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SigmaTron International, Inc., an electronic manufacturing services company, reported revenues and earnings for the fiscal quarter ended October 31, 2022.
Revenues increased $8.5 million, or 8 percent, to $108.7 million in the second quarter of fiscal 2023 compared to $100.2 million for the same quarter in the prior year. Net income for the second quarter ended October 31, 2022, was $871,872 compared to a net income of $3,150,205 for the same quarter in the prior year. Basic and diluted income per share for the quarter ended October 31, 2022, were both $0.14, compared to basic and diluted income per share of $0.73 and $0.69, respectively, for the prior year fiscal quarter ended October 31, 2021.
Revenues increased $28.3 million, or 11.5 percent, to $214.2 million in the first six months of fiscal 2023 compared to $186.0 million for the first six months of fiscal 2022. Net income for the six months ended October 31, 2022, was $2,248,547, compared to a net income of $11,946,921 (including $6,282,973 from the forgiveness of the PPP loan) for the six months ended October 31, 2021. Basic and diluted income per share for the six months ended October 31, 2022, were both $0.37, compared to basic and diluted income per share of $2.78 and $2.69, respectively, for the six months ended October 31, 2021.
Commenting on SigmaTron’s second quarter, fiscal 2023 results, Gary R. Fairhead, Chief Executive Officer and Chairman of the Board, said “I’m pleased to report another solid quarter for fiscal 2023. Our pre-tax profit was $2,127,839, (which includes an expected pre-tax loss of $2,731,823 for Wagz, our Pet Tech IoT startup) was slightly better than our first quarter for fiscal 2023. However, the inclusion of Wagz for our second quarter and six months ending October 31, 2022, makes comparisons between this year and last year difficult. In addition, as reported in our press release on September 12, 2022, the first quarter of last year included a one time gain from the forgiveness of the PPP loan of $6,282,973. Our EMS segment reported pre-tax income in our second quarter that was $729,329 higher than the first quarter, in this fiscal year.
“Clearly, during the second quarter, there were signs of a slowing in the macro economy. However, our EMS backlog has remained strong. We have had some customers, primarily in the consumer goods markets, request the ability to push out some of their backlog, but overall it has been surpassed by other customers increasing their orders or accelerating them. This of course is completely dependent on the market that the customer competes in.
We are not sure what to make of this other than at this time, our backlog remains strong, we are talking with several new significant customers and our biggest barrier to increased sales remains the supply chain and the volatile market for semiconductor products. We have seen the availability of several semiconductor types improve, but we still have others where the lead time is beyond 52 weeks and suppliers continue to miss commitments. Pricing pressures are expected to continue as well. Coupling the volatile component marketplace with continuing geopolitical events provides continuing supply chain issues that are challenging to predict. It is a testament to our operations teams, both in the areas of supply chain and manufacturing, that we were able to achieve these excellent levels of production and sales in the current environment.
“Regarding Wagz, we have continued to make progress on the design and engineering front. We are ahead of schedule in that area. Our revenue was negatively impacted short term because of supply chain issues on the raw material side, which delayed production. We believe sales will gradually increase over the next several quarters and include the introduction of one major new product. In the interim, the losses will continue, but we hope to reduce them going forward. The consumer economy slowing somewhat has created some headwinds for the Wagz products, but we believe there is significant opportunity in the Pet Tech market.
“At this time, we remain optimistic about the balance of fiscal 2023. However, as mentioned above, there is significant volatility as a backdrop and we will adjust if necessary as things change.”