FOR IMMEDIATE RELEASE
Trio-Tech Reports Preliminary Fiscal 2002 Results
Backlog Increases to $7.9 Million at June 30th From $3.1 Million at December 31st
VAN NUYS, CALIFORNIA-- October 8, 2002 -- Trio-Tech International (ASE:TRT) announced a net loss for the three months ended June 30, 2002, of $2,043,000 or $0.70 per share, which included impairment charges of $1,089,000 (before tax) and the write-down of certain inventory of manufactured goods of $511,000 (before tax). Excluding these charges, the preliminary loss from operations for the quarter was $578,000 (before tax). For the fourth quarter of fiscal 2001, net income was $228,000, or $0.08 per diluted share. Revenue for the fourth quarter of fiscal 2002 was $5,012,000 compared to $7,063,000 for the same period a year earlier. Trio-Tech anticipates reporting final audited results in the near future.
For the twelve months ended June 30, 2002, the net loss was $3,547,000, or $1.21 per share, which included impairment charges of $1,631,000 (before tax) and the inventory write-down mentioned above. This compares to net income of $1,163,000, or $0.39 per diluted share, for fiscal 2001. Revenue for fiscal 2002 declined to $19,617,000 from $36,133,000 for fiscal 2001.
Net sales for Trio-Tech's testing and burn-in segment declined to $8,942,000 for fiscal 2002 from $11,112,000 for fiscal 2001. Operating income in this segment increased to $771,000 from $743,000, the result of improved efficiency and aggressive cost reductions. Manufacturing segment revenue declined to $5,022,000 from $18,472,000. The operating loss in this segment was $4,084,000 compared to an operating loss of $197,000 a year earlier. Distribution segment revenue declined to $5,653,000 from $6,549,000. The operating loss was $55,000 compared to operating income of $390,000 for the prior year.
Cash flow, as measured by earnings before interest, taxes, depreciation and amortization (EBITDA) and the impairment and inventory charges, was $587,000 for fiscal 2002 compared to $3,393,000 for the prior year.
President and Chief Executive Officer S.W. Yong said, "We made significant changes in our company during fiscal 2002 in response to the changing realities in the global semiconductor industry. Income from operations in our semiconductor testing and burn-in segment increased by 4% for the year despite a 20% decline in revenue, which is a tribute to the success of our cost reduction efforts and the efficiencies we have achieved. Semiconductor testing and burn-in is Trio-Tech's crown jewel, and we are focused on continuing to expand this business and capitalizing on the operating leverage we have built into it. Testing and burn-in backlog continues to increase from the low point reported in December, and we are making carefully targeted investments to accommodate the higher volumes we are beginning to enjoy even during these difficult times in the semiconductor industry.
"On the other hand, due to the global downturn in capital spending in the semiconductor industry, revenue in our manufacturing segment declined precipitously during the past year, and our equipment distribution business also was severely affected. Accordingly, we implemented significant reductions in work force in both of these business segments, wrote off certain inventory, and booked an impairment charge to reduce goodwill, intangible assets and fixed assets primarily associated with our manufacturing segment. We
currently plan to stay in both of these businesses, and we believe that we now have reduced our costs sufficiently to allow us to ride out this period of weakness while remaining prepared to benefit from the inevitable industry recovery."
Chairman A. Charles Wilson added, "Fiscal 2002 was the toughest year in memory, but we took the steps we needed to take to position Trio-Tech to compete effectively in the present environment and to support renewed revenue and earnings growth when market conditions permit. Trio-Tech's financial condition is strong, with cash and short-term investments at June 30th of $7,588,000, long-term debt and capitalized lease obligations of $986,000 compared to $1,745,000 last year and stockholders' equity of $8,372,000, or approximately $2.86 per share.
"Our relationships with key testing and burn-in clients have grown closer, and we added several important new accounts in this segment during the past year. Our management and employees are experienced, tough and determined. We have proven that we can manage the business effectively through difficult times, and based on the growth in backlog, we believe that Trio-Tech is positioned to return to profitability in fiscal 2003."
Total order backlog at June 30, 2002 was $7,937,000, including testing and burn-in backlog of $6,615,000. This compares to total backlog at December 31, 2001 of $3,124,000, including testing and burn-in backlog of $1,973,000, and to total backlog at June 30, 2001 of $8,448,000, including testing and burn-in backlog of $5,863,000.
Trio-Tech will host a conference call today at 11:00 AM EST. A simultaneous WebCast is available at http://www.companyboardroom.com/company.asp?ticker=TRT&coid=97656&client=cb or at http://www.TrioTech.com/corporate2.htm. A replay will be available approximately one hour after the WebCast at these same Internet addresses. For a telephone replay, dial
(800) 633-8284, reservation # 20881094 one hour after the call.
Founded in 1958, Trio-Tech International provides third-party semiconductor testing and burn-in services primarily through its laboratories in Southeast Asia. Headquartered in Van Nuys, California, the Company also designs, manufactures and markets equipment and systems used in the testing and production of semiconductors and distributes semiconductor processing and testing equipment manufactured by others.. For further information or to request quotations for any of Trio-Tech's complete line of semiconductor test equipment, please visit the Company's Web site at www.TrioTech.com.
This press release contains statements that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations, estimates and projections about the Company's business based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors, including those described above and the following: the effectiveness of the cost reduction initiatives undertaken by the Company, changes in demand for the Company's products, product mix, the timing of customer orders and deliveries, the impact of competitive products and pricing, excess or shortage of production capacity, and other risks discussed from time to time in the Company's Securities and Exchange Commission filings and reports. In addition, such statements could be affected by general industry and market conditions and growth rates, and general domestic and international economic conditions. Such forward-looking statements speak only as of the date on which they are made, and the Company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release.
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