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TAMPA, FL -- Kimball International paid $5.4 million for Genesis Electronics Manufacturing, a Tampa-based EMS firm acquired by Kimball in September.

Kimball, whose EMS group's sales rank in the top 25 worldwide, declined to specify the price at the time of the acquisition. However, the amount, which covers Genesis' assets and some liabilities, was included in the company's recent earning report.

Genesis had 2007 revenues of about $16 million.

Genesis' programs and staff will be moved to Kimball’s Tampa facility.

LOUISVILLE -- Sypris Solutions today reported revenue of $100.2 million for its third quarter, down 4.1% from the prior year.

The company swung to a net loss of $7.8 million, whereas a year-ago it reported income of $2.6 million. The most recent results included restructuring charges of $700,000 and foreign exchange losses of $1.0 million.

WASHINGTON, DC -- The AeA and the Electronics Components Association (ECA) are considering a merger, the two groups said.

In a statement, AeA chairman Peter Boni said there is a growing need "for a trade association that has the size, scale and flexibility to support and promote its members and the industry as a whole."

Ironically, ECA was spun out in mid 2006 when the Electronics Industries Alliance diviied up its assets among its member organizations. Moreover, in September the AeA (formerly the American Electronics Association) and the Information Technology Association of America, another former EIA partner, announced discussions to merge their respective memberships and programs.

AeA has 2,400 corporate members and focuses on lobbying at the state, federal and international levels. Its 2006 revenues, the last year for which records are available, were $19.4 million.

ECA has more than 92 members and reported a small loss on revenues of $1.9 million in 2006.

ITAA has 360 members and concentrates on business development, public policy advocacy, market forecasting and standards development. Its 2006 revenues were $5.9 million. Combined, the groups spent $2.25 million to lobby the federal government in 2007, according to required filings, and have been increasing their contributions this year.

EL SEGUNDO, CA — Contract electronics manufacturers will not escape the impact of the current economic downturn, but will continue to expand and even experience a mild rebound in three years, according to iSuppli Corp.

Global EMS revenue, including ODM providers, is expected to grow 8.3% in 2008, down from 16.1% in 2007. iSuppli previously forecasted growth of 9.1% this year.

In 2009, growth will slow to 6.1%, as the global recession sets in and demand from consumers and enterprises continues to soften. In 2010, OEM demand will stabilize and contract-manufacturing growth will rise to 7.6%. In 2011, growth will rise to 9%, as the global electronics and contract manufacturing markets recover.

“Speculative activities specific to the housing market and mortgage-backed securities will or already have triggered a recession in the United States that could spread across the world,” observed Adam Pick, principal analyst, EMS/ODM, for iSuppli. “Demand specific to the electronics marketplace will continue to soften. As the end-markets erode due to recession, the trickle-down effect will cause less significant revenue growth for electronics supply-chain participants, including EMS/ODM providers.”

However, the EMS market will continue to expand during this period, as OEMs attempt to adjust cost structures and enhance core competencies.

“OEMs, including Dell, are reported to be selling off up to $15 billion in annual manufacturing revenues via a divestiture of desktop and integration facilities,” Pick said. “Furthermore, non-traditional OEMs – i.e., those in the medical, industrial, aerospace markets – will continue to explore, test and adopt external manufacturing partners during the financial downturn.”

The firm indicates short-term credit issues are not currently impacting contract manufacturers’ operations. “Fear and concern that most contract manufacturers are at a short-run risk for bankruptcy appear to be overstated,” Pick opined.

An analysis of the bankruptcy risk for the top eight EMS providers indicates most providers remain in a financial safety zone. Furthermore, iSuppli’s quick survey of EMS providers did not indicate any immediate risk specific to upcoming maturity dates for debt instruments. Finally, the short-term cash reserves of the top EMS providers should mitigate any short-term financial crisis.

During the last major recession, between 2001 and 2003, the contract manufacturing industry managed to maintain growth, and then experienced a surge in revenue in 2004 as the market recovered. The EMS/ODM industry has frequently noted this “rubber-band effect,” where the market snaps back vigorously from industry downturns.

“This recession and recovery will be fundamentally different for the contract manufacturers,” Pick stated. “There are several macroeconomic and industrial factors that will prohibit the revenue explosion we saw in 2003, 2004 and 2005.”

ELKHART, IN -- The top financial officer of CTS Corp. yesterday suggested the economy is straining smaller EMS firms, thus opening the door for larger players.

On a conference call with analysts, president and chief financial officer Vinod M. Khilnani said, "Financial constraints on smaller tier three and tier four competitors are presenting new business opportunities for our EMS business."

Kimball's Price for Genesis: $5.4M

Sypris Swings to Q3 Loss, Electronics Remains Strong

Kimball's EMS Sales Up 3%

AeA, ECA Consider Merger

EMS/ODMs to Stay Afloat During Recession

CTS Pres: Economy Straining Smaller EMS Firms

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