Sigma Circuits Report Earnings
hursday January 16 8:00 AM EDT
Sigma Circuits Announces Fiscal Results for Second Quarter
Ended December 31, 1996
SANTA CLARA, Calif., Jan. 16 /PRNewswire/ -- Sigma Circuits Inc today announced financial results for the second quarter ended December 31, 1996.
Net sales for the second quarter of fiscal 1997 were $19.9 million, a decrease of 25.4% from the record sales of $26.7 million for the same quarter one year ago. This decline was primarily the result of a
slowdown in demand for the printed circuit board (PCB) business in calendar 1996 after a particularly strong quarter ended December 31, 1995. However, compared to the first quarter of fiscal 1997 ended
September 30, 1996, net sales for the second quarter increased 5.9%. The combined net sales for the Systems Integration and Flexible Circuits divisions increased 21.4% from the same period one year ago;
however declined 14.1% from the first quarter of fiscal 1997. Said B. Kevin Kelly, President and CEO, "Although we are pleased with the steady improvement in PCB sales and margins subsequent to the closure of the Costa Mesa operation, the pace of top line growth in our newer divisions has not met expectations. We believe that realizing the potential in the value added business will be a major ingredient toward meeting our internal profitability goals."
Gross profit and margin for the second quarter ended December 31, 1996 were $3.5 million and 17.8%, respectively, down from $5.9 million and 22.0%, respectively, for the same period last year. However, gross profit and margin improved over the $2.3 million and 12.3% recorded in the first quarter ended September 30, 1996. Gross margin in the PCB business improved to 22.7% in the second quarter as compared to 17.2% for the first quarter of fiscal 1997 but was still below the 3.8% achieved on record PCB sales during the comparable second quarter one year ago. Gross profit and margins for the second quarter were negatively impacted by lower sales in the Systems Integration division. Selling, general and administrative expenses were $2.6 million or 13.3% of sales compared to $3.3 million or 12.3% of sales
during the comparable quarter one year ago. Impacting second quarter selling, general and administrative expenses was an increase in bad debt reserve of approximately $230,000. Offsetting this charge was a $250,000 reversal of an accrual for environmental remediation at the Costa Mesa facility.
For the second quarter, the Company reported net income of $273,000 or 6 cents per share on 4.5 million equivalent shares outstanding as compared to net income of $1.1 million or 24 cents per share on 4.8 million shares in the same quarter of the prior fiscal year. Kelly noted, "As compared to the pre-consolidation cost structure, the Company has realized a net labor reduction of approximately
$850,000 for the second quarter of fiscal 1997 as compared to the pre-consolidation quarter ended March 30, 1996. Our challenge today is to grow our value added business and contain costs while we seek additional financing solutions to reduce debt levels."
Net sales for the six months ended December 31, 1996 were $38.7 million, a decline of 9.5% from the $42.8 million recorded during the same six month period one year ago. Gross profit and margin for the
six months ended December 31, 1996 was $5.9 million and 15.1%, respectively, compared to $9.4 million and 22.1% during the same period last fiscal year. Net earnings for the current six months ended
December 31, 1996 were $90,000 or 2 cents per share on 4.5 million equivalent shares outstanding compared to net income of $1.7 million or 38 cents per share on 4.5 million equivalent shares outstanding one year ago.
This news release contains forward-looking statements that involve risks and uncertainties, and the actual results may differ materially from the above forward-looking statements due to a number of
important factors, including, but not limited to, the timing and volume of orders, product mix, and capacity utilization. These factors are fully discussed in Sigma's regular financial filings with the
Securities and Exchange Commission.
Sigma Circuits, Inc. is a leading quick-turn manufacturer of electronic interconnect products including multilayer printed circuit boards, backplane assemblies and flexible circuits. The Company focuses on the time-to-market and time-to-volume requirements of its OEM and contract manufacturing customers in the data communications, telecommunications, computers, peripherals, instrumentation and medical segments of the electronics industry. Headquartered in Silicon Valley, Sigma's shares are traded on the Nasdaq National Market under the symbol: SIGA.
SIGMA CIRCUITS, INC.
STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
Three Months Ended Six Months Ended
December 31, December 31,
(unaudited) (unaudited)
1996 1995 1996 1995
Net sales $19,916 $26,711 $38,718 $42,787
Cost of sales 16,380 20,829 32,864 33,342
Gross profit 3,536 5,882 5,854 9,445
Selling, general and
administrative 2,644 3,280 4,610 5,660
Plant closure charge (250) -- (250) --
Amortization of goodwill 125 157 250 207
Operating income 1,017 2,445 1,244 3,578
Interest expense, net 514 530 1,052 674
Net income before taxes 503 1,915 192 2,904
Provision for income taxes 230 767 102 1,190
Net income $273 $1,148 $90 $1,714
Net income per share $0.06 $0.24 $0.02 $0.38
Number of shares used
in computing
per share information 4,506 4,766 4,544 4,458
SIGMA CIRCUITS, INC.
BALANCE SHEETS
(In thousands)
December 31, June 30,
1996 1995
(unaudited)
ASSETS
Cash and cash equivalents $495 $--
Accounts receivable 13,539 11,987
Inventory 3,589 4,753
Other 3,531 4,367
Current assets $21,154 $21,107
Property and equipment, net 17,952 18,899
Goodwill 6,364 6,615
Deposits and other assets 262 339
Total assets $45,732 $46,960
LIABILITIES & STOCKHOLDERS' EQUITY
Cash overdraft $-- $297
Current portion of long-term debt 6,850 7,681
Accounts payable 6,373 4,418
Accrued liabilities 3,997 5,947
Current liabilities $17,220 $18,343
Long-term debt 13,888 14,345
Deferred taxes 1,349 1,354
Stockholders' equity $13,275 $12,918
Total liabilities and
stockholders' equity $45,732 $46,960
SOURCE Sigma Circuits Inc. |
