Exhibit 99.1
SigmaTron International, Inc. Report Financial Results for
Third Fiscal Quarter 2004
ELK GROVE VILLAGE, Ill.--(BUSINESS WIRE)--March 8, 2004--SigmaTron
International, Inc. (NASDAQ: SGMA) today reported revenues and
earnings for the third quarter of fiscal 2004.
For the three months ended January 31, 2004, SigmaTron reported
net revenues of $23,906,176 compared to net revenues of $27,879,095
for the three month period ended January 31, 2003. Net income and
diluted earnings per share for the third quarter of fiscal 2004
decreased to $1,192,840 and $0.33, respectively, compared to a net
income of $1,642,946 and dilutive earnings per share of $0.49 for the
third quarter of fiscal 2003.
For the nine months ended January 31, 2004, net revenues decreased
to $75,266,852 compared to $77,010,647 for the nine months ended
January 31, 2003. Net income was $4,313,074 for the nine months ended
January 31, 2004 compared to a net income of $3,396,513 for the nine
months ended January 31, 2003, an increase of $916,561 or 27%. Diluted
earnings per share for the nine month period ended January 31, 2004
was $1.22 compared to $1.02 for the nine month period ended January
31, 2003.
Commenting on SigmaTron's third quarter results, Gary R. Fairhead,
president and chief executive officer, observed: "We are pleased to
report a profitable third quarter for fiscal 2004, with results for
the first nine months of the fiscal year remaining up from the same
period of the prior fiscal year. Please note that a recent change in
accounting standards now requires us to consolidate the income
statement and balance sheet of our affiliate, SMT Unlimited L.P., on a
line by line basis. This will undoubtedly complicate comparative
analysis. This change and its effects will be explained in our 10-Q
for the third quarter, which will be released later this week.
"We did see a reduction in revenue for our third quarter, which
resulted in a decline year-to-date as well. This was primarily caused
by significantly lower revenue numbers out of our Las Vegas operation,
price reductions to several major customers, and the volatile nature
of our customer's markets in general. However, all of our major
customers are projecting calendar 2004 to be a solid year, and we
expect to see sales stabilize.
"Our third quarter profits were down from the prior fiscal year's
third quarter, yet we are ahead year-to-date compared to the prior
fiscal year. Pricing pressures from customers, increased insurance
costs and regulatory costs such as those imposed by Sarbanes Oxley,
which have negatively affected our bottom line. As we have already
disclosed, we also have continuing start-up expenses for China as we
get ready to start production.
"During the quarter we had many positive developments. Our Mexico
operation continues to perform well, and recently completed the
planned consolidation of its operations from two sites into one plant,
which we own. We expect the consolidation to further improve Mexico's
productivity. Our Elk Grove Village operation had an excellent
quarter, compared to prior periods as several new customers and
increased business from older customers raised revenues and produced
positive operating margins. Our China operation will commence
production in the fourth fiscal quarter. Although it will be limited
as the operation goes through qualification processes, it should be
well positioned to contribute positive operating margins for fiscal
2005.
"The Las Vegas operation has seen its revenue stream soften, but
the gaming market it primarily serves can be volatile. Several new
non-gaming customers show some long-term promise to soften the effect
of the volatility of the gaming customers. Our affiliate, SMT
Unlimited L.P., remains profitable with continuing challenges to
attract new business. Finally, SigmaTron has formed a strategic
alliance with Wave Zero, a revolutionary shielding company located in
Sunnyvale, California. We are hopeful that our relationship with Wave
Zero will lead to new customers and revenue for SigmaTron. We have
also started discussions with several new customers that like our
global footprint and size. We believe that a company our size with
operations in the United States, Mexico and China will offer
significant value to companies whose EMS requirements are too small
for the larger firms in our industry.
"We appreciate the continued support from everyone involved with
SigmaTron."
Headquartered in Elk Grove Village, IL, SigmaTron International,
Inc. is an electronic manufacturing services company that provides
components, printed circuit board assemblies and turnkey (completely
assembled) electronic products. SigmaTron International, Inc. operates
manufacturing facilities in Elk Grove Village, Illinois, Las Vegas,
Nevada, and Acuna, Mexico. SigmaTron International, Inc. maintains
engineering and materials sourcing offices in Elk Grove Village,
Illinois and Taipei, Taiwan. The Company provides engineering support
services in Acuna, Mexico and warehousing services in Del Rio, Texas.
In addition, SigmaTron International, Inc. has a 42.5% owned
affiliate, SMT Unlimited L.P., that provides electronic manufacturing
services in Fremont, California. SigmaTron is currently expanding its
operations to include a manufacturing facility in China.
Detailed results follow.
Note: To the extent any statements in this press release statement
may be deemed to be forward looking, such statements should be
evaluated in the context of the risks and uncertainties inherent in
the Company's business, including the Company's continued dependence
on certain significant customers; the continued market acceptance of
products and services offered by the Company and its customers; the
activities of competitors, some of which may have greater financial or
other resources than the Company; the variability of the Company's
operating results; the availability and cost of necessary components;
the continued availability and sufficiency of the Company's credit
arrangements; changes in U.S., Mexican or Chinese regulations
affecting the Company's business; the continued stability of the
Mexican and Chinese economic, labor and political conditions and the
ability of the Company to manage its growth, including expansion into
China and securing financing for the operation in China. These and
other factors which may affect the Company's future business and
results of operations are identified throughout the Annual Report on
Form 10-K, and may be detailed from time to time in the Company's
filings with the Securities and Exchange Commission. These statements
speak as of the date of this Report and the Company undertakes no
obligation to update such statements in light of future events or
otherwise.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATION
Unaudited
Three Months Ended Nine Months Ended
January 31, January 31, January 31, January 31,
2004 2003 2004 2003
------------ ------------ ------------ ------------
Net sales $23,906,176 $27,879,095 $75,266,852 $77,010,647
Cost of products
sold 19,459,181 22,810,115 60,547,366 63,694,707
------------ ------------ ------------ ------------
Gross profit 4,446,995 5,068,980 14,719,486 13,315,940
Operating expenses 2,372,841 2,396,446 7,401,512 7,083,586
------------ ------------ ------------ ------------
Operating income 2,074,154 2,672,534 7,317,974 6,232,354
Other (income)
deductions-net 16,458 160,153 69,044 709,695
------------ ------------ ------------ ------------
Income before income
tax expense 2,057,696 2,512,381 7,248,930 5,522,659
Minority interest
in income (loss)
of related entity 50,446 (111,905) 178,324 13,862
Income tax expense 814,410 981,340 2,757,532 2,112,284
------------ ------------ ------------ ------------
Net income 1,192,840 1,642,946 4,313,074 3,396,513
============ ============ ============ ============
Net income (loss) per
common share -
assuming
dilution $0.33 $0.49 $1.22 $1.02
============ ============ ============ ============
Weighted average number of
common equivalent
shares outstanding
- assuming
dilution 3,655,200 3,355,227 3,521,565 3,319,394
============ ============ ============ ============
CONDENSED CONSOLIDATED BALANCE SHEET
Unaudited
January 31, April 30,
2004 2003
------------ ------------
Current assets $37,768,983 $29,368,558
Machinery and
equipment-net 22,700,817 19,096,970
Other assets 1,230,152 1,352,853
------------ ------------
Total assets $61,699,952 $49,818,381
============ ============
Liabilities and shareholders'
equity
Current
liabilities $13,132,746 $15,530,773
Long-term
obligations 8,171,287 7,759,888
Minority interest
in affiliate 396,886 218,560
Stockholders'
equity 39,999,033 26,309,160
------------ ------------
Total liabilities
and stockholders'
equity $61,699,952 $49,818,381
============ ============
CONTACT: SigmaTron International, Inc.
Linda K. Blake, 800-700-9095