Exhibit 99.1
SigmaTron International, Inc. Reports Third-Quarter Financial Results
for Fiscal Year 2007
ELK GROVE VILLAGE, Ill.--(BUSINESS WIRE)--March 13,
2007--SigmaTron International, Inc. (NASDAQ:SGMA), an electronic
manufacturing services company, today reported revenues and earnings
for the third quarter ended January 31, 2007.
Revenues increased to $44.6 million for the third-quarter fiscal
year 2007 from $34.1 million for the same quarter in the prior year.
Net income decreased to $76,572 in the 2007 period compared to
$278,176 for the same period in the prior year. Basic earnings per
share and diluted earnings per share for the quarter ended January 31,
2007, were $0.02, compared to $0.08 and $0.07 respectively, for the
same quarter in fiscal 2006.
For the nine months ended January 31, 2007, revenues increased to
$126.4 million compared to $90.3 million for the same period ended
January 31, 2006. Net income for the 2007 period was $1,043,252,
compared to $1,664,575 for the same period in the prior year. Basic
and diluted earnings per share for the nine months ended January 31,
2007, were $0.28 and $0.27 respectively, compared to $0.44 and $0.40,
respectively for the nine months ending January 31, 2006.
Commenting on SigmaTron's third-quarter and nine-month results,
Gary R. Fairhead, President and Chief Executive Officer, said, "Our
third quarter results are disappointing. Revenue has continued to
increase significantly, but operating income has remained flat and the
costs of financing our working capital requirements has contributed
towards eroding our profits. In general, we continue to face pricing
pressures from our customers, increasing raw material costs driven
primarily by increases in commodities such as copper and oil, and
increasing operating expenses and costs. We are examining ways to
combat these trends.
"During the third quarter, we continued to perform well at our Elk
Grove Village, Illinois, Acuna, Mexico and Wujiang, China operations.
Operating income margins at each of these locations were reasonable
but continue to have pressure on them.
"However, our problems at our Hayward, California and Tijuana,
Mexico operations continue. Our transition of low volume, high mix,
medium complexity box builds to Tijuana has proven more difficult than
I anticipated for both operations. We are focused on correcting those
problems and we are slowly making progress. I am convinced that we
must have this skill set as a part of our profile to succeed long term
in North America, but getting there has been challenging and has
negatively affected our financial performance.
"In conjunction with the pricing pressures we have seen, we have
also started to see a general softening in customer demand across many
of the markets we serve. It has not been dramatic, but given our third
quarter results it does not bode well for the Company's fourth
quarter.
"While much of the news contained here is negative, we still
believe that we are well-positioned for the future because of our
footprint. I expect to see business opportunities grow for our Mexican
and Chinese operations while we increase our skill sets in those
locations. Our domestic operations have opportunities as well, as we
continue to refine their capabilities as described above. As we go
through these transitions, our financial results will continue to be
negatively affected, but these transitions must be successfully
completed if we are to reverse our current trends."
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.
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,
2007 2006 2007 2006
------------- ------------ ------------- ------------
Net sales $44,584,513 $34,061,657 $126,403,040 $90,267,615
Cost of products
sold 40,281,945 30,381,859 113,385,773 79,027,187
------------- ------------ ------------- ------------
Gross profit 4,302,568 3,679,798 13,017,267 11,240,428
Selling and
administrative
expenses 3,519,246 2,886,874 9,635,932 7,970,016
------------- ------------ ------------- ------------
Operating income 783,322 792,924 3,381,335 3,270,412
Other expense
(income) -net 657,813 354,961 1,671,070 777,811
------------- ------------ ------------- ------------
Income from
continuing
operations
before income
tax and interest
of affiliate 125,509 437,963 1,710,265 2,492,601
Income tax
expense 48,937 150,628 667,013 791,575
------------- ------------ ------------- ------------
Income from
continuing
operations
76,572 287,335 1,043,252 1,701,026
Gain on sale of
Las Vegas
operation - - - (310,731)
(Loss) income
from operations
of discontinued
Las Vegas
location - (15,014) - 370,486
Income tax
(benefit)
expense - (5,855) - (23,304)
------------- ------------ ------------- ------------
(Loss) income on
discontinued
operation - (9,159) - (36,451)
-------------------------- --------------------------
Net income $76,572 $278,176 $1,043,252 $1,664,575
============= ============ ============= ============
Net income per
common share -
assuming
dilution $0.02 $0.07 $0.27 $0.40
============= ============ ============= ============
Weighted average
number of common
equivalent
shares
outstanding -
assuming
dilution 3,895,939 4,192,229 3,877,564 4,117,358
============= ============ ============= ============
CONDENSED CONSOLIDATED BALANCE SHEETS
January 31, April 30,
2007 2006
------------- ------------
Current assets $65,015,253 $55,362,530
Machinery and
equipment-net 31,404,199 30,544,307
Intangible assets 1,632,316 2,186,350
Goodwill 9,298,945 9,298,945
Other assets 945,196 1,548,240
------------- ------------
Total assets $108,295,909 $98,940,372
============= ============
Liabilities and
shareholders'
equity
Current
liabilities 23,109,635 21,029,469
Long-term
obligations 36,196,325 30,016,092
Stockholders'
equity 48,989,949 47,894,811
------------- ------------
Total liabilities
and
stockholders'
equity $108,295,909 $98,940,372
============= ============
CONTACT: SigmaTron International, Inc.
Linda K. Blake, 1-800-700-9095