TORONTO -- SMTC Corp. today reported first-quarter net income fell to $700,000, a third of last year's level.

The electronics manufacturing services provider reported revenue of $56.3 million, down 8% from the first quarter 2010, on lower demand, particularly from one larger customer.

The company took $364,000 in restructuring charges related to severance at its Canada and Mexico operations. On an EBITDA basis, earnings were $2.3 million for the quarter compared to $3.2 million a year earlier.

Gross profit for the quarter was $5.1 million, down from  $6.4 million a year ago. Bank debt net of cash increased by $7.1 million in the quarter, as lower revenues resulted in higher inventories -- and higher debt. The company said the conditions are temporary and it expects to generate cash through the rest of the year.

SMTC continues to seek a permanent chief executive. In a statement it called the results "disappointing," and said it is targeting $5 million by year end. It did not disclose how it planned to reduce costs, but it closed its San Jose plant in the fourth quarter 2010 and has been laying off staff elsewhere.

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