Thu, Sep 19, 8:52 PM (303 days ago)
For the quarter ending July 31, 2024, SigmaTron International, Inc. reported a significant decline in financial performance, with net sales dropping 13.6% to $84.8 million compared to the prior year. This decrease was driven primarily by reduced demand in industrial electronics and medical/life sciences sectors, despite a rise in consumer electronics sales. Gross profit margins fell to 7.6%, down from 9.8%, attributed to lower sales volumes and increased labor and fixed manufacturing costs, including severance expenses. The company experienced a net loss of $3.3 million, a stark contrast to a net income of $262,099 in the same quarter the previous year. Operating cash flow decreased to $2.6 million, impacted by a rise in accounts receivable and a decrease in accounts payable. SigmaTron is currently facing covenant defaults on its credit agreements, leading to the reclassification of debt as current liabilities. Despite recent amendments to their credit terms, uncertainties remain regarding future compliance and operational stability amid ongoing supply chain challenges and economic conditions. The company is actively pursuing strategies to reduce debt and enhance liquidity, although risks persist from potential delays in customer orders and global market fluctuations.