Reading time ( words)
SMTC Corp., a global electronics manufacturing services provider, has announced second quarter fiscal 2016 revenue of $43.6 million; gross profit of $3.1 million; net loss of $0.6 million; and adjusted EBITDA of $0.9 million.
Revenue for the second quarter was $43.6 million compared to $57.7 million in the second quarter of the prior year. The decrease in revenue was primarily the result of reduced revenues from one former and one exiting customer and another customer’s product which has reached end of life. The decreases were partially offset by increases in new customer revenue and net volume increases with existing customers.
Gross profit was $3.1 million or 7.1% for the second quarter compared to $5.4 million or 9.4% for the same period in the prior year. Adjusted gross profit was $3.1 million or 7.2% for the second quarter compared to $4.6 million or 8.0% for the second quarter of the prior year. The reduction in gross profit in the second quarter of 2016 was the result of product mix and the impact of covering our fixed costs with lower revenues partially offset by improved manufacturing efficiencies and reduced direct labor cost.
Net loss was $0.6 million for the second quarter of 2016 compared to a net income of $1.0 million for the second quarter in the prior year. The 2016 second quarter net loss of $0.6 million and the 2015 second quarter net income of $1.0 million included unrealized foreign exchange loss and gain of $0.05 and $0.8 million, respectively on unsettled forward exchange contracts.
Adjusted EBITDA was $0.9 million for the second quarter of 2016 compared to $1.8 million for the same period in the prior year which was mainly the result of reduced revenues.
Chief Executive Officer Sushil Dhiman stated “We experienced lower revenue in the quarter due to product ramp delays with some of our customers in addition to the transfer of one customer to a consignment model. I am pleased with the sequential revenue growth over the first quarter of 2016 and remain confident that revenue will continue to increase quarter over quarter for the remainder the year.”
Cash flow from operations was $3.1 million in the second quarter compared to $0.2 million in the second quarter of the prior year due to continued improved working capital management.
Debt, net of cash was $10.6 million in the second quarter compared to $17.2 million for the second quarter of the prior year.
Chief Financial Officer Roger Dunfield stated “We continue to strengthen our balance sheet as we actively improve our cash cycle days resulting in the generation of cash flow from operations during the quarter and the pay down of debt. We are well positioned to support additional growth for the remainder of the year.”