SigmaTron International, Inc. Reports Second Quarter Financial Results for Fiscal 2020
December 11 2019 - 9:00AM
SigmaTron International, Inc. (NASDAQ: SGMA), an electronic
manufacturing services company, today reported revenues and
earnings for the quarter ended October 31, 2019.
Revenues decreased to $74.9 million for the second quarter of
fiscal 2020 from $77 million for the same quarter in the prior
year. Net income increased to $661,183 in the second fiscal
quarter compared to a net loss of $723,941 for the same period in
the prior year. Basic and diluted earnings per share were
$0.16 and $0.15, respectively, for the quarter ended October 31,
2019 compared to basic and diluted loss per share of each $0.17 for
the same quarter in fiscal 2019.
For the six months ended October 31, 2019, revenues increased to
$148.8 million compared to $148.4 million for the same period ended
October 31, 2018. Net income for the six-month period ended
October 31, 2019 was $1,022,208 compared to a net loss of
$1,250,548 for the same period in the prior year. Basic and
diluted earnings per share for the six months ended October 31,
2019, were each $0.24 compared to basic and diluted loss per share
of each $0.30 for the six months ended October 31, 2018.
Commenting on SigmaTron’s second quarter, fiscal 2020 results,
Gary R. Fairhead, President, Chief Executive Officer and Chairman
of the Board, said, “I am pleased to report that SigmaTron had a
solid second quarter for fiscal 2020. We posted a pre-tax
profit of $977,289 on revenue of $74,855,312. For the first
six months we posted a pre-tax profit of $1,585,429 on revenue of
$148,865,263. This compares favorably to the second quarter
and six-month numbers from the prior fiscal years shown
above. As stated in our press release for the first quarter
of fiscal 2020, we anticipated these results based on the trend
going into the second quarter.
“These results were driven by higher gross margins, lower
operating costs and reduced interest expense resulting from
significant reductions in inventory. The inventory reduction
also improved our liquidity provided under our bank line of
credit. These positive factors were offset in part by
continuing increases in cost of labor and some significant misses
in projections by several key customers.
“We find ourselves heading into the third quarter of fiscal 2020
with less optimism and some negative trends for the first part of
the quarter. There is no doubt that the China trade war is
negatively affecting revenue and operations as the uncertainty and
volatility caused by this trade war continues to impact customer
sentiment regarding the overall economy. That, coupled with
the usual holiday slowdown and customers trying to manage year-end
inventory levels, leads us to expect a slower than anticipated
November and December. However, we believe our business will
bounce back positively in January and continue at a good level for
the balance of the fiscal year. While that’s good news, the
continuing overall volatility could change those forecasts
quickly. Helping the positive trend from January forward are
several new programs and customers that will be starting up right
after the first of the year. We are looking forward to that
new business coming to fruition.
“In terms of our supply chain, we have continued to see slight
improvements in lead times and some modest cost reductions in
several component categories but those have generally been offset
by some increased lead times and price increases in other
categories. It’s better than it was a year ago but still has
the ability to negatively affect margins and production
efficiencies. However, in spite of some of these negative
issues and the short-term slowdown in the third quarter, I
currently remain optimistic regarding the full year and direction
we see the Company heading into going forward.”
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; the impact of tariffs; 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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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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$74,855,312 |
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$77,001,091 |
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$148,865,293 |
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$148,415,148 |
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Cost of
products sold |
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67,725,826 |
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70,307,006 |
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134,775,475 |
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135,932,007 |
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Gross
profit |
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7,129,486 |
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6,694,085 |
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14,089,818 |
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12,483,141 |
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Selling and
administrative expenses |
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5,700,288 |
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5,817,155 |
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11,527,614 |
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11,751,271 |
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Operating
income |
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1,429,198 |
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876,930 |
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2,562,204 |
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731,870 |
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Other
expense |
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451,909 |
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474,879 |
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976,775 |
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1,053,432 |
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Income
(loss) before income tax |
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977,289 |
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402,051 |
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1,585,429 |
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(321,562 |
) |
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Income tax
expense |
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316,106 |
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1,125,992 |
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563,221 |
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928,986 |
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Net income
(loss) |
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$661,183 |
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($723,941 |
) |
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$1,022,208 |
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($1,250,548 |
) |
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Net income
(loss) per common share - basic |
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$0.16 |
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($0.17 |
) |
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$0.24 |
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($0.30 |
) |
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Net income
(loss) per common share - assuming dilution |
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$0.15 |
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($0.17 |
) |
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$0.24 |
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($0.30 |
) |
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Weighted
average number of common equivalent |
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shares outstanding - assuming dilution |
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4,278,901 |
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4,230,008 |
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4,251,590 |
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4,226,833 |
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CONDENSED CONSOLIDATED BALANCE SHEETS |
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October 31, |
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April 30, |
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2019 |
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2019 |
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Assets: |
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Current
assets |
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$108,708,882 |
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$123,545,289 |
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Machinery
and equipment-net |
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32,018,795 |
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33,232,769 |
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Deferred
income taxes |
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384,021 |
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384,022 |
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Intangibles |
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2,531,610 |
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2,713,360 |
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Other
assets |
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8,015,582 |
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1,589,325 |
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Total
assets |
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$151,658,890 |
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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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$47,933,184 |
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$55,606,766 |
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Long-term
obligations |
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44,416,054 |
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47,570,550 |
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Stockholders' equity |
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59,309,652 |
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58,287,449 |
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Total
liabilities and stockholders' equity |
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$151,658,890 |
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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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