Exhibit 99.1
SigmaTron International, Inc. Reports
Second-Quarter Financial Results for Fiscal 2007
ELK GROVE VILLAGE, Ill.--(BUSINESS WIRE)--Dec. 12, 2006--SigmaTron
International, Inc. (NASDAQ: SGMA), an electronic manufacturing
services company, today reported revenues and earnings for the second
quarter ended October 31, 2006.
Revenues increased to $44.9 million for the second-quarter fiscal
2007 from $34.9 million for the same quarter in the prior year. Net
income decreased to $708,011 in the 2007 period compared to $1,221,332
for the same period in the prior year. Basic earnings per share and
diluted earnings per share for the quarter ended October 31, 2006,
were $0.19 and $0.18, respectively compared to $0.33 and $0.29 for the
same quarter in fiscal 2006.
For the six months ended October 31, 2006, revenues increased to
$81.8 million compared to $56.2 million for the same period ended
October 31, 2005. Net income for the 2006 period was $966,681,
compared to $1,386,399 for the same period in the prior year. Basic
and diluted earnings per share for the six months ended October 31,
2006, were $0.25 compared to $0.37 and $0.34, respectively for the six
months ending October 31, 2005.
Commenting on SigmaTron's second-quarter and six-month results,
Gary R. Fairhead, president and chief executive officer, said, "During
the second quarter, we continued to see significant increases in
revenue with only nominal increases in profits. While profits were up
significantly from the first quarter, we expected higher profits from
the type of revenue increases we saw in the second quarter. A
substantial portion of the increase was unforecasted demand from
several markets, which led to operating inefficiencies during the
period. We are working to correct those.
"During the second quarter, we continued to realize significant
revenue growth at our Elk Grove Village operation. I am pleased to
inform you that we also reached an agreement with our Elk Grove
Village Union that runs until November 30, 2009. Both the increased
revenue and new labor agreement are positive signs.
"Both of our Acuna, Mexico and Wujiang, China operations continued
to perform well. We are starting to experience more of our customers
utilizing our China facility, and its strategic value remains evident.
Acuna continues to attract new opportunities and customers. Our hope
is that we see some of the work in Acuna migrate to China as we expand
our customer base in Acuna.
"Unfortunately, we continue to struggle in Hayward and Tijuana.
Our plan remains to transfer a significant portion of our revenue from
Hayward to Tijuana due to pricing pressures. Ramping up an operation
is always challenging, and it often goes slower than one would want,
which has been the case here. Our short term focus remains on both
operations as we get Tijuana up to speed while tripling their output
over two quarters. On a positive note, we have seen increased business
from existing customers for the Hayward operation, which should offset
a portion of the business moving to Tijuana. We have taken advantage
of Hayward's capacity and technology level in supporting customers at
our other locations.
"The challenges we face in our industry, including pricing
pressures, have not abated. Commodity prices continue to cause
material costs to go up and the transition from leaded assemblies to
RoHS compliant assemblies for some of our customers has created
working capital challenges, primarily with inventory. We are working
through those with our customers as required. However, we continue to
see significant opportunity for our Company and remain excited about
the future."
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,
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," "anticipate," "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, the
Company's plans, actions and actual results could differ materially.
Such statements should be evaluated in the context of the risks and
uncertainties inherent in the Company'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, suppliers and the
market; the activities of competitors, some of which may have greater
financial or other resources than the Company; the variability of our
operating results; the variability of our customers' requirements; the
availability and cost of necessary components and materials; the
Company's ability to continue to produce products that are in
compliance with the European Standard of "Restriction of Use of
Hazardous Substance ("RoHS"); the ability of the Company 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 the Company's business; the
continued stability of the U.S., Mexican, Chinese and Taiwanese
economic systems, labor and political conditions; and the ability of
the Company 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 the Company's future business and
results of operations are identified throughout the Company's Annual
Report on Form 10-K and risk factors 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 press
release and the Company 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 Six Months Six Months
Ended Ended Ended Ended
October 31, October 31, October 31, October 31,
2006 2005 2006 2005
------------- ------------ ------------ ------------
Net sales $44,858,662 $34,893,265 $81,818,527 $56,205,958
Cost of products
sold 40,002,612 29,874,320 73,103,828 48,645,328
------------- ------------ ------------ ------------
Gross profit 4,856,050 5,018,945 8,714,699 7,560,630
Selling and
administrative
expenses 3,098,733 2,951,060 6,116,686 5,127,883
------------- ------------ ------------ ------------
Operating
income 1,757,317 2,067,885 2,598,013 2,432,747
Other expense
(income) -net 553,646 328,610 1,013,256 422,850
------------- ------------ ------------ ------------
Income before
income tax 1,203,671 1,739,275 1,584,757 2,009,897
Income tax
expense 495,660 517,943 618,076 623,498
------------- ------------ ------------ ------------
Net income 708,011 1,221,332 966,681 1,386,399
============= ============ ============ ============
Net income per
common share -
basic $0.19 $0.33 $0.25 $0.37
============= ============ ============ ============
Net income per
common share -
assuming dilution $0.18 $0.29 $0.25 $0.34
============= ============ ============ ============
Weighted
average number
of common
equivalent
shares
outstanding -
basic 3,787,251 3,755,420 3,791,098 3,755,420
============= ============ ============ ============
Weighted average
number of common
equivalent shares
outstanding -
assuming dilution 3,872,654 4,187,632 3,877,692 4,074,866
============= ============ ============ ============
CONDENSED CONSOLIDATED BALANCE SHEETS
October 31, April 30,
2006 2006
------------- ------------
Current assets $69,197,068 $55,362,530
Machinery and
equipment-net 31,322,960 30,544,307
Intangible
assets 1,802,860 2,186,350
Goodwill 9,298,945 9,298,945
Other assets 1,233,116 1,548,240
------------- ------------
Total assets $112,854,949 $98,940,372
============= ============
Liabilities and
shareholders'
equity
Current
liabilities 27,319,928 21,029,469
Long-term
obligations 36,636,887 30,016,092
Stockholders'
equity 48,899,134 47,894,811
------------- ------------
Total liabilities
and stockholders'
equity $112,855,949 $98,940,372
============= ============
CONTACT: SigmaTron International, Inc.
Linda K. Blake, 1-800-700-9095