SigmaTron reports Q2 results - revenue up
Dec 16, 2005
For the three months ended October 31, 2005, net revenues increased to $34.9 million compared to net revenues of $24.7 million for the same period ended October 31, 2004.
Net income for the 2006 second quarter of fiscal 2006 was $1.2 million compared to $1.3 million for the 2005 second fiscal quarter. Diluted earnings per share for the quarter were $0.29 compared to $0.34 for the same period in the prior fiscal year. Revenues increased in the appliance, fitness, industrial electronics, life sciences and semiconductor marketplaces. Pricing pressures and an increase in manufacturing supplies and components continued to negatively impact gross margins.
For the six months ended October 31, 2005, net revenues increased to $56.2 million compared to $46.1 million for the same period ended October 31, 2004. Net income for the 2006 period was $1.4 million, compared to $2.3 million for the 2005 period. Diluted earnings per share for the six months ended October 31, 2005, were $0.34 compared to $0.61 for the six months ending October 31, 2004.
Commenting on SigmaTron's second-quarter and six-month results, Gary R. Fairhead, president and chief executive officer, said, "Our results for our second quarter of fiscal 2006 were much improved over our first quarter results. The second quarter was the first fiscal quarter in which we owned Able Electronics for the entire reporting period. Second-quarter and year-to-date net income and earnings were negatively impacted by operating resulting from our acquisition of Able Electronics.
"Much of last quarter's activities were focused on the assimilation of Able Electronics into our operations. Effective November 1, 2005, which is the beginning of our third fiscal quarter, Able Electronics was legally merged into SigmaTron, becoming a division we refer to as SigmaTron Hayward. AbleMex S.A. de C.V. remains a wholly-owned subsidiary of SigmaTron operating in Tijuana, Mexico. Our intention remains to combine the operations of SigmaTron Fremont into SigmaTron Hayward by the end of fiscal 2006. The consolidation of these two entities, which is already underway, is expected to bring improved operating efficiencies.
"Although the effect of the Able Electronics acquisition has not generated positive bottom line results to date, we remain optimistic and excited about the opportunities we foresee. In particular, we believe revenues from the Able operations will continue to grow, enhanced by SigmaTron's international footprint. While we have already experienced some incremental business opportunities from Able's existing customer base, we expect to see the full benefit from this acquisition in fiscal 2007."
Fairhead continued, "SigmaTron China continues to grow and perform well financially. Our primary challenge remains finding experienced employees with the technical skill sets needed to support the growth we anticipate.
"SigmaTron Acuna continues to perform well and remains our largest operation. While we expect continued migration of certain jobs from this operation to SigmaTron China, we have two significant customers, one new and one existing, that will start new programs with SigmaTron Acuna. We expect SigmaTron Acuna will continue to perform well for the balance of fiscal 2006.
"Our Elk Grove Village operation had a stronger second quarter than first quarter this year, but continues to experience uneven results. Our focus remains on adding new customers and additional revenue at this location.
"For the balance of fiscal 2006, we anticipate continued pricing pressures and challenges related to compliance for RoHS, the European Union mandate on the restrictions of the use of hazardous substances. However, we remain excited about the opportunities that lie ahead. SigmaTron's international footprint and size makes us an attractive option for many OEMs."