| Suntron: Sales Up, Profit Down in Q1 |
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| Written by Robin Norvell | |||
| Thursday, 11 May 2006 06:26 | |||
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PHOENIX-- Suntron Corp., a provider of electronics manufacturing services, reported net sales of $95.8 million and operating income of $1.7 million for the first quarter of 2006. Net sales were up 15.8% over 2005 and 14.2% sequentially. The increase in net sales reflects a one-time spike from an industrial sector customer that was expected and strong demand from semiconductor equipment sector customers. Gross profit for the quarter rose to $8 million, from $0.5 million in Q1 2005 and $7 million in Q4 2005. The year-on-year improvement was primarily attributable to the cumulative impact of restructuring and cost containment actions that were initiated throughout 2005 and supplemented by higher net sales. Operating income was $1.7 million, vs. an operating loss of $5.4 million for the first quarter of 2005. Sequentially, operating income improved $0.4 million. On March 30, Suntron entered into a new $50 million credit agreement that matures in March 2009, and a $10 million secured subordinated note purchase agreement with an affiliate of Suntron's majority stockholder. The company also sold a building and land in Sugar Land, TX, which generated net proceeds of $16.5 million that was used to repay outstanding debt. Suntron leased back approximately 50% of the building under a seven-year lease. Suntron reported a net loss of $1.1 million, compared to net income of $0.1 million sequentially, and a net loss of $6.2 million year-on-year. Paul Singh, president and chief executive, said, ``With the first quarter results, we have now had four consecutive quarters of improved operating performance and two consecutive quarters of positive operating income. In 2006, our goal is to further improve the utilization of our assets and right-size our U.S. footprint.” Singh guided for second-quarter sales between $83 million to $86 million.
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