SigmaTron International, Inc. Reports Third Quarter Financial Results for Fiscal 2011
March 08 2011 - 8:15AM
SigmaTron International, Inc. (Nasdaq:SGMA), an electronic
manufacturing services company, today reported revenues and
earnings for the third quarter ended January 31, 2011.
Revenues increased to $36.9 million for the third quarter fiscal
2011 from $30.6 million for the same quarter in the prior year. Net
income decreased to $254,818 in the fiscal 2011 period compared to
$415,468 for the same period in the prior year. Basic and diluted
earnings per share were $0.07 for the quarter ended January 31,
2011, compared to $0.11 for the same quarter in fiscal 2010.
For the nine months ended January 31, 2011, revenues increased
to $113.2 million compared to $87.5 million for the same period
ended January 31, 2010. Net income for the same period in fiscal
2011 was $1,698,857 compared to $530,291 for the same period in the
prior year. Basic and diluted earnings per share for the nine
months ended January 31, 2011, were $0.44 compared to $0.14 and
$0.13, respectively, for the nine months ended January 31,
2010.
Commenting on SigmaTron's third quarter and nine month results,
Gary R. Fairhead, President and Chief Executive Officer, said, "I
am pleased to report a profit for our third quarter of fiscal 2011,
but the amount of the profit did not meet our
expectations. Several items negatively affected our results
both expected and unexpected. The weakening of the U.S. dollar
had an unexpected and significant negative effect on the
quarter. We incurred a pre-tax expense of $229,459 during the
quarter due to currency exchange rates driven primarily by the
relationship to the New Taiwan Dollar. Our international
purchasing office in Taiwan sources components for all of our
locations and their accounts payable, were primarily affected.
"The expected negative developments were the customary calendar
year end slow down due to the holidays and customers adjusting
inventory levels. Also, negotiated price reductions starting
in 2011 affected margins. Finally, and unexpectedly, many new
programs with existing and new customers were delayed for various
reasons, resulting in lower revenue than anticipated.
"Going forward, we expect continued pressure on our margins as
raw material costs continue upward and we have limited or delayed
ability to pass along the increases to our customers. We
continue to work with our customers and vendors in efforts to take
out cost and to try to minimize the effect on margins. We also
need to grow revenue, diversify our markets served, which should
help us manage the situation. However, some of our new
programs will not be significant revenue contributors until later
this calendar year.
"I am pleased to report that during the quarter we extended our
credit arrangement with Wells Fargo Bank to September 2013. I
want to thank Wells Fargo for their continuing support of SigmaTron
and for working with us as we look to grow our revenue stream.
"While I believe that the economy in general has stabilized for
our customer base, we also expect that there will continue to be
challenges in the area of currency exchange rates, margins and
supply chain. I expect that short term, our results will be
negatively affected by all of these factors. However, we are
excited about new programs that have been awarded with existing and
new customers, several of which are in the medical and defense
markets. I believe that long term these new markets will be
important to SigmaTron."
Headquartered in Elk Grove Village, IL, SigmaTron International,
Inc. is an electronic manufacturing services company that provides
printed circuit board assemblies and completely assembled
electronic products. SigmaTron International, Inc. operates
manufacturing facilities in Elk Grove Village, Illinois; Acuna and
Tijuana, Mexico; Union City, California; and Suzhou-Wujiang,
China. SigmaTron International, Inc. maintains engineering and
materials sourcing offices in Taipei, Taiwan.
Note: This press release contains
forward-looking statements. Words such as "continue,"
"anticipate," "will," "expect," "believe," "plan," and similar
expressions identify forward-looking statements. These
forward-looking statements are based on the current expectations of
the Company. Because these forward-looking statements involve
risks and uncertainties, the Company's plans, actions and actual
results could differ materially. Such statements should be
evaluated in the context of the risks and uncertainties inherent in
the Company's business including, but not necessarily limited to,
the Company's continued dependence on certain significant
customers; the continued market acceptance of products and services
offered by the Company and its customers; pricing pressures from
our customers, suppliers and the market; the activities of
competitors, some of which may have greater financial or other
resources than the Company; the variability of our operating
results; the results of long-lived assets impairment testing; the
variability of our customers' requirements; the availability and
cost of necessary components and materials; the ability of the
Company and our customers to keep current with technological
changes within our industries; regulatory compliance; the continued
availability and sufficiency of our credit arrangements; changes in
U.S., Mexican, Chinese or Taiwanese regulations affecting the
Company's business; the turmoil in the global economy and financial
markets; the stability of the U.S., Mexican, Chinese and Taiwanese
economic, labor and political systems and conditions; currency
exchange fluctuations; the expenses and savings from the relocation
of our Hayward, California facility to Union City, California; and
the ability of the Company to manage its growth. These and
other factors which may affect the Company's future business and
results of operations are identified throughout the Company's
Annual Report on Form 10-K and as risk factors and may be detailed
from time to time in the Company's filings with the Securities and
Exchange Commission. These statements speak as of the date of
such filings, and the Company undertakes no obligation to update
such statements in light of future events or otherwise unless
otherwise required by law.
Financial tables to follow...
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS |
|
|
|
|
|
|
|
Three Months |
Three Months |
Nine Months |
Nine Months |
|
Ended |
Ended |
Ended |
Ended |
|
January 31, |
January 31, |
January 31, |
January 31, |
|
2011 |
2010 |
2011 |
2010 |
|
|
|
|
|
Net sales |
$36,934,982 |
$30,599,499 |
$113,191,548 |
$87,493,820 |
|
|
|
|
|
Cost of products sold |
33,519,936 |
27,219,708 |
100,892,328 |
78,570,880 |
|
|
|
|
|
Gross profit |
3,415,046 |
3,379,791 |
12,299,220 |
8,922,940 |
|
|
|
|
|
Selling and administrative expenses |
2,691,460 |
2,503,571 |
8,734,478 |
7,448,821 |
|
|
|
|
|
Operating income |
723,586 |
876,220 |
3,564,742 |
1,474,119 |
|
|
|
|
|
Other expense |
318,983 |
211,860 |
867,948 |
627,519 |
|
|
|
|
|
Income from operations before income tax |
404,603 |
664,360 |
2,696,794 |
846,600 |
|
|
|
|
|
Income tax expense |
149,785 |
248,892 |
997,937 |
316,309 |
|
|
|
|
|
Net income |
$254,818 |
$415,468 |
$1,698,857 |
$530,291 |
|
|
|
|
|
|
|
|
|
|
Net income per common share
-- basic |
$0.07 |
$0.11 |
$0.44 |
$0.14 |
|
|
|
|
|
Net income per common share -- assuming
dilution |
$0.07 |
$0.11 |
$0.44 |
$0.13 |
|
|
|
|
|
|
|
|
|
|
Weighted average number of common
equivalent |
|
|
shares outstanding - assuming
dilution |
3,886,181 |
3,873,531 |
3,882,066 |
3,853,902 |
|
CONDENSED CONSOLIDATED
BALANCE SHEETS |
|
|
|
|
January 31, |
April 30, |
|
2011 |
2010 |
|
|
|
Assets: |
|
|
|
|
|
Current assets |
$74,912,374 |
$69,332,932 |
|
|
|
Machinery and equipment-net |
26,768,598 |
25,176,664 |
|
|
|
Intangible assets |
237,415 |
363,671 |
Other assets |
681,345 |
822,341 |
|
|
|
Total assets |
$102,599,732 |
$95,695,608 |
|
|
|
Liabilities and shareholders'
equity: |
|
|
|
|
Current liabilities |
$20,802,278 |
$27,165,130 |
|
|
|
Long-term obligations |
32,426,147 |
20,867,271 |
|
|
|
Stockholders' equity |
49,371,307 |
47,663,207 |
|
|
|
Total liabilities and stockholders'
equity |
$102,599,732 |
$95,695,608 |
CONTACT: SigmaTron International, Inc.
Linda K. Frauendorfer
1-800-700-9095
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