Sigmatron International, Inc. Reports Third Quarter Financial Results for Fiscal 2019
March 14 2019 - 5:37PM
SigmaTron International, Inc. (NASDAQ: SGMA), an electronic
manufacturing services company, today reported revenues and
earnings for the third quarter ended January 31, 2019.
Revenues increased to $68.8 million for the third quarter of
fiscal 2019 from $65.7 million for the same quarter in the prior
year. Net loss for the quarter was $595,526 compared to a net
income of $31,338 for the same period in the prior year.
Basic and diluted loss per share were each $0.14 for the quarter
ended January 31, 2019, compared to basic and diluted earnings per
share each of $0.01 for the same quarter in fiscal 2018.
For the nine months ended January 31, 2019, revenues increased
to $217.3 million compared to $209.9 million for the same period in
the prior year. Net loss for the nine month period ended
January 31, 2019 was $1,846,074 compared to net income of
$1,150,335 for the same period in the prior year. Basic and
diluted loss per share for the nine months ended January 31, 2019,
were each $0.44, compared to basic and diluted earnings per share
each of $0.27 for the nine months ended January 31, 2018.
Commenting on SigmaTron’s third quarter, fiscal 2019 results,
Gary R. Fairhead, President, Chief Executive Officer and Chairman
of the Board, said, “Our disappointing results continued in the
third quarter of fiscal 2019, tied directly to the issues noted in
our second quarter fiscal 2019 press release. The trade
dispute between the United States and China has continued with all
of the negative issues attached to it. Customers continue to
miss projections with many of them linking their reduced
requirements to the trade dispute and associated tariffs. The
tariffs impact cash flow, increase overhead costs and continue to
drive customers to look at alternative supply chain solutions which
creates inefficiencies. Finally, the trade war has created
significant uncertainty regarding short-term plans with our
customers on items such as new program launches.”
“In conjunction with the issues associated with the trade war
with China, the new Mexican administration did increase the
nationwide compensation structure / minimum wage effective January
1, 2019. This change created some short-term increased costs
and will continue to have a negative effect on our cost structure
going forward.
“We have addressed these issues and required price increases
where necessary with customers. Some discussions are
completed and others are expected to be complete in the fourth
quarter.
“Regarding the component marketplace availability lead times,
deliveries and price increases continue but they are fewer and
farther between. In fact for some component classes, lead
times have shortened.
“For the first nine months of fiscal 2019, we have posted a
pre-tax loss of $922,695. Of that amount, $379,000 was a
non-cash accrual related to currency fluctuations. While the
year has been difficult due to external issues and resultant
revenue misses, we have been able to manage much of the
volatility. We posted a small profit in January and remained
in compliance with our bank covenants at the end of the third
quarter. Based on our current backlog for the fourth quarter
of fiscal 2019, we should see revenue increase compared to the
third quarter and we expect that trend to continue. While I
am optimistic regarding the current backlog, the trade war with
China will continue to weigh heavily on our operations
short-term. Hopefully it will be resolved soon.”
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 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 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;
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 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.
For Further Information Contact:SigmaTron International,
Inc.Linda K. Frauendorfer1-800-700-9095
Financial tables to follow…
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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2019 |
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2018 |
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2019 |
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2018 |
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Net sales |
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$68,852,050 |
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$65,733,723 |
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$217,267,198 |
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$209,917,090 |
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Cost of products
sold |
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63,322,930 |
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59,836,383 |
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199,254,937 |
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190,159,128 |
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Gross profit |
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5,529,120 |
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5,897,340 |
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18,012,261 |
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19,757,962 |
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Selling and
administrative expenses |
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5,539,831 |
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5,637,680 |
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17,291,102 |
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17,192,099 |
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Operating (loss)
income |
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(10,711 |
) |
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259,660 |
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721,159 |
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2,565,863 |
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Other expense |
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590,422 |
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375,532 |
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1,643,854 |
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949,436 |
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Income (loss) before
income tax |
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(601,133 |
) |
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(115,872 |
) |
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(922,695 |
) |
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1,616,427 |
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Income tax (benefit)
expense |
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(5,607 |
) |
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(147,210 |
) |
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923,379 |
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466,092 |
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Net (loss)
income |
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($595,526 |
) |
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$31,338 |
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($1,846,074 |
) |
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$1,150,335 |
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Net (loss) income per
common share - basic |
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($0.14 |
) |
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$0.01 |
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($0.44 |
) |
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$0.27 |
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Net (loss) income per
common share - assuming dilution |
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($0.14 |
) |
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$0.01 |
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($0.44 |
) |
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$0.27 |
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Weighted average number
of common equivalent |
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shares
outstanding - assuming dilution |
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4,230,008 |
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4,356,509 |
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4,227,891 |
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4,325,197 |
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CONDENSED
CONSOLIDATED BALANCE SHEETS |
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January 31, |
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April 30, |
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2019 |
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2018 |
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Assets: |
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Current assets |
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$132,640,709 |
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$120,029,726 |
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Machinery and
equipment-net |
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33,723,247 |
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35,288,997 |
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Deferred income
taxes |
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340,745 |
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1,109,681 |
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Intangible assets |
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2,806,900 |
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3,088,085 |
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Other assets |
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1,582,655 |
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1,713,481 |
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Total assets |
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$171,094,256 |
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$161,229,970 |
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Liabilities and
stockholders' equity: |
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Current
liabilities |
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$63,139,403 |
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$59,378,486 |
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Long-term
obligations |
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50,671,930 |
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43,041,533 |
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Stockholders'
equity |
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57,282,923 |
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58,809,951 |
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Total liabilities and
stockholders' equity |
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$171,094,256 |
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$161,229,970 |
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