SigmaTron International, Inc. Reports Third Quarter Financial Results for Fiscal 2006.ELK GROVE VILLAGE Elk Grove Village, village (1990 pop. 33,429), Cook and Du Page counties, NE Ill., a suburb of Chicago; inc. 1956. With a population of c.100 at the time of its establishment on open farmland, the village has grown dramatically and steadily, largely because of its , Ill. -- SigmaTron International, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :SGMA SGMA Sporting Goods Manufacturers Association SGMA Southern Gospel Music Association SGMA Sierpinski Gasket Monopole Antenna ), an electronic manufacturing services company, today reported revenues and earnings for the 2006 third fiscal quarter ended January January: see month. 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 diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of 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 A stand-alone hardware device or software environment dedicated to a specific task. See hardware appliance and software 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 July: see month. 2005, acquisition of Able Electronics Company in Hayward, California Hayward is a city located in the East Bay in Alameda County. The sixth largest city in the San Francisco Bay Area, it is one of the larger suburbs of Oakland. As of the 2000 census, the city population was 140,030. The estimated population in 2007 is 155,312. ("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 European Union (EU), name given since the ratification (Nov., 1993) of the Treaty of European Union, or Maastricht Treaty, to the European Community mandate on the restrictions of hazardous substances) compliance transitions required in Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). by July, 2006 and cost
inefficiencies related to the consolidation of the Company's
Fremont, California For the unincorporated community in Yolo County, California, see .Fremont (IPA: /ˈfriːmɒnt/) is a city in California that was incorporated on January 23, 1956, from the merger of five smaller communities: facility into Able, and integration of the Able operations. Commenting on SigmaTron's third-quarter and nine-month results, Gary Gary, city (1990 pop. 116,646), Lake co., NW Ind., a port of entry on Lake Michigan; inc. 1909. Gary was founded by the U.S. Steel Corporation, which purchased the land in 1905 and landscaped it for a city. 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 op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op and excited about the opportunities this operation can provide to SigmaTron. We have already realized incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. 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 The amount of geographic space covered by an object. A computer footprint is the desk or floor surface it occupies. A satellite's footprint is the earth area covered by its downlink. See form factor. 1. . 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 Las Vegas (läs vā`gəs), city (1990 pop. 258,295), seat of Clark co., S Nev.; inc. 1911. It is the largest city in Nevada and the center of one of the fastest-growing urban areas in the United States. 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 Fiscal Year-End The completion of a one-year, or 12-month, accounting period. Notes: The reason that a company's fiscal year often differs from the calendar year and does not close on Dec 31, is due to the nature of company's needs. . 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 Elk Grove Village is a municipality located in northeastern Illinois adjacent to O'Hare International Airport and the City of Chicago. Elk Grove Village encompasses 10.9 square miles in land area with 10.5 square miles located in Cook County and 0. 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 as·sem·ble v. as·sem·bled, as·sem·bling, as·sem·bles v.tr. 1. To bring or call together into a group or whole: assembled the jury. 2. 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 forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. . 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- mid- pref. Middle: midbrain. 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 Mexican named after or originating in Mexico. Mexican axolotl see ambystomamexicanum. Mexican beaded lizard (Heloderma horridum , 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 Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 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
============ ============
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