SigmaTron Reports Flat Q3 Revenue
ELK GROVE VILLAGE, IL – SigmaTron's revenue decreased by $500,000, or 0.5%, to $93.2 million in the third quarter of its fiscal year from $93.7 million for the same quarter last year.
For the nine months ended Jan. 31, revenues were $307.5 million, a 10% increase compared to $279.6 million for the first nine month's of the prior fiscal year.
“As previously reported via our press release on May 4, 2023, SigmaTron reached an agreement with its secured lenders going forward and sold a majority position of its wholly owned subsidiary, Wagz, Inc.," said Chairman and CEO Gary R. Fairhead. "As of the end of the third quarter, the company concluded that under GAAP, the carrying amounts for goodwill and long-lived asset groups were impaired and the Company would incur non-cash impairment charges of approximately $21.3 million. These impairment charges coupled with Wagz’ operating losses resulted in the company’s failure to maintain certain financial covenants. Now that the covenant violations have been waived, the agreements amended and the majority position in Wagz has been sold, the company is able to file its third quarter results."
"As stated in the May 4 press release, the company’s core business, EMS, has remained strong during this entire period. It remains strong during the fourth quarter as well, but the company still has significant write-offs that it will take during the fourth quarter as it concluded the Wagz transaction. All financial commitments related to Wagz have been paid in full and cash will no longer be consumed going forward. The backlog for the EMS business remains strong from existing customers and several new opportunities look promising. The volatility of the electronic component market has subsided slightly, but there are still significant issues in terms of price, lead time and predictability in terms of delivery. Also, with filing our third quarter results, the company will no longer be out of compliance with NASDAQ requirements. We fully expect that the fourth quarter and fiscal year end statements will be filed on time," he said.
