SigmaTron Reports Financial Results for Fiscal 2024

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SigmaTron International, Inc., an electronic manufacturing services company, 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.”