TORONTO, Nov. 8 - SMTC Corp. today reported third-quarter net earnings of $2.9 million on revenue of $60.8 million.

Last year the electronics manufacturing services provider reported net earnings of $2.6 million on $77 million in sales.

Sequentially, net earnings were up from $1 million, although sales dropped from $66.3 million.

SMTC settled two legal disputes during the quarter. In a claim for obsolete inventory previously written down, the company recovered $1.8 million, which was recorded in cost of sales. And the company adjusted by $1.7 million an earlier restructuring charge taken for early termination of a lease.

SMTC took restructuring charges of $1 million during the quarter.

Gross profit was $7.3 million, or 12.1% of revenue, compared with $8.1 million (10.6% of revenue) last year and $7.3 million (11.1%) in the second quarter. Cash from operations was $3.9 million; as a result the company's outstanding revolving credit facility dropped to $9.7 million from $13.3 million. The company reported no cash balance on its balance sheet. Debt was reduced by $4 million during the quarter.

Through Oct. 3 SMTC posted revenue of $196.6 million, down from $229.2 million in 2003. Net earnings were $3.8 million, compared with a net loss of $37.2 million.

SMTC was recently notified by Nasdaq that it has regained compliance with the minimum bid price requirement of $1 per share.