EXHIBIT 99.1
SigmaTron International, Inc. Reports Financial Results for Second
Quarter Fiscal 2005
ELK GROVE VILLAGE, Ill.--(BUSINESS WIRE)--Dec. 7, 2004--SigmaTron
International, Inc. (NASDAQ:SGMA) today reported revenues and earnings
for the quarter and six-month periods ended October 31, 2004.
For the three months ended October 31, 2004, net revenues
increased to $27.9 million compared to net revenues of $26.5 million
for the same period ended October 31, 2003. Net income for the 2005
second fiscal quarter was $1.3 million compared to $1.8 million for
the 2004 second fiscal quarter. Diluted earnings per share for the
quarter were $0.34 compared to $0.52 for the same period in the prior
fiscal year.
For the six months ended October 31, 2004, net revenues increased
to $52.9 million compared to $51.4 million for the same period ended
October 31, 2003. Net income for the 2004 period was $2.3 million,
compared to $3.1 million for the 2003 period. Diluted earnings per
share for the six months ended October 31, 2004, were $0.61 compared
to $0.92 for the six months ending October 31, 2003.
Commenting on SigmaTron's second-quarter and six-month results,
Gary R. Fairhead, president and chief executive officer, said, "In the
second fiscal quarter, sales increased in the telecommunications and
appliance marketplaces, and for the first six months of the fiscal
year, sales increased in the telecommunications and fitness
industries. However, pricing pressures in our industry, product life
cycle issues and component pricing impacted our results for the three-
and six-month periods when compared to the same period in the prior
year. In the second fiscal quarter and six months of 2005, gross
profit decreased from the prior-year periods. While we remain focused
on expanding our customer base and improving our performance, pricing
pressures in the marketplace and increased raw material costs continue
to impact our results.
"Selling and administrative expenses increased slightly in the
three- and six-month periods primarily due to an increase in
insurance, other professional and legal fees. Interest expense also
increased in the reported periods due to the increase in interest for
notes associated with the purchase of the Company's corporate and
manufacturing facility in Elk Grove Village and our Mexican
manufacturing facility."
"The Company's Elk Grove Village and Mexico locations maintained
strong operating levels. Although the operation continues to perform
well, quarterly sales at the Las Vegas facility decreased from the
prior-year period, primarily attributable to a flat gaming market.
Results at the Fremont site continued to recover. SigmaTron's
operation in China experienced increased sales in the most recent
period and now has approximately 135 employees.
Fairhead concluded, "As we previously announced, SMT Unlimited,
L.P. is now wholly-owned by SigmaTron and operates in Fremont as a
division of the Company. We believe this acquisition will assist in
providing seamless service to our customers through our operations in
the United States, Mexico and China. We remain enthusiastic about the
opportunities that Fremont and China will provide the Company."
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, Acuna, Mexico, Fremont, California and Suzhou-Wujiang, China.
SigmaTron International, Inc. maintains engineering and materials
sourcing offices in Taipei, Taiwan.
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 Company's ability to manufacture lead free assemblies by mid -
2006; regulatory compliance; 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, currency fluctuations, 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.
Financial table to follow...
CONSOLIDATED STATEMENTS OF OPERATION
Three Months Ended Six Months Ended
October 31, October 31, October 31, October 31,
2004 2003 2004 2003
------------ ------------ ------------ ------------
Net sales $27,861,691 $26,526,879 $52,939,858 $51,360,675
Cost of products
sold 22,668,658 20,968,331 43,121,127 41,088,186
------------ ------------ ------------ ------------
Gross profit 5,193,033 5,558,548 9,818,731 10,272,489
Operating expenses 2,949,772 2,520,746 5,661,847 5,028,669
------------ ------------ ------------ ------------
Operating income 2,243,261 3,037,802 4,156,884 5,243,820
Other
deductions-net 53,630 10,037 120,313 52,585
------------ ------------ ------------ ------------
Income before
income tax expense
and minority
interest in
affiliate 2,189,631 3,027,765 4,036,571 5,191,235
Income tax expense 869,800 1,157,760 1,556,091 1,943,122
------------ ------------ ------------ ------------
Income before
minority interest
in affiliate 1,319,831 1,870,005 2,480,480 3,248,113
Minority interest
in affiliate 10,654 57,269 134,334 127,879
------------ ------------ ------------ ------------
Net income $1,309,177 $1,812,736 2,346,146 3,120,234
============ ============ ============ ============
Net income per
common share -
assuming dilution $0.34 $0.52 $0.61 $0.92
============ ============ ============ ============
Weighted average
number of common
equivalent shares
outstanding
- assuming
dilution 3,840,442 3,478,249 3,837,379 3,403,659
============ ============ ============ ============
CONSOLIDATED BALANCE SHEET
October 31, April 30,
2004 2004
------------ ------------
Current assets $37,854,350 $35,973,957
Property, machinery
and equipment-net 25,626,014 25,707,901
Other assets 2,364,985 1,316,814
------------ ------------
Total assets 65,845,349 62,998,672
============ ============
Liabilities and
shareholders'
equity
Current liabilities 15,650,885 13,086,206
Long-term
obligations 6,784,974 8,269,923
Minority interest
in affiliate - 439,787
Stockholders'
equity 43,409,490 41,202,756
------------ ------------
Total liabilities
and stockholders'
equity $65,845,349 $62,998,672
============ ============
CONTACT: SigmaTron International, Inc.
Linda K. Blake, 1-800-700-9095