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PHOENIX -- Suntron Corp. said that the loss of Applied Materials as a customer was responsible for a big dip in revenues for its just completed quarter.

The electronics manufacturing services provider reported second-quarter net sales were $81.8 million, down $49.6 million over a year ago. Sales were off just $900,00 from the first quarter.

Gross profit fell $4.8 million to $3.9 million vs. a year ago. Gross profit was up $3.4 million sequentially. Gross profit includes restructuring charges of $400,000 in Q1 and and $500,000 in Q2.

The operating loss narrowed to $3.1 million, from $5.4 million from the first quarter. A year ago Suntron had operating income of $2.1 million.

Paul Singh, Suntron president and chief executive, guided for third quarter net sales to be up to 5% higher sequentially.

For the quarter, selling, general and administrative expense increased to $6.1 million from $5.6 million sequentially, primarily due to an increase in bad debt expense. SG&A decreased $300,000 in the second quarter of 2005 year-over-year.

Earnings before interest, taxes, depreciation and amortization (EBITDA) for the second quarter improved by $2.5 million to a loss of $500,000 sequentially. EBITDA for the second quarter 2004 was $4.8.

The net loss narrowed to $3.7 million, from $6.2 million in the first quarter, but was down from net income of $1 million in Q2 2004.

CEO Singh said, "[W]e are starting to see the benefit of our cost-cutting actions and our asset utilization improvements."   

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