Trio-Tech International: Form 10-Q for the period ended Mar 31, 2026

Overview

The following should be read in conjunction with the condensed consolidated financial statements and notes in Item I above and with the audited consolidated financial statements and notes, the information under the headings “Management’s discussion and analysis of financial condition and results of operations” in our Annual Report on Form 10-K for the fiscal year ended June 30, 2025 (“Fiscal 2025”).

Trio-Tech International (“TTI”) was incorporated in 1958 under the laws of the State of California. As used herein, the term “Trio-Tech” or “Company” or “we” or “us” or “Registrant” includes Trio-Tech International and its subsidiaries unless the context otherwise indicates. Our mailing address and executive offices are located at Block 1008 Toa Payoh North, Unit 03-09 Singapore 318996, and our telephone number is (65) 6265 3300.

The Company has traditionally been a provider of reliability test equipment and services to the semiconductor and other industries. Our customers rely on us to verify that their semiconductor components meet or exceed the rigorous reliability standards demanded for automotive electronics, industrial electronics, computing and data storage, consumer electronics, and communication markets. We act as a global one-stop solution for our customers by designing and building reliability test solutions and offering comprehensive testing services. The Company also develops and manufactures an extensive range of equipment used in the manufacturing processes of semiconductors and various other industries.

The types of products and services provided by each segment are summarized below:

Semiconductor Back-end Solutions

The SBS segment of the Company designs and manufactures an extensive range of burn-in and reliability test equipment used in the “back-end” manufacturing processes of semiconductors. Our equipment includes burn-in systems, burn-in boards and related equipment that is used in the testing of structural integrity of integrated circuits. We also act as an extended development team of Integrated Device Manufacturers (“IDMs”) and Fabless semiconductor companies in the testing process with our expert technical skills, especially in the New Product Introduction (“NPI”) process.

The Company also provides comprehensive electrical, environmental, and burn-in testing services to semiconductor manufacturers in our testing laboratories in Asia. Our customers include both manufacturers and end users of semiconductor and electronic components who look to us when they decide to outsource their testing process. We also support the asset-light strategy of our customers by setting up test facilities and providing component level, package level and system level testing services with expert technology that improves the productivity of our customers. The independent tests are performed to industry and customer specific standards.

Industrial Electronics

The IE segment of the Company engages in the design, manufacture and distribution of an extensive range of test, process and other equipment used in the manufacturing processes of customers in various industries in the consumer and industrial markets. Our IE segment’s product offerings include environmental chambers, leak detectors, autoclaves, centrifuges, dynamic testers, HAST testers, temperature-controlled chucks, and more. In addition to its equipment offerings, the segment also provides preventive maintenance, calibration services, repair services and upgrading and refurbishment services for temperature, humidity and pressurization equipment.

The IE segment markets both proprietary products and distribute mechanical, electrical and electronic products made by manufacturers around the world. These products include environmental chambers, mechanical shock and vibration testers, specialized equipment for the semiconductor and automotive industries, as well as a wide range of components such as connectors, sockets, cables, LCD displays and touch screen panels. The segment also serves the aviation industry with a comprehensive suite of aircraft spares and components, ground support equipment, and specialized maintenance tooling. We act as value-added solutions provider by enhancing the value of the distributed products by customizing each to the needs of our customers through our expert engineering and integration services. In addition, we also support customers as their extended research and development arm in product design, leveraging the expert skills of our component and design engineers.

Critical Accounting Estimates & Policies

The preparation of our Condensed Consolidated Financial Statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions in applying our accounting policies that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We base these estimates and assumptions on historical experience and evaluate them on an ongoing basis to ensure that they remain reasonable under current conditions. Actual results could differ from those estimates. We discuss the development and selection of the critical accounting estimates with the Audit Committee of our Board of Directors.

There have been no material changes in our critical accounting estimates and policies since our Annual Report on Form 10-K for Fiscal 2025. Refer to Note 1 “Basis of Presentation and Summary of Significant Accounting Policies” to our Condensed Consolidated Financial Statements for additional details. In addition, please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in Part II, Item 7 of our Annual Report on Form 10-K for Fiscal 2025 for a complete description of our critical accounting policies and estimates.

Third Quarter Fiscal Year 2026 Highlights

• Total revenue increased by $9,127, or 123.6%, to $16,511 in the third quarter of Fiscal 2026, compared to $7,384 for the same period in Fiscal 2025.
• SBS segment revenue increased by $7,654, or 141.1% to $13,079 for the third quarter of Fiscal 2026, compared to $5,425 for the same period in Fiscal 2025.
• IE segment revenue increased by $1,476, or 75.7%, to $3,426 for the third quarter of Fiscal 2026, compared to $1,950 for the same period in Fiscal 2025.
• The overall gross profit margin decreased by 11.3% to 15.5% for the third quarter of Fiscal 2026, from 26.8% for the same period in Fiscal 2025.

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• General and administrative expense increased by $206, or 10.0%, to $2,273 for the third quarter of Fiscal 2026, from $2,067 for the same period in Fiscal 2025.
• Selling expense increased by $47, or 21.8%, to $263 for the third quarter of Fiscal 2026, from $216 for the same period in Fiscal 2025.
• Loss from operations was $81 for the third quarter of Fiscal 2026, reflecting a decline of $262 as compared to loss from operations of $343 for the same period in Fiscal 2025.
• Other income was $188 for the third quarter of Fiscal 2026, an increase of $332 as compared to other expenses of $144 for the same period in Fiscal 2025.
• Income tax expense was $146 in the third quarter of Fiscal 2026, an increase of $140 as compared to $6 for the same period in Fiscal 2025.
• During the third quarter of Fiscal 2026, loss from continuing operations before non-controlling interest, net of tax was $39, as compared to loss from continuing operations before non-controlling interest of $481 for the same period in Fiscal 2025.
• Net income attributable to non-controlling interest for the third quarter of Fiscal 2026 was $1, a decrease of $18 as compared to net income of $19 for the same period in Fiscal 2025.
• Loss per share for the third quarter of Fiscal 2026 was $0.00, as compared to loss per share of $0.06 for the same period in Fiscal 2025.
• Total assets increased by $3,647 to $44,715 as of March 31, 2026, compared to $41,068 as of June 30, 2025.
• Total liabilities increased by $5,174 to $12,251 as of March 31, 2026, compared to $7,077 as of June 30, 2025.

Results of Operations and Business Outlook

The following table sets forth our revenue components for both three and nine months ended March 31, 2026 and 2025.

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

Revenue for the three and nine months ended March 31, 2026 was $16,511 and $47,674, respectively, representing an increase of $9,127 and $21,872 when compared to revenue of $7,384 and $25,802 for the same period of Fiscal 2025. As a percentage, revenue increased by 123.6% and 84.8% for the three and nine months ended March 31, 2026, when compared to revenue for the same period of Fiscal 2025.

Revenue within our two current segments for the three and nine months ended March 31, 2026, is discussed below.

Semiconductor Back-end Solutions (SBS)

Revenue in the SBS segment as a percentage of total revenue was 79.2% and 77.4% for the three and nine months ended March 31, 2026, an increase of 5.7% and 7.2% of total revenue when compared to 73.5% and 70.2% in the same period of Fiscal 2025. Total SBS revenue increased by $7,654 to $13,079 from $5,425 and increased by $18,775 to $36,888 from $18,113 for the three and nine months ended March 31, 2026.

SBS segment recorded strong revenue growth for three-month period ended March 31, 2026, primarily driven by the commencement of final test services for AI chips in the final month of the first quarter of Fiscal 2026, as a result of a customer shifting testing activities to alternative geographies. Testing services demand in markets outside China are showing signs of recovery and this has further supported the segment’s revenue momentum, partially offset by a decline in revenue from China of approximately 48.4% for the three months ended March 31, 2026 compared to the same period in fiscal year 2025, and a decrease of approximately 84.1% for the nine months ended March 31, 2025.

Revenue from product sales within the SBS segment increased, reflecting increase in Burn-in board sales by approximately 42.6% for the nine months ended March 31, 2026 compared to the same period in fiscal year 2025.

The SBS segment reported overall revenue growth, supported by stronger results in key markets. However, the market remains highly sensitive to global economic shifts and changes in consumer demand, leading to fluctuations in performance. While these developments suggest a gradual recovery from the industry’s cyclical downturn, we continue to adopt a prudent and balanced approach toward growth and risk management.

Industrial Electronics (IE)

Revenue in the IE segment as a percentage of total revenue was 20.7% and 22.6% for the three and nine months ended March 31, 2026, representing a decrease of 5.7% and 7.1% when compared to 26.4% and 29.7% in the same period of Fiscal 2025. Total IE revenue increased by $1,476 from $1,950 to $3,426 and increased by $3,097 from $7,665 to $10,762 for the three and nine months ended March 31, 2026 as compared to the same period of Fiscal 2025.

The increase in IE revenue was primarily attributable to higher sales of aerospace-related products together with increased equipment sales. Since Fiscal 2025, the Company mitigated revenue volatility through service portfolio diversification and expansion into the aerospace business, offsetting softer demand in existing markets. Our ability to deliver customized, value-added solutions has enabled us to capitalize on new partnership opportunities while strengthening market penetration for our proprietary product lines, including Highly Accelerated Stress Test (HAST) systems, bubble testers, centrifuges, and Artic systems. These strategic initiatives underscore our commitment to long-term growth and adaptability amid evolving market conditions.

The equipment and electronic components market is highly competitive, with commoditized products widely available. Our differentiation lies in our value-added distribution model, with enhancement of standard products through customized design, engineering, integration, and sub-assembly services tailored to customer specifications, securing a competitive advantage for the long term.

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Uncertainties and Remedies

There are several influencing factors which create uncertainties when forecasting performance, such as the changing nature of technology, specific customer requirements, decline in demand for certain types of burn-in devices or equipment, decline in demand for testing services and fabrication services, and other factors. One factor that influences uncertainty is the highly competitive nature of the semiconductor industry. Additionally, certain customers are unable to provide a forecast of the products required in the upcoming weeks, rendering it difficult to plan adequate resources needed to meet these customers’ requirements because of short lead time and last-minute order confirmation. This will normally result in a lower margin for these products as it is often more expensive to purchase materials in a short time frame. However, the Company has taken certain actions and formulated certain plans to deal with and to help mitigate these unpredictable factors. For example, to meet manufacturing customers’ demands upon short notice, the Company maintains higher inventories but continues to work closely with its customers to avoid stockpiling. We believe that we have improved customer service through our efforts to keep our staff up to date on the newest technology and stressing the importance of understanding and meeting the stringent requirements of our customers. Finally, the Company is exploring new markets and products, looking for new customers, and upgrading and improving burn-in technology while at the same time searching for improved testing methods for higher technology chips.

The Company’s primary exposure to movements in foreign currency exchange rates relates to non-U.S. dollar-denominated sales and operating expense in its subsidiaries. Strengthening of the U.S. dollar relative to foreign currencies adversely affects the U.S. dollar value of the Company’s foreign currency-denominated sales and earnings, and generally leads the Company to raise international pricing, potentially reducing demand for the Company’s products. Margins on sales of the Company’s products in foreign countries and on sales of products that include components obtained from foreign suppliers could be materially adversely affected by foreign currency exchange rate fluctuations. In some circumstances, for competitive or other reasons, the Company may decide not to raise local prices to fully offset the U.S. dollar’s strengthening, or at all, which would adversely affect the U.S. dollar value of the Company’s foreign currency-denominated sales and earnings. Conversely, a strengthening of foreign currencies relative to the U.S. dollar, recently observed as a result of current U.S. economic and trade policies, while generally beneficial to the Company’s foreign currency denominated sales and earnings, could cause the Company to reduce international pricing, thereby limiting the benefit. Additionally, strengthening of foreign currencies may also increase the Company’s cost of product components denominated in those currencies, thus adversely affecting gross margins.

We may experience supply shortages as well as inflationary cost pressures in at least the near term. Risks and uncertainties related to supply chain challenges, and inflationary pressures may continue to negatively impact our revenue and gross margin. We continue to monitor and evaluate the business impact to react proactively.

On August 9, 2022, the CHIPS and Science Act of 2022 (“CHIPS Act”) was enacted in the U.S. The CHIPS Act will provide financial incentives to the semiconductor industry which are primarily directed at manufacturing activities within the U.S. We continue to evaluate the business impact and potential opportunities related to the CHIPS Act. To date, we do not see any direct effect of the CHIPS Act on the Company in the foreseeable future. Meanwhile, the One Big Beautiful Bill Act enacted in July 2025 extended key business provisions of the Tax Cuts and Jobs Act, which are expected to benefit the Company by allowing immediate expensing of qualified capital investments, thereby reducing taxable income, tax expense and improved operating cash flow to support ongoing growth.

The recent U.S. tariff regime announced in April 2025 could potentially influence downstream demand variability among our customers. While we have no direct significant exposure to these tariffs, secondary effects may arise if customers adjust their procurement strategies in response to trade policy changes. However, the tariff environment remains fluid, with ongoing policy adjustments continuing to reshape regional trade dynamics. Based on our preliminary observations, demand appears to shift from China to other countries in the region. However, potential effects on macro demand in the future are far from clear, although we recognize the risk of revenue volatility should global demand continue to weaken due to the continued trade tensions between China and the U.S. and the potential that such continued trade tensions result in declining economic conditions. We continue to evaluate capacity adjustments in alignment with observable demand signals while maintaining operational flexibility to adapt to changing market conditions.

As of March 31, 2026, ongoing geopolitical tensions in Middle East region have heightened volatility in global energy markets, resulting in increased inflationary pressures across the global supply chain. Based on our assessment, there has been minimal impact to our supply chain due to indirect exposure and geographic diversification of suppliers and customers.

Risks and uncertainties related to supply chain challenges, uncertainty regarding tariffs, and inflationary pressures may continue to negatively impact our gross margin and operating results. We continue to closely monitor these developments and their broader impacts, as well as evaluate appropriate actions to mitigate potential business impacts.

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Comparison of the Three Months Ended March 31, 2026, and March 31, 2025

The following table sets forth certain consolidated statements of income data as a percentage of revenue for the three months ended March 31, 2026 and 2025 respectively:

(Unaudited)

(Unaudited)

Overall Gross Margin

Overall gross margin as a percentage of revenue decreased by 11.3% to 15.5% for the three months ended March 31, 2026, from 26.8% for the same period of Fiscal 2025. Gross profits increased by $578 to $2,554 for the three months ended March 31, 2026, from $1,976 for the same period in Fiscal 2025.

Gross profit margin as a percentage of revenue in the SBS segment decreased by 11.4% to 15.1% for the three months ended March 31, 2026, as compared to 26.5% for the same period in Fiscal 2025. In absolute dollar amounts, gross profit in the SBS segment for the three months ended March 31, 2026, was $1,973, an increase of $537, compared to $1,436 in the same period in Fiscal 2025.

During the three-month period ended March 31, 2026, the SBS segment experienced a notable decline in gross profit margins attributable to its China operations, primarily due to reduced revenue contributions compared to the same period in Fiscal 2025. While revenue from markets outside China trended upward, the associated margins remained relatively compressed. The incremental revenue relating to final testing services that commenced in the final month of the first quarter was attributable to new service streams that required no capital investment, resulting in lower margin profiles that reflect the reduced risk exposure. The reduction in SBS gross profit margin was further impacted by a decrease in the gross profit margin in China, which declined by approximately 64.6%. As the revenue mix increasingly shifts toward final testing services, gross profit margins are expected to trend below historical levels for the SBS segment.

Gross profit margin as a percentage of revenue in the IE segment decreased by 10.8% to 17.3% for the three months ended March 31, 2026, from 28.1% for the same period in Fiscal 2025. In absolute dollar amounts, gross profit in the IE segment for the three months ended March 31, 2026, was $593, indicating an increase of $45, compared to $548 in the same period in Fiscal 2025. Gross profit margin declined due to an unfavorable product mix during the quarter, with lower-margin products accounting for a significantly larger proportion of total sales compared to previous periods.

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Operating Expense

Operating expense for the three months ended March 31, 2026 and 2025 was as follows:

(Unaudited)

(Unaudited)

General and administrative expense increased by $206, or 10.0%, from $2,067 to $2,273 for the three months ended March 31, 2026, compared to the same period in Fiscal 2025. The increase in general and administrative expenses was primarily driven by higher corporate-related costs incurred for corporate activities, higher stock option expenses, higher personnel-related costs and increase of headcount to support growing operations scale of the SBS and IE segment. For the IE segment, the increase was largely attributable to expansion into new markets and related business development activities. In addition, the IE segment recognized approximately $158 in expected credit losses.

Selling expense increased by $47, or 21.8%, from $216 to $263 for the three months ended March 31, 2026, compared to the same period in Fiscal 2025. The increase in selling expense was primarily attributable to higher business travel expenses and increased commissionable sales across both the SBS and IE segments.

Loss from Operations

Loss from operations was $81 for the three months ended March 31, 2026, an improvement of $262, as compared to a loss of $343 from operations for the same period in Fiscal 2025. As discussed above, higher revenues in the SBS segments drove the improvement; however, the impact was tempered by compressed gross profit margins reflecting the lower-risk nature of these sales. Notwithstanding the margin compression, the increase in overall revenue contributed to improved income from operations during the period.

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Interest Expense

Interest expense for the three months ended March 31, 2026 and 2025 was as follows:

(Unaudited)

(Unaudited)

Interest expense was $11 for the three months ended March 31, 2026, an increase of $1, or 10.0%, compared to $10 for the same period of Fiscal 2025 due to utilization of credit facilities in Singapore operation. As of March 31, 2026, the Company had an unused line of credit of $6,124 as compared to $5,797 as at March 31, 2025.

Other Income / (Expense)

Other income / (expense) for the three months ended March 31, 2026 and 2025 was as follows:

(Unaudited)

(Unaudited)

There was a increase of $332 in other income to $188 for the three months ended March 31, 2026 as compared to other expenses of $144 for the same period in Fiscal 2025. The increase of other income was primarily due to lower foreign exchange losses and dividend income received by Prestal Sdn. Bhd., one of the Company’s subsidiaries, from an investment in unquoted shares.

Our net income is exposed to foreign exchange fluctuations as our subsidiaries' functional currencies differ from the U.S. dollar. For the three months ended March 31, 2026, the strengthening of the Singapore dollar against the U.S. dollar resulted in an unrealized foreign exchange loss, primarily from the remeasurement of U.S. dollar denominated monetary assets and liabilities. The impact of such fluctuations was partially mitigated by the change in functional currency of Universal Far East, which reduced the overall exposure to U.S. dollar movements.

Government Grant

(Unaudited)

(Unaudited)

In the three months ended March 31, 2026, the Company received government grants of $11, wholly from the Singapore government for local resident recruitment. In comparison, during the same period in Fiscal 2025, the Company received government grants amounting to $22, $19 consisting of an incentive from the Singapore government for local resident recruitment, and $3 related to capital expenditure subsidy received from the government in China.

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Income Tax Expense

The Company's income tax expense was $146 and $6 for the three months ended March 31, 2026, and 2025, respectively. The increase was mainly driven by higher GILTI expenses and withholding taxes.

Non-controlling Interest

As of March 31, 2026, we held a 55% interest in SHI International Pte. Ltd. and 76% interest in Prestal Enterprise Sdn. Bhd. The share of non-controlling interest in the net income from the subsidiaries for the three months ended March 31, 2026 was $1 compared to the share of income from the non-controlling interest of $19 for the same period in Fiscal 2025.

The Company received the required approval from the Ministry of Investment, Trade and Industry in Malaysia, and the acquisition of the remaining shares in Trio-Tech Malaysia (“TTM”) was consummated on December 3, 2025. The purchase price for the acquisition was RM14,200, payable in cash, or approximately $3,503. Upon consummation of the transaction, the Company, through Trio-Tech Singapore, acquired the remaining equity interest and now owns 100% of the issued and outstanding share capital of TTM. Accordingly, the Company recognized the non-controlling interest’s share of profits through the acquisition date, and no non-controlling interest will be recognized in subsequent periods.

During the second quarter of fiscal 2026, it was identified that PT SHI Indonesia, a dormant entity that was 95% owned by SHI International Pte Ltd has been dissolved and this dissolution did not have a material impact on the Company's consolidated financial statements.

Net Loss Attributable to Trio-Tech International Common Shareholders

Net loss attributable to Company’s common shareholders was $38 for the three months ended March 31, 2026, compared to a net loss of $495 for the same period in Fiscal 2025.

Loss per Share

Basic loss per share from continuing operations were $0.00 for three months ended March 31, 2026 as compared to basic loss per share of $0.06 for the same period in Fiscal 2025. Basic earnings per share from discontinued operations were $nil for three months ended March 31, 2026 and March 31, 2025 respectively.

Diluted loss per share from continuing operations were $0.00 for three months ended March 31, 2026 as compared to diluted loss per share of $0.06 for the same period in Fiscal 2025. Diluted earnings per share from discontinued operations were $nil for three months ended March 31, 2026 and March 31, 2025.

Segment Information

The revenue, gross margin, and income from operations for each segment during the third quarter of Fiscal 2026 and Fiscal 2025 are presented below. As the revenue and gross margin for each segment were discussed in the previous section, only the comparison of income from operations is discussed below.

Semiconductor Back-end Solutions (SBS)

The revenue, gross margin and income / (loss) from operations for the SBS segment for the three months ended March 31, 2026 and 2025 were as follows:

(Unaudited)

(Unaudited)

Income from operations from the SBS segment was $319 compared to loss from operations of $3 in the same period in Fiscal 2025. The increase was primarily attributable to the higher gross profit generated from increased revenue, primarily driven by factors discussed above. Operating expense increased from $1,439 for the three months ended March 31, 2025 to $1,654 for the three months ended March 31, 2026 mainly attributable to an increase in personnel-related costs and selling expense.

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Industrial Electronics (IE)

The revenue, gross margin, and income from operations for the IE segment for the three months ended March 31, 2026 and 2025 were as follows:

(Unaudited)

(Unaudited)

Income for operations from IE segment for the three months ended March 31, 2026 was $10, compared to a breakeven in the same period in Fiscal 2025. Operating expense was increased from $548 for the three months ended March 31, 2025 to $583 for the three months ended March 31, 2026. While revenue increased during the period, income from operations did not increase proportionately due to the higher proportion of lower-margin sales during the period. In addition, the prior-year period included a gain on fixed assets that did not recur in the current period.

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Comparison of the Nine Months Ended March 31, 2026, and March 31, 2025

The following table sets forth certain consolidated statements of income data as a percentage of revenue for the nine months ended March 31, 2026 and 2025 respectively:

Overall Gross Margin

Overall gross margin as a percentage of revenue decreased by 9.3% to 16.0% for the nine months ended March 31, 2026, from 25.3% for the same period of Fiscal 2025. Gross profits increased by $1,122 to $7,638 for the nine months ended March 31, 2026, from $6,516 for the same period in Fiscal 2025.

Gross profit margin as a percentage of revenue in the SBS segment decreased by 12.6% to 14.8% for the nine months ended March 31, 2026, as compared to 27.4% for the same period in Fiscal 2025. In absolute dollar amounts, gross profit in the SBS segment for the nine months ended March 31, 2026, was $5,460, an increase of $488, compared to $4,972 in the same period in Fiscal 2025.

During the nine-month period ended March 31, 2026, the SBS segment experienced a notable decline in gross profit margins attributable to its China operations, primarily due to reduced revenue contributions compared to the same period in Fiscal 2025. Gross profit from China declined by approximately 84.1% for the nine months ended March 31, 2026 compared to the same period in the prior year.

While revenue from markets outside China showed an upward trend, the associated margins remained relatively compressed. The incremental revenue relating to final testing services that commenced in the final month of the first quarter was derived from new service streams that required no capital investment and carried a lower risk profile, resulting in lower gross profit margins. As final testing services continue to represent a greater proportion of SBS segment revenue, gross profit margins are expected to remain below historical levels. Nevertheless, the additional revenue is anticipated to improve overall profitability in absolute dollar terms.

Gross profit margin as a percentage of revenue in the IE segment remained unchanged of 20.5% for the nine months ended March 31, 2026 and 2025. In absolute dollar amounts, gross profit in the IE segment for the nine months ended March 31, 2026, was $2,206, indicating an increase of $634, compared to $1,572 in the same period in Fiscal 2025 mainly attributed by improved sales performance of aerospace-related products and higher component sales.

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Operating Expense

Operating expense for the nine months ended March 31, 2026 and 2025 was as follows:

(Unaudited)

(Unaudited)

General and administrative expense increased by $648, or 10.8%, from $5,996 to $6,644 for the nine months ended March 31, 2026, compared to the same period in Fiscal 2025. General and administrative expense increased primarily due to increased corporate costs related to corporate activities, stock option expense and higher personnel-related costs within the SBS and IE segments associated with headcount growth. In addition, general and administrative expense was also further impacted by the expected credit loss provisions recognized during the period related to the IE segment.

Selling expense increased by $91, or 16.8%, from $542 to $633 for the nine months ended March 31, 2026, compared to the same period in Fiscal 2025. The increase in selling expense was primarily attributable to an increase in commissionable sales in both the SBS and IE segments.

Income / (Loss) from Operations

Income from operations was $62 for the nine months ended March 31, 2026, an increase of $275, as compared to loss from operations of $213 for the same period in Fiscal 2025. As discussed above, revenues in the SBS and IE segments increased during the period. Operating income increased primarily due to improved performance in the SBS segment, partially offset by compressed gross profit margins associated with the lower-risk nature of sales, higher operating expenses in the SBS operations, and also decreased demand in China. The IE segment also contributed to the increase, driven by improved sales performance of aerospace-related products and higher component sales.

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Interest Expense

Interest expense for the nine months ended March 31, 2026 and 2025 was as follows:

(Unaudited)

(Unaudited)

Interest expense was $41 for the nine months ended March 31, 2026, an increase of $5, or 13.9%, compared to $36 for the same period of Fiscal 2025. As of March 31, 2026, The Company had an unused line of credit of $6,124 as compared to $5,797 as at March 31, 2025.

Other Income

Other Income for the nine months ended March 31, 2026 and 2025 was as follows:

(Unaudited)

(Unaudited)

There was an increase of $433 in other income to $610 for the nine months ended March 31, 2026 as compared to other income of $177 for the same period in Fiscal 2025. The increase was mainly due to dividend income received by Prestal Sdn. Bhd., one of the Company’s subsidiaries, from an investment of unquoted shares amounting to $371 and also lower foreign exchange impact. The upsurge was partially offset by lower interest income, reflecting reduced fixed deposit placements for operating requirements and lower interest rates.

Government Grant

(Unaudited)

(Unaudited)

In the nine months ended March 31, 2026, the Company received government grants amounting to $15, $13 consisting of an incentive from the Singapore government for local resident recruitment, and $2 related to a capital expenditure subsidy received from the government in China.

During the same period in Fiscal 2025, the Company received government grants amounting to $93, $81 consisting of an incentive from the Singapore government for local resident recruitment, and $12 related to a capital expenditure subsidy received from the government in China.

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Income Tax Expense

The Company's income tax expense was $287 and $196 for the nine months ended March 31, 2026, and 2025, respectively. Income tax expense increased primarily due to higher GILTI expenses and withholding taxes.

Non-controlling Interest

As of March 31, 2026, we held a 55% interest in SHI International Pte. Ltd. and 76% interest in Prestal Enterprise Sdn. Bhd. The share of non-controlling interest in the net income from the subsidiaries for the nine months ended March 31, 2026 was $254 compared to the share of income from the non-controlling interest of $54 for the same period in Fiscal 2025. The increase in net income shared by non-controlling interest in the subsidiaries was attributable to the increase in net income generated by the Company.

The Company received the required approval from the Ministry of Investment, Trade and Industry in Malaysia, and the acquisition of the remaining shares in Trio-Tech Malaysia (“TTM”) was consummated on December 3, 2025. The purchase price for the acquisition was RM14,200, payable in cash, or approximately $3,503. Upon consummation of the transaction, the Company, through Trio-Tech Singapore, acquired the remaining equity interest and now owns 100% of the issued and outstanding share capital of TTM. Accordingly, the Company recognized the non-controlling interest’s share of profits through the acquisition date, and no non-controlling interest will be recognized in subsequent periods.

During the second quarter of fiscal 2026, it was identified that PT SHI Indonesia, a dormant entity that was 95% owned by SHI International Pte Ltd has been dissolved and this dissolution did not have a material impact on the Company's consolidated financial statements.

Net Income / (Loss) Attributable to Trio-Tech International Common Shareholders

Net income attributable to Company’s common shareholders was $165 for the nine months ended March 31, 2026, compared to a net loss of $224 for the same period in Fiscal 2025.

Earnings / (Loss) per Share

Basic earnings per share from continuing operations were $0.02 for nine months ended March 31, 2026 as compared to basic loss per share of $0.03 for the same period in Fiscal 2025. Basic earnings per share from discontinued operations were $nil for nine months ended March 31, 2026 and March 31, 2025.

Diluted earnings per share from continuing operations were $0.02 for nine months ended March 31, 2026 as compared to diluted loss per share of $0.03 for the same period in Fiscal 2025. Diluted earnings per share from discontinued operations were $nil for nine months ended March 31, 2026 and March 31, 2025.

Segment Information

The revenue, gross margin, and income from operations for each segment for the six months ended March 31, 2026 and March 31, 2025 are presented below. As the revenue and gross margin for each segment were discussed in the previous section, only the comparison of income from operations is discussed below.

Semiconductor Back-end Solutions (SBS)

The revenue, gross margin and income from operations for the SBS segment for the nine months ended March 31, 2026 and 2025 were as follows:

(Unaudited)

(Unaudited)

Income from operations from the SBS segment was $407 compared to income from operations of $271 in the same period in Fiscal 2025. The increase was primarily attributable to the higher gross profit generated from increased revenue, primarily driven by incremental revenue from final testing services that commenced in the final month of the first quarter. These revenues were generated from new service streams that required no capital investment and carried a lower risk profile, which resulted in lower gross profit margins. In addition, results in China were adversely impacted by the prevailing macroeconomic environment and were more favorable during the nine months ended March 31, 2025 compared to the current nine-month period. As a result, gross profit margins were lower during the current period; however, absolute gross profit and income from operations improved due to the overall increase in revenue.

Operating expense increased from $4,701 for the nine months ended March 31, 2025 to $5,053 for the nine months ended March 31, 2026. This increase of $352 in operating expense was primarily driven by increase in personnel-related costs in Malaysia and Singapore operations to support the business growth.

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Industrial Electronics (IE)

The revenue, gross margin, and income / (loss) from operations for the IE segment for the nine months ended March 31, 2026 and 2025 were as follows:

(Unaudited)

(Unaudited)

Income for operations from IE segment for the nine months ended March 31, 2026 was $226, an increase of $256 from loss from operations of $30 in the same period in Fiscal 2025. The increase was mainly attributable to an increase in revenue and gross profit in absolute dollar amounts. Operating expense increased from $1,602 for the nine months ended March 31, 2025 to $1,980 for the nine months ended March 31, 2026. The increase was primarily due to higher personnel-related costs associated with headcount growth, higher selling expenses derived from commissionable sales, as well as expected credit loss provisions recognized during the period. The improvement in gross profit more than offset higher operating expense, resulting in increased operating income compared to nine months ended March 31, 2025.

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Financial Condition

During the nine months ended March 31, 2026 total assets increased by $3,647 to $44,715 compared to $41,068 as of June 30, 2025. The increase was primarily due to an increase in cash and cash equivalents. trade accounts receivable, inventories and prepaid expense, which was partially offset by a decrease in short-term deposits.

Cash and cash equivalents and short-term deposits were $15,528 at March 31, 2026, reflecting a decrease of $1,179 from $16,707 at June 30, 2025. The decrease was primarily due to payments made to acquire a minority interest in the Company's Malaysia operations, which more than offset the cash generated from operating activities during the period.

The trade accounts receivable balance as of March 31, 2026 increased by $2,582 to $13,386, from $10,804 at June 30, 2025, primarily reflecting higher overall revenue across both segments between June 30, 2025 and March 31, 2026. The overall increase in trade receivables was primarily attributable to higher sales from the Company’s Malaysia and Singapore operations during the current quarter. The number of days’ sales outstanding in trade receivables for group decreased in current quarter to 69 days from 106 days at June 30, 2025.

Other receivables at March 31, 2026, were $511, a decrease of $97, compared to $608 at June 30, 2025. The decrease was primarily attributable to lower advance payments made to suppliers for goods and services in the Company’s Singapore operations.

Inventories at March 31, 2026, were $2,472, an increase of $210, compared to $2,262 at June 30, 2025. The increase in inventories was primarily attributable to higher backlog levels in the Company’s Singapore and Malaysia operations to support ongoing order fulfillment.

Prepaid expense increased to $555 as of March 31, 2026 from $384 as of June 30, 2025, and primarily related to insurance, rental and software license fees.

Investment properties’ net in China was $305 at March 31, 2026 and $345 at June 30, 2025. The decrease was primarily driven by the depreciation charged and foreign currency exchange movement between June 30, 2025 and March 31, 2026.

Property, plant and equipment decreased by $27 from $6,021 at June 30, 2025, to $5,994 at March 31, 2026, mainly due to depreciation charged for the period and foreign currency movements between June 30, 2025 to March 31, 2026 in spite of acquisition of machinery and equipment in the current quarter attributable to the Company's operation in Malaysia.

Other assets increased by $13 to $244 at March 31, 2026 compared to $231 at June 30, 2025. This was primarily due to rental deposit and foreign currency exchange movement between June 30, 2025 and March 31, 2026.

Accounts payable increased by $3,802 to $5,698 at March 31, 2026, compared to $1,896 at June 30, 2025. The increase in trade payables during the quarter was aligned with increased revenue in the Company’s Malaysia and Singapore operations and was driven by higher supplier purchases to support growing operations.

Contract liabilities decreased by $158 to $92 at March 31, 2026 as compared to $250 at June 30, 2025. The decrease in contract liabilities was primarily attributable to lower customer deposits from our operations in Singapore.

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Bank loans payable decreased by $169 to $515 as of March 31, 2026, as compared to $684 as of June 30, 2025. The decrease was primarily attributable to scheduled debt repayments, no new borrowing activity during the period and the impact of foreign currency exchange movements between June 30, 2025 and March 31, 2026.

Finance leases decreased by $42 to $1 at March 31, 2026, as compared to $43 at June 30, 2025. This was due to the lease repayments, with no new lease additions during the period between June 30, 2025 and March 31, 2026.

Operating lease right-of-use assets and the corresponding lease liability increased by $2,006 to $2,870 at March 31, 2026, as compared to $864 at June 30, 2025. The increase was primarily attributable to the commencement of new lease and also a lease renewal during the current financial year in the Company’s Singapore operations.

Liquidity Comparison

Net cash provided by operating activities increased by $1,283 to an inflow of $2,318 for the nine months ended March 31, 2026, from an inflow of $1,035 for the same period in Fiscal 2025. The increase was primarily attributable to favorable changes in working capital of approximately $1,218 and also improved operating performance, as the Company generated net income during the current period compared to a net loss in the prior-year period. The favorable working capital changes were primarily driven by an increase in accounts payable, accrued liabilities and contract liabilities of approximately $5,814, partially offset by an increase in trade receivables of approximately $4,430, resulting from higher revenue levels and the timing of customer collections.

Net cash provided by investing activities was $1,965 for the nine months ended March 31, 2026 an increase of $2,064 compared to net cash used in investing activities of $99 for the same period in Fiscal 2025. This was primarily due to a higher net withdrawal from unrestricted term deposits upon maturity for the nine months ended March 31, 2026, and were held in cash to fund the upcoming operational expansion and capital requirements.

Net cash used in financing activities for the nine months ended March 31, 2026, was $3,035, representing an increase of $2,939, compared to cash outflows of $96 during the nine months ended March 31, 2025. The outflow of cash in financing activities was mainly attributable to the acquisition of non-controlling interest in a foreign subsidiary. This was partially offset by proceeds from exercising stock options of $888 and proceeds from lines of credit of $ 856 in the nine months period ended March 31, 2026. The outstanding balance under lines of credit totaling of $1,003 was fully repaid, as of March 31, 2026.

The Company filed a shelf registration statement with the Securities and Exchange Commission ("SEC"), pursuant to which we may raise capital of up to $50 million in any combination of securities including Common Stock, warrants and units, for certain capital expenditures, to finance possible acquisitions, to increase ownership or purchase the remaining equity in subsidiaries partially owned by the Company, and/or for general corporate purposes, including working capital.

Subsequent to March 31, 2026, on April 24, 2026, the Company entered into a securities purchase agreement with certain purchasers, pursuant to which the Company agreed to sell an aggregate of 1,052,632 shares of its Common Stock in a registered direct offering at a purchase price of $9.50 per share, utilizing the shelf registration statement filed with the SEC (the “Offering”). The Offering closed on April 27, 2026, resulting in aggregate gross proceeds of approximately $10.0 million, before deducting placement agent commissions and other Offering-related expenses. The Company intends to use the net proceeds for working capital and general corporate purposes.

An evaluation was carried out by the Company’s Chief Executive Officer and Chief Financial Officer of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934, as amended) as March 31, 2026, the end of the period covered by this Form 10-Q. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that these disclosure controls and procedures were effective at a reasonable level.

Changes in Internal Control Over Financial Reporting

There has been no change in the Company’s internal control over financial reporting during the fiscal quarter ended March 31, 2026, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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TRIO-TECH INTERNATIONAL