SigmaTron Reports Fiscal Q4 Revenues Down 12%
ELK GROVE VILLAGE, IL – SigmaTron reported fiscal fourth quarter revenues of $64.8 million, a decrease of 11.6% year-over-year. Sales have been improving month to month since May, however, the EMS company said.
Fiscal 2020 revenues were $281 million, down 3.3% year-over-year. For the fiscal year ended Apr. 30, net income increased to $443,102, compared to a net loss of $865,114 in fiscal 2019.
The EMS company posted a pretax loss of $172,525 for the quarter and a pretax profit of $1.09 million for its fiscal year.
“While it is always disappointing to report a quarterly loss, the results were impacted by operational interruptions and extraordinary expenses related to the Covid pandemic at all of our operations,” said Gary R. Fairhead, president, CEO and chairman. “In some locations the interruptions and expenses were worse than others. In addition to those problems, we saw a dramatic drop in revenue of approximately 30% in the month of April as the pandemic and its effects grew rapidly in North America.
“As previously reported, during the [fiscal] fourth quarter the company received a $6.3 million PPP Loan under the CARES Act. If part or all of the loan is forgiven under the program, that benefit will be recorded in the quarter in which the forgiveness occurs. The PPP Loan provided assistance to the company as intended by the government, and we are grateful such a program was made available to the company. During this period, we were able to avoid significant layoffs or compensation reductions to our employees.
“The first quarter of fiscal 2021 started the same as fiscal 2020 ended. May’s revenue drop was similar to April’s, and May’s results alone will result in a first quarter pretax loss. However, the revenue trend was positive from month to month during the quarter, and revenue is definitely trending in the right direction. This, of course, is primarily based on our customers’ orders and backlog, and while the economic recovery seems fragile at this time, the positive trend continues with current customers. We are also seeing potential new opportunities with new and existing customers.
“One of several disappointments tied to the Covid pandemic is we were approaching the fourth quarter with significant momentum and a strong backlog. We fully expected it would be a strong quarter on its own, and we would be heading into fiscal 2021 with continued growth. During the pandemic, we have seen several customers with an unexpected and unforecasted uptick in demand, while we’ve seen others have a precipitous drop in demand. It’s hard to predict how these various markets will sort themselves out over the next several quarters. We continue to believe the trade war with China is a negative for the general economy, as well as the company. It’s hard to see any progress in that area until after the election, so it will remain a reality for the company, our customers and our suppliers for several more quarters, at a minimum.
“The one positive item to come out of the pandemic for the company was the incredible performance by each of the operations during the quarter. They had to deal with various governmental orders in five different countries, all of which had different requirements and regulations. They had to deal with sick employees, some of whom were ultimately determined to have been infected by Covid-19. In addition to dealing with disrupted supply chains in terms of component availability and uncertain transportation, all locations had to deal with customers that had businesses that were uncertain from day to day. In spite of all these obstacles, all of the operations and corporate departments found a way to get the job done and support our customers’ needs. It was amazing to see the dedication to the company and their jobs the entire team performed in the wake of such uncertainty. I am pleased we are able to report positive results for the entire fiscal year.”
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