Exhibit 99.1
SigmaTron International, Inc. Reports Third Quarter Financial Results
for Fiscal 2006
ELK GROVE VILLAGE, Ill.--(BUSINESS WIRE)--March 14, 2006--SigmaTron
International, Inc. (NASDAQ:SGMA), an electronic manufacturing services company,
today reported revenues and earnings for the 2006 third fiscal quarter ended
January 31, 2006.
For the three months ended January 31, 2006, net revenues were $34.1
million compared to net revenues of $25.1 million for the same period ended
January 31, 2005. Net income for the third quarter of fiscal 2006 was $0.3
million compared to $1.4 million for the 2005 third fiscal quarter. Diluted
earnings per share for the quarter were $0.07 compared to $0.38 for the same
period in the prior fiscal year.
For the nine months ended January 31, 2006, net revenues were $90.3 million
compared to $71.2 million for the same period ended January 31, 2005. Net income
for the 2006 period was $1.7 million, compared to $3.9 million for the 2005
period. Diluted earnings per share for the nine months ended January 31, 2006,
were $0.40 compared to $1.02 for the nine months ended January 31, 2005.
Sales volume increased for the 2006 three and nine month periods as
compared to the same periods in the prior year in the appliance, fitness,
industrial electronics, life sciences and semiconductor marketplaces. The
increase in the industrial electronics, life sciences and semiconductor
industries was primarily due to sales to new customers as the result of the
Company's July 2005, acquisition of Able Electronics Company in Hayward,
California ("Able"). Results for the three and nine month periods compared to
the same periods for fiscal 2005 were negatively impacted by pricing
concessions, increasing component and manufacturing supplies cost, cost related
to RoHS (the European Union mandate on the restrictions of hazardous substances)
compliance transitions required in Europe by July, 2006 and cost inefficiencies
related to the consolidation of the Company's Fremont, California facility into
Able, and integration of the Able operations.
Commenting on SigmaTron's third-quarter and nine-month results, Gary R.
Fairhead, president and chief executive officer, said, "While the results from
the Able Electronics acquisition have not generated positive bottom line results
to date, we remain optimistic and excited about the opportunities this operation
can provide to SigmaTron. We have already realized incremental business
opportunities from Able's existing customer base and fully expect revenues from
the Able operations will continue to grow, enhanced by SigmaTron's international
footprint. We believe we will see the full benefit from this acquisition in
fiscal 2007."
"The Able Electronics acquisition, along with the sale of our Las Vegas
operation, were critical steps we have taken to help ensure the Company's
future. In particular, the Able acquisition diversifies the markets we serve,
diversifies our customer base and expands the range of services we offer."
Fairhead continued, "We anticipate the consolidation of our Fremont
operation into our Hayward operation will be completed as scheduled before this
fiscal year-end. The consolidation of these two entities is expected to bring
improved operating efficiencies. Furthermore, we expect the production of
various product groups to migrate to Tijuana for production as part of the
consolidation plan."
"Our Suzhou-Wujiang China operation had a good quarter. Our Elk Grove
Village, Illinois operation continued to grow and added several new customers
because of our RoHS capabilities. Our Acuna, Mexico operation continued to post
solid results and continued to garner interest from potential customers."
Fairhead concluded, "While our overall third quarter results were
disappointing, we continue to believe that we have laid the foundation for
continued growth and long term success."
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.
Financial tables to follow...
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
January 31, January 31, January 31, January 31,
2006 2005 2006 2005
------------ ------------ ------------ ------------
Net sales $34,061,657 $25,085,493 $90,267,615 $71,206,740
Cost of products
sold 30,381,859 20,528,342 79,027,187 57,286,829
------------ ------------ ------------ ------------
Gross profit 3,679,798 4,557,151 11,240,428 13,919,911
Selling and
administrative
expenses 2,886,874 2,788,060 7,970,016 8,553,938
------------ ------------ ------------ ------------
Operating income 792,924 1,769,091 3,270,412 5,365,973
Other expense
(income) -net 354,961 (361,541) 777,811 (345,259)
------------ ------------ ------------ ------------
Income from
continuing
operations before
income tax and
interest of
affiliate 437,963 2,130,632 2,492,601 5,711,232
Income tax expense 150,628 830,909 791,575 2,209,171
------------ ------------ ------------ ------------
Income from
continuing
operations
287,335 1,299,723 1,701,026 3,502,061
(Loss) income from
operations of
discontinued
Las Vegas location (15,014) 225,605 (59,755) 681,576
Income tax
(benefit) expense (5,855) 87,986 (23,304) 265,815
------------ ------------ ------------ ------------
(Loss) income on
discontinued
operation (9,159) 137,619 (36,451) 415,761
------------ ------------ ------------ ------------
Net income $278,176 $1,437,342 $1,664,575 $3,917,822
============ ============ ============ ============
Net income per
common share -
assuming dilution $0.07 $0.38 $0.40 $1.02
============ ============ ============ ============
Weighted average
number of common
equivalent
shares outstanding
- assuming
dilution 4,192,229 3,822,157 4,117,358 3,832,121
============ ============ ============ ============
CONDENSED CONSOLIDATED BALANCE SHEETS
January 31, April 30,
2006 2005
------------ ------------
Current assets $52,920,949 $37,709,388
Machinery and
equipment-net 28,069,851 26,689,940
Intangible assets 2,269,945 42,876
Goodwill 9,298,945 756,959
Other assets 1,959,908 1,343,894
------------ ------------
Total assets $94,519,598 $66,543,057
============ ============
Liabilities and
shareholders'
equity
Current
liabilities 16,223,955 13,116,078
Long-term
obligations 30,698,974 7,494,885
Stockholders'
equity 47,596,669 45,932,094
------------ ------------
Total liabilities
and stockholders'
equity $94,519,598 $66,543,057
============ ============
CONTACT: SigmaTron International, Inc.
Linda K. Blake, 800-700-9095