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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________
FORM
8-K
_________________
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
September 3, 2024
_______________________________
SIGMATRON INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
_______________________________
Delaware 000-23248 36-3918470
(State or Other Jurisdiction of Incorporation) (Commission File Number) (I.R.S. Employer Identification No.)
2201 Landmeier Road
Elk Grove Village
,
Illinois
60007
(Address of Principal
Executive Offices) (Zip Code)
(
847
)
956-8000
(Registrant's telephone number,
including area code)
Not applicable
(Former name or former address, if changed
since last report)
_______________________________
Check the appropriate box
below if the Form 8-K filing is intended to simultaneously satisfy the filing
obligation of the registrant under any of the following provisions:
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications
pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securitie
s registered pursuant to Section 12(b) of the Act:
Title of each class
Trading
Symbol(s)
Name of each exchange on which registered
Common Stock $0.01 par
value per share
SGMA
The
NASDAQ
Capital Market
Indicate by check mark whether
the registrant is an emerging growth company as defined in Rule 405 of the
Securities Act of 1933 ((s)230.405 of this chapter) or Rule 12b-2 of the
Securities Exchange Act of 1934 ((s)240.12b-2 of this chapter).
Emerging
growth company
If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to
Section 13(a) of the Exchange Act.
Item 2.02. Results of Operations and
Financial Condition.
On September 3, 2024, the Registrant issued a press
release, a copy of which is attached hereto as Exhibit 99.1 and is
incorporated herein by reference.
Item 9.01. Financial Statements and
Exhibits.
(d) Exhibits
Exhibit Number
Description
99.1
Press Release dated
September 3, 2024
104
Cover Page Interactive Data File (embedded within the
Inline XBRL document)
SIGNATURE
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
SIGMATRON
INTERNATIONAL, INC.
Date: September 3, 2024
By:
/s/ Gary R. Fairhead
Gary R.
Fairhead
Chief Executive Officer
ELK GROVE VILLAGE, Ill., Sept. 03, 2024 (GLOBE NEWSWIRE) -- SigmaTron
International, Inc. (NASDAQ: SGMA), an electronic manufacturing services
company (the "Company"), today reported revenues and earnings for the fiscal
quarter and fiscal year ended April 30, 2024.
Revenues from continuing operations decreased $40.6 million, or 10 percent, to
$373.9 million for fiscal 2024 compared to $414.4 million for fiscal 2023. Net
income/(loss) from continuing operations for fiscal 2024 was a loss of $2.5
million, compared to net income of $14.2 million for fiscal 2023. Basic and
diluted income/(loss) per share from continuing operations for fiscal 2024 was
a loss of $0.41, compared to $2.34 income per share for fiscal 2023.
For the three months ended April 30, 2024, revenues from continuing operations
decreased $27.1 million, or 25 percent, to $81.1 million compared to $108.3
million for the same period in the prior year. Net income/(loss) from
continuing operations for the three-month period ended April 30, 2024, was a
loss of $3.4 million compared to income of $5.3 million for the same period in
the prior year. Basic and diluted income/(loss) per share from continuing
operations for the three months ended April 30, 2024 was a loss of $0.55,
compared to income of $0.87 income per share for the same period last year.
As previously reported, the Company sold a majority position of its wholly
owned subsidiary, Wagz, Inc. ("Wagz"), effective April 1, 2023. As a result,
the Company has reported results from Wagz for fiscal 2023 as discontinued
operations. For fiscal 2023, net loss from discontinued operations was $34.8
million. Net loss per share from discontinued operations for fiscal 2023 was
$5.73. For the three months ended April 30, 2023, net loss from discontinued
operations was $5.0 million. Net loss per share from discontinued operations
for the three months ended April 30, 2023 was $0.82.
Commenting on SigmaTron's results for both the 4th quarter and fiscal year,
ended April 30, 2024, Gary R. Fairhead, Chief Executive Officer and Chairman
of the Board said, "The fourth quarter of fiscal 2024 was one of the most
difficult quarters in SigmaTron's history, a reflection of an industry-wide
slowdown and the lingering effects of the supply chain crisis. As previously
reported on March 8, 2024, when we released our third quarter results for
fiscal 2024, we saw a general softness from our customer base which led to a
February sales decline that continued through the balance of the quarter. By
the end of our quarter, many of our competitors who are also public were
reporting similar results for the first calendar quarter of 2024. Our outlook,
however, remains positive as our customers expect this to be a short-term
phenomenon and demand to bounce back in short order. Backlogs remain strong,
and we continue to quote new platforms and projects.
"Prior to experiencing these pressures, we had already started decreasing our
overall costs. This included the sale of our Elgin building, which closed in
February of 2024, and the consolidation of the operations in Elgin into our
Elk Grove Village headquarters. In addition, we started taking actions to
reduce headcount through layoffs or retirements, with the people retiring not
being replaced. We had several operations go to shortened weeks and work
schedules. We continue to do this as we react to the continuing soft demand
short term.
"Unfortunately, the lower results for the fourth quarter led to covenant
violations with our two secured lenders. I am pleased to report that we
reached an agreement with both lenders going forward, under which the covenant
violations were waived and the existing loan agreements were amended. As part
of that process, SigmaTron's board of directors decided to engage the services
of Lincoln International as an advisor for strategic alternatives to de-lever
the Company. Several of these are underway and others will be started shortly.
At this time, we believe that our plan of action between the strategic
initiatives and the operational cost reductions will allow us to continue to
remain in compliance with the amended bank covenants. In conjunction with
those activities, we will look at various refinancing alternatives.
"The one thing that has come out of the softness in our market is the return
to normalcy for the component marketplace in terms of lead times. While there
are always exceptions, in general we continue to successfully reduce our
inventory levels and thereby reduce our working capital requirements. This
will continue to be one of our objectives going forward. Unfortunately, on the
revenue side, the softness has continued through the first quarter of fiscal
2025. Our customers are indicating that they expect demand to rebound by the
fourth calendar quarter of 2024 and we have seen several signs with specific
customers where that appears to be the case. However, our focus remains on
driving the Company's cost structure lower, while continuing to meet our
customers' requests. If the upside does materialize, then we will be in a
position to service it.
"The general economy remains volatile and the geopolitical events worldwide
remain a potential source of instability. However, our customer base remains
intact and we continue to work with them on working capital situations, as
well as new opportunities. We are thankful for their business and our long
term relationships and we look forward to continuing to grow them. We also
appreciate the fact that our secured lenders worked with us to restructure our
agreements. Finally, we also thank our supply chain, our board of directors
and most importantly, our dedicated employees who continue to work with us
through these difficult times."
About SigmaTron International, Inc.
Headquartered in Elk Grove Village, Illinois, SigmaTron International, Inc.
operates in one reportable segment as an independent provider of electronic
manufacturing services ("EMS"). The EMS segment includes printed circuit board
assemblies, electro-mechanical subassemblies and completely assembled
(box-build) electronic products. The Company and its wholly-owned subsidiaries
operate manufacturing facilities in Elk Grove Village, Illinois; Acuna,
Chihuahua, and Tijuana Mexico; Union City, California; Suzhou, China; and Bien
Hoa City, Vietnam. In addition, the Company maintains an International
Procurement Office and Compliance and Sustainability Center in Taipei, Taiwan.
The Company also provides design services in Elk Grove Village, Illinois, U.S.
Forward-Looking Statements
Note: This press release contains forward-looking statements. Words such as
"continue," "anticipate," "will," "expect," "believe," "plan," and similar
expressions identify forward-looking statements. These forward-looking
statements are based on the current expectations of the Company. 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 direct and indirect risks and
uncertainties inherent in the Company's business including, but not
necessarily limited to, the Company's continued dependence on certain
significant customers; the continued market acceptance of products and
services offered by the Company and its customers; pricing pressures from the
Company's 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 the Company's operating results; the results of long-lived
assets and goodwill impairment testing; the risks inherent in any merger,
acquisition or business combination, including the ability to achieve the
expected benefits of acquisitions as well as the expenses of acquisitions; the
collectability of aged account receivables; the variability of the Company's
customers' requirements; the impact of inflation on the Company's operating
results; the availability and cost of necessary components and materials; the
impact acts of war may have to the supply chain; the ability of the Company
and its customers to keep current with technological changes within its
industries; regulatory compliance, including conflict minerals; the continued
availability and sufficiency of the Company's credit arrangements; the costs
of borrowing under the Company's senior and subordinated credit facilities,
including under the rate indices that replaced LIBOR; increasing interest
rates; the ability to meet the Company's financial and restrictive covenants
under its loan agreements; changes in U.S., Mexican, Chinese, Vietnamese or
Taiwanese regulations affecting the Company's business; the turmoil in the
global economy and financial markets; public health crises, including COVID-19
and variants; the continued availability of scarce raw materials, exacerbated
by global supply chain disruptions, necessary for the manufacture of products
by the Company; the stability of the U.S., Mexican, Chinese, Vietnamese and
Taiwanese economic, labor and political systems and conditions; global
business disruption caused by the Russian invasion of Ukraine and related
sanctions and the Israel-Hamas conflict; currency exchange fluctuations; and
the ability of the Company to manage its growth. 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 as risk
factors, 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
such filings, and the Company undertakes no obligation to update such
statements in light of future events or otherwise unless otherwise required by
law.
For Further Information Contact:
SigmaTron International, Inc.
James J. Reiman
1-800-700-9095
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Three Months Twelve Twelve
Months Months
Ended Ended Ended Ended
April 30, April 30, April 30, April 30,
2024 2023 2024 2023
Net 81,141,893 108,288,074 373,883,821 414,435,845
sales
Cost of 76,881,510 92,878,680 340,357,503 362,982,248
products sold
Gross 4,260,383 15,409,394 33,526,318 51,453,597
profit
Selling and 6,252,476 7,101,421 26,392,403 26,495,951
administrative expenses
Operating (1,992,093 ) 8,307,973 7,133,915 24,957,646
(loss) income
Other (1,925,960 ) (3,003,292 ) (9,895,334 ) (7,771,681 )
expense
(Loss) income (3,918,053 ) 5,304,681 (2,761,419 ) 17,185,965
before income tax
Income tax benefit 542,529 (43,218 ) 275,262 (2,991,541 )
(expense)
Net (loss) income from (3,375,524 ) 5,261,463 (2,486,157 ) 14,194,424
continuing operations
Discontinued
operations:
Loss before tax from - (5,648,092 ) - (36,629,902 )
discontinued operations
Tax benefit from - 640,361 - 1,860,093
discontinued operations
Net loss from - (5,007,731 ) - (34,769,809 )
discontinued operations
Net (loss) ($3,375,524 ) $253,732 ($2,486,157 ) ($20,575,385 )
income
Net income (loss) per
common share - basic
Net (loss) income per common share (0.55 ) 0.87 (0.41 ) 2.34
- basic from continuing operations
Net loss per common share - basic - (0.82 ) - (5.73 )
from discontinued operations
Net (loss) income per ($0.55 ) $0.04 ($0.41 ) ($3.39 )
common share - basic
Net income (loss) per
common share - diluted
Net (loss) income per common share - (0.55 ) 0.87 (0.41 ) 2.34
diluted from continuing operations
Net loss per common share - diluted - (0.82 ) - (5.73 )
from discontinued operations
Net (loss) income per ($0.55 ) $0.04 ($0.41 ) ($3.39 )
common share - diluted
Weighted average number
of common equivalent
shares outstanding - 6,099,955 6,077,490 6,094,914 6,069,680
assuming dilution
CONDENSED CONSOLIDATED BALANCE SHEETS
April 30, April 30,
2024 2023
Assets:
Current 175,902,619 220,466,442
assets
Machinery and 33,755,078 35,788,357
equipment-net
Deferred 4,432,210 2,640,902
income taxes
Intangibles 979,188 1,311,030
Other 8,724,880 8,420,468
assets
Total $ 223,793,975 $ 268,627,199
assets
Liabilities and
stockholders' equity:
Current 145,888,791 152,308,599
liabilities
Long-term 11,832,931 48,227,573
obligations
Stockholders' 66,072,253 68,091,027
equity
Total liabilities and $ 223,793,975 $ 268,842,199
stockholders' equity
ELK GROVE VILLAGE, Ill., Sept. 03, 2024 (GLOBE NEWSWIRE) -- SigmaTron
International, Inc. (NASDAQ: SGMA), an electronic manufacturing services
company (the "Company"), today reported revenues and earnings for the fiscal
quarter and fiscal year ended April 30, 2024.
Revenues from continuing operations decreased $40.6 million, or 10 percent, to
$373.9 million for fiscal 2024 compared to $414.4 million for fiscal 2023. Net
income/(loss) from continuing operations for fiscal 2024 was a loss of $2.5
million, compared to net income of $14.2 million for fiscal 2023. Basic and
diluted income/(loss) per share from continuing operations for fiscal 2024 was
a loss of $0.41, compared to $2.34 income per share for fiscal 2023.
For the three months ended April 30, 2024, revenues from continuing operations
decreased $27.1 million, or 25 percent, to $81.1 million compared to $108.3
million for the same period in the prior year. Net income/(loss) from
continuing operations for the three-month period ended April 30, 2024, was a
loss of $3.4 million compared to income of $5.3 million for the same period in
the prior year. Basic and diluted income/(loss) per share from continuing
operations for the three months ended April 30, 2024 was a loss of $0.55,
compared to income of $0.87 income per share for the same period last year.
As previously reported, the Company sold a majority position of its wholly
owned subsidiary, Wagz, Inc. ("Wagz"), effective April 1, 2023. As a result,
the Company has reported results from Wagz for fiscal 2023 as discontinued
operations. For fiscal 2023, net loss from discontinued operations was $34.8
million. Net loss per share from discontinued operations for fiscal 2023 was
$5.73. For the three months ended April 30, 2023, net loss from discontinued
operations was $5.0 million. Net loss per share from discontinued operations
for the three months ended April 30, 2023 was $0.82.
Commenting on SigmaTron's results for both the 4th quarter and fiscal year,
ended April 30, 2024, Gary R. Fairhead, Chief Executive Officer and Chairman
of the Board said, "The fourth quarter of fiscal 2024 was one of the most
difficult quarters in SigmaTron's history, a reflection of an industry-wide
slowdown and the lingering effects of the supply chain crisis. As previously
reported on March 8, 2024, when we released our third quarter results for
fiscal 2024, we saw a general softness from our customer base which led to a
February sales decline that continued through the balance of the quarter. By
the end of our quarter, many of our competitors who are also public were
reporting similar results for the first calendar quarter of 2024. Our outlook,
however, remains positive as our customers expect this to be a short-term
phenomenon and demand to bounce back in short order. Backlogs remain strong,
and we continue to quote new platforms and projects.
"Prior to experiencing these pressures, we had already started decreasing our
overall costs. This included the sale of our Elgin building, which closed in
February of 2024, and the consolidation of the operations in Elgin into our
Elk Grove Village headquarters. In addition, we started taking actions to
reduce headcount through layoffs or retirements, with the people retiring not
being replaced. We had several operations go to shortened weeks and work
schedules. We continue to do this as we react to the continuing soft demand
short term.
"Unfortunately, the lower results for the fourth quarter led to covenant
violations with our two secured lenders. I am pleased to report that we
reached an agreement with both lenders going forward, under which the covenant
violations were waived and the existing loan agreements were amended. As part
of that process, SigmaTron's board of directors decided to engage the services
of Lincoln International as an advisor for strategic alternatives to de-lever
the Company. Several of these are underway and others will be started shortly.
At this time, we believe that our plan of action between the strategic
initiatives and the operational cost reductions will allow us to continue to
remain in compliance with the amended bank covenants. In conjunction with
those activities, we will look at various refinancing alternatives.
"The one thing that has come out of the softness in our market is the return
to normalcy for the component marketplace in terms of lead times. While there
are always exceptions, in general we continue to successfully reduce our
inventory levels and thereby reduce our working capital requirements. This
will continue to be one of our objectives going forward. Unfortunately, on the
revenue side, the softness has continued through the first quarter of fiscal
2025. Our customers are indicating that they expect demand to rebound by the
fourth calendar quarter of 2024 and we have seen several signs with specific
customers where that appears to be the case. However, our focus remains on
driving the Company's cost structure lower, while continuing to meet our
customers' requests. If the upside does materialize, then we will be in a
position to service it.
"The general economy remains volatile and the geopolitical events worldwide
remain a potential source of instability. However, our customer base remains
intact and we continue to work with them on working capital situations, as
well as new opportunities. We are thankful for their business and our long
term relationships and we look forward to continuing to grow them. We also
appreciate the fact that our secured lenders worked with us to restructure our
agreements. Finally, we also thank our supply chain, our board of directors
and most importantly, our dedicated employees who continue to work with us
through these difficult times."
About SigmaTron International, Inc.
Headquartered in Elk Grove Village, Illinois, SigmaTron International, Inc.
operates in one reportable segment as an independent provider of electronic
manufacturing services ("EMS"). The EMS segment includes printed circuit board
assemblies, electro-mechanical subassemblies and completely assembled
(box-build) electronic products. The Company and its wholly-owned subsidiaries
operate manufacturing facilities in Elk Grove Village, Illinois; Acuna,
Chihuahua, and Tijuana Mexico; Union City, California; Suzhou, China; and Bien
Hoa City, Vietnam. In addition, the Company maintains an International
Procurement Office and Compliance and Sustainability Center in Taipei, Taiwan.
The Company also provides design services in Elk Grove Village, Illinois, U.S.
Forward-Looking Statements
Note: This press release contains forward-looking statements. Words such as
"continue," "anticipate," "will," "expect," "believe," "plan," and similar
expressions identify forward-looking statements. These forward-looking
statements are based on the current expectations of the Company. 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 direct and indirect risks and
uncertainties inherent in the Company's business including, but not
necessarily limited to, the Company's continued dependence on certain
significant customers; the continued market acceptance of products and
services offered by the Company and its customers; pricing pressures from the
Company's 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 the Company's operating results; the results of long-lived
assets and goodwill impairment testing; the risks inherent in any merger,
acquisition or business combination, including the ability to achieve the
expected benefits of acquisitions as well as the expenses of acquisitions; the
collectability of aged account receivables; the variability of the Company's
customers' requirements; the impact of inflation on the Company's operating
results; the availability and cost of necessary components and materials; the
impact acts of war may have to the supply chain; the ability of the Company
and its customers to keep current with technological changes within its
industries; regulatory compliance, including conflict minerals; the continued
availability and sufficiency of the Company's credit arrangements; the costs
of borrowing under the Company's senior and subordinated credit facilities,
including under the rate indices that replaced LIBOR; increasing interest
rates; the ability to meet the Company's financial and restrictive covenants
under its loan agreements; changes in U.S., Mexican, Chinese, Vietnamese or
Taiwanese regulations affecting the Company's business; the turmoil in the
global economy and financial markets; public health crises, including COVID-19
and variants; the continued availability of scarce raw materials, exacerbated
by global supply chain disruptions, necessary for the manufacture of products
by the Company; the stability of the U.S., Mexican, Chinese, Vietnamese and
Taiwanese economic, labor and political systems and conditions; global
business disruption caused by the Russian invasion of Ukraine and related
sanctions and the Israel-Hamas conflict; currency exchange fluctuations; and
the ability of the Company to manage its growth. 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 as risk
factors, 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
such filings, and the Company undertakes no obligation to update such
statements in light of future events or otherwise unless otherwise required by
law.
For Further Information Contact:
SigmaTron International, Inc.
James J. Reiman
1-800-700-9095
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Three Months Twelve Twelve
Months Months
Ended Ended Ended Ended
April 30, April 30, April 30, April 30,
2024 2023 2024 2023
Net 81,141,893 108,288,074 373,883,821 414,435,845
sales
Cost of 76,881,510 92,878,680 340,357,503 362,982,248
products sold
Gross 4,260,383 15,409,394 33,526,318 51,453,597
profit
Selling and 6,252,476 7,101,421 26,392,403 26,495,951
administrative expenses
Operating (1,992,093 ) 8,307,973 7,133,915 24,957,646
(loss) income
Other (1,925,960 ) (3,003,292 ) (9,895,334 ) (7,771,681 )
expense
(Loss) income (3,918,053 ) 5,304,681 (2,761,419 ) 17,185,965
before income tax
Income tax benefit 542,529 (43,218 ) 275,262 (2,991,541 )
(expense)
Net (loss) income from (3,375,524 ) 5,261,463 (2,486,157 ) 14,194,424
continuing operations
Discontinued
operations:
Loss before tax from - (5,648,092 ) - (36,629,902 )
discontinued operations
Tax benefit from - 640,361 - 1,860,093
discontinued operations
Net loss from - (5,007,731 ) - (34,769,809 )
discontinued operations
Net (loss) ($3,375,524 ) $253,732 ($2,486,157 ) ($20,575,385 )
income
Net income (loss) per
common share - basic
Net (loss) income per common share (0.55 ) 0.87 (0.41 ) 2.34
- basic from continuing operations
Net loss per common share - basic - (0.82 ) - (5.73 )
from discontinued operations
Net (loss) income per ($0.55 ) $0.04 ($0.41 ) ($3.39 )
common share - basic
Net income (loss) per
common share - diluted
Net (loss) income per common share - (0.55 ) 0.87 (0.41 ) 2.34
diluted from continuing operations
Net loss per common share - diluted - (0.82 ) - (5.73 )
from discontinued operations
Net (loss) income per ($0.55 ) $0.04 ($0.41 ) ($3.39 )
common share - diluted
Weighted average number
of common equivalent
shares outstanding - 6,099,955 6,077,490 6,094,914 6,069,680
assuming dilution
CONDENSED CONSOLIDATED BALANCE SHEETS
April 30, April 30,
2024 2023
Assets:
Current 175,902,619 220,466,442
assets
Machinery and 33,755,078 35,788,357
equipment-net
Deferred 4,432,210 2,640,902
income taxes
Intangibles 979,188 1,311,030
Other 8,724,880 8,420,468
assets
Total $ 223,793,975 $ 268,627,199
assets
Liabilities and
stockholders' equity:
Current 145,888,791 152,308,599
liabilities
Long-term 11,832,931 48,227,573
obligations
Stockholders' 66,072,253 68,091,027
equity
Total liabilities and $ 223,793,975 $ 268,842,199
stockholders' equity
{graphic omitted}
{graphic omitted}