SigmaTron Reports Fiscal Q2 Revenues Down 7%
ELK GROVE VILLAGE, IL – SigmaTron International reported fiscal second quarter revenues decreased 7.1% year-over-year to $69.6 million.
Net income for the quarter ended Oct. 31 was down 5.2% to $626,858.
For the six months ended Oct. 31, revenues decreased 12.6% year-over-year to $130.1 million compared to the same period last year. Net loss for the six-month period was $273,808, compared to net income of just over $1 million for the same period in 2019.
“I am pleased to report SigmaTron continued its recovery from the downturn experienced in April and May of this year, and we had a solid second quarter for this fiscal year,” said Gary R. Fairhead, president, CEO and chairman of the board. “We posted a pre-tax profit of $1,069,801 on revenue of $69,618,293. While the revenue for the quarter was lower than the same period in the prior year, mix was favorable. Because of this strong second quarter, we are close to breakeven for the first six months of fiscal 2021, which is most encouraging, especially considering our results included expenses of $661,000 directly related to Covid. Those expenses will continue in all likelihood for the balance of this fiscal year.
“At this time, the backlog continues to be strong for our third quarter. Some of our customers have unexpectedly benefited from the pandemic and are having people spend more time at home, while others continue to be depressed in terms of demand. In addition, several of our customer’s customers apparently took their inventory lower than demand, and they are now expediting orders for delivery as soon as possible. How long this will last is hard to determine, but it appears the possibility of a vaccine in the near term has encouraged our customers to ramp up production again. If, indeed, the economy continues to grow as it has recently, we believe we are well positioned for the second half of fiscal 2021, and we have recently landed several new opportunities that bode well for fiscal 2022. However, as positive as things are now, we believe the situation remains fluid and volatile and could change for our customers quickly. As you would expect, with the unexpected increase in demand come the challenges on the supply side regarding components and lead times. Some of that is handled by the inventory on-hand, but the possibility exists of lengthening lead times slowing down the ability to meet the un-forecasted demand.
“As previously reported, the company received a PPP Loan in April 2020, and we recorded it as a liability on our balance sheet. We have not yet applied for forgiveness. Also, as previously reported, we continue to work toward a deal, whereby the company will acquire Wagz. We are hopeful the transaction will be closed by the end of our third fiscal quarter.
“In summary, the second quarter was a good one, and the company continues to head in the right direction. Many of our short-term challenges now are the ones tied to un-forecasted demand inside of lead time, which are generally good problems to have. Our customers seem to be more optimistic because of the vaccine, which is also encouraging. Finally, we believe the opportunities with Wagz continue to grow, and the combination of the two companies will ultimately benefit all shareholders involved.”
