TORONTO – EMS provider SMTC Corp. reported revenue of $54 million in the third quarter, down nearly 18% year-over-year, and down 18.3% sequentially.
The company recorded a net loss of $1.2 million, compared to a net income of $6.1 million in the third quarter last year.
The net loss includes a $1 million gain for stock-based
compensation, the result of marked-to-market deferred stock liabilities
offset in part by approximately $600,000 arising from restructuring
charges and the write off of certain deferred financing costs.
Gross profit for the third quarter was $3.4 million, a decrease of 42.3% sequentially and year-over-year.
third quarter was “particularly difficult … as almost all of our
customers reduced orders due to lower end customer demand or to adjust
inventory levels. We believe the changes in end customer demand is not
systemic, nor the result of macro economic factors. We took action
early in the quarter to lower expenses, balancing the requirement to
adjust costs while retaining capability to support sequential growth
expected in the fourth quarter," stated John Caldwell, president and
"For the fourth quarter, we expect to
substantially increase sequential revenue, although we are unlikely to
attain the record level in the fourth quarter of 2006. We also expect
to return to satisfactory margin and profitability levels," said