Trio-Tech Second Quarter Net Income $0.09 Per Diluted Share

Trio-Tech International (NYSE MKT: TRT) today announced financial results for the second quarter and first six months of fiscal 2019.

Fiscal 2019 Second Quarter Results

For the three months ended December 31, 2018, revenue decreased 8% to $9,690,000 compared to revenue of $10,552,000 for the same quarter last year. Manufacturing revenue was $3,352,000, a 16% decline compared to $3,973,000 for the same quarter last year. Semiconductor testing services revenue was $4,393,000, an 11% decline compared to $4,936,000 in the same quarter last year. Distribution revenue was $1,916,000, a 19% increase compared to $1,606,000 for the same quarter last year.

Gross margin for the second quarter of fiscal 2019 was $2,258,000, or 23% of revenue, compared to $2,795,000, or 26% of revenue, for the same quarter last year, reflecting lower sales and a less favorable product mix in manufacturing and testing services.

Operating expenses declined 3% to $2,031,000, or 21% of revenue, from $2,097,000, or 20% of revenue, primarily due to reduced selling expenses.

Net income attributable to Trio-Tech common shareholders for the fiscal 2019 second quarter was $348,000, or $0.09 per diluted share. This compares to net income attributable to Trio-Tech common shareholders for the second quarter of fiscal 2018 of $673,000, or $0.18 per diluted share.

Net income for the second quarter of fiscal 2019 benefitted from adjustments related to the finalization of the One-Time Mandatory Repatriation Tax expense of $900,000 which was recognized in the third quarter of fiscal 2018. Upon finalization of the accounting analysis, Trio-Tech recorded a reversal of $145,000 from provision of income tax to reduce the tax liability related to the one-time transition tax to $755,000. This estimated tax is payable over a period of eight years at no interest and is not expected to have a material effect on the Company’s working capital position.

CEO Comments

S.W. Yong, Trio-Tech's CEO, said, "We are glad to report higher profitability for the second quarter of fiscal 2019 compared to the year’s first quarter and are working diligently to improve the Company’s financial performance in the second half of fiscal 2019. Our state-of-the-art products and services, in many cases, are available only from Trio-Tech. Based on customer inquiries and follow-up meetings, we believe Trio-Tech has a competitive advantage in today’s complex and increasingly competitive semiconductor manufacturing and testing environment."

Fiscal 2019 First Half Results

For the six months ended December 31, 2018, revenue decreased 8% to $19,735,000 compared to revenue of $21,497,000 for the first half of fiscal 2018. Manufacturing revenue decreased 20% to $6,989,000 compared to $8,738,000 last year. Semiconductor testing services revenue was down 7% to $8,830,000 compared to $9,541,000 a year ago, while distribution revenue increased 23% to $3,860,000 compared to $3,142,000.

Gross margin for the first six months of fiscal 2019 decreased 22% to $4,359,000, or 22% of revenue, compared to $5,555,000, or 26% of revenue, for last year’s first six months.

Operating expenses for the first six months of fiscal 2019 decreased 7% to $4,009,000 compared to $4,310,000 for the same period last year. Operating expenses were 20% of revenue in both periods.

Net income attributable to Trio-Tech common shareholders for the first six months of fiscal 2019 was $413,000, or $0.11 per diluted share, compared to $1,248,000, or $0.34 per diluted share, for the first six months of fiscal 2018.

Shareholders' equity at December 31, 2018 was $23,511,000, or $6.40 per outstanding share, compared to $23,501,000, or $6.61 per outstanding share, at June 30, 2018. There were approximately 3,673,055 Trio-Tech International common shares outstanding at December 31, 2018.

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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