Core Insights - SigmaTron International, Inc. reported a net loss of $1.55 per share for the second quarter of fiscal 2025, compared to breakeven earnings per share in the same quarter last year, with revenues declining by 24% year over year to $74.7 million [2][4] - The company's stock has seen a 3.2% increase since the earnings report, but a significant decline of 40.7% over the past month, underperforming the S&P 500 index [1] Financial Performance - Gross profit for the quarter was $6.9 million, down from $9.7 million in the prior year, with gross margin contracting due to lower revenues and supply chain challenges [4] - Operating income decreased to $0.5 million from $3.1 million a year ago, while selling and administrative expenses slightly decreased to $6.4 million from $6.6 million [4] Management Commentary - CEO Gary R. Fairhead noted ongoing revenue softness attributed to economic challenges and supply chain volatility, including previous overordering of electronic components leading to inflated inventory levels [5] - Despite the loss, the company achieved operating profitability in October 2024, driven by restructuring efforts, with management optimistic about demand recovery in calendar 2025 [6] Influencing Factors - Revenue decline was influenced by weaker backlog levels and inventory destocking in the electronics manufacturing industry, along with supply chain disruptions and previous component overordering [7] - One-time costs of approximately $3.3 million related to debt restructuring negatively impacted the quarter's net income [7] Guidance - Management did not provide formal guidance but indicated expectations for continued weak revenues in the fiscal third quarter, exacerbated by seasonal slowdowns in North America and Asia [8] - There is cautious optimism for improved demand trends in calendar 2025, supported by customer activity and new opportunities [8] Other Developments - SigmaTron completed a significant sale and leaseback transaction for its Elk Grove Village property, reducing bank debt and expected to result in a one-time capital gain of about $7 million in the fiscal third quarter [9] - The company made progress in inventory reduction and remains committed to further deleveraging its balance sheet [10]

Financial Performance - Net loss for the three-month period ended October 31, 2024, was $9,466,669, a decrease of $9,494,931 compared to a net income of $28,262 for the same period in the prior fiscal year [183]. - The Company reported a net loss of $12,755,829 for the six-month period ended October 31, 2024, a decrease of $13,046,190 compared to net income of $290,361 for the same period in the prior fiscal year [186]. - Net sales for the three months ended October 31, 2024, decreased by $23,972,324, or -24.3%, to $74,719,360 compared to $98,691,684 for the same period in the prior fiscal year [200]. - Net sales for the six months ended October 31, 2024, decreased by $37,325,702, or -19.0%, to $159,496,338 compared to $196,822,040 for the same period in the prior fiscal year [205]. - Gross profit margin for the three months ended October 31, 2024, was 9.2%, down from 9.8% for the same period in the prior fiscal year [202]. - Gross profit margin for the six months ended October 31, 2024, was 8.3%, down from 9.8% for the same period in the prior fiscal year [207]. Expenses and Costs - Selling and administrative expenses decreased by $243,123, or 3.7%, to $6,370,511, representing 8.5% of net sales for the three-month period ended October 31, 2024 [179]. - Selling and administrative expenses decreased by $462,062, or -3.4%, to $12,994,377 for the six months ended October 31, 2024 [209]. - Cost of products sold for the three months ended October 31, 2024, decreased by $21,188,773, or -23.8%, to $67,815,156, representing 90.8% of net sales [201]. - Cost of products sold for the six months ended October 31, 2024, decreased by $31,296,125, or -17.6%, to $146,186,940, which is 91.7% of net sales [206]. Interest and Tax Expenses - Interest expense, net, increased to $4,701,108 for the three-month period ended October 31, 2024, compared to $2,708,696 for the same period in the prior fiscal year [181]. - Interest expense, net, increased to $6,969,383 for the six months ended October 31, 2024, compared to $5,427,774 for the same period in the prior fiscal year [211]. - Income tax expense increased by $4,329,588 to $4,673,254 for the three-month period ended October 31, 2024, with an effective tax rate of (61.46)% [182]. - Income tax expense increased by $5,285,936 to $5,475,467 for the six months ended October 31, 2024, compared to $189,531 for the same period in the prior fiscal year [243]. Cash Flow and Financing - Cash flow provided by operating activities decreased to $12,931,640 for the six months ended October 31, 2024, down from $15,766,616 in the prior fiscal year, primarily due to a decrease in inventory of $12,798,326 [190]. - Cash used in financing activities was $10,657,216 for the six months ended October 31, 2024, primarily due to net payments under the line of credit and term loan agreement [250]. - Cash flow provided by operating activities was $15,766,616 for the six months ended October 31, 2023, primarily due to a decrease in inventory of $19,214,849 and accounts receivable of $5,244,132 [248]. Debt and Liabilities - The Company has reduced its debt by selling assets and reducing workforce, and is exploring additional activities to further reduce its debt load [188]. - The TCW Term Loan has a principal amount of $40,000,000, with an outstanding balance of $38,245,241 as of October 31, 2024 [222]. - The Revolving Commitment was reduced from $70 million to $55 million as part of the 2024 Amendments [228]. - The Company is obligated to meet certain debt ratios by August 31, 2025 or find a Replacement Transaction by September 30, 2025 [246]. - The Company was not in compliance with financial covenants as of August 19, 2024, with the Fixed Charge Coverage Ratio being less than 1.10:1.00 and the Total Debt to EBITDA Ratio exceeding 4.50:1.00 for the twelve-month period ending April 30, 2024 [258]. Compliance and Internal Controls - The Company has identified a material weakness in its internal controls related to revenue recognition, which continues to exist as of October 31, 2024 [239]. - The Company received a delinquency notification from Nasdaq on August 16, 2024, for failing to timely file its Form 10-K annual report for the fiscal year ended April 30, 2024, which constituted a default under the Credit Agreements [259]. - The Company entered into waivers with JPM and TCW on April 28, 2023, to address non-compliance with financial covenants, including modifications to the definition of EBITDA [257]. Asset Management - The Company’s right-of-use assets for operating leases increased to $10,090,512 as of October 31, 2024, compared to $7,463,301 as of April 30, 2024 [165]. - The Company’s operating lease current liabilities increased to $3,155,101 as of October 31, 2024, compared to $2,789,107 as of April 30, 2024 [165]. - The Company executed a sale/leaseback transaction for its principal facility in December 2024, with a sale price of $9,500,000 intended to reduce debt [194]. - The Company recorded a liability of $2,263,000 for warrants classified as a derivative liability, which were valued at $2,889,000 as of October 31, 2024 [264]. Foreign Operations - The Company incurred net foreign currency transaction losses of $767,167 for the six-month period ended October 31, 2024, compared to losses of $461,859 for the same period in the prior year [268]. - The Company paid approximately $28,440,000 to its foreign subsidiaries for manufacturing services during the six months of fiscal year 2025 [268].

Financial Performance - For the six-month period ended October 31, 2024, revenues decreased by $37.3 million, or 19%, to $159.5 million compared to $196.8 million for the same period in the prior year[2] - The net loss for the six-month period ended October 31, 2024, was $12.8 million, compared to a net income of $0.3 million for the same period in the prior year[2] - For the three-month period ended October 31, 2024, revenues decreased by $24 million, or 24%, to $74.7 million compared to $98.7 million for the same quarter in the prior year[8] - The net loss for the three-month period ended October 31, 2024, was $9.5 million compared to break even for the same period in the prior year[8] - Basic and diluted loss per share for the six-month period ended October 31, 2024, was $2.08, compared to income per share of $0.05 for the same period in the prior year[2] Expenses and Financial Adjustments - The company recorded approximately $3.3 million in expenses during the second quarter related to debt modification and deferred financing costs[8] - A sale/leaseback of the Elk Grove Village property was completed, resulting in a one-time capital gain of approximately $7 million expected to be reported in the third quarter[3] Future Outlook - The company anticipates that the current trend of depressed revenue levels will continue into the third fiscal quarter due to seasonal factors[15] - Customers are starting to indicate a stronger economic outlook for calendar 2025, with modest orders being pulled in and increased activity in new opportunities[24] - The company is focused on reducing inventory further, with expectations for significant gains in reduction efforts during the third quarter[24]

Core Viewpoint - SigmaTron International, Inc. reported a significant decline in revenues and net income for the fiscal quarter ended October 31, 2024, indicating ongoing challenges in the electronic manufacturing services sector due to economic conditions and supply chain issues [2][4][5]. Financial Performance - For the three-month period ended October 31, 2024, revenues decreased by $24 million, or 24%, to $74.7 million compared to $98.7 million in the same quarter of the previous year [2]. - The net loss for the same period was $9.5 million, contrasting with a break-even result in the prior year [2]. - Basic and diluted loss per share for the quarter was $1.55, compared to $0.00 income per share in the same period last year [2]. - For the six-month period ended October 31, 2024, revenues decreased by $37.3 million, or 19%, to $159.5 million compared to $196.8 million in the prior year [3]. - The net loss for the six-month period was $12.8 million, compared to a net income of $0.3 million for the same period last year [3]. - Basic and diluted loss per share for the six-month period was $2.08, compared to $0.05 income per share in the prior year [3]. Operational Insights - The CEO noted that revenue softness has persisted, with a sequential decline from $84.8 million in the first quarter to $74.7 million in the second quarter of fiscal 2025 [4]. - The company anticipates continued depressed revenue levels into the third fiscal quarter, influenced by holiday seasons in North America and Asia [4]. - Despite the challenges, the company reported an operating profit in October, indicating positive impacts from restructuring efforts [5]. - The ongoing softness in revenue is attributed to general economic conditions and supply chain volatility, with customers having overordered in the past due to uncertainty in component availability [5]. - The company believes that excess inventory has largely been consumed, which may lead to increased demand in 2025 [5]. Future Outlook - Customers are beginning to express optimism for a stronger economy in calendar 2025, suggesting that the current revenue trend may have bottomed out [6]. - The company is focused on reducing inventory and has made modest progress, expecting significant gains in the third quarter [6]. - On December 13, 2024, SigmaTron entered into a sale/leaseback of its Elk Grove Village property, which will reduce bank debt and result in a one-time capital gain of approximately $7 million in the third quarter [7].

Company Overview - SGMA International experienced a significant stock decline of 5.33%, with its share price dropping to $3.02 and a trading volume of 23,606 shares [1] - The company specializes in electronic manufacturing services (EMS), providing products ranging from printed circuit board assemblies to fully assembled electronic products [4] Financial Performance - SGMA reported revenue of $84.78 million but incurred a net loss of $3.29 million, resulting in an earnings per share of -$0.54 [2] - The gross profit for the company was $6.41 million, and it has a price-to-earnings ratio of -3.07 [2] - Currently, there are no institutional investors providing ratings for the stock, such as "buy," "hold," or "sell" [2] Industry Context - The broader electronics component industry saw a 0.79% increase, with notable gains from companies like Interlink Electronics, Inc., Ouster, Inc., and Tianhong Technology [3] - Certain stocks within the industry, such as Microcloud Hologram Inc C/Wts 31/01/2028 (To Pur Com) and Neonode Inc., exhibited significant trading activity with amplitude rates of 15.43%, 11.44%, and 9.57% respectively [3] Revenue Sources - SGMA's major revenue source is Mexico, followed by the US, China, and Vietnam [4]

Core Insights - SigmaTron International, Inc. reported a challenging first quarter of fiscal 2025, with a loss of 54 cents per share compared to earnings of 4 cents per share in the prior-year quarter, and revenues decreased by 14% to $84.8 million from $98.1 million [1][2] Financial Performance - The gross profit for SigmaTron was $6.4 million, down from $9.7 million year-over-year, resulting in a gross margin of approximately 7.6%, a decline from 9.8% in the prior year [3] - Selling and administrative expenses were stable at $6.6 million, slightly down from $6.8 million in the first quarter of fiscal 2024, but the significant drop in gross profit led to an operating loss of $0.2 million, compared to an operating income of $2.8 million in the prior-year period [4] - The company recorded an "other expense" of $2.3 million, primarily due to interest and debt-related costs, resulting in a pre-tax loss of $2.5 million and a net loss of $3.3 million, contrasting with a net income of $0.3 million a year earlier [5] Management Guidance - Management anticipates a market recovery in the latter part of calendar year 2024, with a sequential quarterly revenue increase of 4.4% from the fourth quarter of fiscal 2024 to the first quarter of fiscal 2025, indicating potential stabilization [6] - The company is actively reducing overhead and operational costs in response to market softness, with additional cost reductions implemented in August 2024, and is focusing on reducing inventory to alleviate working capital constraints [6] Strategic Developments - SigmaTron is collaborating with Lincoln International to improve its financial structure and de-leverage its balance sheet, as part of a broader strategy to navigate current market softness, which is widespread across the industry [7] - The company's strategic cost management and operational adjustments are critical as it prepares for expected improvements in customer activity levels in 2025 [7]

Financial Performance - Net sales decreased by $13,353,378, or 13.6%, to $84,776,978 for the three months ended July 31, 2024, compared to $98,130,356 for the same period in the prior fiscal year[94] - Cost of products sold decreased by $10,107,352, or 11.4%, to $78,371,784, representing 92.4% of net sales for the three months ended July 31, 2024[96] - Gross profit margin was 7.6% of net sales for the three months ended July 31, 2024, down from 9.8% for the same period in the prior fiscal year[97] - Net loss increased to $3,289,160 for the three months ended July 31, 2024, compared to a net income of $262,099 for the same period in the prior fiscal year[99] - Cash flow provided by operating activities was $2,627,667 for the three months ended July 31, 2024, down from $7,750,014 for the same period in the prior fiscal year[102] Expenses and Costs - Selling and administrative expenses decreased by $218,939, or 3.2%, to $6,623,866, representing 7.8% of net sales for the three months ended July 31, 2024[97] - Interest expense, net, decreased to $2,268,275 for the three months ended July 31, 2024, compared to $2,719,078 for the same period in the prior fiscal year[97] Tax and Compliance - The effective tax rate increased to (32.26)% for the three months ended July 31, 2024, compared to (142.76)% for the same period in the prior fiscal year[98] - The Company was not in compliance with financial covenants as of August 19, 2024, with the Fixed Charge Coverage Ratio below 1.10:1.00 and Total Debt to EBITDA Ratio exceeding 4.25:1.00[113] - The 2024 Amendments modified the Fixed Charge Coverage Ratio minimums to range from 0.70:1.0 for the twelve months ending July 31, 2024, to 1.00:1.0 for the twelve months ending September 30, 2025[116] - The maximum Total Debt to EBITDA Ratio was adjusted to range from 6.50:1.0 for the twelve months ending July 31, 2024, to 3.50:1.0 for the twelve months ending April 30, 2027[116] Debt and Financing - Cash provided by financing activities was $426,104 for the three-month period ended July 31, 2024, compared to cash used of $6,292,323 for the same period in 2023[105] - As of July 31, 2024, the outstanding balance under the revolving loan facility was $30,284,657, with $16,087,627 of unused availability, compared to an outstanding balance of $28,598,719 and $13,443,766 of unused availability at April 30, 2024[108] - The TCW Term Loan outstanding amount as of July 31, 2024, was $37,253,301, down from $37,503,301 at April 30, 2024[109] - The Revolving Commitment was reduced from $70 million to $55 million as of the Third Amendment Effective Date[118] - The Company can borrow up to 10,000,000 Renminbi (approximately $1,400,000) under a credit facility with China Construction Bank, with no outstanding balance as of July 31, 2024[121] - The outstanding balance of the mortgage agreement for the property in Del Rio, Texas, was $353,469 as of July 31, 2024, down from $366,572 at April 30, 2024[123] Foreign Operations and Currency - The Company paid approximately $15,460,000 to its foreign subsidiaries for manufacturing services during the three months of fiscal year 2025[125] - The cumulative amount of unremitted earnings for which U.S. income taxes have not been recorded is $14,036,000 as of July 31, 2024[126] - The Company reported net foreign currency transaction losses of $461,748 for the three-month period ended July 31, 2024, compared to losses of $275,970 for the same period in the prior year[125] Internal Controls and Governance - The Company identified a material weakness in its disclosure controls and procedures related to revenue recognition, which continues to exist as of July 31, 2024[128] - Management remains committed to addressing the material weakness in internal controls, but there is no assurance of success[130] - The Company’s disclosure controls and procedures were deemed ineffective as of July 31, 2024, due to identified control deficiencies[128] Future Outlook - The Company anticipates continuing improvement in supply chain predictability in fiscal 2025[91] - The Company has taken steps to reduce its debt and cost structure, including consolidating operations and reducing headcounts[101] - The Company does not expect ongoing legal proceedings to have a material adverse impact on its future consolidated financial position[132]

Financial Performance - Revenues for the first quarter of fiscal 2025 decreased by $13.4 million, or 14% year-over-year, totaling $84.8 million compared to $98.1 million in the same period last year[1]. - Net loss for the quarter was $3.3 million, resulting in a loss per share of $0.54, compared to a net income of $0.3 million and earnings per share of $0.04 in the prior year[1][8]. - Sequentially, revenues increased by 4.4% compared to the fourth quarter of fiscal 2024, indicating a potential positive trend[2]. - The first quarter's gross profit was $6.4 million, down from $9.7 million in the same period last year, reflecting the impact of reduced revenues[7]. Asset Management - Current assets decreased to $167.9 million from $175.9 million in the previous quarter, while total assets decreased to $218.8 million from $223.8 million[8]. - Current liabilities remained relatively stable at $145.4 million, with long-term obligations decreasing to $10.6 million from $11.8 million[8]. - The company is focused on reducing inventory to lower working capital requirements, which will remain a priority for the remainder of the calendar year[3]. Future Outlook - The company is optimistic about calendar 2025 being a stronger year, as customer relationships remain excellent and new projects are in progress[3]. - The company has made progress in de-leveraging its balance sheet in collaboration with Lincoln International[3]. - The company continues to monitor market conditions and adjust manufacturing schedules and overhead costs accordingly[2].

Core Viewpoint - SigmaTron International, Inc. reported a significant decline in revenues and a net loss for the fiscal quarter ended July 31, 2024, indicating ongoing challenges in the electronic manufacturing services sector [2][3]. Financial Performance - Revenues for the three months ended July 31, 2024, decreased by $13.4 million, or 14%, to $84.8 million compared to $98.1 million for the same period in the prior year [2]. - The net loss for the same period was $3.3 million, contrasting with a net income of $0.3 million for the previous year [2]. - Basic and diluted loss per share was $0.54, compared to an income of $0.04 per share for the same period last year [2]. Management Commentary - The CEO noted that the revenue softness has persisted as anticipated, with expectations of a potential increase in activity by the fourth quarter of calendar 2024 [3]. - Despite the year-over-year decline of 14.4% in revenue, there was a sequential increase of 4.4% compared to the fourth quarter of fiscal 2024, suggesting a possible positive trend [3]. - The company is actively managing costs and overhead, including further reductions in manufacturing schedules and inventory to lower working capital requirements [3][4]. Operational Focus - SigmaTron is concentrating on reducing inventory levels and maintaining strong relationships with customers, with optimism for a stronger performance in calendar 2025 [4]. - The company is collaborating with Lincoln International to de-lever its balance sheet and has made progress in this area [4]. Company Overview - SigmaTron International operates as an independent provider of electronic manufacturing services, with facilities in the U.S., Mexico, China, and Vietnam [5]. - The company's services include printed circuit board assemblies, electro-mechanical subassemblies, and fully assembled electronic products [5].

SigmaTron International, Inc. (SGMA) reported a challenging fourth quarter of fiscal 2024. It incurred a loss per share of 55 cents in the quarter under review against earnings of 87 cents per share in the same period last year. SigmaTron's revenues from continuing operations were $81.1 million, a 25% decrease compared to $108.3 million in the same period in 2023. The company incurred a net loss of $3.4 million for the quarter against a net income of $5.3 million in the prior-year period. Management highlig ...