Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Jul. 31, 2023 | Sep. 08, 2023 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --04-30 | |
Document Fiscal Year Focus | 2024 | |
Document Period End Date | Jul. 31, 2023 | |
Document Transition Report | false | |
Entity File Number | 0-23248 | |
Entity Registrant Name | SIGMATRON INTERNATIONAL, INC. | |
Entity Incorporation State Country Code | DE | |
Entity Tax Identification Number | 36-3918470 | |
Entity Address Address Line 1 | 2201 Landmeier Road | |
Entity Address City Or Town | Elk Grove Village | |
Entity Address State Or Province | IL | |
Entity Address Postal Zip Code | 60007 | |
City Area Code | 847 | |
Local Phone Number | 956-8000 | |
Title of 12b Security | Common Stock $0.01 par value per share | |
Trading Symbol | SGMA | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 6,094,288 | |
Amendment Flag | false | |
Entity Central Index Key | 0000915358 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Jul. 31, 2023 | Apr. 30, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 1,654,891 | $ 819,129 |
Accounts receivable, less allowance for credit losses of $100,000 at July 31, 2023 and April 30, 2023 | 44,226,653 | 46,284,818 |
Inventories, net | 158,462,273 | 165,555,199 |
Prepaid expenses and other assets | 1,736,083 | 1,678,263 |
Refundable and prepaid income taxes | 411,487 | 779,705 |
Other receivables | 6,092,331 | 5,349,328 |
Total current assets | 212,583,718 | 220,466,442 |
Property, machinery and equipment, net | 35,903,317 | 35,788,357 |
Intangible assets, net | 1,227,615 | 1,311,030 |
Deferred income taxes | 2,460,689 | 2,640,902 |
Right-of-use assets | 6,424,222 | 7,225,423 |
Other assets | 1,235,547 | 1,195,045 |
Total other long-term assets | 11,348,073 | 12,372,400 |
Total assets | 259,835,108 | 268,627,199 |
Current liabilities: | ||
Trade accounts payable | 74,636,197 | 75,159,716 |
Accrued wages | 8,654,795 | 7,917,266 |
Accrued expenses | 3,084,368 | 2,933,430 |
Income taxes payable | 1,041,998 | |
Deferred revenue | 5,542,269 | 8,063,197 |
Current portion of long-term debt | 46,980,450 | 52,761,520 |
Current portion of finance lease obligations | 1,821,641 | 1,523,259 |
Current portion of operating lease obligations | 2,740,678 | 2,908,213 |
Total current liabilities | 143,460,398 | 152,308,599 |
Long-term debt, less current portion | 40,572,777 | 40,539,180 |
Income taxes payable | 148,888 | 267,998 |
Finance lease obligations, less current portion | 2,902,042 | 2,596,178 |
Operating lease obligations, less current portion | 4,111,504 | 4,723,867 |
Other long-term liabilities | 101,556 | 100,350 |
Total long-term liabilities | 47,836,767 | 48,227,573 |
Total liabilities | 191,297,165 | 200,536,172 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock, $0.01 par value; 500,000 shares authorized, none issued or outstanding | ||
Common stock, $0.01 par value; 12,000,000 shares authorized, 6,091,288 shares issued and outstanding at July 31, 2023 and April 30, 2023 | 60,634 | 60,634 |
Capital in excess of par value | 42,171,387 | 41,986,570 |
Retained earnings | 26,305,922 | 26,043,823 |
Total stockholders' equity | 68,537,943 | 68,091,027 |
Total liabilities and stockholders' equity | $ 259,835,108 | $ 268,627,199 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Jul. 31, 2023 | Apr. 30, 2023 |
Condensed Consolidated Balance Sheets [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 100,000 | $ 100,000 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 500,000 | 500,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 12,000,000 | 12,000,000 |
Common stock, shares issued | 6,091,288 | 6,091,288 |
Common stock, shares outstanding | 6,091,288 | 6,091,288 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | |
Jul. 31, 2023 | Jul. 31, 2022 | |
Condensed Consolidated Statements Of Income [Abstract] | ||
Net sales | $ 98,130,356 | $ 105,189,979 |
Cost of products sold | 88,479,136 | 93,612,759 |
Gross profit | 9,651,220 | 11,577,220 |
Selling and administrative expenses | 6,842,805 | 6,529,842 |
Operating income | 2,808,415 | 5,047,378 |
Other income | 18,627 | 35,816 |
Interest expense, net | (2,719,078) | (953,558) |
Income from continuing operations before income tax expense | 107,964 | 4,129,636 |
Income tax benefit (expense) | 154,135 | (1,008,296) |
Net income from continuing operations | 262,099 | 3,121,340 |
Loss before tax from discontinued operations | (2,223,561) | |
Tax benefit from discontinued operations | 478,896 | |
Net loss from discontinued operations | (1,744,665) | |
Net income | $ 262,099 | $ 1,376,675 |
Basic earnings (loss) per common share: | ||
Income (loss) from continuing operations | $ 0.04 | $ 0.52 |
Income (loss) from discontinued operations | (0.29) | |
Basic earnings (loss) per common share: | 0.04 | 0.23 |
Diluted earnings (loss) per common share: | ||
Income (loss) from continuing operations | 0.04 | 0.50 |
Income (loss) from discontinued operations | (0.28) | |
Diluted earnings (loss) per common share: | $ 0.04 | $ 0.22 |
Weighted average shares of common stock outstanding - Basic | 6,091,288 | 6,058,908 |
Weighted average shares of common stock outstanding - Diluted | 6,100,284 | 6,191,395 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements Of Changes In Stockholders' Equity - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Capital In Excess Of Par Value [Member] | Retained Earnings [Member] | Total |
Balance at Apr. 30, 2022 | $ 60,379 | $ 41,654,410 | $ 46,619,208 | $ 88,333,997 | |
Recognition of stock-based compensation | 94,893 | 94,893 | |||
Restricted stock awards | 55 | 49,818 | 49,873 | ||
Net loss from discontinued operations | (1,744,665) | (1,744,665) | |||
Net income from continuing operations | 3,121,340 | 3,121,340 | |||
Net income | 1,376,675 | ||||
Balance at Jul. 31, 2022 | 60,434 | 41,799,121 | 47,995,883 | 89,855,438 | |
Balance at Apr. 30, 2023 | 60,634 | 41,986,570 | 26,043,823 | 68,091,027 | |
Recognition of stock-based compensation | 184,817 | 184,817 | |||
Net loss from discontinued operations | |||||
Net income from continuing operations | 262,099 | ||||
Net income | 262,099 | 262,099 | |||
Balance at Jul. 31, 2023 | $ 60,634 | $ 42,171,387 | $ 26,305,922 | $ 68,537,943 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements Of Cash Flows - USD ($) | 3 Months Ended | |
Jul. 31, 2023 | Jul. 31, 2022 | |
Cash flows from operating activities | ||
Net income from continuing operations | $ 262,099 | $ 3,121,340 |
Net loss from discontinued operations | (1,744,665) | |
Adjustments to reconcile net income to net cash provided by (used in) operating activities from continuing operations | ||
Depreciation and amortization of property, machinery and equipment | 1,496,034 | 1,457,220 |
Stock-based compensation | 184,817 | 94,893 |
Restricted stock expense | 49,873 | |
Deferred income tax expense | 180,213 | 110,324 |
Amortization of intangible assets | 83,415 | 85,248 |
Amortization of financing fees | 116,745 | 79,520 |
Loss from disposal or sale of machinery and equipment | 43,286 | 13,576 |
Changes in operating assets and liabilities, net of acquisition | ||
Accounts receivable | 2,058,165 | (10,837,157) |
Inventories | 7,092,926 | (11,397,902) |
Prepaid expenses and other assets | 189,396 | 892,516 |
Refundable and prepaid income taxes | 368,218 | (77,448) |
Income taxes payable | (1,161,108) | 209,040 |
Trade accounts payable | (523,519) | (1,023,788) |
Operating lease liabilities | (779,898) | (768,542) |
Accrued expenses and wages | 660,153 | (1,763,440) |
Deferred revenue | (2,520,928) | 3,085,492 |
Net cash provided by (used in) operating activities from continuing operations | 7,750,014 | (16,669,235) |
Cash flows from investing activities from continuing operations | ||
Purchases of machinery and equipment | (621,929) | (313,934) |
Net cash used in investing activities from continuing operations | (621,929) | (313,934) |
Cash flows from financing activities from continuing operations | ||
Proceeds under equipment notes | 783,461 | |
Payments under finance lease agreements | (428,105) | (353,258) |
Payments under equipment notes | (278,250) | (278,138) |
Payments under building notes payable | (12,372) | (6,006,127) |
Borrowings under term loan agreement | 40,000,000 | |
Payments under term loan agreement | (250,000) | |
Borrowings under revolving line of credit | 103,905,204 | 123,016,860 |
Payments under revolving line of credit | (109,632,319) | (135,200,692) |
Payments of debt financing costs | (379,942) | (1,290,907) |
Net cash (used in) provided by financing activities from continuing operations | (6,292,323) | 19,887,738 |
Cash flows from discontinued operations: | ||
Net cash used in operating activities | (1,457,558) | |
Net cash used in financing activities | (55,481) | |
Net cash used in discontinued operations | (1,513,039) | |
Change in cash and cash equivalents | 835,762 | 1,391,530 |
Cash and cash equivalents at beginning of period | 819,129 | 3,054,643 |
Cash and cash equivalents at end of period | 1,654,891 | 4,446,173 |
Supplementary disclosures of cash flow information | ||
Cash paid for interest | 2,583,509 | 792,971 |
Cash paid for income taxes | 434,038 | 242,633 |
Purchase of machinery and equipment financed under finance leases | 1,032,351 | 825,826 |
Right-of-use assets obtained in exchange for operating lease liabilities | 1,531 | 756,380 |
Financing of insurance policy | $ 229,520 | $ 99,768 |
Description Of The Business
Description Of The Business | 3 Months Ended |
Jul. 31, 2023 | |
Description Of The Business [Abstract] | |
Description of the Business | Note A - Description of the Business SigmaTron International, Inc., its subsidiaries, foreign enterprises and international procurement office (collectively, the “Company”) operates as an independent provider of electronic manufacturing services (“EMS”). The EMS segment includes printed circuit board assemblies, electro-mechanical subassemblies and completely assembled (box-build) electronic products. In connection with the production of assembled products, the EMS segment also provides services to its customers, including (1) automatic and manual assembly and testing of products; (2) material sourcing and procurement; (3) manufacturing and test engineering support; (4) design services; (5) warehousing and distribution services; (6) assistance in obtaining product approval from governmental and other regulatory bodies and (7) compliance reporting. Until the sale described below, effective April 1, 2023, the Company, through its subsidiary, Wagz, Inc. (“Wagz”), operated in a second reportable segment, as a provider of products to the pet technology (“Pet Tech”) market. The Pet Tech reportable segment offered electronic products such as the Freedom Smart Dog Collar™, a wireless geo-mapped fence and wellness system, along with apparel and accessories. During the fourth quarter of fiscal 2023, the Company exited its active involvement in the Pet Tech business that is conducted by Wagz through the sale by the Company of a majority stake in Wagz, effective as of April 1, 2023. The Company entered into a Stock Purchase Agreement (“SPA”) by and among the Company, Wagz, Vynetic LLC, a Delaware limited liability company (“Buyer”), and Terry B. Anderton, co-founder of Wagz and principal of Buyer (“Anderton”), pursuant to which the Company sold to Buyer 81 % of the issued and outstanding shares of common stock of Wagz for the purchase price of one dollar. Under the SPA, the Company also agreed to provide a $ 900,000 working capital term loan (the “Wagz Loan”) to Wagz during the month of April 2023. The Company agreed to work with Wagz as an EMS provider pursuant to a manufacturing agreement, but the Company did not commit to extending any further financial support beyond the Wagz Loan. On April 28, 2023, the sale of the majority interest in Wagz pursuant to the SPA was consummated effective as of April 1, 2023, and as a result, as of the closing, the Company holds a minority 19 % ownership of Wagz common stock and Buyer holds a majority 81 % of Wagz common stock. |
Basis Of Presentation
Basis Of Presentation | 3 Months Ended |
Jul. 31, 2023 | |
Basis Of Presentation [Abstract] | |
Basis of Presentation | Note B - Basis of Presentation The accompanying unaudited condensed consolidated financial statements of SigmaTron International, Inc. (“SigmaTron”), its wholly-owned subsidiaries, Standard Components de Mexico, S.A., AbleMex S.A. de C.V., Digital Appliance Controls de Mexico, S.A. de C.V., Spitfire Controls (Vietnam) Co. Ltd., and Spitfire Controls (Cayman) Co. Ltd., wholly-owned foreign enterprises Wujiang SigmaTron Electronics Co. Ltd., and Wujiang SigmaTron Electronic Technology Co., Ltd. (collectively, “SigmaTron China”), its international procurement office, SigmaTron International Inc. Taiwan Branch, and Wagz, Inc. ( 19 % ownership, effective as of April 1, 2023), have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. The accompanying unaudited condensed consolidated financial statements do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three month period ended July 31, 2023 are not necessarily indicative of the results that may be expected for the year ending April 30, 2024. The condensed consolidated balance Note B - Basis of Presentation - Continued sheet at April 30, 2023, was derived from audited annual financial statements but does not contain all of the footnote disclosures from the annual financial statements. For further information, refer to the condensed consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended April 30, 2023. On April 1, 2023, SigmaTron completed the sale of a majority interest in the Wagz, Inc. business. In accordance with the authoritative guidance for discontinued operations (Accounting Standards Codification (ASC) 205-20), the Company determined that the Wagz business met discontinued operations accounting criteria at the end of the fourth quarter of fiscal year 2023. The results of the Wagz business and the related cash flows have been reported as discontinued operations in the Consolidated Statements of Operations and Consolidated Statements of Cash Flows, respectively, through the date of sale. These changes have been applied to all periods presented. See Note M - Discontinued Operations, for additional information. |
Inventories, Net
Inventories, Net | 3 Months Ended |
Jul. 31, 2023 | |
Inventories, Net [Abstract] | |
Inventories, Net | Note C - Inventories, net The components of inventory consist of the following: July 31, April 30, 2023 2023 Finished products $ 18,904,503 $ 22,093,018 Work-in-process 5,739,599 5,415,917 Raw materials 137,785,867 142,612,325 162,429,969 170,121,260 Less excess and obsolescence reserve ( 3,967,696 ) ( 4,566,061 ) $ 158,462,273 $ 165,555,199 |
Earnings Per Share And Stockhol
Earnings Per Share And Stockholders' Equity | 3 Months Ended |
Jul. 31, 2023 | |
Earnings Per Share And Stockholders' Equity [Abstract] | |
Earnings Per Share And Stockholders' Equity | Note D - Earnings Per Share and Stockholders’ Equity The following table sets forth the computation of basic and diluted (loss) earnings per share: Three Months Ended July 31, July 31, 2023 2022 Net income from continuing operations $ 262,099 $ 3,121,340 Net loss from discontinued operations - ( 1,744,665 ) Total net income 262,099 1,376,675 Weighted-average shares Basic 6,091,288 6,058,908 Effect of dilutive stock options 8,996 132,487 Diluted 6,100,284 6,191,395 Basic (loss) earnings per common share Basic earnings per share from continuing operations 0.04 0.52 Basic loss per share from discontinued operations - ( 0.29 ) Basic total earnings per share $ 0.04 $ 0.23 Diluted (loss) earnings per common share Diluted earnings per share from continuing operations 0.04 0.50 Diluted loss per share from discontinued operations - ( 0.28 ) Diluted total earnings per share $ 0.04 $ 0.22 Options to purchase 602,081 and 508,519 shares of common stock were outstanding and exercisable at July 31, 2023 and 2022, respectively. There were 186,000 options granted during the three month period ended July 31, 2023 and there were no options granted during the three month period ended July 31, 2022. There was $ 184,817 and $ 94,893 stock option expense recognized for the three month periods ended July 31, 2023 and 2022, respectively. The balance of unrecognized compensation expense related to the Company’s stock option plans at July 31, 2023 and 2022 was $ 530,502 and $ 1,034,531 , respectively. There were 379,493 anti-dilutive common stock equivalents and no anti-dilutive common stock equivalents for the three month periods ended July 31, 2023 and 2022, respectively, which have been excluded from the calculation of diluted earnings per share. |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Jul. 31, 2023 | |
Long-Term Debt [Abstract] | |
Long-Term Debt | Note E - Long-term Debt Debt and finance lease obligations consisted of the following at July 31, 2023 and April 30, 2023: July 31, April 30, 2023 2023 Debt: Notes Payable - Secured lenders $ 84,990,885 $ 90,968,000 Notes Payable - Buildings 404,771 417,143 Notes Payable - Equipment 4,029,326 3,524,115 Unamortized deferred financing costs ( 1,871,755 ) ( 1,608,558 ) Total debt 87,553,227 93,300,700 Less current maturities* 46,980,450 52,761,520 Long-term debt $ 40,572,777 $ 40,539,180 Finance lease obligations $ 4,723,683 $ 4,119,437 Less current maturities 1,821,641 1,523,259 Total finance lease obligations, less current portion $ 2,902,042 $ 2,596,178 * Due to availability being less than 10 % of the Revolving Commitment, the Facility (as defined below) has been classified as a current liability on the Consolidated Balance Sheet at July 31, 2023 and April 30, 2023. Notes Payable – Secured lenders On January 29, 2021, the Company entered into a Credit Agreement (the “JPM Agreement”) with JPMorgan Chase Bank, N.A. (“Lender” or “JPM”), pursuant to which Lender provided the Company with a secured credit facility consisting of a revolving loan facility and a term loan facility (collectively, the “Facility”). On July 18, 2022, SigmaTron, Wagz and Lender amended and restated the JPM Agreement by entering into an Amended and Restated Credit Agreement (as so amended and restated, the “JPM Credit Agreement”). The Facility, as amended, allows the Company to borrow on a revolving basis up to the lesser of (i) $ 70,000,000 or (ii) an amount equal to a percentage of the eligible receivable borrowing base plus a percentage of the inventory borrowing base minus any reserves established by Lender (the “Revolving Commitment”). The maturity date of the Facility is July 18, 2027. Deferred financing costs of $ 238,576 and $ 332,139 were capitalized during the three month period ended July 31, 2023 and during the fiscal year ended April 30, 2023, respectively, which are amortized over the term of the JPM Credit Agreement. As of July 31, 2023, there was $ 45,407,584 outstanding and $ 12,468,259 of unused availability under the revolving loan facility compared to an outstanding balance of $ 51,134,699 and $ 11,539,183 of unused availability at April 30, 2023. As of July 31, 2023 and April 30, 2023, the unamortized amount offset against outstanding debt was $ 763,478 and $ 572,191 , respectively. Note E - Long-term Debt - Continued Under the JPM Credit Agreement, a minimum Fixed Charge Coverage Ratio (“FCCR”) financial covenant of 1.10 x is applicable only during an FCCR trigger period which occurs when (a) commencing on the Effective Date (as defined in the JPM Credit Agreement) and ending when the Term Loan Obligations (as defined in the JPM Credit Agreement) have been paid in full and (b) following the payment in full of the Term Loan Obligations, (i) an event of default (as defined in the JPM Credit Agreement) has occurred and is continuing, and Lender has elected to impose a FCCR trigger period upon notice to the Company or (ii) availability falls below the greater of (y) 10 % of the Revolving Commitment and (z) the outstanding principal amount of the term loans. In addition, prior to the amendment to the JPM Credit Agreement pursuant to the JPM Waiver (as discussed below under “ Waiver, Consent and Amendment to Credit Agreements ”), the JPM Credit Agreement imposed a financial covenant that required the Company to maintain a leverage ratio of Total Debt to EBITDA (each as defined in the JPM Credit Agreement) for any twelve month period ending on the last day of a fiscal quarter through the maturity of the revolving Facility not to exceed a certain amount, which ratio (a) ranged from 5.00 -to-1 for fiscal quarters beginning with the fiscal quarter ending on January 31, 2023 to 3.00 -to-1 for the fiscal quarter ending on July 31, 2026 (if the Term Loan Borrowing Base Coverage Ratio (as defined in the JPM Credit Agreement) as of the end of the applicable fiscal quarter is less than or equal to 1.50 -to-1) and (b) ranged from 5.50 -to-1 for the fiscal quarter ending on January 31, 2023 to 4.00 -to-1 for the fiscal quarters beginning with the fiscal quarter ending on July 31, 2026 (if the Term Loan Borrowing Base Coverage Ratio as of the end of the applicable fiscal quarter is greater than 1.50 -to-1). In addition, the JPM Credit Agreement imposes a cash dominion period if there is an event of default or if availability is less than 10 % of the Revolving Commitment, and such requirement continues until there is no event of default and availability is greater than 10 % of the Revolving Commitment, in each case for 30 consecutive days. Based on this criteria, the total debt balances for the Facility must be classified as a current liability on the Consolidated Balance Sheet as of July 31, 2023 and April 30, 2023. In connection with the entry into the JPM Credit Agreement, Lender and TCW Asset Management Company LLC, as administrative agent under the Term Loan Agreement (as defined below), entered into the Intercreditor Agreement, dated July 18, 2022, and acknowledged by SigmaTron and Wagz (the “ICA”), to set forth and govern the lenders’ respective lien priorities, rights and remedies under the JPM Credit Agreement and the Term Loan Agreement. Th e Facility under the JPM Credit Agreement is secured by: (a) a first priority security interest in SigmaTron’s and Wagz’s (i) accounts receivable and inventory (excluding Term Priority Mexican Inventory (as defined in the ICA) and certain inventory in transit, (ii) deposit accounts, (iii) proceeds of business interruption insurance that constitute ABL BI Insurance Share (as defined in the ICA), (iv) certain other property, including payment intangibles, instruments, equipment, software and hardware and similar systems, books and records, to the extent related to the foregoing, and (v) all proceeds of the foregoing, in each case, now owned or hereafter acquired (collectively, the “ABL Priority Collateral”); and (b) a second priority security interest in Term Priority Collateral (as defined below) other than (i) real estate and (ii) the equity interests of SigmaTron’s foreign subsidiaries (unless such a pledge is requested by Lender). Note E - Long-term Debt - Continued On July 18, 2022, SigmaTron, Wagz and TCW Asset Management Company LLC, as administrative agent (the “Agent”), and other Lenders party thereto (collectively, the “TCW Lenders” and together with the Agent, “TCW”) entered into a Credit Agreement (the “Term Loan Agreement”) pursuant to which TCW made a term loan to the Company in the principal amount of $ 40,000,000 (the “TCW Term Loan”). The TCW Term Loan bears interest at a rate per annum based on SOFR, plus the Applicable Margin of 7.50 % (each as defined in the Term Loan Agreement). The TCW Term Loan has a SOFR floor of 1.00 %. The maturity date of the TCW Term Loan is July 18, 2027 . The amount outstanding as of July 31, 2023, was $ 39,583,301 compared to an outstanding balance of $ 39,833,301 at April 30, 2023. Deferred financing costs of $ 141,366 and $ 1,233,894 were capitalized during the three month period ended July 31, 2023 and fiscal year ended April 30, 2023, respectively. As of July 31, 2023 and April 30, 2023, the unamortized amount offset against outstanding debt was $ 1,108,277 and $ 1,036,367 , respectively. The Term Loan Agreement imposes financial covenants, including covenants requiring the Company to maintain a minimum Fixed Charge Coverage Ratio (as defined in the Term Loan Agreement) of 1.10 -to-1 and maintain the same leverage ratio of Total Debt to EBITDA as described above under the JPM Credit Agreement. The Company is required to make quarterly repayments of the principal amount of the TCW Term Loan in amounts equal to $ 250,000 per fiscal quarter for the quarters beginning October 31, 2022 and $ 500,000 per fiscal quarter for quarters beginning October 31, 2024. The Term Loan Agreement also requires mandatory annual repayments equal to 50 % of Excess Cash Flow (as defined in the Term Loan Agreement). The TCW Term Loan is secured by: (a) a first priority security interest in all property of SigmaTron and Wagz that does not constitute ABL Priority Collateral, which includes: (i) SigmaTron’s and Wagz’s real estate other than SigmaTron’s Del Rio, Texas, warehouses, (ii) SigmaTron’s and Wagz’s machinery, equipment and fixtures (but excluding ABL Priority Equipment (as defined in the ICA)) , (iii) the Term Priority Mexican Inventory (as defined in the ICA), (iv) SigmaTron’s stock in its direct and indirect subsidiaries, (v) SigmaTron’s and Wagz’s general intangibles (excluding any that constitute ABL Priority Collateral), goodwill and intellectual property, (vi) the proceeds of business interruption insurance that constitute Term BI Insurance Share (as defined in the ICA) , (vii) tax refunds, and (viii) all proceeds thereof, in each case, now owned or hereafter acquired (collectively, the “Term Priority Collateral”); and (b) a second priority security interest in all collateral that constitutes ABL Priority Collateral. Also, SigmaTron’s three Mexican subsidiaries pledged all of their assets as security for the TCW Term Loan. Note E - Long-term Debt - Continued Waiver, Consent and Amendment to Credit Agreements On March 2, 2023, the Company received notices of default from both JPM and TCW. T he Notices indicated the occurrence of certain events of default under the JPM Credit Agreement and the Term Loan Agreement ( together with the JPM Credit Agreement the “Credit Agreements”). In addition, the Company received a delinquency notification letter from Nasdaq indicating that the Company was not in compliance with the continued listing requirements of Nasdaq for failing to timely file the Company ’ s F o rm 10-Q for the fiscal quarter ended January 31, 2023. This notification also constituted a default under the Credit Agreements. The delinquency was remedied on May 19, 2023. The JPM Notice indicated that the Lender was informed of the occurrence of events of defaults and the continuation thereof under the JPM Credit Agreement as a result of the Company’s failure to maintain a FCCR for the twelve month period ended January 31, 2023 of at least 1.10 x as required under the JPM Credit Agreement (the “JPM Covenant Defaults”). The TCW Notice indicated that Agent and TCW Lenders were informed of the occurrence of events of default and the continuation thereof under the Term Loan Agreement (described below) as a result of the Company permitting the Total Debt to EBITDA Ratio for the twelve month period ended on January 31, 2023 to be greater than 5.00 :1.00 in violation of the Term Loan Agreement and the Company’s failure to maintain FCCR as required under the JPM Credit Agreement (the “TCW Covenant Defaults” and together with the JPM Covenant Defaults, the “Defaults”). As a result of the Defaults, the Company was not in compliance with its financial covenants under the Credit Agreements as of January 31, 2023. Due to the Notices received on March 2, 2023, from each of JPM and TCW, the total debt balances for both the Facility and the TCW Term Loan had been classified as a current liability on the Condensed Consolidated Balance Sheet as of January 31, 2023. On April 28, 2023, the Company entered into (i) a W aive r , Consent and Amendment No. 1 to the JPM Credit Agreement (“JPM W aiver”) with W agz and JPM, as l e nder , which waived certain events of default under and amended certain terms of the JPM Credit Agreement and (i i ) a W aive r , Consent and Amendment No. 1 to the Credit Agreement (“TCW W aiver”) with W agz and TCW ( collectively with JPM, the “Lender Parties”), which waived certain events of default under and amended certain terms of the Credit Agreements. T he Company was in compliance with its revised financial covenants under the Credit Agreements as of July 31, 2023. Pursuant to the W aivers, the Company has agreed, among other things, to (i) if requested by the Agent, e f fect a corporate restructuring that would create a new holding company structure to own all of the Company ’ s stock through a me r ger pursuant to Section 251(g) of the General Corporation Law of the State of Delaware, after which the holding c o mpany would continue as the public compan y , Note E - Long-term Debt - Continued become a guarantor under the Credit Agreements and pledge to the Lender Parties all of the equity of the Compan y (the “Corporate Restructuring”), (ii) engage a financial advisor to review certain of the Company ’ s financial reporting to JPM and the Agent and participate in weekly confer e nce calls with the adviso r , JPM and the Agent to discuss and provide updates on the Company ’ s liquidity and operations, (iii) extend the W agz Loan, (iv) pay to JPM an amendment fee in the amount of $ 70,000 , paid in cash, and (v) pay to the TCW Lenders an amendment fee of $ 395,000 and a default rate fee of $ 188,301 , both of which were paid in kind by being added to the principal of the TCW Term Loan. The W aivers also amended the Credit Agreements to, among other things, (x) require that the Company maintain a minimum of $ 2.5 mil l ion in revolver availability under the JPM Credit Agreement, (y) modify the definition of EBITDA to allow adjustments to account for W agz oper a ting losses, impairment cha r ges relating to the write-down of the W agz business, the Wagz Loan and net assets of the Com p any and W agz, and expenses relating to the W aivers, the W agz sale and S P A, and (z) modify the existing T otal Debt to EBITDA R a tios (as defined in the Credit Agreements) as follows: Fiscal Quarter Total Debt to EBITDA Ratio* (as amended) Total Debt to EBITDA Ratio* (prior to amendment) October 31,2023 4.50 :1.0 4.25 :1.0 January 31, 2024 4.50 :1.0 4.00 :1.0 April 30, 2024 4.50 :1.0 4.00 :1.0 July 31, 2024 4.25 :1.0 3.75 :1.0 October 31, 2024 4.00 :1.0 3.75 :1.0 * Assumes the T erm Loan Borrowing Base Coverage Ratio (as defined in the Credit Agreements) is less than or equal to 1.50 :1.0. In addition, pursuant to the TCW Waiver, if the Total Debt to EBITDA Ratio for the trailing twelve month period as of the end o f the third quarter of fiscal 2023 exceeds the ratios that were in e f fect prior to the amendment (as set forth in the far right column of the table above) for a fiscal quarter during the PIK Period (defined in the Term Loan Agreement ), then the Applicable Ma r gin under t he Term Loan Agreement in respect of the outstanding TCW Term Loan would increase by an amount equal to 1.0 % per annum for the fiscal quarte r , with such interest being paid in kind. Furthermore, the JPM W aiver modified the definition of Applicable Ma r gin from a fixed amount equal to 2.00 % to an amount that varies from 2.00 % (for revolver availability greater than or equal to $ 20.0 million), to 2.50 % (for revolver availability greater than or equal to $ 10.0 million), to 3.00 % (for revolver availability less than $ 10.0 million), and fixed the Applicable Ma r gin at 3.00 % for six months starting April 1, 2023. T he Company was in compliance with its revised financial covenants under the Credit Agreements as of July 31, 2023. In exchange for such agreements, the Lender Parties waived all of the existing events of default under the Credit Agreements through March 31, 2023, consented to the sale of W agz and Note E - Long-term Debt - Continued released W agz and its property and the Company ’ s 81 % interest in W agz that was sold to Buyer (as disclosed below) from the lien of the Lender Parties. In connection with the W aivers, the Company exited its active involvement in the Pet T ech business that is conducted b y W agz through the sale by the Company of a majority stake in W agz, effective as of April 1, 2023. On June 15, 2023, the Company entered into (i) Amendment No. 2 to the Credit Agreement (the “JPM Amendment No. 2”) by and among the Company and Lender, with respect to the JPM Credit Agreement and (ii) Amendment No. 2 to the Credit Agreement (“TCW Amendment No. 2”) by and among the Company and TCW with respect to the Term Loan Agreement. The JPM Amendment No. 2 and TCW Amendment No. 2 (together, the “Amendments”) amended the Credit Agreements to extend the date, from May 31, 2023 to July 31, 2023, after which the Agent may request that the Company effect the Corporate Restructuring. On March 15, 2019, the Company’s wholly-owned foreign enterprise, Wujiang SigmaTron Electronic Technology Co., Ltd., entered into a credit facility with China Construction Bank. On January 26, 2021, the agreement was amended and expired in accordance with its terms on January 6, 2022 . On January 17, 2022, the agreement was renewed, and expired in accordance with its terms on December 23, 2022 . On February 17, 2023, the agreement was renewed, and is scheduled to expire on February 7, 2024 . Under the agreement Wujiang SigmaTron Electronic Technology Co., Ltd. can borrow up to 10,000,000 Renminbi, approximately $ 1,400,000 as of July 31, 2023, and the facility is collateralized by Wujiang SigmaTron Electronics Co., Ltd.’s manufacturing building. Interest is payable monthly and the facility bears a fixed interest rate of 3.35 % per annum. There was no outstanding balance under the facility at July 31, 2023 and April 30, 2023. Notes Payable – Buildings The Company entered into a mortgage agreement on March 3, 2020, in the amount of $ 556,000 , with The Bank and Trust SSB to finance the purchase of the property that serves as the Company’s warehousing and distribution center in Del Rio, Texas. The note requires the Company to pay monthly installment payments in the amount of $ 6,103 . Interest accrues at a fixed rate of 5.75 % per year until March 3, 2025, and adjusts thereafter, on an annual basis, equal to 1.0 % over the Prime Rate as published by The Wall Street Journal. The note is payable over a 120 month period. The outstanding balance was $ 404,771 and $ 417,143 at July 31, 2023 and April 30, 2023, respectively. Note E - Long-term Debt - Continued Notes Payable – Equipment The Company routinely entered into secured note agreements with Engencap Fin S.A. DE C.V. to finance the purchase of equipment. The terms of the outstanding secured note agreement, which had a fixed interest rate of 8.00 % per annum, matured on May 1, 2023 , with a final quarterly installment payment of $ 9,310 . The Company routinely enters into secured note agreements with FGI Equipment Finance LLC to finance the purchase of equipment. The terms of the outstanding secured note agreements mature from March 2025 through August 2028 , with quarterly installment payments ranging from $ 10,723 to $ 69,439 and a fixed interest rate ranging from 8.25 % to 11.75 % per annum. Annual maturities of the Company’s debt, net of deferred financing fees for the remaining periods, as of July 31, 2023, are as follows: Secured lenders Building Equipment Total For the remaining 9 months of the fiscal year ending April 30: 2024 $ 45,394,106 $ 38,199 $ 900,945 $ 46,333,250 For the fiscal years ending April 30: 2025 1,467,036 53,557 1,335,736 2,856,329 2026 1,717,036 56,719 987,526 2,761,281 2027 1,717,036 60,068 454,913 2,232,017 2028 32,823,916 63,614 249,932 33,137,462 2029 - 132,614 100,274 232,888 $ 83,119,130 $ 404,771 $ 4,029,326 $ 87,553,227 * Due to availability being less than 10% of the Revolving Commitment, the Facility (as defined above) has been classified as a current liability on the Consolidated Balance Sheet at July 31, 2023. The maturity date of both the Facility and the TCW Term Loan is July 18, 2027 with an outstanding balance of $ 83,119,130 . Finance Lease Obligations The Company enters into various finance lease agreements. The terms of the outstanding lease agreements mature through April 1, 2027 , with monthly installment payments ranging from $ 2,874 to $ 33,706 and a fixed interest rate ranging from 7.09 % to 12.73 % per annum. |
Income Tax
Income Tax | 3 Months Ended |
Jul. 31, 2023 | |
Income Tax [Abstract] | |
Income Tax | Note F - Income Tax The income tax benefit was $ 154,135 for the three month period ended July 31, 2023 compared to an income tax expense of $ 1,008,296 for the same period in the prior fiscal year. The Company’s effective tax rate was - 142.76 % and 24.42 % for the quarters ended July 31, 2023 and 2022, respectively. The decrease in income tax expense for the three month period ended July 31, 2023 compared to the same period in the previous year is due to decreased taxable earnings in the current quarter compared to the same period in the previous year . The decrease in effective tax rate is due to variations in income earned by jurisdiction. SigmaTron and Wagz filed or are expected to file U.S. tax returns on a consolidated basis for periods during which Wagz was wholly owned. Therefore, a valuation allowance was previously established on the group’s U.S. deferred tax assets during fiscal year 2022. After the sale of the majority interest in Wagz, SigmaTron expects to file on a standalone basis and utilize its U.S. deferred tax assets with the exception of the capital loss on sale, its investment in subsidiary, and certain foreign tax credits. The Company has established a valuation allowance of $ 7,258,454 on its U.S. capital loss, its investment in subsidiary, and foreign tax credit carryforwards. The Company has also established a valuation allowance of $ 284,968 on NOLs attributable to its Vietnam subsidiary as of July 31, 2023. Based on historical losses and forecasted future earnings, the Company has determined that the tax benefit from such assets are not more likely than not to be realized. The Company’s valuation allowance was $ 7,543,422 and $ 7,703,517 as of July 31, 2023 and April 30, 2023, respectively. The Company has not changed its plans to indefinitely reinvest the earnings of the Company’s foreign subsidiaries. The cumulative amount of unremitted earnings for which U.S. income taxes have not been recorded is $ 13,878,000 as of July 31, 2023. |
Commitments And Contingencies
Commitments And Contingencies | 3 Months Ended |
Jul. 31, 2023 | |
Commitments And Contingencies [Abstract] | |
Commitments And Contingencies | Note G - Commitments and Contingencies From time to time the Company is 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 management’s assessment of the merits of any 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, results of operations or cash flows. |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Jul. 31, 2023 | |
Significant Accounting Policies [Abstract] | |
Significant Accounting Policies | Note H - Significant Accounting Policies Management Estimates and Uncertainties - The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) 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 credit losses, excess and obsolete reserves for inventory, deferred income, deferred taxes, uncertain tax positions, valuation allowance for deferred taxes and valuation of goodwill and long-lived assets. Actual results could materially differ from these estimates. The potential impact of future disruptions and continued economic uncertainty over public health crises, including COVID-19 and variants, and the global supply chain may have a significant adverse impact on the timing of delivery of customer orders and the levels of future customer orders. It is possible that these potential adverse impacts may result in the recognition of material impairments of the Company’s long-lived assets or other related charges in future periods. Accounts Receivable - Accounts receivable is presented net of allowance for credit losses of $ 100,000 as of July 31, 2023 and April 30, 2023. The Company believes that its allowance for credit losses is adequate and represents its best estimate as of July 31, 2023. The Company continues to closely monitor customer liquidity along with industry and economic conditions, which may result in changes to its estimate. Revenue Recognition - The following table presents the Company’s revenue disaggregated by the principal end-user markets it serves: Three Months Ended July 31, July 31, Net trade sales by end-market 2023 2022 Industrial Electronics $ 67,875,530 $ 70,329,487 Consumer Electronics 22,657,886 28,515,328 Medical / Life Sciences 7,596,940 6,345,164 Total Net Trade Sales $ 98,130,356 $ 105,189,979 During the three month period ended July 31, 2023, no material revenues were recognized from performance obligations satisfied or partially satisfied in previous periods and no amounts were allocated to performance obligations that remain unsatisfied or partially unsatisfied at July 31, 2023. The Company is electing not to disclose the amount of the remaining unsatisfied performance obligations with a duration of one year or less. The Company had no material remaining unsatisfied performance obligations as of July 31, 2023, with an expected duration of greater than one year. Note H - Significant Accounting Policies - Continued Contract liabilities consist of payments received in advance of the transfer of control to the customer. As products are delivered and control transfers, the Company recognizes the deferred revenue in net sales in the Consolidated Statements of Operations. The following table summarizes the deferred revenue associated with payments received in advance of the transfer of control to the customer reported as deferred revenue in the Consolidated Balance Sheets and amounts recognized through net sales for each period presented. Three Months Ended July 31, July 31, 2023 2022 Contract liability (deferred revenue) beginning of period $ 8,063,197 $ 11,394,820 Deferred revenue recognized in period ( 4,996,715 ) ( 13,384,902 ) Revenue deferred in period 2,475,787 16,470,394 Deferred revenue end of period $ 5,542,269 $ 14,480,312 Income Tax - The Company’s income tax expense, deferred tax assets and liabilities and reserves for unrecognized tax benefits reflect management’s best assessment of estimated future taxes to be paid. The Company is subject to income taxes in both the U.S. and several foreign jurisdictions. Significant judgments and estimates by management are required in determining the consolidated income tax expense assessment. Deferred income tax assets and liabilities are determined based on differences between financial reporting and tax basis of assets and liabilities, and are measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. In evaluating the Company’s ability to recover its deferred tax assets within the jurisdiction from which they arise, the Company considers all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and recent financial operations. In projecting future taxable income, the Company begins with historical results and changes in accounting policies, and incorporates assumptions including the amount of future state, federal and foreign pre-tax operating income, the reversal of temporary differences, and the implementation of feasible and prudent tax planning strategies. These assumptions require significant judgment and estimates by management about the forecasts of future taxable income and are consistent with the plans and estimates the Company uses to manage the underlying businesses. In evaluating the objective evidence that historical results provide, the Company considers three years of cumulative operating income and/or loss. Valuation allowances are established when necessary to reduce deferred income tax assets to an amount more likely than not to be realized. SigmaTron and Wagz filed or are expected to file U.S. tax returns on a consolidated basis for periods during which Wagz was wholly owned. Therefore, a valuation allowance was previously established on the group’s U.S. deferred tax assets during fiscal year 2022. After the sale of Wagz, SigmaTron expects to file on a standalone basis and utilize its U.S. deferred tax assets with the exception of the capital loss on sale and certain foreign tax credits. The Company has established a valuation allowance of $ 7,258,454 on its U.S. capital loss and foreign tax credit carryforwards and a valuation allowance of $ 284,968 on certain foreign loss carryforwards as of July 31, 2023. Note H - Significant Accounting Policies - Continued Impairment of Long-Lived Assets - The Company reviews long-lived assets, including amortizable intangible assets, for impairment in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 360: Property, Plant and Equipment . Property, machinery and equipment and finite life intangible assets are reviewed whenever events or changes in circumstances occur that indicate possible impairment. If events or changes in circumstances occur that indicate possible impairment, the Company first performs an impairment review based on an undiscounted cash flow analysis at the lowest level at which cash flows of the long-lived assets are largely independent of other groups of its assets and liabilities. This analysis requires management judgment with respect to changes in technology, the continued success of product lines, and future volume, revenue and expense growth rates. If the carrying value exceeds the undiscounted cash flows, the Company records an impairment, if any, for the difference between the estimated fair value of the asset group and its carrying value. The Company further conducts annual reviews of its long-lived asset groups for possible impairment. During the third quarter of fiscal 2023, the Company revised the financial outlook for the Pet Tech segment, resulting in lower projected sales and net income for future periods. The Company assessed the overall market acceptance of the then current Wagz product offerings after the holiday season and determined that this constituted a triggering event for the Company’s long-lived asset groups, primarily consisting of patents, trade names and certain fixed assets. The Company reviewed the undiscounted future cash flows for the identified long-lived asset group, and the results of the analysis indicated the carrying amount for the long-lived group was not expected to be recovered. The fair value of the identified intangible assets was estimated using the relief from royalty method, which is a risk-adjusted discounted cash flow approach. The relief from royalty method values an intangible asset by estimating the royalties saved through ownership of the asset. The relief from royalty method requires identifying the future revenue that would be generated by the intangible asset, multiplying it by a royalty rate deemed to be avoided through ownership of the asset and discounting the projected royalty savings amounts back to the acquisition date using the internal rate of return. The Company determined the fair value of the long-lived asset group was lower than its carrying value and recorded an intangible asset impairment charge of $ 9,527,773 during the third quarter of fiscal 2023. This non-cash charge was recorded to impairment of goodwill and intangible assets on the unaudited condensed consolidated statements of operations as of January 31, 2023. As of April 30, 2023 this non-cash charge had been reported under discontinued operations. See Note K – Intangible Assets and Note M – Discontinued Operations, for more information. Goodwill - Goodwill represents the excess cost over fair value of the net assets of acquired businesses. The Company does not amortize goodwill and intangible assets that have indefinite lives. The Company performs an impairment assessment of goodwill and intangible assets with indefinite lives annually, or more frequently if triggering events occur, based on the estimated fair value of the related reporting unit or intangible asset. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. When performing its annual impairment assessment as of April 30, the Company evaluates the goodwill assigned to each of its reporting units for potential impairment by comparing the estimated fair value of the relevant reporting unit to the carrying value. The Company uses various Level 2 and Level 3 Note H - Significant Accounting Policies - Continued valuation techniques to determine the fair value of its reporting units, including discounting estimated future cash flows based on a cash flow forecast prepared by the relevant reporting unit and market multiples of relevant public companies. If the fair value of a reporting unit is less than its carrying value, a goodwill impairment loss is recorded for the difference. The Company observed during the third quarter of fiscal 2023, the overall lack of market acceptance of the then current Wagz product offerings during the holiday season and determined this constituted a triggering event. Accordingly, the Company performed a quantitative goodwill impairment test and estimated the fair value of the Pet Tech segment based on a combination of an income approach (estimates of future discounted cash flows), a market approach (market multiples for similar companies) and a cost approach. Significant unobservable inputs and assumptions inherent in the valuation methodologies, which represented Level 3 inputs, under the fair value hierarchy, were employed and included, but were not limited to, prospective financial information, terminal value assumptions, discount rates, and multiples from comparable publicly traded companies in the Pet Tech industry. The cost approach is based on upon the concept of replacement cost as an indicator of value. Stated another way, this approach is premised on the assumption that a prudent investor would pay no more for an asset than the amount for which the asset could be replaced. The cost approach establishes value based on the cost reproducing or replacing the property, less depreciation from physical deterioration and functional obsolescence, if present and measurable. During the third quarter of fiscal 2023, the Company determined its goodwill was fully impaired as the fair value was lower than the carrying value and recorded an impairment charge of $ 13,320,534 . This non-cash charge was recorded to impairment of goodwill and intangible assets on the unaudited condensed consolidated statements of operations during the quarter ended January 31, 2023. Note H - Significant Accounting Policies - Continued New Accounting Standards: In June 2016, the FASB issued ASU No. 2016-13, “ Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments .” ASU 2016-13, as amended by ASU 2019-04 and ASU 2019-05, that introduces a new forward-looking approach, based on expected losses, to estimate credit losses on certain types of financial instruments, including trade receivables. The estimate of expected credit losses will require entities to incorporate considerations of historical information, current information and reasonable and supportable forecasts. This ASU also expands the disclosure requirements to enable users of financial statements to understand the entity’s assumptions, models and methods for estimating expected credit losses. For smaller reporting companies, ASU 2016- 13 is effective for annual and interim reporting periods beginning after December 15, 2022, and the guidance is to be applied using the modified-retrospective approach. Earlier adoption is permitted. The Company adopted this ASU in the first quarter ended July 31, 2023 and it had no material impact on the consolidated financial statements. In March 2020, the FASB issued ASU 2020-04, “ Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting ”, which provides optional expedients and exceptions for a period of time to ease the potential burden in accounting for the transition from reference rates that are expected to be discontinued. Regulators and market participants in various jurisdictions have undertaken efforts to eliminate certain reference rates and introduce new reference rates that are based on a larger and more liquid population of observable transactions. The amendments in this update apply only to contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The expedients and exceptions provided by the amendments do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022, except for hedging relationships existing as of December 31, 2022, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship. In January 2021, the FASB issued clarification on the scope of relief related to the reference rate reform. In December 2022, the FASB extended the period of time entities can use the reference rate reform relief guidance by two years which defers the sunset date from December 31, 2022 to December 31, 2024. The Company adopted this ASU in fiscal 2023 and it had no impact on its consolidated financial statements . |
Leases
Leases | 3 Months Ended |
Jul. 31, 2023 | |
Leases [Abstract] | |
Leases | Note I – Leases The Company leases office and storage space, vehicles and other equipment under non-cancellable operating leases with initial terms typically ranging from 1 to 5 years. At contract inception, the Company reviews the facts and circumstances of the arrangement to determine if the contract is or contains a lease. The Company follows the guidance in Topic 842 to evaluate whether the contract has an identified asset; if the Company has the right to obtain substantially all economic benefits from the asset; and if the Company has the right to direct the use of the underlying asset. When determining if a contract has an identified asset, the Company considers both explicit and implicit assets, and whether the supplier has the right to substitute the asset. When determining if the Company has the right to direct the use of an underlying asset, the Company considers if it has the right to direct how and for what purpose the asset is used throughout the period of use and if it controls the decision-making rights over the asset. The Company’s lease terms may include options to extend or terminate the lease. The Company exercises judgment to determine the term of those leases when extension or termination options are present and includes such options in the calculation of the lease term when it is reasonably certain that it will exercise those options. The Company has elected to include both lease and non-lease components in the determination of lease payments. Payments made to a lessor for items such as taxes, insurance, common area maintenance, or other costs commonly referred to as executory costs, are also included in lease payments if they are fixed. The fixed portion of these payments are included in the calculation of the lease liability, while any variable portion would be recognized as variable lease expenses, when incurred. Variable payments made to third parties for these, or similar costs, such as utilities, are not included in the calculation of lease payments. At commencement, lease-related assets and liabilities are measured at the present value of future lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company exercises judgment in determining the incremental borrowing rate based on the information available when the lease commences to measure the present value of future payments. Operating lease expense is recognized on a straight-line basis over the lease term. Finance lease cost includes amortization, which is recognized on a straight-line basis over the expected life of the leased asset, and interest expense, which is recognized following an effective interest rate method. Operating leases are included in other assets, current operating lease obligations, and operating lease obligations (less current portion) on the Company’s Consolidated Balance Sheet. Finance leases are included in property, plant and equipment and current and long-term portion of finance lease obligations on the Company’s Consolidated Balance Sheet. Short term leases with an initial term of 12 months or less are not presented on the balance sheet with expense recognized as incurred. Note I – Leases – Continued The following table presents lease assets and liabilities and their balance sheet classification: July 31, April 30, Classification 2023 2023 Operating Leases: Right-of-use Assets Right-of-use assets $ 6,424,222 $ 7,225,423 Operating lease current liabilities Current portion of operating lease obligations 2,740,678 2,908,213 Operating lease noncurrent liabilities Operating lease obligations, less current portion 4,111,504 4,723,867 Finance Leases: Right-of-use Assets Property, machinery and equipment 5,863,929 5,294,097 Finance lease current liabilities Current portion of finance lease obligations 1,821,641 1,523,259 Finance lease noncurrent liabilities Finance lease obligations, less current portion 2,902,042 2,596,178 The components of lease expense for the three month periods ended July 31, 2023 and 2022, are as follows: Three Months Three Months Ended Ended Expense July 31, July 31, Classification 2023 2022 Operating Leases: Operating lease cost Operating 895,469 623,811 Variable lease cost Operating 56,900 54,815 Short term lease cost Operating 2,250 2,250 Finance Leases: Amortization of right-of-use assets Operating 640,847 571,103 Interest expense Interest 119,686 63,614 Total 1,715,152 1,315,593 Note I – Leases – Continued The weighted average lease term and discount rates for the quarters ended July 31, 2023 and 2022, are as follows: July 31, July 31, 2023 2022 Operating Leases: Weighted average remaining lease term (months) 34.57 43.42 Weighted average discount rate 3.4 % 3.2 % Finance Leases: Weighted average remaining lease term (months) 32.51 36.35 Weighted average discount rate 9.8 % 9.5 % Future payments due under leases reconciled to lease liabilities are as follows: Operating Leases Finance Leases For the remaining 9 months of the fiscal year ending April 30: 2024 $ 2,219,127 $ 1,625,031 For the fiscal years ending April 30: 2025 2,445,223 1,985,274 2026 1,920,820 1,318,005 2027 343,006 488,060 2028 74,382 - 2029 75,870 - Thereafter 57,848 - Total undiscounted lease payments 7,136,276 5,416,370 Present value discount, less interest 284,094 692,687 Lease liability $ 6,852,182 $ 4,723,683 Note I – Leases – Continued Supplemental disclosures of cash flow information related to leases for the three months ended July 31, 2023 and 2022 are as follows: Three Months Ended July 31, July 31, Other Information 2023 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from finance leases 119,686 63,614 Operating cash flows from operating leases 61,121 86,633 Financing cash flows from finance leases 428,105 353,258 Supplemental non-cash information on lease liabilities arising from obtaining right-of-use assets: Right-of-use assets obtained in exchange for new finance lease liabilities 1,032,351 825,826 Right-of-use assets obtained in exchange for operating lease liabilities 1,531 756,380 |
Acquisition And Disposition
Acquisition And Disposition | 3 Months Ended |
Jul. 31, 2023 | |
Acquisition And Disposition [Abstract] | |
Acquisition And Disposition | Note J – Disposition During the fourth quarter of fiscal 2023, the Company exited its active involvement in the Pet Tech business that is conducted by Wagz through the sale of a majority stake in Wagz, effective as of April 1, 2023. The Company entered into the SPA with Wagz, Buyer and Anderton, pursuant to which the Company sold to Buyer 81 % of Wagz common stock for the purchase price of one dollar. Under the SPA, the Company also agreed to provide a Wagz Loan to Wagz during the month of April 2023. The Company agreed to work with Wagz as an EMS provider pursuant to a manufacturing agreement, but the Company did not commit to extending any further financial support beyond the Wagz Loan. On April 28, 2023, the sale of the majority interest in Wagz pursuant to the SPA was consummated with effect as of April 1, 2023, and as a result, as of the closing, the Company holds a minority 19 % ownership of Wagz common stock and Buyer holds a majority 81 % of Wagz common stock. See Note M – Discontinued Operations, for more information. |
Intangible Assets
Intangible Assets | 3 Months Ended |
Jul. 31, 2023 | |
Intangible Assets [Abstract] | |
Intangible Assets | Note K – Intangible Assets Intangible assets subject to amortization are summarized as of July 31, 2023 as follows: July 31,2023 Gross Carrying Accumulated Net Intangible Amount Amortization Asset Balance Spitfire: Non-contractual customer relationship 4,690,000 3,462,385 1,227,615 Total $ 4,690,000 $ 3,462,385 $ 1,227,615 Intangible assets subject to amortization are summarized as of April 30, 2023 as follows: April 30, 2023 Gross Carrying Accumulated Impairment Write Off Net Intangible Amount Amortization Amount Amount Asset Balance Spitfire: Non-contractual customer relationship 4,690,000 3,378,970 - - 1,311,030 Wagz: Trade name 1,230,000 68,380 813,960 347,660 - Patents 9,730,000 586,313 8,713,813 429,874 - Total $ 15,650,000 $ 4,033,663 $ 9,527,773 $ 777,534 $ 1,311,030 Estimated aggregate amortization expense for the Company’s intangible assets, which become fully amortized in 2028 , for the remaining periods as of July 31, 2023, are as follows: For the remaining 9 months of the fiscal year ending April 30: 2024 $ 248,427 For the fiscal years ending April 30: 2025 324,702 2026 317,728 2027 310,900 2028 25,858 $ 1,227,615 Amortization expense was $ 83,415 and $ 85,248 for the three month periods ended July 31, 2023 and July 31, 2022, respectively. |
Segment And Geographic Area Inf
Segment And Geographic Area Information | 3 Months Ended |
Jul. 31, 2023 | |
Segment And Geographic Area Information [Abstract] | |
Segment And Geographic Area Information | Note L – Segment and Geographic Area Information The Company’s reportable segments are strategic business units that offer different products and services. They are managed separately because each business requires different technology and marketing strategies. Separate financial information is regularly evaluated by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources. For the Company, the CODM is the Company’s Chief Executive Officer. The EMS reportable segment includes printed circuit board assemblies, electro-mechanical subassemblies and completely assembled (box-build) electronic products. In connection with the production of assembled products, the EMS segment provides services to its customers, including (1) automatic and manual assembly and testing of products; (2) material sourcing and procurement; (3) manufacturing and test engineering support; (4) design services; (5) warehousing and distribution services; (6) assistance in obtaining product approval from governmental and other regulatory bodies and (7) compliance reporting. The EMS segment produces the Freedom Smart Dog Collar™ sold by the Pet Tech segment. The Pet Tech reportable segment offered electronic products such as the Freedom Smart Dog Collar™, a wireless geo-mapped fence and wellness system, along with apparel and accessories. The majority of the Pet Tech Segment was sold, effective as of April 1, 2023. The results for the Pet Tech Segment are reported as discontinued operations for the three month period ended July 31, 2022. The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies in Note-A Description of the Business. The CODM allocates resources to and evaluates the performance of each operating segment based on operating income. Note L – Segment and Geographic Area Information – Continued The tables below present information about the Company’s reportable segments for the three month periods ended July 31, 2023 and July 31, 2022. Three Months Ended July 31, 2023 EMS Pet Tech Segment Segment Consolidated Net sales $ 98,130,356 $ - $ 98,130,356 Operating income 2,808,415 - 2,808,415 Other income 18,627 Interest expense, net ( 2,719,078 ) Income before income taxes $ 107,964 Depreciation and amortization of property, machinery and equipment 1,496,034 - 1,496,034 Amortization of intangible assets 83,415 - 83,415 Identifiable assets $ 259,835,108 $ - $ 259,835,108 Three Months Ended July 31, 2022 EMS Pet Tech Segment Segment Consolidated Net sales (1)(2) $ 105,189,979 $ 382,877 $ 105,572,856 Operating income (loss) 5,047,378 ( 2,223,561 ) 2,823,817 Other income 35,816 Interest expense, net ( 953,558 ) Income before income taxes $ 1,906,075 Depreciation and amortization of property, machinery and equipment 1,457,220 18,653 1,475,873 Amortization of intangible assets 85,248 150,514 235,762 Identifiable assets $ 292,367,580 $ 23,685,666 $ 316,053,246 (1) The EMS segment manufactures products sold to the Pet Tech segment. Related intersegment sales of $ 83,516 have been eliminated. (2) The results for the Pet Tech Segment are reported as discontinued operations for the three month period ended July 31, 2022. Note L – Segment and Geographic Area Information – Continued The following tables set forth net sales from continuing operations and tangible long-lived assets by geographic area where the Company operates. Tangible long-lived assets include property, machinery and equipment and operating lease assets. Three Months Ended July 31, July 31, 2023 2022 Net sales: U.S. $ 32,732,166 $ 25,507,752 China 8,912,301 13,592,386 Vietnam 1,990,374 3,592,644 Mexico 54,495,515 62,497,197 Total net sales $ 98,130,356 $ 105,189,979 July 31, April 30, 2023 2023 Tangible long-lived assets, net: U.S. $ 19,330,218 $ 20,371,298 China 4,032,792 4,212,780 Mexico 18,210,501 17,574,899 Other 754,028 854,803 Total tangible long-lived assets, net $ 42,327,539 $ 43,013,780 |
Discontinued Operations
Discontinued Operations | 3 Months Ended |
Jul. 31, 2023 | |
Discontinued Operations [Abstract] | |
Discontinued Operations | Note M – Discontinued Operations During the fourth quarter of fiscal 2023, the Company exited its active involvement in the Pet Tech business that is conducted by Wagz through the sale by the Company of a majority stake in Wagz, effective as of April 1, 2023. The Company entered into the SPA with Wagz, Buyer and Anderton, pursuant to which the Company sold to Buyer 81 % of Wagz common stock for the purchase price of one dollar. Under the SPA, the Company also agreed to provide a Wagz Loan to Wagz during the month of April 2023. The Company agreed to work with Wagz as an EMS provider pursuant to a manufacturing agreement, but the Company did not commit to extending any further financial support beyond the Wagz Loan. On April 28, 2023, the sale of the majority interest in Wagz pursuant to the SPA was consummated with effect as of April 1, 2023, and as a result, as of the closing, the Company holds a minority 19 % ownership of Wagz common stock and Buyer holds a majority 81 % of Wagz common stock. In accordance with ASC 205-20 Presentation of Financial Statements: Discontinued Operations, a disposal of a component of an entity or a group of components of an entity is required to be reported as discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results when the component of an entity meets the criteria in paragraph 205-20-45-10. In the period in which the component meets discontinued operations criteria the major current assets, other assets, current liabilities, and noncurrent liabilities shall be reported as Note M – Discontinued Operations – Continued components of total assets and liabilities separate from those balances of the continuing operations. At the same time, the results of all discontinued operations, less applicable income taxes (benefit), shall be reported as components of net income (loss) separate from the net income (loss) of continuing operations. Pet Tech Segment (Wagz Business) The following amounts related to the Pet Tech Segment (Wagz Business) have been segregated from the Company’s continuing operations and are reported as discontinued operations: Three months ended July 31, 2023 2022 Net Sales $ - $ 382,877 Cost of products sold - 275,062 Gross profit - 107,815 Selling and administrative expenses - 2,331,376 Operating loss - ( 2,223,561 ) Loss before income taxes from discontinued operations - ( 2,223,561 ) Income tax benefit - 478,896 Loss from discontinued operations $ - $ ( 1,744,665 ) |
Significant Accounting Polici_2
Significant Accounting Policies (Policy) | 3 Months Ended |
Jul. 31, 2023 | |
Significant Accounting Policies [Abstract] | |
Management Estimates And Uncertainties | Management Estimates and Uncertainties - The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) 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 credit losses, excess and obsolete reserves for inventory, deferred income, deferred taxes, uncertain tax positions, valuation allowance for deferred taxes and valuation of goodwill and long-lived assets. Actual results could materially differ from these estimates. The potential impact of future disruptions and continued economic uncertainty over public health crises, including COVID-19 and variants, and the global supply chain may have a significant adverse impact on the timing of delivery of customer orders and the levels of future customer orders. It is possible that these potential adverse impacts may result in the recognition of material impairments of the Company’s long-lived assets or other related charges in future periods. |
Accounts Receivable | Accounts Receivable - Accounts receivable is presented net of allowance for credit losses of $ 100,000 as of July 31, 2023 and April 30, 2023. The Company believes that its allowance for credit losses is adequate and represents its best estimate as of July 31, 2023. The Company continues to closely monitor customer liquidity along with industry and economic conditions, which may result in changes to its estimate. |
Revenue Recognition | Revenue Recognition - The following table presents the Company’s revenue disaggregated by the principal end-user markets it serves: Three Months Ended July 31, July 31, Net trade sales by end-market 2023 2022 Industrial Electronics $ 67,875,530 $ 70,329,487 Consumer Electronics 22,657,886 28,515,328 Medical / Life Sciences 7,596,940 6,345,164 Total Net Trade Sales $ 98,130,356 $ 105,189,979 During the three month period ended July 31, 2023, no material revenues were recognized from performance obligations satisfied or partially satisfied in previous periods and no amounts were allocated to performance obligations that remain unsatisfied or partially unsatisfied at July 31, 2023. The Company is electing not to disclose the amount of the remaining unsatisfied performance obligations with a duration of one year or less. The Company had no material remaining unsatisfied performance obligations as of July 31, 2023, with an expected duration of greater than one year. Note H - Significant Accounting Policies - Continued Contract liabilities consist of payments received in advance of the transfer of control to the customer. As products are delivered and control transfers, the Company recognizes the deferred revenue in net sales in the Consolidated Statements of Operations. The following table summarizes the deferred revenue associated with payments received in advance of the transfer of control to the customer reported as deferred revenue in the Consolidated Balance Sheets and amounts recognized through net sales for each period presented. Three Months Ended July 31, July 31, 2023 2022 Contract liability (deferred revenue) beginning of period $ 8,063,197 $ 11,394,820 Deferred revenue recognized in period ( 4,996,715 ) ( 13,384,902 ) Revenue deferred in period 2,475,787 16,470,394 Deferred revenue end of period $ 5,542,269 $ 14,480,312 |
Income Tax | Income Tax - The Company’s income tax expense, deferred tax assets and liabilities and reserves for unrecognized tax benefits reflect management’s best assessment of estimated future taxes to be paid. The Company is subject to income taxes in both the U.S. and several foreign jurisdictions. Significant judgments and estimates by management are required in determining the consolidated income tax expense assessment. Deferred income tax assets and liabilities are determined based on differences between financial reporting and tax basis of assets and liabilities, and are measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. In evaluating the Company’s ability to recover its deferred tax assets within the jurisdiction from which they arise, the Company considers all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and recent financial operations. In projecting future taxable income, the Company begins with historical results and changes in accounting policies, and incorporates assumptions including the amount of future state, federal and foreign pre-tax operating income, the reversal of temporary differences, and the implementation of feasible and prudent tax planning strategies. These assumptions require significant judgment and estimates by management about the forecasts of future taxable income and are consistent with the plans and estimates the Company uses to manage the underlying businesses. In evaluating the objective evidence that historical results provide, the Company considers three years of cumulative operating income and/or loss. Valuation allowances are established when necessary to reduce deferred income tax assets to an amount more likely than not to be realized. SigmaTron and Wagz filed or are expected to file U.S. tax returns on a consolidated basis for periods during which Wagz was wholly owned. Therefore, a valuation allowance was previously established on the group’s U.S. deferred tax assets during fiscal year 2022. After the sale of Wagz, SigmaTron expects to file on a standalone basis and utilize its U.S. deferred tax assets with the exception of the capital loss on sale and certain foreign tax credits. The Company has established a valuation allowance of $ 7,258,454 on its U.S. capital loss and foreign tax credit carryforwards and a valuation allowance of $ 284,968 on certain foreign loss carryforwards as of July 31, 2023. |
Impairment Of Long-Lived Assets | Note H - Significant Accounting Policies - Continued Impairment of Long-Lived Assets - The Company reviews long-lived assets, including amortizable intangible assets, for impairment in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 360: Property, Plant and Equipment . Property, machinery and equipment and finite life intangible assets are reviewed whenever events or changes in circumstances occur that indicate possible impairment. If events or changes in circumstances occur that indicate possible impairment, the Company first performs an impairment review based on an undiscounted cash flow analysis at the lowest level at which cash flows of the long-lived assets are largely independent of other groups of its assets and liabilities. This analysis requires management judgment with respect to changes in technology, the continued success of product lines, and future volume, revenue and expense growth rates. If the carrying value exceeds the undiscounted cash flows, the Company records an impairment, if any, for the difference between the estimated fair value of the asset group and its carrying value. The Company further conducts annual reviews of its long-lived asset groups for possible impairment. During the third quarter of fiscal 2023, the Company revised the financial outlook for the Pet Tech segment, resulting in lower projected sales and net income for future periods. The Company assessed the overall market acceptance of the then current Wagz product offerings after the holiday season and determined that this constituted a triggering event for the Company’s long-lived asset groups, primarily consisting of patents, trade names and certain fixed assets. The Company reviewed the undiscounted future cash flows for the identified long-lived asset group, and the results of the analysis indicated the carrying amount for the long-lived group was not expected to be recovered. The fair value of the identified intangible assets was estimated using the relief from royalty method, which is a risk-adjusted discounted cash flow approach. The relief from royalty method values an intangible asset by estimating the royalties saved through ownership of the asset. The relief from royalty method requires identifying the future revenue that would be generated by the intangible asset, multiplying it by a royalty rate deemed to be avoided through ownership of the asset and discounting the projected royalty savings amounts back to the acquisition date using the internal rate of return. The Company determined the fair value of the long-lived asset group was lower than its carrying value and recorded an intangible asset impairment charge of $ 9,527,773 during the third quarter of fiscal 2023. This non-cash charge was recorded to impairment of goodwill and intangible assets on the unaudited condensed consolidated statements of operations as of January 31, 2023. As of April 30, 2023 this non-cash charge had been reported under discontinued operations. See Note K – Intangible Assets and Note M – Discontinued Operations, for more information. |
Goodwill | Goodwill - Goodwill represents the excess cost over fair value of the net assets of acquired businesses. The Company does not amortize goodwill and intangible assets that have indefinite lives. The Company performs an impairment assessment of goodwill and intangible assets with indefinite lives annually, or more frequently if triggering events occur, based on the estimated fair value of the related reporting unit or intangible asset. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. When performing its annual impairment assessment as of April 30, the Company evaluates the goodwill assigned to each of its reporting units for potential impairment by comparing the estimated fair value of the relevant reporting unit to the carrying value. The Company uses various Level 2 and Level 3 Note H - Significant Accounting Policies - Continued valuation techniques to determine the fair value of its reporting units, including discounting estimated future cash flows based on a cash flow forecast prepared by the relevant reporting unit and market multiples of relevant public companies. If the fair value of a reporting unit is less than its carrying value, a goodwill impairment loss is recorded for the difference. The Company observed during the third quarter of fiscal 2023, the overall lack of market acceptance of the then current Wagz product offerings during the holiday season and determined this constituted a triggering event. Accordingly, the Company performed a quantitative goodwill impairment test and estimated the fair value of the Pet Tech segment based on a combination of an income approach (estimates of future discounted cash flows), a market approach (market multiples for similar companies) and a cost approach. Significant unobservable inputs and assumptions inherent in the valuation methodologies, which represented Level 3 inputs, under the fair value hierarchy, were employed and included, but were not limited to, prospective financial information, terminal value assumptions, discount rates, and multiples from comparable publicly traded companies in the Pet Tech industry. The cost approach is based on upon the concept of replacement cost as an indicator of value. Stated another way, this approach is premised on the assumption that a prudent investor would pay no more for an asset than the amount for which the asset could be replaced. The cost approach establishes value based on the cost reproducing or replacing the property, less depreciation from physical deterioration and functional obsolescence, if present and measurable. During the third quarter of fiscal 2023, the Company determined its goodwill was fully impaired as the fair value was lower than the carrying value and recorded an impairment charge of $ 13,320,534 . This non-cash charge was recorded to impairment of goodwill and intangible assets on the unaudited condensed consolidated statements of operations during the quarter ended January 31, 2023. |
New Accounting Standards | New Accounting Standards: In June 2016, the FASB issued ASU No. 2016-13, “ Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments .” ASU 2016-13, as amended by ASU 2019-04 and ASU 2019-05, that introduces a new forward-looking approach, based on expected losses, to estimate credit losses on certain types of financial instruments, including trade receivables. The estimate of expected credit losses will require entities to incorporate considerations of historical information, current information and reasonable and supportable forecasts. This ASU also expands the disclosure requirements to enable users of financial statements to understand the entity’s assumptions, models and methods for estimating expected credit losses. For smaller reporting companies, ASU 2016- 13 is effective for annual and interim reporting periods beginning after December 15, 2022, and the guidance is to be applied using the modified-retrospective approach. Earlier adoption is permitted. The Company adopted this ASU in the first quarter ended July 31, 2023 and it had no material impact on the consolidated financial statements. In March 2020, the FASB issued ASU 2020-04, “ Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting ”, which provides optional expedients and exceptions for a period of time to ease the potential burden in accounting for the transition from reference rates that are expected to be discontinued. Regulators and market participants in various jurisdictions have undertaken efforts to eliminate certain reference rates and introduce new reference rates that are based on a larger and more liquid population of observable transactions. The amendments in this update apply only to contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The expedients and exceptions provided by the amendments do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022, except for hedging relationships existing as of December 31, 2022, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship. In January 2021, the FASB issued clarification on the scope of relief related to the reference rate reform. In December 2022, the FASB extended the period of time entities can use the reference rate reform relief guidance by two years which defers the sunset date from December 31, 2022 to December 31, 2024. The Company adopted this ASU in fiscal 2023 and it had no impact on its consolidated financial statements |
Inventories, Net (Tables)
Inventories, Net (Tables) | 3 Months Ended |
Jul. 31, 2023 | |
Inventories, Net [Abstract] | |
Components Of Inventory | July 31, April 30, 2023 2023 Finished products $ 18,904,503 $ 22,093,018 Work-in-process 5,739,599 5,415,917 Raw materials 137,785,867 142,612,325 162,429,969 170,121,260 Less excess and obsolescence reserve ( 3,967,696 ) ( 4,566,061 ) $ 158,462,273 $ 165,555,199 |
Earnings Per Share And Stockh_2
Earnings Per Share And Stockholders' Equity (Tables) | 3 Months Ended |
Jul. 31, 2023 | |
Earnings Per Share And Stockholders' Equity [Abstract] | |
Computation Of Basic And Diluted Earnings Per Share | Three Months Ended July 31, July 31, 2023 2022 Net income from continuing operations $ 262,099 $ 3,121,340 Net loss from discontinued operations - ( 1,744,665 ) Total net income 262,099 1,376,675 Weighted-average shares Basic 6,091,288 6,058,908 Effect of dilutive stock options 8,996 132,487 Diluted 6,100,284 6,191,395 Basic (loss) earnings per common share Basic earnings per share from continuing operations 0.04 0.52 Basic loss per share from discontinued operations - ( 0.29 ) Basic total earnings per share $ 0.04 $ 0.23 Diluted (loss) earnings per common share Diluted earnings per share from continuing operations 0.04 0.50 Diluted loss per share from discontinued operations - ( 0.28 ) Diluted total earnings per share $ 0.04 $ 0.22 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Jul. 31, 2023 | |
Long-Term Debt [Abstract] | |
Schedule Of Debt And Finance Lease Obligations | July 31, April 30, 2023 2023 Debt: Notes Payable - Secured lenders $ 84,990,885 $ 90,968,000 Notes Payable - Buildings 404,771 417,143 Notes Payable - Equipment 4,029,326 3,524,115 Unamortized deferred financing costs ( 1,871,755 ) ( 1,608,558 ) Total debt 87,553,227 93,300,700 Less current maturities* 46,980,450 52,761,520 Long-term debt $ 40,572,777 $ 40,539,180 Finance lease obligations $ 4,723,683 $ 4,119,437 Less current maturities 1,821,641 1,523,259 Total finance lease obligations, less current portion $ 2,902,042 $ 2,596,178 * Due to availability being less than 10 % of the Revolving Commitment, the Facility (as defined below) has been classified as a current liability on the Consolidated Balance Sheet at July 31, 2023 and April 30, 2023. |
Schedule Of Debt To EBITDA Ratio | Fiscal Quarter Total Debt to EBITDA Ratio* (as amended) Total Debt to EBITDA Ratio* (prior to amendment) October 31,2023 4.50 :1.0 4.25 :1.0 January 31, 2024 4.50 :1.0 4.00 :1.0 April 30, 2024 4.50 :1.0 4.00 :1.0 July 31, 2024 4.25 :1.0 3.75 :1.0 October 31, 2024 4.00 :1.0 3.75 :1.0 * Assumes the T erm Loan Borrowing Base Coverage Ratio (as defined in the Credit Agreements) is less than or equal to 1.50 :1.0. |
Aggregate Amount Of Debt, Net Deferred Financing Fees | Secured lenders Building Equipment Total For the remaining 9 months of the fiscal year ending April 30: 2024 $ 45,394,106 $ 38,199 $ 900,945 $ 46,333,250 For the fiscal years ending April 30: 2025 1,467,036 53,557 1,335,736 2,856,329 2026 1,717,036 56,719 987,526 2,761,281 2027 1,717,036 60,068 454,913 2,232,017 2028 32,823,916 63,614 249,932 33,137,462 2029 - 132,614 100,274 232,888 $ 83,119,130 $ 404,771 $ 4,029,326 $ 87,553,227 * Due to availability being less than 10% of the Revolving Commitment, the Facility (as defined above) has been classified as a current liability on the Consolidated Balance Sheet at July 31, 2023. The maturity date of both the Facility and the TCW Term Loan is July 18, 2027 with an outstanding balance of $ 83,119,130 . |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 3 Months Ended |
Jul. 31, 2023 | |
Significant Accounting Policies [Abstract] | |
Revenue Disaggregated By Principal End-User Markets | Three Months Ended July 31, July 31, Net trade sales by end-market 2023 2022 Industrial Electronics $ 67,875,530 $ 70,329,487 Consumer Electronics 22,657,886 28,515,328 Medical / Life Sciences 7,596,940 6,345,164 Total Net Trade Sales $ 98,130,356 $ 105,189,979 |
Summary Of Deferred Revenue | Three Months Ended July 31, July 31, 2023 2022 Contract liability (deferred revenue) beginning of period $ 8,063,197 $ 11,394,820 Deferred revenue recognized in period ( 4,996,715 ) ( 13,384,902 ) Revenue deferred in period 2,475,787 16,470,394 Deferred revenue end of period $ 5,542,269 $ 14,480,312 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Jul. 31, 2023 | |
Leases [Abstract] | |
Lease Assets And Liabilities Related To Balance Sheet Classification | July 31, April 30, Classification 2023 2023 Operating Leases: Right-of-use Assets Right-of-use assets $ 6,424,222 $ 7,225,423 Operating lease current liabilities Current portion of operating lease obligations 2,740,678 2,908,213 Operating lease noncurrent liabilities Operating lease obligations, less current portion 4,111,504 4,723,867 Finance Leases: Right-of-use Assets Property, machinery and equipment 5,863,929 5,294,097 Finance lease current liabilities Current portion of finance lease obligations 1,821,641 1,523,259 Finance lease noncurrent liabilities Finance lease obligations, less current portion 2,902,042 2,596,178 |
Components Of Lease Expense | Three Months Three Months Ended Ended Expense July 31, July 31, Classification 2023 2022 Operating Leases: Operating lease cost Operating 895,469 623,811 Variable lease cost Operating 56,900 54,815 Short term lease cost Operating 2,250 2,250 Finance Leases: Amortization of right-of-use assets Operating 640,847 571,103 Interest expense Interest 119,686 63,614 Total 1,715,152 1,315,593 |
Weighted Average Lease Term And Discount Rate | July 31, July 31, 2023 2022 Operating Leases: Weighted average remaining lease term (months) 34.57 43.42 Weighted average discount rate 3.4 % 3.2 % Finance Leases: Weighted average remaining lease term (months) 32.51 36.35 Weighted average discount rate 9.8 % 9.5 % |
Future Payments Due Under Operating And Finance Leases | Operating Leases Finance Leases For the remaining 9 months of the fiscal year ending April 30: 2024 $ 2,219,127 $ 1,625,031 For the fiscal years ending April 30: 2025 2,445,223 1,985,274 2026 1,920,820 1,318,005 2027 343,006 488,060 2028 74,382 - 2029 75,870 - Thereafter 57,848 - Total undiscounted lease payments 7,136,276 5,416,370 Present value discount, less interest 284,094 692,687 Lease liability $ 6,852,182 $ 4,723,683 |
Supplemental Cash Flow Information Related To Leases | Three Months Ended July 31, July 31, Other Information 2023 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from finance leases 119,686 63,614 Operating cash flows from operating leases 61,121 86,633 Financing cash flows from finance leases 428,105 353,258 Supplemental non-cash information on lease liabilities arising from obtaining right-of-use assets: Right-of-use assets obtained in exchange for new finance lease liabilities 1,032,351 825,826 Right-of-use assets obtained in exchange for operating lease liabilities 1,531 756,380 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Jul. 31, 2023 | |
Intangible Assets [Abstract] | |
Summary Of Intangible Assets Subject To Amortization | July 31,2023 Gross Carrying Accumulated Net Intangible Amount Amortization Asset Balance Spitfire: Non-contractual customer relationship 4,690,000 3,462,385 1,227,615 Total $ 4,690,000 $ 3,462,385 $ 1,227,615 Intangible assets subject to amortization are summarized as of April 30, 2023 as follows: April 30, 2023 Gross Carrying Accumulated Impairment Write Off Net Intangible Amount Amortization Amount Amount Asset Balance Spitfire: Non-contractual customer relationship 4,690,000 3,378,970 - - 1,311,030 Wagz: Trade name 1,230,000 68,380 813,960 347,660 - Patents 9,730,000 586,313 8,713,813 429,874 - Total $ 15,650,000 $ 4,033,663 $ 9,527,773 $ 777,534 $ 1,311,030 |
Estimated Aggregate Amortization Expense | For the remaining 9 months of the fiscal year ending April 30: 2024 $ 248,427 For the fiscal years ending April 30: 2025 324,702 2026 317,728 2027 310,900 2028 25,858 $ 1,227,615 |
Segment and Geographic Area I_2
Segment and Geographic Area Information (Tables) | 3 Months Ended |
Jul. 31, 2023 | |
Segment And Geographic Area Information [Abstract] | |
Schedule of Segment Reporting Information | Three Months Ended July 31, 2023 EMS Pet Tech Segment Segment Consolidated Net sales $ 98,130,356 $ - $ 98,130,356 Operating income 2,808,415 - 2,808,415 Other income 18,627 Interest expense, net ( 2,719,078 ) Income before income taxes $ 107,964 Depreciation and amortization of property, machinery and equipment 1,496,034 - 1,496,034 Amortization of intangible assets 83,415 - 83,415 Identifiable assets $ 259,835,108 $ - $ 259,835,108 Three Months Ended July 31, 2022 EMS Pet Tech Segment Segment Consolidated Net sales (1)(2) $ 105,189,979 $ 382,877 $ 105,572,856 Operating income (loss) 5,047,378 ( 2,223,561 ) 2,823,817 Other income 35,816 Interest expense, net ( 953,558 ) Income before income taxes $ 1,906,075 Depreciation and amortization of property, machinery and equipment 1,457,220 18,653 1,475,873 Amortization of intangible assets 85,248 150,514 235,762 Identifiable assets $ 292,367,580 $ 23,685,666 $ 316,053,246 (1) The EMS segment manufactures products sold to the Pet Tech segment. Related intersegment sales of $ 83,516 have been eliminated. (2) The results for the Pet Tech Segment are reported as discontinued operations for the three month period ended July 31, 2022. |
Schedule of Net Sales and Tangible Long-lived Assets by Geographical Areas | Three Months Ended July 31, July 31, 2023 2022 Net sales: U.S. $ 32,732,166 $ 25,507,752 China 8,912,301 13,592,386 Vietnam 1,990,374 3,592,644 Mexico 54,495,515 62,497,197 Total net sales $ 98,130,356 $ 105,189,979 July 31, April 30, 2023 2023 Tangible long-lived assets, net: U.S. $ 19,330,218 $ 20,371,298 China 4,032,792 4,212,780 Mexico 18,210,501 17,574,899 Other 754,028 854,803 Total tangible long-lived assets, net $ 42,327,539 $ 43,013,780 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 3 Months Ended |
Jul. 31, 2023 | |
Discontinued Operations [Abstract] | |
Discontinued Operations | Three months ended July 31, 2023 2022 Net Sales $ - $ 382,877 Cost of products sold - 275,062 Gross profit - 107,815 Selling and administrative expenses - 2,331,376 Operating loss - ( 2,223,561 ) Loss before income taxes from discontinued operations - ( 2,223,561 ) Income tax benefit - 478,896 Loss from discontinued operations $ - $ ( 1,744,665 ) |
Description Of The Business (Na
Description Of The Business (Narrative) (Details) - USD ($) | Apr. 01, 2023 | Mar. 31, 2023 | Apr. 30, 2023 |
Wagz Business Disposed [Member] | |||
Percentage of equity interest sold | 81% | 81% | |
Wagz [Member] | |||
Working capital term loan | $ 900,000 | ||
Investment in Wagz [Member] | |||
Equity method investment, ownership percentage | 19% | ||
Buyer [Member] | Investment in Wagz [Member] | |||
Equity method investment, ownership percentage | 81% |
Basis Of Presentation (Narrativ
Basis Of Presentation (Narrative) (Details) | Apr. 01, 2023 |
Investment in Wagz [Member] | |
Basis Of Presentation [Line Items] | |
Equity method investment, ownership percentage | 19% |
Inventories, Net (Components Of
Inventories, Net (Components Of Inventory) (Details) - USD ($) | Jul. 31, 2023 | Apr. 30, 2023 |
Inventories, Net [Abstract] | ||
Finished products | $ 18,904,503 | $ 22,093,018 |
Work-in-process | 5,739,599 | 5,415,917 |
Raw materials | 137,785,867 | 142,612,325 |
Total inventory, gross | 162,429,969 | 170,121,260 |
Less excess and obsolescence reserve | (3,967,696) | (4,566,061) |
Total inventory, net | $ 158,462,273 | $ 165,555,199 |
Earnings Per Share And Stockh_3
Earnings Per Share And Stockholders' Equity (Narrative) (Details) - USD ($) | 3 Months Ended | |
Jul. 31, 2023 | Jul. 31, 2022 | |
Earnings Per Share And Stockholders' Equity [Abstract] | ||
Options to purchase, common stock outstanding | 602,081 | 508,519 |
Options granted | 186,000 | 0 |
Stock option expense | $ 184,817 | $ 94,893 |
Unrecognized compensation expense | $ 530,502 | $ 1,034,531 |
Anti-dilutive common stock outstanding excluded from the calculation of diluted earnings per share | 379,493 | 0 |
Earnings Per Share And Stockh_4
Earnings Per Share And Stockholders' Equity (Computation Of Basic And Diluted Earnings Per Share) (Details) - USD ($) | 3 Months Ended | |
Jul. 31, 2023 | Jul. 31, 2022 | |
Earnings Per Share And Stockholders' Equity [Abstract] | ||
Net income from continuing operations | $ 262,099 | $ 3,121,340 |
Net loss from discontinued operations | (1,744,665) | |
Net income | $ 262,099 | $ 1,376,675 |
Weighted-average shares - Basic | 6,091,288 | 6,058,908 |
Weighted-average shares, Effect of dilutive stock options | 8,996 | 132,487 |
Diluted | 6,100,284 | 6,191,395 |
Basic earnings per share from continuing operations | $ 0.04 | $ 0.52 |
Basic loss per share from discontinued operations | (0.29) | |
Basic total earnings per share | 0.04 | 0.23 |
Diluted earnings per share from continuing operations | 0.04 | 0.50 |
Diluted loss per share from discontinued operations | (0.28) | |
Diluted total earnings per share | $ 0.04 | $ 0.22 |
Long-Term Debt (Narrative) (Det
Long-Term Debt (Narrative) (Details) | 3 Months Ended | ||||||||||||||||||
Apr. 01, 2023 | Mar. 31, 2023 | Feb. 17, 2023 | Jul. 18, 2022 USD ($) | Jan. 17, 2022 | Jan. 06, 2022 | Mar. 03, 2020 USD ($) | Oct. 31, 2024 USD ($) | Jul. 31, 2024 | Apr. 30, 2024 | Jan. 31, 2024 | Oct. 31, 2023 | Jul. 31, 2023 USD ($) | Oct. 31, 2022 USD ($) | Jul. 31, 2026 | Apr. 30, 2026 | Apr. 30, 2023 USD ($) | Jul. 31, 2022 USD ($) | Mar. 15, 2019 CNY (¥) | |
Wagz Business Disposed [Member] | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Percentage of equity interest sold | 81% | 81% | |||||||||||||||||
Waivers Agreement [Member] | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Applicable Margin Rate Fixed | 2% | ||||||||||||||||||
Forecast [Member] | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Total Debt to EBITDA Ratio | 4 | 4.25 | 4.50 | 4.50 | 4.50 | ||||||||||||||
TCW Term Loan [Member] | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Amendment fee | $ 395,000 | ||||||||||||||||||
Debt instrument default rate fee | $ 188,301 | ||||||||||||||||||
TCW Term Loan [Member] | Waivers Agreement [Member] | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Applicable Margin Rate Increase Per Annum | 1% | ||||||||||||||||||
TCW Term Loan [Member] | Notes Payable - Secured Lenders [Member] | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Loan | $ 40,000,000 | ||||||||||||||||||
Outstanding balance under the credit facility | $ 39,583,301 | $ 39,833,301 | |||||||||||||||||
Unamortized deferred financing costs | 1,108,277 | 1,036,367 | |||||||||||||||||
Deferred financing costs | $ 141,366 | 1,233,894 | |||||||||||||||||
Maturity date | Jul. 18, 2027 | ||||||||||||||||||
Debt Instrument, Periodic Payment | $ 250,000 | ||||||||||||||||||
Percentage of mandatory annual repayments | 50% | ||||||||||||||||||
Fixed charge coverage ratio | 1.10 | ||||||||||||||||||
TCW Term Loan [Member] | Notes Payable - Secured Lenders [Member] | Forecast [Member] | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Debt Instrument, Periodic Payment | $ 500,000 | ||||||||||||||||||
TCW Term Loan [Member] | SOFR Rate [Member] | Notes Payable - Secured Lenders [Member] | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Variable interest rate | 7.50% | ||||||||||||||||||
JPMorgan Chase Bank [Member] | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Amendment fee | $ 70,000 | ||||||||||||||||||
Cash dominion period | 30 days | ||||||||||||||||||
Applicable Margin Rate Fixed | 3% | ||||||||||||||||||
JPMorgan Chase Bank [Member] | FCCR trigger period [Member] | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Percentage of the revolving commitment | 10% | ||||||||||||||||||
Fixed charge coverage ratio | 1.10 | ||||||||||||||||||
JPMorgan Chase Bank [Member] | Cash dominion period [Member] | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Percentage of the revolving commitment | 10% | ||||||||||||||||||
JPMorgan Chase Bank [Member] | Waivers Agreement [Member] | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Unused availability under the credit facility | $ 2,500,000 | ||||||||||||||||||
JPMorgan Chase Bank [Member] | JPM Waiver Applicable Rate 2 percent [Member] | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Applicable Margin Rate Variable | 2% | ||||||||||||||||||
JPMorgan Chase Bank [Member] | JPM Waiver, Applicable Rate 2.5 percent [Member] | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Applicable Margin Rate Variable | 2.50% | ||||||||||||||||||
JPMorgan Chase Bank [Member] | JPM Waiver, Applicable Rate 3 percent [Member] | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Unused availability under the credit facility | $ 10,000,000 | ||||||||||||||||||
Applicable Margin Rate Variable | 3% | ||||||||||||||||||
JPMorgan Chase Bank [Member] | Notes Payable - Secured Lenders [Member] | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Leverage ratio | 5 | ||||||||||||||||||
Term Loan Borrowing Base Coverage Ratio | 5.50 | ||||||||||||||||||
JPMorgan Chase Bank [Member] | Notes Payable - Secured Lenders [Member] | Forecast [Member] | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Leverage ratio | 3 | ||||||||||||||||||
Term Loan Borrowing Base Coverage Ratio | 4 | ||||||||||||||||||
JPMorgan Chase Bank [Member] | TCW Term Loan [Member] | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Total Debt to EBITDA Ratio | 5 | ||||||||||||||||||
JPMorgan Chase Bank [Member] | Amended Facility [Member] | Notes Payable - Secured Lenders [Member] | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Outstanding balance under the credit facility | $ 45,407,584 | $ 51,134,699 | |||||||||||||||||
Unused availability under the credit facility | 12,468,259 | 11,539,183 | |||||||||||||||||
Deferred financing costs | 238,576 | 332,139 | |||||||||||||||||
Unamortized amount | 763,478 | $ 572,191 | |||||||||||||||||
The Bank And Trust SSB [Member] | Notes Payable - Buildings [Member] | Warehousing And Distribution Center [Member] | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Variable interest rate | 1% | ||||||||||||||||||
Mortgage agreement, amount | $ 556,000 | ||||||||||||||||||
Mortgage agreement, monthly principal payment | $ 6,103 | ||||||||||||||||||
Mortgage agreement, interest rate | 5.75% | ||||||||||||||||||
Mortgage agreement, payable period | 120 months | ||||||||||||||||||
Mortgage agreement, outstanding amount | $ 404,771 | 417,143 | |||||||||||||||||
Minimum [Member] | Finance Lease And Sales Leaseback Agreements [Member] | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Fixed interest rate | 7.09% | ||||||||||||||||||
Debt Instrument, Periodic Payment | $ 2,874 | ||||||||||||||||||
Minimum [Member] | TCW Term Loan [Member] | Notes Payable - Secured Lenders [Member] | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Variable interest rate | 1% | ||||||||||||||||||
Minimum [Member] | JPMorgan Chase Bank [Member] | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Unused availability under the credit facility | $ 20,000,000 | ||||||||||||||||||
Minimum [Member] | JPMorgan Chase Bank [Member] | No event of default [Member] | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Percentage of the revolving commitment | 10% | ||||||||||||||||||
Minimum [Member] | JPMorgan Chase Bank [Member] | JPM Waiver, Applicable Rate 2.5 percent [Member] | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Unused availability under the credit facility | $ 10,000,000 | ||||||||||||||||||
Minimum [Member] | FGI Equipment Finance LLC [Member] | Notes Payable - Equipment [Member] | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Fixed interest rate | 8.25% | ||||||||||||||||||
Maturity date | Mar. 01, 2025 | ||||||||||||||||||
Debt Instrument, Periodic Payment | $ 10,723 | ||||||||||||||||||
Maximum [Member] | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Percentage of the revolving commitment | 10% | ||||||||||||||||||
Term Loan Borrowing Base Coverage Ratio | 1.50 | ||||||||||||||||||
Maximum [Member] | Finance Lease And Sales Leaseback Agreements [Member] | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Fixed interest rate | 12.73% | ||||||||||||||||||
Maturity date | Apr. 01, 2027 | ||||||||||||||||||
Debt Instrument, Periodic Payment | $ 33,706 | ||||||||||||||||||
Maximum [Member] | JPMorgan Chase Bank [Member] | Notes Payable - Secured Lenders [Member] | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Term Loan Borrowing Base Coverage Ratio | 1.50 | ||||||||||||||||||
Maximum [Member] | JPMorgan Chase Bank [Member] | Amended Facility [Member] | Notes Payable - Secured Lenders [Member] | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Credit facility | $ 70,000,000 | ||||||||||||||||||
Maximum [Member] | Engencap Fin S.A. DE C.V. [Member] | Notes Payable - Equipment [Member] | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Fixed interest rate | 8% | ||||||||||||||||||
Maturity date | May 01, 2023 | ||||||||||||||||||
Debt Instrument, Periodic Payment | $ 9,310 | ||||||||||||||||||
Maximum [Member] | FGI Equipment Finance LLC [Member] | Notes Payable - Equipment [Member] | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Fixed interest rate | 11.75% | ||||||||||||||||||
Maturity date | Aug. 01, 2028 | ||||||||||||||||||
Debt Instrument, Periodic Payment | $ 69,439 | ||||||||||||||||||
SigmaTron Electronic Technology Co [Member] | China Construction Bank [Member] | Notes Payable - Secured Lenders [Member] | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Credit facility | 1,400,000 | ||||||||||||||||||
Expiration date | Feb. 07, 2024 | Dec. 23, 2022 | Jan. 06, 2022 | ||||||||||||||||
Fixed interest rate | 3.35% | ||||||||||||||||||
Outstanding balance under the credit facility | $ 0 | $ 0 | |||||||||||||||||
SigmaTron Electronic Technology Co [Member] | Maximum [Member] | China Construction Bank [Member] | Notes Payable - Secured Lenders [Member] | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Credit facility | ¥ | ¥ 10,000,000 |
Long-Term Debt (Schedule Of Deb
Long-Term Debt (Schedule Of Debt And Finance Lease Obligations) (Details) - USD ($) | Jul. 31, 2023 | Apr. 30, 2023 |
Debt Instrument [Line Items] | ||
Unamortized deferred financing costs | $ (1,871,755) | $ (1,608,558) |
Total debt | 87,553,227 | 93,300,700 |
Less current maturities | 46,980,450 | 52,761,520 |
Long-term debt | 40,572,777 | 40,539,180 |
Finance lease obligations | 4,723,683 | 4,119,437 |
Less current maturities | 1,821,641 | 1,523,259 |
Total finance lease obligations, less current portion | 2,902,042 | 2,596,178 |
Notes Payable - Secured Lenders [Member] | ||
Debt Instrument [Line Items] | ||
Debt | 84,990,885 | 90,968,000 |
Total debt | 83,119,130 | |
Notes Payable - Buildings [Member] | ||
Debt Instrument [Line Items] | ||
Debt | 404,771 | 417,143 |
Total debt | 404,771 | |
Notes Payable - Equipment [Member] | ||
Debt Instrument [Line Items] | ||
Debt | 4,029,326 | $ 3,524,115 |
Total debt | $ 4,029,326 |
Long-Term Debt (Schedule Of D_2
Long-Term Debt (Schedule Of Debt To EBITDA Ratio) (Details) | 3 Months Ended | |||||
Oct. 31, 2024 | Jul. 31, 2024 | Apr. 30, 2024 | Jan. 31, 2024 | Oct. 31, 2023 | Jul. 31, 2023 | |
Forecast [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Total Debt to EBITDA Ratio | 4 | 4.25 | 4.50 | 4.50 | 4.50 | |
Forecast [Member] | Prior To Amendment[Member] | ||||||
Debt Instrument [Line Items] | ||||||
Total Debt to EBITDA Ratio | 3.75 | 3.75 | 4 | 4 | 4.25 | |
Maximum [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Term Loan Borrowing Base Coverage Ratio | 1.50 |
Long-Term Debt (Aggregate Amoun
Long-Term Debt (Aggregate Amount Of Debt, Net Deferred Financing Fees) (Details) - USD ($) | 3 Months Ended | |
Jul. 31, 2023 | Apr. 30, 2023 | |
For the remaining 9 months of the fiscal year ending April 30 2024 | $ 46,333,250 | |
For the fiscal years ending April 30: | ||
2025 | 2,856,329 | |
2026 | 2,761,281 | |
2027 | 2,232,017 | |
2028 | 33,137,462 | |
2029 | 232,888 | |
Total debt | 87,553,227 | $ 93,300,700 |
Notes Payable - Secured Lenders [Member] | ||
For the remaining 9 months of the fiscal year ending April 30 2024 | 45,394,106 | |
For the fiscal years ending April 30: | ||
2025 | 1,467,036 | |
2026 | 1,717,036 | |
2027 | 1,717,036 | |
2028 | 32,823,916 | |
2029 | ||
Total debt | 83,119,130 | |
Notes Payable - Buildings [Member] | ||
For the remaining 9 months of the fiscal year ending April 30 2024 | 38,199 | |
For the fiscal years ending April 30: | ||
2025 | 53,557 | |
2026 | 56,719 | |
2027 | 60,068 | |
2028 | 63,614 | |
2029 | 132,614 | |
Total debt | 404,771 | |
Notes Payable - Equipment [Member] | ||
For the remaining 9 months of the fiscal year ending April 30 2024 | 900,945 | |
For the fiscal years ending April 30: | ||
2025 | 1,335,736 | |
2026 | 987,526 | |
2027 | 454,913 | |
2028 | 249,932 | |
2029 | 100,274 | |
Total debt | 4,029,326 | |
Facility And TCW Term Loan [Member] | ||
For the fiscal years ending April 30: | ||
Total debt | $ 83,119,130 | |
Maturity date | Jul. 18, 2027 |
Income Tax (Narrative) (Details
Income Tax (Narrative) (Details) - USD ($) | 3 Months Ended | ||
Jul. 31, 2023 | Jul. 31, 2022 | Apr. 30, 2023 | |
Income Tax [Line Items] | |||
Effective tax rate | (142.76%) | 24.42% | |
Operating loss carryforwards, valuation allowance | $ 7,543,422 | $ 7,703,517 | |
Cumulative earnings | 13,878,000 | ||
Income tax (benefit) expense | (154,135) | $ 1,008,296 | |
Foreign [Member] | |||
Income Tax [Line Items] | |||
Tax Credit Carryforward, Valuation Allowance | 7,258,454 | ||
Vietnam [Member] | Foreign [Member] | |||
Income Tax [Line Items] | |||
Tax credit carryforwards | $ 284,968 |
Significant Accounting Polici_4
Significant Accounting Policies (Narrative) (Details) - USD ($) | 3 Months Ended | ||
Jul. 31, 2023 | Jan. 31, 2023 | Apr. 30, 2023 | |
Critical Accounting Policies [Line Items] | |||
Revenue recognized from performance obligations satisfied | $ 0 | ||
Amounts allocated to performance obligations remain unsatisfied or partially unsatisfied | 0 | ||
Impairment of goodwill | $ 13,320,534 | ||
Intangible asset impairment charge | $ 9,527,773 | ||
Allowance for credit losses | 100,000 | $ 100,000 | |
Foreign [Member] | |||
Critical Accounting Policies [Line Items] | |||
Tax Credit Carryforward, Valuation Allowance | 7,258,454 | ||
Foreign [Member] | Vietnam [Member] | |||
Critical Accounting Policies [Line Items] | |||
Tax Credit Carryforward, Amount | $ 284,968 |
Significant Accounting Polici_5
Significant Accounting Policies (Revenue Disaggregated By Principal End-User Markets) (Details) - USD ($) | 3 Months Ended | |
Jul. 31, 2023 | Jul. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Total Net Trade Sales | $ 98,130,356 | $ 105,189,979 |
Industrial Electronics [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Net Trade Sales | 67,875,530 | 70,329,487 |
Consumer Electronics [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Net Trade Sales | 22,657,886 | 28,515,328 |
Medical / Life Sciences [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Net Trade Sales | $ 7,596,940 | $ 6,345,164 |
Significant Accounting Polici_6
Significant Accounting Policies (Summary Of Deferred Revenue) (Details) - USD ($) | 3 Months Ended | |
Jul. 31, 2023 | Jul. 31, 2022 | |
Significant Accounting Policies [Abstract] | ||
Contract liability (deferred revenue) beginning of period | $ 8,063,197 | $ 11,394,820 |
Deferred revenue recognized in period | (13,384,902) | |
Deferred revenue recognized in period | (4,996,715) | |
Revenue deferred in period | 2,475,787 | 16,470,394 |
Deferred revenue end of period | $ 5,542,269 | $ 14,480,312 |
Leases (Narratives) (Details)
Leases (Narratives) (Details) | Jul. 31, 2023 |
Minimum [Member] | |
Leases [Line Items] | |
Operating leases, term | 1 year |
Maximum [Member] | |
Leases [Line Items] | |
Operating leases, term | 5 years |
Leases (Lease Assets And Liabil
Leases (Lease Assets And Liabilities Related To Balance Sheet Classification) (Details) - USD ($) | Jul. 31, 2023 | Apr. 30, 2023 |
Leases [Abstract] | ||
Operating Leases: Right-of-use Assets | $ 6,424,222 | $ 7,225,423 |
Operating lease current liabilities | 2,740,678 | 2,908,213 |
Operating lease noncurrent liabilities | 4,111,504 | 4,723,867 |
Finance Leases: Right-of-use Assets | 5,863,929 | 5,294,097 |
Finance lease current liabilities | 1,821,641 | 1,523,259 |
Finance lease noncurrent liabilities | $ 2,902,042 | $ 2,596,178 |
Leases (Components Of Lease Exp
Leases (Components Of Lease Expense) (Details) - USD ($) | 3 Months Ended | |
Jul. 31, 2023 | Jul. 31, 2022 | |
Leases [Abstract] | ||
Operating lease cost | $ 895,469 | $ 623,811 |
Variable lease cost | 56,900 | 54,815 |
Short term lease cost | 2,250 | 2,250 |
Amortization of right-of-use assets | 640,847 | 571,103 |
Interest expense | 119,686 | 63,614 |
Total | $ 1,715,152 | $ 1,315,593 |
Leases (Weighted Average Lease
Leases (Weighted Average Lease Term And Discount Rate) (Details) | Jul. 31, 2023 | Jul. 31, 2022 |
Leases [Abstract] | ||
Operating Leases: Weighted average remaining lease term (months) | 34 months 17 days | 43 months 12 days |
Operating Leases: Weighted average discount rate | 3.40% | 3.20% |
Finance Leases: Weighted average remaining lease term (months) | 32 months 15 days | 36 months 10 days |
Finance Leases: Weighted average discount rate | 9.80% | 9.50% |
Leases (Future Payments Due Und
Leases (Future Payments Due Under Operating And Finance Leases) (Details) - USD ($) | Jul. 31, 2023 | Apr. 30, 2023 |
Operating Leases | ||
For the remaining 9 months of the fiscal year ending April 30 2024: | $ 2,219,127 | |
For the fiscal year ending April 30: 2025 | 2,445,223 | |
For the fiscal year ending April 30: 2026 | 1,920,820 | |
For the fiscal year ending April 30: 2027 | 343,006 | |
For the fiscal year ending April 30: 2028 | 74,382 | |
For the fiscal year ending April 30: 2029 | 75,870 | |
Thereafter | 57,848 | |
Total undiscounted lease payments | 7,136,276 | |
Present value discount, less interest | 284,094 | |
Lease liability | 6,852,182 | |
Finance Leases | ||
For the remaining 9 months of the fiscal year ending April 30 2024: | 1,625,031 | |
For the fiscal year ending April 30: 2025 | 1,985,274 | |
For the fiscal year ending April 30: 2026 | 1,318,005 | |
For the fiscal year ending April 30: 2027 | 488,060 | |
For the fiscal year ending April 30: 2028 | ||
For the fiscal year ending April 30: 2029 | ||
Thereafter | ||
Total undiscounted lease payments | 5,416,370 | |
Present value discount, less interest | 692,687 | |
Lease liability | $ 4,723,683 | $ 4,119,437 |
Leases (Supplemental Cash Flow
Leases (Supplemental Cash Flow Information Related To Leases) (Details) - USD ($) | 3 Months Ended | |
Jul. 31, 2023 | Jul. 31, 2022 | |
Leases [Abstract] | ||
Operating cash flows from finance leases | $ 119,686 | $ 63,614 |
Operating cash flows from operating leases | 61,121 | 86,633 |
Financing cash flows from finance leases | 428,105 | 353,258 |
Right-of-use assets obtained in exchange for new finance lease liabilities | 1,032,351 | 825,826 |
Right-of-use assets obtained in exchange for operating lease liabilities | $ 1,531 | $ 756,380 |
Acquisition and Disposition (Na
Acquisition and Disposition (Narrative) (Details) | Apr. 01, 2023 | Mar. 31, 2023 |
Investment in Wagz [Member] | ||
Equity method investment, ownership percentage | 19% | |
Buyer [Member] | Investment in Wagz [Member] | ||
Equity method investment, ownership percentage | 81% | |
Wagz Business Disposed [Member] | ||
Percentage of equity interest sold | 81% | 81% |
Intangible Assets (Narrative) (
Intangible Assets (Narrative) (Details) - USD ($) | 3 Months Ended | |
Jul. 31, 2023 | Jul. 31, 2022 | |
Goodwill [Line Items] | ||
Amortization expense | $ 83,415 | $ 85,248 |
Fully amortized year | 2028 |
Intangible Assets (Summary Of I
Intangible Assets (Summary Of Intangible Assets Subject To Amortization) (Details) - USD ($) | Jul. 31, 2023 | Apr. 30, 2023 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 4,690,000 | $ 15,650,000 |
Accumulated Amortization | 3,462,385 | 4,033,663 |
Impairment Amount | 9,527,773 | |
Write off | 777,534 | |
Net Intangible Asset Balance | 1,227,615 | 1,311,030 |
Spitfire [Member] | Non-Contractual Customer Relationship [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 4,690,000 | 4,690,000 |
Accumulated Amortization | 3,462,385 | 3,378,970 |
Net Intangible Asset Balance | $ 1,227,615 | 1,311,030 |
Wagz [Member] | Trade Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,230,000 | |
Accumulated Amortization | 68,380 | |
Impairment Amount | 813,960 | |
Write off | 347,660 | |
Wagz [Member] | Patents [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 9,730,000 | |
Accumulated Amortization | 586,313 | |
Impairment Amount | 8,713,813 | |
Write off | $ 429,874 |
Intangible Assets (Estimated Ag
Intangible Assets (Estimated Aggregate Amortization Expense) (Details) - USD ($) | Jul. 31, 2023 | Apr. 30, 2023 |
Intangible Assets [Abstract] | ||
For the remaining 9 months of the fiscal year ending April 30 2024: | $ 248,427 | |
For the fiscal years ending April 30, 2025 | 324,702 | |
For the fiscal years ending April 30, 2026 | 317,728 | |
For the fiscal years ending April 30, 2027 | 310,900 | |
For the fiscal years ending April 30, 2028 | 25,858 | |
Net Intangible Asset Balance | $ 1,227,615 | $ 1,311,030 |
Segment and Geographic Area I_3
Segment and Geographic Area Information (Schedule of Segment Reporting Information) (Details) - USD ($) | 3 Months Ended | ||
Jul. 31, 2023 | Jul. 31, 2022 | Apr. 30, 2023 | |
Segment Reporting Information [Line Items] | |||
Net sales | $ 98,130,356 | $ 105,189,979 | |
Operating income (loss) | 2,808,415 | 5,047,378 | |
Other income | 18,627 | 35,816 | |
Interest expense, net | (2,719,078) | (953,558) | |
Income before income taxes | 107,964 | 4,129,636 | |
Depreciation and amortization of property, machinery and equipment | 1,496,034 | 1,457,220 | |
Amortization of intangible assets | 83,415 | 85,248 | |
Identifiable assets | 259,835,108 | $ 268,627,199 | |
Continuing and discontinued operations [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales | 98,130,356 | 105,572,856 | |
Operating income (loss) | 2,808,415 | 2,823,817 | |
Other income | 18,627 | 35,816 | |
Interest expense, net | (2,719,078) | (953,558) | |
Income before income taxes | 107,964 | 1,906,075 | |
Depreciation and amortization of property, machinery and equipment | 1,496,034 | 1,475,873 | |
Amortization of intangible assets | 83,415 | 235,762 | |
Identifiable assets | 259,835,108 | 316,053,246 | |
Operating Segments [Member] | EMS Segment [Member] | Continuing Operations [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales | 98,130,356 | 105,189,979 | |
Operating income (loss) | 2,808,415 | 5,047,378 | |
Depreciation and amortization of property, machinery and equipment | 1,496,034 | 1,457,220 | |
Amortization of intangible assets | 83,415 | 85,248 | |
Identifiable assets | $ 259,835,108 | 292,367,580 | |
Operating Segments [Member] | Pet Tech Segment [Member] | Discontinued Operations [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales | 382,877 | ||
Operating income (loss) | (2,223,561) | ||
Depreciation and amortization of property, machinery and equipment | 18,653 | ||
Amortization of intangible assets | 150,514 | ||
Identifiable assets | 23,685,666 | ||
Intersegment Eliminations [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales | $ 83,516 |
Segment and Geographic Area I_4
Segment and Geographic Area Information (Schedule of Net Sales and Tangible Long-lived Assets by Geographical Areas) (Details) - USD ($) | 3 Months Ended | ||
Jul. 31, 2023 | Jul. 31, 2022 | Apr. 30, 2023 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | $ 98,130,356 | $ 105,189,979 | |
Total tangible long-lived assets, net | 42,327,539 | $ 43,013,780 | |
Operating Segments [Member] | U.S. [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | 32,732,166 | 25,507,752 | |
Total tangible long-lived assets, net | 19,330,218 | 20,371,298 | |
Operating Segments [Member] | China [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | 8,912,301 | 13,592,386 | |
Total tangible long-lived assets, net | 4,032,792 | 4,212,780 | |
Operating Segments [Member] | Vietnam [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | 1,990,374 | 3,592,644 | |
Operating Segments [Member] | Mexico [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | 54,495,515 | $ 62,497,197 | |
Total tangible long-lived assets, net | 18,210,501 | 17,574,899 | |
Operating Segments [Member] | Other [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total tangible long-lived assets, net | $ 754,028 | $ 854,803 |
Discontinue Operations (Details
Discontinue Operations (Details) - USD ($) | 3 Months Ended | |||
Apr. 01, 2023 | Mar. 31, 2023 | Jul. 31, 2023 | Jul. 31, 2022 | |
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract] | ||||
Loss before income taxes from discontinued operations | $ (2,223,561) | |||
Tax benefit from discontinued operations | 478,896 | |||
Net loss from discontinued operations | (1,744,665) | |||
Pet Tech Segment (Wagz Business) [Member] | ||||
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract] | ||||
Net sale | 382,877 | |||
Cost of products sold | 275,062 | |||
Gross (loss) profit | 107,815 | |||
Selling and administrative expenses | 2,331,376 | |||
Operating loss | (2,223,561) | |||
Loss before income taxes from discontinued operations | (2,223,561) | |||
Tax benefit from discontinued operations | 478,896 | |||
Net loss from discontinued operations | $ (1,744,665) | |||
Wagz Business Disposed [Member] | ||||
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract] | ||||
Percentage of equity interest sold | 81% | 81% | ||
Investment in Wagz [Member] | ||||
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract] | ||||
Equity method investment, ownership percentage | 19% | |||
Buyer [Member] | Investment in Wagz [Member] | ||||
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract] | ||||
Equity method investment, ownership percentage | 81% |