SMTC Corporation Announces Third Quarter Results

“Our sales organization continues to gain market share and expand our sales funnel, including $46 million in new awards and bookings during the third quarter, from five new customers and one existing customer. I am pleased that we are beginning to see an acceleration of customer programs moving through the customer certification process, into new product introduction phase and entering production that will continue to ramp in 2021,” said Ed Smith, SMTC’s President and Chief Executive Officer.

“Our focus on expanding our market share in key markets that play to our strengths, such as the Industrial IoT market, the highly complex, regulated medical markets, and the defense and aerospace industry, continues to provide a stable and solid base to profitably grow our business during the ongoing COVID-19 pandemic. We also benefited from a rebound by our semiconductor customers,” noted Smith.

For the three months ended September 27, 2020, cash used by operations was $0.2 million and capital expenditures were $1.1 million. During the third quarter, the Company amended its credit facilities to provide increased covenant flexibility as it navigates through the COVID-19 pandemic.

As of September 27, 2020, subject to debt covenants, SMTC had $30.5 million available for borrowing under its asset-based lending facility and reduced its debt-to-adjusted EBITDA ratio to 2.55 (excluding leases).

“Rich Fitzgerald, SMTC’s Chief Operating Officer, has decided for personal reasons to pursue other opportunities. We want to thank Rich for his leadership and guidance over the past three-and-a-half-year tenure, during which time SMTC tripled in size with increased profitability and customer satisfaction. Rich will continue in his current role during the search for his successor which is expected to be completed by the end of the first quarter of 2021,” said Smith.

Looking ahead
“Based on our current demand and supply chain visibility, and assuming our facilities continue to operate at currently planned levels, we are reaffirming at the higher end of our prior guidance issued on August 5, 2020. We now expect revenue to range between $195 million and $205 million and adjusted-EBITDA to range between $14 million and $15 million for the second half of 2020,” said Smith.

“As we embark on our next-phase of growth, with our ongoing sales momentum, recent customer awards, strong bookings-backlog, and planned operating efficiencies, we currently expect revenue for 2021 to range between $430 million and $450 million and adjusted EBITDA to range between $33.0 million and $37.0 million, with revenue growth and adjusted EBITDA margins consistent with our long-term financial model targets,” added Smith.