Trio-Tech International(US:TRT)2022-05-16 17:41Revenue Performance - Trio-Tech International generated approximately 99.9% of its revenue from its three core business segments: manufacturing of test equipment, testing services, and distribution of test equipment during the three months ended March 31, 2022 [178]. - Total revenue increased by $3,026, or 37.3%, to $11,138 for the third quarter of fiscal year 2022 compared to $8,112 for the same period in fiscal year 2021 [218]. - Revenue in the manufacturing segment decreased by $33, or 1.1%, to $3,097 for the third quarter of fiscal year 2022 compared to $3,130 for the same period in fiscal year 2021 [218]. - Testing segment revenue increased by $913, or 26.1%, to $4,417 for the third quarter of fiscal year 2022 compared to $3,504 for the same period in fiscal year 2021 [218]. - Distribution segment revenue increased by $2,153, or 146.8%, to $3,620 for the third quarter of fiscal year 2022 compared to $1,467 for the same period in fiscal year 2021 [218]. - Revenue attributable to the distribution segment increased by $4,248 to $8,038 for the nine months ended March 31, 2022, compared to $3,790 for the same period in the prior fiscal year [229]. - Revenue from the testing segment accounted for 39.6% of total revenue for the three months ended March 31, 2022, representing a decrease of 3.6% compared to 43.2% for the same period in the last fiscal year [225]. - Revenue for the three months ended March 31, 2022, was $3,097 million, a slight decrease from $3,130 million for the same period in 2021 [260]. - Testing segment revenue increased to $13,983 million for the nine months ended March 31, 2022, up from $10,018 million in the same period last year, with a gross margin improvement to 34.6% from 23.6% [289]. - Distribution segment revenue rose to $8,038 million, compared to $3,790 million in the prior year, with income from operations increasing to $1,108 million from $407 million [291]. Financial Position - As of March 31, 2022, the company had cash and cash equivalents and short-term deposits totaling $12,431,000 and an unused line of credit of $5,158,000 [187]. - Total assets increased by $3,497 to $41,803 as of March 31, 2022, compared to $38,306 as of June 30, 2021 [218]. - Total liabilities increased by $1,173 to $13,426 as of March 31, 2022, compared to $12,253 as of June 30, 2021 [218]. - Cash and cash equivalents rose to $7,478 million, reflecting an increase of $1,642 million from $5,836 million as of June 30, 2021 [295]. - Trade accounts receivable increased by $2,292 million to $10,585 million, primarily due to an increase in overall Group's revenue [296]. - Accrued expenses increased by $1,680 million to $5,043 million as of March 31, 2022, mainly due to an increase in accrued purchases and customer deposits [302]. - Operating lease right-of-use assets increased by $725 million to $2,601 million as of March 31, 2022, due to a new lease agreement in the China operation [304]. Profitability and Expenses - Overall gross profit margin decreased by 3.2% to 22.2% for the third quarter of fiscal year 2022 from 25.4% for the same period in fiscal year 2021 [218]. - General and administrative expenses increased by $455, or 23.7%, to $2,378 for the third quarter of fiscal year 2022 from $1,923 for the same period in fiscal year 2021 [218]. - Overall gross margin decreased by 3.2% to 22.2% for the three months ended March 31, 2022, compared to 25.4% for the same period last year [240]. - Gross profit margin in the manufacturing segment decreased by 13.1% to 18.3% for the three months ended March 31, 2022, from 31.4% in the same period last year, resulting in a gross profit decrease of $415 to $567 million [241]. - Gross profit margin in the testing segment increased by 4.0% to 28.3% for the three months ended March 31, 2022, with gross profit rising by $395 to $1,248 million [242]. - General and administrative expenses increased by $1,060 million, or 20.3%, to $6,305 million for the nine months ended March 31, 2022, primarily due to higher payroll-related expenses [273]. - Selling expenses rose by $93 million, or 26.1%, to $449 million for the nine months ended March 31, 2022, driven by increased commission expenses in the manufacturing and distribution segments [274]. Operational Challenges - The company suffered a revenue loss of approximately $260,000 due to a 12-day shutdown of its facility in Tianjin, China, in compliance with local COVID-19 lockdown measures [184]. - The company has implemented various safety measures for employees during the COVID-19 pandemic, including social distancing and wellness screenings [185]. - The company evaluates its long-lived assets for impairment whenever events indicate that the carrying value may not be recoverable [206]. - The semiconductor industry is characterized by rapid technological change, which impacts inventory valuation and necessitates regular reviews of inventory quantities [195]. - The company’s operations are classified as part of the global supply chain and essential businesses in many jurisdictions [185]. Net Income and Loss - Loss from operations increased to $130 million for the three months ended March 31, 2022, compared to a loss of $65 million for the same period last year [249]. - Interest expense increased by $6, or 24.0%, to $31 million for the three months ended March 31, 2022, compared to $25 million for the same period in 2021 [250]. - Other income decreased by $146 million from $273 million to $127 million for the three months ended March 31, 2022, primarily due to a decrease in government grants [251]. - Net loss attributable to common shareholders was $167 million for the three months ended March 31, 2022, a change of $345 million from a net income of $178 million for the same period last year [256]. - Basic earnings per share from continuing operations were negative $0.04 for the three months ended March 31, 2022, compared to $0.05 for the same period last year [257]. - The share of net loss from subsidiaries by noncontrolling interest decreased to $37 million for the three months ended March 31, 2022, from $112 million for the same period last year [255]. - Income from operations improved to $1,496 million for the nine months ended March 31, 2022, compared to a loss of $429 million in the same period of the last fiscal year [275]. - Net income attributable to common shareholders was $1,605 million for the nine months ended March 31, 2022, an increase of $1,200 million compared to $405 million for the same period in the last fiscal year [283]. - Basic earnings per share from continuing operations increased to $0.40 for the nine months ended March 31, 2022, compared to $0.11 for the same period in the last fiscal year [284]. Future Outlook - The company believes its existing cash balances and credit sources are sufficient to fund operations for the foreseeable future [187]. - The company filed an S3 registration statement to potentially raise $10,000 million for expansion of testing capacity and working capital [308].