptions regarding future activities and results of operations of the Company. In light of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, the following factors, among others, could cause actual results to differ materially from those reflected in any forward looking statements made by or on behalf of the Company: market acceptance of Company products and services; changing business conditions or technologies and volatility in the semiconductor industry, which could affect demand for the Company's products and services; the impact of competition; problems with technology; product development schedules; delivery schedules; changes in military or commercial testing specifications which could affect the market for the Company's products and services; difficulties in profitably integrating acquired businesses, if any, into the Company; risks associated with conducting business internationally and especially in Asia, including currency fluctuations and devaluation, currency restrictions, local laws and restrictions and possible social, political and economic instability; changes in U.S. and global financial and equity markets, including market disruptions and significant interest rate fluctuations; and other economic, financial and regulatory factors beyond the Company's control. Other than statements of historical fact, all statements made in this Quarterly Report are forward looking, including, but not limited to, statements regarding industry prospects, future results of operations or financial position, and statements of our intent, belief and current expectations about our strategic direction, prospective and future financial results and condition. In some cases, you can identify forward looking statements by the use of terminology such as "may," "will," "expects," "plans," "anticipates," "estimates," "potential," "believes," "can impact," "continue," or the negative thereof or other comparable terminology. Forward looking statements involve risks and uncertainties that are inherently difficult to predict, which could cause actual outcomes and results to differ materially from our expectations, forecasts and assumptions.

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