SigmaTron Incurs Q4 Loss, Revenues Drop on Weak Demand

Core Insights - SigmaTron International, Inc. reported a challenging fourth quarter for fiscal 2024, with a loss per share of 55 cents compared to earnings of 87 cents per share in the same period last year [1] - Revenues from continuing operations decreased by 25% to $81.1 million from $108.3 million in the prior year [1] - The company incurred a net loss of $3.4 million for the quarter, contrasting with a net income of $5.3 million in the same period last year [1] Financial Performance - The revenue drop of $27.1 million in the fiscal fourth quarter was primarily due to a broader softness in customer demand, particularly noted in February 2024 [3] - Total revenues for fiscal 2024 from continuing operations were $373.9 million, a decrease of $40.6 million, or 10%, compared to $414.4 million in fiscal 2023 [6] - The company shifted from a net income of $14.2 million in fiscal 2023 to a net loss of $2.5 million in fiscal 2024, with a loss per share of 41 cents compared to earnings per share of $2.34 in the previous year [6] Operational Challenges - Management cited a broad industry slowdown and ongoing supply chain disruptions as key factors affecting financial performance, leading to reduced customer demand [2][3] - SigmaTron's cost structure faced significant pressure due to declining revenues, prompting the implementation of cost-saving measures such as the sale of its Elgin building and consolidation of operations [4] Strategic Initiatives - The company successfully renegotiated loan agreements with secured lenders, obtaining waivers for covenant violations and amending the agreements [5] - SigmaTron engaged Lincoln International to explore strategic alternatives for reducing its debt, with several initiatives already underway [5] - The sale of the Elgin facility in February 2024 was a key component of the cost-reduction strategy, strengthening the balance sheet and providing additional liquidity [8] Management Outlook - Management remains cautiously optimistic, with expectations of demand recovery by the fourth quarter of calendar 2024, despite weak demand in the first quarter of fiscal 2025 [7] - The company is continuing to streamline operations and lower costs in preparation for a potential rebound in demand [7]