EXHIBIT 99.1
SMTC Reports Second Quarter Results
- Reports revenue of $57.7 million, compared to $58.0 million in the prior year and an increase of 19% vs. the first quarter of 2015.
- Reports gross profit of 9.4% compared to 10.1% in the prior year. When excluding the effects of the unrealized portion of foreign exchange on derivative financial instruments, adjusted gross profit was 8.0% compared to 8.6% in the prior year. Also included in gross profit was a realized foreign exchange loss on derivative instruments of $1.0 million compared to a loss of $0.3 million in the prior year
- Reports net earnings of $1.0 million compared to net earnings of $0.1 million in the prior year, reflecting continued operating improvement.
- Reports $1.8 million or 3.1% in adjusted EBITDA, a 16.9% increase compared to prior year of $1.5 million or 2.6%.
- EPS of $0.06 compared to $0.01 in the prior year.
- Positive cash flow from operations of $0.2 million compared to negative cash flow of $1.2 million in the prior year.
- Debt, net of cash of $17.2 million, compared to $21.2 million in the second quarter of 2014; a reduction of $4 million.
TORONTO, July 28, 2015 (GLOBE NEWSWIRE) -- SMTC Corporation (Nasdaq:SMTX) ("SMTC"), a global electronics manufacturing services provider, today announced second quarter 2015 unaudited results.
Chief Executive Officer Sushil Dhiman stated, "As mentioned in previous earnings calls, the business has experienced a transition in volume away from two previously large customers. I am pleased with our second quarter revenues, which reflect continued growth from current customers and the addition of significant new customers. Our sales funnel is strong and we are continuing to attract new customers, which are expected to position us for growth in 2016."
Net earnings during the quarter increased to $1.0 million compared to $0.1 million in the prior year. Earnings per share for the quarter were $0.06, compared to $0.01 in the prior year.
Chief Financial Officer Jim Currie stated, "Continued focus on our working capital and cost structure has allowed us to produce improved bottom line results, at comparable revenues to the prior year. The business is now positioned for operating leverage with the achievement of revenue growth."
Non-GAAP information
Adjusted EBITDA and Adjusted Gross Profit are non-GAAP measures. Adjusted EBITDA is computed as net income from continuing operations excluding depreciation, restructuring charges, unrealized foreign exchange gains/losses on derivative financial instruments, stock based compensation, interest and income tax expense. SMTC Corporation has provided in this release a non-GAAP calculation of adjusted EBITDA as supplemental information regarding the operational performance of SMTC's core business. A reconciliation of adjusted EBITDA to net earnings (loss) is included in the attachment. Adjusted Gross Profit is computed as gross profit excluding unrealized gains or losses on derivative financial instruments. A reconciliation of adjusted gross profit to gross profit is included in the attachment. Management uses these non-GAAP financial measures internally in analyzing SMTC's financial results to assess operational performance and liquidity as well as to provide a consistent method of comparison to historical periods and to the performance of competitors and peer group companies. SMTC believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing SMTC's performance and when planning, forecasting and analyzing future periods. SMTC believes these non-GAAP financial measures are useful to investors because it allows for greater transparency with respect to key financial metrics we use in making operating decisions and because investors and analysts use it to help assess the health of our business. Non-GAAP measures are subject to limitations as these measures are not in accordance with, or an alternative for, Generally Accepted Accounting Principles and may be different from non-GAAP measures used by other companies. Because of these limitations, investors should consider adjusted EBITDA and adjusted gross profit along with other financial performance measures, including revenue, gross profit and net income, as reflected in SMTC's consolidated financial statements prepared in accordance with US GAAP.
Note for Investors: The statements contained in this release that are not purely historical are forward-looking statements which involve risk and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. These statements may be identified by their use of forward-looking terminology such as "believes," "expect," "may," "should," "would," "will," "intends," "plans," "estimates," "anticipates" and similar words, and include, but are not limited to, statements regarding the expectations, intentions or strategies of SMTC. For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Risks and uncertainties that may cause future results to differ from forward looking statements include the challenges of managing quickly expanding operations and integrating acquired companies, fluctuations in demand for customers' products and changes in customers' product sources, competition in the EMS industry, component shortages, and others risks and uncertainties discussed in SMTC's most recent filings with the SEC. The forward-looking statements contained in this release are made as of the date hereof and SMTC assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ materially from those projected in the forward-looking statements.
About SMTC Corporation: SMTC Corporation, founded in 1985, is a mid-size provider of end-to-end electronics manufacturing services (EMS) including PCBA production, systems integration and comprehensive testing services, enclosure fabrication, as well as product design, sustaining engineering and supply chain management services. SMTC facilities span a broad footprint in the United States, Mexico, and China, with approximately 1,285 employees. SMTC services extend over the entire electronic product life cycle from the development and introduction of new products through to the growth, maturity and end-of-life phases. SMTC offers fully integrated contract manufacturing services with a distinctive approach to global original equipment manufacturers (OEMs) and emerging technology companies primarily within industrial, computing and communication market segments. SMTC is a public company incorporated in Delaware with its shares traded on the Nasdaq National Market System under the symbol SMTX. For further information on SMTC Corporation, please visit our website at www.smtc.com (http://www.smtc.com/).
The SMTC Corporation logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=9800
| Consolidated Statements of Operations and Comprehensive Income (Loss) |
| (Unaudited) | | | | |
| | Three months ended | Six months ended |
| |
| (Expressed in thousands of U.S. dollars, except number of shares and per share amounts) | June 28,
2015 | June 29,
2014 (1) | June 29,
2014 | June 29,
2014 (1) |
| | | | | |
| Revenue | $ 57,741 | $ 57,984 | $ 106,455 | $ 116,007 |
| Cost of sales | 52,311 | 52,151 | 97,397 | 105,463 |
| Gross profit | 5,430 | 5,833 | 9,058 | 10,544 |
| Selling, general and administrative expenses | 3,961 | 4,504 | 7,626 | 8,747 |
| Gain on sale of property,plant and equipment | 3 | -- | 3 | -- |
| Restructuring charges | -- | 509 | -- | 1,179 |
| Operating earnings | 1,466 | 820 | 1,429 | 618 |
| Interest expense | 304 | 473 | 614 | 867 |
| Earnings (loss) before income taxes | 1,162 | 347 | 815 | (249) |
| Income tax expense (recovery) | | | | |
| Current | 157 | 265 | 329 | 445 |
| Deferred | 36 | (5) | (59) | (2) |
| | 193 | 260 | 270 | 443 |
| Net earnings (loss), also being comprehensive income (loss) | $ 969 | $ 87 | $ 545 | $ (692) |
| | | | | |
| Basic earnings(loss) per share | $ 0.06 | $ 0.01 | $ 0.03 | $ (0.04) |
| Diluted earnings (loss) per share | $ 0.06 | $ 0.01 | $ 0.03 | $ (0.04) |
| | | | | |
| Weighted average number of shares outstanding | | | | |
| Basic | 16,417,276 | 16,417,276 | 16,417,276 | 16,417,273 |
| Diluted | 16,417,276 | 16,417,276 | 16,417,276 | 16,417,273 |
| | | | | |
| (1) As revised, see Note 2 in the financial statements included in Form 10-Q |
| |
| Consolidated Balance Sheets |
| (Unaudited) | | |
| |
| (Expressed in thousands of U.S. dollars) | June 28,
2015 | December 28,
2014 |
| Assets | | |
| | | |
| Current assets: | | |
| Cash | $ 6,102 | $ 5,447 |
| Accounts receivable - net | 31,351 | 31,024 |
| Inventories | 34,116 | 31,590 |
| Prepaid expenses and other assets | 2,142 | 2,135 |
| Income taxes receivable | 311 | 359 |
| Deferred income taxes - net | 487 | 428 |
| | 74,509 | 70,983 |
| Property, plant and equipment - net | 17,035 | 17,590 |
| Deferred financing costs - net | 85 | 90 |
| | $ 91,629 | $ 88,663 |
| Liabilities and Shareholders' Equity | | |
| | | |
| Current liabilities: | | |
| Accounts payable | $ 31,716 | $ 29,425 |
| Accrued liabilities | 7,463 | 7,080 |
| Derivative liabilities | 2,232 | 2,703 |
| Income taxes payable | 374 | 449 |
| Revolving credit facility | 22,080 | 21,370 |
| Current portion of capital lease obligations | 716 | 980 |
| | 64,581 | 62,007 |
| Capital lease obligations | 495 | 866 |
| | | |
| Shareholders' equity: | | |
| Capital stock | 390 | 390 |
| Additional paid-in capital | 264,214 | 263,996 |
| Deficit | (238,051) | (238,596) |
| | 26,553 | 25,790 |
| | $ 91,629 | $ 88,663 |
| |
| |
| Consolidated Statements of Cash Flows |
| (Unaudited) | | | | |
| | Three months ended | Six months ended |
| (Expressed in thousands of U.S. dollars) |
| |
| Cash provided by (used in): | June 28, 2015 | June 29, 2014 (1) | June 28, 2015 | June 29, 2014 (1) |
| Operations: | | | | |
| Net earnings (loss) | $ 969 | $ 87 | $ 545 | $ (692) |
| Items not involving cash: | | | | |
| Depreciation | 969 | 979 | 1,995 | 1,932 |
| Unrealized gain on derivative financial instruments | (789) | (851) | (471) | (1,094) |
| Gain on sale of property, plant and equipment | 3 | -- | 3 | -- |
| Deferred income taxes | 36 | (5) | (59) | (2) |
| Amortization of deferred financing fees | 7 | 136 | 15 | 240 |
| Stock-based compensation | 128 | 60 | 218 | 105 |
| Change in non-cash operating working capital: | | | | |
| Accounts receivable | (5,291) | (1,877) | (327) | 313 |
| Inventories | 690 | (2,328) | (2,526) | (2,420) |
| Prepaid expenses and other assets | (55) | (46) | (7) | 220 |
| Income taxes payable | (11) | (178) | (27) | (351) |
| Accounts payable | 3,458 | 1,812 | 2,222 | 2,291 |
| Accrued liabilities | 40 | 1,043 | 384 | (285) |
| | 154 | (1,168) | 1,965 | 257 |
| Financing: | | | | |
| Net advances on revolving credit facility | 1,949 | 1,897 | 710 | 1,528 |
| Principal payment of capital lease obligations | (278) | (647) | (635) | (1,014) |
| Deferred financing costs | (10) | (100) | (10) | (100) |
| | 1,661 | 1,150 | 65 | 414 |
| Investing: | | | | |
| Purchase of property, plant and equipment | (888) | (495) | (1,378) | (747) |
| Proceeds from sale of property, plant and equipment | 3 | 10 | 3 | 10 |
| | (885) | (485) | (1,375) | (737) |
| Increase (decrease) in cash | 930 | (503) | 655 | (66) |
| Cash, beginning of period | 5,172 | 3,732 | 5,447 | 3,295 |
| Cash, end of the period | $ 6,102 | $ 3,229 | $ 6,102 | $ 3,229 |
| | | | | |
| (1) As revised, see Note 2 in the financial statements included in Form 10-Q |
| |
| Supplementary Information: |
| | | | | |
| Reconciliation of Adjusted EBITDA |
| |
| | Three months ended | Six months ended |
| | June 28, 2015 | June 29, 2014 (1) | June 28, 2015 | June 29, 2014 (1) |
| Net earnings (loss) | $ 969 | $ 87 | $ 545 | $ (692) |
| Add (deduct): | | | | |
| Stock compensation expense | 128 | 60 | 218 | 105 |
| Interest | 304 | 473 | 614 | 867 |
| Unrealized gain on derivative instruments | (789) | (851) | (471) | (1,094) |
| Income tax expense | 193 | 260 | 270 | 443 |
| Depreciation | 969 | 979 | 1,995 | 1,932 |
| Restructuring charges | -- | 509 | -- | 1,179 |
| Adjusted EBITDA | 1,774 | 1,517 | 3,171 | 2,740 |
| | | | | |
| (1) As revised, see Note 2 in the financial statements included in Form 10-Q |
| |
| Supplementary Information: |
| | | | | |
| Reconciliation of Adjusted Gross Profit |
| |
| | Three months ended | Six months ended |
| | June 28, 2015 | June 29, 2014 (1) | June 28, 2015 | June 29, 2014 (1) |
| Gross Profit | $ 5,430 | $ 5,833 | $ 9,058 | $ 10,544 |
| Deduct: | | | | |
| Unrealized foreign exchange gain on forward contracts | (789) | (851) | (471) | (1,094) |
| Adjusted Gross Profit | 4,641 | 4,982 | 8,587 | 9,450 |
| | | | | |
| (1) As revised, see Note 2 in the financial statements included in Form 10-Q |
CONTACT: Investor Relations Information:
Blair McInnis
Corporate Controller
Telephone: (905) 413.1222
Email: blair.mcinnis@smtc.com
Public Relations Information:
Tom Reilly
Director of Marketing
Telephone: (905) 413.1188
Email: publicrelations@smtc.com