ELK GROVE VILLAGE, IL - SigmaTron International reported third fiscal quarter net revenues of $28.3 million, up 18% for the three months ended Jan. 31. Net income was $1.4 million, up 16%, the company said.

For the nine months ended Jan. 31, the company's net revenues are up 8% to $81.2 million. Net income is down 13%, to $3.9 million.

In a press release, president and chief executive Gary R. Fairhead said sales of appliances and fitness gear increased, but competitive pricing pressures hurt gross margins.

"We also experienced a decrease in sales in the consumer market due to slowing sales to a significant customer. We believe this customer will cease to do business with SigmaTron in the fourth quarter because they decided to move the production of their product into a new company-owned facility in Mexico."

Sales in the gaming marketplace were softer as well, he said. "Overall, customer price concessions, increases in manufacturing supply costs, and increases in raw material component costs continued to negatively impact our results in the reported periods, and we expect this will continue."

For the quarter, the company's Elk Grove Village plant performed well, but its operations in Fremont and Las Vegas were off. Ramp of a new facility in China was slower than expected during the quarter, but generated positive income from operations. The operation now has approximately 170 employees, and Sigmatron expects to move business from Mexico to China over the next six months.

The Mexico site will remain, Fairhead said. "Our Mexican facility posted solid operating results again due to continued strong demand for its services," Fairhead said. "The facility also gained two new customers during the quarter, which we are optimistic will become an important part of Mexico's revenue stream going forward. We have seen increased customer interest in our Mexican facility and we anticipate that most of the business transferred to China will be replaced with new business."

The company guided for a sequentially weaker fiscal fourth quarter.