SMTC (SMTX) 8-K SMTC Corporation Reports Fourth Quarter and Full Year Results

Exhibit 99.1

FOR IMMEDIATE RELEASE

Thursday, March 6, 2008

SMTC Corporation Reports Fourth Quarter and Full Year Results

Reports 24% Sequential Quarterly Revenue Growth; Generates $25 Million Cash Flow for the Year

TORONTO, March 6, 2008 - SMTC Corporation (Nasdaq: SMTX) (TSX: SMX), a global electronics manufacturing services (EMS) provider, today reported fourth quarter revenue of $66.8 million representing a 24% increase over third quarter revenue of $54.0 million. Net earnings of $1.0 million, or $0.07 per share, for the fourth quarter ended December 31, 2007 compares with a net loss of $1.2 million, or ($0.08) in the third quarter. The fourth quarter of 2006 was a record quarter for SMTC with revenue of $76.1 million and net income of $2.1 million, or $0.14 per share.

Gross profit for the fourth quarter of 2007 was $6.4 million, or 9.5% of revenue, compared with $3.4 million, or 6.3% of revenue for the previous quarter and $7.7 million, or 10.1% of revenue, for the fourth quarter of 2006. SMTC generated $2.3 million in positive cash flow from operations in the fourth quarter.

“Fourth quarter results reflect our customers’ resumption of traditional order levels that were unusually low in the previous quarter. As expected, our results did not attain the record level in 2006; however our overall financial performance was in line with our expectations”, stated John Caldwell, President and Chief Executive Officer. Notably, we have engaged with several new customers that are now ramping to solid revenue levels. We also progressed two important strategic initiatives to bring additional capability to our customers by expanding our footprint in Mexico and China.”

“Largely through earnings and effective working capital management, we produced $2.3 million in positive cash flow from operations while increasing revenue by 24% in the quarter”, stated Jane Todd, Senior Vice President Finance and Chief Financial Officer. “We applied our cash flow to debt reduction, lowering total indebtedness to $21.0 million, the lowest level in eight years.”

Revenue for the year ended December 31, 2007 was $256.4 million and net income was $2.7 million, or $0.18 per share, compared with revenue of $262.8 million and net income of $10.5 million, or $0.71 per share for 2006. One-time items recorded in net income were $0.9 million and $5.0 million, respectively, for 2007 and 2006. Gross profit for the year was $22.1 million or, 8.6% of revenue, compared with $26.4 million, or 10.0% for 2006. Largely the result of improved working capital in 2007, cash generated from operations was $24.7 million comparing favourably with cash usage of $9.5 million in 2006.

“While our results did not attain the previous years’ revenue and earnings levels largely due to very soft order levels in the third quarter, we generated approximately $25 million in positive cash flow. Overall we consider 2007 a successful year for the Company”, stated John Caldwell. “We enter 2008 with the broadest capability in SMTC’s history and with a much stronger balance sheet. Our goals for 2008 are to achieve substantially higher earnings on a growing revenue base as well as continuing to generate cash from operations to further reduce debt. We expect results in the second half of the year to be stronger with new customers ramping to higher volumes and seasonality of certain of our long standing customers. However, the unpredictable nature of our customers’ order patterns may affect our quarterly results. We will continue to monitor and update this guidance on a quarterly basis”, stated John Caldwell.

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, Canada, and Mexico, and a partnering relationship in China, with over 1300 full time 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 and on the Toronto Stock Exchange under the symbol SMX. For further information on SMTC Corporation, please visit our website at www.smtc.com (http://www.smtc.com/)

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 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 further information:

Jane Todd,

Senior Vice President, Finance and Chief Financial Officer,

(905) 413-1300,

Email:jane.todd@smtc.com

Consolidated Balance Sheets as of

(Unaudited)

(Expressed in thousands of U.S. dollars)	December 31, 2007			December 31, 2006
Assets
Current assets:
Cash	$	182		$	—
Accounts receivable - net		38,658		$	45,160
Inventories		30,879			42,851
Prepaid expenses		940			1,280
		70,659			89,291
Property, plant and equipment - net		22,295			24,804
Deferred financing fees		1,410			1,310
Deferred income taxes		483			557
	$	94,847		$	115,962
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	37,172		$	36,730
Accrued liabilities		7,272			10,253
Income taxes payable		604			1,979
Current portion of long-term debt		3,071			22,405
Current portion of capital lease obligations		736			541
		48,855			71,908
Long-term debt		17,913			18,632
Capital lease obligations		1,244			1,531
Shareholders’ equity:
Capital stock		7,854			11,969
Warrants		10,372			10,372
Loans receivable		(5	)		(5	)
Additional paid-in capital		248,888			244,501
Deficit		(240,274	)		(242,946	)
		26,835			23,891
	$	94,847		$	115,962

Consolidated Statements of Operations and Comprehensive Income

(Unaudited)

	Three months ended						Twelve months ended
(Expressed in thousands of U.S. dollars, except number of shares and per share amounts)	December 31, 2007			December 31, 2006			December 31, 2007			December 31, 2006
Revenue	$	66,775		$	76,055		$	256,408		$	262,782
Cost of sales		60,430			68,386			234,316			236,351
Gross profit		6,345			7,669			22,092			26,431
Selling, general and administrative expenses		4,198			3,640			14,564			15,162
Restructuring (recoveries) charges		—			—			242			(1,350	)
Gain on sale of assets		(24	)		—			(24	)		(1,228	)
Loss on extinguishment of debt		—			—			371			—
Other expenses		—			—			—			826
Operating earnings		2,171			4,029			6,939			13,021
Interest expense		1,055			1,995			5,584			5,395
Earnings before income taxes		1,116			2,034			1,355			7,626
Income tax (recovery) expense
Current		64			(141	)		(1,317	)		(2,023	)
Deferred		98			62			—			62
		162			(79	)		(1,317	)		(1,961	)
Net (loss) earnings from continuing operations		954			2,113			2,672			9,587
Net earnings from discontinued operations		—			—			—			874
Net earnings, also being comprehensive income	$	954		$	2,113		$	2,672		$	10,461
Basic earnings per share	$	0.07		$	0.14		$	0.18		$	0.71
Diluted earnings per share	$	0.06		$	0.14		$	0.18		$	0.70
Weighted average number of shares outstanding
Basic		14,646,333			14,645,790			14,646,333			14,646,333
Diluted		14,734,877			14,921,634			14,959,978			14,906,280

Consolidated Statements of Cash Flows

(Unaudited)

	Three months ended						Twelve months ended
(Expressed in thousands of U.S. dollars)	December 31, 2007			December 31, 2006			December 31, 2007			December 31, 2006
Cash provided by (used in):
Operations:
Net earnings	$	954		$	2,113		$	2,672		$	10,461
Items not involving cash:
Depreciation		1,230			1,231			4,970			4,688
Gain on disposition of property, plant and equipment		(49	)		—			(24	)		(1,228	)
Other		—			—			—			46
Deferred income taxes		169			43			74			62
Non-cash interest		75			900			1,593			1,949
Stock-based compensation		(161	)		(205	)		(26	)		187
Loss on extinguishment of debt		—			—			269			—
Discontinued operations		—			—			—			(874	)
		2,218			4,082			9,528			15,291
Change in non-cash operating working capital:
Accounts receivable		(3,771	)		(824	)		6,502			(18,373	)
Inventories		5,973			6,903			11,972			(9,595	)
Prepaid expenses		557			354			340			418
Income taxes recoverable/payable		192			56			(1,375	)		776
Accounts payable		(2,304	)		(8,608	)		442			5,791
Accrued liabilities		(579	)		(717	)		(2,683	)		(3,847	)
		2,286			1,246			24,726			(9,539	)
Financing:
Increase in long-term debt		—			1,402			21,500			16,639
Repayment of long-term debt		(2,094	)		(1,834	)		(42,106	)		(4,732	)
Principal payment of capital lease obligations		(173	)		(283	)		(653	)		(1,686	)
Net proceeds from issuance of shares		—			3			—			3
Proceeds from discontinued operations		—			—			—			874
Debt issuance and deferred financing costs		(47	)		—			(1,409	)		(606	)
		(2,314	)		(712	)		(22,668	)		10,492
Investing:
Purchase of property, plant and equipment		(156	)		(534	)		(1,914	)		(2,181	)
Proceeds from sale of property, plant and equipment		38			—			38			1,228
		(118	)		(534	)		(1,876	)		(953	)
Increase in cash and cash equivalents		(146	)		—			182			—
Cash and cash equivalents, beginning of period		328			—			—			—
Cash, end of the period	$	182		$	—		$	182		$	—

Supplementary Information:

Reconciliation of EBITDA

	Three months ended				Twelve months ended
	December 31, 2007		December 31, 2006		December 31, 2007		December 31, 2006
Operating earnings	$	2,171	$	4,029	$	6,939	$	13,021
Add:
Depreciation		1,230		1,231		4,970		4,688
Loss on extinguishment of debt		—		—		371		—
EBITDA		3,401		5,260		12,280		17,709