SigmaTron International, Inc. (NASDAQ: SGMA), an electronic
manufacturing services company (the “Company”), today reported
revenues and earnings for the fiscal quarter ended October 31,
2023.
Revenues from continuing operations decreased $9.5 million, or 9
percent, to $98.7 million in the second quarter of fiscal 2024,
compared to $108.2 million for the same quarter in the prior year.
Net income from continuing operations for the second quarter ended
October 31, 2023, was breakeven, compared to net income of $3.1
million for the same quarter in the prior year. Diluted income per
share from continuing operations for the quarter ended October 31,
2023 was zero, compared to $0.51 income per share for the same
quarter in the prior year.
For the six months ended October 31, 2023, revenues from
continuing operations decreased $16.6 million, or 8 percent, to
$196.8 million, compared to $213.4 million for the same period in
the prior year. Net income from continuing operations for the six
months ended October 31, 2023, was $0.3 million, compared to net
income of $6.2 million for the same period in the prior year.
Diluted income per share from continuing operations for the six
months ended October 31, 2023 was $0.05, compared to $1.01 income
per share for the same period in the prior year.
As previously reported, the Company sold a majority position of
its wholly owned subsidiary, Wagz, Inc. (“Wagz”), effective April
1, 2023. As a result, the Company has reported results from Wagz
for fiscal 2023 as discontinued operations. For the second quarter
ended October 31, 2022, net loss from discontinued operations was
$2.2 million. For the six months ended October 31, 2022, net loss
from discontinued operations was $4.0 million. Diluted net loss per
share from discontinued operations for the second quarter ended
October 31, 2022 was $0.37 and was $0.65 for the six month period
ending October 31, 2022.
Commenting on SigmaTron’s second quarter, fiscal 2024 results,
Gary R. Fairhead, Chief Executive Officer and Chairman of the
Board, said “I’m pleased to report a pre-tax profit of $371,928 for
a difficult quarter. Revenues were 9% below the second quarter of
fiscal 2023, as the weaker general economy continued to affect our
customer base. Our revenues were essentially flat from the first
quarter of fiscal 2024 and yet we managed to increase our pre-tax
profit, up from $107,964 for the first quarter. We continue to make
progress in reducing our on-hand inventory, which is a clear
objective for the Company.
“As we head into our third quarter, our short-term backlog
remains soft as our customers evaluate their inventory levels
starting the new calendar year. We expect the third quarter to be
difficult and believe revenue levels will start to increase during
our fourth quarter. Putting aside the short-term softness, we are
excited about our prospects for the first part of fiscal 2025. We
have recently been awarded several new contracts with significant
upside and the backlog for our current business should start to
increase at the same time.
“Regarding the electronic component marketplace, we have seen
some modest improvements. However, several semiconductor components
remain on allocation or with lead times beyond 52 weeks. We expect
supply chain metrics to continue to relax, resulting in shorter
lead times. Significant uncertainty remains as we are eleven months
out from an election, and geopolitical problems in Ukraine and the
Middle East are definitely creating volatility. On balance, we
remain positive about the prospects for the Company.”
About SigmaTron International, Inc.
Headquartered in Elk Grove Village, Illinois, SigmaTron
International, Inc. operates in one reportable segment as an
independent provider of electronic manufacturing services (“EMS”).
The EMS segment includes printed circuit board assemblies,
electro-mechanical subassemblies and completely assembled
(box-build) electronic products. The Company and its wholly-owned
subsidiaries operate manufacturing facilities in Elk Grove Village,
Illinois; Acuna, Chihuahua, and Tijuana Mexico; Union City,
California; Suzhou, China; and Biên Hòa City, Vietnam. In addition,
the Company maintains an International Procurement Office and
Compliance and Sustainability Center in Taipei, Taiwan. The Company
also provides design services in Elgin, Illinois, U.S.
Forward-Looking Statements
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 direct and indirect 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 the Company’s 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 the Company’s operating results; the results of
long-lived assets and goodwill impairment testing; the risks
inherent in any merger, acquisition or business combination,
including the ability to achieve the expected benefits of
acquisitions as well as the expenses of acquisitions; the
collectability of aged account receivables; the variability of the
Company’s customers’ requirements; the impact of inflation on the
Company’s operating results; the availability and cost of necessary
components and materials; the impact acts of war may have to the
supply chain; the ability of the Company and its customers to keep
current with technological changes within its industries;
regulatory compliance, including conflict minerals; the continued
availability and sufficiency of the Company’s credit arrangements;
the costs of borrowing under the Company’s senior and subordinated
credit facilities, including under the rate indices that replaced
LIBOR; increasing interest rates; the ability to meet the Company’s
financial and restrictive covenants under its loan agreements;
changes in U.S., Mexican, Chinese, Vietnamese or Taiwanese
regulations affecting the Company’s business; the turmoil in the
global economy and financial markets; public health crises,
including COVID-19 and variants; the continued availability of
scarce raw materials, exacerbated by global supply chain
disruptions, necessary for the manufacture of products by the
Company; the stability of the U.S., Mexican, Chinese, Vietnamese
and Taiwanese economic, labor and political systems and conditions;
global business disruption caused by the Russian invasion of
Ukraine and related sanctions and the Israel-Hamas conflict;
currency exchange fluctuations; 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, 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.
For Further Information Contact:SigmaTron International,
Inc.James J. Reiman1-800-700-9095
CONDENSED CONSOLIDATED STATEMENT OF
OPERATIONS |
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Three Months |
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Three Months |
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Six Months |
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Six Months |
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Ended |
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Ended |
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Ended |
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Ended |
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October 31, |
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October 31, |
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October 31, |
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October 31, |
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2023 |
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2022 |
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2023 |
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2022 |
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Net sales |
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98,691,684 |
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108,221,067 |
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196,822,040 |
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213,411,047 |
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Cost of products sold |
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89,003,929 |
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94,914,988 |
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177,483,065 |
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188,527,748 |
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Gross profit |
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9,687,755 |
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13,306,079 |
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19,338,975 |
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24,883,299 |
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Selling and administrative expenses |
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6,613,634 |
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6,506,097 |
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13,456,439 |
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13,035,939 |
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Operating income |
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3,074,121 |
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6,799,982 |
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5,882,536 |
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11,847,360 |
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Other expense |
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(2,702,193 |
) |
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(1,941,017 |
) |
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(5,402,644 |
) |
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(2,858,759 |
) |
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Income before income tax |
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371,928 |
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4,858,965 |
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479,892 |
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8,988,601 |
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Income tax expense |
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(343,666 |
) |
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|
(1,743,554 |
) |
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(189,531 |
) |
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(2,751,850 |
) |
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Net income from continuing operations |
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$ |
28,262 |
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$ |
3,115,411 |
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$ |
290,361 |
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$ |
6,236,751 |
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Discontinued operations: |
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Loss before tax from discontinued operations |
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- |
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(2,731,126 |
) |
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- |
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(4,954,687 |
) |
Tax benefit from discontinued operations |
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- |
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487,587 |
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- |
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966,483 |
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Net loss from discontinued operations |
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- |
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(2,243,539 |
) |
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- |
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(3,988,204 |
) |
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Net income |
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$ |
28,262 |
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|
$ |
871,872 |
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$ |
290,361 |
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$ |
2,248,547 |
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Net income per common share - basic |
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Net income per common share - basic from continuing operations |
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- |
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|
0.51 |
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|
0.05 |
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|
|
1.03 |
|
Net loss per common share - basic from discontinued operations |
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- |
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(0.37 |
) |
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- |
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(0.66 |
) |
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Net income per common share - basic |
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- |
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$ |
0.14 |
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$ |
0.05 |
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$ |
0.37 |
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Net income (loss) per common share - diluted |
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Net income per common share - diluted from continuing
operations |
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- |
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|
0.51 |
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0.05 |
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|
1.01 |
|
Net loss per common share - diluted from discontinued
operations |
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- |
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(0.37 |
) |
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- |
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(0.65 |
) |
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Net income per common share - diluted |
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- |
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$ |
0.14 |
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$ |
0.05 |
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|
0.36 |
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Weighted average number of common equivalent |
|
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shares outstanding - assuming dilution |
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6,190,696 |
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6,145,223 |
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6,166,524 |
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6,159,265 |
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CONDENSED CONSOLIDATED BALANCE SHEETS |
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October 31, |
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April 30, |
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2023 |
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2023 |
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Assets: |
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Current assets |
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$ |
199,833,558 |
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220,466,442 |
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Machinery and equipment-net |
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35,716,761 |
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35,788,357 |
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Deferred income taxes |
|
|
2,907,481 |
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|
2,640,902 |
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Intangibles |
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1,144,806 |
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1,311,030 |
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Other assets |
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6,971,753 |
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8,420,468 |
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Total assets |
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$ |
246,574,359 |
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|
$ |
268,627,199 |
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Liabilities and stockholders' equity: |
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Current liabilities |
|
$ |
91,467,508 |
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|
|
152,308,599 |
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Long-term obligations |
|
|
86,452,890 |
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|
|
48,227,573 |
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|
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|
|
|
|
|
|
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|
Stockholders' equity |
|
|
68,653,961 |
|
|
|
68,091,027 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders' equity |
|
$ |
246,574,359 |
|
|
$ |
268,627,199 |
|
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