UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DCD.C. 20549

FORM 10-K/A
AMENDMENT NO. 110-K

(Mark One)

[X] Annual Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
For the fiscal year ended April 30, 20042005

[ ] Transition Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
For the transition period from
___________to ___________.___________to___________.

Commission file number 0-23248

SIGMATRON INTERNATIONAL, INC.
----------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)

Delaware 36-3918470
- -------- ----------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)

2201 Landmeier Road,Rd., Elk Grove Village, IllinoisIL 60007
- ----------------------------------------------------------------------------------------- -----
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: 847-956-8000
Securities registered pursuant to Section 12(g) of the Act:

Common Stock $0.01 par value per share
--------------------------------------
Title of each class

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X][X ] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K [X].[X ].

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). Yes [ ] No [X][X ]

The aggregate market value of the voting common equity held by non-affiliates of
the registrant as of October 31, 20032004 (the last business day of the registrant's
most recently completed second fiscal quarter) was $68,611,732,$41,872,923 based on the
closing sale price of $19.18$11.16 per share as reported by Nasdaq NationalSmall Cap Market as
of such date.

The number of outstanding shares of the registrant's Common Stock, as of April
1,July 8,
2005, was 3,755,420.

DOCUMENTS INCORPORATED BY REFERENCE

Those sections or portions of the definitive proxy statement of SigmaTron
International, Inc., for use in connection with its annual meeting of
stockholders, which will be filed within 120 days of the fiscal year ended April
30, 2004,2005, are incorporated by reference into Part III of this Form 10-K.

EXPLANATORY NOTE FOR FILING

TABLE OF FORM 10-K/A

This amendment No.CONTENTS

PART I

ITEM 1. BUSINESS........................................................... 3
ITEM 2. PROPERTIES......................................................... 11
ITEM 3. LEGAL PROCEEDINGS.................................................. 12
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS................ 13
ITEM 4A. EXECUTIVE OFFICERS OF THE REGISTRANT............................... 13

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES................ 14
ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA............................... 15
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.............................. 15
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK................................................ 22
ITEM 8. FINANCIAL STATEMENT AND SUPPLEMENTARY DATA......................... 22
ITEM 9. CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.............................. 22
ITEM 9A. CONTROLS AND PROCEDURES............................................ 22

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT................. 22
ITEM 11. EXECUTIVE COMPENSATION............................................. 23
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS................... 23
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS..................... 23
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES............................. 23

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS
ON FORM 8-K...................................................... 23

SIGNATURES............................................................................ 26

PART 1

ITEM 1. BUSINESS

CAUTIONARY NOTE:

In addition to historical financial information, this discussion of the
business of SigmaTron International, Inc.'s its wholly owned subsidiary Standard
Components de Mexico S.A., its wholly owned foreign enterprise Wujiang SigmaTron
Electronics Co., Ltd. ("SigmaTron China"), and its procurement branch SigmaTron
Taiwan (the "Company") and other Items in this Annual Report on Form 10-K
contain forward-looking statements concerning the Company's business or results
of operations. These statements should be evaluated in the context of the risks
and uncertainties inherent in the Company's business, including the Company's
continued dependence on certain significant customers; the continued market
acceptance of products and services offered by the Company and its customers;
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 availability and cost of necessary components; the Company's ability to
manufacture lead-free assemblies by mid-2006; regulatory compliance; the
continued availability and sufficiency of the Company's credit arrangements;
changes in U.S., Mexican, Chinese or Taiwanese regulations affecting the
Company's business; the continued stability of the U.S., Mexican, Chinese and
Taiwanese economic, labor and political conditions; currency fluctuations; and
the ability of the Company to manage its growth; including its expansion into
China and its integration of the Able Electronics operations acquired in July
2005. 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
this Form 10-K, and risk factors contained herein and 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 this report and the Company undertakes
no obligation to update or revise such statements in light of new information,
future events or otherwise.

OVERVIEW

The Company operates in one business segment as an independent provider of
electronic manufacturing services ("EMS"), which includes printed circuit board
assemblies and completely assembled (box-build) electronic products. In
connection with the production of assembled products the Company also provides
services to its customers including (1) automatic and manual assembly and
testing of products; (2) material sourcing and procurement; (3) design,
manufacturing and test engineering support; (4) warehousing and shipment
services; and (5) assistance in obtaining product approval from governmental and
other regulatory bodies. The Company provides these manufacturing services
through an international network of facilities located in North America, China
and Taiwan.

The Company provides manufacturing and assembly services ranging from the
assembly of individual components to the assembly and testing of box-build
electronic products. The Company has the ability to produce assemblies requiring
mechanical as well as electronic capabilities. The products assembled by the
Company are then incorporated into finished products sold in various industries,
particularly appliance, consumer electronics, gaming, fitness, industrial
electronics, telecommunications and automotive.

In August and September 2004 the Company acquired the interests all of the
outside investors in its affiliate SMT Unlimited L.P. ("SMTU") and the general
partner of SMTU, SMT Unlimited, Inc. On October 1, 2004 SMT Unlimited, Inc. was
merged into the Company, and SMTU was liquidated, thereby becoming an operating
division of the Company. Prior to the acquisition by the Company, SMTU was
consolidated under FASB Interpretation No. 46 ("FIN46R") Consolidation of
Variable Interest Entities (Footnote H).

The Company operates manufacturing facilities in Elk Grove Village,
Illinois; Fremont, California; Acuna, Mexico; and Wujiang, China. The Company
maintains materials sourcing offices in Elk Grove Village, Illinois; Fremont,
California; Acuna, Mexico; and Taipei, Taiwan. The Company provides warehousing
services in Del Rio, Texas and Huntsville, Alabama.

The Company is a Delaware corporation which was organized on November 16,
1993 and commenced operations when it became the successor to all of the assets
and liabilities of SigmaTron L.P., an Illinois limited partnership, through a
reorganization on February 8, 1994.

PRODUCTS AND SERVICES

The Company provides a broad range of manufacturing related outsourcing
solutions for its customers on both a turnkey basis (material purchased by the
Company) and consignment basis (material provided by the customer). These
solutions incorporate the Company's knowledge and expertise in the EMS industry
to provide its customers with advanced manufacturing technologies and high
quality, responsive and flexible manufacturing services. The Company's EMS
solutions provide services from product inception through the ultimate delivery
of a finished good. Such technologies and services include the following:

Supply Chain Management. The Company is primarily a turnkey manufacturer
and directly sources all, or a substantial portion, of the components necessary
for its product assemblies, rather than receiving the raw materials from its
customers on consignment. Turnkey services involve a greater investment in
resources and an increased inventory risk compared to consignment services.
Supply chain management includes the purchasing, management, storage and
delivery of raw components required for the manufacture or assembly of a
customer's product based upon the customer's orders. The Company procures
components from a select group of vendors which meet its standards for timely
delivery, high quality and cost effectiveness, or as directed by its customers.
Raw materials used in the assembly and manufacture of printed circuit boards and
electronic assemblies are generally available from several suppliers, unless
restricted by the customer. The Company does not enter into purchase agreements
with the majority of its major or single-source suppliers. The Company believes
ad-hoc negotiations with its suppliers provides the flexibility needed to source
inventory based on the needs of its customers.

The Company believes that its ability to source and procure competitively
priced, quality components is critical to its ability to effectively compete. In
addition to obtaining materials in North America, the Company uses its Taiwanese
procurement office and agents to source materials from the Far East. The Company
believes this office allows it to more effectively manage its relationships with
key suppliers in the Far East by permitting it to respond more quickly to
changes in market dynamics, including fluctuations in price, availability and
quality.

Assembly and Manufacturing. The Company's core business is the assembly of
printed circuit boards through the automated and manual insertion of components
onto raw printed circuit boards. The Company offers its assembly services using
both pin-through-hole ("PTH") and surface mount ("SMT") interconnect
technologies at all of its manufacturing locations. SMT is an assembly process
which allows the placement of a higher density of components directly on both
sides of a printed circuit board. The SMT process is an advancement over the
mature PTH technology, which normally permits electronic components to be
attached to only one side of a printed circuit board by inserting the component
into holes drilled through the board. The SMT process allows original equipment
manufacturers ("OEMs") to use advanced circuitry, while at the same time
permitting the placement of a greater number of components on a printed circuit
board without having to increase the size of the board. By allowing increasingly
complex circuits to be packaged with the components in closer proximity to each
other, SMT greatly enhances circuit processing speed, and thus, board and system
performance.

The Company performs PTH assembly both manually and with automated
component insertion and soldering equipment. Although SMT is a more
sophisticated interconnect technology, the Company intends to continue providing
PTH assembly services for its customers as the Company's customers continue to
require both PTH and SMT capabilities. SigmaTron is also capable of assembling
fine pitch and ball grid array ("BGA") components. BGA is used for more complex
circuit boards required to perform at higher speeds.

Manufacturing and Related Services. The Company offers The Restriction of
Use of Hazardous Substances ("RoHS") compliant assembly services in order to
comply with the European Union environmental mandate that takes effect July 1,
2006. The Company also provides quick turnaround, turnkey prototype services at
all of its locations. In Elk Grove Village, the Company offers touch screen /
LCD assembly services

in a clean room environment. In Mexico, the Company offers parylene coating
services. In all locations, the Company offers box-build services, which
integrate its printed circuit board and other manufacturing and assembly
technologies into higher level sub-assemblies and end products. Finally, the
Company designs and manufactures DC to AC inverters.

Product Testing. The Company has the ability to perform both in-circuit
and functional testing of its assemblies and finished products. In-circuit
testing verifies that the correct components have been properly inserted and
that the electrical circuits are complete. Functional testing determines if a
board or system assembly is performing to customer specifications. In addition,
the Company provides X-ray laminography services. The Company seeks to provide
customers with highly sophisticated testing services that are at the forefront
of current test technology.

Warehousing and Distribution. In response to the needs of select
customers, the Company has the ability to provide in-house warehousing, shipping
and receiving and customer brokerage services in Del Rio, Texas for goods
manufactured or assembled in Mexico. The Company also has the ability to provide
custom-tailored delivery schedules and services to fulfill the just-in-time
inventory needs of its customers.

MARKETS AND CUSTOMERS

The Company's customers are in the appliance, gaming, industrial
electronics, fitness, telecommunications, consumer electronics and automotive
industries. As of April 30, 2005, the Company had approximately 225 active
customers ranging from Fortune 500 companies to small, privately held
enterprises.

The following table shows, for the periods indicated, the percentage of
net sales to the principal end-user markets it serves.

PERCENT OF NET SALES
----------------------
TYPICAL FISCAL FISCAL FISCAL
MARKETS OEM APPLICATION 2003 2004 2005
- ---------------------- ------------------------------------ ------ ------ ------

Appliances Household appliance controls 30.2% 36.4% 37.1%

Fitness Treadmills, exercise bikes 13.7 13.4 18.5

Industrial Electronics Motor controls, power supplies 10.1 13.8 15.6

Gaming Slot machines, lighting displays 21.3 17.9 11.6

Telecommunications Pagers, microphones and modems 9.5 10.9 10.0

Consumer Electronics Carbon monoxide alarms, tanning beds 13.3 7.1 6.4

Automotive Automobile interior lighting 1.9 .5 .8

Total 100% 100% 100%
---- ---- ----

For the year ended April 30, 2005, Spitfire Controls, Inc. and Life
Fitness accounted for 31.5% and 17.5%, respectively, of the Company's net sales.
For the fiscal year ended April 30, 2004, Spitfire Controls, Inc. and Life
Fitness accounted for 35.7% and 13.0%, respectively, of the Company's net sales.
For the fiscal year ended April 30, 2003, Spitfire Controls, Inc. and Life
Fitness accounted for 27.2% and 13.3%, respectively, of the Company's net sales.
Although the Company does not have long term contracts with these two customers,
the Company expects that as a group these customers will continue to account for
a significant percentage of the Company's net sales, although the individual
percentages may vary from period to period.

SALES AND MARKETING

The Company markets its services through 26 independent manufacturers'
representative organizations that together currently employ approximately 60
sales personnel in the United States and Canada. Independent manufacturers'
representative organizations receive variable commissions based on orders
received by the Company and are assigned specific accounts, not territories. The
members of the Company's senior management are actively involved in sales and
marketing efforts and the Company has 5 direct sales people.

Sales can be a misleading indicator of the Company's financial
performance. Sales levels can vary considerably among customers and products
depending on the mix of services, consignment and turnkey, rendered by the
Company and demanded by customers. Consignment orders require the Company to
perform manufacturing services on components and other materials supplied by a
customer, and the Company charges only for its labor, overhead and manufacturing
costs, plus a profit. In the case of turnkey orders, the Company provides, in
addition to manufacturing services, the components and other materials used in
assembly. Turnkey contracts, in general, have a higher dollar volume of sales
for each given assembly, owing to inclusion of the cost of components and other
materials in net sales and cost of goods sold. Variations in the number of
turnkey orders compared to consignment orders can lead to significant
fluctuations in the Company's revenue level. However, the Company does not
believe that such variations are a meaningful indicator of the Company's gross
margins. Consignment orders accounted for less than 5% of the Company's revenues
for the fiscal year ended April 30, 2005.

In the past, the timing and rescheduling of orders has caused the Company
to experience significant quarterly fluctuations in its revenue and earnings,
and the Company expects such fluctuations to continue.

MEXICO OPERATIONS

The Company's wholly owned subsidiary, Standard Components de Mexico, S.A,
a Mexican corporation, is located in Acuna, Mexico, a border town across the Rio
Grande River from Del Rio, Texas, and is 155 miles west of San Antonio. Standard
Components de Mexico, S.A. was incorporated and commenced operation in 1968. The
Company believes that one of the key benefits to having operations in Mexico is
its access to cost-effective labor resources while having geographic proximity
to the United States.

The Company provides funds for salaries, wages, overhead and capital
expenditure items as necessary to operate Standard Components de Mexico, S.A.
The Company provides funding to Standard Components de Mexico, S.A. in U.S.
dollars, which are exchanged for pesos as needed. The fluctuation of the peso
from time to time, without an equal or greater increase in Mexican inflation,
has not had a material impact on the financial results of the Company. In the
fiscal year ended April 30, 2005 the Company paid approximately $8,400,000 to
Standard Components de Mexico, S.A. for services provided. At April 30, 2005 the
Mexican operation had approximately 1,160 employees.

On July 14, 2005 the Company purchased Able Electronics, Corporation
("Able"). Able is headquartered in Hayward, California, with an additional
manufacturing facility located in Tijuana, Mexico. Able is an ISO 9001:2000
certified EMS company serving Original Equipment Manufacturers in the test and
measurement, medical instruments, telecommunications, computer peripherals,
industrial controls and genetic research industries.

CHINA OPERATIONS

The Company has entered into an agreement with governmental authorities in
the economic development zone of Wujiang, Jiangsu Province, Peoples Republic of
China, pursuant to which the Company became the lessee of a parcel of land of
approximately ten U.S. acres. The term of the land lease is 50 years. The
Company built a manufacturing plant office space and dormitories on this site
during the fiscal year ended April 30, 2004. The manufacturing plant and office
space is approximately 80,000 square feet, which can be expanded if conditions
require. SigmaTron China operates at this site as the Company's wholly owned
foreign enterprise. At April 30, 2005 this operation had 170 employees.

COMPETITION

The EMS industry is highly competitive and subject to rapid change.
Furthermore, both large and small companies compete in the industry, and many
have significantly greater financial resources, more extensive business
experience and greater marketing and production capabilities than the Company.
The significant competitive factors in this industry include price, quality,
service, timeliness, reliability, the ability to source raw components, and
manufacturing and technological capabilities. The Company believes it can
competitively provide all of these services.

In addition, the Company may be operating at a cost disadvantage compared
to manufacturers who have greater direct buying power with component suppliers
or who have lower cost structures. Current and prospective customers continually
evaluate the merits of manufacturing products internally and will from time to
time offer manufacturing services to third parties in order to utilize excess
capacity. During downturns in the electronics industry, OEMs may become more
price sensitive.

There can be no assurance that competition from existing or potential
competitors will not have a material adverse impact on the Company's business,
financial condition or results of operations. The introduction of lower priced
competitive products, significant price reductions by the Company's competitors
or significant pricing pressures from its customers could result in price
reductions that would adversely affect the Company's business, financial
condition, and results of operations, as would the introduction of new
technologies which render the Company's manufacturing process technology less
competitive or obsolete.

CONSOLIDATION

The consolidated financial statements include the accounts and
transactions of the Company, its wholly-owned subsidiary, Standard Components de
Mexico, S.A., its wholly owned foreign enterprise Wujiang SigmaTron Electronics
Co., LTD. and its procurement branch, SigmaTron Taiwan. The functional currency
of the Mexican and Chinese subsidiaries and procurement branch, SigmaTron Taiwan
is the U.S. dollar. The Company adopted the provisions of Financial Accounting
Standards Board ("FASB") Interpretation No. 46R, ("FIN 46R") "Consolidation of
Variable Interest Entities. The Company adopted FIN 46R as of November 1, 2003
as it relates to its former affiliate SMTU. On September 2, 2004, whichthe remaining
minority interest in SMTU was originally filedacquired. On October 1, 2004 SMTU was liquidated,
thereby becoming an operating division of the Company.

As a result of consolidation and other transactions involving competitors
and other companies in the Company's markets, the Company occasionally reviews
potential transactions relating to its business, products and technologies. Such
transactions could include mergers, acquisitions, strategic alliances, joint
ventures, licensing agreements, co-promotion agreements, financing arrangements
or other types of transactions. The Company recently completed one such
transaction in July 2005, with the acquisition of Able. In the future, the
Company may choose to enter into other transactions at any time depending on
July 20, 2004 (the "Original Filing"), amends Item 9Aavailable sources of Part II, Item 10financing, and such transactions could have a material
impact on the Company, its business or operations. Recent transactions are
disclosed in Footnote K of Part IIIthe financial statements included with this Annual
Report on Form 10-K.

GOVERNMENTAL REGULATIONS

The Company's operations are subject to certain foreign, federal, state
and Item 15 of Part IV. Item 9A of Part II has been
amended solocal regulatory requirements relating to environmental, waste management,
labor and health and safety matters. Management believes that the language requiredCompany's
business is operated in material compliance with all such regulations. To date,
the cost to the Company of such compliance to date has not had a material impact
on the Company's business, financial condition or results of operations.
However, there can be no assurance that violations will not occur in the future
as a result of human error, equipment failure or other causes. Further, the
Company cannot predict the nature, scope or effect of environmental legislation
or regulatory requirements that could be imposed or how existing or future laws
or regulations will be administered or interpreted. Compliance with more
stringent laws or regulations, as well as more vigorous enforcement policies of
regulatory agencies, could require substantial expenditures by Item 9A mirrors the language required
by Items 307Company and
308could have a material impact on the Company's business, financial condition and
results of Regulation S-K. Item 10operations. In addition, effective mid-2006 the Company's customers
must be in compliance with

the European Standard: the "Restriction of Part III has been amendedUse of Hazardous Substance" directive
for all of their products that ship to indicatethe European marketplace. The Company's
customers are also requesting that the Company have the lead-free manufacturing
capability.

BACKLOG

The Company's backlog as of April 30, 2005 was approximately $44,000,000,
including approximately $950,000 in backlog for the Company's Las Vegas
operation which subsequently was sold on June 3, 2005 (Footnote K of the
Company's consolidated financial statements included with this Annual Report on
Form 10-K). Backlog consists of contracts or purchase orders with delivery dates
scheduled within the next twelve months. The Company currently expects to ship
substantially all of the remaining April 30, 2005 backlog by the end of the 2006
fiscal year. Backlog as of April 30, 2004 totaled approximately $38,600,000.
Variations in the magnitude and duration of contracts and purchase orders
received by the Company and delivery requirements generally may result in
substantial fluctuations in backlog from period to period. Because customers may
cancel or reschedule deliveries, backlog may not be a meaningful indicator of
future revenue.

EMPLOYEES

The Company employed approximately 1,740 people as of April 30, 2005,
including 56 engaged in engineering or engineering related services, 1,518 in
manufacturing and 166 in administrative and marketing functions.

The Company has adopted a codelabor contract with Production Workers Union Local No.
10, AFL-CIO, covering the Company's workers in Elk Grove Village, Illinois which
expires on November 30, 2006. The Company's Mexican subsidiary, Standard
Components de Mexico S.A., has a labor contract with Sindicato De Trabajadores
de la Industra Electronica, Similares y Conexos del Estado de Coahuila, C.T.M.
covering the Company's workers in Acuna, Mexico which expires on January 15,
2006.

Since the time the Company commenced operations, it has not experienced
any union related work stoppages. The Company believes its relations with both
unions and its other employees are good.

RISK FACTORS

In addition to the other risks identified herein, the Company's business
is subject to the following risks:

THE COMPANY'S ABILITY TO SECURE AND MAINTAIN SUFFICIENT CREDIT ARRANGEMENTS IS
KEY TO ITS CONTINUED OPERATIONS.

The ability of ethics as definedthe Company to secure and maintain sufficient credit
arrangements is key to its continued operations. The Company entered into an
Amended Loan and Security Agreement in Item 406July 2005 subsequent to the end of Regulation S-K,the
2005 fiscal year, which provides for a revolving credit facility. The maximum
borrowing limit under the revolving credit facility is limited to the lesser of:
(i) $17,000,000 or (ii) an amount equal to the sum of 85% of the receivable
borrowing base and the lesser of $8,500,000 or varying percentages of the
inventory base. The Amended Loan and Security Agreement expires on June 30, 2008
and is subject to certain financial covenants. The Amended Loan and Security
Agreement also provides a term loan in the amount of $3,000,000. Interest
accrues at 5.75% and interest only is due each quarter through June 30, 2006.
Quarterly principal payments of $250,000 are due in years two through four.

At April 30, 2005 the Company was in compliance with its financial
covenants and had borrowings of $392,038 outstanding under this line of credit.

SigmaTron China entered into a loan agreement in April 2005, which
provides for a line of credit with the China Construction Bank. The terms of the
agreement includes four draws on the line of credit of approximately $121,000,
$362,750, $362,750 and $362,750, on April 15, 2005, July 1, 2005, October 8,
2005, and January 3, 2006, respectively. The interest rate under the agreement
is 5.76% and at April 30, 2005 SigmaTron China had $121,000 outstanding under
the loan. The loan is collateralized by the Company's

building in Suzhou-Wujiang China and 60 of the 100 Chinese acres (approximately
ten U.S. acres) leased at the property.

The Company anticipates its credit facility, cash flow from operations and
leasing resources will be adequate to meet its working capital requirements in
fiscal 2006. In the event the business grows rapidly or the Company considers an
acquisition, additional financing resources could be necessary in the current or
future fiscal years. There is no assurance that appliesthe Company will be able to
obtain equity or debt financing at acceptable terms in the future.

THE COMPANY EXPERIENCES VARIABLE OPERATING RESULTS.

The Company's results of operations have varied and may continue to
fluctuate significantly from period to period, including on a quarterly basis.
Consequently, results of operations in any period should not be considered
indicative of the results for any future period, and fluctuations in operating
results may also result in fluctuations in the price of the Company's Common
Stock.

The Company's quarterly and annual results may vary significantly
depending on numerous factors, many of which are beyond the Company's control.
These factors include:

- Changes in sales mix to customers

- Changes in availability and cost of components

- Volume of customer orders relative to capacity

- Market demand and acceptance of our customers' products

- Price erosion within the EMS marketplace

- Capital equipment requirements needed to remain technologically
competitive

THE COMPANY'S CUSTOMER BASE IS CONCENTRATED.

Sales to the Company's principal executive officer,
principal financial officer, principal accounting officer or controller or
persons performing similar functions. Item 15five largest customers accounted for 63%, 68% and
59% of Part IV has also been amendednet sales for the fiscal years ended April 30, 2005, 2004 and 2003,
respectively. Further, the Company's two largest customers accounted for 31.5%
and 17.5% of net sales, respectively. Significant reduction in sales to file a copyany of
the Company's codemajor customers or the loss of ethics as exhibit 14a major customer could have a
material impact on the Company's operations. If the Company cannot replace
canceled or reduced orders, sales will decline, which could have a material
impact on the results of operations. Although the Company believes its
relationships with its large customers are good, the Company generally does not
enter into long-term contracts in connection with the sale of its goods and
services. There can be no assurance that the Company will retain any or all of
its large customers. This risk may be further complicated by pricing pressures
and intense competition prevalent in our industry. If the Company cannot replace
canceled or reduced orders, sales will decline, which could have a material
impact on the results of operations.

THERE IS VARIABILITY IN THE REQUIREMENTS OF THE COMPANY'S CUSTOMERS.

The Company does not generally obtain long-term purchase contracts. The
timing of purchase orders placed by the Company's customers is affected by a
number of factors, including variation in demand for the customers' products,
regulatory changes affecting customer industries, customer attempts to manage
inventory, changes in the customers' manufacturing strategies and customers'
technical problems or issues. Many of these factors are outside the control of
the Company.

THE COMPANY AND ITS CUSTOMERS MAY BE UNABLE TO KEEP CURRENT WITH THE INDUSTRY'S
TECHNOLOGICAL CHANGES.

The market for the Company's manufacturing services is characterized by
rapidly changing technology and continuing product development. The future
success of the Company's business will depend in large part upon its customers'
ability to maintain and enhance their technological capabilities, develop and
market manufacturing services which meet changing customer needs and
successfully anticipate or respond to technological changes in manufacturing
processes on a cost-effective and timely basis.

Effective mid-2006 the Company's customers must be in compliance with the
European Standard; RoHS for all products shipped to the European marketplace.
The purpose of the directive is to restrict the use of hazardous substances in
electrical and electronic equipment and to reflectcontribute to the inclusionenvironmentally
sound recovery and disposal of updated certificationselectrical and electronic equipment waste. The
Company is in the initial stages of certainworking in conjunction with its suppliers
and customers to prepare for the implementation of lead-free wave solder and
reflow systems. In addition, electronic component manufacturers must produce
electronic components which are lead-free. The Company relies on numerous
third-party suppliers for components used in the Company's production process.
Customers' specifications may require the Company to obtain components from a
single source or a small number of suppliers. There is no assurance these
suppliers will comply with RoHS. The inability to utilize any such suppliers
could have a material impact on the Company's results of operations.

THE COMPANY FACES INTENSE INDUSTRY COMPETITION AND DOWNWARD PRICING PRESSURES.

The EMS industry is highly fragmented and characterized by intense
competition. Many of the Company's competitors have substantially greater
experience, as well as greater manufacturing, purchasing, marketing and
financial resources than the Company.

There can be no assurance that competition from existing or potential
competitors will not have a material adverse impact on the Company's business,
financial condition or results of operations. The introduction of lower priced
competitive products, significant price reductions by the Company's competitors
or significant pricing pressures from its customers could adversely affect the
Company's business, financial condition, and results of operations.

THE COMPANY HAS FOREIGN OPERATIONS THAT MAY POSE ADDITIONAL RISKS.

A substantial part of the Company's manufacturing operations is based in
Mexico. Therefore, the Company's business and results of operations are
dependent upon numerous related factors, including the stability of the Mexican
economy, the political climate in Mexico and Mexico's relations with the United
States, prevailing worker wages, the legal authority of the Company to own and
operate its business in Mexico and the ability to identify, hire, train and
retain qualified personnel and operating management in Mexico.

The Company has opened an operation in China in order to better support
and grow its customer base. It is uncertain whether the China operation will
have a material impact, either positive or negative, on the Company's business,
financial condition and results of operations. The success of the operation is
dependent on the Company's ability to obtain new business; to hire and train
qualified personnel; and to implement an efficient manufacturing environment.
Other factors could have a material impact on the business, including the
Chinese political climate and its relations with the United States, stability of
the Chinese economy and the need for additional capital to expand operations in
China.

The Company obtains many of its materials and components through its
office in Taipei, Taiwan and, therefore, the Company's access to these materials
and components is dependent on the continued success of its Asian suppliers.

THERE IS A RISK OF FLUCTUATION OF VARIOUS CURRENCIES INTEGRAL TO THE COMPANY'S
OPERATIONS.

The Company purchases some of its material components and funds some of
its operations in foreign currencies. From time to time the currencies fluctuate
against the U.S. dollar. Such fluctuations could have a measurable impact on the
Company's operations and performance. These fluctuations are expected to
continue. The Company does not utilize derivatives or hedge foreign currencies
to reduce the risk of such fluctuations.

THE AVAILABILITY OF RAW COMPONENTS MAY AFFECT THE COMPANY'S OPERATIONS.

The Company relies on numerous third-party suppliers for components used
in the Company's production process. Certain of these components are available
only from single sources or a limited number of suppliers. In addition, a
customer's specifications may require the Company to obtain components from a
single source or a small number of suppliers. The loss of any such suppliers
could have a material impact on the

Company's results of operations. The Company could operate at a cost
disadvantage compared to competitors who have greater direct buying power from
suppliers.

THE COMPANY IS DEPENDENT ON KEY PERSONNEL.

The Company depends significantly on its President and Chief Executive
Officer, Gary R. Fairhead, and on other executive officers. In accordance with Rule 12b-15The loss of the
Securities Exchangeservices of any of these key employees could have a material impact on the
Company's business and results of operations. In addition, despite significant
competition, continued growth and expansion of the Company's contract
manufacturing business will require that it attract, motivate and retain
additional skilled and experienced personnel. The inability to satisfy such
requirements could have a negative impact on the Company's ability to remain
competitive in the future.

FAVORABLE LABOR RELATIONS ARE IMPORTANT TO THE COMPANY.

The Company currently has labor union contracts with certain of its
employees constituting approximately 70% of its workforce. Although the Company
believes its labor relations are good, any labor disruptions, whether
union-related or otherwise, could significantly impair the Company's business,
substantially increase the Company's costs or otherwise have a material impact
on the Company's results of operations.

FAILURE TO COMPLY WITH ENVIRONMENTAL REGULATIONS COULD SUBJECT THE COMPANY TO
LIABILITY.

The Company is subject to a variety of environmental regulations relating
to the use, storage, discharge and disposal of hazardous chemicals used during
its manufacturing process. Any failure by the Company to comply with present or
future regulations could subject it to future liabilities or the suspension of
production which could have a material negative impact on the Company's results
of operations.

THE PRICE OF THE COMPANY'S STOCK IS VOLATILE.

The price of the Company's Common Stock historically has experienced
significant volatility due to fluctuations in the Company's revenue and
earnings, other factors relating to the Company's operations, the market's
changing expectations for the Company's growth, overall equity market conditions
and other factors unrelated to the Company's operations. In addition, the
limited float of the Company's Common Stock and the limited number of market
makers also affect the volatility of the Company's Common Stock. Such
fluctuations are expected to continue.

BEING A PUBLIC COMPANY INCREASES THE COMPANY'S ADMINISTRATIVE COSTS.

The Sarbanes-Oxley Act of 1934,2002 ("Sarbanes-Oxley"), as well as rules
subsequently implemented by the following itemsSecurities and Exchange Commission and listing
requirements subsequently adopted by Nasdaq in response to Sarbanes-Oxley, have
required changes in corporate governance practices, internal control policies
and audit committee practices of public companies. These new rules, regulations,
and requirements have significantly increased the company's legal, financial
compliance and administrative costs, and made many other activities more time
consuming and costly. Specifically, the Company's ability to become compliant
with Sarbanes-Oxley Section 404, Internal Control Over Financial Reporting, may
be very costly. These new rules and regulations have also made it more difficult
and more expensive for the Company to obtain director and officer liability
insurance. These new rules and regulations could also make it more difficult for
us to attract and retain qualified members of our board of directors,
particularly to serve on its audit committee.

ITEM 2. PROPERTIES

At April 30, 2005 the Company had manufacturing facilities located in Elk
Grove Village, Illinois; Las Vegas, Nevada; Wujiang, China; Fremont, California
and Acuna, Mexico. In addition, the Company provides inventory management
services through its Del Rio, Texas, warehouse facilities and materials
procurement services through its Elk Grove Village, Illinois; Las Vegas, Nevada;
Acuna, Mexico; and Taipei, Taiwan offices and a warehouse facility in
Huntsville, Alabama.

Certain information about the Company's manufacturing, warehouse and
purchasing facilities is set forth below:

SQUARE OWNED/
LOCATION FEET SERVICES OFFERED LEASED
- --------------------- ------- -------------------------------------------------------- ------

Elk Grove Village, IL 118,000 Corporate Headquarters, assembly and testing of PTH, SMT Owned
and BGA, box-build, prototyping, warehousing

Acuna, Mexico 115,000 High volume assembly, and testing of PTH and SMT, ***
box-build, transformers

Suzhou-Wujiang, China 147,500 High volume assembly, and testing of PTH and SMT, *
box-build

Las Vegas, NV 38,250 Automatic insertion and cable assembly, PTH, SMT and Leased
testing ****

Del Rio, TX 36,000 Warehouse, portion of which is bonded Leased

Fremont, CA 24,500 Assembly and testing of PTH, SMT and BGA, box-build, Leased
prototyping, warehousing

Taipei, Taiwan 2,900 Materials procurement, alternative sourcing assistance Leased
and quality control

Huntsville, AL ** Just-in-time inventory management and delivery **

*The Company's Wujiang, China building is owned by the Company and the land is
leased from the Chinese government for a 50 year term.

**There is no lease for this facility. The Company has entered into a service
agreement whereby contracted warehouse personnel provide services for the
Company and its customer.

***A portion of the Original Filing are amended in their entiretyfacility is leased.

****Subsequent to the year ended April 30, 2005 the Las Vegas operation was
sold. The Company continues to be obligated under the primary lease agreement
for the facility and sublets the property to other occupants.

The Las Vegas, Nevada, a portion of the Del Rio, Texas and the complete textFremont,
California properties are occupied pursuant to leases of those Itemsthe premises. The lease
agreements for the Nevada, Texas and California properties expire October 2009,
December 2015 and September 2008, respectively. The Alabama space is set outprovided
under a service agreement. The Company's manufacturing facilities located in
Acuna, Mexico and Elk Grove Village, Illinois are owned by the Company, except
for a portion of the facility in Mexico, which is leased. The properties in
Mexico and Illinois are financed under separate mortgage agreements, which
mature in November 2008. The Company, through an agent, leases the purchasing
and engineering office in Taipei, Taiwan to coordinate Far East purchasing and
design activities.

In connection with the Company's July 2005 acquisition of Able, which
occurred after the end of its 2005 fiscal year, the Company also acquired a
lease for manufacturing space in Hayward, California and Tijuana, Mexico.

ITEM 3. LEGAL PROCEEDINGS

On May 25, 2001, Nancy Messina, a former employee of the Company, filed a
lawsuit against the Company in the United States District Court for the Northern
District of Illinois, Eastern Division, asserting claims of sexual harassment
and gender discrimination under Title VII of the Civil Rights Act of 1964 and
claims of violation of the Federal Equal Pay Act. The Company believes that it
has meritorious defenses to the claims and is defending itself vigorously in
this Amendment No. 1action. Although the complaint does not specify a dollar

amount, based on information presently available to Form 10-K/A:

Part II

Item 9A. Controls and Procedures.

Part III

Item 10. Directors and Executive Officersthe Company, the Company
believes that the resolution of these claims will not have a material adverse
effect on the financial condition or results of the Registrant.

Part IV

Item 15. Exhibits and Financial Statement and Schedules.

The other Itemsoperations of the Original Filing are unaffectedCompany.

On September 3, 2002, a lawsuit was filed by the changes described
aboveliquidating trustee of
Circuit Systems, Inc. ("CSI") in the United States Bankruptcy Court for the
Northern District of Illinois, Eastern Division, against Gary R. Fairhead,
President and Chief Executive Officer of the Company and a former director of
CSI and other former directors of CSI, alleging in part, that Mr. Fairhead and
the named directors had breached their fiduciary duty to CSI and its
stockholders in a number of respects, and corporate counsel had committed
malpractice. Although the Compliant did not quantify the relief sought, the
initial settlement demand against all defendants was $12 million. On January 9,
2005, the parties to this suit entered into a settlement agreement, which was
approved by the court on January 26, 2005 and was dismissed on February 15,
2005. The financial settlement which provides that the plaintiff will be paid
$1,750,000 was satisfied, for the most part, from CSI's directors and officers
liability insurance and from legal malpractice insurance. Mr. Fairhead and the
Company did not contribute to the financial settlement. No defendant admitted to
any liability regarding the claims asserted in the complaint. The Company
determined that it has a duty under Delaware law to indemnify Mr. Fairhead for
his expenses not covered by CSI's directors and officers liability policy, which
consisted of immaterial advancements of legal costs.

From time to time the Company is also involved in legal proceedings,
claims or investigations that are incidental to the conduct of the Company's
business. In future periods, the Company could be subjected to cash cost or
non-cash charges to earnings if any of these matters is resolved on unfavorable
terms. However, although the ultimate outcome of any legal matter cannot be
predicted with certainty, based on present information, including our assessment
of the merits of the particular claim, the Company does not expect that these
legal proceedings or claims will have any material adverse impact on its future
consolidated financial position or results of operations.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matter was submitted to a vote of security holders in the fourth
quarter of fiscal 2005.

ITEM 4A. EXECUTIVE OFFICERS OF THE REGISTRANT

NAME AGE POSITION
- ------------------- --- --------------------------------------------------------------------------

Gary R. Fairhead 53 President and Chief Executive Officer.
Gary R. Fairhead has been the President of the Company since January 1990.
Gary R. Fairhead is the brother of Gregory A. Fairhead.

Linda K. Blake 44 Chief Financial Officer, Vice President - Finance, Treasurer and
Secretary since February 1994.

Gregory A. Fairhead 49 Executive Vice President - Operations and Assistant Secretary.
Gregory A. Fairhead has been Executive Vice President since February
2000 and is Assistant Secretary. Mr. Fairhead was Vice President -
Mexican Operations for the Company from February 1990 to February
2000. Gregory A. Fairhead is the brother of Gary R. Fairhead.

John P. Sheehan 44 Vice President - Director of Materials and Assistant Secretary since
February 1994.

Daniel P. Camp 56 Vice President - China Operation since 2003, Mr. Camp was the General
Manager/Vice President of Mexican Operations from 1994 to 2003.

Raj B. Upadhyaya 50 Executive Vice President - Fremont

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED
STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

The Company's Common Stock is traded on the Nasdaq SmallCap System under
the symbol SGMA. The following table sets forth the range of quarterly high and
low bid information for the Common Stock for the periods ended April 30, 2005
and 2004.

Common Stock as Reported
by Nasdaq

Period High Low
- -------------- ------- -------

Fiscal 2005:
Fourth Quarter $12.930 $10.700
Third Quarter 14.730 10.830
Second Quarter 11.740 8.520
First Quarter 14.600 8.750

Fiscal 2004:
Fourth Quarter $25.890 $ 9.900
Third Quarter 33.860 16.000
Second Quarter 28.500 12.800
First Quarter 14.990 5.630

As of July 8, 2005, there were approximately 70 holders of record of the
Company's Common Stock, which does not been amendedinclude shareholders whose stock is held
through securities position listings. The Company estimates there to be
approximately 1,650 beneficial owners of the Company's Common Stock.

The Company has not paid cash dividends on its Common Stock since
completing its February 1994 initial public offering and does not intend to pay
any dividends in this Amendment No. 1the foreseeable future. So long as any indebtedness remains
unpaid under the Company's revolving loan facility, the Company is prohibited
from paying or declaring any cash or other dividends on any of its capital
stock, except stock dividends, without the written consent of the lender under
the facility.

ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA

Years Ended April 30
-----------------------------------
(In thousands except per share data)
2001 2002 2003 2004 2005
-------- -------- -------- -------- --------

Net Sales $120,798 $102,293 $105,824 $100,494 $106,078

Income (loss) before income tax
expense (benefit) and minority
interest <1,856> 2,486 9,023 9,219 7,916

Net income (loss) <1,156> 1,542 5,715 5,406 4,699

Total Assets 68,818 51,809 53,400 62,998 66,543

Long-term debt and capital lease
obligations (including current
maturities) 30,930 17,514 9,911 7,025 7,194

Net income (loss) per common share-
Basic $ <0.40> $ 0.54 $ 1.98 $ 1.58 $ 1.25

Net income (loss) per common share-
Diluted $ <0.40> $ 0.52 $ 1.70 $ 1.53 $ 1.23

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

CRITICAL ACCOUNTING POLICES

Management Estimates and Uncertainties - The preparation of consolidated
financial statements in conformity with accounting principles generally accepted
in the United States of America requires management to Form 10-K/A. All
information in this Amendment No. 1 to Form 10/K-A is asmake estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the Original Filingconsolidated
financial statements and the reported amounts of revenues and expenses during
the reporting period. Significant estimates made in preparing the consolidated
financial statements include depreciation and amortization periods, the
allowance for doubtful accounts and reserves for inventory and valuation of
goodwill. Actual results could materially differ from these estimates.

Revenue Recognition - Revenues from sales of product including the
Company's electronic manufacturing service business are recognized when the
product is shipped. In general it is the Company's policy to recognize revenue
and related costs when the order has been shipped from our facilities, which is
also the same point that title passes under the terms of the purchase order
except for consignment inventory. Consignment inventory is shipped from the
Company to an independent warehouse for storage or shipped directly to the
customer and stored in a segregated part of the customer's own facility. Upon
the customer's request for inventory, the consignment inventory is shipped to
the customer if the inventory was stored offsite or transferred from the
segregated part of the customer's facility for consumption, or use, by the
customer. The Company recognizes revenue upon such transfer. The Company does
not earn a fee for storing the consignment inventory. The Company provides a
ninety (90) day warranty for workmanship only and does not reflecthave any
subsequent informationinstallation, acceptance or sales incentives, although the Company has
negotiated extended warranty terms in certain instances. The Company assembles
and tests assemblies based on customers specifications. Historically the amount
of returns for workmanship issues has been de minimus under the Company's
standard or extended warranties. Any returns for workmanship issues received
after each period end are accrued in the respective financial statements.

Inventories - Inventories are valued at the lower of cost or market. Cost
is determined by the first-in, first-out method. The Company establishes
inventory reserves for valuation, shrinkage, and excess and obsolete inventory.
The Company records provisions for inventory shrinkage based on historical
experience to account for unmeasured usage or loss. Actual results differing
from these estimates could significantly affect the Company's inventories and
cost of products sold. The Company records provisions for excess and obsolete
inventories for the difference between the cost of inventory and its estimated
realizable value based on assumptions about future product demand and market
conditions. Actual product demand or market conditions could be different than
that projected by management.

Impairment of Long-Lived Assets - The Company reviews long-lived assets
for impairment, whenever events occurring afteror changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. An asset is considered
impaired if its carrying amount exceeds the future net cash flow the asset is
expected to generate. If such asset is considered to be impaired, the impairment
to be recognized is measured by the amount by which the carrying amount of the
asset, if any, exceeds its fair market value. The Company has adopted SFAS No.
144, which establishes a single accounting model for the impairment or disposal
of long-lived assets, including discontinued operations.

Goodwill and Other Intangibles - The Company adopted SFAS No. 142,
"Goodwill and Other Intangible Assets" effective January 1, 2002. Under SFAS No.
142, goodwill is recognized as the excess cost of an acquired entity over the
net amount assigned to assets acquired and liabilities assumed. Goodwill is not
amortized, but rather tested for impairment on an annual basis and more often if
circumstances require. Impairment losses are recognized whenever the implied
fair value of goodwill is less than its carrying value.

NEW ACCOUNTING STANDARDS

In December 2004, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 123 (revised 2004), Share-Based
Payment ("SFAS 123R"). The Company is required to adopt SFAS 123R on May 1,
2006. SFAS 123R requires the Company to measure the cost of employee services
received in exchange for an equity award based on the grant date fair value. The
cost will be recognized in financial statements as an expense over the period
during which an employee is required to provide service. As regulations are
still pending, the Company has not been able to determine whether the impact
will be material.

On December 21, 2004, the Financial Accounting Standards Board ("FASB")
Staff Position ("FSP") FAS 109-I, "Application of FASB Statement No. 109,
Accounting for Income Taxes, to the Tax Deduction on Qualified Production
Activities Provided by the American Jobs Creation Act of 2004" was issued. FSP
FAS 109-I clarifies that this tax deduction must be accounted for as a special
deduction in accordance with Statement 109. As such, the special deduction has
no effect on deferred tax assets and liabilities existing at the date of
enactment. Rather, the Original Filing. Accordingly,impact of this Amendmentdeduction would be reported in the period
in which the deduction is claimed on the Company's tax return beginning in 2005.
As regulations are still pending, the Company has not been able to determine
whether the impact will be material; the Company believes that the impact will
not be material.

On December 21, 2004, FSP FAS 109-2, "Accounting and Disclosure Guidance
for the Foreign Earnings Repatriation Provision within the American Jobs
Creation Act of 2004 ("Act")," was issued. FSP FAS 109-2 provides companies
additional time, beyond the financial reporting period during which the Act took
effect, to evaluate the Act's impact on a company's plan for reinvestment or
repatriation of certain foreign earnings for purposes of applying Statement 109.
FSP FAS 109-2 was effective upon issuance. Based on management's analysis of the
repatriation provision of the Act , although not yet finalized, it is unlikely
that the Company had any foreign earnings to repatriate and accordingly, the
financial statements do not reflect any provisions for taxes on unremitted
foreign earnings. The Company does not believe the impact of the Act will be
material.

regardless of whether they meet the criterion of "abnormal." The statement also
requires that allocation of fixed production overheads to the cost of conversion
be based on the normal capacity of the production facilities. The provisions of
this statement are effective for inventory costs incurred during fiscal years
beginning after June 15, 2005 (as of February 1, 2006 for the Company) and are
to Form 10-K/Abe applied prospectively. The Company anticipates the impact will not be
material.

On October 22, 2004, the President signed the American Jobs Creation Act
of 2004 ("the Act"). The Act provides a deduction from income from qualified
domestic production activities, which will be phased in from 2005 through 2010.
In return, the Act also provides for a two-year phase-out (except for certain
pre-existing binding contracts) of the existing Extraterritorial Income ("ETI")
exclusion tax benefit for foreign sales which the World Trade Organization
("WTO") ruled was an illegal export subsidy. The European Union ("EU") believes
that the Act fails to adequately repeal the illegal export subsidies because of
the transitional provisions and has asked the WTO to review whether these
transitional provisions are in compliance with their prior ruling. This will
have no material impact on the Company. Additionally, the Act creates a
temporary incentive for U.S. corporations to repatriate accumulated income
earned abroad by providing an 85% dividend received deduction for certain
dividends from controlled foreign corporations. The impact on the Company in the
future will not be material.

CAUTIONARY NOTE:

The following discussion provides an analysis of the Company's financial
condition and results of operations, and should be read in conjunction with the
Company's filings madeSelected Consolidated Financial Data and the Consolidated Financial Statements
of the Company, and the Notes thereto, appearing in this Annual Report on Form
10-K, as well as in conjunction with the Securitiescautionary note concerning
forward-looking information which appears at the beginning of Item 1 and Exchange Commission subsequentthe
risk factors which appear at the end of Item 1.

OVERVIEW

Sales can be a misleading indicator of the Company's financial
performance. Sales levels can vary considerably among customers and products
depending on the mix of services, consignment and turnkey, rendered by the
Company and demanded by its customers. Consignment orders require the Company to
perform manufacturing services on components and other materials supplied by a
customer, and the Company charges only for its labor, overhead and manufacturing
costs, plus a profit. In the case of turnkey orders, the Company provides, in
addition to manufacturing services, the components and other materials used in
assembly. Turnkey contracts, in general, have a higher dollar volume of sales
for each given assembly, owing to inclusion of the cost of components and other
materials in net sales and cost of goods sold. Variations in the number of
turnkey orders compared to consignment orders can lead to significant
fluctuations in the Company's revenue level. However, the Company does not
believe that such variations are a meaningful indicator of the Company's gross
margins. Consignment orders accounted for less than 5% of the Company's revenues
for the year ended April 30, 2005.

RESULTS OF OPERATIONS:

FISCAL YEAR ENDED APRIL 30, 2005 COMPARED
TO FISCAL YEAR ENDED APRIL 30, 2004

Net sales increased 5.6% to $106,076,965 in fiscal 2005 from $100,494,122
in the prior year. The Company's sales increased in the fitness, industrial
electronics and appliance marketplaces during fiscal 2005 as compared to the
filingprior year. The increase in sales volume in the fitness and appliance industries
was partially offset by price reductions to customers. The Company anticipates
pricing pressures from customers will continue in fiscal 2006.

Sales in the gaming industry decreased by 6.3% due to a reduction in
orders placed by the Company's customers. Subsequent to the year ended April 30,
2005, the Company sold its Las Vegas operation, which primarily serviced the
gaming industry. The decline in this business has served to further concentrate
the Company's business within the other industries it serves. The Company will
continue to sell into the gaming marketplace out of its remaining operations.
The acquisition of Able will give the Company a presence in a number of new
markets, diversify its current customer base and expand the number of industries
it serves. Concentration of sales by the Company into a specific industry
increases the Company's risks related to business and economic factors within
that industry.

The Company's sales in a particular industry are driven by the fluctuating
forecasts and end-market demand of the customers within that industry. Sales to
customers are subject to variations from period to period depending on customer
order terminations, the life cycle of customer products and product transition.
There can be no assurance that sales levels or gross margins will remain stable
in future periods.

Sales to the Company's five largest customers accounted for 63% and 68% of
net sales for fiscal years 2005 and 2004, respectively.

Gross profit decreased to $18,567,574 or 17% of net sales in fiscal year
2005 compared to $19,115,930 or 19.0% of net sales in the prior period. The
decrease is due to an increase in price concessions, manufacturing costs and
component pricing. There can be no assurance gross margins will not decrease in
the future.

Selling and administrative expenses increased in fiscal year 2005 to
$10,919,006 or 10.3% of net sales compared to $9,664,903 or 9.6% of net sales in
fiscal 2004. The increase is due to additional personnel in the sales and
purchasing departments, advertising expenditures and increased legal fees. The
increase in selling and administrative expenses is partially offset by a
reduction in bonus expense. The Company anticipates it will incur additional
professional fees related to Sarbanes-Oxley, specifically Section 404, Internal
Control Over Financial Reporting.

Interest expense increased to $283,137 in fiscal 2005 compared to $239,792
in fiscal 2004. The interest expense increased due to increased borrowings under
the Company's lines of credit, additional capital leases for machinery and
equipment, interest for notes payable in connection with the acquisition of SMTU
and notes payable associated with the purchase of the Company's corporate and
manufacturing facility in Elk Grove Village, Illinois.

In fiscal 2005 tax expense was $3,082,568 which resulted in an effective
rate of 38.9% compared to $3,550,038 in income tax expense and an effective rate
of $39.6% in fiscal 2004.

Net income decreased to $4,698,799 in fiscal 2005 compared to $5,405,732
in fiscal 2004. Diluted earnings per share for the year ended April 30, 2005 was
$1.25 compared to $1.53 in fiscal 2004. Basic earnings per share was $1.23 and
$1.58 for the year ended April 30 2005 and 2004, respectively.

FISCAL YEAR ENDED APRIL 30, 2004 COMPARED
TO FISCAL YEAR ENDED APRIL 30, 2003

Net sales decreased 5% to $100,494,122 in fiscal 2004 from $105,824,257 in
the prior year. The Company's sales decreased in the consumer electronics,
gaming and fitness industries during fiscal 2004. The Company continued to
experience sales growth within the appliance industry in fiscal 2004. The
Company's concentration in a specific industry increases the Company's risk due
to business and economic factors within that specific industry. The Company's
five largest customers accounted for 68% and 62% of net sales in fiscal 2004 and
2003, respectively. Sales to the Company's largest customers can vary from
period to period. In addition, the Company generally does not obtain long-term
purchase contracts. Any significant change in orders from these customers could
materially impact the Company's operating results.

Gross profit decreased to $19,115,930 in fiscal 2004 from $19,919,683 in
the prior year. The reduction in absolute dollars of gross profit is primarily
due to lower sales volume for the fiscal year ended 2004. Gross profit increased
as a percent to net sales to 19.0% compared to 18.8% in fiscal 2003. The overall
increase as a percentage is due to product life cycles, product mix and
component pricing. The Company's gross profit margin can vary considerably due
to price erosion within the EMS industry, product mix, component pricing,
overall capacity utilization, product life cycle, the mix of turnkey and
consignment orders and labor cost. There can be no assurance that gross profit
margins will not decrease in the future.

Selling and administrative expenses decreased in fiscal 2004 to $9,664,903
from $10,048,229 in fiscal 2003. The decrease is primarily due to the receipt of
approximately $283,000 in settlement of an insurance claim, and a reduction in
commission and legal expenses. The Company anticipates administrative expenses
and professional fees in conjunction with Sarbanes-Oxley compliance will
increase significantly in future periods.

Interest expense decreased to $239,792 from $847,846. The decrease is
primarily attributed to the reduction in the loan balance of the Company's
credit facility and lower interest rates.

In fiscal 2004 tax expense was $3,550,038, which resulted in an effective
rate of 39.6% compared to $3,251,511 in income tax expense and an effective rate
of 36.2% in fiscal 2003.

Net income for fiscal 2004 was $5,405,732, which resulted in basic
earnings per share of $1.58 and dilutive earnings per share of $1.53. Net income
for fiscal 2003 was $5,714,924. Basic and dilutive earnings per share were $1.98
and $1.70, respectively for fiscal 2003.

LIQUIDITY AND CAPITAL RESOURCES:

Cash flow provided by operating activities was $1,337,081 for the year
ended April 30, 2005 compared to $9,368,628 for the prior fiscal year. During
fiscal 2005, cash provided by operations was the result of net income, the
non-cash effect of depreciation and amortization and an increase in income taxes
payable. The Company has applied its income tax receivable to estimated tax
payments due for fiscal 2004 and part of fiscal 2005. The balance of income
taxes due resulted in an accrual for income taxes for the year ended April 30,
2005. Cash provided by operating activities was partially offset by an increase
in receivables of approximately $1,624,000 and an increase of approximately
$6,980,000 in inventories. The increase in inventories is primarily attributable
to an increase in customer required safety stock, the start up of the Company's
China facility and new product programs driven by customers.

STRATEGIC ACTIVITIES.

In fiscal 2005 the Company made several strategic decisions that will be
important to the Company going forward. These included acquiring the portion of
SMTU previously owned by outside investors, selling our Las Vegas operation and
acquiring Able.

On July 14, 2005, the Company closed on the purchase of all of the
outstanding stock of Able, a company headquartered in Hayward California, with
an additional manufacturing facility located in Tijuana, Mexico. Able is an ISO
9001:2000 certified EMS company serving Original Filing,Equipment Manufacturers in the
test and measurement, medical instruments, telecommunications, computer
peripherals, industrial controls and

genetic research industries. Able's long-term relationships with its customers
will give the Company a presence in a number of new markets, diversify its
current customer base and expand the number of industries it serves. The
effective date of the transaction was July 1, 2005. The purchase price was
$12,800,000 plus the assumption of approximately $3,700,000 in debt and was
recorded as stock purchase transaction in first quarter of fiscal 2006. The
transaction was financed by the Company's amended credit facility and resulted
in an increase of approximately $9,000,000 in goodwill.

On June 3, 2005 the Company closed on the sale of its Las Vegas, Nevada
operation. The Las Vegas facility operated as a complete electronic
manufacturing services ("EMS") center specializing in the assembly of electronic
products and cables for a broad range of customers primarily in the gaming
industry. The effective date of the transaction was May 30, 2005. The
transaction was structured as an asset purchase, and included a $2,000,000 cash
payment to the Company for the buyer's purchase of the machinery, equipment and
other assets of the Las Vegas operation. The transaction will be recorded by the
Company in the first quarter of fiscal 2006 and will include a gain on the
transaction of approximately $140,000. The Company continues to be obligated
under the primary lease agreement for the Las Vegas facility and subleases the
facility in part to Grand Products, Inc., the buyer of the Company's Las Vegas
operation and in part to Western Money Systems.

On August 2, 2004, the Company acquired the interest of outside investors
in its affiliate SMTU and the general partner of SMTU, SMT Unlimited, Inc.,
thereby bringing the Company's interest in its affiliate SMTU to approximately
80%. On September 2, 2004 the Company acquired the remaining interests in its
affiliate SMTU from its managers. The aggregate price paid for all the interests
was $2,814,699. This aggregate price was paid with $1,330,000 in notes with
terms of up to 2 years and cash in the amount of $1,338,858 and forgiveness of
interest payable. The acquisition was treated as a step acquisition and resulted
in goodwill of $756,959. On October 1, 2004 SMT Unlimited, Inc. was merged into
the Company, and SMTU was liquidated, thereby becoming an operating division of
the Company.

The Company expects all three of its strategic decisions; the acquisition
of the outstanding portion STMU, sale of our Las Vegas operation and acquisition
of Able will be important to the Company's future. In particular, the Able
acquisition directly achieves the Company's strategic goals of diversifying our
markets served, diversifying our customer base and expanding the range of
services we offer.

FINANCING TRANSACTIONS.

The Company entered into an Amended Loan and Security Agreement in July
2005, which provides for a revolving credit facility. The maximum borrowing
limit under the amended revolving credit facility is limited to the lesser of:
(i) $17,000,000 or (ii) an amount equal to the sum of 85% of the receivable
borrowing base and the lesser of $8,500,000 or varying percentages of the
inventory base. The Amended Loan and Security Agreement expires on June 30, 2008
and is subject to certain financial covenants. The Amended Loan and Security
Agreement also provides a term loan in the amount of $3,000,000. Interest
accrues at 5.75% and interest only is due each quarter through June 30, 2006.
Quarterly principal payments of $250,000 are due in years two through four.

At April 30, 2005 the Company was in compliance with its financial
covenants and had borrowings of $392,038 outstanding under this line of credit.

The revolving credit facility is collateralized by substantially all of
the domestically located assets of the Company and contains certain financial
covenants, including specific covenants pertaining to the maintenance of minimum
tangible net worth and net income. The agreement also restricts annual lease
rentals and capital expenditures and the payment of dividends or distributions
of any amendmentscash or other property on any of its capital stock.

SigmaTron China entered into a loan agreement in April 2005, which
provides for a line of credit with the China Construction Bank. The agreement
provides for four draws on the line of credit of approximately $121,000,
$362,750, $362,750 and $362,750, on April 15, 2005, July 1, 2005, October 8,
2005, and January 3, 2006, respectively. The interest rate under the agreement
is 5.76% and at April 30, 2005 SigmaTron China had $121,000 outstanding under
the loan. The loan is collateralized by the Company's building in Suzhou-Wujiang
China and 60 of the 100 Chinese acres leased at the property.

SigmaTron China had its first production during fiscal 2005, making a
positive contribution to those filings.

PART IISigmaTron's margins while it continues to ramp up its
sales activities. The Company believes that certain of Able's customers may be
interested in doing business with SigmaTron China, which could provide
opportunities for added growth.

In fiscal 2005, the Company purchased approximately $3,800,000 in
machinery and equipment and it anticipates it will make additional machinery and
equipment purchases during fiscal 2006. The Company executed three to five year
capital leases to finance the majority of the purchases. The machinery and
equipment purchases were necessary to assist with capacity constraints and the
Company commenced its lead-free manufacturing program in the fourth quarter of
fiscal 2005.

Effective mid-2006 the Company's customers that provide products to the
European Union must be in compliance with the European Standard: the
"Restriction of Use of Hazardous Substance" directive for all of their products
that ship to the European marketplace. The Company's customers are also
requesting that the Company have the lead-free manufacturing capability.

The Company anticipates its credit facility, cash flow from operations and
leasing resources will be adequate to meet its working capital requirements in
fiscal 2006. In the event the business grows rapidly or the Company considers an
acquisition, additional financing resources could be necessary in the current or
future fiscal years. There is no assurance that the Company will be able to
obtain equity or debt financing at acceptable terms in the future.

The Company provides funds for salaries, wages, overhead and capital
expenditure items as necessary to operate its wholly owned subsidiary Standard
Components de Mexico, S.A. The Company provides funding to Standard Components
de Mexico, S.A. in U.S. dollars, which are exchanged for pesos as needed. The
fluctuation of the peso from time to time, without an equal or greater increase
in Mexican inflation, has not had a material impact on the financial results of
the Company. In fiscal 2005 the Company paid approximately $8,400,000 to
Standard Components de Mexico, S.A. for services provided.

On May 2002, the Company acquired a plant in Mexico through seller
financing. The loan of $1,950,000 is payable in equal monthly installments of
approximately $31,000 over six and a half years at a rate of 7% interest per
annum. Prior to acquiring this the plant, the Company rented the facility. At
April 30, 2005, $1,158,828 was outstanding in connection with the financing of
that facility.

The impact of inflation for the past three fiscal years has been minimal.

CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS:

The following table summarizes the Company's contractual obligations at
April 30, 2005 and the effect such obligations are expected to have on its
liquidity and cash flows in future periods. Payment Obligations

Total 4/30/06 4/30/08 4/30/10
---------- ---------- ---------- ----------

Notes Payable, including current maturities $4,503,829 $ 482,740 $1,032,717 $2,988,372

Capital Leases, including current maturities 1,876,957 637,766 923,051 316,140

SMTU purchase 300,000 300,000 0 0
---------- ---------- ---------- ----------
Total contractual cash obligations $6,680,786 $1,420,506 $1,955,768 $3,304,512
========== ========== ========== ==========

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISKS

Interest Rate Risk

The Company's exposure to market risk for changes in interest rates is due
to primarily to its short-term investments and borrowings under its credit
agreements. As of April 30, 2005 the Company had no short-term investments and
approximately $513,000 in borrowings under its credit agreements. The Company
does not use derivative financial investments. The Company's cash equivalents if
any, are invested in overnight commercial paper. The Company does not have any
significant cash flow exposure due to rate changes for its cash equivalents, as
these instruments are short-term.

ITEM 8. FINANCIAL STATEMENT AND SUPPLEMENTARY DATA

The response to this item is included in Item 15(a) of this Report.

ITEM 9. CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE

Not applicable.

ITEM 9A. CONTROLS AND PROCEDURES

Our management, including our President and Chief Executive Officer and
Chief Financial Officer, evaluated the effectiveness of the design and operation
of our disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) as of April 30, 2004.2005. Our disclosure controls and
procedures are designed to ensure that information required to be disclosed by
the Company in the reports filed by the Company under the Securities Exchange
Act of 1934 (the "Exchange Act"), is recorded, processed, summarized and reported
within the time periods specified in the Securities and Exchange Commission's
rules and forms and that such information is accumulated and communicated to our
management, including our President and Chief Executive Officer and Chief
Financial Officer, as appropriate to allow timely decisions regarding required
disclosure. Based on this evaluation, our President and Chief Executive Officer
and Chief Financial Officer concluded that the Company's disclosure controls and
procedures were effective as of April 30, 2004.

2005.

There has been no change in our internal control over financial reporting
during the quarter ended April 30, 2004,2005, that has materially affected or is
reasonably likely to materially affect, our internal control over financial
reporting.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.REGISTRANT

The information required under this item is incorporated herein by
reference to the Company's definitive proxy statement, filed with the Securities
and Exchange Commission not later than 120 days after the close of the Company's
fiscal year ended April 30, 2004.2005.

ITEM 11. EXECUTIVE COMPENSATION

The Company has adopted a codeinformation required under this item is incorporated herein by
reference to the Company's definitive proxy statement, filed with the Securities
and Exchange Commission not later than 120 days after the close of ethics that appliesthe Company's
fiscal year ended April 30, 2005.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required under this item is incorporated herein by
reference to its principal
executive officer, principal financial officer, principal accounting officer or
controller or persons performing similar functions.the Company's definitive proxy statement, filed with the Securities
and Exchange Commission not later than 120 days after the close of the Company's
fiscal year ended April 30, 2005.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND
REPORTS ON FORM 8-K

(a)(1) and (a)(2)

The financial statements, including required supporting schedule, which
wereare
listed in the index to Financial Statements and Financial Schedule were
previously filed as part
of thethis Annual Report on Form 10-K for the fiscal year ended April 30,
2004,beginning on Page F-1.

INDEX TO EXHIBITS

(a)(3)

3.1 Certificate of Incorporation of the Company, incorporated herein by
reference to Exhibit 3.1 to Registration Statement on Form S-1, File No.
33-72100, dated February 9, 1994.

3.2 Amended and Restated By-laws of the Company, adopted on September 24,
1999, filed as Exhibit 3.2 to the Company's Form 10-K for the year ended
April 30, 2000 and hereby incorporated by reference.

10.1 Form of 1993 Stock Option Plan - filed as Exhibit 10.4 to the Company's
Registration Statement on Form S-1, File No. 33-72100, and hereby
incorporated by reference.

*10.2 Form of Incentive Stock Option Agreement for the Company's 1993 Stock
Option Plan - filed as exhibit 10.5 to the Company's Registration
Statement on Form S-1, File No. 33-72100, and hereby incorporated by
reference.

*10.3 Form of Non-Statutory Stock Option Agreement for the Company's 1993
Stock Option Plan - filed as Exhibit 10.6 to the Company's Registration
Statement on Form S-1, File No. 33-72100, and hereby incorporated by
reference.

*10.4 1994 Outside Directors Stock Option Plan - filed as Exhibit 10.15 to the
Company's Registration Statement on Form S-1, File No. 33-72100, and
hereby incorporated by reference.

10.5 The Company's 1997 Directors' Stock Option Plan - filed as Exhibit A to
the Company's 1997 Proxy Statement filed on August 18, 1997 and hereby
incorporated by reference.

10.6 Organization Agreement between the Company and other Partners of SMT
Unlimited L.P. dated September 15, 1994, filed as Exhibit 10.23 to the
Company's Form 10-K for the fiscal year ended April 30, 1995 and hereby incorporated by reference.

10.1 Form of 1993 Stock Option Plan - filed as Exhibit 10.4 to the Company's
Registration Statement on Form S-1, File No. 33-72100, and hereby
incorporated by reference.

*
10.2 Form of Incentive Stock Option Agreement for the Company's 1993 Stock
Option Plan - filed as Exhibit 10.5 to the Company's Registration
Statement on Form S-1, File No. 33-72100, and hereby incorporated by
reference.

*
10.3 Form of Non-Statutory Stock Option Agreement for the Company's 1993 stock
Option Plan - filed as Exhibit 10.6 to the Company's Registration
Statement on Form S-1, File No. 33-72100, and hereby incorporated by
reference.

*
10.4 2000 Outside Directors' Stock Option Plan and hereby incorporated by
reference - filed as Appendix 1 to the Company's 2000 Proxy Statement
filed on August 21, 2000.

10.5 Loan and Security Agreement between SigmaTron International, Inc. and
LaSalle National Bank dated August 25, 1999 filed as Exhibit 10.26 to the
Company's Form 10-Q for the quarter ended October 31, 1999 and hereby
incorporated by reference.

10.6 Amended and Restated Agreement between Nighthawk Systems, Inc. and
SigmaTron International Inc., dated January 1, 2000, filed as Exhibit
10.25 to the Company's Form 10-K for the year ended April 30, 2000 and
hereby incorporated by reference.

10.7 Lease Agreement # 00-190 between SigmaTron International, Inc. and
International Financial Services dated July 18, 2000, filed as Exhibit
10.27 to the Company's Form 10-Q for the quarter ended October 31, 2000
and hereby incorporated by reference.

10.8 Lease Agreement # 00-280 between SigmaTron International, Inc. and
International Financial Services dated December 12, 2000, filed as
Exhibit 10.27 to the Company's Form 10-K for the year ended April 30,
2001 and hereby incorporated by reference.

10.9 Amended Loan and Security Agreement between SigmaTron International, Inc.
and LaSalle Bank National Association, dated October 16, 2002, filed as
Exhibit 10.27 to the Company's Form 10-Q for the quarter ended October
31, 2002 and hereby incorporated by reference.

10.10 Mortgage and Security Agreement between SigmaTron International, Inc. and
LaSalle Bank National Association, dated November 17, 2003, filed as
Exhibit 10.19 to the Company's Form 10-Q for the quarter ended October
31, 2003 and hereby incorporated by reference.

10.11 Mortgage Note between SigmaTron International, Inc. and LaSalle Bank
National Association, dated November 17, 2003, filed as Exhibit 10.20 to
the Company's Form 10-Q for the quarter ended October 31, 2003 and hereby
incorporated by reference.

10.12 Amended Loan and Security Agreement between SigmaTron International, Inc.
and LaSalle Bank National Association, dated January, 2004, filed as
Exhibit 10.21 to the Company's Form 10-Q for the quarter ended January
31, 2004 and hereby incorporated by reference.

*10.7 2000 Outside Directors' Stock Option Plan and hereby incorporated by
reference - filed as Appendix 1 to the Company's 2000 Proxy Statement
filed on August 21, 2000.

*10.8 2000 Employee Stock Option Plan - filed as Appendix 2 to the Company's
2000 Proxy Statement filed on August 21, 2000 and hereby incorporated by
reference.

10.9 Loan and Security Agreement between SigmaTron International, Inc. and
LaSalle National Bank dated August 25, 1999, filed as Exhibit 10.26 to
the Company's Form 10-Q for the quarter ended October 31, 1999 and
hereby incorporated by reference.

10.10 Amended and Restated Agreement between Nighthawk Systems, Inc. and
SigmaTron International Inc., dated January 1, 2000, filed as Exhibit
10.25 to the Company's Form 10-K for the year ended April 30, 2000 and
hereby incorporated by reference.

10.11 Lease Agreement # 00-190 between SigmaTron International, Inc. and
International Financial Services dated July 18, 2000, filed as Exhibit
10.27 to the Company's Form 10-Q for the quarter ended October 31, 2000
and hereby incorporated by reference.

10.12 Lease Agreement # GE005 between SigmaTron International, Inc. and
General Electric Capital Corporation dated December 21, 2000, filed as
Exhibit 10.28 to the Company's Form 10-Q for the quarter ended January
31, 2001, and hereby incorporated by reference.

10.13 Lease Agreement # 00-280 between SigmaTron International, Inc. and
International Financial Services dated December 12, 2000, filed as
Exhibit 10.27 to the Company's Form 10-K for the year ended April 30,
2001 and hereby incorporated by reference.

10.14 Lease Agreement # 200029352 between SigmaTron International, Inc. and
Citicorp Vendor Finance, Inc. dated March 15, 2001, filed as Exhibit
10.28 to the Company's Form 10-K for the year ended April 30, 2001 and
hereby incorporated by reference.

10.15 Amended Loan and Security Agreement between SigmaTron International,
Inc. and LaSalle National Association, dated October 16, 2002, filed as
Exhibit 10.27 to the Company's Form 10-Q for the quarter ended October
31, 2002 and hereby incorporated by reference.

10.16 Mortgage and Security Agreement between SigmaTron International, Inc.
and LaSalle Bank, dated November 17, 2003, filed as Exhibit 10.19 to the
Company's Form 10-Q for the quarter ended October 31, 2003 and hereby
incorporated by reference.

10.17 Mortgage Note between SigmaTron International, Inc. and LaSalle Bank,
dated November 17, 2003, filed as Exhibit 10.20 to the Company's Form
10-Q for the quarter ended October 31, 2003 and hereby incorporated by
reference.

10.18 Amended Loan and Security Agreement between SigmaTron International,
Inc. and LaSalle Bank, dated January, 2004, filed as Exhibit 10.21 to
the Company's Form 10-Q for the quarter ended January 31, 2004 and
hereby incorporated by reference.

+10.19 Amended Loan and Security Agreement between SMT Unlimited L.P. and
LaSalle Bank, dated June 25, 2004.

14 Code of Ethics.

22.1 Subsidiaries of the Registrant - filed as Exhibit 22.1 of the Company's
Registration Statement on Form S-1, File No. 33-72100, and hereby
incorporated by reference.

+23.1 Consent of Grant Thornton LLP
*
10.13 2004 Directors' Stock Option Plan and hereby incorporated by reference -
filed as Appendix C to the Company's 2004 Proxy Statement filed on August
16, 2004.

*
10.14 2004 Employee Stock Option Plan and hereby incorporated by reference -
filed as Appendix B to the Company's 2004 Proxy Statement filed on August
16, 2004.

*
10.15 Change in Control Plan dated May 30, 2002, filed as Exhibit 10.15.

10.16 Ninth Amendment to Loan and Security Agreement between SigmaTron
International, Inc. and LaSalle Bank National Association, dated March
11, 2005, filed as Exhibit 10.16.

10.17 Stock Purchase Agreement, dated the 14th day of July, 2005, between
SigmaTron International, Inc. and Able Electronics Corporation, filed as
Exhibit 10.17.

22.1 Subsidiaries of the Registrant - filed as Exhibit 22.1 of the Company's
Registration Statement on Form S-1, File No. 33-72100, and hereby
incorporated by reference.

23.1 Consent of Grant Thornton LLP.

31.1 Certification of Principal Executive Officer of the Company Pursuant to
Rule 13a-14(a) under the Exchange Act, as adopted Pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.

31.2 Certification of Principal Financial Officer of the Company Pursuant to
Rule 13a-14(a) under the Exchange Act, as adopted Pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.

31.2 Certification of Principal Financial Officer of the Company Pursuant to
Rule 13a-14(a) under the Exchange Act, as Adopted Pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.

32.1 Certification by the Principal Executive Officer of SigmaTron
International, Inc. Pursuant to Rule 13a-14(b) under the Exchange Act and
Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).

32.2 Certification by the Principal Financial Officer of SigmaTron
International, Inc. Pursuant to Rule 13a-14(b) under the Exchange Act and
Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).

- ----------
* Indicates management contract or compensatory plan.

+ Indicates Exhibit was previously filed with the Form 10-K for the fiscal
year ended April 30, 2004.

(b) Reports on Form 8-K

The Company furnished a report on Form 8-K on September 8, 2003 to
announce financial results for the quarter ended July 31, 2003, and
hereby incorporated by reference.

The Company furnished a report on Form 8-K on December 8, 2003 to
announce financial results for the quarter ended October 31, 2003,
and hereby incorporated by reference.

The Company furnished a report on Form 8-K on March 8, 2004 to
announce financial results for the quarter ended January 31, 2004,
and hereby incorporated by reference.

The Company hereby files as exhibits to this Report the exhibits
listed in Item 15(a)(3) above, which are attached hereto or
incorporated herein.

(d) Financial Statements Schedules

The Company hereby files a schedule to this Report the financial
schedules in Item 15, were previously filed as part of
the Form 10-K for the fiscal year ended April 30, 2004.which are attached hereto.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this Report to be signed on its
behalf by the undersigned, thereunto duly authorized.

SIGMATRON INTERNATIONAL, INC.

By: /s/ Gary R. Fairhead
-------------------------------------------------------------
Gary R. Fairhead, President
and Chief Executive Officer

Dated: July 27, 2005

KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned directors and
officers of SigmaTron International, Inc., a Delaware corporation, which is
filing an Annual Report on Form 10-K with the Securities and Exchange Commission
under the provisions of the Securities Exchange Act of 1934 as amended, hereby
constitute and appoint Gary R. Fairhead and Linda K. Blake, and each of them,
each of their true and lawful attorneys-in fact and agents; with full power of
substitution and resubstitution, for him and in his name, place and stead, in
all capacities, to sign any or all amendments to the report to be filed with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as each of them might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities, and on the dates indicated.

Signature Title Date
--------- ----- ----

/s/ Franklin D. Sove Chairman of the Board of Directors July 27, 2005
- --------------------
Franklin D. Sove

/s/ Gary R. Fairhead President and Chief Executive Officer July 27, 2005
- --------------------
Gary R. Fairhead (Principal Executive Officer)

/s/ Linda K. Blake Chief Financial Officer, Secretary and Treasurer July 27, 2005
- ------------------
Linda K. Blake (Principal Financial Officer and Principal
Accounting Officer)

/s/ John P. Chen Director July 27, 2005
- ----------------
John P. Chen

/s/ W.L. McClelland Director July 27, 2005
- -------------------
W.L. McClelland

/s/ Thomas W. Rieck Director July 27, 2005
- -------------------
Thomas W. Rieck

/s/ Dilip S. Vyas Director July 27, 2005
- -----------------
Dilip S. Vyas

/s/ Carl Zemenick Director July 27, 2005
- -----------------
Carl Zemenick

INDEX TO FINANCIAL STATEMENTS

PAGE

SIGMATRON INTERNATIONAL, INC. AND SUBSIDIARIES

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM..................................... F-2

CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEETS
ASSETS................................................................................. F-3
LIABILITIES AND STOCKHOLDERS' EQUITY................................................... F-4
CONSOLIDATED STATEMENTS OF INCOME........................................................ F-5
CONSOLIDATED STATEMENT OF CHANGES IN
STOCKHOLDERS' EQUITY................................................................... F-6
CONSOLIDATED STATEMENTS OF CASH FLOWS.................................................... F-7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS............................................... F-8

Financial statement schedules not listed above are omitted because they are not
applicable or required.

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders
SigmaTron International, Inc.

We have audited the accompanying consolidated balance sheets of SigmaTron
International, Inc. and subsidiaries (a Delaware corporation) as of April 12 30,
2005 and 2004, and the related consolidated statements of income, stockholders'
equity, and cash flows for each of the three years in the period ended April 30,
2005. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of SigmaTron
International, Inc. and subsidiaries as of April 30, 2005 and 2004, and the
results of its operations and its cash flows for the each of the three years in
the period ended April 30, 2005 in conformity with accounting principles
generally accepted in the United States of America.

GRANT THORNTON LLP

Chicago, Illinois
July 8, 2005

F-2

SIGMATRON INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
APRIL 30,

ASSETS 2005 2004
------------- -------------

CURRENT ASSETS
Cash and cash equivalents $ 184,014 $ 5,145,814
Restricted cash - 100,000
Accounts receivable, less allowance for doubtful
accounts of $120,000 at April 30, 2005
and 2004. 14,275,308 12,651,272
Inventories, net 21,468,506 14,168,357
Prepaid and other assets 1,168,366 1,315,127
Refundable income taxes - 275,583
Deferred income taxes 429,528 1,902,551
Other receivables 183,666 415,253
------------- -------------

Total current assets 37,709,388 35,973,957

PROPERTY, PLANT AND EQUIPMENT, NET 26,689,940 25,707,901

LONG-TERM ASSETS
Other assets 1,386,770 1,316,814
Goodwill 756,959 -
------------- -------------

Total long-term assets 2,143,729 1,316,814
------------- -------------

TOTAL ASSETS $ 66,543,057 $ 62,998,672
============= =============

The accompanying notes are an integral part of these statements.

F-3

SIGMATRON INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS - CONTINUED
APRIL 30,

LIABILITIES AND STOCKHOLDERS' EQUITY 2005 2004
------------ ------------

CURRENT LIABILITIES
Trade accounts payable $ 7,395,111 $ 7,475,026
Accrued expenses 2,269,703 2,987,889
Accrued payroll 1,675,788 1,552,855
Income taxes payable 407,710 -
Notes payable - buildings 430,000 430,000
Notes payable - other 300,000 -
Capital lease obligations 637,766 640,436
------------ ------------

Total current liabilities 13,116,078 13,086,206

NOTES PAYABLE - BANKS 512,958 1,118,514

NOTES PAYABLE - BUILDINGS,
LESS CURRENT PORTION 4,073,828 4,536,159

CAPITAL LEASE OBLIGATIONS,
LESS CURRENT PORTION 1,239,190 299,536

SUBORDINATED DEBENTURE PAYABLE - 1,050,000

DEFERRED INCOME TAXES 1,668,909 1,265,714

------------ ------------
Total liabilities 20,610,963 21,356,129

MINORITY INTEREST IN AFFILIATE - 439,787

STOCKHOLDERS' EQUITY
Preferred stock, $.01 par value; 500,000 shares
authorized, none issued and outstanding - -
Common stock, $.01 par value; 12,000,000 shares
authorized, 3,755,420 and 3,750,954 shares issued and
outstanding at April 30, 2005 and 2004, respectively 37,554 37,510
Capital in excess of par value 19,087,020 19,056,525
Retained earnings 26,807,520 22,108,721
------------ ------------

Total stockholders' equity 45,932,094 41,202,756
------------ ------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 66,543,057 $ 62,998,672
============ ============

The accompanying notes are an integral part of these statements.

F-4

SIGMATRON INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED APRIL 30,

2005 2004 2003
-------------- -------------- --------------

Net sales $ 106,076,965 $ 100,494,122 $ 105,824,257

Cost of products sold 87,509,391 81,378,192 85,904,574
-------------- -------------- --------------

Gross profit 18,567,574 19,115,930 19,919,683

Selling and administrative expenses 10,919,006 9,664,903 10,048,229
-------------- -------------- --------------

Operating income 7,648,568 9,451,027 9,871,454

Other income (550,270) - -
Interest expense - banks and capital lease obligations 283,137 232,292 847,846

-------------- -------------- --------------

Income before income tax expense and
minority interest of affiliate 7,915,701 9,218,735 9,023,608

Income tax expense 3,082,568 3,550,038 3,251,551
-------------- -------------- --------------
Income before minority interest of affiliate 4,833,133 5,668,697 5,772,057

Minority interest in income of affiliate 134,334 262,965 57,133
-------------- -------------- --------------

NET INCOME $ 4,698,799 $ 5,405,732 $ 5,714,924
============== ============== ==============

Net income per common share
Basic $ 1.25 $ 1.58 $ 1.98
============== ============== ==============

Diluted $ 1.23 $ 1.53 $ 1.70
============== ============== ==============
Weighted-average shares of common
stock outstanding
Basic 3,751,792 3,423,999 2,885,652
============== ============== ==============

Diluted 3,815,549 3,541,297 3,355,076
============== ============== ==============

The accompanying notes are an integral part of these statements.

F-5

SIGMATRON INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
THREE YEARS ENDED APRIL 30, 2003, 2004 AND 2005

Capital in Total
Preferred Common excess of Retained stockholders'
stock stock par value earnings equity
------------ ------------ ------------ ------------ ------------

Balance at May 1, 2002 $ - $ 28,812 $ 9,436,554 $ 10,988,065 $ 20,453,431

Exercise of options - 528 123,787 - 124,315

Net income - - - 5,714,924 5,714,924
------------ ------------ ------------ ------------ - -----------

Balance at April 30, 2003 - 29,340 9,560,341 16,702,989 26,292,670

Exercise of options - 8,170 4,310,695 - 4,318,865

Tax benefit of exercise of option - - 5,185,489 - 5,185,489

Net income - - - 5,405,732 5,405,732
------------ ------------ ------------ ------------ - -----------

Balance at April 30, 2004 - 37,510 19,056,525 22,108,721 41,202,756

Exercise of options - 44 17,774 - 17,818

Tax benefit of exercise of option - - 12,721 - 12,721

Net income - - - 4,698,799 4,698,799
------------ ------------ ------------ ------------ -------------

Balance at April 30, 2005 $ - $ 37,554 $ 19,087,020 $ 26,807,520 $ 45,932,094
============ ============ ============ ============ =============

The accompanying notes are an integral part of these statements.

F-6

SIGMATRON INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED APRIL 30,

2005 2004 2003
------------- ------------- -------------

Cash flows from operating activities
Net income $ 4,698,799 $ 5,405,732 $ 5,714,924
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation and amortization 3,249,055 2,682,530 3,456,773
Provision for doubtful accounts - - (124,786)
Reduction in provision for inventory obsolescence (319,445) (169,926) -
Deferred income taxes 1,876,218 (1,607,756) 69,780
Forgiveness of SMTU interest payable (145,841) - -

Changes in assets and liabilities
Accounts receivable (1,624,036) 981,616 (2,219,235)
Inventories (6,980,704) 109,594 233,995
Prepaid expenses and other assets 408,394 (1,015,409) 349,221
Refundable income taxes 275,583 (128,761) -
Minority interest in affiliate (439,787) 205,241 (272,075)
Trade accounts payable (79,915) (444,749) 1,588,230
Tax benefits of options exercised 12,721 5,185,489 -
Accrued expenses and wages (1,671) (412,761) 1,496,498
Income taxes 407,710 (1,422,212) 1,405,119
------------- ------------- -------------

Net cash provided by operating activities 1,337,081 9,368,628 11,698,444

Cash flows from investing activities
Proceeds from sale of machinery and equipment - - 1,282
Purchases of machinery and equipment (3,816,935) (9,231,061) (1,666,103)
Purchase of SMTU interest (1,338,858) - -
------------- ------------- -------------

Net cash used in investing activities (5,155,793) (9,231,061) (1,664,821)

Cash flows from financing activities
Proceeds from exercise of options 17,774 4,318,865 124,315
Proceeds under building notes payable - 3,600,000 -
Payments under building notes payable (462,289) (1,992,258) (245,546)
Payments from other notes payable (1,030,000) - (58,749)
Proceeds under capital lease obligations 1,729,073 - 894,612
Payments under capital lease obligations (792,090) (985,275) (2,077,256)
Net payments under line of credit (605,556) (357,929) (8,593,535)
------------- ------------- -------------

Net cash (used in) provided by
financing activities (1,143,088) 4,583,403 (9,956,159)
------------- ------------- -------------

(DECREASE) INCREASE IN CASH (4,961,800) 4,720,970 77,464

Cash at beginning of year 5,145,814 424,844 347,380
------------- ------------- -------------

Cash at end of year $ 184,014 $ 5,145,814 $ 424,844
============= ============= =============

Supplementary disclosures of cash flow information
Cash paid for interest $ 412,324 $ 341,212 $ 1,117,848
Cash paid for income taxes, net of (refunds) 333,518 1,322,633 1,881,210
Acquisition of buildings financed under bank notes - 3,600,000 1,950,000

Non Cash Investing Activities
Acquisition of SMTU $ 2,814,699
Forgiveness of interest payable of SMTU (145,841)
Cash paid for acquisition (1,338,858)
-----------
Notes issued for acquisition $ 1,330,000

Forgiveness of subordinated debenture 1,050,000
Forgiveness of accrued interest payable 593,582
Reduction of long lived assets from purchase of SMTU 452,087
Goodwill created 756,959

The accompanying notes are an integral part of these statements.

F-7

SIGMATRON INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2005, 2004 AND 2003

NOTE A - DESCRIPTION OF THE BUSINESS

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

CONSOLIDATION POLICY

The consolidated financial statements include the accounts and transactions of
the Company, its wholly-owned subsidiary, Standard Components de Mexico, S.A.,
its wholly owned foreign enterprise Wujiang SigmaTron Electronics Co., LTD.
("SigmaTron China") and its procurement branch, SigmaTron Taiwan. The functional
currency of the Mexican and Chinese subsidiaries and procurement branch,
SigmaTron Taiwan is the U.S. dollar. The Company adopted the provisions of
Financial Accounting Standards Board ("FASB") Interpretation No. 46R, ("FIN
46R") "Consolidation of Variable Interest Entities. The Company adopted FIN 46R
as of November 1, 2003 as it relates to its former affiliate SMTU. On September
2, 2004, the remaining minority interest in SMTU was acquired. On October 1,
2004 SMTU was liquidated, thereby becoming an operating division of the Company.

USE OF ESTIMATES

The preparation of consolidated financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosures of contingent assets and
liabilities at the date of the consolidated financial statements and the
reported amounts of revenues and expenses during the reporting period.
Significant estimates made in preparing the consolidated financial statements
include depreciation and amortization periods, the allowance for doubtful
accounts and reserves for inventory. Actual results could materially differ from
these estimates.

F-8

SIGMATRON INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
APRIL 30, 2005, 2004 AND 2003

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

CASH AND CASH EQUIVALENTS

Cash and cash equivalents include cash and all highly liquid short-term
investments maturing within three months of the purchase date.

RESTRICTED CASH

Restricted cash represents amounts held in escrow as it relates to the
acquisition of the Company's corporate headquarters and midwestern manufacturing
facility. The amounts become unrestricted upon settlement of all matters related
to the acquisition of the facility.

ACCOUNTS RECEIVABLE

The majority of the Company's accounts receivable are due from companies in the
consumer electronics, gaming, fitness, industrial electronics,
telecommunications, home appliances and automotive industries. Credit is
extended based on evaluation of a customer's financial condition, and generally,
collateral is not required. Accounts receivable are due in accordance with
agreed upon terms, and are stated at amounts due from customers net of an
allowance for doubtful accounts. Accounts outstanding longer than the
contractual payments terms are considered past due. The Company determines its
allowance by considering a number of factors, including the length of time trade
accounts receivable are past due, the Company's previous loss history, the
customer's current ability to pay its obligation to the Company, and the
condition of the general economy and the industry as a whole. The Company writes
off accounts receivable when they become uncollectible, and payments
subsequently received on such receivables are credited to the allowance for
doubtful accounts.

INVENTORIES

Inventories are valued at the lower of cost or market. Cost is determined by the
first-in, first-out method. The inventory includes an allocation of labor and
overhead, including direct and indirect labor, freight and other overhead costs.
The Company establishes inventory reserves for valuation, shrinkage, and excess
and obsolete inventory. The Company records provisions for inventory shrinkage
based on historical experience to account for unmeasured usage or loss. Actual
results differing from these estimates could significantly affect the Company's
inventories and cost of products sold. The Company records provisions for excess
and obsolete inventories for the difference between the cost of inventory and
its estimated realizable value based on assumptions about future product demand
and market conditions. Actual product demand or market conditions could be
different than projected by management.

F-9

SIGMATRON INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
APRIL 30, 2005, 2004 AND 2003

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

PLANT PROPERTY AND EQUIPMENT

Machinery and equipment are valued at cost. The Company provides for
depreciation and amortization using the straight-line method over the estimated
useful life of the assets:

Buildings 20 years
Machinery and equipment 5-12 years
Office equipment 5 years
Leasehold improvements 15 years

INCOME TAXES

Deferred tax assets and liabilities are determined based on differences between
financial reporting and tax bases of assets and liabilities, and are measured
using the enacted tax rates and laws that will be in effect when the differences
are expected to reverse.

EARNINGS PER SHARE

Basic earnings per share are computed by dividing income available to common
stockholders (the numerator) by the weighted-average number of common shares
outstanding (the denominator) for the period. The computation of the diluted
earnings per share is similar to the basic earnings per share, except that the
denominator is increased to include the number of additional common shares that
would have been outstanding if the potentially dilutive common shares had been
issued.

REVENUE RECOGNITION

Revenues from sales of product including the Company's electronic manufacturing
service business are recognized when the product is shipped. In general it is
the Company's policy to recognize revenue and related costs when the order has
been shipped from its facilities, which is also the same point that title passes
under the terms of the purchase order except for consignment inventory.
Consignment inventory is shipped from the Company to an independent warehouse
for storage or shipped directly to the customer and stored in a segregated part
of the customer's own facility. Upon the customer's request for inventory, the
consignment inventory is shipped to the customer if the inventory was stored
offsite or transferred from the segregated part of the customer's facility for
consumption, or use, by the customer. The Company recognizes revenues upon such
transfer. The Company does not earn a fee for storing the consignment inventory.
The Company provides a ninety (90) day warranty for workmanship only and does
not have any installation, acceptance or sales incentives, although the Company
has negotiated extended

F-10

SIGMATRON INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
APRIL 30, 2005, 2004 AND 2003

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

REVENUE RECOGNITION - CONTINUED

warranty terms in certain instances. The Company assembles and tests assemblies
based on customers specifications. Historically the amount of returns for
workmanship issues has been de minimus under the Company's standard or extended
warranties. Any returns for workmanship issues received after each period end
are accrued in the respective financial statements.

SHIPPING AND HANDLING COSTS

The Company records shipping and handling costs net, within selling and
administrative expenses. Customers are typically invoiced for shipping costs.
Shipping and handling costs totaled $136,008, $77,495 and $113,238 in fiscal
2005, 2004 and 2003, respectively.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company's financial instruments include receivables, notes payable, accounts
payable, stock warrants and accrued liabilities. The fair values of financial
instruments are not materially different from their carrying values.

WARRANTS

The Company accounts for warrants in accordance with SFAS No. 133, Accounting
for Derivative Instruments and Hedging Activities. The Company determines the
appropriate classification of all warrants as available-for-sale at the time of
award and at April 30, 2005, all of the Company's investments were reported at
fair value. Unrealized gains and losses are reported in other income (expense).

LONG-LIVED ASSETS

The Company reviews long-lived assets for impairment, whenever events or changes
in circumstances indicate that the carrying amount of an asset may not be
recoverable. An asset is considered impaired if its carrying amount exceeds the
future net cash flow the asset is expected to generate. If such asset is
considered to be impaired, the impairment to be recognized is measured by the
amount by which the carrying amount of the asset, if any, exceeds its fair
market value. The Company has adopted SFAS No 144, which establishes a single
accounting model for the impairment or disposal of long-lived assets, including
discontinued operations. There were no impairments for the fiscal years ended
April 30, 2005, 2004 and 2003.

F-11

SIGMATRON INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
APRIL 30, 2005, 2004 AND 2003

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

GOODWILL

The Company assesses the recoverability of goodwill on an annual basis or
whenever adverse events or changes in circumstances or business climate indicate
that expected future undiscounted cash flows may not be sufficient to support
recorded goodwill. If impairment exists, the carry amount of goodwill would be
reduced by the estimated shortfall of discounted cash flows. There was no
impairment for the fiscal year ended April 30, 2005.

STOCK INCENTIVE PLANS

The Company maintains various stock incentive plans. See Note P for additional
information regarding these plans. The Company accounts for these plans under
the recognition and measurement principles of APB Opinion No. 25, "Accounting
for Stock Issued to Employees," and related interpretations. The Company is in
compliance with disclosure provisions of SFAS 123, Accounting for Stock-Based
Compensation and SFAS 148 Accounting for Stock-Based Compensation-Transition and
Disclosure. The Company recognizes compensation cost for restricted shares and
restricted stock units to employees. As of April 30, 2005, there are no issued
restricted shares or restricted stock units. No compensation cost is recognized
for stock option grants. All options granted under the Company's plans had an
exercise price equal to the market value of the underlying common stock on the
date of grant. The following table illustrates the effect on net earnings and
earnings per share if the Company had applied the fair value recognition
provisions.

The following table also provides the amount of stock-based compensation cost
included in net earnings as reported.

2005 2004 2003
------------ ------------ ------------

Net income as reported $ 4,698,799 $ 5,405,732 $ 5,714,924

Deduct total stock-based employee compensation
expense determined under fair value based method
for awards granted, modified, or settled, net of
related tax effects (217,322) (266,528) (563,018)
------------ ------------ ------------

Pro forma net income $ 4,481,477 $ 5,139,204 $ 5,151,906
============ ============ ============

F-12

SIGMATRON INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
APRIL 30, 2005, 2004 AND 2003

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

STOCK INCENTIVE PLANS - CONTINUED

2005 2004 2003
------------ ------------ ------------

Earnings per share
Basic - as reported $ 1.25 $ 1.58 $ 1.98
Basic - pro forma 1.19 1.50 1.78

Diluted - as reported 1.23 1.53 1.70
Diluted - pro forma 1.17 1.45 1.54

RISKS AND UNCERTAINTIES

The Company's inventories include parts and components that may be specialized
in nature or subject to customers' future usage requirements. The Company has
programs to minimize the required inventories on hand and actively monitors
customer purchase orders and backlog. The Company uses estimated allowances to
reduce recorded amounts to market values; such estimates could change in the
future.

NEW ACCOUNTING STANDARDS

In December 2004, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 123 (revised 2004), Share- Based Payment
("SFAS 123R"). The Company is required to adopt SFAS 123R on May 1, 2006. SFAS
123R requires the Company to measure the cost of employee services received in
exchange for an equity award based on the grant date fair value. The cost will
be recognized as an expense in financial statements over the period during which
an employee is required to provide service. As regulations are still pending,
the Company has not been able to determine whether the impact will be material.

On December 21, 2004, the Financial Accounting Standards Board ("FASB") Staff
Position ("FSP") FAS 109-I, "Application of FASB Statement No. 109, Accounting
for Income Taxes, to the Tax Deduction on Qualified Production Activities
Provided by the American Jobs Creation Act of 2004" was issued. FSP FAS 109-I
clarifies that this tax deduction should be accounted for as a special deduction
in accordance with Statement 109. As such, the special deduction has no effect
on deferred tax assets and liabilities existing at the date of enactment.
Rather, the impact of this deduction would be reported in the period in which
the deduction is claimed on the Company's tax return beginning in 2005. As
regulations are still pending, the Company has not been able to determine
whether the impact will be material; however, the Company believes that the
impact will not be material.

F-13

SIGMATRON INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
APRIL 30, 2005, 2004 AND 2003

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

NEW ACCOUNTING STANDARDS - CONTINUED

On December 21, 2004, FSP FAS 109-2, "Accounting and Disclosure Guidance for the
Foreign Earnings Repatriation Provision within the American Jobs Creation Act of
2004" was issued. FSP FAS 109-2 provides companies additional time, beyond the
financial reporting period during which the Act took effect, to evaluate the
Act's impact on a company's plan for reinvestment or repatriation of certain
foreign earnings for purposes of applying Statement 109. FSP FAS 109-2 was
effective upon issuance. As of December 31, 2004 based on management's analysis
of the Act, although not yet finalized, it is unlikely that under the
repatriation provision of the Act the Company had any foreign earnings to
repatriate and accordingly, the financial statements do not reflect any
provisions for taxes on unremitted foreign earnings. The Company does not
believe the impact will be material.

In November 2004, the FASB issued SFAS No. 151, "Inventory Costs - an amendment
of ARB No. 43, Chapter 4." This statement amends the guidance in Accounting
Research Bulletin (ARB) No. 43, Charter 4, "Inventory Pricing," to clarify the
accounting for abnormal amounts of idle facility expense, freight, handling
costs and wasted material (spoilage) and requires that those items be recognized
as current-period charges regardless of whether they meet the criterion of
"abnormal." The statement also requires that allocation of fixed production
overheads to the cost of conversion be based on the normal capacity of the
production facilities. The provisions of this statement are effective for
inventory costs incurred during fiscal years beginning after June 15, 2005 (as
of February 1, 2006 for the Company) and are to be applied prospectively. The
Company anticipates the impact will not be material.

On October 22, 2004, the President signed the American Jobs Creation Act of
2004. The Act provides a deduction from income from qualified domestic
production activities, which will be phased in from 2005 through 2010. In
return, the Act also provides for a two-year phase-out (except for certain
pre-existing binding contracts) of the existing Extraterritorial Income
exclusion tax benefit for foreign sales which the World Trade Organization
("WTO") ruled was an illegal export subsidy. The European Union ("EU") believes
that the Act fails to adequately repeal the illegal export subsidies because of
the transitional provisions and has asked the WTO to review whether these
transitional provisions are in compliance with their prior ruling. This will
have no material impact on the Company. Additionally, the Act creates a
temporary incentive for U.S. corporations to repatriate accumulated income
earned abroad by providing an 85% dividend received deduction for certain
dividends from controlled foreign corporations. The impact on the Company in the
future will not be material.

RECLASSIFICATIONS

Certain amounts in the 2003 and 2004 financial statements have been reclassified
to conform with the 2005 presentation.

F-14

SIGMATRON INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
APRIL 30, 2005, 2004 AND 2003

NOTE C - ALLOWANCE FOR DOUBTFUL ACCOUNTS

Changes in the Company's allowance for doubtful accounts are as follows:

2005 2004 2003
--------- --------- ---------

Beginning balance $ 120,000 $ 120,000 $ 276,470
Bad debt expense 22,281 2,650 77,759
Write-offs (22,281) (2,650) (234,229)
Recoveries - - -
--------- --------- ---------

Ending balance $ 120,000 $ 120,000 $ 120,000
========= ========= =========

NOTE D - INVENTORIES

Inventories consist of the following at April 30:

2005 2004
----------- -----------

Finished products $ 7,205,332 $ 3,400,742
Work in process 1,007,594 1,221,160
Raw materials 13,635,029 10,245,349
----------- -----------

21,847,955 14,867,251

Less obsolescence reserve 379,449 698,894
----------- -----------

$21,468,506 $14,168,357
=========== ===========

Changes in the Company's inventory obsolescence reserve are as follows:

2005 2004 2003
--------- --------- ---------

Beginning balance $ 698,894 $ 868,820 $ 754,644
Write-offs - - 114,176
Recoveries (319,445) (169,926) -
--------- --------- ---------

Ending balance $ 379,449 $ 698,894 $ 868,820
========= ========= =========

F-15

SIGMATRON INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
APRIL 30, 2005, 2004 AND 2003

NOTE E - PROPERTY, PLANT AND EQUIPMENT, NET
Machinery and equipment consist of the following at April 30:

2005 2004
----------- -----------

Land and buildings $10,380,359 $ 8,832,653
Property, plant and equipment 30,591,691 29,948,005
Office equipment 2,745,155 2,578,362
Tools and dies 268,630 268,630
Leasehold improvements 1,861,508 1,838,958
Equipment under capital leases 4,215,171 2,364,813
----------- -----------

50,062,514 45,831,421

Less accumulated depreciation and
amortization, including amortization
of assets under capital leases of
$922,946 and $759,136 at April 30,
2005 and 2004, respectively 23,372,574 20,123,520
----------- -----------

Property, plant and equipment, net $26,689,940 $25,707,901
=========== ===========

NOTE F - NOTES PAYABLE

The Company entered into an Amended Loan and Security Agreement in July 2005,
which provides for a revolving credit facility. The maximum borrowing limit
under the amended revolving credit facility is limited to the lesser of: (i)
$17,000,000 or (ii) an amount equal to the sum of 85% of the receivable
borrowing base and the lesser of $8,500,000 or varying percentages of the
inventory base. The Amended Loan and Security Agreement expires on June 30, 2008
and is subject to certain financial covenants. At April 30, 2005 the Company was
in compliance with its financial covenants and had borrowings of $392,038
outstanding under this line of credit.

The amended Loan and Security Agreement also provides a term loan in the amount
of $3,000,000. Interest only is due in year one and quarterly principal payments
of $250,000 are due in years two through four. Interest accrues at 5.75% and
interest only is due each quarter through June 30, 2006. Quarterly principal
payments of $250,000 are due in years two through four.

F-16

SIGMATRON INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
APRIL 30, 2005, 2004 AND 2003

NOTE F - NOTES PAYABLE - CONTINUED

Borrowings under the revolving line of credit bear interest at the prime rate up
to prime rate minus 0.5% (4.25% - 5.75% at April 30, 2005). The Company must
also pay an unused commitment fee equal to 0.25% on the revolving credit
facility. As of April 30, 2005, the Company had an available line of credit of
approximately $12,608,000. The revolving credit facility matures June 30, 2008.
At April 30, 2005, the Company was in compliance with its financial covenants.

The loan and security agreement is collateralized by substantially all of the
domestically located assets of the Company and contains certain financial
covenants, including specific covenants pertaining to the maintenance of minimum
tangible net worth and net income. The agreement also restricts annual lease
rentals and capital expenditures and the payment of dividends.

SigmaTron China entered into a loan agreement in April 2005, which provides for
a line of credit with the China Construction Bank. The terms of the agreement
includes four draws on the line of credit of approximately $121,000, $362,750,
$362,750 and $362,750, on April 15, 2005, July 1, 2005, October 8, 2005, and
January 3, 2006, respectively. The interest rate under the agreement is 5.76%
and at April 30, 2005 SigmaTron China had $121,000 outstanding under the loan.
The loan is collateralized by the Company's building in Suzhou-Wujiang China and
60 of the 100 Chinese acres leased at the property.

On November 19, 2003 the Company purchased the property that serves as the
Company's corporate headquarters and its Midwestern manufacturing facility. The
Company executed a note with LaSalle Bank N.A. in the amount of $3,600,000. The
note bears a fixed interest rate of 5.43% and is payable in sixty monthly
installments. A final payment of approximately $2,700,000 is due on or before
November 30, 2008. At April 30, 2005, $3,345,000 was outstanding.

On May 2002, the Company acquired a plant in Mexico through seller financing.
The loan of $1,950,000 is payable in equal monthly installments of approximately
$31,000 over six and a half years at a rate of 7% interest per annum. Prior to
the acquisition of the plant the Company rented the facility. At April 30, 2005,
$1,158,828 was outstanding.

F-17

SIGMATRON INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
APRIL 30, 2005, 2004 AND 2003

NOTE G - ACCRUED EXPENSES

Accrued expenses consist of the following at April 30:

2005 2004
---------- ----------

Bonuses 1,454,204 1,941,402
Interest payable 139,810 542,200
Commissions 43,054 49,905
Professional fees 632,635 454,382
---------- ----------

$2,269,703 $2,987,889
========== ==========

NOTE H - RELATED-PARTY TRANSACTIONS AND COMMITMENTS

The Company had a related-party transaction with Circuit Systems, Inc., a former
shareholder of the Company who filed for protection under Chapter 11 of the
Federal bankruptcy code, and is now known as Circuit Systems, Inc. Liquidating
Grantor's Trust, dated October 14, 2001 ("CSI"). CSI divested itself of the
investment in common stock of the Company in April 2001. The transaction
primarily involved the leasing of operating space. The Company leased space in
Elk Grove Village, Illinois, at a base rental of $33,800 per month, with an
additional $7,000 per month for property taxes. The lease required the Company
to pay maintenance and utility expenses. Subsequent to the renewal agreement,
CSI sold the building to a non-related party. Rent and property tax expense
related to the agreement totaled approximately $270,000 from May 2003 through
mid-November 2003 and $495,000 for the year ended April 30, 2003.

During 1996, the Company invested $1,200 in exchange for a 12% limited
partnership interest in Lighting Components, L.P. ("LC") and invested $1,300 in
Lighting Components, Inc., which is the general partner of LC, in exchange for
13% of its capital stock. At April 30, 1998, the Company had also made advances
to LC in exchange for subordinated debentures and promissory notes totaling
$280,000. The subordinated debentures and promissory notes totaling $280,000
were fully reserved at April 30, 1998.

In addition to the subordinated debentures and promissory notes, at April 30,
2000, the Company had recorded miscellaneous receivables, interest and trade
receivables from LC of $1,560,000, against which a reserve of $789,000 was
recorded. The Company wrote off its investment in LC of $2,500 in the statement
of operations for the year ended April 30, 2001. In April 2001, LC sold certain
assets to a third party. In connection with the asset sale, the Company received
a

F-18

SIGMATRON INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
APRIL 30, 2005, 2004 AND 2003

NOTE H - RELATED-PARTY TRANSACTION AND COMMITMENTS - CONTINUED

$400,000 promissory note receivable from a third party. Payments were due on the
promissory note as follows: $125,000 plus accrued interest due January 1, 2002,
$125,000 plus accrued interest due January 1, 2003, and $150,000 plus accrued
interest due January 1, 2004. The payment obligations for $125,000 due January
1, 2003, and 2002, plus accrued interest were paid in December 2002 and 2001,
respectively. The payment obligation of $150,000 due January 1, 2004 was paid in
January 2004 plus accrued interest. Interest on the promissory note accrued at
5% per annum. The third party also agreed to pay LC royalties on certain sales
derived from the purchase of the acquired assets as defined in the agreement. LC
or its successor will receive royalty payments through April 30, 2007. Per the
terms of a separate agreement, the Company will receive its share of the royalty
payments. These royalty payments, if any, will be recorded by the Company as
received and reflected as payments on the notes. At April 30, 2005 a royalty
receivable of $50,740 was recorded. The receivable was paid subsequent to the
fiscal year ended April 30, 2005.

In August and September 2004 the Company acquired the interests of all the
outside investors in its affiliate SMT Unlimited L.P. ("SMTU") and the general
partner of SMTU, SMT Unlimited, Inc., including voting interest. On October 1,
2004 SMT Unlimited, Inc. was merged into the Company, and SMTU was liquidated,
thereby becoming an operating division of the Company. Prior to the acquisition
by the Company, SMTU was consolidated under FASB Interpretation No. 46,
("FIN46R") Consolidation of Variable Interest Entities. The aggregate price paid
for all the interests was $2,814,699. This aggregate price was paid with
$1,330,000 in notes with terms of up to 2 years and cash in the amount of
$1,338,858 and the forgiveness of interest expense of $145,841. The acquisition
was treated as a step acquisition and resulted in goodwill of $756,959 from one
step and negative goodwill of $452,087 from the second transaction. The negative
goodwill was treated as a reduction in the acquired long lived assets from SMTU.
On October 1, 2004 SMT Unlimited, Inc. was merged into the Company, and SMTU was
liquidated, thereby becoming an operating division of the Company. Prior to the
Company's acquisition, SMTU was consolidated under FASB Interpretation No. 46,
Consolidation of Variable Interest Entities. The Company purchased the
outstanding interest of SMTU in order to provide seamless service to its
customers.

F-19

SIGMATRON INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
APRIL 30, 2005, 2004 AND 2003

CONDENSED BALANCE SHEET OF SMTU AT THE DATE OF MERGER, OCTOBER 1, 2005

September 30, 2004
------------------

Assets
Current assets $ 4,009,305
Machinery & Equipment-net 3,917,418
Other assets 11,755
-----------
Total Assets $ 7,938,478
===========

Liabilities
Current liabilities 5,225,840
Total long term liabilities 2,100,000
Owner's Equity 612,638
-----------
Total Liabilities and Shareholder's Equity $ 7,938,478
===========

NOTE I - BLOCK SHIELD WARRANTS

The Company expended $25,000 to investigate the feasibility of manufacturing a
product for WaveZero, Inc., the owner of design rights to certain shielding
products. In exchange the Company received warrants convertible into 153,781
shares of common stock of Block Shield Corporation, PLC (BLS; London Stock
Exchange), the parent of WaveZero, Inc. Those warrants were subject to
forfeiture upon the occurrence of certain events. During the quarter ending
January 31, 2005, the risk of forfeiture terminated. Upon such termination SFAS
No. 138 provides that this security be marked to market. Accordingly, the
Company has recognized a gain of $303,810 to reflect the increase in the fair
market value of said warrants since the date of acquisition through April 30,
2005.

NOTE J - CONTINGENCIES

On July 16, 2003, the Company signed a land use rights contract with the Wujiang
Land Administration Bureau to obtain the use rights of land in Yao Jiazhuang
Village, Wujiang Province, People's Republic of China. This particular contract
covered the 40 Chinese acres of land that was adjacent to 60 Chinese acres of
land for which the Company had already signed a separate land use rights
contract. For the 40 acre parcel, the Company paid the transfer fee for the land
and subsequently built a dormitory, canteen and power station on the land. In
December

F-20

SIGMATRON INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
APRIL 30, 2005, 2004 AND 2003

NOTE J - CONTINGENCIES - CONTINUED

2004, the Company received an administration penalty notice of approximately
$16,000 from the Wujiang Land Resources Bureau which stated that the Company was
occupying the 40 acres without its permission. Under Chinese law the Wujiang
Land Resources Bureau may seek penalties for this violation, which includes one
or more of the following: 1) levying a fine, 2) confiscating any Company
property on the land and 3) requiring the land to be returned. The Company has
not received any other administrative notifications other than the penalty
notice. The Company estimates the value of the land and building to be
$1,100,000 to $1,200,000. The Company received a letter from the Business
Development Department of Wujiang Developing District under the Management
Committee of Wujiang Developing District which stated that the Company acted
properly and that it will indemnify the Company against any penalties assessed
against it by the Wujiang Land Resources Bureau. On January 5, 2005 the Company
paid the penalty which was assessed against it by the Wujiang Land Resources
Bureau. Prior to its payment, the Wujiang Financial Bureau paid the Company the
amount of the fine, which is consistent with the terms of the indemnity letter.
The Company anticipates the issue will be resolved with the Wujiang Land
Resources Bureau without any liability to the Company.

NOTE K - SUBSEQUENT EVENTS

On June 3, 2005 the Company sold its Las Vegas Nevada operation to Grand
Products, Nevada, Inc. The facility is a complete electronic manufacturing
services ("EMS") center specializing in the assembly of electronic products and
cables for a broad range of customers primarily in the gaming industry. The
effective date of the transaction was May 31, 2005. The transaction was treated
as an asset sale and included a $2,000,000 cash payment to the Company for the
purchase of the machinery and equipment and other assets of the operation. The
transaction will be recorded by the Company in the first quarter of fiscal 2006
and will include a gain on the transaction of approximately $140,000. The
Company continues to be obligated under the primary lease agreement and
subleases the facility in part to Grand Products Inc., the buyer of the Las
Vegas operation and in part to Western Money Systems.

On July 14, 2005 the Company purchased Able Electronics Corporation ("Able").
Able is headquartered in Hayward California, with an additional manufacturing
facility located in Tijuana, Mexico. Able is an ISO 9001:2000 certified EMS
company serving Original Equipment Manufacturers in the test and measurement,
medical instruments, telecommunications, computer peripherals, industrial
controls and genetic research industries. Able's long-term relationships with
its customers will give the Company a presence in a number of new markets,
diversify its current customer base and expand the number of industries it
serves. The effective date of the transaction was July 1, 2005. The purchase
price was $12,800,000 plus debt of approximately

F-21

SIGMATRON INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
APRIL 30, 2005, 2004 AND 2003

NOTE K - SUBSEQUENT EVENTS - CONTINUED

$3,700,000 and will be recorded as stock purchase transaction in first quarter
of fiscal 2006. The transaction was financed through the Company's credit
facility and resulted in approximately $9,000,000 in goodwill.

NOTE L - INCOME TAXES

The income tax provision (benefit) for the years ended April 30 consists of the
following:

2005 2004 2003
---------- ---------- ----------

Current
Federal $ 739,920 $2,763,249 $2,654,888
State 338,686 483,944 421,535
Foreign 168,395 102,200 105,348
Deferred
Federal 1,600,258 174,922 59,313
State 235,309 25,723 10,467
---------- ---------- ----------

$3,082,568 $3,550,038 $3,251,551
========== ========== ==========

As a result of the redemption of stock options, in fiscal year 2005 and 2004 the
Company was able to obtain an income tax benefit related to stock issued to
employees in the amount of approximately $13,000 and $5,200,000, respectively.
This tax benefit did not affect net income, but rather was added to additional
paid in capital. As a result the Company generated a net tax operating loss,
which offset taxes already paid in fiscal years 2004 and 2005. Since a portion
of the benefit is not recognized in the current period, it is netted against the
income tax payable and was recorded as a deferred tax asset in fiscal year 2004.
The entire amount of the benefit from the net operating loss was utilized in
fiscal year 2005, reversing the tax deferred asset and reducing current federal
taxes payable.

The reason for the differences between the income tax provision and the amounts
computed by applying the statutory Federal income tax rates to income before
income tax expense for the years ended April 30 are as follows:

F-22

SIGMATRON INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
APRIL 30, 2005, 2004 AND 2003

NOTE L - INCOME TAXES - CONTINUED

2005 2004 2003
---------- ---------- ----------

Income tax at
Federal rate $2,691,338 $3,134,369 $3,068,026
State income tax, net of federal 384,703 (227,136) 278,213
Benefit of Chinese tax holiday (100,675) - -
Benefit of stock option exercise 12,721 275,583 -
Other, net 94,481 367,222 (94,688)
---------- ---------- ----------

$3,082,568 $3,550,038 $3,251,551
========== ========== ==========

Significant temporary differences that result in deferred tax assets and
(liabilities) at April 30, 2005 and 2004, are as follows:

2005 2004
--------- ----------

Allowance for doubtful accounts $ 46,799 $ 27,300
Inventory obsolescence reserve 147,983 101,399
Net operating loss carry-forward - 1,738,924
Accruals not currently deductible 191,707 92,248
Inventory 242,462 110,846
--------- ----------

Current deferred tax asset 628,951 2,070,717

Prepaid insurance (199,423) (168,166)
--------- ----------

Current deferred tax liability (199,423) (168,166)
--------- ----------

Net current deferred tax asset $ 429,528 $1,902,551
========= ==========

F-23

SIGMATRON INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
APRIL 30, 2005, 2004 AND 2003

NOTE L - INCOME TAXES - CONTINUED

2005 2004
----------- -----------

Ownership in SMTU $ - $ 20,352
Impairment reserve - 71,098
----------- -----------
Long-term deferred tax asset - 91,450
Machinery and equipment (1,668,909) (1,357,165)
----------- -----------

Net long-term deferred tax liability $(1,668,909) $(1,265,715)
=========== ===========

NOTE M - 401(k) RETIREMENT SAVINGS PLAN

The Company sponsors 401(k) retirement savings plans, which are available to all
non-union U.S. employees. The Company may elect to match participant
contributions ranging from $300 - $500 annually. The Company contributed
$82,961, $68,252 and $52,848 to the plans during the fiscal years ended April
30, 2005, 2004 and 2003, respectively. The Company paid total expenses of
$15,063, $10,932 and $11,589 for the fiscal years ended April 30, 2005, 2004 and
2003, respectively, relating to costs associated with the administration of the
plans.

NOTE N - MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK

Financial instruments that potentially subject the Company to concentration of
credit risk consist principally of uncollateralized accounts receivable. For the
year ended April 30, 2005, two customers accounted for 32% and 18%, of net sales
of the Company, and 32% and 7%, of accounts receivable at April 30, 2005. For
the fiscal year ended April 30, 2004, two customers accounted for 36% and 13%,
of net sales of the Company, and 26% and 6%, of accounts receivable at April 30,
2004.

F-24

SIGMATRON INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
APRIL 30, 2005, 2004 AND 2003

NOTE O - LEASES

The Company leases certain facilities under various operating leases. The
Company also leases various machinery and equipment under capital leases.

Future minimum lease payments under leases with terms of one year or more are as
follows at April 30, 2005:

Capital Operating
Years ending April 30, leases leases
- --------------------- ---------- ----------

2006 $ 753,432 $ 640,839
2007 542,583 692,876
2008 493,548 663,483
2009 325,066 561,357
2010 - 252,690
Thereafter - 72,900
---------- ----------

$2,114,629 $2,884,145
========== ==========

Less amounts representing interest 237,638
----------

1,876,991

Less current portion 637,780
----------

$1,239,211
==========

Rent expense incurred under operating leases was approximately $669,000,
$659,000 and $886,000 for the years ended April 30, 2005, 2004 and 2003,
respectively.

During fiscal 2005 and subsequent to the year ended April 30, 2005, the Company
refinanced machinery and equipment under two separate sale/leaseback
arrangements. The equipment was sold for approximately $2,137,000 in cash. The
Company has the option to purchase the equipment at the end of the lease term
for $1. The transactions have been accounted for as a financing lease, wherein
the property remains on the balance sheet and will continue to be depreciated,
and a financing obligation equal to the proceeds has been recorded.

F-25

SIGMATRON INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
APRIL 30, 2005, 2004 AND 2003

NOTE P - STOCK OPTIONS

The Company has stock option plans ("Option Plans") under which certain
employees and outside non-employee directors may acquire up to 1,603,500 shares
of common stock. Options to be granted under the employee plans total 1,207,500,
with the non-employee director plans allowing for a total of 396,000 options to
be granted. At April 30, 2005, the Company has 417,854 shares reserved for
future issuance to employees under the Option Plans. The Option Plans are
interpreted and administered by the Compensation Committee of the Board of
Directors. The maximum term of options granted under the Option Plans is
generally 10 years. Options granted under the Option Plans are either incentive
stock options or nonqualified options. Options forfeited under the Option Plans
are available for reissuance. Options granted under these plans are granted at
an exercise price equal to the fair market value of a share of the Company's
common stock on the date of grant. employee options of 138,953 vest over five
years with the remaining 3,100 employee options vesting over three years from
the date of grant, provided the optionee remains an employee of the Company.
Options granted to non-employee directors are vested on the date of grant.

The Company has elected to follow APB Opinion No. 25 in accounting for its
employee stock options because, as discussed below, the alternative fair value
accounting method provided for under SFAS No. 123 requires the use of
option-valuation models that were not developed for use in valuing employee
stock options. Under APB Opinion No. 25, because the exercise price of the
Company's employee stock options equals the market price of the underlying stock
on the date of grant, no compensation expense is recognized. Pro forma
information regarding net income and earnings per share is required by SFAS No.
123 as if the Company had accounted for its employee stock options granted
subsequent to December 31, 1994, under the fair value method of that statement.
For purposes of pro forma disclosures, the estimated fair value of the options
is amortized to expense over the option vesting period.

The weighted-average grant date fair value of the options granted during fiscal
2005, 2004 and 2003 was $7.06, $0 and $2.84, respectively.

The fair value of each option grant is estimated on the date of the grant using
the Black-Scholes option-valuation model with the following assumptions:

2005 2004 2003
------ ---- ------

Expected dividend yield .0% N/A .0%
Expected stock price volatility 0.800 N/A 0.794
Average risk-free interest rate 2.20% N/A 2.78%
Weighted-average expected life of options 5 years N/A 5 years

F-26

SIGMATRON INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
APRIL 30, 2005, 2004 AND 2003

NOTE P - STOCK OPTIONS - CONTINUED

Option-valuation models require the input of highly subjective assumptions.
Because the Company's employee stock options have characteristics significantly
different from those of traded options, and because changes in the subjective
input assumptions can materially affect the fair value estimate in management's
opinion, the existing method does not necessarily provide a reliable single
measure of the fair value of the Company's employee stock options.

The table below summarizes option activity through April 30, 2005:

Number of
Weighted- options
average exercisable
Number of exercise at end
options price of year
---------- --------- -----------

Outstanding at April 30, 2002 1,130,493 5.16 748,497
Options granted during 2003 72,500 4.36
Options exercised during 2003 (52,757) 2.36
Options cancelled during 2003 (179,000) 7.09
Options forfeited during 2003 (1,866) 4.66
---------

Outstanding at April 30, 2003 969,370 4.89 833,304
Options exercised during 2004 (818,751) 5.63
---------
Outstanding at April 30, 2004 150,619 2.71 137,284

Options granted during 2005 45,000 10.88
Options exercised during 2005 (4,466) 3.99
Options forfeited during 2005 (15,000) 10.64
---------
176,153 169,485
=========

Information with respect to stock options outstanding and stock options
exercisable at April 30, 2005, follows:

Options outstanding
-----------------------------------------------------------
Number Weighted-average Weighted-
outstanding at remaining average
Range of exercise prices April 30, 2005 contractual life exercise price
- ------------------------ -------------- ---------------- --------------

$ 2.20 - 5.63 143,053 6.76 years $ 2.47
10.25 - 14.50 33,100 8.99 years 11.12
-------
176,153
=======

F-27

SIGMATRON INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
APRIL 30, 2005, 2004 AND 2003

NOTE P - STOCK OPTIONS - CONTINUED

Options exercisable
----------------------------------
Number Weighted-
exercisable at average
Range of exercise prices April 30, 2005 exercise price
- ------------------------ -------------- --------------

$ 2.20 - 5.63 136,385 $ 2.39
10.25 - 14.50 33,100 11.12
-------

169,485
=======

NOTE Q - EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings per
share:

2005 2004 2003
---------- ---------- ----------

Net income $4,698,799 $5,405,732 $5,714,924
========== ========== ==========
Weighted-average shares
Basic 3,751,792 3,423,999 2,885,652
Effect of dilutive stock options 63,757 117,298 469,424
---------- ---------- ----------

Diluted 3,815,549 3,541,297 3,355,076
========== ========== ==========
Basic earnings per share $ 1.25 $ 1.58 $ 1.98

Diluted earnings per share $ 1.23 $ 1.53 $ 1.70

Options to purchase 176,153, 150,619 and 969,370 shares of common stock were
outstanding at April 30, 2005, 2004 and 2003, respectively.

F-28

SIGMATRON INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
APRIL 30, 2005, 2004 AND 2003

NOTE R - SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

The following is a summary of unaudited quarterly financial data for fiscal
2005, 2004 and 2003:

First Second Third Fourth
quarter quarter quarter quarter
----------- ----------- ----------- -----------

2005

Net sales $25,078,167 $28,310,243 $28,301,593 $24,386,992
Gross margin 4,625,698 5,193,033 4,782,756 3,966,087
Net income 1,036,969 1,309,177 1,437,342 915,311
Net income per common share
Basic 0.28 0.35 0.38 0.24
Diluted 0.27 0.34 0.38 0.24

2004

Net sales $24,833,797 $26,526,879 $23,906,181 $25,227,265
Gross margin 4,713,943 5,558,548 4,447,000 4,396,439
Net income 1,307,497 1,812,736 1,192,840 1,092,658
Net income per common share
Basic 0.44 0.54 0.33 0.29
Diluted 0.38 0.52 0.33 0.29

2003

Net sales $22,983,430 $26,148,122 $27,879,095 $28,813,610
Gross margin 3,621,139 4,625,818 5,068,980 6,603,746
Net (loss) income 616,201 1,137,368 1,642,944 2,318,411
Net (loss) income per common share
Basic 0.21 0.39 0.58 0.79
Diluted 0.19 0.34 0.49 0.58

F-29

SIGMATRON INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
APRIL 30, 2005, 2004 AND 2003

NOTE S - LITIGATION

On May 25, 2001, Nancy Messina, a former employee of the Company, filed a
lawsuit against the Company in the United States District Court for the Northern
District of Illinois, Eastern Division, asserting claims of sexual harassment
and gender discrimination under Title VII of the Civil Rights Act of 1964 and
claims of violation of the Federal Equal Pay Act. The Company believes that it
has meritorious defenses to the claims and is defending itself vigorously in
this action. Although the compliant does not specify a dollar amount, based on
information presently available to the Company, the Company believes that the
resolution of these claims will not have a material adverse effect on the
financial condition or results of the operations of the Company.

On September 3, 2002, a lawsuit was filed by the liquidating trustee of Circuit
Systems, Inc. ("CSI") in the United States Bankruptcy Court for the Northern
District of Illinois, Eastern Division, against Gary R. Fairhead, President and
Chief Executive Officer of the Company and a former director of CSI and other
former directors of CSI, alleging in part, that Mr. Fairhead and the named
directors had breached their fiduciary duty to CSI and its stockholders in a
number of respects, and corporate counsel had committed malpractice. Although
the Compliant did not quantify the relief sought, the initial settlement demand
against all defendants was $12 million. On January 9, 2005, the parties to this
suit entered into a settlement agreement, which was approved by the court on
January 26, 2005 and was dismissed on February 15, 2005. The financial
settlement which provides that the plaintiff will be paid $1,750,000 was
satisfied, for the most part, from CSI's directors and officers liability
insurance and from legal malpractice insurance. Mr. Fairhead and the Company did
not contribute to the financial settlement. No defendant admitted to any
liability regarding the claims asserted in the complaint. The Company determined
that it had a duty under Delaware law to indemnify Mr. Fairhead for his expenses
not covered by CSI's directors and officers liability policy, which consisted of
immaterial advancements of legal costs.

F-30