Executive Summary

Strong start to FY2018: revenue rose 22.0% year over year to $10.95M, operating income increased 45.1% to $0.55M, and diluted EPS doubled to $0.16; strength was broad-based across manufacturing, testing and distribution, with Singapore and Tianjin leading regional performance .
Mix-driven margin headwind: gross margin dollars increased to $2.76M, but gross margin rate declined to 25.2% (vs. 26.3% in Q1 FY2017) due to product/service mix in manufacturing and testing .
Operating discipline: operating expenses rose in dollars but fell to 20.2% of revenue (vs. 22.1% a year ago), supporting operating leverage; net income attributable to shareholders rose 89.8% to $0.58M .
No formal guidance and no transcripted earnings call were found in company filings for Q1 FY2018; management’s press release tone was optimistic on demand trends in Singapore and Tianjin .
Trend context: the prior quarter (Q4 FY2017) saw revenue of $10.64M and diluted EPS of $0.09; the following quarter (Q2 FY2018) continued strength with $10.55M revenue and $0.18 diluted EPS, albeit with mix dynamics; Street consensus from S&P Global for Q1 FY2018 was unavailable in our data access, so no beat/miss vs. estimates is provided .

What Went Well and What Went Wrong

What Went Well
- Broad-based growth: revenue up 22.0% y/y with manufacturing +29.8% to $4.77M, testing services +10.8% to $4.61M, and distribution +39.1% to $1.54M .
- Operating leverage: operating expenses fell to 20.2% of revenue from 22.1% a year ago; operating income rose 45.1% to $0.55M .
- Management confidence and regional momentum: “Our Singapore and Tianjin, China operations were especially strong... business conditions there currently appear likely to remain favorable... we are optimistic regarding the remainder of the year.” — CEO S.W. Yong .
What Went Wrong
- Margin rate compression: gross margin rate fell to 25.2% from 26.3% in the prior-year quarter due to mix in manufacturing and testing services, partially diluting the flow-through from higher revenue .
- Cash down sequentially: cash and equivalents decreased to $3.19M at 9/30/2017 from $4.77M at 6/30/2017, reflecting working capital needs amid growth .
- Limited external visibility: no formal guidance and no earnings call transcript were found for Q1 FY2018, limiting near-term visibility on order pipelines beyond commentary on Singapore/Tianjin strength .

Financial Results

Metric	Q1 FY2017	Q4 FY2017	Q1 FY2018
Revenue ($USD Millions)	$8.971	$10.638	$10.945
Gross Margin ($USD Millions)	$2.358	$2.363	$2.760
Gross Margin (%)	26.3%	—	25.2%
Operating Expenses ($USD Millions)	$1.981	$2.014	$2.213
Operating Expenses (% of Revenue)	22.1%	18.9%	20.2%
Income from Operations ($USD Millions)	$0.377	$0.349	$0.547
Net Income Attributable to TRT ($USD Millions)	$0.303	$0.353	$0.575
Diluted EPS ($)	$0.08	$0.09	$0.16
Diluted Shares (Millions)	3.579	3.737	3.673

Segment revenue breakdown:

Segment Revenue ($USD Millions)	Q1 FY2017	Q4 FY2017	Q1 FY2018
Manufacturing/Products	$3.671	$4.068	$4.765
Testing Services	$4.157	$4.382	$4.605
Distribution	$1.104	$2.151	$1.536
Other	$0.039	$0.037	$0.039

KPIs and growth indicators:

KPI	Q1 FY2017	Q4 FY2017	Q1 FY2018
Manufacturing y/y growth	—	—	+29.8%
Testing Services y/y growth	—	—	+10.8%
Distribution y/y growth	—	—	+39.1%
Net Income y/y growth	—	—	+89.8%
Gross Margin (%)	26.3%	—	25.2%
Cash and Equivalents ($USD Millions, period end)	—	$4.772	$3.188
Shareholders’ Equity ($USD Millions)	—	$21.527	$22.554
Equity per Share ($)	—	$6.11	$6.38

Note: “—” indicates not disclosed in the referenced documents for that period.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Company guidance	Q2 FY2018 and FY2018	None provided	None provided	Maintained (no formal guidance)

Earnings Call Themes & Trends

Note: No Q1 FY2018 earnings call transcript was found; themes are drawn from company press releases for Q4 FY2017 (Q-1), and the Q1 FY2018 current period. Where relevant, we note how themes evolved in subsequent Q2/Q3 FY2018 press releases.

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q1 FY2018)	Trend
Regional momentum (Asia)	Q4 FY2017: Testing volume increased in Asian facilities .	“Singapore and Tianjin... especially strong; conditions likely to remain favorable” .	Strengthening demand in Asia .
Segment breadth	Q4 FY2017: All segments posted higher revenue y/y .	Broad-based revenue growth across manufacturing, testing, and distribution .	Positive breadth persists .
Margin dynamics (mix)	Not specifically discussed in Q4 release.	Gross margin rate declined to 25.2% on mix in manufacturing/testing .	Mix headwind emerging .
Backlog/visibility	Q4 FY2017: Backlog up to $7.546M vs. $6.304M prior year .	No backlog update disclosed.	Visibility not updated in Q1 .
End-market opportunities (Automotive)	Not mentioned in Q4 FY2017.	Not discussed in Q1 FY2018.	Emerged next quarter: “Automotive industry... attractive opportunity” (Q2 FY2018) .
Seasonality/holidays	Not mentioned in Q4 FY2017.	Not discussed in Q1 FY2018.	Noted next quarter (Q3 FY2018): Chinese New Year impact .

Management Commentary

“Trio-Tech’s excellent first quarter financial results speak for themselves: Revenue increased sharply in each of our business segments... Our Singapore and Tianjin, China operations were especially strong... we are optimistic regarding the remainder of the year.” — CEO S.W. Yong .
“A change in product mix at both manufacturing and testing services reduced gross margin to 25.2% of revenue, compared to 26.3%... last year.” .
Balance sheet context: shareholders’ equity increased to $22.55M ($6.38/share) at 9/30/2017 from $21.53M ($6.11/share) at 6/30/2017 .

Q&A Highlights

No earnings call transcript was found for Q1 FY2018 in company filings; therefore, no Q&A highlights or guidance clarifications are available for this quarter.

Estimates Context

Wall Street consensus (S&P Global) for Q1 FY2018 EPS and revenue was unavailable in our environment; we were unable to retrieve Primary EPS Consensus Mean and Revenue Consensus Mean for this period to assess beat/miss. As a result, no comparison to Street estimates is provided.

Key Takeaways for Investors

Execution positive: revenue +22.0% y/y to $10.95M, operating income +45.1% to $0.55M, diluted EPS doubled to $0.16, with growth across manufacturing, testing, and distribution .
Watch mix: gross margin rate compressed to 25.2% (from 26.3% y/y) on unfavorable mix in manufacturing/testing; continued mix shifts are the key swing factor for margins near term .
Regional strength as a catalyst: Singapore and Tianjin momentum underpinned results; sustained strength in these operations could drive continued revenue/earnings upside .
Operating discipline: opex leverage (20.2% of revenue vs. 22.1% y/y) is supporting EBIT growth despite margin rate pressure .
Liquidity working capital draw: cash declined to $3.19M from $4.77M sequentially; monitor cash conversion and inventory/receivables as growth continues .
Visibility: no formal guidance and no call transcript limit external visibility; track subsequent quarter disclosures (Q2 FY2018 highlighted automotive opportunity and continued operating leverage) .
Near-term focus: monitor segment mix (manufacturing vs. testing), Asia demand trends, and any updates on backlog/orders to gauge sustainability of the growth trajectory .

Supporting documents and data:

Q1 FY2018 8-K/press release with detailed P&L and balance sheet .
Q4 FY2017 8-K/press release for prior-quarter context .
Q2 FY2018 8-K/press release for subsequent quarter context .
Q3 FY2018 8-K/press release noting tax reform one-time charge and seasonality (context beyond current quarter) .

TRIO-TECH INTERNATIONAL (TRT)·Q1 2018 Earnings Summary