ELK GROVE VILLAGE, IL – SigmaTron International reported fiscal third quarter revenues decreased 2.2% year-over-year to $67.4 million.

Net loss was $217,039, compared to a net loss of $595,526 for the same period in the prior year.

For the nine months ended Jan. 31, revenues were $216.3 million, down 0.5% year-over-year. Net income was $805,169, compared to net loss of $1.8 million in the nine-month period the prior year.

“Unfortunately, I am reporting disappointing results for the third quarter of fiscal 2020,” said Gary R. Fairhead, president, CEO and chairman of the board. “We had a modest pre-tax loss for the quarter, directly tied to lower sales than projected. The third quarter of our fiscal year is historically our weakest quarter due to the holiday period, and this year the Lunar New Year in Asia fell in the third quarter as well. While sales were lower than last year’s third quarter, we were able to reduce the loss for the period and still remain profitable for the first three quarters of fiscal 2020. Gross profit increased by almost 1% for the nine months ended Jan. 31 compared to the previous year.

“As mentioned in our second quarter press release, we were not optimistic regarding the third quarter results. Exactly as we expected, we had weak sales in November and December, which started to rebound in January. In addition to the holiday period impacting revenue and results, customers were managing year-end inventory levels, which led to the lower revenue than expected.

“Heading into the fourth quarter, our backlog was strong, and revenue was ramping, and all of a sudden the world was introduced to the novel coronavirus. There is no doubt this will negatively affect our fourth quarter but to what extent remains to be seen. On the manufacturing level, our China plant was delayed by the government in terms of reopening after the Lunar New Year holiday. As of the end of February, we are up to 60% of our direct labor headcount before the holiday, and it has steadily increased. If that wasn’t bad enough, we will now be facing disruptions in the supply chain, as our supply base returns to work with smaller workforces due to the coronavirus outbreak. Through the end of February, the disruptions were manageable, but we are being told de-commits from suppliers may increase in the weeks ahead. We have little doubt that is accurate. With that said, the customer backlog remains strong, and we believe once the coronavirus situation is under control business will be strong.

“We have continued to successfully reduce inventory and increase our availability under our line of credit. That will help us going forward. We also have several new customers ramping their business with us. The primary negative at this time is the uncertainty surrounding our China operation and supply chain. Hopefully, it will be under control soon and will allow us to continue in a positive direction.”

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