Trio-Tech CEO, S.W. Yong, Appointed Chairman of the Board

VAN NUYS, Calif.--(BUSINESS WIRE)--Trio-Tech International (NYSE MKT: TRT) today announced results for the fourth quarter and fiscal year ended June 30, 2023.

S.W. Yong, CEO and newly elected Chairman said, “Challenging conditions in the global semiconductor industry had a significant impact on Trio-Tech’s performance this past year, especially in the fourth fiscal quarter. Through proactive management of the business, we nevertheless maintained solid operating margins, significantly improved cash flow and delivered a profitable quarter and year. What’s more, we enhanced our cash-rich balance sheet, reduced debt and increased shareholders’ equity. A constant focus on improving our balance sheet enables the Company to be well positioned for investing in opportunities to create new revenue streams, improve profitability and enhance shareholder value.

“While we are very pleased that testing services revenue increased 18.8% for the year, primarily attributable to our subsidiaries in China, the Company experienced a softening of demand for testing services in the second half of fiscal 2023. Testing services revenue is vulnerable to escalating US-China tensions, and we are taking steps to minimize this risk by exploring opportunities for diversification.

“Trio-Tech closed the fiscal year with near-record backlog and market demand for semiconductor equipment shows signs of a gradual recovery as we enter fiscal 2024. Distribution revenue is also projected to increase in fiscal 2024 as the demand for our value-added products shows encouraging signs. With due caution about the overall tone of the semiconductor industry and economic prospects in China, we remain optimistic for continued growth in Trio-Tech’s core businesses in the new fiscal year.

“The semiconductor industry has experienced periods of rapid growth and downturns, often in connection with, or in anticipation of, maturing product cycles of both semiconductor companies, customer products and general economic conditions. Consequently, we are increasing our efforts to expand our lines of businesses to reduce the risks associated with a single industry focus and customer concentration.”

Board of Directors Appoints S.W. Yong Chairman of the Board

Trio-Tech’s Board of Directors announced the appointment of CEO, Mr. Siew Wai Yong, as Chairman of the Board of Directors, effective September 20, 2023. “Mr. Yong joined the Company in 1976 and has been an exceptional leader during his tenure as President and CEO since September 1990. With his appointment as Chairman, Mr. Yong will continue to play a key role shaping the direction of the Company and its long-term success,” said the Board of Directors.

“I would like to thank the Board for the opportunity to serve as the Chairman and feel honored to take on this additional role. On behalf of the Board, I would also like to thank Mr. A. Charles Wilson for his guidance and his contributions as Chairman over the many years of his distinguished service. I look forward to working with the Board and our Management to support the company’s continued growth,” said Mr. Yong.

Fourth Quarter Results

Revenue for the fourth quarter of fiscal 2023 decreased 23.3% to $9,079,000 from $11,834,000 for the fourth quarter of fiscal 2022, reflecting a 52.8% decrease in distribution revenue and a 33.1% decrease in manufacturing revenue. Testing services revenue was essentially flat.

Gross margin decreased 28.2% to $2,290,000, or 25.2% of revenue, compared to $3,190,000, or 27.0% of revenue, for the fourth quarter of fiscal 2022. Income from operations was $129,000 compared to $857,000 for the fourth quarter of the prior fiscal year.

Net income for the fourth quarter of fiscal 2023 was $162,000, or $0.04 per diluted share. This compares to net income of $790,000, or $0.19 per diluted share, for the fourth quarter of fiscal 2022.

Backlog at June 30, 2023 was $17,437,000. This compares to record backlog of $17,463,000 at June 30, 2022.

Fiscal 2023 Results

Fiscal 2023 testing services revenue increased 18.8% to $23,130,000 from $19,477,000 in fiscal 2022, led by higher sales at the Company’s new China joint venture subsidiary. This increase was partially offset by a 43.2% decline in distribution segment revenue to $6,270,000 from $11,037,000 in fiscal 2022. Manufacturing revenue increased to $13,827,000 compared to $13,526,000 in fiscal 2022. Total fiscal 2023 revenue was $43,250,000 compared to revenue of $44,065,000 for fiscal 2022.

Fiscal 2023 gross margin declined slightly to $11,705,000 compared to $11,733,000 for fiscal 2022 and improved to 27.1% of revenue compared to 26.6% of revenue for fiscal 2022.

Operating expenses increased to $9,477,000, or 21.9% of revenue, compared to $9,380,000, or 21.3% of revenue for fiscal 2022.

Net income attributable to our common shareholders for fiscal 2023 was $1,544,000, or $0.37 per diluted share, compared to net income of $2,395,000, or $0.57 per diluted share, for fiscal 2022.

Balance Sheet Highlights

Cash and cash equivalents at June 30, 2023 were $7,583,000, compared to $7,698,000 at June 30, 2022. Shareholders' equity at June 30, 2023 increased to $29,571,000, or $7.22 per outstanding share, compared to $28,002,000, or $6.88 per outstanding share, a year earlier. There were approximately 4,096,680 and 4,071,680 common shares outstanding at June 30, 2023 and June 30, 2022, respectively.

About Trio‑Tech

Established in 1958, Trio-Tech International is located in Van Nuys, California, with its Principal Executive Office and regional headquarter in Singapore. Trio-Tech International is a diversified business group with interests in semiconductor testing services, manufacturing and distribution of semiconductor testing equipment, and real estate. Our subsidiary locations include Tianjin, Suzhou, Chongqing and Jiangsu in China, as well as Kuala Lumpur, Malaysia and Bangkok, Thailand. Further information about Trio-Tech's semiconductor products and services can be obtained from the Company's Web site at www.triotech.com and www.universalfareast.com.

Forward Looking Statements

This press release contains statements that are forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and may contain forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and assumptions regarding future activities and results of operations of the Company. In light of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, the following factors, among others, could cause actual results to differ materially from those reflected in any forward looking statements made by or on behalf of the Company: market acceptance of Company products and services; changing business conditions or technologies and volatility in the semiconductor industry, which could affect demand for the Company's products and services; the impact of competition; problems with technology; product development schedules; delivery schedules; changes in military or commercial testing specifications which could affect the market for the Company's products and services; difficulties in profitably integrating acquired businesses, if any, into the Company; risks associated with conducting business internationally and especially in Asia, including currency fluctuations and devaluation, currency restrictions, local laws and restrictions and possible social, political and economic instability; changes in U.S. and global financial and equity markets, including market disruptions and significant interest rate fluctuations; public health issues related to the COVID-19 pandemic; trade tension between U.S. and China and other economic, financial and regulatory factors beyond the Company's control. Other than statements of historical fact, all statements made in this release 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. Many of these risks and uncertainties are beyond the Company's control. Reference is made to the discussion of risk factors detailed in the Company's filings with the Securities and Exchange Commission including its reports on Form 10-K and 10-Q. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the dates on which they are made.

Contacts

Company Contact:
Siew Wai Yong

Chairman & CEO

(818) 787-7000

Investor Contact:

Berkman Associates

(310) 927-3108

[email protected]