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SigmaTron International, Inc., an electronic manufacturing services company, reported revenues and earnings for the fiscal quarter ended July 31, 2022.
Revenues increased $19.8 million, or 23 percent, to $105.5 million in the first quarter of fiscal 2023 compared to $85.7 million for the same quarter in the prior year. Net income for the first quarter ended July 31, 2022, was $1,376,675 compared to a net income of $8,796,716 (including $6,282,973 from the forgiveness of the PPP loan) for the same quarter in the prior year. Basic and diluted income per share for the quarter ended July 31, 2022, were $0.23 and $0.22, respectively, compared to basic and diluted income per share of $2.06 and $2.02, respectively, for the same quarter ended July 31, 2021.
Commenting on SigmaTron’s first quarter, fiscal 2023 results, Gary R. Fairhead, Chief Executive Officer, and Chairman of the Board, said, “I’m pleased to report a solid quarter for the beginning of fiscal 2023. Our pre-tax profit was $1,906,075, which included an expected pre-tax loss of $2,223,561 for Wagz, our pet tech IoT start-up. Comparisons between the first quarter of fiscal 2022 and the first quarter of fiscal 2023 are difficult. The pre-tax profit for the first quarter of fiscal 2022 was $9,553,661, which included a one-time gain from the forgiveness of the PPP loan of $6,282,973 and was before SigmaTron acquired Wagz. This compares to the pre-tax profit for the first quarter of fiscal 2023 was $1,906,075, after a Wagz pre-tax loss of $2,223,561, mentioned above.”
“The backlog for the EMS segment remains strong and growing. Despite the continuing challenges in the electronic component marketplace, sales are running at record levels for the Company. We continue to see strength in the industrial marketplace. Existing customers are slowly launching new products and we have several new opportunities that look promising. Unfortunately, we see no end in sight to the supply chain challenges that we have been dealing with for at least 18 months and none of the semiconductor companies are suggesting otherwise. The challenges will certainly continue for the balance of fiscal 2023, based on what we know at this time. This of course causes our inventory to grow significantly and puts pressure on cash flow. It also leads to manufacturing inefficiencies due to the uncertainty of when parts will be received.”
“The Pet Tech Segment, as mentioned above, had a loss for the first quarter as anticipated. We continue to make progress with the performance of the Freedom Smart Dog Collar™, as well as a new product that will be introduced early next year. We are also working on related products, with several large OEM’s and interest in pet tech remains strong. We remain optimistic that this will be an important part of our future as our product line and capabilities grow in this IoT market.”
“We earlier announced on July 21, 2022, that we had secured a new $40,000,000 term loan under a credit agreement with TCW Asset Management Company, LLC, as administrative agent, and the other Lenders party thereto (collectively, “TCW”). In conjunction with the TCW credit agreement, JPMorgan Chase, our senior lender, increased the maximum revolving line of credit available to $70,000,000, based on the current borrowing base and eligible collateral. In addition, the JPMorgan Chase credit agreement has been extended and now expires in 5 years on July 18, 2027, which matches the term of the TCW credit agreement. The purpose of this term loan was to focus on the working capital requirements for both segments as they grow and deal with the electronic component marketplace. We remain pleased and appreciate the support and confidence we have received from both JPMorgan Chase Bank, NA and TCW as we move forward with these opportunities.”