SigmaTron International, Inc. Reports First Quarter Financial Results for Fiscal 2021
September 09 2020 - 9:15AM
SigmaTron International, Inc. (NASDAQ: SGMA), an electronic
manufacturing services company, today reported revenues and
earnings for the fiscal quarter ended July 31, 2020.
Revenues decreased to $60.5 million in the first quarter of
fiscal 2021 from $74.0 million for the same quarter in the prior
year. The Company incurred a net loss of $900,666 for the
quarter ended July 31, 2020 compared to net income of $361,025 for
the same period in the prior year. Basic and diluted loss per
share for the quarter ended July 31, 2020, were each $0.21,
compared to basic and diluted earnings per share of $0.09 each for
the same quarter ended July 31, 2019.
Commenting on SigmaTron’s first quarter fiscal 2021 results,
Gary R. Fairhead, President, Chief Executive Officer and Chairman
of the Board, said, “As previously reported in our fiscal year 2020
press release and 10-K, SigmaTron is reporting a pre-tax loss for
the first quarter of fiscal 2021. Over the past two quarters
we have experienced a v-shaped curve in terms of revenue:
February was close to forecast, March was a 10% decline, April and
May’s decline was 30% or greater, followed by a significant rebound
in June and a full recovery in July. The May pre-tax loss was
greater than the loss for the entire quarter so we were slightly
above breakeven for the last two months of the first quarter of
fiscal 2021.
“During the first quarter results were negatively affected by
the revenue decline and manufacturing inefficiencies caused by
COVID, especially in Mexico. Several of our plants were shut
down while we were required to incur continuing labor costs and as
they reopened, we experienced significant inefficiencies.
None of this is a surprise given the far-reaching effects of the
pandemic.
“As disappointing as the first quarter was, the second quarter
is as encouraging. The backlog for the second quarter is
strong and while several of our major customers continue to be
negatively affected by the pandemic, others have benefitted and are
compensating for those customers with lower than expected
revenue. As stated in our 10-K, the full impact of the
pandemic will depend on future developments, which are highly
uncertain and cannot be predicted. And there is no doubt that
customers are also mindful of the election in November.
“As reported at fiscal 2020 year-end, the Company elected to
account for its PPP Loan by using loan accounting. There is
no effect from any potential loan forgiveness reflected in our
first quarter results. Once the procedure to apply for
forgiveness is finalized by the government, the Company currently
plans to apply for the forgiveness of the entire loan.
“Also, as previously reported, the Company and Wagz, Inc.
entered into a Letter of Intent under which the Company and Wagz
would be combined by the end of August 2020. To date that has
not happened but both companies are continuing to work towards
closing the deal by the end of our second fiscal quarter. We
will report on that separately when appropriate.
“In summary, the current trend for the Company is heading in the
right direction. Obviously, uncertainty remains regarding the
general economy because of the pandemic and the election. In
spite of this, we continue to land new customers and are working on
several significant new opportunities. We are enthusiastic
about our pending deal with Wagz. All of the aforementioned
leads us to believe that better times are ahead.”
About SigmaTron International, Inc.
Headquartered in Elk Grove Village, Illinois, 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 Biên Hòa City, Vietnam. SigmaTron
International, Inc. maintains engineering and materials sourcing
offices in Elgin, Illinois and Taipei, Taiwan.
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 impairment
testing; the ability to achieve the expected benefits of
acquisitions; 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, including the
phase-out of LIBOR; 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
revenues, caused a disruption to the Company’s global supply chain,
caused plant closings or reduced operations thus reducing output at
those facilities; 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 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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Ended |
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Ended |
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July 31, |
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July 31, |
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2020 |
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2019 |
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Net sales |
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$60,524,956 |
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$74,009,981 |
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Cost of products sold |
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56,252,765 |
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67,049,649 |
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Gross profit |
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4,272,191 |
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6,960,332 |
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Selling and administrative expenses |
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5,059,525 |
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5,827,326 |
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Operating (loss) income |
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(787,334 |
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1,133,006 |
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Other expense |
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334,166 |
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524,866 |
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(Loss) income before income tax |
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(1,121,500 |
) |
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608,140 |
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Income tax (benefit) expense |
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(220,834 |
) |
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247,115 |
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Net (loss) income |
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($900,666 |
) |
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$361,025 |
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Net (loss) income per common share - basic |
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($0.21 |
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$0.09 |
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Net (loss) income per common share - assuming dilution |
($0.21 |
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$0.09 |
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Weighted average number of common equivalent |
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shares outstanding - assuming dilution |
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4,250,986 |
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4,241,883 |
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CONDENSED CONSOLIDATED BALANCE SHEETS |
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July 31, |
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April 30, |
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2020 |
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2020 |
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Assets: |
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Current assets |
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$123,189,280 |
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$130,616,797 |
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Machinery and equipment-net |
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33,632,655 |
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33,935,760 |
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Deferred income taxes |
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280,764 |
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284,435 |
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Intangibles |
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2,261,913 |
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2,350,949 |
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Other assets |
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9,482,870 |
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8,891,090 |
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Total assets |
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$168,847,482 |
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$176,079,031 |
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Liabilities and stockholders' equity: |
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Current liabilities |
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$60,797,911 |
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$70,048,041 |
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Long-term obligations |
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50,059,209 |
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47,155,191 |
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Stockholders' equity |
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57,990,362 |
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58,875,799 |
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Total liabilities and stockholders' equity |
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$168,847,482 |
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$176,079,031 |
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For Further Information Contact:SigmaTron International,
Inc.Linda K. Frauendorfer1-800-700-9095
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