SigmaTron International, Inc. Reports First Quarter Financial Results for Fiscal 2019
12 September 2018 - 11:45PM
SigmaTron International, Inc. (NASDAQ: SGMA), an electronic
manufacturing services company, today reported revenues and
earnings for the fiscal quarter ended July 31, 2018.
Revenues increased to $71.4 million in the first quarter of
fiscal 2019 from $71.2 million for the same quarter in the prior
year. Net income decreased to a net loss of $526,607 for the
quarter ended July 31, 2018 compared to net income of $382,882 for
the same period in the prior year. Basic and diluted loss per
share for the quarter ended July 31, 2018, were each $0.12,
compared to basic and diluted earnings per share of $0.09 each for
the same quarter ended July 31, 2017.
Commenting on SigmaTron’s first quarter fiscal 2019 results,
Gary R. Fairhead, President, Chief Executive Officer and Chairman
of the Board, said, “I am disappointed to report a pre-tax loss for
our first quarter of fiscal 2019. During this quarter we
experienced several issues that negatively impacted our
results. The first issue and one that will continue to impact
fiscal 2019, if it is not resolved soon, is the trade war between
the United States and China that started in July, 2018 with the
imposition of punitive tariffs on various goods and
commodities. During the first quarter the United States
dollar strengthened significantly vs. many currencies but
especially against the Yuan. Included in our first quarter
results is a foreign currency loss of approximately $300,000,
primarily unrealized but accrued. If the trade issues are
ultimately resolved, some or all of this foreign currency loss may
reverse itself in future quarters. The second issue is the
continuing volatile marketplace for electronic components as
reported in prior press releases and filings. This phenomenon
continued to negatively affect production and revenue in the first
quarter. Once again, we did not see any orders cancelled
related to this issue which is a positive sign. Finally, we
had several major programs encounter design issues unrelated to
SigmaTron but still resulted in pushed-out revenue. Most of
these were resolved during the quarter and are back in production
heading into the second quarter.
“We fully expected the revenue for the first quarter to be
higher than we are reporting. However, the quarter trended in
a positive direction on a monthly basis and we have better momentum
heading into the second quarter.
“The issues impacting our operating results during the first
quarter will continue to impact the company going forward.
However, our backlog remains strong, and if we are able to timely
receive the required electronic components we should see positive
revenue growth during the second quarter. As I stated
previously, no orders have been cancelled. The trade war with
China, and the negotiations with Mexico and Canada on trade, remain
a wild card. Customers are discussing alternative supply
chain solutions with us for their business if they had been or will
be affected by the tariffs. On a positive note, our customers
are exploring options within the SigmaTron global footprint.
Hopefully, a resolution will come soon and certainty regarding
trade costs will return.
“Even with these continuing issues, I remain optimistic.
Our supply chain team has done an excellent job solving the
problems this market has given us and I fully expect they will
continue to do so. Demand from customers remains strong and
we continue to win new programs from existing customers and land
first-time customers. So while some problems will persist, I
see greater opportunity and upside in the short term.”
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.
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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Ended |
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Ended |
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July 31, |
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July 31, |
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2018 |
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2017 |
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Net sales |
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$71,414,057 |
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$71,224,293 |
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Cost of products
sold |
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65,625,001 |
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64,467,239 |
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Gross profit |
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5,789,056 |
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6,757,054 |
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Selling and
administrative expenses |
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5,934,116 |
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5,912,146 |
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Operating (loss)
income |
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(145,060 |
) |
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844,908 |
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Other expense |
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578,553 |
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264,063 |
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(Loss) income before
income tax |
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(723,613 |
) |
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580,845 |
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Income tax (benefit)
expense |
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(197,006 |
) |
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197,963 |
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Net (loss) income |
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($526,607 |
) |
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$382,882 |
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Net (loss) income per
common share - basic |
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($0.12 |
) |
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$0.09 |
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Net (loss) income per
common share - assuming dilution |
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($0.12 |
) |
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$0.09 |
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Weighted average number
of common equivalent |
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shares
outstanding - assuming dilution |
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4,223,657 |
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4,269,501 |
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CONDENSED
CONSOLIDATED BALANCE SHEETS |
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July 31, |
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April
30, |
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2018 |
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2018 |
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Assets: |
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Current assets |
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$125,708,689 |
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$120,029,726 |
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Machinery and
equipment-net |
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34,705,443 |
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35,288,997 |
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Deferred income
taxes |
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1,360,839 |
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1,109,681 |
Intangible assets |
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2,993,980 |
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3,088,085 |
Other assets |
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1,613,703 |
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1,713,481 |
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Total assets |
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$166,382,654 |
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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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$60,855,543 |
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$59,378,486 |
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Long-term
obligations |
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47,243,767 |
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43,041,533 |
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Stockholders'
equity |
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58,283,344 |
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58,809,951 |
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Total liabilities and
stockholders' equity |
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$166,382,654 |
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$161,229,970 |
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For Further Information Contact:SigmaTron International,
Inc.Linda K. Frauendorfer1-800-700-9095
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