Exhibit 99.1
SigmaTron International, Inc. Reports
Year-End Financial Results for Fiscal Year 2007
ELK GROVE VILLAGE, Ill.--(BUSINESS WIRE)--July 13, 2007--SigmaTron
International, Inc. (NASDAQ: SGMA), an electronic manufacturing
services company, today reported revenues and earnings for the fiscal
year ended April 30, 2007. Revenues increased 32.9 percent to $165.9
million in fiscal 2007 from $124.8 million in the prior year. Net
income decreased to $1.70 million in fiscal 2007 compared to $1.88
million in fiscal 2006. Diluted earnings per share from continuing
operations for the year ended April 30, 2007, were $0.44 compared to
$0.48 in fiscal 2006.
For the fourth quarter of fiscal 2007, revenues increased to $39.5
million compared to $34.5 million for the same quarter in the prior
year. Diluted earnings per share from continuing operations for the
fiscal 2007 fourth quarter were $0.17 per share compared to $0.06 per
share for the same period of fiscal 2006.
Commenting on SigmaTron's results, Gary R. Fairhead, President and
Chief Executive Officer, said, "When comparing our fourth quarter to
the third quarter of fiscal 2007 we can see some modest financial
progress. Revenue for the fourth quarter was down 11% from the third
quarter, yet net income was up 9.7 times. Clearly this is due in no
small part to the poor performance in the third quarter, but I believe
it also reflects two other events. The first is that the integration
of Able Electronics into SigmaTron is now finished. The second is that
the European Economic Community July 1, 2006 deadline for completing
the transition to the RoHS standard created almost chaotic conditions
for SigmaTron through much of 2006. That transition, largely completed
by the end of our fiscal first quarter of fiscal 2007, was immediately
followed by a sharp increase in revenues during the second and third
quarters, creating significant inefficiencies in our supply chain,
operations and many customers' forecasts.
"When comparing fiscal 2007 to 2006, we experienced continued
revenue growth with a small decline in net income. The revenue growth
was driven by the following: 1) inclusion of customers from the Able
acquisition for a full year versus ten months, 2) short term demand
increases related to the RoHS conversion, which have now run their
course, 3) organic growth from existing customers and 4) several new
significant customers.
"During fiscal 2007 net income was negatively impacted by the
following: 1) the operating inefficiencies caused by the RoHS
conversion required by many customers, 2) the longer than expected
integration of Able Electronics into SigmaTron, 3) increased raw
material cost related to the RoHS conversion, soaring commodity prices
and increased transportation costs, 4) continuous pricing pressures
from customers, 5) increasing regulatory costs and 6) increased
interest expense directly tied to increases in working capital
requirements.
"For fiscal 2007, we saw continued satisfactory results from our
Acuna, Mexico and Suzhou-Wujiang, China operations. Both operations
are growing in size and as reported in the last quarter, we are
looking at increasing the Acuna operation and facility. China has
started to modestly expand its customer base, and received its first
intra-China order just before the end of fiscal 2007. Elk Grove
Village had a significantly better fiscal 2007 than 2006 from a
financial perspective. Much of their results were tied to the RoHS
conversion and customers' request for geographical proximity during
the transition. While we expect some of Elk Grove Village's revenue to
migrate to some of our offshore locations during fiscal 2008, we have
other opportunities for the operation and we fully expect Elk Grove
Village to be a positive contributor to our fiscal 2008 financial
results. Finally, our Taiwan branch grew slightly during fiscal 2007.
It continues to add value to our supply chain, and we are exploring
ways to create income from its supply chain knowledge and experience.
"Our Tijuana, Mexico and Hayward, California operations did not
perform to expectations during fiscal 2007. The integration of those
operations took longer than anticipated, and we had to put in place
new systems and in some areas new personnel. The integration is now
complete and we have clearly made financial progress at both
operations during the fourth quarter. Real challenges remain for both
operations, as well as the entire company, but it appears we are
heading in the right direction.
"Our company remains well positioned for an electronic
manufacturing services company our size, and we believe we will
continue to be attractive to our current customers as well as new
customers. I believe we will be able to attract new and significant
relationships. However, pricing pressures abound, and our marketplace
remains very competitive. Our expectation is that we have gotten some
of our challenges behind us, and even though we are heading into a
slower quarter we are positioned to build on the momentum we
experienced at the end of fiscal 2007."
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
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. 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 Twelve Months Twelve Months
Ended Ended Ended Ended
April 30, April 30, April 30, April 30,
2007 2006 2007 2006
------------ ------------ ------------- -------------
Net sales $39,506,066 $34,518,861 $165,909,106 $124,786,476
Cost of
products sold 34,764,577 30,959,190 148,150,350 109,986,377
------------ ------------ ------------- -------------
Gross profit 4,741,489 3,559,671 17,758,756 14,800,099
Selling and
administrative
expenses 3,236,421 2,955,630 12,872,353 10,925,646
------------ ------------ ------------- -------------
Operating
income 1,505,068 604,041 4,886,403 3,874,453
Other expense
(income) -net 620,830 234,755 2,291,900 1,012,566
------------ ------------ ------------- -------------
Income from
continuing
operations
before income
tax and
interest of
affiliate 884,238 369,286 2,594,503 2,861,887
Income tax
expense 229,166 144,014 896,179 935,589
------------ ------------ ------------- -------------
Income from
continuing
operations 655,072 225,272 1,698,324 1,926,298
Minority
interest in
affiliate - - - -
------------ ------------ ------------- -------------
Income before
discontinued
operations 655,072 225,272 1,698,324 1,926,298
Loss from
operations of
discontinued
Las Vegas
location - (12,648) - (72,403)
Income tax
benefit - (4,933) - (28,237)
------------ ------------ ------------- -------------
(Loss) income
on
discontinued
operation - (7,715) - (44,166)
------------ ------------ ------------- -------------
Net income $655,072 $217,557 $1,698,324 $1,882,132
============ ============ ============= =============
Net income per
common share -
continuing
operations $0.17 $0.06 $0.45 $0.51
Net income per
common share -
discontinued
operations $0.17 $0.00 $0.45 ($0.01)
------------ ------------ ------------- -------------
Net income per
common share -
basic $0.17 $0.06 $0.45 $0.50
============ ============ ============= =============
Net income per
common share -
assuming
dilution $0.17 $0.06 $0.44 $0.48
============ ============ ============= =============
Weighted
average number
of common
equivalent
shares
outstanding -
assuming
dilution 3,885,055 3,905,791 3,879,155 3,894,731
============ ============ ============= =============
CONDENSED CONSOLIDATED BALANCE SHEETS
April 30, April 30,
2007 2006
------------ ------------
Current assets $66,663,956 $55,362,530
Machinery and
equipment-net 30,971,107 30,544,307
Intangible
assets 1,461,772 2,186,350
Goodwill 9,298,945 9,298,945
Other assets 1,006,126 1,548,240
------------ ------------
Total assets $109,401,906 $98,940,372
============ ============
Liabilities and
shareholders'
equity
Current
liabilities 23,790,708 21,029,469
Long-term
obligations 35,870,177 30,016,092
Stockholders'
equity 49,741,021 47,894,811
------------ ------------
Total
liabilities
and
stockholders'
equity $109,401,906 $98,940,372
============ ============
CONTACT: SigmaTron International, Inc.
Linda K. Blake
1-800-700-9095