SigmaTron International, Inc. Reports Financial Results For the Second Quarter of Fiscal 2025

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].