R
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
£
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
California
|
95-2086631
|
|
(State
or other jurisdiction of
|
(I.R.S.
Employer
|
|
incorporation
or organization)
|
Identification
Number)
|
|
16139
Wyandotte
|
||
Van
Nuys, California
|
91406
|
|
(Address
of principle executive offices)
|
(Zip
Code)
|
Page
|
||
Part
I.
|
||
Item
1.
|
||
4
|
||
5
|
||
6
|
||
7
|
||
Item
2.
|
18
|
|
Item
3.
|
31
|
|
Item
4T.
|
31
|
|
Part
II.
|
||
Item
1.
|
32
|
|
Item
1A.
|
32
|
|
Item
2.
|
32
|
|
Item
3.
|
32
|
|
Item
4.
|
32
|
|
Item
5.
|
32
|
|
Item
6.
|
32
|
|
|
33
|
|
Exhibits
|
|
34
|
Certifications
|
|
34
|
March
31,
|
June
30,
|
||||||
2008
|
2007
|
||||||
ASSETS
|
(Unaudited)
|
||||||
CURRENT
ASSETS:
|
|||||||
Cash
|
$
|
5,958
|
$
|
7,135
|
|||
Short-term
deposits
|
8,342
|
7,815
|
|||||
Trade
accounts receivable, less allowance for doubtful accounts of $44
and $42
|
7,083
|
7,410
|
|||||
Other
receivables
|
682
|
245
|
|||||
Inventories,
less provision for obsolete inventory of $817 and
$781
|
2,144
|
1,946
|
|||||
Prepaid
expenses and other current assets
|
222
|
122
|
|||||
Assets
held for sale
|
219
|
--
|
|||||
Total
current assets
|
24,650
|
24,673
|
|||||
INVESTMENT
IN CHINA (Note 11)
|
2,931
|
--
|
|||||
PROPERTY,
PLANT AND EQUIPMENT, Net
|
7,713
|
7,458
|
|||||
OTHER
INTANGIBLE ASSETS, Net
|
143
|
212
|
|||||
OTHER
ASSETS
|
645
|
445
|
|||||
TOTAL
ASSETS
|
$
|
36,082
|
$
|
32,788
|
|||
LIABILITIES
AND SHAREHOLDERS' EQUITY
|
|||||||
CURRENT
LIABILITIES:
|
|||||||
Accounts
payable
|
$
|
2,413
|
$
|
2,265
|
|||
Accrued
expenses
|
3,658
|
4,354
|
|||||
Advances
from buyer
|
22
|
--
|
|||||
Income
taxes payable
|
544
|
948
|
|||||
Current
portion of notes payable
|
1,417
|
536
|
|||||
Current
portion of capital leases
|
93
|
125
|
|||||
Total
current liabilities
|
8,147
|
8,228
|
|||||
NOTES
PAYABLE, net of current portion
|
1,961
|
139
|
|||||
CAPITAL
LEASES, net of current portion
|
95
|
155
|
|||||
DEFERRED
TAX LIABILITIES
|
499
|
373
|
|||||
TOTAL
LIABILITIES
|
$
|
10,702
|
$
|
8,895
|
|||
MINORITY
INTEREST
|
2,728
|
2,459
|
|||||
SHAREHOLDERS'
EQUITY:
|
|||||||
Common
stock; no par value, 15,000,000 shares authorized; 3,226,430 and
3,225,930 shares issued and outstanding as of
March
31, 2008 and June 30, 2007, respectively
|
10,362
|
10,361
|
|||||
Paid-in
capital
|
850
|
460
|
|||||
Retained
earnings
|
9,286
|
10,135
|
|||||
Accumulated
other comprehensive income
|
2,154
|
478
|
|||||
Total
shareholders' equity
|
22,652
|
21,434
|
|||||
TOTAL
LIABILITIES AND SHAREHOLDERS' EQUITY
|
$
|
36,082
|
$
|
32,788
|
Nine
Months Ended
|
Three
Months Ended
|
|||||||||||||||
March
31,
|
March
31,
|
March
31,
|
March
31,
|
|||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|||||||||||||
Revenue
|
||||||||||||||||
Products
|
$ | 18,190 | $ | 22,037 | $ | 4,482 | $ | 7,265 | ||||||||
Services
|
15,186 | 15,519 | 3,973 | 6,348 | ||||||||||||
33,376 | 37,556 | 8,455 | 13,613 | |||||||||||||
Cost
of Sales
|
||||||||||||||||
Cost
of products sold
|
15,716 | 18,480 | 4,248 | 6,019 | ||||||||||||
Cost
of services rendered
|
10,014 | 9,655 | 2,798 | 3,997 | ||||||||||||
25,730 | 28,135 | 7,046 | 10,016 | |||||||||||||
Gross
Margin
|
7,646 | 9,421 | 1,409 | 3,597 | ||||||||||||
Operating
Expenses
|
||||||||||||||||
General
and administrative
|
6,144 | 5,121 | 2,075 | 1,971 | ||||||||||||
Selling
|
466 | 660 | 189 | 262 | ||||||||||||
Research
and development
|
45 | 52 | 7 | 18 | ||||||||||||
Impairment
loss
|
457 | 174 | 441 | 2 | ||||||||||||
Loss
on disposal of property, plant & equipment
|
11 | -- | 11 | -- | ||||||||||||
Total
operating expenses
|
7,123 | 6,007 | 2,723 | 2,253 | ||||||||||||
Income
(Loss ) from Operations
|
523 | 3,414 | (1,314 | ) | 1,344 | |||||||||||
Other
Income (Expenses)
|
||||||||||||||||
Interest
expense
|
(257 | ) | (119 | ) | (93 | ) | (53 | ) | ||||||||
Other
income (expenses)
|
(224 | ) | 155 | (33 | ) | 45 | ||||||||||
Total
other (expenses) income
|
(481 | ) | 36 | (126 | ) | (8 | ) | |||||||||
Income
(Loss) Before Income Taxes
|
42 | 3,450 | (1,440 | ) | 1,336 | |||||||||||
Income
Tax Provision
|
268 | 717 | (46 | ) | 239 | |||||||||||
Income
(Loss) Before Minority Interest
|
(226 | ) | 2,733 | (1,394 | ) | 1,097 | ||||||||||
Minority
interest
|
(269 | ) | (97 | ) | (17 | ) | (16 | ) | ||||||||
Net
Income (Loss) Attributable to Common Shares
|
(495 | ) | 2,636 | (1,411 | ) | 1,081 | ||||||||||
EARNINGS
PER SHARE:
|
||||||||||||||||
Basic
earnings (loss) per share
|
$ | (0.15 | ) | $ | 0.82 | $ | (0.44 | ) | $ | 0.34 | ||||||
Diluted
earnings (loss) per share
|
$ | (0.15 | ) | $ | 0.82 | $ | (0.44 | ) | $ | 0.33 | ||||||
Weighted
Average Shares Outstanding:
|
||||||||||||||||
Basic
|
3,226 | 3,225 | 3,226 | 3,226 | ||||||||||||
Diluted
|
3,226 | 3,235 | 3,226 | 3,236 | ||||||||||||
Comprehensive
Income (Loss):
|
||||||||||||||||
Net
income (loss)
|
$ | (495 | ) | $ | 2,636 | $ | (1,411 | ) | $ | 1,081 | ||||||
Foreign
currency translation adjustment
|
1,676 | 957 | 758 | 449 | ||||||||||||
Comprehensive
Income (Loss)
|
$ | 1,181 | $ | 3,593 | $ | (653 | ) | $ | 1,530 |
March
31,
|
March
31,
|
|||||||
2008
|
2007
|
|||||||
(Unaudited)
|
(Unaudited)
|
|||||||
Cash
Flow from Operating Activities
|
||||||||
Net
income (loss)
|
$ | (495 | ) | $ | 2,636 | |||
Adjustments
to reconcile net income to net cash flow provided by operating
activities
|
||||||||
Depreciation
and amortization
|
2,262 | 2,007 | ||||||
Bad
debts expense, net
|
2 | 145 | ||||||
Inventory
provision
|
36 | 151 | ||||||
Interest
income on short-term deposits
|
(39 | ) | (66 | ) | ||||
Impairment
loss
|
457 | 174 | ||||||
Stock
compensation
|
390 | 4 | ||||||
Loss
(gain) on sale of property
|
11 | (41 | ) | |||||
Deferred
tax provision
|
126 | 25 | ||||||
Minority
interest
|
268 | 98 | ||||||
Changes
in operating assets and liabilities, net
of acquisition effects
|
||||||||
Accounts
receivables
|
325 | (2,099 | ) | |||||
Other
receivables
|
(437 | ) | 69 | |||||
Other
assets
|
(200 | ) | (102 | ) | ||||
Inventories
|
(234 | ) | 310 | |||||
Prepaid
expenses and other current assets
|
(100 | ) | 4 | |||||
Accounts
payable and accrued liabilities
|
(548 | ) | (729 | ) | ||||
Income
tax payable
|
(404 | ) | 286 | |||||
Net
cash provided by operating activities
|
1,421 | 2,872 | ||||||
Cash
Flow from Investing Activities
|
||||||||
Proceeds
from short-term deposits matured
|
25,537 | 10,238 | ||||||
Investments
in short-term deposits
|
(25,946 | ) | (9,836 | ) | ||||
Additions
to property, plant and equipment
|
(2,507 | ) | (2,409 | ) | ||||
Investment
in Chongqing, China
|
(2,931 | ) | -- | |||||
Proceeds
from sale of property
|
15 | 50 | ||||||
Net
cash used in investing activities
|
(5,832 | ) | (1,957 | ) | ||||
Cash
Flow from Financing Activities
|
||||||||
Net
borrowings on lines of credit
|
22 | 316 | ||||||
Repayment
of bank loans and capital leases
|
(1,305 | ) | (698 | ) | ||||
Proceeds
from long-terms bank loans and capital leases
|
3,837 | 6 | ||||||
Proceeds
from exercising stock options
|
1 | 23 | ||||||
Proceeds
from 10% shareholder on the short swing profit of the company
stock
|
-- | 118 | ||||||
Dividends
paid to minority interest
|
-- | (42 | ) | |||||
Paid
dividends
|
(354 | ) | (323 | ) | ||||
Net
cash provided (used) in financing activities
|
2,201 | (600 | ) | |||||
Effect
of Changes in Exchange Rate
|
1,033 | 614 | ||||||
NET
INCREASE IN CASH
|
(1,177 | ) | 929 | |||||
CASH
AND CASH EQUIVALENTS, BEGINNING OF PERIOD
|
7,135 | 2,551 | ||||||
CASH
AND CASH EQUIVALENTS, END OF PERIOD
|
$ | 5,958 | $ | 3,480 | ||||
Supplementary
Information of Cash Flows
|
||||||||
Cash
paid during the period for:
|
||||||||
Interest
|
$ | 186 | $ | 119 | ||||
Income
taxes
|
$ | 732 | $ | 433 | ||||
Non-Cash
Transactions
|
||||||||
Capital
lease of property, plant and equipment
|
$ | -- | $ | 52 | ||||
Declaration
of cash dividends to be paid
|
$ | 354 | $ | -- |
1.
|
ORGANIZATION
AND BASIS OF PRESENTATION
|
|
Ownership
|
Location
|
Express
Test Corporation (dormant)
|
100%
|
Van
Nuys, California
|
Trio-Tech
Reliability Services (dormant)
|
100%
|
Van
Nuys, California
|
KTS
Incorporated, dba Universal Systems (dormant)
|
100%
|
Van
Nuys, California
|
Trio-Tech
International Pte. Ltd.
|
100%
|
Singapore
|
Universal
(Far East) Pte. Ltd.
|
100%
|
Singapore
|
Trio-Tech
Thailand
|
100%
|
Bangkok,
Thailand
|
Trio-Tech
Bangkok
|
100%
|
Bangkok,
Thailand
|
Trio-Tech
Malaysia
|
55%
|
Penang
and Selangor, Malaysia
|
Trio-Tech
Kuala Lumpur – 100% owned by
|
55%
|
Selangor,
Malaysia
|
Trio-Tech
Malaysia
|
|
|
Prestal
Enterprise Sdn. Bhd.
|
76%
|
Selangor,
Malaysia
|
Trio-Tech
(SIP) Co. Ltd.
|
100%
|
Suzhou,
China
|
Trio-Tech
(Shanghai) Co. Ltd.
|
100%
|
Shanghai,
China
|
Trio-Tech
(Chongqing) Co. Ltd.
|
100%
|
Chongqing,
China
|
2.
|
NEW
ACCOUNTING PRONOUNCEMENTS
|
3.
|
INVENTORIES
|
|
March
31,
|
June
30,
|
||||||
2008
|
2007
|
|||||||
(Unaudited)
|
||||||||
Raw
materials
|
$ | 1,650 | $ | 1,295 | ||||
Work
in progress
|
1,087 | 1,210 | ||||||
Finished
goods
|
224 | 222 | ||||||
Less:
provision for obsolete inventory
|
(817 | ) | (781 | ) | ||||
$ | 2,144 | $ | 1,946 |
4.
|
STOCK
OPTIONS
|
Nine
Months Ended
|
Year
Ended
|
|||||
March
31, 2008
|
June
30, 2007
|
|||||
Expected
volatility
|
115.07-110.91% | 73.22-98.51% | ||||
Risk-free
interest rate
|
1.62 % | 4.5 % | ||||
Expected
life (years)
|
2.00 | 2.00 |
Weighted-
Average Exercise
|
Weighted
- Average Remaining Contractual
|
Aggregate
Intrinsic
|
||||||||||||||
Options
|
Price
|
Term
(Years)
|
Value
|
|||||||||||||
|
|
|||||||||||||||
Outstanding
at July 1, 2007
|
-- | -- | ||||||||||||||
Granted
|
50,000 | $ | 9.57 | |||||||||||||
Exercised
|
-- | -- | ||||||||||||||
Forfeited
or expired
|
-- | -- | ||||||||||||||
Outstanding
at March 31, 2008
|
50,000 | $ | 9.57 | 4.68 | -- | |||||||||||
Exercisable
at March 31, 2008
|
12,500 | $ | 9.57 | 4.68 | -- |
Weighted-Average
Grant-Date
|
||||||||
Options
|
Fair
Value
|
|||||||
Non-vested
at July 1, 2007
|
-- | -- | ||||||
Granted
|
50,000 | $ | 5.55 | |||||
Vested
|
(12,500 | ) | $ | 5.55 | ||||
Forfeited
|
-- | -- | ||||||
Non-vested
at March 31, 2008
|
37,500 | $ | 5.55 |
Weighted-
Average Exercise
|
Weighted
- Average Remaining Contractual
|
Aggregate
Intrinsic
|
||||||||||||||
Options
|
Price
|
Term
(Years)
|
Value
|
|||||||||||||
|
|
|||||||||||||||
Outstanding
at July 1, 2007
|
-- | |||||||||||||||
Granted
|
50,000 | $ | 9.57 | |||||||||||||
Exercised
|
-- | -- | ||||||||||||||
Forfeited
or expired
|
-- | -- | ||||||||||||||
Outstanding
at March 31, 2008
|
50,000 | $ | 9.57 | 4.68 | -- | |||||||||||
Exercisable
at March 31,
2008
|
50,000 | $ | 9.57 | 4.68 | -- |
Weighted-
Average Exercise
|
Weighted
- Average Remaining Contractual
|
Aggregate
Intrinsic
|
||||||||||||||
Options
|
Price
|
Term
(Years)
|
Value
|
|||||||||||||
|
|
|||||||||||||||
Outstanding
at July 1, 2007
|
13,050 | $ | 3.03 | |||||||||||||
Granted
|
-- | -- | ||||||||||||||
Exercised
|
500 | -- | ||||||||||||||
Forfeited
or expired
|
-- | -- | ||||||||||||||
Outstanding
at March 31, 2008
|
12,550 | $ | 3.03 | 0.49 | $ | 41,525 | ||||||||||
Exercisable
at March 31, 2008
|
12,550 | $ | 3.03 | 0.49 | $ | 41,525 |
Non-vested
Options
|
Shares
|
Weighted
Average Grant Date
Fair
Value
|
||||||
Non-vested
at July 1, 2007
|
1,375 | $ | 1.31 | |||||
Granted
|
-- | -- | ||||||
Vested
|
(1,375 | ) | $ | 1.31 | ||||
Forfeited
|
-- | -- | ||||||
Non-vested
at March 31, 2008
|
-- | -- |
5.
|
EARNINGS
PER SHARE
|
Nine
Months Ended
|
Three
Months Ended
|
|||||||||||||||
March
31,
|
March
31,
|
March
31,
|
March
31,
|
|||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|||||||||||||
Net
income (loss) attributable to common shares
|
$ | (495 | ) | $ | 2,636 | $ | (1,411 | ) | $ | 1,081 | ||||||
Basic
Earnings (loss) Per Share
|
$ | (0.15 | ) | $ | 0.82 | $ | (0.44 | ) | $ | 0.34 | ||||||
Diluted
Earnings (loss) Per Share
|
$ | (0.15 | ) | $ | 0.82 | $ | (0.44 | ) | $ | 0.33 | ||||||
Weighted
average number of common shares outstanding - basic
|
3,226 | 3,225 | 3,226 | 3,226 | ||||||||||||
Dilutive
effect of stock options
|
-- | 10 | -- | 10 | ||||||||||||
Number
of shares used to compute Earnings Per Share - diluted
|
3,226 | 3,235 | 3,226 | 3,236 |
6.
|
ACCOUNTS
RECEIVABLE AND ALLOWANCE FOR DOUBTFUL
ACCOUNTS
|
March
31,
|
June
30,
|
|||||||
2008
|
2007
|
|||||||
(Unaudited)
|
||||||||
Beginning
|
$ | 42 | $ | 225 | ||||
Additions
charged to expense
|
17 | 18 | ||||||
Recovered
|
(15 | ) | (159 | ) | ||||
Actual
write-offs
|
- | (42 | ) | |||||
Ending
|
$ | 44 | $ | 42 |
7.
|
DIVIDEND
PAID TO SHAREHOLDERS
|
8.
|
WARRANTY
ACCRUAL
|
March
31,
|
June
30,
|
|||||||
2008
|
2007
|
|||||||
(Unaudited)
|
||||||||
Beginning
|
$ | 211 | $ | 142 | ||||
Additional
accruals
|
- | 74 | ||||||
Warranty
expenses incurred
|
(12 | ) | (3 | ) | ||||
Reverse
|
(64 | ) | (2 | ) | ||||
Ending
|
$ | 135 | $ | 211 |
9.
|
LONG
TERM DEBT
|
As
of March 31, 2008
|
Calendar
Year 2008
|
Calendar
Year 2009
|
Calendar Year
2010
|
Thereafter
|
Total
|
Fair
Value
|
||||||||||||||||||
Loan:
|
||||||||||||||||||||||||
Denominated
in Singapore dollars; interest is at the bank's prime rate (2.51% at March
31, 2008) plus 3.0% per annum
|
$ | 999 | $ | 1,332 | $ | 962 | $ | - | $ | 3,293 | $ | 3,293 |
10.
|
ADOPTION
OF FIN 48
|
11.
|
INVESTMENT
IN CHONGQING, CHINA
|
Investment
Date
|
Investment
Amount
|
Investment
Amount
|
|||||||
(RMB)
|
(U.S.
Dollars)
|
||||||||
Investment
in property with Jiasheng
|
8/28/07
|
10,000 | 1,426 | ||||||
Investment
in property with Jiasheng
|
12/17/07
|
5,000 | 713 | ||||||
Purchase
an investment property
|
1/04/08
|
5,554 | 792 | ||||||
Total
investment in China
|
RMB20,554
|
$ | 2,931 |
12.
|
ASSETS
HELD FOR SALE
|
13.
|
IMPAIRMENT
LOSS
|
14.
|
BUSINESS
SEGMENTS
|
Business
Segment Information:
|
|||||||||||||||||||||
Quarter |
Operating
|
Depr.
|
|||||||||||||||||||
Ended |
Net
|
Income
|
Total
|
and
|
Capital
|
||||||||||||||||
March 31,
|
Sales
|
(loss)
|
Assets
|
Amort.
|
Expenditures
|
||||||||||||||||
Manufacturing
|
2008 | $ | 4,367 | $ | (884 | ) | $ | 3,747 | $ | 67 | $ | 43 | |||||||||
2007 | $ | 6,923 | $ | 350 | $ | 3,511 | $ | 53 | $ | 98 | |||||||||||
Testing
services
|
2008 | 3,973 | (553 | ) | 31,814 | 662 | 966 | ||||||||||||||
2007 | 6,348 | 1,077 | 27,978 | 826 | 313 | ||||||||||||||||
Distribution
|
2008 | 115 | (69 | ) | 424 | 5 | 5 | ||||||||||||||
2007 | 342 | (91 | ) | 556 | 4 | - | |||||||||||||||
Corporate
and
|
2008 | - | 192 | 97 | - | - | |||||||||||||||
unallocated
|
2007 | - | 8 | 208 | - | - | |||||||||||||||
Total
Company
|
2008 | $ | 8,455 | $ | (1,314 | ) | $ | 36,082 | $ | 734 | $ | 1,014 | |||||||||
2007 | $ | 13,613 | $ | 1,344 | $ | 32,253 | $ | 883 | $ | 411 |
Business
Segment Information:
|
|||||||||||||||||||||
Nine | |||||||||||||||||||||
Months |
Operating
|
Depr.
|
|||||||||||||||||||
Ended |
Net
|
Income
|
Total
|
and
|
Capital
|
||||||||||||||||
March
31,
|
Sales
|
(loss)
|
Assets
|
Amort.
|
Expenditures
|
||||||||||||||||
Manufacturing
|
2008
|
$ | 17,848 | $ | (92 | ) | $ | 3,747 | $ | 174 | $ | 258 | |||||||||
2007
|
$ | 20,602 | $ | 1,041 | $ | 3,511 | $ | 147 | $ | 246 | |||||||||||
Testing
services
|
2008
|
15,186 | 1,110 | 31,814 | 2,074 | 2,233 | |||||||||||||||
2007
|
15,519 | 2,421 | 27,978 | 1,848 | 2,214 | ||||||||||||||||
Distribution
|
2008
|
342 | (152 | ) | 424 | 14 | 14 | ||||||||||||||
2007
|
1,435 | (101 | ) | 556 | 12 | 1 | |||||||||||||||
Corporate
and unallocated
|
2008
|
- | (343 | ) | 97 | - | 2 | ||||||||||||||
|
2007
|
- | 53 | 208 | - | - | |||||||||||||||
Total
Company
|
2008
|
$ | 33,376 | $ | 523 | $ | 36,082 | $ | 2,262 | $ | 2,507 | ||||||||||
2007
|
$ | 37,556 | $ | 3,414 | $ | 32,253 | $ | 2,007 | $ | 2,461 |
Geographic
Area Information:
|
|||||||||||||||||||||||||||||||||
Elimin-
|
|||||||||||||||||||||||||||||||||
Quarter
|
ations
|
||||||||||||||||||||||||||||||||
Ended
|
United
|
Other
|
and
|
Total
|
|||||||||||||||||||||||||||||
March
31,
|
States
|
China
|
Countries
|
Singapore
|
Thailand
|
Malaysia
|
Other
|
Company
|
|||||||||||||||||||||||||
Net
sales to
|
2008
|
$ | 1,052 | $ | 467 | $ | 551 | $ | 2,312 | $ | 471 | $ | 3,618 | $ | (16 | ) | $ | 8,455 | |||||||||||||||
customers
|
2007
|
$ | 1,301 | $ | 1,102 | $ | 293 | $ | 8,493 | $ | 617 | $ | 1,868 | $ | (61 | ) | $ | 13,613 | |||||||||||||||
Operating
|
2008
|
(183 | ) | (83 | ) | (96 | ) | (413 | ) | (84 | ) | (647 | ) | 192 | (1,314 | ) | |||||||||||||||||
income
(loss)
|
2007
|
104 | 112 | 14 | 854 | 63 | 189 | 8 | 1,344 | ||||||||||||||||||||||||
Long-lived
|
2008
|
5 | 995 | - | 1,850 | 774 | 4,272 | (40 | ) | 7,856 | |||||||||||||||||||||||
assets
|
2007
|
10 | 848 | - | 3,695 | 877 | 2,748 | (40 | ) | 8,138 |
Geographic
Area Information:
|
|||||||||||||||||||||||||||||||||
Nine
|
Elimin-
|
||||||||||||||||||||||||||||||||
Months
|
ations
|
||||||||||||||||||||||||||||||||
Ended
|
United
|
Other
|
and
|
Total
|
|||||||||||||||||||||||||||||
March
31,
|
States
|
China
|
Countries
|
Singapore
|
Thailand
|
Malaysia
|
Other
|
Company
|
|||||||||||||||||||||||||
Net
sales to
|
2008
|
$ | 4,096 | $ | 1,239 | $ | 1,468 | $ | 15,024 | $ | 1,544 | $ | 10,113 | $ | (108 | ) | $ | 33,376 | |||||||||||||||
customers
|
2007
|
$ | 5,152 | $ | 4,493 | $ | 518 | $ | 21,030 | $ | 1,763 | $ | 4,722 | $ | (122 | ) | $ | 37,556 | |||||||||||||||
Operating
|
2008
|
42 | (12 | ) | (18 | ) | 758 | 23 | 73 | (343 | ) | 523 | |||||||||||||||||||||
income
(loss)
|
2007
|
351 | 413 | 24 | 1,966 | 165 | 442 | 53 | 3,414 | ||||||||||||||||||||||||
Long-lived
|
2008
|
5 | 995 | - | 1,850 | 774 | 4,272 | (40 | ) | 7,856 | |||||||||||||||||||||||
assets
|
2007
|
10 | 848 | - | 3,695 | 877 | 2,748 | (40 | ) | 8,138 |
ITEM
2.
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF
OPERATIONS
(IN
THOUSANDS, EXCEPT PER SHARE
AMOUNTS)
|
·
|
In
the third quarter of fiscal year 2008, we recorded $441, or $0.14 per
diluted share, in impairment loss due primarily to the phase-out of an
advanced burn-in testing service provided by our facilities in Singapore
and China.
|
·
|
Total
revenue decreased 37.89% to $8,455 for the third quarter of fiscal 2008,
compared with revenue of $13,613 for the third quarter of fiscal 2007, as
the result of the phase-out of the advanced burn-in testing service that
we provided to one of our major
customers.
|
·
|
Testing
segment revenue decreased by $2,375, or 37.41%, to $3,973 compared with
$6,348 for the third quarter of fiscal
2007.
|
·
|
Manufacturing
segment revenue decreased by $2,556, or 36.92%, to $4,367 compared with
$6,923 for the third quarter of fiscal
2007.
|
·
|
Distribution
segment revenue decreased by $227, or 66.37%, to $115 compared with $342
for the second quarter of fiscal
2007.
|
·
|
Loss
from operations increased by $2,658, or 197.77%, to $1,314 compared with
an income of $1,344 for the third quarter of fiscal
2007.
|
·
|
Gross
profit margins decreased by 9.76% to 16.66% from 26.42% for the third
quarter of fiscal 2007.
|
·
|
Selling
expenses increased by 0.32% from 1.92% of revenue for the third quarter of
fiscal 2007.
|
·
|
General
and administrative expenses increased by 10.06% from 14.48% of revenue for
the third quarter of fiscal 2007.
|
Revenue
Components
|
||||||||||||||
Nine
Months Ended March 31,
|
Three
Months Ended March 31,
|
|||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||
Net
Sales:
|
||||||||||||||
Manufacturing
|
53.48
|
%
|
54.86
|
%
|
51.65
|
%
|
50.86
|
%
|
||||||
Testing
|
45.50
|
41.32
|
46.99
|
46.63
|
||||||||||
Distribution
|
1.02
|
3.82
|
1.36
|
2.51
|
||||||||||
Total
|
100.00
|
%
|
100.00
|
%
|
100.00
|
%
|
100.00
|
%
|
Three
Months Ended March 31,
|
||||||||
2008
|
2007
|
|||||||
Net
Sales
|
100 | % | 100.0 | % | ||||
Cost
of sales
|
83.3 | % | 73.6 | % | ||||
Gross
Margin
|
16.7 | % | 26.4 | % | ||||
Operating
Expenses
|
||||||||
General
and administrative
|
24.6 | % | 14.5 | % | ||||
Selling
|
2.2 | % | 1.9 | % | ||||
Research
and development
|
0.1 | % | 0.1 | % | ||||
Impairment
loss
|
5.2 | % | 0.0 | % | ||||
Loss
on disposal of property, plant and equipment
|
0.1 | % | 0.0 | % | ||||
Total
operating expenses
|
32.2 | % | 16.5 | % | ||||
Income
(Loss) from Operations
|
(15.5 | )% | 9.9 | % |
Three
Months Ended March 31,
|
||||||||
(In
Thousands, unaudited)
|
2008
|
2007
|
||||||
General
and administrative
|
$ | 2,075 | $ | 1,971 | ||||
Selling
|
189 | 262 | ||||||
Research
and development
|
7 | 18 | ||||||
Impairment
loss
|
441 | 2 | ||||||
Loss
on disposal of property, plant and equipment
|
11 | - | ||||||
Total
|
$ | 2,723 | $ | 2,253 |
Three
Months Ended March 31,
|
||||||||
(In
Thousands, unaudited)
|
2008
|
2007
|
||||||
Interest
expense
|
$ | 93 | $ | 53 |
Three
Months Ended March 31,
|
||||||||
(In
Thousands, unaudited)
|
2008
|
2007
|
||||||
Other
(expenses) income
|
$ | (33 | ) | $ | 45 |
Three
Months Ended March 31,
|
||||||||
(In
Thousands, unaudited)
|
2008
|
2007
|
||||||
Revenue
|
$ | 4,367 | $ | 6,923 | ||||
Gross
margin
|
4.4 | % | 17.7 | % | ||||
(Loss)
Income from operations
|
$ | (884 | ) | $ | 350 |
Three
Months Ended March 31,
|
||||||||
(In
Thousands, unaudited)
|
2008
|
2007
|
||||||
Revenue
|
$ | 3,973 | $ | 6,348 | ||||
Gross
margin
|
29.6 | % | 37.0 | % | ||||
(Loss)
Income from operations
|
$ | (553 | ) | $ | 1,077 |
Three
Months Ended March 31,
|
||||||||
(In
Thousands, unaudited)
|
2008
|
2007
|
||||||
Revenue
|
$ | 115 | $ | 342 | ||||
Gross
margin
|
37.4 | % | 6.1 | % | ||||
Loss
from operations
|
$ | (69 | ) | $ | (91 | ) |
Three
Months Ended March 31,
|
||||||||
(In
Thousands, unaudited)
|
2007
|
2006
|
||||||
Income
from operations
|
$ | 192 | $ | 8 |
Nine
Months Ended March 31,
|
||||||||
2008
|
2007
|
|||||||
Net
Sales
|
100 | % | 100.0 | % | ||||
Cost
of sales
|
77.1 | % | 74.9 | % | ||||
Gross
Margin
|
22.9 | % | 25.1 | % | ||||
Operating
Expenses
|
||||||||
General
and administrative
|
18.4 | % | 13.6 | % | ||||
Selling
|
1.4 | % | 1.8 | % | ||||
Research
and development
|
0.1 | % | 0.1 | % | ||||
Impairment
loss
|
1.3 | % | 0.5 | % | ||||
Loss
on disposal of property, plant and equipment
|
0.1 | % | 0.0 | % | ||||
Total
operating expenses
|
21.3 | % | 16.0 | % | ||||
Income
from Operations
|
1.6 | % | 9.1 | % |
Nine
Months Ended March 31,
|
||||||||
(In
Thousands, unaudited)
|
2008
|
2007
|
||||||
General
and administrative
|
$ | 6,144 | $ | 5,121 | ||||
Selling
|
466 | 660 | ||||||
Research
and development
|
45 | 52 | ||||||
Impairment
loss
|
457 | 174 | ||||||
Loss
on disposal of property, plant and equipment
|
11 | -- | ||||||
Total
|
$ | 7,123 | $ | 6,007 |
Nine
Months Ended March 31,
|
||||||||
(In
Thousands, unaudited)
|
2008
|
2007
|
||||||
Interest
expense
|
$ | 257 | $ | 119 |
Nine
Months Ended March 31,
|
||||||||
(In
Thousands, unaudited)
|
2008
|
2007
|
||||||
Other
(expenses) income
|
$ | (224 | ) | $ | 155 |
Nine
Months Ended March 31,
|
||||||||
(In
Thousands, unaudited)
|
2008
|
2007
|
||||||
Revenue
|
$ | 17,848 | $ | 20,602 | ||||
Gross
margin
|
13.3 | % | 16.2 | % | ||||
(Loss)
Income from operations
|
$ | (92 | ) | $ | 1,041 |
Nine
Months Ended March 31,
|
||||||||
(In
Thousands, unaudited)
|
2008
|
2007
|
||||||
Revenue
|
$ | 15,186 | $ | 15,519 | ||||
Gross
margin
|
34.1 | % | 37.8 | % | ||||
Income
from operations
|
$ | 1,110 | $ | 2,421 |
Nine
Months Ended March 31,
|
||||||||
(In
Thousands, unaudited)
|
2008
|
2007
|
||||||
Revenue
|
$ | 342 | $ | 1,435 | ||||
Gross
margin
|
29.5 | % | 14.9 | % | ||||
Loss
from operations
|
$ | (152 | ) | $ | (101 | ) |
Nine
Months Ended March 31,
|
||||||||
(In
Thousands, unaudited)
|
2008
|
2007
|
||||||
(Loss)
Income from operations
|
$ | (343 | ) | $ | 53 |
Legal
Proceedings
|
Risk
Factors
|
Unregistered
Sales of Equity Securities and Use of
Proceeds
|
Defaults
upon Senior Securities
|
Submission
of Matters to Vote of Security
Holders
|
Other
Information
|
Exhibits
|
10.1
|
Sales
and purchase agreement on office units at Jiang Bei No. 21 Road,
Chongqing
|
10.2
|
Tenant
lease of U.S. office
|
31.1
|
Rule
13a-14(a) Certification of Principal Executive Officer of
Registrant
|
31.2
|
Rule
13a-14(a) Certification of Principal Financial Officer of
Registrant
|
32
|
Section
1350 Certification.
|
TRIO-TECH INTERNATIONAL | |||
|
By:
|
/s/ Victor H.M. Ting | |
VICTOR H.M. TING | |||
Chief Financial Officer | |||
(Principal Financial Officer) | |||
Dated: May 15, 2008 |