SMTC (SMTX) 8-K SMTC Reports Fourth Quarter and Fiscal Year 2004 Results

Exhibit 99.1

SMTC Corporation   www.smtc.com investorrelations@smtc.com NEWS RELEASE   Nasdaq: SMTX Toronto Stock Exchange: SMX

FOR IMMEDIATE RELEASE

Thursday, March 10, 2005

SMTC Reports Fourth Quarter and Fiscal Year 2004 Results

Reports Positive Net Earnings and Cash Flow from Operations for the Year

TORONTO – March 10, 2005 — SMTC Corporation⁽¹⁾ (Nasdaq: SMTX, TSE: SMX), a global electronics manufacturing services provider, today reported net earnings for fiscal year 2004 of $1.3 million, or $0.12 per share, on revenue of $245 million and cash generated from operations of $5.1 million. This compares with a net loss of $40.0 million, or a loss of $6.93 per share, on revenue of $306 million and cash generated from operations of $5.5 million for fiscal year 2003.

“2004 was an important transitional year for SMTC as the Company executed on a comprehensive transformation plan resulting in significant changes in virtually all areas of the business,” stated John Caldwell, President and Chief Executive Officer. “On balance, 2004 was a successful year. Our overall financial results, while meeting our expectations, remain below satisfactory levels. We exited 2004 with lower debt levels, a more competitive cost structure and renewed senior management and sales organizations. We believe the fourth quarter of 2004 will prove to be the low point in quarterly revenue. We expect to produce sequential revenue growth by the second quarter of 2005 and continue with positive momentum through the back half of the year.”

In the fourth quarter of 2004, the Company reported a net loss of $2.5 million, or $0.17 per share, on revenue of $48.0 million, compared with a net loss of $2.6 million, or $0.45 per share, on revenue of $76.9 million for the fourth quarter of the previous year. The Company generated cash from operations of $6.2 million during the fourth quarter of 2004 resulting in a reduction in overall indebtedness of $5.8 million from $39.7 million at the end of the third quarter of 2004 to $33.9 at December 31, 2004. The Company has drawn $4.3 million against its $40 million revolving credit facility at the end of the fiscal year.

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(1) Expressed in millions of U.S. dollars, except per share amounts and as otherwise stated

During the fourth quarter of 2004, the Company recorded net restructuring and other charges of $0.7 million (of which $0.6 million was recorded in cost of sales) compared with restructuring and other charges of $1.1 million (of which a recovery of $0.1 million was recorded in selling, general and administrative expenses) for the same period last year.

Jane Todd, Senior Vice President Finance and Chief Financial Officer added, “While our fourth quarter financial performance produced significant positive cash flow, our revenue and earnings were adversely affected by an unanticipated volume decline from a major customer that operates in a cyclical sector. This also resulted in a $1.0 million charge to adjust inventory values”.

About the Company: SMTC Corporation is a global provider of advanced electronic manufacturing services. The Company’s electronics manufacturing, technology and design centers are located in Appleton, Wisconsin; Boston, Massachusetts; San Jose, California; Toronto, Canada; and Chihuahua, Mexico with a third party facility in Chang An, China. SMTC offers technology companies and electronics OEMs a full range of value-added services. SMTC supports the needs of a growing, diversified OEM customer base primarily within the industrial, networking, communications and computing markets. SMTC is a public company incorporated in Delaware with its shares traded on the Nasdaq National Market System under the symbol SMTX and on The Toronto Stock Exchange under the symbol SMX. Visit SMTC’s web site, www.smtc.com, for more information about the Company.

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 Corporation. For these statements, we claim the protection of the safe harbor for forward-looking statements provisions 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 discussed in the Company’s most recent filings

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with securities regulators in the United States and Canada. The forward-looking statements contained in this release are made as of the date hereof and the Company 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.

For additional information, please contact:

Jane Todd

Senior Vice President Finance and Chief Financial Officer

(905) 479-1810

jane.todd@smtc.com

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Company Financials To Follow

SMTC CORPORATION

Consolidated Unaudited Statements of Earnings (Loss)

(US dollars, in thousands, except share and per share data)

	Three months ended December 31,						Year ended December 31,
	2004			2003			2004			2003
Revenue	$	48,018		$	76,901		$	244,596		$	306,121
Cost of sales		46,508			71,104			221,563			279,497
Gross profit		1,510			5,797			23,033			26,624
Selling, general and administrative expenses		3,252			4,761			15,713			18,780
Amortization		—			1,121			2,330			4,062
Restructuring and other charges (recoveries)		126			1,115			(542	)		1,002
Operating earnings (loss)		(1,868	)		(1,200	)		5,532			2,780
Interest		966			1,202			4,521			5,113
Earnings (loss) before income taxes and discontinued operations		(2,834	)		(2,402	)		1,011			(2,333	)
Income tax expense (recovery)		(362	)		172			506			35,011
Earnings (loss) from continuing operations		(2,472	)		(2,574	)		505			(37,344	)
Earnings (loss) from discontinued operations		—			—			837			(2,422	)
Net earnings (loss)	$	(2,472	)	$	(2,574	)	$	1,342		$	(39,766	)
Net earnings (loss) per share:
Basic from continuing operations	$	(0.17	)	$	(0.45	)	$	0.05		$	(6.51	)
Earnings (loss) from discontinued operations	$	—		$	—		$	0.07		$	(0.42	)
Basic	$	(0.17	)	$	(0.45	)	$	0.12		$	(6.93	)
Diluted	$	(0.17	)	$	(0.45	)	$	0.12		$	(6.93	)
Weighted average number of shares outstanding:
Basic		14,641,345			5,737,956			10,943,763			5,737,956
Diluted		14,641,345			5,737,956			10,972,169			5,737,956

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SMTC CORPORATION

Consolidated Balance Sheets

(US dollars, in thousands)

	December 31, 2004		December 31, 2003
Cash	$	—	$	167
Accounts receivable		23,856		41,318
Inventories		33,025		31,463
Prepaid expenses		1,702		1,922
		58,583		74,870
Capital assets		29,269		30,805
Other assets		4,729		3,088
Deferred income taxes		135		—
	$	92,716	$	108,763
Accounts payable	$	25,943	$	40,565
Accrued liabilities		13,014		18,843
Income taxes payable		1,571		355
Current portion of long-term debt		3,800		70,077
Current portion of capital lease obligations		1,897		193
		46,225		130,033
Long-term debt		30,091		—
Capital lease obligations		1,542		35
Shareholders’ equity (deficiency)		14,858		(21,305	)
	$	92,716	$	108,763
	$	—

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