TrioTech International (TRT, Financial) filed Quarterly Report for the period ended 2012-09-30.
Trio-tech International has a market cap of $4.5 million; its shares were traded at around $1.65 with and P/S ratio of 0.1.
Revenue in the distribution segment accounted for 3.5% of total revenue for the three months ended September 30, 2012, a slight decrease of 0.1%, compared to 3.6% of total revenue for the same period of the last fiscal year. The absolute amount of revenue increased by $26 to $344 for the three months ended September 30, 2012, from $318 for the same period of the last fiscal year. -19- Table of Contents
Gross profit margin as a percentage of revenue in the manufacturing segment decreased by 6.3% to 10.3% for the three months ended September 30, 2012, from 16.6% in the same period of the last fiscal year. The decrease of gross profit margin was primarily due to the change in product mix and the higher material cost. The increase in revenues in Singapore operation was primarily due to increase in orders from one major customer as discussed above. In absolute dollar amounts, gross profits in the manufacturing segment increased by $78 to $543 for the three months ended September 30, 2012 from $465 for the same period of the last fiscal year. Gross profit margin as a percentage of revenue in the testing segment increased by 11.5% to 31.5% for the three months ended September 30, 2012, from 20.0% in the same period of the last fiscal year. The increase in gross profit margin was primarily due to an increase in testing volume in the first quarter fiscal 2013 as compared to the same period of the last fiscal year. The fixed costs are spread over the increased output, causing the increase gross profit margin.. In absolute dollar amounts, gross profit in the testing segment increased by $ 575 to $1,232 for the three months ended September 30, 2012 from $ 657 for the same period of the last fiscal year. Gross profit margin as a percentage of revenue in the distribution segment increased by 5.7% to 19.5% for the three months ended September 30, 2012, from 13.8% for the same period of the last fiscal year. The increase was due to the change in product mix, as we sold more products with a higher profit margin in the distribution segment as compared to the same period of last fiscal year. In terms of absolute dollar amounts, gross profit in the distribution segment for the three months ended September 30, 2012 was $ 68, an increase of $ 24, as compared to $ 44 in the same period of the last fiscal year. The gross profit margin of the distribution segment is not only affected by the market price of our products, but also our product mix, which changes frequently as a result of changes in market demand. Gross profit margin as a percentage of revenue in the real estate segment was a negative 10.0% for the three months ended September 30, 2012, a decrease of 54.7% as compared to positive gross margin of 44.7% for the same period in the last fiscal year. In absolute dollar amounts, gross profit in the real estate segment for the three months ended September 30, 2012 was negative $3, as compared to gross profit of $21 in the same period of the last fiscal year. The decrease in gross profit margin was mainly due to a decrease in rental revenue in the first quarter of fiscal 2013 as one of the rental contracts reached maturity in January, 2012. In addition, the depreciation expenses increased in the first quarter of fiscal 2013 as compared to the same period of the last fiscal year, due to increase in the investment property. An amount of $673 was transferred from down payment, which was capitalized during April 2012 into investment property in China and in property, plant and equipment as the assets were put to use during the fiscal 2012.
Income from operations in the testing segment for the three months ended September 30, 2012 was $104, as compared to a loss of $342 in the same period of the last fiscal year. The improvement was attributable to an increase of $575 in gross margin, as discussed earlier, which was partially offset by an increase of $129 in operating expenses. Operating expenses were $1,128 and $999 for the three months ended September 30, 2012 and 2011, respectively. The increase in operating expenses of $129 was mainly attributable to an increase in payroll expenses in the Malaysia operation as a result of an increase in employee headcount and the basic wage rate, and an increase in transportation expenses and electricity expenses in our China testing operation as a result of an increase in sales. These increases were partially offset by a decrease in payroll related expenses in the Singapore testing operation as a result of a reduction in employee headcount, as compared to the same period of last fiscal year.
Net cash used in investing activities increased by $154, to $614 for the three months ended September 30, 2012 from $460 for the same period of the last fiscal year. The increase in cash used in investing activities was primarily due to capital expenditure of $673 which was partially offset by the proceeds from maturing unrestricted and restricted term deposits of $53. Net cash provided by financing activities for the three months ended September 30, 2012 was $1,363, representing an increase of $861 compared to $502 during the three months ended September 30 2011. The increase was mainly due to additional capital lease of $267 and line of credits of $770 for our Singapore operation for our capital expenditure and working capital needs respectively. We increased our borrowings on lines of credit due to higher sales in the manufacturing segment in the first quarter of fiscal year 2013. We believe that our projected cash flows from operations, borrowing availability under our revolving lines of credit, cash on hand, trade credit and the secured bank loan will provide the necessary financial resources to meet our projected cash requirements for at least the next 12 months. Critical Accounting Estimates & Policies
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Trio-tech International has a market cap of $4.5 million; its shares were traded at around $1.65 with and P/S ratio of 0.1.
Highlight of Business Operations:
Revenue in the manufacturing segment as a percentage of total revenue was 54.3% for the three months ended September 30, 2012, an increase of 22.5%, compared to 31.8% of total revenue for the same period of the last fiscal year. The absolute amount of revenue increased by $2,494 to $5,292 for the three months ended September 30, 2012 compared to $2,798 when compared to the same period of the last fiscal year.Revenue in the distribution segment accounted for 3.5% of total revenue for the three months ended September 30, 2012, a slight decrease of 0.1%, compared to 3.6% of total revenue for the same period of the last fiscal year. The absolute amount of revenue increased by $26 to $344 for the three months ended September 30, 2012, from $318 for the same period of the last fiscal year. -19- Table of Contents
Gross profit margin as a percentage of revenue in the manufacturing segment decreased by 6.3% to 10.3% for the three months ended September 30, 2012, from 16.6% in the same period of the last fiscal year. The decrease of gross profit margin was primarily due to the change in product mix and the higher material cost. The increase in revenues in Singapore operation was primarily due to increase in orders from one major customer as discussed above. In absolute dollar amounts, gross profits in the manufacturing segment increased by $78 to $543 for the three months ended September 30, 2012 from $465 for the same period of the last fiscal year. Gross profit margin as a percentage of revenue in the testing segment increased by 11.5% to 31.5% for the three months ended September 30, 2012, from 20.0% in the same period of the last fiscal year. The increase in gross profit margin was primarily due to an increase in testing volume in the first quarter fiscal 2013 as compared to the same period of the last fiscal year. The fixed costs are spread over the increased output, causing the increase gross profit margin.. In absolute dollar amounts, gross profit in the testing segment increased by $ 575 to $1,232 for the three months ended September 30, 2012 from $ 657 for the same period of the last fiscal year. Gross profit margin as a percentage of revenue in the distribution segment increased by 5.7% to 19.5% for the three months ended September 30, 2012, from 13.8% for the same period of the last fiscal year. The increase was due to the change in product mix, as we sold more products with a higher profit margin in the distribution segment as compared to the same period of last fiscal year. In terms of absolute dollar amounts, gross profit in the distribution segment for the three months ended September 30, 2012 was $ 68, an increase of $ 24, as compared to $ 44 in the same period of the last fiscal year. The gross profit margin of the distribution segment is not only affected by the market price of our products, but also our product mix, which changes frequently as a result of changes in market demand. Gross profit margin as a percentage of revenue in the real estate segment was a negative 10.0% for the three months ended September 30, 2012, a decrease of 54.7% as compared to positive gross margin of 44.7% for the same period in the last fiscal year. In absolute dollar amounts, gross profit in the real estate segment for the three months ended September 30, 2012 was negative $3, as compared to gross profit of $21 in the same period of the last fiscal year. The decrease in gross profit margin was mainly due to a decrease in rental revenue in the first quarter of fiscal 2013 as one of the rental contracts reached maturity in January, 2012. In addition, the depreciation expenses increased in the first quarter of fiscal 2013 as compared to the same period of the last fiscal year, due to increase in the investment property. An amount of $673 was transferred from down payment, which was capitalized during April 2012 into investment property in China and in property, plant and equipment as the assets were put to use during the fiscal 2012.
Income from operations in the testing segment for the three months ended September 30, 2012 was $104, as compared to a loss of $342 in the same period of the last fiscal year. The improvement was attributable to an increase of $575 in gross margin, as discussed earlier, which was partially offset by an increase of $129 in operating expenses. Operating expenses were $1,128 and $999 for the three months ended September 30, 2012 and 2011, respectively. The increase in operating expenses of $129 was mainly attributable to an increase in payroll expenses in the Malaysia operation as a result of an increase in employee headcount and the basic wage rate, and an increase in transportation expenses and electricity expenses in our China testing operation as a result of an increase in sales. These increases were partially offset by a decrease in payroll related expenses in the Singapore testing operation as a result of a reduction in employee headcount, as compared to the same period of last fiscal year.
Net cash used in investing activities increased by $154, to $614 for the three months ended September 30, 2012 from $460 for the same period of the last fiscal year. The increase in cash used in investing activities was primarily due to capital expenditure of $673 which was partially offset by the proceeds from maturing unrestricted and restricted term deposits of $53. Net cash provided by financing activities for the three months ended September 30, 2012 was $1,363, representing an increase of $861 compared to $502 during the three months ended September 30 2011. The increase was mainly due to additional capital lease of $267 and line of credits of $770 for our Singapore operation for our capital expenditure and working capital needs respectively. We increased our borrowings on lines of credit due to higher sales in the manufacturing segment in the first quarter of fiscal year 2013. We believe that our projected cash flows from operations, borrowing availability under our revolving lines of credit, cash on hand, trade credit and the secured bank loan will provide the necessary financial resources to meet our projected cash requirements for at least the next 12 months. Critical Accounting Estimates & Policies
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