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SigmaTron Reports Q3 Financial Results for Fiscal 2023
May 19, 2023 | Globe NewswireEstimated reading time: 2 minutes
SigmaTron International, Inc., an electronic manufacturing services (EMS) provider, reported revenues and earnings for the fiscal quarter ended January 31, 2023.
Revenues decreased $0.5 million, or 0.5 percent, to $93.2 million in the third quarter of fiscal 2023 from $93.7 million for the same quarter in the prior year. Net loss for the third quarter ended January 31, 2023 was $23,077,664, compared to a net loss of $2,724,297 for the same period in the prior year. The net loss for the third quarter ended January 31, 2023 includes a charge of $23,096,771 for an impairment of goodwill and long-term assets and the net loss for the third quarter ended January 31, 2022 includes a charge of $6,300,235 for an impairment of notes receivable and a long-term investment. Basic and diluted loss per share was $3.80 for the quarter ended January 31, 2023, compared to basic and diluted loss per share of $0.58 each for the same quarter ended January 31, 2022.
For the nine months ended January 31, 2023, revenues increased $27.9 million, or 10 percent, to $307.5 million compared to $279.6 million for the same period in the prior year. Net loss for the nine-month period ended January 31, 2023 was $20,829,117, compared to a net income of $9,222,624 for the same period in the prior year. As noted above, the net loss for the nine months ended January 31, 2023 includes a charge of $23,096,771 for an impairment of goodwill and long-term assets and the net loss for the nine months ended January 31, 2022 includes a charge of $6,300,235 for an impairment of notes receivable and a long-term investment. Basic and diluted loss per share for the nine months ended January 31, 2023, was $3.43, compared to basic and diluted loss per share of $2.08 and $1.97, respectively, for the nine months ended January 31, 2022.
Gary R. Fairhead, Chairman and Chief Executive Officer, said, “As previously reported via our press release on May 4, 2023, SigmaTron reached an agreement with its secured lenders going forward and sold a majority position of its wholly owned subsidiary, Wagz, Inc. (“Wagz”). As of the end of the third quarter, the Company concluded that under GAAP, the carrying amounts for goodwill and long-lived asset groups were impaired and the Company would incur non-cash impairment charges of approximately $21.3 million. These impairment charges coupled with Wagz’ operating losses resulted in the Company’s failure to maintain certain financial covenants. Now that the covenant violations have been waived, the agreements amended and the majority position in Wagz has been sold, the Company is able to file its third quarter results.
“As stated in the May 4 press release, the Company’s core business, EMS, has remained strong during this entire period. It remains strong during the fourth quarter as well, but the Company still has significant write-offs that it will take during the fourth quarter as it concluded the Wagz transaction. All financial commitments related to Wagz have been paid in full and cash will no longer be consumed going forward. The backlog for the EMS business remains strong from existing customers and several new opportunities look promising. The volatility of the electronic component market has subsided slightly, but there are still significant issues in terms of price, lead time and predictability in terms of delivery. Also, with filing our third quarter results, the Company will no longer be out of compliance with NASDAQ requirements. We fully expect that the fourth quarter and fiscal year end statements will be filed on time.”
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