SigmaTron International, Inc. (SGMA) research, news, and more from GeoInvesting

Company description

Mon, 14 Dec 2009 05:00:00 GMT

SigmaTron International, Inc. is an independent provider of electronic manufacturing services (EMS), which includes printed circuit board assemblies and completely assembled (box-build) electronic products. In connection with the production of assembled products, the Company also provides services to its customers, including automatic and manual assembly and testing of products; material sourcing and procurement; design, manufacturing and test engineering support; warehousing and shipment services, and assistance in obtaining product approval from governmental and other regulatory bodies. It provides these manufacturing services through an international network of facilities located in the United States, Mexico, China and Taiwan. The Company operates manufacturing facilities in Elk Grove Village, Illinois; Hayward, California; Acuna and Tijuana, Mexico, and Suzhou-Wujiang, China. In addition the Company provides inventory management services.

Research

Fri, 21 Jul 2023 12:05:03 GMT

Sigmatron International, Inc. (NASDAQ:SGMA) ($3.53; $21.5M market cap) operates as an independent provider of electronic manufacturing services (EMS). The company reported Q4 2023 results:

Sales of $108.3 million vs $98.9 million in the prior year
EPS from continuing operations of $0.87 vs $0.39 in the prior year

“As we enter fiscal 2024, our customer requirements range from increased orders and pull-ins to push-outs. We continue to see mixed signals and uncertain signs in general. It is difficult to determine if the economy is slowing or starting to grow again. On balance, the backlog remains strong and we see modestly more favorable conditions despite the uncertainty. The other issue remains the volatile marketplace for electronic components, which is our raw material. We have seen some improvements in terms of deliveries on time and shorter lead times but other components are still out 18 months in terms of lead time and pricing remains volatile for some other parts. It’s hard to know how this is going to sort itself out short term but we remain optimistic long term regarding the upside for some of our longer-term customers, especially those involved in infrastructure related industries."

The company reported a $3.0 million other expense line item in the quarter, so it is possible that the non-GAAP EPS for the quarter could be roughly $0.50 higher than reported. We will wait for the filing of the 10-K to confirm what the other expense was.

Research

Tue, 25 Jul 2017 14:43:15 GMT

SGMA ($7.40) reported strong Q4 2017 results on July 21, 2017:

Q4 sales of $65.6 million vs $60.8 million in the prior year
Q4 EPS of $0.30 vs $0.01 in the prior year

SGMA’s press release indicated there were several one-time events that contributed to the fourth quarter results. This morning, the Company filed its 10-K. After adjusting for “other income”, the company would still have reported a very strong quarter - EPS of $0.26 vs $0.01 in the prior year.

However, other commentary from press release still indicates some caution:

“We believe that the election results have generated a more positive attitude regarding the economy for calendar 2017 and at this time we expect this trend to continue. There has been some short-term volatility with our customers compared to their scheduled orders three months ago, but we do expect some additional new customers to come on board later this year. Margin pressures continue but we believe the additional revenue will assist us in managing those pressures. The optimistic economic outlook, however, has created some additional challenges as we are seeing some shortages in the component marketplace that could affect our ability to meet our customers’ backlog. In all cases, each effected customer is working with us to address the issue with the supplier of the component.

For traders who may be looking for a short term trade opportunity, earnings momentum may continue as investors gain clarity on the one-time events from the strong Q4 results, despite some caveats mentioned above by management.

Comments & Business Outlook

Tue, 08 Mar 2011 05:00:00 GMT

Third Quarter Highlights:

Revenues increased to $36.9 million for the third quarter fiscal 2011 from $30.6 million for the same quarter in the prior year.
Net income decreased to $254,818 in the fiscal 2011 period compared to $415,468 for the same period in the prior year.
Basic and diluted earnings per share were $0.07 for the quarter ended January 31, 2011, compared to $0.11 for the same quarter in fiscal 2010.

Commenting on SigmaTron's third quarter and nine month results, Gary R. Fairhead, President and Chief Executive Officer, said, "I am pleased to report a profit for our third quarter of fiscal 2011, but the amount of the profit did not meet our expectations. Several items negatively affected our results both expected and unexpected. The weakening of the U.S. dollar had an unexpected and significant negative effect on the quarter."

"Going forward, we expect continued pressure on our margins as raw material costs continue upward and we have limited or delayed ability to pass along the increases to our customers. We continue to work with our customers and vendors in efforts to take out cost and to try to minimize the effect on margins. We also need to grow revenue, diversify our markets served, which should help us manage the situation. However, some of our new programs will not be significant revenue contributors until later this calendar year.

Liquidity Requirements

Wed, 28 Jul 2010 04:00:00 GMT

The Company anticipates that its new credit facilities, cash flow from operations and leasing resources will be adequate to meet its working capital requirements and capital expenditures for the balance of fiscal year 2011.

Source: April 2010 10K

Special Situations

Wed, 14 Jul 2010 04:00:00 GMT

Added to the GeoSpecial list on July 13, 2010 @ 7.05. Was previously coded as a GeoSpecial on the radar at $5.20.

Catalyst: Fiscal 2010 fourth quarter EPS may have experienced a break out; Was selling below its book value per share of $12.28; Upbeat about the future; Strong commentary; We believe technology stocks will experience strong financials in the near term.

Peak performance: Stock just added to the GeoSpecial list

Current Price: $7.05

Current road block: SGMA operates in a volatile industry where trends can change quickly; Company has an erratic EPS history.

The Key to finding success in a stock like SGMA is to consider it when it is entering a unique point in its growth cycle. Fiscal 2010 fourth quarter revenue increased 28.8% to $34.98 million. This was SGMA's first revenue gain of over 15% in seven quarters. Fourth quarter operating EPS grew 500.0% to $0.24 and was the best quarter of its year which easily eclipsed any of the previous six quarters where the highest EPS achieved was $0.13.

Also consider:

Results substantially exceeded expectations outlined in the fiscal 2010 third quarter:
"Heading into our fourth quarter, we see many customers adjusting inventory levels short term. My current expectation is that revenue during the fourth quarter will be lower than that of the third quarter ($30.6 million)."
Additional third quarter comments insinuated that SGMA's first two quarters of fiscal 2011 would show growth:
"I also believe that the second half of calendar 2010 will be stronger than the same period of 2009."

The fourth quarter results solidify this position. With trailing EPS of $0.49 investors need to ask themselves if SGMA can experience P/E expansion to about 20 and approach its book value per share. This would imply a price target of $9.60 to $12.28

We are still awaiting the release of the 10K to determine if liquidity is intact.

Comments & Business Outlook

Wed, 14 Jul 2010 04:00:00 GMT

Commenting on SigmaTron's results, Gary R. Fairhead, President and Chief Executive Officer, said, "I am pleased to report our third consecutive profitable quarter and perhaps even more significant, a quarter in which our revenue grew nicely from the levels in quarters two and three. While I have repeatedly pointed out that revenue levels are not always good indicators of financial performance in our industry because of the various types of services we offer and products we assemble, our increased revenue in the fourth quarter was generally across our entire customer base and I believe was indicative of improved levels of economic activity. If that trend continues, it should point to better days ahead for the Company as the U.S. and worldwide economies hopefully recover and grow..