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SMTC Corporation, a global electronics manufacturing services provider, today announced fourth quarter 2015 and fiscal year 2015 results.
Revenue for the fourth quarter was $60.7 million. Gross profit was $5.5 million or 9.1% and adjusted EBITDA was $1.5 million. The 2015 fourth quarter results included $0.2 million in professional services related to the Company’s previously disclosed mergers and acquisitions activities and $0.2 million in additional severance charges not incurred in the fourth quarter of 2014. Adjusted gross profit was $4.6 million or 7.6% in the fourth quarter of 2015. Due to unfavorable market rates, realized foreign exchange losses included in gross profit on settled forward foreign exchange contracts was $1.3 million in the fourth quarter of 2015 compared to $0.2 million in the fourth quarter of 2014.
Revenue for the year was $220.6 million, or a 3.5% decrease from $228.6 million in 2014. Revenue from our largest customer in 2015 represented 13.4% of total revenue compared to our largest customer which represented 30.8% of total revenue in prior year. Revenue from our largest three customers in 2015 represented 33.3% of total revenue compared to the largest three customers which represented 53.2% of total revenue in prior year.
The gross profit percentage for 2015 was 8.0%, compared to 8.3% in the prior year, with some attrition due to new customer initial investment as well as higher realized foreign exchange losses of $3.3 million in 2015 compared to 2014. Adjusted gross profit percentage was 7.8% in 2015 compared to 9.1% in the prior year.
Adjusted EBITDA for the year was $5.7 million as compared to $7.1 million in 2014. 2015 included additional severance costs of $0.9 million that were not incurred in 2014. 2015 results also included $0.6 million in professional services related to the Company’s previously disclosed mergers and acquisitions activities. The severance and professional services were not included as reconciling items added back in the calculation of the adjusted EBITDA reported for 2015.
During 2015, we generated $10.9 million in cash flow from operations compared to $5.0 million in 2014 primarily as a result of achieving 8 times inventory turns and working capital management.
Debt, net of cash, was $10.4 million a marked improvement from $17.8 million year ended 2014.
Chief Executive Officer Sushil Dhiman, stated, “I am pleased and encouraged with the fourth quarter revenue of $60.7 million which is the highest we have achieved in two years. During 2015, we continued to diversify our customer base and reduce customer concentration risk. Our largest customer in 2015 represented 13.4% of total revenue versus 30.8% in the prior year. The 2015 revenue is consistent with what I have communicated previously in the earnings calls as we did not anticipate growth in 2015. However, despite the revenue challenges we faced, we remained focused on improving the balance sheet by generating cash flow from operations and reducing our debt. Our net debt of $10.4 million is the lowest in over 10 years. While we foresee lower revenue in the first quarter of 2016, we expect growth in margin and revenue for the year.”
About SMTC Corporation
SMTC Corporation, founded in 1985, is a mid-size provider of end-to-end electronics manufacturing services (EMS) including PCBA production, systems integration and comprehensive testing services, enclosure fabrication, as well as product design, sustaining engineering and supply chain management services. SMTC facilities span a broad footprint in the United States, Mexico, and China, with approximately 1,170 employees. SMTC services extend over the entire electronic product life cycle from the development and introduction of new products through to the growth, maturity and end-of-life phases. SMTC offers fully integrated contract manufacturing services with a distinctive approach to global original equipment manufacturers (OEMs) and emerging technology companies primarily within industrial, computing and communication market segments. SMTC is a public company incorporated in Delaware with its shares traded on the Nasdaq National Market System under the symbol SMTX.