SMTC Corporation (Nasdaq:SMTX), a global electronics manufacturing
services provider and winners of the Frost & Sullivan’s 2019
Best Practices Award for Customer Value Leadership in the
Electronics Manufacturing Services Industry, today announced its
second quarter 2019 results.
Second Quarter Financial Highlights
|
|
|
Q2 2018 |
|
Q2 2018 |
|
|
$s in millions |
Q2 2019 |
(as reported) |
Change |
Proforma1 |
Change |
|
Revenue |
$90.9 |
$44.5 |
104.4% |
$82.0 |
10.9% |
|
Gross Profit |
$9.0 |
$4.3 |
109.2% |
$8.3 |
8.4% |
|
Gross Margin |
9.9% |
9.6% |
|
10.1% |
|
|
Adjusted Gross Profit2 |
$10.8 |
$4.4 |
145.5% |
$8.4 |
28.6% |
|
Adjusted Gross Profit Percentage2 |
11.9% |
9.8% |
|
10.3% |
|
|
Net Loss |
($2.5) |
($0.1) |
2398% |
($1.1) |
127% |
|
Adjusted Net Income (Loss)2 |
$1.1 |
$0.2 |
450.0% |
($0.7) |
|
|
Adjusted EBITDA2 |
$6.1 |
$1.6 |
279.8% |
$3.5 |
73.6% |
|
Net Debt |
$86.0 |
$19.7 |
|
$89.5 |
|
1Proforma assumes MC Assembly Holdings, Inc. (“MC
Assembly”), acquired on November 9, 2018 had been acquired by SMTC
on April 1, 2018, the first day of the second quarter of 2018.
2Adjusted Gross Profit, Adjusted Gross Profit percentage, and
Adjusted Net Income (Loss) and Adjusted EBITDA are non-GAAP
measures. Please refer to the section below labeled Non-GAAP
information and the various reconciliations shown below in this
press release.
SMTC Corporation (“SMTC”) experienced robust year-over-year
revenue growth, up 104.4% from its reported revenue in the second
quarter of 2018 and up 10.9% on a proforma basis which assumes that
MC Assembly, acquired in the fourth quarter of 2018, had been part
of STMC in the second quarter of 2018. Revenue from Test and
Measurement, Industrial, Power and Clean Tech and Aerospace and
Defense customers were large contributors to the year-over-year
growth in revenue.
As reported and Proforma Adjusted EBITDA both increased
significantly over the second quarter of 2018. The improvement in
Adjusted EBITDA metrics was due to higher revenue and gains from
operational efficiencies resulting from various company
initiatives, synergies achieved and increased scale from the
completed integration of the of MC Assembly.
“During Q2 we completed the integration of MC Assembly and
turned our attention toward executing our strategic growth plans.
We invested $1.3 million in capital improvements initiatives that
are intended to improve operating efficiencies, enhance service to
support our growing customer base, and create value for our
shareholders in the second quarter,” said Ed Smith, STMC President
and CEO.
“With tariff concerns high on the mind of our customers, we
incurred additional costs in the second quarter as we shifted some
customer production to Mexico. To address this growing customer
concern about tariffs, we have expanded our North American
capabilities and production capacity at two facilities acquired in
the 2018 acquisition of MC Assembly. This quarter we are adding a
new capability in our Billerica, United States location that
provides our customers with world-class 'Quick-turn' manufacturing
and should enable an accelerated launch timetable for our
customers’ products with the flexibility to scale into a low-cost
geography that is available from other SMTC sites. We also upgraded
and expanded our capacity at its Fresnillo facility in Zacatecas,
Mexico enabling a 25% increase in capacity, which we started to
ramp up during the third quarter,” added Smith.
“As part of our strategy to improve our capital structure, at
the end of June we completed a Rights Offering and Registered
Direct Offering that generated aggregate proceeds of approximately
$14.6 million. On July 3, 2019 we used $12 million of these
proceeds to accelerate pay-off of our outstanding Term B debt. This
week we refinanced our credit agreements which reduced the Term A
outstanding balance to $40 million from $50 million, reduced our
interest costs and expanded borrowing capacity under the
asset-based revolver facilities to $65 million to better support
our future growth,” Smith commented.
Outlook
“Customer concerns about the continuing impact of tariffs and
macro-economic factors has caused, as we experienced in the second
quarter, many customers to review and begin to revise where they
outsource their manufacturing. While we believe SMTC is well
positioned with our North American facilities, we expect customer
demand may be impacted over the second half of the year as
customers continue to react and adjust to the ongoing geo-political
impacts on global trade. As a result, our current expectation for
revenue and Adjusted EBITDA for 2019 will more likely approach the
lower end of our prior guidance of $393 to $408 million in revenue
and $27 to $29 million for Adjusted EBITDA,” noted Smith.
Financial Results Conference Call
SMTC will host a conference call which will start at 5:00 p.m.
Eastern Time on Thursday, August 8, 2019. The conference call can
be accessed by visiting the Investor Relations section of SMTC’s
web site on the Investor Relations Calendar page at
https://www.smtc.com/investors/news-events/ir-calendar or dialing
1-877-317-6789 (for U.S. participants) or 1-412-317-6789 (for
participants outside of the U.S ten minutes prior to the start of
the call and request to join the SMTC Corporation’s Second Quarter
2019 Results Conference Call).
The conference call will be available for rebroadcast from the
Investor Relations section of SMTC’s web site on the Investor
Relations Calendar page.
Non-GAAP information
Adjusted Gross Profit, Adjusted Gross Profit Percent, Adjusted
Net Income (Loss), EBITDA, and Adjusted EBITDA are non-GAAP
measures. Adjusted Gross Profit is computed as gross profit
excluding unrealized gains or losses on unsettled forward foreign
exchange contracts and amortization of intangible assets. Adjusted
Gross Profit Percentage is computed as Adjusted Gross Profit
divided by revenue. A reconciliation of Adjusted Gross Profit to
gross profit is included in the attachment. Adjusted Net Income
(Loss) is computed as Net Income (Loss) excluding restructuring
charges, unrealized foreign exchange gains/losses on unsettled
forward foreign exchange contracts, stock-based compensation,
stock-based compensation – warrant revaluation, amortization of
intangible assets, merger and acquisition related expenses and
gains or losses on contingent consideration. A reconciliation of
Adjusted Net Income (Loss) to Net Income (Loss) is included in the
attachment. EBITDA is defined as net income (loss) before
Interest, taxes, depreciation and amortization. Adjusted EBITDA is
computed as net income (loss) from operations excluding
depreciation and amortization, restructuring charges, unrealized
foreign exchange gains/losses on unsettled forward foreign exchange
contracts, stock-based compensation, stock-based compensation –
warrant revaluation, interest, income tax expense and merger and
acquisition related expenses and gains or losses on contingent
consideration. SMTC Corporation has provided in this release a
non-GAAP calculation of Adjusted EBITDA as supplemental information
regarding the operational performance of SMTC’s core business. A
reconciliation of Adjusted EBITDA to Net Income (Loss) is included
in the attachment. Management uses these non-GAAP financial
measures internally in analyzing SMTC’s financial results to assess
operational performance and liquidity as well as to provide a
consistent method of comparison to historical periods and to the
performance of competitors and peer group companies. SMTC believes
that these non-GAAP financial measures are useful for management
and investors in assessing SMTC’s performance and when planning,
forecasting and analyzing future periods. SMTC believes these
non-GAAP financial measures are useful to investors because they
allow for greater transparency with respect to key financial
metrics we use in making operating decisions and because investors
and analysts use it to help assess the health of our business.
Non-GAAP measures are subject to limitations as these measures are
not in accordance with, or an alternative for, United States
Generally Accepted Accounting Principles (US GAAP) and may be
different from non-GAAP measures used by other companies. Because
of these limitations, investors should consider Adjusted Gross
Profit, Adjusted Gross Profit Percentage, Adjusted Net Income
(Loss) and Adjusted EBITDA along with other financial performance
measures, including revenue, gross profit and net earnings (loss),
as reflected in SMTC’s interim consolidated financial statements
prepared in accordance with US GAAP.
Forward-Looking Statements
The statements contained in this release that are not purely
historical are forward-looking statements, which involve risk and
uncertainties that could cause actual results to differ materially
from those expressed in the forward-looking statements. These
statements may be identified by their use of forward looking
terminology such as “anticipates,” “believes,” “can,”
“continue,” “could,” “estimates,” “expects,” “intends,” “may,”
“plans,” “potential,” “predicts,” “should,” or “will” or the
negative of these terms or other and similar words, and include,
but are not limited to, statements regarding the expected outcome
of our capital expenditure initiatives, the anticipated benefits to
our customers of recent facilities improvements, and other For
these statements, we claim the protection of the safe harbor for
forward looking statements contained in the Private Securities
Litigation Reform Act of 1995. Risks and uncertainties that may
cause future results to differ from forward looking statements
include the challenges of managing quickly expanding operations and
integrating acquired companies, fluctuations in demand for
customers' products and changes in customers' product sources,
competition in the electronics manufacturing services industry,
component shortages, and others risks and uncertainties discussed
in SMTC's most recent filings with the Securities and Exchange
Commission. The forward-looking statements contained in this
release are made as of the date hereof and SMTC assumes no
obligation to update the forward-looking statements, or to update
the reasons why actual results could differ materially from those
projected in the forward-looking statements.
About SMTC
SMTC Corporation was founded in 1985 and acquired MC Assembly
Holdings, Inc. in November 2018. Following this acquisition,
SMTC has more than 50 manufacturing and assembly lines in United
States, China and Mexico which creates a powerful low-to-medium
volume, high-mix, end-to-end global electronics manufacturing
services (EMS) provider. With local support and expanded
manufacturing capabilities globally, including fully integrated
contract manufacturing services with a focus on global original
equipment manufacturers and emerging technology companies,
including those in the Defense and Aerospace, Industrial, Power and
Clean Technology, Medical and Safety, Retail and Payment Systems,
Semiconductors and Telecom, Networking and Communications; and Test
and Measurement industries. As a mid-size provider of end-to-end
EMS, SMTC provides printed circuit boards assemblies production,
systems integration and comprehensive testing services, enclosure
fabrication, as well as product design, sustaining engineering and
supply chain management services. SMTC services extend over the
entire electronic product life cycle from the development and
introduction of new products through to the growth, maturity and
end-of-life phases.
SMTC is a public company incorporated in Delaware with its
shares traded on the Nasdaq National Market System under the symbol
SMTX and was added to the Russell Microcap® Index in 2018. For
further information on SMTC Corporation, please visit our website
at www.smtc.com.
|
|
|
|
Consolidated Statements of Operations and Comprehensive
Income |
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
Three months ended |
|
Six months ended |
|
|
|
|
|
|
|
|
(Expressed in thousands of U.S. dollars, except number of shares
and per share amounts) |
June 30,2019 |
|
July 1,2018 |
|
June 30,2019 |
|
July 1,2018 |
|
|
|
|
|
|
|
|
Revenue |
$ |
90,936 |
|
|
$ |
44,479 |
|
|
$ |
193,585 |
|
|
$ |
81,599 |
|
Cost of
sales |
|
81,939 |
|
|
|
40,196 |
|
|
|
175,964 |
|
|
|
73,466 |
|
Gross profit |
|
8,997 |
|
|
|
4,283 |
|
|
|
17,621 |
|
|
|
8,133 |
|
Selling, general and
administrative expenses |
|
6,600 |
|
|
|
3,647 |
|
|
|
13,298 |
|
|
|
7,156 |
|
Gain on Contingent
Consideration |
|
- |
|
|
|
- |
|
|
|
(3,050 |
) |
|
|
- |
|
Restructuring charges |
|
1,546 |
|
|
|
96 |
|
|
|
2,170 |
|
|
|
96 |
|
|
|
|
|
|
|
|
|
Operating earnings |
|
851 |
|
|
|
540 |
|
|
|
5,203 |
|
|
|
881 |
|
Interest expense |
|
2,800 |
|
|
|
403 |
|
|
|
5,670 |
|
|
|
710 |
|
Net income (loss) before
income taxes |
|
(1,949 |
) |
|
|
137 |
|
|
|
(467 |
) |
|
|
171 |
|
Income tax expense
(recovery) |
|
|
|
|
|
|
|
Current |
|
416 |
|
|
|
196 |
|
|
|
695 |
|
|
|
306 |
|
Deferred |
|
103 |
|
|
|
38 |
|
|
|
95 |
|
|
|
(46 |
) |
|
|
519 |
|
|
|
234 |
|
|
|
790 |
|
|
|
260 |
|
Net
loss and comprehensive loss |
$ |
(2,468 |
) |
|
$ |
(97 |
) |
|
$ |
(1,257 |
) |
|
$ |
(89 |
) |
|
|
|
|
|
|
|
|
Basic loss per share |
$ |
(0.10 |
) |
|
$ |
(0.01 |
) |
|
$ |
(0.05 |
) |
|
$ |
(0.01 |
) |
Diluted loss per share |
$ |
(0.10 |
) |
|
$ |
(0.01 |
) |
|
$ |
(0.05 |
) |
|
$ |
(0.01 |
) |
|
|
|
|
|
|
|
|
Weighted average number of
shares outstanding |
|
|
|
|
|
|
|
Basic |
|
23,557,944 |
|
|
|
17,222,439 |
|
|
|
23,403,431 |
|
|
|
17,131,971 |
|
Diluted |
|
23,557,944 |
|
|
|
17,222,439 |
|
|
|
23,403,431 |
|
|
|
17,131,971 |
|
|
|
|
|
|
|
|
|
Consolidated Balance Sheets |
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
(Expressed in thousands of U.S. dollars) |
June 30,2019 |
|
December 30,2018 |
Assets |
|
|
|
|
|
|
|
Current
assets: |
|
|
|
Cash |
$ |
634 |
|
|
$ |
1,601 |
|
Accounts receivable - net |
|
64,951 |
|
|
|
72,986 |
|
Unbilled contract assets |
|
27,619 |
|
|
|
20,405 |
|
Inventories - net |
|
46,149 |
|
|
|
53,203 |
|
Prepaid expenses and other assets |
|
6,691 |
|
|
|
5,548 |
|
Derivative assets |
|
- |
|
|
|
15 |
|
Income taxes receivable |
|
158 |
|
|
|
160 |
|
|
|
146,202 |
|
|
|
153,918 |
|
Property, plant and equipment - net |
|
26,855 |
|
|
|
28,160 |
|
Operating lease right of use assets - net |
|
4,445 |
|
|
|
- |
|
Goodwill |
|
18,165 |
|
|
|
18,165 |
|
Intangible assets - net |
|
16,247 |
|
|
|
19,935 |
|
Deferred financing costs - net |
|
646 |
|
|
|
668 |
|
Deferred income taxes - net |
|
285 |
|
|
|
380 |
|
Total
assets |
$ |
212,845 |
|
|
$ |
221,226 |
|
|
|
|
|
Liabilities and Shareholders' Equity |
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
Revolving credit facility |
|
13,748 |
|
|
$ |
25,020 |
|
Accounts payable |
|
66,639 |
|
|
|
76,893 |
|
Accrued liabilities |
|
12,174 |
|
|
|
13,040 |
|
Warrant liability |
|
1,948 |
|
|
|
2,009 |
|
Contingent consideration |
|
- |
|
|
|
3,050 |
|
Income taxes payable |
|
213 |
|
|
|
12 |
|
Current portion of long-term debt |
|
1,368 |
|
|
|
1,368 |
|
Current portion of operating lease obligations |
|
1,891 |
|
|
|
- |
|
Current portion of finance lease obligations |
|
1,401 |
|
|
|
1,547 |
|
|
|
99,382 |
|
|
|
122,939 |
|
|
|
|
|
Long-term debt |
|
55,887 |
|
|
|
56,039 |
|
Operating lease
obligations |
|
3,019 |
|
|
|
Finance
lease obligations |
|
9,284 |
|
|
|
9,947 |
|
Total liabilities |
|
167,572 |
|
|
|
188,925 |
|
|
|
|
|
Shareholders’
equity: |
|
|
|
Capital stock |
|
506 |
|
|
|
458 |
|
Additional paid-in capital |
|
292,829 |
|
|
|
278,648 |
|
Deficit |
|
(248,062 |
) |
|
|
(246,805 |
) |
|
|
45,273 |
|
|
|
32,301 |
|
Total
liabilities and shareholders' equity |
$ |
212,845 |
|
|
$ |
221,226 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
Statements of Cash Flows |
|
|
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
Three months ended |
|
Six months ended |
(Expressed in thousands of U.S. dollars) |
|
|
|
|
|
|
|
Cash
provided by (used in): |
June 30,2019 |
|
July 1,2018 |
|
June 30,2019 |
|
July 1,2018 |
Operations: |
|
|
|
|
|
|
|
Net loss |
$ |
(2,468 |
) |
|
$ |
(97 |
) |
|
$ |
(1,257 |
) |
|
$ |
(89 |
) |
Items not involving cash: |
|
|
|
|
|
|
|
Depreciation on property, plant and equipment |
|
1,626 |
|
|
|
769 |
|
|
|
3,253 |
|
|
|
1,543 |
|
Amortization of acquired Intangible assets |
|
1,844 |
|
|
|
- |
|
|
|
3,688 |
|
|
|
- |
|
Unrealized foreign exchange gain on unsettled forward |
|
|
|
|
|
|
|
exchange contracts |
|
- |
|
|
|
89 |
|
|
|
- |
|
|
|
(230 |
) |
Deferred income taxes (recovery) |
|
103 |
|
|
|
38 |
|
|
|
95 |
|
|
|
(46 |
) |
Amortization of deferred financing fees |
|
274 |
|
|
|
12 |
|
|
|
545 |
|
|
|
21 |
|
Stock-based compensation |
|
97 |
|
|
|
77 |
|
|
|
185 |
|
|
|
203 |
|
Change in fair value of warrant liability |
|
40 |
|
|
|
- |
|
|
|
(61 |
) |
|
|
- |
|
Change in fair value of contingent consideration |
|
- |
|
|
|
- |
|
|
|
(3,050 |
) |
|
|
- |
|
|
|
|
|
|
|
|
|
Change in non-cash operating working capital: |
|
|
|
|
|
|
|
Accounts receivable |
|
9,229 |
|
|
|
(1,223 |
) |
|
|
8,035 |
|
|
|
(3,016 |
) |
Unbilled contract assets |
|
(3,411 |
) |
|
|
(1,339 |
) |
|
|
(7,214 |
) |
|
|
(6,488 |
) |
Inventories |
|
2,511 |
|
|
|
(4,516 |
) |
|
|
7,054 |
|
|
|
(2,851 |
) |
Prepaid expenses and other assets |
|
(61 |
) |
|
|
(1,068 |
) |
|
|
(1,128 |
) |
|
|
(1,437 |
) |
Income taxes payable |
|
174 |
|
|
|
- |
|
|
|
203 |
|
|
|
(48 |
) |
Accounts payable |
|
(12,100 |
) |
|
|
4,383 |
|
|
|
(10,130 |
) |
|
|
8,995 |
|
Accrued liabilities |
|
(952 |
) |
|
|
177 |
|
|
|
(866 |
) |
|
|
1,361 |
|
Net change in operating lease right of use asset and liability |
|
65 |
|
|
|
- |
|
|
|
465 |
|
|
|
- |
|
|
|
(3,029 |
) |
|
|
(2,698 |
) |
|
|
(183 |
) |
|
|
(2,082 |
) |
Financing: |
|
|
|
|
|
|
|
Advances (repayments) of revolving credit facility |
|
(9,888 |
) |
|
|
1,940 |
|
|
|
(11,272 |
) |
|
|
(209 |
) |
Repayments of long-term debt |
|
(312 |
) |
|
|
(500 |
) |
|
|
(625 |
) |
|
|
(1,000 |
) |
Principal repayments of finance lease obligations |
|
(392 |
) |
|
|
(50 |
) |
|
|
(809 |
) |
|
|
(94 |
) |
Proceeds from issuance of common stock |
|
14,044 |
|
|
|
361 |
|
|
|
14,044 |
|
|
|
361 |
|
Equipment facility advance |
|
- |
|
|
|
1,894 |
|
|
|
- |
|
|
|
1,894 |
|
Debt issuance and deferred financing fees |
|
(50 |
) |
|
|
(15 |
) |
|
|
(50 |
) |
|
|
(48 |
) |
|
|
3,402 |
|
|
|
3,630 |
|
|
|
1,288 |
|
|
|
904 |
|
Investing: |
|
|
|
|
|
|
|
Purchase of property, plant and equipment |
|
(1,335 |
) |
|
|
(2,301 |
) |
|
|
(2,072 |
) |
|
|
(2,405 |
) |
|
|
(1,335 |
) |
|
|
(2,301 |
) |
|
|
(2,072 |
) |
|
|
(2,405 |
) |
Decrease in cash |
|
(962 |
) |
|
|
(1,369 |
) |
|
|
(967 |
) |
|
|
(3,583 |
) |
Cash, beginning of period |
|
1,596 |
|
|
|
3,322 |
|
|
|
1,601 |
|
|
|
5,536 |
|
Cash,
end of the period |
$ |
634 |
|
|
$ |
1,953 |
|
|
$ |
634 |
|
|
|
$ 1,953 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplementary
Information: |
|
|
|
|
|
|
|
Reconciliation of
Adjusted EBITDA |
|
|
|
|
|
|
|
|
Three months ended |
|
Six months ended |
|
|
|
Note 1 |
|
|
|
Note 1 |
|
June 30,2019 |
|
July 1,2018 |
|
June 30,2019 |
|
July 1,2018 |
|
|
|
|
|
|
|
|
Net loss |
$ |
(2,468 |
) |
|
$ |
(97 |
) |
|
$ |
(1,257 |
) |
|
$ |
(89 |
) |
Add (deduct): |
|
|
|
|
|
|
|
Depreciation of property, plant and equipment |
|
1,626 |
|
|
|
769 |
|
|
|
3,253 |
|
|
|
1,543 |
|
Amortization of Intangible assets |
|
1,844 |
|
|
|
- |
|
|
|
3,688 |
|
|
|
- |
|
Interest |
|
2,800 |
|
|
|
403 |
|
|
|
5,670 |
|
|
|
710 |
|
Income tax expense |
|
519 |
|
|
|
234 |
|
|
|
790 |
|
|
|
260 |
|
|
|
|
|
|
|
|
|
EBITDA |
$ |
4,321 |
|
|
$ |
1,309 |
|
|
$ |
12,144 |
|
|
$ |
2,424 |
|
|
|
|
|
|
|
|
|
Add (deduct): |
|
|
|
|
|
|
|
Stock compensation expense |
|
97 |
|
|
|
77 |
|
|
|
185 |
|
|
|
203 |
|
Stock compensation expense - warrant revaluation |
|
40 |
|
|
|
- |
|
|
|
(61 |
) |
|
|
- |
|
Restructuring charges |
|
1,546 |
|
|
|
96 |
|
|
|
2,170 |
|
|
|
96 |
|
Merger and acquisitions related expenses |
|
73 |
|
|
|
- |
|
|
|
164 |
|
|
|
- |
|
Contingent Consideration reversal |
|
- |
|
|
|
- |
|
|
|
(3,050 |
) |
|
|
- |
|
Unrealized foreign exchange loss (gain) |
|
- |
|
|
|
89 |
|
|
|
- |
|
|
|
(230 |
) |
on unsettled forward exchange contracts |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
$ |
6,077 |
|
|
$ |
1,571 |
|
|
$ |
11,552 |
|
|
$ |
2,493 |
|
|
|
|
|
|
|
|
|
Note 1: Reflects
historical SMTC results as filed |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplementary
Information: |
|
|
|
|
|
|
|
Reconciliation of
Adjusted Gross Profit |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
Six months ended |
|
June 30,2019 |
|
July 1,2018 |
|
June 30,2019 |
|
July 1,2018 |
|
|
|
|
|
|
|
|
Gross Profit |
$ |
8,997 |
|
|
$ |
4,283 |
|
|
$ |
17,621 |
|
|
$ |
8,133 |
|
Add (deduct): |
|
|
|
|
|
|
|
Amortization of
intangible assets |
|
1,844 |
|
|
|
- |
|
|
|
3,688 |
|
|
|
- |
|
Unrealized foreign exchange loss (gain) |
|
|
|
|
|
|
|
on unsettled forward exchange contracts |
|
- |
|
|
|
89 |
|
|
|
- |
|
|
|
(230 |
) |
|
|
|
|
|
|
|
|
Adjusted Gross Profit |
$ |
10,841 |
|
|
$ |
4,372 |
|
|
$ |
21,309 |
|
|
$ |
7,903 |
|
|
|
|
|
|
|
|
|
Adjusted Gross Profit Percentage |
|
11.9 |
% |
|
|
9.8 |
% |
|
|
11.0 |
% |
|
|
9.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplementary
Information: |
|
|
|
|
|
|
|
Reconciliation of
Adjusted Net (Loss) Income |
Three months ended |
|
Six months ended |
|
|
|
|
|
|
|
|
|
June 30,2019 |
|
July 1,2018 |
|
June 30,2019 |
|
July 1,2018 |
Net Loss |
$ |
(2,468 |
) |
|
$ |
(97 |
) |
|
$ |
(1,257 |
) |
|
$ |
(89 |
) |
add back |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangible assets |
|
1,844 |
|
|
|
- |
|
|
|
3,688 |
|
|
|
- |
|
Unrealized foreign exchange loss (gain) |
|
|
|
on unsettled forward exchange contracts |
|
- |
|
|
|
89 |
|
|
|
- |
|
|
|
(230 |
) |
Stock compensation expense |
|
97 |
|
|
|
77 |
|
|
|
185 |
|
|
|
203 |
|
Stock Revaluation of Warrant |
|
40 |
|
|
|
- |
|
|
|
(61 |
) |
|
|
- |
|
Restructuring charges |
|
1,546 |
|
|
|
96 |
|
|
|
2,170 |
|
|
|
96 |
|
Merger and acquisitions related expenses |
|
73 |
|
|
|
- |
|
|
|
164 |
|
|
|
- |
|
Contingent Consideration reversal |
|
- |
|
|
|
- |
|
|
|
(3,050 |
) |
|
|
- |
|
|
|
|
Adjusted Net Income (Loss) |
|
1,132 |
|
|
|
165 |
|
|
|
1,839 |
|
|
|
(20 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplementary Information: |
|
|
|
|
Reconciliation of Net Debt |
|
|
|
|
|
|
|
|
|
Proforma |
|
|
June 30,2019 |
July 1, 2018 |
July 1, 2018 |
|
|
|
Revolver |
$ |
13,748 |
|
11,981 |
|
31,414 |
|
|
Term Debt |
|
61,376 |
|
8,894 |
|
46,629 |
|
|
Discount (Term Debt) |
|
(4,121 |
) |
- |
|
597 |
|
|
Capital Lease (Finance) |
|
10,685 |
|
796 |
|
12,850 |
|
|
Capital Lease (Operating) |
|
4,910 |
|
- |
|
- |
|
|
$ |
86,598 |
|
21,671 |
|
91,490 |
|
|
Cash |
|
(634 |
) |
(1,953 |
) |
2,024 |
|
|
Net Debt |
$ |
85,964 |
|
19,718 |
|
89,466 |
|
|
|
Consolidated Statements of Operations and Comprehensive
Loss |
|
(Unaudited) |
|
|
|
|
|
|
|
|
SMTC |
MC |
Proforma |
|
July 1, 2018 |
July 1, 2018 |
July 1, 2018 |
|
|
|
|
Revenue |
$ |
44,479 |
|
$ |
37,544 |
|
$ |
82,023 |
|
Cost of
sales |
|
40,196 |
|
|
33,505 |
|
|
73,701 |
|
Gross profit |
|
4,283 |
|
|
4,038 |
|
|
8,321 |
|
Selling, general and
administrative expenses |
|
3,647 |
|
|
2,946 |
|
|
6,593 |
|
Restructuring charges |
|
96 |
|
|
153 |
|
|
249 |
|
|
|
|
|
Operating income |
|
540 |
|
|
939 |
|
|
1,479 |
|
Interest expense |
|
403 |
|
|
1,835 |
|
|
2,238 |
|
Income (loss) before income
taxes |
|
137 |
|
|
(895 |
) |
|
(758 |
) |
Income tax expense
(recovery) |
|
|
|
Current |
|
196 |
|
|
112 |
|
|
308 |
|
Deferred |
|
38 |
|
|
- |
|
|
38 |
|
|
|
234 |
|
|
112 |
|
|
346 |
|
Net
loss from continuing operations |
|
(97 |
) |
|
(1,007 |
) |
|
(1,104 |
) |
Net
loss, and comprehensive loss |
$ |
(97 |
) |
$ |
(1,007 |
) |
$ |
(1,104 |
) |
|
|
|
|
|
|
|
|
Supplementary
Information: |
|
|
|
Reconciliation of
Adjusted EBITDA |
|
|
|
|
|
|
|
SMTC |
MC |
Proforma |
|
July 1, 2018 |
July 1, 2018 |
July 1, 2018 |
|
|
|
|
Net loss |
$ |
(97 |
) |
$ |
(1,007 |
) |
$ |
(1,104 |
) |
Add (deduct): |
|
|
|
Depreciation of property, plant and equipment |
|
769 |
|
|
828 |
|
|
1,597 |
|
Interest |
|
403 |
|
|
1,835 |
|
|
2,238 |
|
Income tax expense |
|
234 |
|
|
112 |
|
|
346 |
|
|
|
|
|
EBITDA |
$ |
1,309 |
|
$ |
1,767 |
|
$ |
3,076 |
|
|
|
|
|
Add (deduct): |
|
|
|
Stock compensation expense |
|
77 |
|
|
- |
|
|
77 |
|
Restructuring charges |
|
96 |
|
|
153 |
|
|
249 |
|
Unrealized foreign exchange loss |
|
89 |
|
|
- |
|
|
89 |
|
on unsettled forward exchange contracts |
|
|
|
|
|
|
|
Adjusted EBITDA |
|
1,571 |
|
|
1,920 |
|
|
3,491 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Adjusted Gross Profit |
|
|
|
|
|
|
|
|
SMTC |
MC |
Proforma |
|
July 1, 2018 |
July 1, 2018 |
July 1, 2018 |
|
|
|
|
Gross Profit |
$ |
4,283 |
|
$ |
4,038 |
|
$ |
8,321 |
|
Add (deduct): |
|
|
|
Unrealized foreign exchange loss |
|
|
|
on unsettled forward exchange contracts |
|
89 |
|
|
- |
|
|
89 |
|
Adjusted Gross Profit |
$ |
4,372 |
|
$ |
4,038 |
|
$ |
8,410 |
|
Adjusted Gross Profit % |
|
9.8 |
% |
|
10.8 |
% |
|
10.3 |
% |
|
|
|
|
|
|
|
|
|
|
Investor Relations Contact
Peter SeltzbergManaging DirectorDarrow Associates,
Inc.516-419-9915pseltzberg@darrowir.com
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