SigmaTron International, Inc. (NASDAQ: SGMA), an electronic
manufacturing services company, today reported revenues and
earnings for the quarter ended October 31, 2020.
Revenues decreased to $69.6 million for the second quarter of
fiscal 2021 from $74.9 million for the same quarter in the prior
year. Net income decreased to $626,858 in the second fiscal quarter
compared to $661,183 for the same period in the prior year. Basic
and diluted earnings per share were each $0.15 for the quarter
ended October 31, 2020 compared to basic and diluted earnings per
share of $0.16 and $0.15, respectively, for the same quarter in
fiscal 2020.
For the six months ended October 31, 2020, revenues decreased to
$130.1 million compared to $148.9 million for the same period ended
October 31, 2019. Net loss for the six-month period ended October
31, 2020 was $273,808 compared to a net income of $1,022,208 for
the same period in the prior year. Basic and diluted loss per share
for the six months ended October 31, 2020, were each $0.06 compared
to basic and diluted earnings per share of each $0.24 for the six
months ended October 31, 2019.
Commenting on SigmaTron’s second quarter, fiscal 2021 results,
Gary R. Fairhead, President, Chief Executive Officer and Chairman
of the Board, said, “I am pleased to report that SigmaTron
continued its recovery from the downturn experienced in April and
May of this year, and we had a solid second quarter for this fiscal
year; we posted a pre-tax profit of $1,069,801 on revenue of
$69,618,293. While the revenue for the quarter was lower than the
same period in the prior year, mix was favorable. Because of this
strong second quarter, we are close to breakeven for the first six
months of fiscal 2021, which is most encouraging, especially
considering that our results included expenses of $661,000 directly
related to COVID. Those expenses will continue in all likelihood
for the balance of this fiscal year.
“At this time, the backlog continues to be strong for our third
quarter. Some of our customers have unexpectedly benefited
from the pandemic and having people spend more time at home, which
others continue to be depressed in terms of demand. In
addition, several of our customer’s customers apparently took their
inventory lower than demand and they are now expediting orders for
delivery as soon as possible. How long this will last is hard
to determine but it appears that the possibility of a vaccine in
the near term has encouraged our customers to ramp up production
again. If, indeed, the economy continues to grow as it has
recently, we believe we are well positioned for the second half of
fiscal 2021 and we have recently landed several new opportunities
that bode well for fiscal 2022. However, as positive as
things are now, we believe the situation remains fluid and volatile
and could change for our customers quickly. As you would
expect, with the unexpected increase in demand come the challenges
on the supply side regarding components and lead-times. Some
of that is handled by the inventory on-hand but the possibility
exists of lengthening lead-times slowing down the ability to meet
the un-forecasted demand.
“As previously reported, the Company received a PPP Loan in
April 2020, and we recorded it as a liability on our balance sheet.
We have not yet applied for forgiveness. Also, as previously
reported, we continue to work towards a deal whereby the Company
will acquire Wagz, Inc. We are hopeful that the transaction will be
closed by the end of our third fiscal quarter.
“In summary, the second quarter was a good one and the Company
continues to head in the right direction. Many of our
short-term challenges now are the ones tied to un-forecasted demand
inside of lead-time, which are generally good problems to
have. Our customers seem to be more optimistic because of the
vaccine, which is also encouraging. Finally, we believe that
the opportunities with Wagz continue to grow and the combination of
the two companies will ultimately benefit all shareholders
involved.”
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 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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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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2020 |
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2019 |
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2020 |
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2019 |
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Net sales |
$69,618,424 |
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$74,855,312 |
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$130,143,380 |
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$148,865,293 |
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Cost of products sold |
62,858,882 |
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67,725,826 |
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119,111,647 |
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134,775,475 |
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Gross profit |
6,759,542 |
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7,129,486 |
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11,031,733 |
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14,089,818 |
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Selling and administrative expenses |
5,421,739 |
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5,700,288 |
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10,481,264 |
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11,527,614 |
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Operating income |
1,337,803 |
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1,429,198 |
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550,469 |
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2,562,204 |
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Other expense |
268,002 |
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451,909 |
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602,168 |
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976,775 |
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Income (loss) before income tax |
1,069,801 |
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977,289 |
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(51,699) |
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1,585,429 |
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Income tax expense |
442,943 |
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316,106 |
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222,109 |
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563,221 |
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Net income (loss) |
$626,858 |
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$661,183 |
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($273,808) |
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$1,022,208 |
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Net income (loss) per common share - basic |
$0.15 |
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$0.16 |
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($0.06) |
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$0.24 |
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Net income (loss) per common share - assuming dilution |
$0.15 |
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$0.15 |
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($0.06) |
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$0.24 |
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Weighted average number of common equivalent |
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shares outstanding - assuming dilution |
4,257,508 |
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4,278,901 |
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4,254,247 |
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4,251,590 |
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CONDENSED CONSOLIDATED BALANCE SHEETS |
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October 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 |
$121,312,642 |
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$130,616,797 |
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Machinery and equipment-net |
33,735,679 |
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33,935,760 |
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Deferred income taxes |
285,105 |
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284,435 |
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Intangibles |
2,173,525 |
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2,350,949 |
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Other assets |
8,933,500 |
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8,891,090 |
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Total assets |
$166,440,451 |
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$176,079,031 |
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Liabilities and stockholders' equity: |
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Current liabilities |
$63,043,430 |
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$70,048,041 |
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Long-term obligations |
44,779,801 |
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47,155,191 |
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Stockholders' equity |
58,617,220 |
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58,875,799 |
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Total liabilities and stockholders' equity |
$166,440,451 |
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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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