Exhibit 99.1
SigmaTron International, Inc. Reports Second-Quarter Financial Results for
Fiscal 2006
ELK GROVE VILLAGE, Ill.--(BUSINESS WIRE)--Dec. 15, 2005--SigmaTron
International, Inc. (NASDAQ:SGMA), an electronic manufacturing
services company, today reported revenues and earnings for the second
quarter ended October 31, 2005.
For the three months ended October 31, 2005, net revenues
increased to $34.9 million compared to net revenues of $24.7 million
for the same period ended October 31, 2004. Net income for the 2006
second quarter of fiscal 2006 was $1.2 million compared to $1.3
million for the 2005 second fiscal quarter. Diluted earnings per share
for the quarter were $0.29 compared to $0.34 for the same period in
the prior fiscal year. Revenues increased in the appliance, fitness,
industrial electronics, life sciences and semiconductor marketplaces.
Pricing pressures and an increase in manufacturing supplies and
components continued to negatively impact gross margins.
For the six months ended October 31, 2005, net revenues increased
to $56.2 million compared to $46.1 million for the same period ended
October 31, 2004. Net income for the 2006 period was $1.4 million,
compared to $2.3 million for the 2005 period. Diluted earnings per
share for the six months ended October 31, 2005, were $0.34 compared
to $0.61 for the six months ending October 31, 2004.
Commenting on SigmaTron's second-quarter and six-month results,
Gary R. Fairhead, president and chief executive officer, said, "Our
results for our second quarter of fiscal 2006 were much improved over
our first quarter results. The second quarter was the first fiscal
quarter in which we owned Able Electronics for the entire reporting
period. Second-quarter and year-to-date net income and earnings were
negatively impacted by operating resulting from our acquisition of
Able Electronics.
"Much of last quarter's activities were focused on the
assimilation of Able Electronics into our operations. Effective
November 1, 2005, which is the beginning of our third fiscal quarter,
Able Electronics was legally merged into SigmaTron, becoming a
division we refer to as SigmaTron Hayward. AbleMex S.A. de C.V.
remains a wholly-owned subsidiary of SigmaTron operating in Tijuana,
Mexico. Our intention remains to combine the operations of SigmaTron
Fremont into SigmaTron Hayward by the end of fiscal 2006. The
consolidation of these two entities, which is already underway, is
expected to bring improved operating efficiencies.
"Although the effect of the Able Electronics acquisition has not
generated positive bottom line results to date, we remain optimistic
and excited about the opportunities we foresee. In particular, we
believe revenues from the Able operations will continue to grow,
enhanced by SigmaTron's international footprint. While we have already
experienced some incremental business opportunities from Able's
existing customer base, we expect to see the full benefit from this
acquisition in fiscal 2007."
Fairhead continued, "SigmaTron China continues to grow and perform
well financially. Our primary challenge remains finding experienced
employees with the technical skill sets needed to support the growth
we anticipate.
"SigmaTron Acuna continues to perform well and remains our largest
operation. While we expect continued migration of certain jobs from
this operation to SigmaTron China, we have two significant customers,
one new and one existing, that will start new programs with SigmaTron
Acuna. We expect SigmaTron Acuna will continue to perform well for the
balance of fiscal 2006.
"Our Elk Grove Village operation had a stronger second quarter
than first quarter this year, but continues to experience uneven
results. Our focus remains on adding new customers and additional
revenue at this location.
"For the balance of fiscal 2006, we anticipate continued pricing
pressures and challenges related to compliance for RoHS, the European
Union mandate on the restrictions of the use of hazardous substances.
However, we remain excited about the opportunities that lie ahead.
SigmaTron's international footprint and size makes us an attractive
option for many OEMs."
Headquartered in Elk Grove Village, IL, SigmaTron International,
Inc. is an electronic manufacturing services company that provides
printed circuit board assemblies and completely assembled electronic
products. SigmaTron International, Inc. operates manufacturing
facilities in Elk Grove Village, Illinois, Acuna and Tijuana, Mexico,
Fremont and Hayward, California and Suzhou-Wujiang, China. SigmaTron
International, Inc. maintains engineering and materials sourcing
offices in Taipei, Taiwan.
Note: This press release contains forward-looking statements.
Words such as "continue," "will," "expects," "believe," "plans," and
similar expressions identify forward-looking statements. These
forward-looking statements are based on the current expectations of
SigmaTron (including its subsidiaries). Because these forward-looking
statements involve risks and uncertainties, SigmaTron's plans, actions
and actual results could differ materially. Such statements should be
evaluated in the context of the risks and uncertainties inherent in
SigmaTron's business, including our continued dependence on certain
significant customers; the continued market acceptance of products and
services offered by the Company and its customers; pricing pressures
from our customers and the market; the activities of competitors, some
of which may have greater financial or other resources than SigmaTron;
the variability of our operating results; the variability of our
customers' requirements; the availability and cost of necessary
components and materials; SigmaTron's ability to produce products that
are in compliance with RoHS by mid-2006; the ability of SigmaTron and
our customers to keep current with technological changes within our
industries; regulatory compliance; the continued availability and
sufficiency of our credit arrangements; changes in U.S., Mexican,
Chinese or Taiwanese regulations affecting SigmaTron's business; the
continued stability of the U.S., Mexican, Chinese and Taiwanese
economic systems, labor and political conditions; and the ability of
SigmaTron to manage its growth, including its expansion into China and
its integration of the Able operation acquired in July 2005. These and
other factors which may affect SigmaTron's future business and results
of operations are identified throughout the Company's Annual Report on
Form 10-K and risk factors contained therein and may be detailed from
time to time in SigmaTron's filings with the Securities and Exchange
Commission. These statements speak as of the date of this report and
SigmaTron undertakes no obligation to update such statements in light
of future events or otherwise.
CONSOLIDATED STATEMENTS OF OPERATION
Three Months Three Months Six Months Six Months
Ended Ended Ended Ended
October 31, October 31, October 31, October 31,
2005 2004 2005 2004
------------ ------------ ------------ ------------
Net sales $34,893,265 $24,660,390 $56,205,958 $46,121,248
Cost of products
sold 29,874,320 19,640,637 48,645,328 36,758,487
------------ ------------ ------------ ------------
Gross profit 5,018,945 5,019,753 7,560,630 9,362,761
Selling and
administrative
expenses 2,946,861 2,949,772 5,083,142 5,661,847
------------ ------------ ------------ ------------
Operating income 2,072,084 2,069,981 2,477,488 3,700,914
Other (income)
deductions-net 328,610 53,630 422,850 120,313
------------ ------------ ------------ ------------
Income from
continuing
operations
before income
tax and interest
of affiliate 1,743,474 2,016,351 2,054,638 3,580,601
Income tax
expense 519,581 802,221 640,947 1,378,262
------------ ------------ ------------ ------------
Income from
continuing
operations
before minority
interest in
affiliate 1,223,893 1,214,130 1,413,691 2,202,339
Minority interest
in affiliate - 10,654 - 134,334
------------ ------------ ------------ ------------
Income from
continuing
operations 1,223,893 1,203,476 1,413,691 2,068,005
(Loss) income from
operations of
discontinued
Las Vegas
location (4,199) 173,280 (44,741) 455,971
Income tax
(benefit) expense (1,638) 67,579 (17,449) 177,829
------------ ------------ ------------ ------------
(Loss) income on
discontinued
operation (2,561) 105,701 (27,292) 278,142
------------ ------------ ------------ ------------
Net income $1,221,332 $1,309,177 $1,386,399 $2,346,147
============ ============ ============ ============
Net income per
common share -
assuming dilution $0.29 $0.34 $0.34 $0.61
============ ============ ============ ============
Weighted average
number of common
equivalent shares
outstanding -
assuming dilution 4,187,632 3,840,442 4,074,866 3,837,379
============ ============ ============ ============
CONSOLIDATED BALANCE SHEET
October 31, April 30,
2005 2005
------------ ------------
Current assets $50,218,569 $37,709,388
Machinery and
equipment-net 27,291,694 26,689,940
Other assets 13,788,649 2,143,729
------------ ------------
Total assets 91,298,912 66,543,057
============ ============
Liabilities and
shareholders' equity
Current
liabilities 17,875,175 13,116,078
Long-term
obligations 26,105,244 7,494,885
Stockholders'
equity 47,318,493 45,932,094
------------ ------------
Total liabilities
and stockholders'
equity $91,298,912 $66,543,057
============ ============
CONTACT: SigmaTron International, Inc.
Linda K. Blake, 800-700-9095