SigmaTron International, Inc. (NASDAQ: SGMA), an electronic
manufacturing services company, hereby provides an update on its
international operations due to the international footprint that it
enjoys and the various COVID-19 related mandates issued in the
countries where the Company has operations.
Our China operation was shut down for one week after Lunar New
Year in February 2020. It resumed operations on February 11,
2020 and slowly added personnel such that by the end of
February 2020 it was back to the same level of capacity it
had prior to Lunar New Year. At this time, there are no
issues affecting manufacturing capacity and operations.
Our Vietnam operation has no mandates in place that have
affected the operation. It has been in full production the
entire period.
Our international purchasing office in Taiwan has no mandates in
place affecting it. There have been no disruptions in support
of our manufacturing operations for the entire period.
Regarding our operation in Union City, California, we were told
on Monday, March 16, 2020 that under a Shelter-in-Place Order from
Alameda County we were required to shut down operations that
day. We were closed the next four days. In response to
certifications by our customers that their products were essential
and that they were Essential Businesses under applicable State and
County Orders we resumed operations on Monday, March 23, 2020 with
about 60% of our workforce. We are currently up to 80% of our
workforce in place and waiting for an update regarding the current
Shelter-in-Place Order at the State level that runs through April
30, 2020.
Illinois issued its Shelter-in-Place Order on March 20,
2020. The vast majority of its customers qualified as
Essential Businesses under the Illinois Order and for that reason
the operation has remained open during the entire period, though
not at full strength. Initially we had 60% of our workforce
in place. We currently have approx. 80% of our workforce on
the job and we are waiting for an update on the current
Shelter-in-Place Order that expires on April 30, 2020.
Our operation in Tijuana, Mexico was visited by Federal
inspectors on Wednesday, April 15, 2020 who decided that our
operation is not an Essential Business under the Mexican Decrees
and was required to shut down that day. The initial Decree
was set to expire on April 30, 2020. We just received notice
that the initial Decree is now extended to May 30, 2020. We
are appealing the mandatory shutdown decision but we have had no
feedback from the government to date. We are also supporting
various organizations working with the U.S. and Mexican
administrations regarding the definition of Essential
Businesses.
In Acuna, Mexico we had a similar experience as Tijuana with the
operation shut down on April 21, 2020. With the extension of
the Decrees, Acuna will be allowed to reopen on either May 18, 2020
or May 30, 2020. We continue to appeal this decision and also
like Tijuana, we are supporting groups working to achieve
reciprocity between the two countries in terms of defining what an
Essential Business is.
Regarding our Chihuahua, Mexico operation, the Federal
inspectors determined that our operation is an Essential Business
and it remains in production. We had a significant number of
employees that the government mandated be sent home because of age
or underlying conditions but production continues.
Gary R. Fairhead, President, CEO and Chairman, stated, “At this
time, it is a significant problem that the Mexican Decrees do not
define Essential Businesses in the same manner as the U.S. Orders.
This is a very fluid situation and we are hopeful that the two
governments understand the necessity to coordinate the
definition.
“During this period, we have taken appropriate safety measures
to protect our employees at work. Employee safety is
paramount in terms of our approach to this unprecedented
situation.
“Obviously, COVID-19 issues will have a negative impact on our
fourth quarter and operations going forward. Many of our
customers continue to have strong demand in spite of the condition
of the global economy and we are hopeful that as the U.S. and other
governments start to open up their economies production and
resultant revenue will continue to improve.”
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, has
negatively affected global economies, caused a disruption to the
Company’s global supply chain, and caused the Company to incur
government mandated closures of factories or reduced production
tied to lower staffing; 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
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