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PHOENIX -- Hurt by the loss of a key customer, Suntron Corp., a provider of electronics manufacturing services, today reported a net loss of $6.2 million as net sales slipped 18% to $82.7 million in its fiscal first quarter.

The results include $400,000 of restructuring charges related to severance, retention and lease exit costs.

Sequentially, net sales decreased $33.1 million, or 29%.

The decline was primarily due to the loss of Applied Materials, Suntron said.

The net loss rose $1.9 million to $6.2 million, as attributable to the lower gross profit.

The company said preliminary forecasts indicate flat to lower net sales for the second quarter sequentially.

Gross profit for the first quarter of 2005 was $500,000, or 0.6% of net sales, down $2.5 million from a year ago.

Sequentially, first quarter gross profit fell $6 million.

Selling, general and administrative expense was flat at $5.6 million, but increased as a percentage of net sales to 6.8%, from approximately 5.6% in the first and fourth quarters of 2004.

Operating loss for the first quarter of 2005 was $5.4 million, an increase of $1.9 million.

Cash flow from operations was $5.4 million, an improvement of $18.7 million. Sequentially, cash flow improved $300,000

At April 3, the company had debt outstanding of $54.9 million as compared to $59.1 million at Dec. 31.

Effective May 6, James K. Bass resigned as president and chief executive. Hargopal (Paul) Singh was promoted to president and chief executive and will be named to the board. Singh was vice president of operations at the company's largest facility, located in Sugar Land, TX, In addition, Michael Eblin resigned as chief operating officer.
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