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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
 For the fiscal year ended June 30, 2006
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
 For the Transition Period from  to
 Commission File Number 1-14523
 TRIO-TECH INTERNATIONAL
  California
    
    95-2086631(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification Number)14731 Califa StreetVan Nuys, California
    
    91411(Address of principal executive offices)
    
    (Zip Code)
 818-787-7000
  Name of each exchangeTitle of each class
    
    On which registeredCommon Stock, no par value
    
    AMEX
 
 o þ
 o þ
 þ o
 o
  o o þ
 o þ




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##### 



TRIO-TECH INTERNATIONAL
 INDEX
 PagePart IItem 1
    
    Business
    
    
    3Item 1A
    
    Risk factors
    
    
    8Item 1B
    
    Unresolved staff comments
    
    
    11Item 2
    
    Properties
    
    
    12Item 3
    
    Legal Proceedings
    
    
    13Item 4
    
    Submission of matters to a vote of security holders
    
    
    13Part IIItem 5
    
    Market for registrants common equity, related stockholder matters and Issuer Purchases of Equity Securities
    
    
    14Item 6
    
    Selected financial data
    
    
    15Item 7
    
    Managements discussion and analysis of financial condition and results of operations
    
    
    16Item 7A
    
    Quantitative and qualitative disclosures about market risk
    
    
    33Item 8
    
    Financial statements and supplementary data
    
    
    34Item 9
    
    Changes in and disagreements with accountants on accounting and financial disclosure
    
    
    34Item 9A
    
    Controls and Procedures
    
    
    34Item 9B
    
    Other Information
    
    
    34Part IIIItem 10
    
    Directors and executive officers of the registrantItem 11
    
    Executive compensationItem 12
    
    Security ownership of certain beneficial owners and management and related stockholder mattersItem 13
    
    Certain relationships and related transactionsItem 14
    
    Principal Accountant Fees and ServicesPart IVItem 15
    
    Exhibits and Financial Statement Schedules
    
    
    35Signatures
    
    
    
    
    39Exhibits
    
    
    
    
    40Report of Independent Registered Public Accounting Firm
    
    
    44Consolidated Balance Sheets as of June 30, 2006 and 2005
    
    
    45Consolidated Statements of Operations and Comprehensive Income (Loss) for the Years Ended June 30, 2006, 2005 and 2004
    
    
    46Consolidated Statements of Shareholders Equity for the Years Ended June 30, 2006, 2005 and 2004
    
    
    48Consolidated Statements of Cash Flows for the Years Ended June 30, 2006, 2005 and 2004
    
    
    49Notes to Consolidated Financial Statements
    
    
    51
  2




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NOTE CONCERNING FORWARD-LOOKING STATEMENTS
   
 ITEM 1  BUSINESS (IN THOURSANDS, EXCEPT PERCENTAGES AND SHARE AMOUNTS)
   General
     3




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Company History
 1958
    
    Incorporated in California.1976
    
    The Company formed Trio-Tech International Pte. Ltd. in Singapore.1984
    
    The Company formed the European Electronic Test Center (EETC), a Cayman Islands domiciled subsidiary, to operate a test facility in Dublin, Ireland.1985
    
    The Companys Singapore subsidiary entered into a joint-venture agreement, Trio-Tech Malaysia, to operate a test facility in Penang.1986
    
    Trio-Tech International listed on the NASDAQ Small Cap market under the symbol TRTC.1988
    
    The Company acquired the Rotating Test Equipment Product Line of Genisco Technology Corporation.1990
    
    Trio-Tech International acquired Express Test Corporation in California.Trio-Tech Malaysia opened a new facility in Kuala Lumpur.1992
    
    Trio-Tech Singapore opened Trio-Tech Bangkok, Thailand.Trio-Tech Singapore achieved ISO 9002 certification.1994
    
    Trio-Tech Malaysia started a new components assembly operation in Batang Kali.1995
    
    Trio-Tech Singapore achieved ISO 9001 certification.1997
    
    In November 1997, the Company acquired KTS Incorporated, dba Universal Systems of Campbell, California.1998
    
    In September 1998, the Company listed on AMEX under the symbol TRT.2000
    
    Trio-Tech Singapore achieved QS 9000 certification.Trio-Tech Malaysia closed its facility in Batang Kali.2001
    
    The Company divested the Rotating Test Equipment Product Line.Trio-Tech Malaysia closed its facility in Kuala Lumpur.2003
    
    Trio-Tech Singapore opened a sales office in China known as Trio-Tech (Suzhou) Co. Ltd.Trio-Tech Malaysia scaled down its facility in Penang.2004
    
    The Company moved its Wet Process Station manufacturing from Campbell, California to Singapore.Trio-Tech Test Services Pte. Ltd. was renamed Universal (Far East) Pte. Ltd.Trio-Tech Malaysia acquired a burn-in testing division in Petaling Jaya.2005
    
    Trio-Tech Singapore, Trio-Tech Malaysia and Trio-Tech Bangkok achieved ISO 9001, 2000 certification.Trio-Tech Singapore, Trio-Tech Malaysia and Trio-Tech Bangkok achieved ISO/TS16949, 2002 certification.Trio-Tech Ireland closed its
facility in Ireland.2006
    
    Trio-Tech Singapore acquired a burn-in testing company in Shanghai and changed its name to Trio-Tech (Shanghai) Co. Ltd.
 Background
  4




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Front-End Products
 Wet Process Stations
  Artic Temperature Controlled Wafer Chucks
 ° °
 Back-End Products
 Autoclaves and HAST (Highly Accelerated Stress Test) Equipment
  5




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Burn-in Equipment and Boards
     Component Centrifuges and Leak Detection Equipment
      Product Research and Development
   6




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Marketing, Distribution and Services
    Backlog
  June 30,
    
    
    June 30,2006
    
    
    2005Manufacturing backlog
    
    $
    3,729
    
    
    $
    882Testing service backlog
    
    
    12,030
    
    
    
    7,384Distribution backlog
    
    
    535
    
    
    
    1,099$
    16,294
    
    
    $
    9,365
  Materials and Supply
  Competition
  7




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Patents
   Employees
  
 ITEM 1A  RISK FACTORS
  8




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Our operating results are affected by a variety of factors
  
    
    economic and market conditions in the semiconductor industry;
    
    market acceptance of our products and services;
    
    changes in technology in the semiconductor industry, which could affect demand for our products and services;
    
    changes in testing processes;
    
    the impact of competition;
    
    the lack of long-term purchase or supply agreements with customers and vendors;
    
    changes in military or commercial testing specifications, which could affect the market
for our products and services;
    
    difficulties in profitably integrating acquired businesses, if any, into the Company;
    
    the loss of key personnel or the shortage of available skilled employees;
    
    international political or economic events
    
    currency fluctuations; and
    
    other technological, economic, financial and regulatory factors beyond our control.
  Semiconductor industry cycles affect our business
   Rapid technological changes may make our products obsolete or result in decreased prices or increased expenses
  9




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Our dependence on international sales involves significant risk
  We may incur losses due to foreign currency fluctuations
   We do not rely on patents to protect our products or technology
  Intense competition can adversely affect our operating results
  Loss, reduction or delay of orders from significant customers could adversely affect our financial
condition
  There is a limited market for our testing products and services
  10




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##### Table of Contents



Acquisition and integration of new businesses could disrupt our ongoing business, distract
management and employees, increase our expenses and adversely affect our business
  We do not have contracts with key suppliers
  We are highly dependent on key personnel
  Our management has significant influence over corporate decisions
  We may not pay cash dividends in the near future
  The market price for our common stock is subject to fluctuation
  
 ITEM 1B-UNRESOLVED STAFF COMMENTS
  11




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ITEM 2  PROPERTIES
   Owned (O)Approx.
    
    
    or Leased (L)Sq. Ft.
    
    
    & ExpirationLocation
    
    Principal Use/Segment
    
    Occupied
    
    
    Date14731 Califa Street
    
    Headquarters/
    
    
    10,000
    
    
    (L) Jan. 2008Van Nuys, CA 9l411
    
    Testing/Manufacturing1004, Toa Payoh North, SingaporeHEX 07-01/07,
    
    Testing
    
    
    6,864
    
    
    (L) Sept. 2006*1HEX 03-01/03,
    
    Testing/Manufacturing
    
    
    2,959
    
    
    (L) Sept. 2006*1HEX 03-16/17,
    
    Testing
    
    
    976
    
    
    (L) Sept. 2006*1HEX 01-08/15
    
    Testing/Manufacturing
    
    
    6,864
    
    
    (L) Jan. 2009HEX 01-16/17
    
    Testing
    
    
    1,983
    
    
    (L) Jan. 2009HEX 02-08/10,
    
    Testing
    
    
    2,959
    
    
    (L) Aug. 2008HEX 02-11/15
    
    Testing
    
    
    3,905
    
    
    (L) Apr. 2008HEX 04-17
    
    Testing
    
    
    1,006
    
    
    (L) May. 2007HEX 04-14/16
    
    Testing
    
    
    2,929
    
    
    (L) May. 2007HEX 03-08/10
    
    Testing
    
    
    2,959
    
    
    (L) May. 2007HEX 01/07-R1/R2
    
    Testing
    
    
    710
    
    
    (L) Sept. 2006*1HEX 03-06/07
    
    Testing/Manufacturing
    
    
    1,953
    
    
    (L) Mar. 2009HEX 04-05/07
    
    Manufacturing
    
    
    2,929
    
    
    (L) May. 200938,9961008, Toa Payoh North, SingaporeHEX 03-01/06,
    
    Testing
    
    
    7,345
    
    
    (L) Feb. 2009HEX 03-09/17,
    
    Logistics/Universal (FE)
    
    
    6,099
    
    
    (L) Jan. 2009HEX 07-17/18,
    
    Testing
    
    
    4,315
    
    
    (L) Nov. 2006*1HEX 07-01,
    
    Testing
    
    
    3,466
    
    
    (L) Jan. 2007HEX 02-17
    
    Universal (FE)
    
    
    832
    
    
    (L) Jun. 2007HEX 02-15/16
    
    Universal (FE)
    
    
    1,400
    
    
    (L) Jul. 2007HEX 01-09/11
    
    Universal (FE)
    
    
    2,202
    
    
    (L) Nov.2007. 2002009HEX 01-15/16
    
    Universal (FE)
    
    
    1,400
    
    
    (L) Oct. 2008HEX 03-07/08
    
    Testing
    
    
    1,765
    
    
    (L) Nov. 2007HEX 01-S3/S4
    
    Power Substation
    
    
    1,627
    
    
    (L) Sept. 2006*1Plot 1A, Phase 1
    
    Subleased
    
    
    42,013
    
    
    (O) *2Bayan Lepas Free Trade Zone11900 PenangLot No. B7, Kawasan MIEL
    
    Vacant
    
    
    24,142
    
    
    (O) *3Batang Kali, Phase II,43300 Batang KaliSelangor Darul Ehsan, MalaysiaLot No. 11A, Jalan SS8/2,
    
    Testing
    
    
    19,334
    
    
    (L) Jul. 2007Sungai Way Free Industrial Zone,47300 Petaling Jaya,Selangor Darul Ehsan, MalaysiaLot No. 4, Kawasan MIEL
    
    Testing
    
    
    14,432
    
    
    (L) Nov. 2007Sungai Way Baru Free Industrial
Zone, Phase III,Selangor Darul Ehsan, Malaysia
 12




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Owned (O)Approx.
    
    
    or Leased (L)Sq. Ft.
    
    
    & ExpirationLocation
    
    Principal Use/Segment
    
    Occupied
    
    
    Date327, Chalongkrung Road,
    
    Testing
    
    
    34,432
    
    
    (O)Lamplathew, Lat Krabang,Bangkok 10520, ThailandNo. 5, Xing Han Street, Block B
    
    Testing
    
    
    560
    
    
    (L) Sept. 2007#05-01/02, Room 6Suzhou Industrial ParkChina 215021No. 389 Gang Ao Road Factory No. 5
    
    Testing
    
    
    6,620
    
    
    (L) Sept. 2007Level 5 (East) Waigaoqiao Free
Trade Zone, Pudong 200131
Shanghai, China
 
 *1
    
    With respect to the various leases that expire during fiscal 2006, the Company
anticipates that the landlord will offer similar terms on each such lease at renewal and does
not believe that material expenses will be incurred.*2
    
    The premises are subleased to a third party.*3
    
    The premises were vacant from June 30, 2005 until June 30, 2006. The Company plans to lease
or sell the property to a third party subsequent to the fiscal year. No agreement as to sale
has been entered into nor has any purchaser for the premises been specifically named. 
 ITEM 3 LEGAL PROCEEDINGS
    
 ITEM 4  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  13




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PART II
 
 ITEM 5
    
    MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
  Quarter Ended
    
    High
    
    LowFiscal 2005September 30, 2004
    
    $
    4.45
    
    
    $
    3.45December 31, 2004
    
    $
    4.98
    
    
    $
    3.25March 31, 2005
    
    $
    5.00
    
    
    $
    3.53June 30, 2005
    
    $
    4.00
    
    
    $
    3.50Fiscal 2006September 30, 2005
    
    $
    4.30
    
    
    $
    3.59December 31, 2005
    
    $
    6.00
    
    
    $
    4.28March 31, 2006
    
    $
    7.15
    
    
    $
    5.08June 30, 2006
    
    $
    7.55
    
    
    $
    6.00
    EQUITY COMPENSATION PLAN INFORMATION
 Number of securitiesremaining available forNumber of
    
    
    
    
    
    
    future issuance undersecurities to be
    
    
    
    
    
    
    equity compensationissued upon
    
    
    Weighted average
    
    
    plans (excludingexercise of
    
    
    exercise price of
    
    
    securities reflected inoutstanding options
    
    
    outstanding options
    
    
    column (a))Plan Category
    
    (a)
    
    
    (b)
    
    
    (c)Equity compensation plans approved
by shareholders(1) Companys 1998 Stock Option Plan
    
    
    28,885
    
    
    $
    2.97
    
    
    
    106,115(2) Directors Stock Option Plan
    
    
    
    
    
    $
    
    
    
    
    163,000Options granted outside of the above plans
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    28,885
    
    
    $
    2.97
    
    
    
    269,115
 14




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ITEM 6  SELECTED FINANCIAL DATA
  June 30,
    
    
    June 30,
    
    
    June 30,
    
    
    June 30,
    
    
    June 30,2006
    
    
    2005
    
    
    2004
    
    
    2003
    
    
    2002Consolidated Statements of OperationsNet sales
    
    $
    29,099
    (1)
    
    $
    25,061
    (2)
    
    $
    18,661
    
    
    $
    20,922
    
    
    $
    19,247Income (Loss) from
Operations
    
    
    487
    
    
    
    359
    
    
    
    56
    
    
    
    (101
    )
    
    
    (3,513
    )Net Income (Loss) from
Continuing Operations
    
    
    597
    
    
    
    216
    
    
    
    162
    
    
    
    51
    
    
    
    (3,497
    )Net Income (Loss) from
Discontinued Operations (3)
    
    
    8,459
    
    
    
    5
    
    
    
    58
    
    
    
    (132
    )
    
    
    (50
    )Total Net income (Loss)
    
    $
    9,056
    
    
    $
    221
    
    
    $
    220
    
    
    $
    (81
    )
    
    $
    (3,547
    )Basic Earnings (Loss) Per Share:Continuing Operations
    
    $
    0.19
    
    
    $
    0.07
    
    
    $
    0.06
    
    
    $
    0.02
    
    
    $
    (1.19
    )Discontinued Operations
    
    
    2.72
    
    
    
    0.00
    
    
    
    0.1
    
    
    
    (0.05
    )
    
    
    (0.02
    )Total Net Income (Loss)
    
    $
    2.91
    
    
    $
    0.07
    
    
    $
    0.07
    
    
    $
    (0.03
    )
    
    $
    (1.21
    )Diluted Earnings (Loss) Per Share:Continuing Operations
    
    $
    0.19
    
    
    $
    0.07
    
    
    $
    0.05
    
    
    $
    0.02
    
    
    $
    (1.19
    )Discontinued Operations
    
    
    2.71
    
    
    
    0.00
    
    
    
    0.02
    
    
    
    (0.05
    )
    
    
    (0.02
    )Total Net Income (Loss)
    
    $
    2.90
    
    
    $
    0.07
    
    
    $
    0.07
    
    
    $
    (0.03
    )
    
    $
    (1.21
    )Weighted average common
shares outstandingBasic
    
    
    3,115
    
    
    
    2,966
    
    
    
    2,937
    
    
    
    2,928
    
    
    
    2,928Diluted
    
    
    3,128
    
    
    
    3,031
    
    
    
    2,995
    
    
    
    2,928
    
    
    
    2,928Consolidated Balance SheetsCurrent assets
    
    $
    21,831
    
    
    $
    10,645
    
    
    $
    12,798
    
    
    $
    11,493
    
    
    $
    13,405Current liabilities
    
    
    8,536
    
    
    
    5,836
    
    
    
    5,624
    
    
    
    5,050
    
    
    
    6,918Working capital
    
    
    13,295
    
    
    
    4,809
    
    
    
    7,174
    
    
    
    6,443
    
    
    
    6,487Total assets
    
    $
    29,384
    
    
    $
    18,345
    
    
    $
    18,000
    
    
    $
    16,711
    
    
    $
    19,075Long-term debt and
capital leases
    
    $
    874
    
    
    $
    744
    
    
    $
    793
    
    
    $
    836
    
    
    $
    986Shareholders equity
    
    $
    17,392
    
    
    $
    9,297
    
    
    $
    9,024
    
    
    $
    8,590
    
    
    $
    8,618Cash dividend paid per share
    
    $
    0.50
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
 
 (1)
    
    The net sales included the sales from the newly acquired business in Shanghai.(2)
    
    The net sales included the sales from the business acquired in Malaysia.(3)
    
    The income from the discontinued operations was significant in fiscal 2006. However, the
company does not expect income from discontinued operations in the future. 15




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##### Table of Contents



ITEM 7  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (IN THOUSANDS, EXCEPT PERCENTAGES AND SHARE AMOUNTS)
 The discussions of Trio-Tech Internationals (the Company) business and activities set forth
in this Form 10-K and in other past and future reports and announcements by the Company may contain
forward-looking statements within 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
statement 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 Southeast Asia,
including currency fluctuations and devaluation, currency restrictions, local laws and
restrictions, and possible social, political and economic instability; and other economic,
financial and regulatory factors beyond the Companys control. See the discussions elsewhere in
this Form 10-K for more information. 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.
 We undertake no obligation to update forward-looking statements to reflect subsequent events,
changed circumstances, or the occurrence of unanticipated events.
 Overview
      16




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Purchase price (paid in cash)
    
    $
    153Property, plant and equipmentPlant and equipment
    
    $
    121Office equipment
    
    
    6Motor vehicle
    
    
    6Subtotal
    
    
    133Other receivables
    
    
    8Total fair value of tangible assets acquired
    
    $
    141Identifiable intangible asset  customer relationship
    
    
    12Purchase price
    
    $
    153
 Critical Accounting Estimates & Policies
   Accounts Receivable and Allowance for Doubtful Accounts
   Inventory Valuation
  17




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Revenue Recognition
   Income Tax
     Impairment of Long-Lived Assets
  18




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Executive Summary
   
    
    We closed our operation in Ireland in November 2005;
    
    We acquired a testing business in Shanghai, China in
January 2006; and
    
    We distributed a cash dividend of $0.50 per share, totaling $1,608 distributed.
  
    
    We acquired a testing business in Malaysia in July 2004.
 General Financial Information
         19




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Comparison of Operation Results
 Comparison of Fiscal 2006 and 2005
  2006
    
    2005Net Sales
    
    
    100.0
    %
    
    
    100.0
    %Cost of Sales
    
    
    72.7
    %
    
    
    75.9
    %Gross Margin
    
    
    27.3
    %
    
    
    24.1
    %Operating ExpensesGeneral and administrative
    
    
    21.7
    %
    
    
    17.8
    %Selling
    
    
    3.3
    %
    
    
    4.2
    %Research and development
    
    
    0.2
    %
    
    
    0.4
    %Impairment Loss
    
    
    0.2
    %
    
    
    0.3
    %Loss (Gain) on disposal of PP&E
    
    
    0.1
    %
    
    
    0.0
    %Total Operating Expenses
    
    
    25.5
    %
    
    
    22.7
    %Income from operations
    
    
    1.8
    %
    
    
    1.4
    %
 Overall Revenue
  Years Ended June 30,2006
    
    2005Revenues:Manufacturing
    
    
    42.77
    %
    
    
    42.62
    %Testing
    
    
    49.67
    
    
    
    45.12Distribution
    
    
    7.56
    
    
    
    12.26Total
    
    
    100.00
    %
    
    
    100.00
    %
     20




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##### Table of Contents



Overall Gross Margin
     21




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##### Table of Contents



Operating Expenses
  (In Thousands)
    
    2006
    
    
    2005General and administrative
    
    $
    6,321
    
    
    $
    4,466Selling
    
    $
    970
    
    
    $
    1,058Research and development
    
    $
    70
    
    
    $
    93Impairment loss
    
    $
    61
    
    
    $
    70Loss on disposal of PP&E
    
    $
    22
    
    
    $
    1$
    7,444
    
    
    $
    5,688
      Income from Operations
  Interest Expense
  (In Thousands)
    
    Fiscal 2006
    
    Fiscal 2005Interest expense
    
    $
    142
    
    
    $
    165
  Other Income
  (In Thousands)
    
    Fiscal 2006
    
    Fiscal 2005Other income
    
    $
    598
    
    
    $
    182
 ,
 22




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##### Table of Contents



Income Tax
  Income from Discontinued Operations
  Net Income
 
 Earnings per Share
  Segment Information
  Manufacturing Segment
 Manufacturing Segment(In Thousands)
    
    Fiscal 2006
    
    Fiscal 2005Revenue
    
    $
    12,444
    
    
    $
    10,681Gross margin
    
    
    19.2
    %
    
    
    15.3
    %Loss from operations
    
    $
    (78
    )
    
    $
    (108
    )
  23




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##### Table of Contents



Testing Segment
 Testing Segment(In Thousands)
    
    Fiscal 2006
    
    Fiscal 2005Revenue
    
    $
    14,455
    
    
    $
    11,307Gross margin
    
    
    35.2
    %
    
    
    32.0
    %Income from operations
    
    $
    1,454
    
    
    $
    540
  Distribution Segment
 Distribution Segment(In Thousands)
    
    Fiscal 2006
    
    Fiscal 2005Revenue
    
    $
    2,200
    
    
    $
    3,073Gross margin
    
    
    20.7
    %
    
    
    25.8
    %Loss from operations
    
    $
    (118
    )
    
    $
    (80
    )
  Corporate
  (In Thousands)
    
    Fiscal 2006
    
    Fiscal 2005Income (Loss) from operations
    
    $
    (771
    )
    
    $
    7
  24




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##### Table of Contents



Comparison of Fiscal 2005 and 2004
  Overall Net Sales and Gross Margin
 2005
    
    2004Net Sales
    
    
    100.0
    %
    
    
    100.0
    %Cost of Sales
    
    
    75.9
    %
    
    
    75.2
    %Gross Margin
    
    
    24.1
    %
    
    
    24.8
    %Operating ExpensesGeneral and administrative
    
    
    17.8
    %
    
    
    19.3
    %Selling
    
    
    4.2
    %
    
    
    4.7
    %Research and development
    
    
    0.4
    %
    
    
    0.6
    %Impairment Loss
    
    
    0.3
    %
    
    
    0.0
    %Loss (Gain) on disposal of PP&E
    
    
    0.0
    %
    
    
    (0.2
    %)Total Operating Expenses
    
    
    22.7
    %
    
    
    24.4
    %Income from operations
    
    
    1.4
    %
    
    
    0.4
    %
 Overall Revenue
  Years Ended June 30,2005
    
    2004Revenues:Manufacturing
    
    
    42.62
    %
    
    
    38.14
    %Testing
    
    
    45.12
    
    
    
    45.09Distribution
    
    
    12.26
    
    
    
    16.77Total
    
    
    100.00
    %
    
    
    100.00
    %
    25




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##### Table of Contents



Overall Gross Margin
     Operating Expenses
  (In Thousands)
    
    2005
    
    
    2004General and administrative
    
    $
    4,466
    
    
    $
    3,609Selling
    
    $
    1,058
    
    
    $
    875Research and development
    
    $
    93
    
    
    $
    117Impairment loss
    
    $
    70
    
    
    $
    4Loss (gain) on disposal of PP&E
    
    $
    1
    
    
    $
    (39
    )$
    5,688
    
    
    $
    4,566
 26




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##### Table of Contents



Income from operations
  27




---



##### Table of Contents



Interest Expense
  (In Thousands)
    
    2005
    
    2004Interest expense
    
    $
    (165
    )
    
    $
    (104
    )
  Other Income
  (In Thousands)
    
    2005
    
    2004Other income
    
    $
    182
    
    
    $
    257
  Income Tax
     Net Income
  28




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##### Table of Contents



Segment Information
 Manufacturing Segment
  (In Thousands)
    
    2005
    
    2004Revenue
    
    $
    10,681
    
    
    $
    7,117Gross margin
    
    
    15.3
    %
    
    
    19.3
    %Loss from operations
    
    $
    (108
    )
    
    $
    (207
    )
  Testing Segment
  (In Thousands)
    
    2005
    
    2004Revenue
    
    $
    11,307
    
    
    $
    8,414Gross margin
    
    
    32
    %
    
    
    29.9
    %Income from operations
    
    $
    540
    
    
    $
    287
  Distribution Segment
  (In Thousands)
    
    2005
    
    2004Revenue
    
    $
    3,073
    
    
    $
    3,130Gross margin
    
    
    25.8
    %
    
    
    23.2
    %Loss from operations
    
    $
    (80
    )
    
    $
    (27
    )
  29




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##### Table of Contents



Corporate
  (In Thousands)
    
    2005
    
    2004Income from operations
    
    $
    7
    
    
    $
    3
  Liquidity and Capital Resources
    Cash Flows Analysis
 Comparison of Fiscal 2006 and 2005
    30




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##### Table of Contents



Comparison of Fiscal 2005 and 2004
     Capital Resources
     31




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##### Table of Contents



Entity with
    
    Type of
    
    
    Interest
    
    
    Expiration
    
    
    Credit
    
    
    UnusedFacility
    
    Facility
    
    
    Rate
    
    
    Date
    
    
    Limitation
    
    
    CreditTrio-TechMalaysia
    
    Line of Credit
    
    Prime rate (7.5% as at June 30, 2006) plus 1% per annum
    
    May 2007
    
    $
    152
    
    
    $
    152Trio-TechBangkok
    
    Line of Credit
    
    Prime rate (7.5% as at June 30, 2006) plus 1% per annum
    
    October 2006
    
    
    63
    
    
    
    63Trio-TechSingapore
    
    Line of Credit
    
    See Note 8 to the financial statements
    
    See Note 8 to the financial statements
    
    
    9,220
    
    
    
    9,104Total
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,435
    
    
    
    9,319
  Contractual Obligations
  Payments Due by Period (at June 30, 2006)Less than
    
    
    1 - 3
    
    
    AfterTotal
    
    
    1 Year
    
    
    Years
    
    
    3 YearsLines of Credit
    
    $
    116
    
    
    $
    116
    
    
    $
    
    
    
    $
    Notes Payable
    
    
    1,500
    
    
    
    856
    
    
    
    644
    
    
    
    Interest on Notes
Payable
    
    $
    96
    
    
    
    68
    
    
    
    28
    
    
    
    Capital Leases
    
    
    336
    
    
    
    106
    
    
    
    230
    
    
    
    Operating Leases
    
    
    1,328
    
    
    
    767
    
    
    
    561
    
    
    
    Total
    
    $
    3,376
    
    
    $
    1,913
    
    
    $
    1,463
    
    
    $
    
 Corporate Guarantee Arrangement
  Recently Issued Accounting Pronouncements
   32




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##### Table of Contents



ITEM 7A  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Foreign Currency Exchange Rate Risk
   Interest Rate Risk
   Fiscal year ending June 30,
    
    2007
    
    
    2008
    
    
    2009
    
    
    Thereafter
    
    
    Total
    
    
    Fair ValueLoans:Denominated by Singapore dollars;
interest is at the banks
prime rate (5.75% at June 30,
2006 and 2005) plus 0.5% per annum
    
    $
    70
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    70
    
    
    $
    70Denominated by Singapore dollars;
interest rate fixed at 5.91%
    
    $
    23
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    23
    
    
    $
    23Denominated by Singapore dollars;
interest is at the banks
prime rate (4.25% at June 30,
2006 and 2005) plus 1% per annum
    
    $
    182
    
    
    $
    16
    
    
    
    
    
    
    
    
    
    
    $
    198
    
    
    $
    198Denominated by Singapore dollars;
interest is at the banks
prime rate (4.25% at June 30,
2006 and 2005) plus 1% per annum
    
    $
    204
    
    
    $
    142
    
    
    
    
    
    
    
    
    
    
    $
    345
    
    
    $
    346Denominated by Thailand baht;
interest is at the banks prime
rate (7.50% at June 30, 2006,
and 4.5% at June30, 2005)
    
    $
    63
    
    
    $
    32
    
    
    
    
    
    
    
    
    
    
    $
    95
    
    
    $
    95
 33




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##### Table of Contents



Fiscal year ending June 30,
    
    2007
    
    
    2008
    
    
    2009
    
    
    Thereafter
    
    
    Total
    
    
    Fair ValueDenominated by Singapore dollars;
interest is at the banks
prime rate (3.41% at June 30,
2006) plus 3.5% per annum
    
    $
    210
    
    
    $
    210
    
    
    $
    88
    
    
    
    
    
    
    $
    509
    
    
    $
    508Denominated by Singapore dollars;
interest is at the banks
prime rate (4.25% at June 30,
2006 and 2005) plus 1% per annum
    
    $
    104
    
    
    $
    110
    
    
    $
    46
    
    
    
    
    
    
    $
    260
    
    
    $
    260Subtotal
    
    $
    856
    
    
    $
    510
    
    
    $
    134134
    
    
    $
    
    
    
    $
    1,500
    
    
    $
    1,500Line of credit:Denominated by Singapore dollars;
interest is at the banks
prime rate (5.75% at June 30,
2006) plus 0.25% per annum
    
    $
    8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    8
    
    
    $
    8Denominated by Singapore dollars;
interest is at the banks
prime rate (4.25% at June 30,
2006) plus 1.25% per annum
    
    $
    108
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    108
    
    
    $
    108$
    116
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    116
    
    
    $
    116Total
    
    $
    972
    
    
    $
    510
    
    
    $
    134
    
    
    $
    
    
    
    $
    1,616
    
    
    $
    1,616
 
 ITEM 8  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
  
 ITEM 9  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
  
 ITEM 9A  CONTROLS AND PROCEDURES
  
 ITEM 9B  OTHER INFORMATION
  
 PART III
  34




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##### Table of Contents



PART IV
 
 ITEM 15  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
   1.
    
    Report of Independent Public Registered Accounting Firm2.
    
    Consolidated Balance Sheets3.
    
    Consolidated Statements of Income and Comprehensive (Loss) Income4.
    
    Consolidated Statements of Shareholders Equity5.
    
    Consolidated Statements of Cash Flows6.
    
    Notes to Consolidated Financial Statements
  Number
    
    Description3.1
    
    Articles of Incorporation, as currently in effect. [Incorporated by reference to Exhibit
3.1 to the Registrants Annual Report on Form 10-K for June 30, 1988.]3.2
    
    Bylaws, as currently in effect. [Incorporated by reference to Exhibit 3.2 to the
Registrants Annual Report on Form 10-K for June 30, 1988.]10.1
    
    Credit Facility Letter dated January 4, 2001, between Trio-Tech International Pte. Ltd. and
Standard Chartered Bank. [Incorporated by reference to Exhibit 10.9 to the
Registrants Annual Report on Form 10-K for June 30, 2001.]10.2
    
    1998 Stock Option Plan. [Incorporated by reference to Exhibit 1 to the Companys proxy
statement filed under regulation 14A on October 27, 1997.] **10.3
    
    Directors Stock Option Plan. [Incorporated by reference to Exhibit 2 to the Companys proxy
statement filed under regulation 14A on October 27, 1997.] **10.4
    
    Real Estate Lease dated February 1, 1999 between Martinvale Development Company and Universal
Systems. [Incorporated by reference to Exhibit 10.12 to the Registrants Annual Report on Form
10-K for June 30, 1999.]10.5
    
    Real Estate Lease dated February 16, 2001 between JTC Corporation and Trio-Tech International
Pte. Ltd. for Block 1004 Toa Payoh North #07-01/07 and #03-01/03. [Incorporated by reference
to Exhibit 10.13 to the Registrants Annual Report on Form 10-K for June 30, 2001.]10.6
    
    Real Estate Lease dated May 13, 1999 between JTC Corporation and Trio-Tech International Pte.
Ltd. for Block 1004 Toa Payoh North #03-16/17. [Incorporated by reference to Exhibit 10.14
to the Registrants Annual Report on Form 10-K for June 30, 2001.]10.7
    
    Real Estate Lease dated October 13, 1999 between JTC Corporation and Trio-Tech International
Pte. Ltd. for Block 1004 Toa Payoh North #01-08/15. [Incorporated by reference to Exhibit
10.15 to the Registrants Annual Report on Form 10-K for June 30, 2001.]10.8
    
    Real Estate Lease dated December 7, 2000 between JTC Corporation and Trio-Tech International
Pte. Ltd. for Block 1004 Toa Payoh North #01-16/17. [Incorporated by reference to Exhibit
10.16 to the Registrants Annual Report on Form 10-K for June 30, 2001.]10.9
    
    Real Estate Lease dated January 3, 2000 between JTC Corporation and Trio-Tech International
Pte. Ltd. for Block 1008 Toa Payoh North #03-01/06. [Incorporated by reference to Exhibit
10.17 to the Registrants Annual Report on Form 10-K for June 30, 2001.]
 35




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##### Table of Contents



Number
    
    Description10.10
    
    Real Estate Lease dated October 13, 1999 between JTC Corporation and Trio-Tech International
Pte. Ltd. for Block 1008 Toa Payoh North #03-09/15 and #03-16/18. [Incorporated by reference
to Exhibit 10.18 to the Registrants Annual Report on Form 10-K for June 30, 2001.]10.11
    
    Real Estate Lease dated May 2, 2000 between JTC Corporation and Trio-Tech International Pte.
Ltd. for Block 1008 Toa Payoh North #01-08. [Incorporated by reference to Exhibit 10.19 to
the Annual Report on Form 10-K for June 30, 2001.]10.12
    
    Real Estate Lease dated September 12, 2000 between JTC Corporation and Trio-Tech
International Pte. Ltd. for Block 1008 Toa Payoh North #07-17/18. [Incorporated by reference
to Exhibit 10.20 to the Registrants Annual Report on Form 10-K for June 30, 2001.]10.13
    
    Real Estate Lease dated October 30, 2000 between JTC Corporation and Trio-Tech International
Pte. Ltd. for Block 1008 Toa Payoh North #07-01. [Incorporated by reference to Exhibit 10.21
to the Registrants Annual Report on Form 10-K for June 30, 2001.]10.14
    
    Real Estate Lease dated February 26, 2002 between JTC Corporation and Trio-Tech
International Pte. Ltd. for Block 1004 Toa Payoh North #02-11/15. [Incorporated by reference
to Exhibit 10.14 to the Registrants Annual Report on Form 10-K for June 30, 2002.]10.15
    
    Real Estate Lease dated June 10, 2002 between JTC Corporation and Trio-Tech International
Pte. Ltd. for Block 1004 Toa Payoh North #02-08/10. [Incorporated by reference to Exhibit
10.15 to the Registrants Annual Report on Form 10-K for June 30, 2002.]10.16
    
    Credit Facility Letter dated November 16, 2001 and June 24, 2002, between Trio-Tech
International Pte. Ltd. and Standard Chartered Bank. [Incorporated by reference to Exhibit
10.16 to the Registrants Annual Report on Form 10-K for June 30, 2002.]10.17
    
    Credit Facility Letter dated July 24, 2002, between Trio-Tech International Pte. Ltd.
and OCBC Bank. [Incorporated by reference to Exhibit 10.17 to the Registrants Annual Report
on Form 10-K for June 30, 2002.]10.18
    
    Credit Facility Letter dated May 21, 2002, between Trio-Tech (M) Sdn Bhd and HSBC Bank
Malaysia Berhad. [Incorporated by reference to Exhibit 10.18 to the Registrants Annual Report
on Form 10-K for June 30, 2002.]10.19
    
    Credit Facility Letter dated January 22, 2002, between Trio-Tech (KL) Sdn Bhd and Public
Bank Berhad. [Incorporated by reference to Exhibit 10.19 to the Registrants Annual Report on
Form 10-K for June 30, 2002.]10.20
    
    Real Estate Lease dated November 8, 2001 between Elbar Investments, L.P. and Trio-Tech
International for 14731 Califa Street, Van Nuys. [Incorporated by reference to Exhibit 23.1 to
the Registrants Annual Report on Form 10-K for June 30, 2002.]10.21
    
    Amendment to the Directors Stock Option Plan [Incorporated by reference to Exhibit 10.21 to
the Registrants Annual Report on Form 10-K for June 30, 2002.] **10.22
    
    Credit Facility Letter dated January 28, 2003, between Trio-Tech (M) Sdn Bhd and HSBC Bank
Malaysia Berhad [Incorporated by reference to Exhibit 10.22 to the Registrants Annual Report
on Form 10-K for June 30, 2003.]10.23
    
    Credit Facility Letter dated September 20, 2002, between KTS Incorporated and Bank of
America. [Incorporated by reference to Exhibit 10.23 to the Registrants Annual Report on Form
10-K for June 30, 2003.]10.24
    
    Real Estate Lease dated January 12, 2001 between JTC Corporation and Trio-Tech
International Pte. Ltd. for Toa Payoh North #01-S3/S4. [Incorporated by reference to Exhibit
10.24 to the Registrants Annual Report on Form 10-K for June 30, 2003.]10.25
    
    Sales and Purchase Agreement, dated March 29, 2004 between TS Matrix BHD. and Trio Tech
(Malaysia) SDN BHD. [Incorporated by reference to Exhibit 99.1 to the Registrants Form 8-K
filed on July 15, 2004.]10.26
    
    Real Estate Sublease, dated July 1, 2004 between TS Matrix BHD. and Trio Tech (Malaysia)
SDN. BHD. for factory lot no. 11A Kawansan MIEL Sungai Way Baru (FTZ), Phase III Selangor
Darul Ehsan. [Incorporated by reference to Exhibit 10.1 to the Registrants Amended Form 8-K
filed on August 20, 2004.]
 36




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##### Table of Contents



Number
    
    Description10.27
    
    Real Estate Lease dated April 28, 2004 between JTC Corporation and Trio-Tech International
Pte. Ltd. for Block 1004 Toa Payoh North #04-14/16 and #04-17. [Incorporated by reference to
Exhibit 10.27 to the Registrants Annual Report on Form 10-K for June 30, 2004.]10.28
    
    Real Estate Lease dated April 28, 2004 between JTC Corporation and Trio-Tech
International Pte. Ltd. for Block 1004 Toa Payoh North #03-08/10. [Incorporated by reference
to Exhibit 10.28 to the Registrants Annual Report on Form 10-K for June 30, 2004.]10.29
    
    Real Estate Lease dated April 19, 2004 between JTC Corporation and Trio-Tech
International Pte. Ltd. for Block 1008 Toa Payoh North #02-17. [Incorporated by reference to
Exhibit 10.29 to the Registrants Annual Report on Form 10-K for June 30, 2004.]10.30
    
    Real Estate Lease dated May 26, 2004 between JTC Corporation and Trio-Tech International
Pte. Ltd. for Block 1008 Toa Payoh North #02-15/16. [Incorporated by reference to Exhibit
10.30 to the Registrants Annual Report on Form 10-K for June 30, 2004.]10.31
    
    Credit Facility Letter dated July 7, 2003, between Trio-Tech International Pte. Ltd, and
Hong Leong Finance Limited. [Incorporated by reference to Exhibit 10.31 to the Registrants
Annual Report on Form 10-K for June 30, 2004.]10.32
    
    Credit Facility Letter dated October 2, 2003, between Trio-Tech Bangkok and Kasikornbank
Public Company Limited. [Incorporated by reference to Exhibit 10.32 to the Registrants Annual
Report on Form 10-K for June 30, 2004.]10.33
    
    Credit Facility Letter dated October 7, 2003, between Trio-Tech International Pte. Ltd,
and DBS Bank Ltd. [Incorporated by reference to Exhibit 10.33 to the Registrants Annual
Report on Form 10-K for June 30, 2004.]10.34
    
    Credit Facility Letter dated August 11, 2003 between Trio-Tech International Pte. Ltd.
and Standard Chartered Bank. [Incorporated by reference to Exhibit 10.34 to the Registrants
Annual Report on Form 10-K for June 30, 2004.]10.35
    
    Letter of Offer, dated June 3, 2005 between Globetronics Technology BHD. and Trio Tech
International PTE. LTD.. [Incorporated by reference to Exhibit 99.1 to the Registrants Form
8-K filed on June 8, 2005.]10.36
    
    Real Estate Lease, dated December 1, 2003 between Trio Tech (Malaysia) SDN. BHD. and
Amphenol Malaysia Sdn. Bhd. for factory plot no. 1A Phase 1, Bayan Lepas Free Trade Zone,
11900 Pulau Pinang. [Incorporated by reference
to Exhibit 10.36 to the Registrants Annual Report on
Form 10-K for June 30, 2005.]10.37
    
    Real Estate Lease, dated December 6, 2004 between Malaysian Industrial Estates Berhad and
Trio Tech (Malaysia) SDN. BHD. for factory lot no. 4 Kawansan MIEL Sungai Way Baru (FTZ),
Phase III Selangor Darul Ehsan. [Incorporated by reference
to Exhibit 10.37 to the Registrants Annual Report on
Form 10-K for June 30, 2005.]10.38
    
    Real Estate Lease, dated September 28, 2004 between Ascendas-Xinsu Development (Suzhou) Co.,
Ltd. and Trio Tech (SIP) Co., Ltd. for Block B #05-01/02 room 6 in Suzhou Industrial Park,
China 215021. [Incorporated by reference
to Exhibit 10.38 to the Registrants Annual Report on
Form 10-K for June 30, 2005.]10.39
    
    Real Estate Lease, dated November 8, 2004 between JTC Corporation and Trio-Tech
International Pte. Ltd. for Block 1008 Toa Payoh North #03-07/08. [Incorporated by reference
to Exhibit 10.39 to the Registrants Annual Report on
Form 10-K for June 30, 2005.]10.40
    
    Real Estate Lease, dated September 10, 2003 between JTC Corporation and Trio-Tech
International Pte. Ltd. for Block 1008 Toa Payoh North #01-09/11. [Incorporated by reference
to Exhibit 10.40 to the Registrants Annual Report on
Form 10-K for June 30, 2005.]10.41
    
    Credit Facility Letter dated May 10, 2005, between Trio-Tech International Pte. Ltd, and DBS
        Bank Ltd. *10.42
    
    Real Estate Lease, dated July 5, 2005 between JTC Corporation and Universal (Far East) Pte. Ltd. for Block 1008 Toa Payoh North #01-15/16 *10.43
    
    Credit Facility Letter dated September 15, 2005 between Trio-Tech International Pte. Ltd. and Standard Chartered Bank. *10.44
    
    Real Estate Lease, dated November 11, 2005 between JTC Corporation and Trio-Tech International Pte Ltd for Block 1004 Toa Payoh North #03-06/07 *10.45
    
    Real Estate Lease, dated
March 10, 2006 between JTC Corporation and Trio-Tech International Pte Ltd for Block 1004 Toa Payoh North #04-05/077 *
 37




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##### Table of Contents



Number
    
    Description10.46
    
    Credit Facility Letter dated
April 6, 2006, between Trio-Tech International Pte. Ltd, and Standard Chartered Bank. *10.47
    
    Credit Facility Letter dated
April 6, 2006, between Trio-Tech International Pte. Ltd, and Standard Chartered Bank. *10.48
    
    Credit Facility Letter dated July 26, 2006, between Trio-Tech International Pte. Ltd, and DBS
	Bank Ltd. *21.1
    
    Subsidiaries of the Registrant (100% owned by the Registrant except as otherwise stated):Trio-Tech International Pte. Ltd., a Singapore CorporationUniversal (Far East) Pte. Ltd., a Singapore CorporationTrio-Tech Reliability Services, a California CorporationExpress Test Corporation, a California CorporationEuropean Electronic Test Center. Ltd. a Cayman Islands CorporationTrio-Tech Malaysia, a Malaysia Corporation (55% owned by the Registrant)Trio-Tech Kuala Lumpur, a Malaysia Corporation (100% owned by Trio-Tech Malaysia)Trio-Tech Bangkok, a Thailand CorporationTrio-Tech Thailand, a Thailand CorporationPrestal Enterprise Sdn. Bhd., a Malaysia Corporation (76% owned by the Registrant)KTS Incorporated, dba Universal Systems, a California CorporationTrio-Tech (Suzhou) Co. Ltd., a China CorporationTrio-Tech (Shanghai) Co. Ltd., a China Corporation23.1
    
    Consent of Independent Registered Public Accounting Firm*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. *
 
 *
    
    Filed electronically herewith.**
    
    Indicates management contracts or compensatory plans or arrangements required to be filed as
an exhibit to this report. 38




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##### Table of Contents



TRIO-TECH
INTERNATIONALBy:
    /s/ Victor H.M. TingVICTOR H.M. TINGVice President and
Chief Financial Officer
Date: September 25, 2006  /s/ A. Charles Wilson
    
    September 25, 2006A. Charles Wilson, DirectorChairman of the Board/s/ S. W. Yong
    
    September 25, 2006S. W. Yong, Director
President, Chief Executive Officer(Principal Executive Officer)/s/ Victor H.M. Ting
    
    September 25, 2006Victor H.M. TingVice President, Chief Financial Officer(Principal Financial Officer)/s/ Jason T. Adelman
    
    September 25, 2006Jason T. Adelman, Director/s/ Richard M. Horowitz
    
    September 25, 2006Richard M. Horowitz, Director
 39




---



##### Table of Contents



CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
   
  40




---



##### Table of Contents



CERTIFICATIONS
             /s/S. W. YONG

S. W. Yong, Chief ExecutiveOfficer and President (Principal Executive Officer)
 41




---



##### Table of Contents



/s/ VICTOR H.M. TING

Victor H.M. Ting, Chief Financial Officer
and Vice President (Principal Financial Officer)
 42




---



##### Table of Contents



/s/ S. W. YONG

Name: S. W. YongTitle: President and Chief Executive OfficerDate: September 25, 2006/s/ VICTOR H. M. TING

Name: Victor H.M. TingTitle: Vice President and
Chief Financial OfficerDate: September 25, 2006
  43




---



##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
     /s/
 
 44




---



##### Table of Contents



TRIO-TECH
INTERNATIONAL AND SUBSIDIARIES
 CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT NUMBER OF SHARES
 June 30,
    
    
    June 30,2006
    
    
    2005ASSETSCURRENT ASSETS:Cash
    
    $
    2,551
    
    
    $
    1,439Short-term deposits
    
    
    7,839
    
    
    
    3,211Trade accounts receivable, less allowance for doubtful
accounts of $225 and $147
    
    
    8,518
    
    
    
    4,178Other receivables
    
    
    306
    
    
    
    142Inventories, less provision for obsolete inventory
of $448 and $445
    
    
    2,447
    
    
    
    1,584Prepaid expenses and other current assets
    
    
    170
    
    
    
    91Total current assets
    
    
    21,831
    
    
    
    10,645PROPERTY, PLANT AND EQUIPMENT, Net
    
    
    7,073
    
    
    
    7,176OTHER INTANGIBLE ASSETS, Net
    
    
    311
    
    
    
    386OTHER ASSETS
    
    
    169
    
    
    
    138TOTAL ASSETS
    
    $
    29,384
    
    
    $
    18,345LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIES:Line of credit
    
    $
    116
    
    
    $
    336Accounts payable
    
    
    3,809
    
    
    
    1,681Accrued expenses
    
    
    3,045
    
    
    
    2,598Income taxes payable
    
    
    311
    
    
    
    168Current portion of notes payable
    
    
    856
    
    
    
    655Current portion of capital leases
    
    
    107
    
    
    
    123Current portion of deferred tax liabilities
    
    
    292
    
    
    
    275Total current liabilities
    
    
    8,536
    
    
    
    5,836NOTES PAYABLE, net of current portion
    
    
    644
    
    
    
    634CAPITAL LEASES, net of current portion
    
    
    230
    
    
    
    110DEFERRED TAX LIABILITIES
    
    
    386
    
    
    
    407TOTAL LIABILITIES
    
    
    9,796
    
    
    
    6,987MINORITY INTEREST
    
    
    2,196
    
    
    
    2,061SHAREHOLDERS EQUITY:Common stock; no par value, 15,000,000 shares authorized;
3,219,407 and 2,976,942 shares issued and outstanding
at June 30, 2006 and 2005, respectively
    
    
    10,338
    
    
    
    9,554Paid-in capital
    
    
    337
    
    
    
    284Accumulated retained earnings (deficit)
    
    
    7,150
    
    
    
    (298
    )Accumulated other comprehensive loss-translation adjustments
    
    
    (433
    )
    
    
    (243
    )Total shareholders equity
    
    
    17,392
    
    
    
    9,297TOTAL LIABILITIES AND
SHAREHOLDERS EQUITY
    
    $
    29,384
    
    
    $
    18,345
  45




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##### Table of Contents



TRIO-TECH
INTERNATIONAL AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)  (IN THOUSANDS, EXCEPT EARNINGS (LOSS) PER SHARE)
 Years Ended June 30,2006
    
    
    2005
    
    
    2004RevenuesProducts
    
    $
    14,644
    
    
    $
    13,754
    
    
    $
    10,248Services
    
    
    14,455
    
    
    
    11,307
    
    
    
    8,41329,099
    
    
    
    25,061
    
    
    
    18,661Costs of SalesCost of products sold
    
    
    11,805
    
    
    
    11,324
    
    
    
    8,145Cost of service rendered
    
    
    9,363
    
    
    
    7,690
    
    
    
    5,89421,168
    
    
    
    19,014
    
    
    
    14,039Gross Margin
    
    
    7,931
    
    
    
    6,047
    
    
    
    4,622Operating Expenses:General and administrative
    
    
    6,321
    
    
    
    4,466
    
    
    
    3,609Selling
    
    
    970
    
    
    
    1,058
    
    
    
    875Research and development
    
    
    70
    
    
    
    93
    
    
    
    117Impairment loss
    
    
    61
    
    
    
    70
    
    
    
    4Loss (gain) on disposal of fixed assets
    
    
    22
    
    
    
    1
    
    
    
    (39
    )Total operating expenses
    
    
    7,444
    
    
    
    5,688
    
    
    
    4,566Income (Loss) from Operations
    
    
    487
    
    
    
    359
    
    
    
    56Other Income (Expenses)Interest expense
    
    
    (142
    )
    
    
    (165
    )
    
    
    (104
    )Other income
    
    
    598
    
    
    
    182
    
    
    
    257Total other income
    
    
    456
    
    
    
    17
    
    
    
    153Income from Continuing Operations
before Income Taxes
    
    
    943
    
    
    
    376
    
    
    
    209Income Tax Provision (Benefits)
    
    
    258
    
    
    
    158
    
    
    
    (8
    )Income from Continuing Operations before
Minority Interest
    
    
    685
    
    
    
    218
    
    
    
    217Minority Interest
    
    
    (88
    )
    
    
    (2
    )
    
    
    (55
    )Income from continuing Operations
    
    
    597
    
    
    
    216
    
    
    
    162Discontinued OperationsIncome from discontinued operations
    
    
    8,459
    
    
    
    5
    
    
    
    58Net Income Attributed to Common Shares
    
    $
    9,056
    
    
    $
    221
    
    
    $
    220BASIC EARNINGS PER SHARE:Basic earnings per share from continuing operations
    
    $
    0.19
    
    
    $
    0.07
    
    
    $
    0.06Basic earnings per share from discontinued
operations
    
    
    2.72
    
    
    
    0.00
    
    
    
    0.01Basic earnings per share
    
    $
    2.91
    
    
    $
    0.07
    
    
    $
    0.07DILUTED EARNINGS PER SHARE:Diluted earnings per share from continuing
operations
    
    $
    0.19
    
    
    $
    0.07
    
    
    $
    0.05
 46




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##### Table of Contents



Years Ended June 30,2006
    
    
    2005
    
    
    2004Diluted earnings per share from discontinued
operation
    
    
    2.71
    
    
    
    0.00
    
    
    
    0.02Diluted earnings per share
    
    $
    2.90
    
    
    $
    0.07
    
    
    $
    0.07Weighted Average Shares OutstandingBasic
    
    
    3,115
    
    
    
    2,966
    
    
    
    2,937Diluted
    
    
    3,128
    
    
    
    3,031
    
    
    
    2,995Comprehensive Income:Net income
    
    
    9,056
    
    
    
    221
    
    
    
    220Unrealized loss on investment
    
    
    
    
    
    
    
    
    
    
    (45
    )Foreign currency translation adjustment
    
    
    (190
    )
    
    
    25
    
    
    
    155Comprehensive Income
    
    $
    8,866
    
    
    $
    246
    
    
    $
    330
  47




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##### Table of Contents



TRIO-TECH
INTERNATIONAL AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY (IN THOUSANDS)
 Retained
    
    
    AccumulatedAdditional
    
    
    Earnings/
    
    
    OtherCommon Stock
    
    
    Paid-in
    
    
    Accumulated
    
    
    ComprehensiveShares
    
    
    Amount
    
    
    Capital
    
    
    Deficit
    
    
    Income (Loss)
    
    
    TotalBalance, June 30, 2003
    
    
    2,927
    
    
    $
    9,423
    
    
    $
    284
    
    
    $
    (739
    )
    
    $
    (378
    )
    
    $
    8,590Cash received from stock
options exercised
    
    
    37
    
    
    
    104
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    104Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    220
    
    
    
    
    
    
    
    220Unrealized loss in
marketable
securities (net of tax)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (45
    )
    
    
    (45
    )Translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    155
    
    
    
    155Balance, June 30, 2004
    
    
    2,964
    
    
    
    9,527
    
    
    
    284
    
    
    
    (519
    )
    
    
    (268
    )
    
    
    9,024Cash received from stock
options exercised
    
    
    12
    
    
    
    27
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    27Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    221
    
    
    
    
    
    
    
    221Translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25
    
    
    
    25Balance, June 30, 2005
    
    
    2,976
    
    
    
    9,554
    
    
    
    284
    
    
    
    (298
    )
    
    
    (243
    )
    
    
    9,297Cash received from stock
options exercised
    
    
    243
    
    
    
    784
    
    
    
    53
    
    
    
    
    
    
    
    
    
    
    
    837Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,056
    
    
    
    
    
    
    
    9,056Dividend declared
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,608
    )
    
    
    
    
    
    
    (1,608
    )Translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (190
    )
    
    
    (190
    )Balance, June 30, 2006
    
    
    3,219
    
    
    $
    10,338
    
    
    $
    337
    
    
    $
    7,150
    
    
    $
    (433
    )
    
    $
    17,392
  48




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##### Table of Contents



TRIO-TECH INTERNATIONAL AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF CASHFLOW (IN THOUSANDS)
 Years Ended June 30,2006
    
    
    2005
    
    
    2004Cash Flow from Operating ActivitiesNet income
    
    $
    9,056
    
    
    $
    221
    
    
    $
    220Adjustments to reconcile from net income to
net cash flow provided by (used in) operating
civilitiesDepreciation and amortization
    
    
    1,758
    
    
    
    1,521
    
    
    
    1,145Bad debt expense, net
    
    
    175
    
    
    
    (18
    )
    
    
    14Inventory provision
    
    
    20
    
    
    
    45
    
    
    
    Interest income from short-term deposits
    
    
    (199
    )
    
    
    (52
    )
    
    
    (63
    )Impairment loss
    
    
    61
    
    
    
    70
    
    
    
    4Stock compensations
    
    
    53
    
    
    
    
    
    
    
    Gain on disposal of property  discontinued operations
    
    
    (8,909
    )
    
    
    
    
    
    
    Loss on disposal of fixed assets  continued operations
    
    
    13
    
    
    
    1
    
    
    
    (101
    )Loss on selling of marketable securities
    
    
    
    
    
    
    
    
    
    
    (115
    )Deferred tax provisions
    
    
    (4
    )
    
    
    38
    
    
    
    (67
    )Minority interest
    
    
    88
    
    
    
    2
    
    
    
    55Changes in operating assets and liabilities,
net of acquisition effectsAccounts receivable
    
    
    (4,515
    )
    
    
    (465
    )
    
    
    (66
    )Other receivables
    
    
    (157
    )
    
    
    (37
    )
    
    
    (200
    )Other assets
    
    
    (31
    )
    
    
    (105
    )
    
    
    9Inventories
    
    
    (883
    )
    
    
    (220
    )
    
    
    (360
    )Prepaid expenses and other
    
    
    (94
    )
    
    
    22
    
    
    
    30Accounts payable and accrued liabilities
    
    
    2,575
    
    
    
    (203
    )
    
    
    1,305Income tax payable
    
    
    143
    
    
    
    119
    
    
    
    (7
    )Net cash provided by (used in) operating activities
    
    
    (850
    )
    
    
    939
    
    
    
    1,803Cash Flow from Investing ActivitiesProceeds from short-term deposit matured
    
    
    20,409
    
    
    
    5,489
    
    
    
    3,537Investment in short-term deposits
    
    
    (24,838
    )
    
    
    (2,999
    )
    
    
    (4,815
    )Additions to property, plant and equipment
    
    
    (1,255
    )
    
    
    (2,306
    )
    
    
    (950
    )Purchase of marketable securities
    
    
    
    
    
    
    
    
    
    
    (4
    )Proceeds from disposal of marketable securities
    
    
    
    
    
    
    
    
    
    
    555Acquisition of a business in China
    
    
    (138
    )
    
    
    (15
    )
    
    
    Acquisition of a business in Malaysia
    
    
    
    
    
    
    (1,126
    )
    
    
    (92
    )Proceeds from selling a property in Ireland
 discontinued operations
    
    
    8,401
    
    
    
    
    
    
    
    Proceeds from disposal of fixed assets
    
    
    154
    
    
    
    1
    
    
    
    241Net cash provided by (used in) investing activities
    
    
    2,733
    
    
    
    (956
    )
    
    
    (1,528
    )Cash Flow from Financing ActivitiesNet borrowings (payments) on lines of credits
    
    
    (220
    )
    
    
    190
    
    
    
    (155
    )Repayments of bank loans and capital leases
    
    
    (1,036
    )
    
    
    (909
    )
    
    
    (1,359
    )Proceeds from long-terms bank loans and capital leases
    
    
    1,062
    
    
    
    862
    
    
    
    999Dividends paid to minority interest
    
    
    (28
    )
    
    
    (53
    )
    
    
    (53
    )Dividends paid to the companys shareholders
    
    
    (1,608
    )
    
    
    
    
    
    
    Proceeds from exercising stock options
    
    
    784
    
    
    
    27
    
    
    
    104Net cash provided by (used in) financing activities
    
    
    (1,046
    )
    
    
    117
    
    
    
    (464
    )
 49




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##### Table of Contents



Years Ended June 30,2006
    
    
    2005
    
    
    2004Effect of Changes in Exchange Rates
    
    
    275
    
    
    
    (18
    )
    
    
    51Net Increase (Decrease) in Cash and Cash Equivalents
    
    
    1,112
    
    
    
    82
    
    
    
    (138
    )Cash and Cash Equivalents, Begin of Fiscal Year
    
    
    1,439
    
    
    
    1,357
    
    
    
    1,495Cash and Cash Equivalents, End of Fiscal Year
    
    
    2,551
    
    
    $
    1,439
    
    
    $
    1,357Supplementary Information of Cash FlowsCash paid during the period for:Interest
    
    $
    142
    
    
    $
    176
    
    
    $
    120Income taxes
    
    $
    2,197
    
    
    $
    13
    
    
    $
    90Non-Cash TransactionsCapitalization of property, plant and equipment paid in
advance
    
    $
    
    
    
    $
    365
    
    
    $
    90Deposit for acquisition in Malaysia
    
    $
    
    
    
    $
    92
    
    
    $
    Bank guarantee note for acquisition of business in Malaysia
    
    $
    
    
    
    $
    395
    
    
    $
    Capital lease of property, plant and equipment
    
    $
    290
    
    
    $
    24
    
    
    $
    135
  50




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##### Table of Contents



TRIO-TECH INTERNATIONAL AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2006, 2005 AND 2004 (IN THOUSANDS, EXCEPT PER SHARE AND NUMBER OF SHARES)
 1. ORGANIZATION AND BASIS OF PRESENTATION
  Ownership
    
    LocationExpress Test Corporation (Dormant)
    
    
    100
    %
    
    Van Nuys, CaliforniaTrio-Tech Reliability Services (Dormant)
    
    
    100
    %
    
    Van Nuys, CaliforniaKTS Incorporated, dba Universal Systems (Dormant)
    
    
    100
    %
    
    Van Nuys, CaliforniaEuropean Electronic Test Centre.
(Operation ceased on November 1, 2005)
    
    
    100
    %
    
    Dublin, IrelandTrio-Tech International Pte. Ltd.
    
    
    100
    %
    
    SingaporeUniversal (Far East) Pte. Ltd.
    
    
    100
    %
    
    SingaporeTrio-Tech Thailand
    
    
    100
    %
    
    Bangkok, ThailandTrio-Tech Bangkok
    
    
    100
    %
    
    Bangkok, ThailandTrio-Tech Malaysia
    
    
    55
    %
    
    Penang and Selangor, MalaysiaTrio-Tech Kuala Lumpur  100% owned by Trio-Tech Malaysia
    
    
    55
    %
    
    Selangor, MalaysiaPrestal Enterprise Sdn. Bhd.
    
    
    76
    %
    
    Selangor, MalaysiaTrio-Tech (Suzhou) Co. Ltd.
    
    
    100
    %
    
    Suzhou, ChinaTrio-Tech (Shanghai) Co. Ltd.
    
    
    100
    %
    
    Shanghai, China
 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Principles of Consolidation 
 Foreign Currency Translation and Transactions 
  Use of Estimates 
 Accounting Period 
 51




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##### Table of Contents



Revenue Recognition 
  Accounts Receivable and Allowance for Doubtful Accounts 
  Warranty Costs 
 Short Term Deposits 
  Investments in Marketable Securities
 Inventories
 52




---



##### Table of Contents



Property, Plant and Equipment 
  Other intangible asset 
  Impairment of Long-Lived Assets 
    Leases 
   Advertising Costs 
 53




---



##### Table of Contents



Comprehensive Income (Loss) 
 Income Taxes 
  Retained earnings 
 Research and Development Costs 
 Stock Based Compensation
 Earnings per Share 
 Fair Values of Financial Instruments
 Concentration of Credit Risk .
 Recently Issued Accounting Pronouncements
  54




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##### Table of Contents



Reclassification 
 3. INVENTORIES
  June 30,
    
    
    June 30,2006
    
    
    2005Raw materials
    
    $
    827
    
    
    $
    842Works in progress
    
    
    1,803
    
    
    
    608Finished goods
    
    
    265
    
    
    
    562Provision for obsolete inventory
    
    
    (448
    )
    
    
    (428
    )$
    2,447
    
    
    $
    1,584
 4. STOCK OPTIONS
  Share-Based Payments
 55




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##### Table of Contents



Assumptions
  Years EndedJune 30, 2006
    
    June 30, 2005
    
    June 30, 2004Volatility
    
    
    49.5-51.53
    %
    
    
    33.5 - 36.8
    %
    
    
    41.9
    %Weighted average volatility
    
    
    49.5
    %
    
    
    33.9
    %
    
    
    41.9
    %Risk free interest rate
    
    
    3.71-4.50
    %
    
    
    2.89 - 3.27
    %
    
    
    2.76
    %Expected life (years)
    
    
    2.00
    
    
    
    2.00
    
    
    
    2.00
  1998 Stock Option Plan
   Weighted
    
    
    WeightedAverage
    
    
    Average
    
    
    AggregateExercise
    
    
    Remaining
    
    
    IntrinsicStock Options
    
    Shares
    
    
    Price
    
    
    Contractual Life
    
    
    ValueOutstanding at July 1, 2005
    
    
    165,000
    
    
    $
    3.44Granted
    
    
    
    
    
    
    Exercised
    
    
    (107,615
    )
    
    
    3.20Forfeited or expired
    
    
    (28,500
    )
    
    
    4.84Outstanding at June 30, 2006
    
    
    28,885
    
    
    $
    2.97
    
    
    
    2.00
    
    
    $
    90,637Exercisable at June 30, 2006
    
    
    14,885
    
    
    $
    2.94
    
    
    
    2.00
    
    
    $
    47,122
   Weighted AverageGrant DateNon-vested Options
    
    Shares
    
    Fair ValueNon-vested at July 1, 2005
    
    
    34,750
    
    
    $
    0.86Granted
    
    
    
    
    
    
    Vested
    
    
    (19,625
    )
    
    
    0.92Forfeited
    
    
    (1,875
    )
    
    
    0.68Non-vested at June 30, 2006
    
    
    13,250
    
    
    $
    0.81
 56




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##### Table of Contents



Directors Stock Option Plan
   WeightedWeighted
    
    
    Average
    
    
    AggregateAverage
    
    
    Remaining
    
    
    IntrinsicStock Options
    
    Shares
    
    
    Exercise Price
    
    
    Contractual Life
    
    
    ValueOutstanding at July 1, 2005
    
    
    137,000
    
    
    $
    3.63Granted
    
    
    30,000
    
    
    
    3.75Exercised
    
    
    (135,000
    )
    
    
    3.24Forfeited or expired
    
    
    (32,000
    )
    
    
    5.37Outstanding at June 30, 2006
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $Exercisable at June 30, 2006
    
    
    
    
    
    
    
  Stock options issued not pursuant to the 1998 Plan or the Directors Plan
   WeightedAverageExerciseStock Options
    
    Shares
    
    
    PriceOutstanding at July 1, 2005
    
    
    
    
    
    $
    Granted
    
    
    750
    
    
    
    2.66Exercised
    
    
    (750
    )
    
    
    2.66Expired
    
    
    
    
    
    
    Outstanding at June 30, 2006
    
    
    
    
    
    $Exercisable at June 30, 2006
    
    
    
    
    
    $
  57




---



##### Table of Contents



June 30,
    
    
    June 30,
    
    
    June 30,2006
    
    
    2005
    
    
    2004Net income: as reported
    
    $
    9,056
    
    
    $
    221
    
    
    $
    220Add: stock based compensation
included in reported income
    
    
    
    
    
    
    
    
    
    
    Deduct: total stock based compensation
expense determined under fair value
method for all awards
    
    
    
    
    
    
    (49
    )
    
    
    (41
    )Pro forma net income
    
    $
    9,056
    
    
    $
    172
    
    
    $
    179Earnings per share  basicAs reported
    
    $
    2.91
    
    
    $
    0.07
    
    
    $
    0.07Pro forma
    
    $
    2.91
    
    
    $
    0.06
    
    
    $
    0.06Earnings per share  dilutedAs reported
    
    $
    2.90
    
    
    $
    0.07
    
    
    $
    0.07Pro forma
    
    $
    2.90
    
    
    $
    0.06
    
    
    $
    0.06
 5. EARNINGS PER SHARE
 Earnings per Share
     58




---



##### Table of Contents



June 30,
    
    
    June 30,
    
    
    June 30,2006
    
    
    2005
    
    
    2004Income from continuing operations
    
    $
    597
    
    
    $
    216
    
    
    $
    162Income from discontinued operations
    
    $
    8,459
    
    
    $
    5
    
    
    $
    58Net income attribute to common shares
    
    $
    9,056
    
    
    $
    221
    
    
    $
    220Basic Earnings Per ShareBasic earnings per share from Continuing operations
    
    
    0.19
    
    
    
    0.07
    
    
    
    0.06Basic earnings per share from Discontinued operations
    
    
    2.72
    
    
    
    0.00
    
    
    
    0.01Basic earnings per share from Net Income
    
    
    2.91
    
    
    
    0.07
    
    
    
    0.07Diluted Earnings Per ShareDiluted earnings per share from Continuing operations
    
    
    0.19
    
    
    
    0.07
    
    
    
    0.05Diluted earnings per share from Discontinued operations
    
    
    2.71
    
    
    
    0.00
    
    
    
    0.02Diluted earnings per share from Net Income
    
    
    2.90
    
    
    
    0.07
    
    
    
    0.07Weighted average number of common shares outstanding  basic
    
    
    3,115
    
    
    
    2,966
    
    
    
    2,937Dilutive effect of stock options
    
    
    13
    
    
    
    65
    
    
    
    58Number of shares used to compute earnings per share  diluted
    
    
    3,128
    
    
    
    3,031
    
    
    
    2,995
 6. PROPERTY, PLANT AND EQUIPMENT
  Estimated Useful
    
    June 30,
    
    
    June 30,Life in Years
    
    2006
    
    
    2005Building and improvements
    
    3-20
    
    $
    337
    
    
    $
    816Leasehold improvements
    
    3-27
    
    
    2,984
    
    
    
    2,669Machinery and equipment
    
    3-7
    
    
    7,448
    
    
    
    7,020Furniture and fixtures
    
    3-5
    
    
    412
    
    
    
    420Equipment under capital leases
    
    3-5
    
    
    788
    
    
    
    1,32211,969
    
    
    
    12,247Less:Accumulated depreciation and amortization
    
    
    
    
    4,734
    
    
    
    4,317Accumulated amortization on equipment
under capital leases
    
    
    
    
    162
    
    
    
    754$
    7,073
    
    
    $
    7,176
  7. ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS
   59




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##### Table of Contents



Years Ended June 30,2006
    
    
    2005
    
    
    2004Beginning
    
    $
    147
    
    
    $
    165
    
    
    $
    157Additions charged to cost and expenses
    
    
    260
    
    
    
    44
    
    
    
    18Recovered
    
    
    (85
    )
    
    
    (62
    )
    
    
    (4
    )Actual write-offs
    
    
    (97
    )
    
    
    
    
    
    
    (6
    )Ending
    
    $
    225
    
    
    $
    147
    
    
    $
    165
 8. LINES OF CREDIT
  June 30,
    
    June 30,2006
    
    2005Revolving line of credit denominated by Singapore dollars, payable to a
commercial bank for working capital purposes, to borrow up to $3,632 with
an interest rate at the banks prime rate (5.75% at June 30, 2006 and 2005)
plus 0.25% per annum. The line of credit is renewable in July 2006 and is
collateralized by short-term deposits owned by Trio-Tech International Pte. Ltd.
    
    $
    116
    
    
    $
    119Revolving line of credit denominated by Singapore dollars, payable to a
commercial bank for working capital purposes, to borrow up to $5,588
with an interest at the banks prime rate (4.25% at June 30, 2006 and 2005)
plus 1.25%
per annum. The line of credit was renewable injury 2006 and
is collateralized by short-term deposits owned by Trio-Tech International
Pte. Ltd. and Universal (Far East) Pte. Ltd.
    
    
    
    
    
    
    217Total
    
    $
    116
    
    
    $
    336
 9. ACCRUED EXPENSES
  June 30,
    
    June 30,2006
    
    2005Payroll and related
    
    $
    1,655
    
    
    $
    1,182Commissions
    
    
    180
    
    
    
    113Customer Deposits
    
    
    25
    
    
    
    26Legal and audit
    
    
    142
    
    
    
    53Sales tax
    
    
    
    
    
    
    285Utilities
    
    
    240
    
    
    
    188Warranty
    
    
    142
    
    
    
    155Provision for sales volume rebate
    
    
    
    
    
    
    5Provision for building sinking fund
    
    
    36
    
    
    
    34Accrued purchase of materials and fixed assets
    
    
    231
    
    
    
    256Unearned revenue
    
    
    
    
    
    
    123Provision for re-installment cost
    
    
    168
    
    
    
    Other accrued expenses
    
    
    226
    
    
    
    178Total
    
    $
    3,045
    
    
    $
    2,598
 60




---



##### Table of Contents



10. WARRANTY ACCRUAL
 June 30,
    
    
    June 30,2006
    
    
    2005Beginning
    
    $
    155
    
    
    $
    162Additions charged to cost and expenses
    
    
    
    
    
    
    43Recovered
    
    
    (1
    )
    
    
    Actual write-offs
    
    
    (12
    )
    
    
    (50
    )Ending
    
    $
    142
    
    
    $
    155
 11. NOTES PAYABLE
  June 30,
    
    
    June 30,2006
    
    
    2005Note payable denominated by Singapore dollars to a commercial bank for
purchasing certain equipment, maturing in October 2006, bearing interest at the
banks prime rate (5.75% at June 30, 2006 and 2005) plus 0.5% per annum, with
monthly payments of principal and interest of $18 through October 2006
collateralized by fixed deposits and existing corporate guarantee granted by
the company to one of the subsidiaries.
    
    $
    70
    
    
    $
    264Note payable denominated by Singapore dollars to a commercial bank for
purchasing certain equipment, maturing in October 2006, bearing fixed interest
5.91%, with monthly payments of principal and interest of $6 through October
2006, collateralized by equipment.
    
    
    23
    
    
    
    83Note payable denominated by Singapore dollars to a commercial bank for
infrastructure investment, maturing in June 2007, bearing interest at the
banks prime rate (4.25% at June 30, 2006 and 2005) plus 1% per annum, with
monthly payments of principal and interest of $16 through June 2007,
collateralized by fixed deposits.
    
    
    198
    
    
    
    348Note payable denominated by Singapore dollars to a commercial bank for
infrastructure investment, maturing in February 2008, bearing interest at the
banks prime rate (4.25% at June 30, 2006 and 2005) plus 1% per annum, with
monthly payments of principal plus interest of $18 through February 2008,
collateralized by fixed deposits.
    
    
    345
    
    
    
    349Note payable denominated by Singapore dollars to a commercial bank for
purchasing certain equipment, maturing in November 2008, bearing interest at
the banks prime rate of funds (3.41% at June 30, 2006) plus 3.5% per annum,
with monthly payments of principal plus interest of $20 through November 2008,
collateralized by fixed deposits and existing corporate guarantee granted by
the company to one of the subsidiaries.
    
    
    509
    
    
    
    Note payable denominated by Singapore dollars to a commercial bank for
infrastructure investment, maturing in April 2009, bearing interest at the
banks prime rate (4.25% at June 30, 2006 and 2005) plus 1% per annum, with
monthly payments of principal plus interest of $10 through April 2009,
collateralized by fixed deposits.
    
    
    260
    
    
    
    Note payable denominated by Thailand baht to a commercial bank for extension of
a building, maturing in December 2007, bearing interest at the banks prime
rate (7.5% at June 30, 2006 and 4.5% at June 30, 2005) per annum, with monthly
payments of principal and interest of $6 through December 2007, collateralized
by land.
    
    
    95
    
    
    
    146
 61




---



##### Table of Contents



June 30,
    
    
    June 30,2006
    
    
    2005Mortgage note payable denominated in Irish pounds to the Industrial Credit
Corporation for purchasing a building, maturing in July 2007, bearing interest
at the banks prime rate (2.09% at June 30, 2006 and 2005) plus 3.5% per annum,
with monthly payments of principal and interest of $3 through July 2007,
collateralized by the building. As of June 30, 2006 the remaining balance due
has been fully repaid.
    
    
    
    
    
    
    60Mortgage note payable denominated by Irish pounds to the Industrial Credit
Corporation for purchasing a building, maturing in May 2008, bearing interest
at the banks prime rate (2.11% at June 30, 2006 and 2005) plus 3% per annum,
with monthly payments of principal plus interest of $1 through May 2008,
collateralized by the relevant building. As of June 30, 2006 the remaining
balance due has been fully repaid.
    
    
    
    
    
    
    391,500
    
    
    
    1,289Less current portion
    
    
    (856
    )
    
    
    (655
    )Long term portion of notes payable
    
    $
    644
    
    
    $
    634
  Years EndingJune 30,2007
    
    $
    8562008
    
    
    5102009
    
    
    134Thereafter
    
    
    $
    1,500
 12. INCOME TAXES
  Years Ended June 30,2006
    
    
    2005
    
    
    2004U.S.
    
    $
    (902
    )
    
    $
    (118
    )
    
    $
    (87
    )Foreign
    
    
    1,845
    
    
    
    494
    
    
    
    296Total
    
    $
    943
    
    
    $
    376
    
    
    $
    209
  Years Ended June 30,2006
    
    
    2005
    
    
    2004Current:Federal
    
    $
    2
    
    
    $
    
    
    
    $
    State
    
    
    4
    
    
    
    3
    
    
    
    3Foreign
    
    
    256
    
    
    
    117
    
    
    
    56262
    
    
    
    120
    
    
    
    59Deferred:Federal
    
    
    
    
    
    
    
    
    
    
    State
    
    
    
    
    
    
    
    
    
    
    Foreign
    
    
    (4
    )
    
    
    38
    
    
    
    (67
    )$
    258
    
    
    $
    158
    
    
    $
    (8
    )
 62




---



##### Table of Contents



Years Ended June 30,2006
    
    
    2005
    
    
    2004Statutory federal tax rate
    
    
    34
    %
    
    
    34
    %
    
    
    34
    %State taxes, net of federal benefit
    
    
    6
    
    
    
    6
    
    
    
    6Foreign tax rate reduction
    
    
    (10
    )
    
    
    (10
    )
    
    
    (41
    )Other
    
    
    5
    
    
    
    3
    
    
    
    (5
    )Changes in valuation allowance
    
    
    (8
    )
    
    
    9
    
    
    
    2Effective rate
    
    
    27
    %
    
    
    42
    %
    
    
    (4
    )%
   June 30
    
    
    June 302006
    
    
    2005Deferred tax assets:Net operating losses and credits
    
    $
    1,152
    
    
    $
    2,470Inventory valuation
    
    
    144
    
    
    
    144Depreciation
    
    
    93
    
    
    
    167Provision for bad debts
    
    
    17
    
    
    
    16Accrued vacation
    
    
    12
    
    
    
    13Accrued expenses
    
    
    7
    
    
    
    7Total deferred tax assets
    
    
    1,425
    
    
    
    2,817Deferred tax liabilities:Depreciation
    
    
    (400
    )
    
    
    (407
    )Other
    
    
    (278
    )
    
    
    (275
    )Total deferred income tax liabilities
    
    
    (678
    )
    
    
    (682
    )Subtotal
    
    
    678
    
    
    
    2,135Valuation allowance
    
    
    (1,425
    )
    
    
    (2,817
    )Net deferred tax liabilities
    
    $
    (678
    )
    
    $
    (682
    )
  13. COMMITMENTS AND CONTINGENCIES
  63




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##### Table of Contents



Capital
    
    
    Operating
    
    
    Minimum
    
    
    Net OperatingYear ending June 30,
    
    Leases
    
    
    Leases
    
    
    Rental Income
    
    
    Leases2007
    
    $
    118
    
    
    $
    767
    
    
    $
    (106
    )
    
    $
    6612008
    
    
    117
    
    
    
    447
    
    
    
    (64
    )
    
    
    3832009
    
    
    60
    
    
    
    114
    
    
    
    
    
    
    
    1142010
    
    
    36
    
    
    
    
    
    
    
    
    
    
    
    Thereafter
    
    
    28
    
    
    
    
    
    
    
    
    
    
    
    Total future minimum lease payments
    
    
    359
    
    
    $
    1,328
    
    
    $
    (170
    )
    
    $
    1,158Less amount representing interest
    
    
    (23
    )Present value of net minimum lease payments
    
    
    336Less current portion of capital lease obligations
    
    
    (106
    )Long-term obligations under capital leases
    
    $
    230
    14. TRANSACTIONS IN SHAREHOLDERS EQUITY
 Fiscal 2006
 Share-Based Payments
  Fiscal 2005
   64




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##### Table of Contents



Fiscal 2004
     15. CONCENTRATION OF CUSTOMERS
  Years ended June 30,
    
    2006
    
    2005
    
    2004Sales- Customer A
    
    
    44
    %
    
    
    36
    %
    
    
    38
    %- Customer B
    
    
    15
    %
    
    
    27
    %
    
    
    0
    %- Customer C
    
    
    9
    %
    
    
    11
    %
    
    
    15
    %Accounts Receivable- Customer A
    
    
    45
    %
    
    
    36
    %
    
    
    32
    %- Customer B
    
    
    7
    %
    
    
    23
    %
    
    
    0
    %- Customer C
    
    
    5
    %
    
    
    9
    %
    
    
    15
    %
 16. BUSINESS ACQUISITIONS
 Fiscal year 2006
   65




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##### Table of Contents



Purchase price (paid in cash)
    
    $
    153Property, plant and equipmentPlant and equipment
    
    $
    121Office equipment
    
    
    6Motor vehicle
    
    
    6Subtotal
    
    
    133Other receivables
    
    
    8Total fair value of tangible assets acquired
    
    $
    141Identifiable intangible asset-customer relationship
    
    
    12Purchase price
    
    $
    153
 Pro Forma Financial Information
  UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
FOR THE YEAR ENDED JUNE 30, 2006
 Historical Information of
    
    (a)The
    
    Acquired
    
    Pro Forma
    
    Pro FormaCompany
    
    Operation
    
    Adjustments
    
    ResultsNet sales
    
    $
    29,099
    
    
    $
    107
    
    
    $
    
    
    
    $
    29,206Net income
    
    $
    9,056
    
    
    $
    1
    
    
    $
    (6
    )
    
    $
    9,051Basic earnings per share
    
    $
    2.91
    
    
    
    
    
    
    
    
    
    
    $
    2.91Diluted earnings per share
    
    $
    2.90
    
    
    
    
    
    
    
    
    
    
    $
    2.89Basic weighted average
common shares outstanding
    
    
    3,115
    
    
    
    
    
    
    
    
    
    
    
    3,115Diluted weighted average
common shares outstanding
    
    
    3,128
    
    
    
    
    
    
    
    
    
    
    
    3,128
 
  (a)
    
    Since the Company acquired the testing operation in Shanghai on January 3, 2006, the
operation results of the testing operation in Shanghai has been included in the
consolidated statement of income since that date. The purpose of pro forma is to
demonstrate as if the acquisition incurred on July 1, 2005. Accordingly, the pro forma
adjustment was
 66




---



##### Table of Contents



based on the assumption that the fair value of the identified customer
relationship needed to be amortized over a one-year period of time, assuming the
acquisition took place on July 1, 2005.
 UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
FOR THE YEAR ENDED JUNE 30, 2005
 Historical Information of
    
    (a)The
    
    Acquired
    
    Pro Forma
    
    Pro FormaCompany
    
    Operations
    
    Adjustments
    
    ResultsNet sales
    
    $
    25,061
    
    
    $
    194
    
    
    $
    
    
    
    $
    25,255Net income (loss)
    
    $
    221
    
    
    $
    (17
    )
    
    $
    (12
    )
    
    $
    192Basic earnings per share
    
    $
    0.07
    
    
    
    
    
    
    
    
    
    
    $
    0.06Diluted earnings per share
    
    $
    0.07
    
    
    
    
    
    
    
    
    
    
    $
    0.06Basic weighted average
common shares outstanding
    
    
    2,966
    
    
    
    
    
    
    
    
    
    
    
    2,966Diluted weighted average
common shares outstanding
    
    
    3,031
    
    
    
    
    
    
    
    
    
    
    
    3,031
 
  (b)
    
    Since the Company acquired the testing operation in Shanghai on January 3, 2006, the
operation results of the testing operation in Shanghai has been included in the
consolidated statement of income since that date. The purpose of pro forma is to
demonstrate as if the acquisition incurred on July 1, 2004. Accordingly, the pro forma
adjustment was based on the assumption that the fair value of the identified customer
relationship needed to be amortized over a one-year period of time, assuming the
acquisition took place on July 1, 2004.
 Fiscal year 2005
   Total purchase price:Cash
    
    $
    823Notes payable
    
    
    395$
    1,218Allocated as follows:Fixed assets-    Machinery and equipment
    
    $
    729-    Leasehold improvements
    
    
    7736Intangible assets  customer relationship
    
    
    482$
    1,218
 67




---



##### Table of Contents



Pro Forma Financial Information
  UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
FOR THE YEAR ENDED JUNE 30, 2004
 Historical Information of
    
    (a)The
    
    Acquired
    
    Pro Forma
    
    Pro FormaCompany
    
    Operation
    
    Adjustment
    
    ResultsNet sales
    
    $
    18,661
    
    
    $
    1,816
    
    
    $
    
    
    
    $
    20,477Net income
    
    $
    220
    
    
    $
    169
    
    
    $
    (96
    )
    
    $
    293Basic earnings per share
    
    $
    0.07
    
    
    
    
    
    
    
    
    
    
    $
    0.10Diluted earnings per share
    
    $
    0.07
    
    
    
    
    
    
    
    
    
    
    $
    0.10Basic weighted average
common shares outstanding
    
    
    2,937
    
    
    
    
    
    
    
    
    
    
    
    2,937Diluted weighted average
common shares outstanding
    
    
    2,995
    
    
    
    
    
    
    
    
    
    
    
    2,995
 
  (a)
    
    Net earnings were adjusted for pro forma purposes to recognize the effect of the
amortization of the other intangible assets over its economic life of five years on a
straight-line method, assuming that the acquisition took place on July 1, 2003.
 17. DIVIDEND PAID TO SHAREHOLDERS
  68




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##### Table of Contents



18. OTHER INCOME
  June 30,
    
    
    June 30,
    
    
    June 30,2006
    
    
    2005
    
    
    2004Interest income
    
    $
    213
    
    
    $
    58
    
    
    $
    78Rental income
    
    
    91
    
    
    
    86
    
    
    
    57Royalty income
    
    
    
    
    
    
    
    
    
    
    Dividend income
    
    
    4
    
    
    
    9
    
    
    
    11Exchange (loss) gain
    
    
    (46
    )
    
    
    10
    
    
    
    (12
    )Sales of other products
    
    
    
    
    
    
    
    
    
    
    6Gain (loss) on disposal on marketable securities
    
    
    
    
    
    
    
    
    
    
    115Other miscellaneous income
    
    
    336
    
    
    
    19
    
    
    
    2Total
    
    $
    598
    
    
    $
    182
    
    
    $
    257
 19. DISCONTINUED OPERATIONS
   
   69




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##### Table of Contents



June 30
    
    
    June 30
    
    
    June 302006
    
    
    2005
    
    
    2004REVENUES
    
    $
    78
    
    
    $
    632
    
    
    $
    493COST OF SALES
    
    
    63
    
    
    
    516
    
    
    
    414GROSS PROFIT
    
    
    15
    
    
    
    116
    
    
    
    79OPERATING EXPENSES:General and administrative
    
    
    120
    
    
    
    201
    
    
    
    160Employment termination benefits
    
    
    330
    
    
    
    
    
    
    
    Gain on sale of PP&E
    
    
    
    
    
    
    
    
    
    
    (62
    )Total
    
    
    450
    
    
    
    201
    
    
    
    98(435
    )
    
    
    (85
    )
    
    
    (19
    )OTHER INCOME (EXPENSE)Interest expense
    
    
    (3
    )
    
    
    (11
    )
    
    
    (17
    )Other (expense) income
    
    
    (12
    )
    
    
    113
    
    
    
    115Total
    
    
    (15
    )
    
    
    102
    
    
    
    98(Loss) Income from
discontinued operations before income tax
    
    
    (450
    )
    
    
    17
    
    
    
    79Gain on sale of property net of capital gain tax
    
    
    8,909
    
    
    
    
    
    
    
    Income tax provision
    
    
    
    
    
    
    12
    
    
    
    21INCOME FROM DISCONTINUED OPERATIONs
    
    $
    8,459
    
    
    $
    5
    
    
    $
    58Breakdown of gain on sale of propertyGross proceeds
    
    $
    10,574
    
    
    
    
    
    
    
    Net book value of the property
    
    
    (261
    )
    
    
    
    
    
    
    Grant payable to Ireland government
    
    
    (86
    )
    
    
    
    
    
    
    Professional fees
    
    
    (92
    )
    
    
    
    
    
    
    Commissions and related selling expenses
    
    
    (40
    )
    
    
    
    
    
    
    10,095
    
    
    
    
    
    
    
    Capital gain tax
    
    
    (1,955
    )
    
    
    
    
    
    
    8,140
    
    
    
    
    
    
    
    Foreign currency translation adjustments
    
    
    769
    
    
    
    
    
    
    
    Gain on sale of property
    
    $
    8,909
    
    
    $
    
    
    
    $
    
   70




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##### Table of Contents



20. BUSINESS SEGMENTS
    Business Segment Information:
 Year
    
    
    
    
    
    Operating
    
    
    
    
    
    Depr.Ended
    
    Net
    
    Income
    
    Total
    
    and
    
    CapitalJun. 30
    
    Sales
    
    (loss)
    
    Assets
    
    Amort.
    
    ExpendituresManufacturing
    
    
    2006
    
    
    $
    12,444
    
    
    $
    (78
    )
    
    $
    3,852
    
    
    $
    133
    
    
    $
    3482005
    
    
    $
    10,681
    
    
    $
    (108
    )
    
    $
    1,907
    
    
    $
    67
    
    
    $
    832004
    
    
    $
    7,117
    
    
    $
    (207
    )
    
    $
    2,423
    
    
    $
    99
    
    
    $
    165Testing Services
    
    
    2006
    
    
    $
    14,455
    
    
    $
    1,454
    
    
    $
    24,351
    
    
    $
    1,610
    
    
    $
    1,3292005
    
    
    $
    11,307
    
    
    $
    540
    
    
    $
    14,417
    
    
    $
    1,212
    
    
    $
    2,0062004
    
    
    $
    8,414
    
    
    $
    287
    
    
    $
    14,893
    
    
    $
    819
    
    
    $
    783Distribution
    
    
    2006
    
    
    $
    2,200
    
    
    $
    (118
    )
    
    $
    772
    
    
    $
    15
    
    
    $
    12005
    
    
    $
    3,073
    
    
    $
    (80
    )
    
    $
    1,843
    
    
    $
    143
    
    
    $
    2412004
    
    
    $
    3,130
    
    
    $
    (27
    )
    
    $
    588
    
    
    $
    129
    
    
    $
    227Corporate and unallocated
    
    
    2006
    
    
    $
    
    
    
    $
    (771
    )
    
    $
    409
    
    
    $
    
    
    
    $
    2005
    
    
    $
    
    
    
    $
    7
    
    
    $
    178
    
    
    $
    1
    
    
    $
    2004
    
    
    $
    
    
    
    $
    3
    
    
    $
    96
    
    
    $
    7
    
    
    $
    Total Company
    
    
    2006
    
    
    $
    29,099
    
    
    $
    487
    
    
    $
    29,384
    
    
    $
    1,758
    
    
    $
    1,6782005
    
    
    $
    25,061
    
    
    $
    359
    
    
    $
    18,345
    
    
    $
    1,423
    
    
    $
    2,3302004
    
    
    $
    18,661
    
    
    $
    56
    
    
    $
    18,000
    
    
    $
    1,054
    
    
    $
    1,175
 Year
    
    
    
    
    
    Europe
    
    
    
    
    
    
    
    
    
    
    
    
    
    ElimiEnded
    
    United
    
    and other
    
    
    
    
    
    
    
    
    
    
    
    
    
    and
    
    TotalJun. 30,
    
    States
    
    Countries
    
    Singapore
    
    Thailand
    
    Malaysia
    
    other
    
    CompanyNet sales to customers
    
    
    2006
    
    
    $
    2,603
    
    
    $
    2,937
    
    
    $
    16,732
    
    
    $
    1,896
    
    
    $
    5,048
    
    
    $
    (117
    )
    
    $
    29,0992005
    
    
    $
    2,209
    
    
    $
    2,051
    
    
    $
    12,620
    
    
    $
    2,135
    
    
    $
    6,340
    
    
    $
    (294
    )
    
    $
    25,0612004
    
    
    $
    4,704
    
    
    $
    762
    
    
    $
    9,944
    
    
    $
    2,534
    
    
    $
    866
    
    
    $
    (149
    )
    
    $
    18,661Operating Income (loss)
    
    
    2006
    
    
    $
    (60
    )
    
    $
    84
    
    
    $
    866
    
    
    $
    100
    
    
    $
    268
    
    
    $
    (771
    )
    
    $
    4872005
    
    
    $
    (190
    )
    
    $
    47
    
    
    $
    283
    
    
    $
    48
    
    
    $
    143
    
    
    $
    28
    
    
    $
    3592004
    
    
    $
    (216
    )
    
    $
    (5
    )
    
    $
    184
    
    
    $
    48
    
    
    $
    17
    
    
    $
    28
    
    
    $
    56Long-lived Assets
    
    
    2006
    
    
    $
    21
    
    
    $
    143
    
    
    $
    3,646
    
    
    $
    808
    
    
    $
    ,2,806
    
    
    $
    (40
    )
    
    $
    7,3842005
    
    
    $
    17
    
    
    $
    305
    
    
    $
    3,518
    
    
    $
    882
    
    
    $
    2,880
    
    
    $
    (40
    )
    
    $
    7,5622004
    
    
    $
    8
    
    
    $
    380
    
    
    $
    3,557
    
    
    $
    886
    
    
    $
    411
    
    
    $
    (40
    )
    
    $
    5,202
 71




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##### Table of Contents



21. QUARTERLY FINANCIAL DATA (UNAUDITED)
  Year ended June 30, 2005
    
    Sep. 30,
    
    
    Dec. 31,
    
    
    Mar. 31,
    
    
    Jun. 30,Revenues
    
    $
    7,743
    
    
    $
    5,533
    
    
    $
    5,884
    
    
    $
    5,901Expenses
    
    
    7,373
    
    
    
    5,738
    
    
    
    5,898
    
    
    
    5,677Income (loss) before income taxes and minority interest
    
    
    370
    
    
    
    (205
    )
    
    
    (14
    )
    
    
    224Income taxes
    
    
    111
    
    
    
    (60
    )(a)
    
    
    (26
    )(b)
    
    
    132Income (loss) before minority interest
    
    
    259
    
    
    
    (145
    )
    
    
    12
    
    
    
    92Minority interest
    
    
    (13
    )
    
    
    34
    
    
    
    (4
    )
    
    
    (20
    )Net income (loss) from continuing operations
    
    $
    246
    
    
    $
    (111
    )
    
    $
    8
    
    
    $
    72Net (loss) income from discontinued operations
    
    
    (9
    )
    
    
    11
    
    
    
    14
    
    
    
    (10
    )Net income (loss)
    
    $
    237
    
    
    $
    (100
    )
    
    $
    22
    
    
    $
    62Basic earnings (loss) per shareContinuing operations
    
    $
    0.08
    
    
    $
    (0.03
    )
    
    $
    0.01
    
    
    $
    0.02Discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net income (loss)
    
    $
    0.08
    
    
    $
    (0.03
    )
    
    $
    0.01
    
    
    $
    0.02Diluted earnings (loss) per shareContinuing operations
    
    $
    0.08
    
    
    $
    (0.03
    )
    
    $
    0.01
    
    
    $
    0.02Discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net income (loss)
    
    $
    0.08
    
    
    $
    (0.03
    )
    
    $
    0.01
    
    
    $
    0.02
 Year ended June 30, 2006
    
    Sep. 30,
    
    
    Dec. 31,
    
    
    Mar. 31,
    
    
    Jun. 30,Revenues
    
    $
    5,705
    
    
    $
    7,425
    
    
    $
    6,469
    
    
    $
    9,500Expenses
    
    
    5,492
    
    
    
    7,754
    
    
    
    6,206
    (d)
    
    
    8,704Income (loss) before income taxes and minority interest
    
    
    213
    
    
    
    (329
    )
    
    
    263
    
    
    
    796Income taxes
    
    
    73
    
    
    
    112
    
    
    
    106
    
    
    
    (33
    )Income (loss) before minority interest
    
    
    140
    
    
    
    (441
    )
    
    
    157
    
    
    
    829Minority interest
    
    
    24
    
    
    
    (5
    )
    
    
    17
    
    
    
    (124
    )Net income (loss) from continuing operations
    
    $
    164
    
    
    $
    (446
    )
    
    $
    174
    
    
    $
    705Net (loss) income from discontinued operations
    
    
    (378
    )
    
    
    8,837
    
    
    
    
    
    
    
    Net (loss) income
    
    $
    (214
    )
    
    $
    8,391
    
    
    $
    174
    
    
    $
    705Basic (loss) earnings per shareContinuing operations
    
    $
    0.05
    
    
    $
    (0.09
    )
    
    $
    0.05
    
    
    $
    0.22Discontinued operations
    
    
    (0.13
    )
    
    
    2.80
    
    
    
    
    
    
    
    Net (loss) income
    
    $
    (0.08
    )
    
    $
    2.71
    
    
    $
    0.05
    
    
    $
    0.22Diluted (loss) earnings per shareContinuing operations
    
    $
    0.05
    
    
    $
    (0.09
    )
    
    $
    0.05
    
    
    $
    0.22Discontinued operations
    
    
    (0.13
    )
    
    
    2.80
    
    
    
    
    
    
    
    Net (loss) income
    
    $
    (0.08
    )
    
    $
    2.71
    
    
    $
    0.05
    
    
    $
    0.22
 
 (a)
    
    This includes a tax refund of $68 in the Singapore operations after the assessment of the
past years taxes were finalized.(b)
    
    This includes a tax refund of $46 in the Malaysia operation after the reassessment of the
prior year tax returns was finalized.(c)
    
    The expenses include write off of machinery and equipment, furniture and fittings, and
leasehold improvement of $70 from the Singapore testing operation.(d)
    
    This includes a reversal of a provision of $269 related to the value added tax assessment
incurred in the testing operation located in Bangkok. 72