SIGMATRON INTERNATIONAL, INC. REPORTS THIRD QUARTER FINANCIAL RESULTS FOR FISCAL 2020
March 11 2020 - 9:00AM
SigmaTron International, Inc. (NASDAQ: SGMA), an electronic
manufacturing services company, today reported revenues and
earnings for the third quarter ended January 31, 2020.
Revenues decreased to $67.4 million for the third quarter of
fiscal 2020 from $68.9 million for the same quarter in the prior
year. Net loss for the quarter was $217,039 compared to a net
loss of $595,526 for the same period in the prior year. Basic
and diluted loss per share were each $0.05 for the quarter ended
January 31, 2020, compared to basic and diluted loss per share each
of $0.14 for the same quarter in fiscal 2019.
For the nine months ended January 31, 2020, revenues decreased
to $216.3 million compared to $217.3 million for the same period in
the prior year. Net income for the nine month period ended
January 31, 2020 was $805,169 compared to net loss of $1,846,074
for the same period in the prior year. Basic and diluted
earnings per share for the nine months ended January 31, 2020, were
each $0.19, compared to basic and diluted loss per share each of
$0.44 for the nine months ended January 31, 2019.
Commenting on SigmaTron’s third quarter, fiscal 2020 results,
Gary R. Fairhead, President, Chief Executive Officer and Chairman
of the Board, said “Unfortunately, I am reporting disappointing
results for the third quarter of fiscal 2020. We had a modest
pre-tax loss for the quarter, directly tied to lower sales than
projected. The third quarter of our fiscal year is
historically our weakest quarter due to the holiday period, and
this year the Lunar New Year in Asia fell in the third quarter as
well. While sales were lower than last year’s third quarter,
we were able to reduce the loss for the period and still remain
profitable for the first three quarters of fiscal 2020. Gross
profit increased by almost 1% for the nine months ended January 31,
2020 compared to the previous year.
“As mentioned in our second quarter press release, we were not
optimistic regarding the third quarter results. Exactly as we
expected we had weak sales in November and December which started
to rebound in January. In addition to the holiday period
impacting revenue and results, customers were managing year-end
inventory levels which led to the lower revenue than expected.
“Heading into the fourth quarter, our backlog was strong and
revenue was ramping and all of a sudden the world was introduced to
the Novel Coronavirus. There is no doubt that this will
negatively affect our fourth quarter but to what extent remains to
be seen. On the manufacturing level, our China plant was
delayed by the government in terms of reopening after the Lunar New
Year holiday. As of the end of February, we are up to 60% of
our direct labor headcount before the holiday and it has steadily
increased. If that wasn’t bad enough, we will now be facing
disruptions in the supply chain, as our supply base returns to work
with smaller workforces due to the Coronavirus outbreak.
Through the end of February, the disruptions were manageable, but
we are being told de-commits from suppliers may increase in the
weeks ahead. We have little doubt that is accurate.
With that said, the customer backlog remains strong and we believe
that once the Coronavirus situation is under control business will
be strong.
“We have continued to successfully reduce inventory and increase
our availability under our line of credit. That will help us
going forward. We also have several new customers ramping
their business with us. The primary negative at this time is
the uncertainty surrounding our China operation and supply
chain. Hopefully, it will be under control soon and will
allow us to continue in a positive direction.”
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,
Chihuahua, and Tijuana Mexico; Union City, California; Suzhou,
China, and Ho Chi Minh City, Vietnam. SigmaTron
International, Inc. maintains engineering and materials sourcing
offices in Elgin, Illinois and 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 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 impairment testing; the collection of aged
account receivables; the variability of the Company’s customers’
requirements; the availability and cost of necessary components and
materials; 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 ability to meet the Company’s financial covenant; changes in
U.S., Mexican, Chinese, Vietnamese or Taiwanese regulations
affecting the Company’s business; the turmoil in the global economy
and financial markets; the spread of COVID-19 (commonly known as
“Coronavirus”) which has threatened the Company’s financial
stability by causing a decrease in consumer spending, caused a
disruption to the Company’s global supply chain, and caused the
Company to temporarily operate its Suzhou facility with a reduced
workforce thus reducing output at that facility; the stability of
the U.S., Mexican, Chinese, Vietnamese and Taiwanese economic,
labor and political systems and conditions; 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.
Financial tables to follow…
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CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
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Three Months |
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Three Months |
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Nine Months |
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Nine 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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January 31, |
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January 31, |
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January 31, |
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January 31, |
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2020 |
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2019 |
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2020 |
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2019 |
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Net sales |
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$ |
67,407,268 |
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$ |
68,852,050 |
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$ |
216,272,561 |
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$ |
217,267,198 |
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Cost of products sold |
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61,885,491 |
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63,322,930 |
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196,660,966 |
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199,254,937 |
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Gross profit |
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5,521,777 |
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5,529,120 |
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19,611,595 |
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18,012,261 |
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Selling and administrative expenses |
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5,469,654 |
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5,539,831 |
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16,997,268 |
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17,291,102 |
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Operating income (loss) |
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52,123 |
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(10,711 |
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2,614,327 |
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721,159 |
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Other expense |
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371,893 |
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590,422 |
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1,348,668 |
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1,643,854 |
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(Loss) income before income tax |
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(319,770 |
) |
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(601,133 |
) |
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1,265,659 |
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(922,695 |
) |
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Income tax (benefit) expense |
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(102,731 |
) |
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(5,607 |
) |
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460,490 |
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923,379 |
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Net (loss) income |
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($ |
217,039 |
) |
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($ |
595,526 |
) |
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$ |
805,169 |
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($ |
1,846,074 |
) |
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Net (loss) income per common share - basic |
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($ |
0.05 |
) |
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($ |
0.14 |
) |
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$ |
0.19 |
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($ |
0.44 |
) |
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Net (loss) income per common share - assuming dilution |
($ |
0.05 |
) |
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($ |
0.14 |
) |
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$ |
0.19 |
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($ |
0.44 |
) |
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Weighted average number of common equivalent |
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shares outstanding - assuming dilution |
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4,242,508 |
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4,230,008 |
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4,260,022 |
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4,227,891 |
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CONDENSED CONSOLIDATED BALANCE SHEETS |
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January 31, |
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April 30, |
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2020 |
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2019 |
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Assets: |
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Current assets |
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$ |
104,962,606 |
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$ |
123,545,289 |
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Machinery and equipment-net |
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32,333,369 |
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33,232,769 |
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Deferred income taxes |
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384,022 |
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384,022 |
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Intangibles |
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2,441,279 |
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2,713,360 |
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Other assets |
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8,335,425 |
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1,589,325 |
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Total assets |
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$ |
148,456,701 |
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$ |
161,464,765 |
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Liabilities and stockholders' equity: |
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Current liabilities |
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$ |
49,232,137 |
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$ |
55,606,766 |
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Long-term obligations |
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40,020,961 |
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47,570,550 |
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Stockholders' equity |
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59,203,603 |
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58,287,449 |
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Total liabilities and stockholders' equity |
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$ |
148,456,701 |
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$ |
161,464,765 |
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For Further Information Contact:SigmaTron International,
Inc.Linda K. Frauendorfer1-800-700-9095
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