Sigmatron International Inc (SGMA) SEC Filing 10-K Annual Report for the fiscal year ending Saturday, April 30, 2022

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Sigmatron International Inc

CIK: 915358 Ticker: SGMA


SigmaTron International, Inc. Reports Year End Financial Results for Fiscal 2022

ELK GROVE VILLAGE, Ill., July 27, 2022 (GLOBE NEWSWIRE) -- SigmaTron International, Inc. (NASDAQ: SGMA), an electronic manufacturing services company (the “Company”), today reported revenues and earnings for the fiscal quarter and fiscal year ended April 30, 2022.

Revenues increased $101.1 million, or 36 percent, to $378.9 million for fiscal 2022 compared to $277.7 million for fiscal 2021. Net income for fiscal 2022 was $9.9 million, compared to net income of $1.5 million for fiscal 2021. Basic and diluted income per share for fiscal 2022 was $2.04 and $1.92, respectively, compared to $0.36 for both basic and diluted income per share for fiscal 2021.

For the three months ended April 30, 2022, revenues increased $23.2 million, or 31 percent, to $99.2 million compared to $76.0 million for the same period in the prior year. Net income for the three-month period ended April 30, 2022, was $0.6 million compared to $1.6 million for the same period in the prior year. Basic and diluted income per share for the three months ended April 30, 2022, were $0.11 and $0.10, respectively, compared to basic and diluted income per share of $0.37 and $0.36, respectively, for the three months ended April 30, 2021.

Commenting on SigmaTron’s results for both the fourth quarter and fiscal year ended April 30, 2022, Gary R. Fairhead, Chief Executive Officer and Chairman of the Board, said, “SigmaTron is pleased to report a solid fourth quarter and an excellent fiscal year for 2022. For the fourth quarter, we posted pre-tax profits of $1.9 million on revenue of $99.2 million. I note that during the fourth quarter we absorbed the operating costs of Wagz for the entire quarter, which as an emerging growth company, was an expected loss.

For the fiscal year, we are reporting revenue of $378.9 million and pre-tax income of $14.2 million. During the year, we had two extraordinary accounting transactions that essentially negated each other. One was the forgiveness of the PPP loan and the other was the accounting impairment of the Wagz investment and notes on the closing of the Wagz transaction. Thus, the results for the year are not affected by any specific one-time event and reflect one of the strongest, if not the strongest, fiscal years in SigmaTron’s history. In addition, the fiscal year results include four months of Wagz operations, a continuing volatile electronic component marketplace which led to operational inefficiencies by default and a continuing disruption of operations related to COVID-19 and the various restrictions put in place in different jurisdictions. We are proud of our results for the year given those factors and excited about the opportunities that lay ahead.

“As mentioned, during fiscal 2022, we closed on the acquisition of Wagz. Wagz recently launched their Freedom® 1.2 Collar and the initial feedback is positive. We are most excited about the product roadmap we have laid out for the next 12-18 months and we think the opportunity for Wagz continues to grow every day. We believe we have the technology and the team to make our products best in class and Wagz the preeminent Pet Tech company in the industry.

“As mentioned above, the unprecedented marketplace for electronic components continues with no end in sight. Demand continues to exceed supply, which results in price increases and missed deliveries from the supply chain. I am not aware of any predictions of this ending in calendar 2022 and most of the experts have it extending until late calendar 2023 at a minimum. This continues to increase revenues through increased raw material cost, causes inventories to grow and puts pressure on working capital. In order to help address those issues, I’m pleased to announce that SigmaTron has closed an agreement with the Private Credit Group of TCW Asset Management Company (“TCW”). Our agreement with them will provide split lien subordinated debt in the amount of $40 million. We closed the transaction on July 18, 2022. In conjunction with the transaction with TCW, our primary lender, JP Morgan Chase, has extended our credit agreement to July 18, 2027 and increased our line of credit from $60 million to $70 million. This additional working capital will allow us to support the inventory growth under the current market conditions, the new opportunities that are starting and Wagz as they go through the customary launch of products to the Pet Tech market. We appreciate the support provided by JP Morgan Chase and look forward to working with TCW as the Company grows.

“Going forward, we have a record backlog and new opportunities that are expected to launch during fiscal 2023. Our end markets have continued to diversify with new customers and we are seeing new programs with our existing customers. The challenge of the supply chain remains difficult at best, but, all of our operational teams have done an incredible job of meeting those challenges head on and working closely with our customers to get products out as best we can. We have only seen a few customers start to push out orders and the balance are continuing to take whatever we can build to meet their requirements. This leads us to believe that we are headed into another strong fiscal year. The overall economy remains a concern, but at this time, we have not seen any significant weakness in the short term.

“As this is year end, I want to thank our customers, supply chain, our bank, JP Morgan Chase, our board of directors and our talented team of dedicated employees who have driven these excellent financial results. They did this in spite of continuing pandemic issues and a volatile and chaotic supply chain marketplace. Congratulations and well done to the team. We look forward to continuing to grow the Company and to take advantage of the opportunities that we see in both electronic manufacturing services and pet technology.”

About SigmaTron International, Inc.

Headquartered in Elk Grove Village, Illinois, SigmaTron International, Inc. is an electronic manufacturing services company that provides printed circuit board assemblies and completely assembled electronic products. SigmaTron International, Inc. operates manufacturing facilities in Elk Grove Village, Illinois; Acuna, Chihuahua, and Tijuana Mexico; Union City, California; Suzhou, China, and Biên Hòa City, Vietnam. SigmaTron International, Inc. maintains engineering and materials sourcing offices in Elgin, Illinois and Taipei, Taiwan.

Forward-Looking Statements

Note: This press release contains forward-looking statements. Words such as “continue,” “anticipate,” “will,” “expect,” “believe,” “plan,” and similar expressions identify forward-looking statements. These forward-looking statements are based on the current expectations of the Company. Because these forward-looking statements involve risks and uncertainties, the Company’s plans, actions and actual results could differ materially. Such statements should be evaluated in the context of the direct and indirect risks and uncertainties inherent in the Company’s business including, but not necessarily limited to, the risks inherent in any merger, acquisition or business combination including the December 31, 2021 transaction with Wagz; the Company’s continued dependence on certain significant customers; the continued market acceptance of products and services offered by the Company and its customers; pricing pressures from the Company’s customers, suppliers and the market; the activities of competitors, some of which may have greater financial or other resources than the Company; the variability of the Company’s operating results; the results of long-lived assets impairment testing; the ability to achieve the expected benefits of acquisitions as well as the expenses of acquisitions; the collection of aged account receivables; the variability of the Company’s customers’ requirements; the impact of inflation on the Company’s operating results; the availability and cost of necessary components and materials; the ability of the Company and its customers to keep current with technological changes within its industries; regulatory compliance, including conflict minerals; the continued availability and sufficiency of the Company’s credit arrangements, including the phase out of LIBOR; the ability to meet the Company’s financial and restrictive covenants under its loan agreements; changes in U.S., Mexican, Chinese, Vietnamese or Taiwanese regulations affecting the Company’s business; the turmoil in the global economy and financial markets; the spread of COVID-19 and variants which has threatened the Company’s financial stability by causing a decrease in consumer revenues, caused a disruption to the Company’s global supply chain, and caused plant closings or reduced operations thus reducing output at those facilities; the continued availability of scarce raw materials, exacerbated by global supply chain disruptions, necessary for the manufacture of products by the Company; the stability of the U.S., Mexican, Chinese, Vietnamese and Taiwanese economic, labor and political systems and conditions; global business disruption caused by the Russian invasion in Ukraine and related sanctions; currency exchange fluctuations; and the ability of the Company to manage its growth. These and other factors which may affect the Company’s future business and results of operations are identified throughout the Company’s Annual Report on Form 10-K, and as risk factors, may be detailed from time to time in the Company’s filings with the Securities and Exchange Commission. These statements speak as of the date of such filings, and the Company undertakes no obligation to update such statements in light of future events or otherwise unless otherwise required by law.

   Three Months Three Months  Twelve MonthsTwelve Months
   Ended Ended  Ended Ended
   April 30,  April 30,   April 30,  April 30,
   2022 2021  2022 2021
 Net sales  99,227,925  76,043,944   378,866,424   277,718,672
 Cost of products sold  88,581,264  68,036,179   334,434,553   252,766,475
 Gross profit  10,646,661  8,007,765   44,431,871   24,952,197
 Selling and administrative expenses  8,226,718  5,868,520   28,902,071   21,562,413
 Impairment of notes receivable and investment  -  -   6,300,235   -
 Operating income  2,419,943  2,139,245   9,229,565   3,389,784
 Gain on extinguishment of long-term debt  -  -   (6,282,973)  -
 Other expense  491,574  212,144   1,346,680   1,291,024
 Income before income tax  1,928,369  1,927,101   14,165,858   2,098,760
 Income tax expense  1,286,825  361,542   4,301,690   557,741
 Net income $641,544 $1,565,559  $9,864,168  $1,541,019
 Net income per common share - basic $0.11 $0.37  $2.04  $0.36
 Net income per common share - assuming dilution $0.10 $0.36  $1.92  $0.36
 Weighted average number of common equivalent         
 shares outstanding - assuming dilution  6,246,580  4,357,478   5,129,234   4,301,981
   April 30,  April 30,     
   2022 2021     
 Current assets  218,944,139  141,553,863     
 Machinery and equipment-net  35,973,215  34,186,918     
 Deferred income taxes  856,863  1,647,143     
 Intangibles  12,409,478  1,996,749     
 Goodwill  13,320,534  -     
 Other assets  12,127,048  14,788,734     
 Total assets $293,631,277 $194,173,407     
 Liabilities and stockholders' equity:         
 Current liabilities  132,501,195  85,315,249     
 Long-term obligations  72,796,085  48,309,097     
 Stockholders' equity  88,333,997  60,549,061     
 Total liabilities and stockholders' equity $293,631,277 $194,173,407     

For Further Information Contact:
SigmaTron International, Inc.
James J. Reiman

The following information was filed by Sigmatron International Inc (SGMA) on Wednesday, July 27, 2022 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Inside Sigmatron International Inc's 10-K Annual Report:

Financial Statements, Disclosures and Schedules

Inside this 10-K Annual Report

Document And Entity Information
Consolidated Balance Sheets
Consolidated Balance Sheets (Parenthetical)
Consolidated Statements Of Cash Flows
Consolidated Statements Of Changes In Stockholders' Equity
Consolidated Statements Of Operations
401(K) Retirement Savings Plan
401(K) Retirement Savings Plan (Narrative) (Details)
Accrued Expenses And Wages
Accrued Expenses And Wages (Schedule Of Accrued Expenses) (Details)
Accrued Expenses And Wages (Schedule Of Accrued Wages) (Details)
Accrued Expenses And Wages (Tables)
Acquisition (Consideration) (Details)
Acquisition (Estimated Useful Lives Of Acquired Intangible Assets) (Details)
Acquisition (Narrative) (Details)
Acquisition (Preliminary Allocation Of Purchase Consideration) (Details)
Acquisition (Supplemental Pro Forma Consolidated Statements Of Operations) (Details)
Acquisition (Tables)
Allowance For Doubtful Accounts
Allowance For Doubtful Accounts (Changes In Company's Allowance For Doubtful Accounts) (Details)
Allowance For Doubtful Accounts (Tables)
Description Of The Business
Description Of The Business (Narrative) (Details)
Income Tax
Income Tax (Deferred Tax Assets And Liabilities) (Details)
Income Tax (Income Before Income Tax Expense (Benefit)) (Detail)
Income Tax (Income Tax Expense) (Details)
Income Tax (Narrative) (Details)
Income Tax (Reconciliation Of Income Taxes) (Details)
Income Tax (Tables)
Intangible Assets
Intangible Assets (Estimated Aggregate Amortization Expense) (Details)
Intangible Assets (Narrative) (Details)
Intangible Assets (Summary Of Intangible Assets Subject To Amortization) (Details)
Intangible Assets (Tables)
Inventories (Changes In Inventory Obsolescence Reserve) (Details)
Inventories (Components Of Inventory) (Details)
Inventories (Tables)
Leases (Components Of Lease Expense) (Details)
Leases (Future Payments Due Under Operating And Finance Leases) (Details)
Leases (Lease Assets And Liabilities Related To Balance Sheet Classification) (Details)
Leases (Narratives) (Details)
Leases (Supplemental Cash Flow Information Related To Leases) (Details)
Leases (Tables)
Leases (Weighted Average Lease Term And Discount Rate) (Details)
Long-Term Debt
Long-Term Debt (Aggregate Amount Of Debt, Net Deferred Financing Fees) (Details)
Long-Term Debt (Future Minimum Obligations Under Finance Leases And Sale Leaseback) (Details)
Long-Term Debt (Narrative) (Details)
Long-Term Debt (Schedule Of Debt And Finance Lease Obligations) (Details)
Long-Term Debt (Tables)
Major Customers And Concentration Of Credit Risk
Major Customers And Concentration Of Credit Risk (Narrative) (Details)
Property, Machinery And Equipment, Net
Property, Machinery And Equipment, Net (Narrative) (Details)
Property, Machinery And Equipment, Net (Schedule Of Property, Machinery And Equipment) (Details)
Property, Machinery And Equipment, Net (Tables)
Segment And Geographic Area Information
Segment And Geographic Area Information (Schedule Of Net Sales And Tangible Long-Lived Assets By Geographical Areas) (Details)
Segment And Geographic Area Information (Schedule Of Segment Reporting Information) (Details)
Segment And Geographic Area Information (Tables)
Selected Quarterly Financial Data
Selected Quarterly Financial Data (Summary Of Quarterly Financial Data) (Details)
Selected Quarterly Financial Data (Tables)
Significant Accounting Policies (Revenue Disaggregated By Principal End-User Markets) (Details)
Stock Compensation And Equity Transactions
Stock Compensation And Equity Transactions (Black-Scholes Option Pricing Model) (Details)
Stock Compensation And Equity Transactions (Narrative) (Details)
Stock Compensation And Equity Transactions (Stock Options Outstanding, Exercisable, And Non-Vested) (Details)
Stock Compensation And Equity Transactions (Summarized Option Activity) (Details)
Stock Compensation And Equity Transactions (Tables)
Subsequent Event (Narrative) (Details)
Subsequent Event Tcw Capital Raise
Summary Of Significant Accounting Policies
Summary Of Significant Accounting Policies (Computation Of Basic And Diluted Earnings (Loss) Per Share) (Details)
Summary Of Significant Accounting Policies (Depreciation And Amortization Using Straight-Line Method Over Estimated Useful Life) (Details)
Summary Of Significant Accounting Policies (Narrative) (Details)
Summary Of Significant Accounting Policies (Policy)
Summary Of Significant Accounting Policies (Tables)
Ticker: SGMA
CIK: 915358
Form Type: 10-K Annual Report
Accession Number: 0000915358-22-000010
Submitted to the SEC: Wed Jul 27 2022 2:36:10 PM EST
Accepted by the SEC: Wed Jul 27 2022
Period: Saturday, April 30, 2022
Industry: Printed Circuit Boards

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