SMTX...up 37% on earnings AH's.. SMTC Reports Fourth Quarter and Annual Results
Monday March 13, 4:30 pm ET
Reports 21% Improvement in Quarterly Revenue Over Comparable Period Last Year and Third Consecutive Profitable Quarter
TORONTO, March 13 /PRNewswire-FirstCall/ - SMTC Corporation (1) (Nasdaq: SMTX, TSX: SMX), a global electronics manufacturing services provider, today reported revenue of $58.1 million and net income of $1.4 million, or $0.10 per share, for the fourth quarter ended December 31, 2005, compared with revenue of $48.0 million and a net loss of $3.2 million, or $0.22 per share, for the quarter ended December 31, 2004. Net income in the fourth quarter of 2005 includes an income tax recovery of $0.6 million, or $0.04 per share, while the net loss for the fourth quarter of 2004 included net restructuring and other charges of $1.1 million, or $0.08 per share. The Company also generated cash from operations of $7.0 million during the fourth quarter of 2005 compared with $6.2 million in the fourth quarter of 2004. In the third quarter of 2005, the Company reported revenue of $64.6 million and net income of $0.8 million, or $0.05 per share.
"Our fourth quarter results demonstrate our continuing progress in improving our financial results," stated John Caldwell, President and Chief Executive Officer. "Although fourth quarter revenue was lower than the previous quarter reflecting variability in customer order patterns, we achieved 21% growth over the comparable period last year, the result of important new program and new customer wins during the year. It was also the third consecutive quarter of earnings growth."
"Following a lengthy period of declining revenue and operating losses, SMTC reversed this trend in 2005 showing significant improvement across all metrics," stated Jane Todd, Senior Vice President and Chief Financial Officer. "Our annual performance in 2005 reflects somewhat lower results than 2004, the result of higher but declining revenue in the first two quarters of 2004".
For the fiscal year ended December 31, 2005, the Company reported revenue of $228.8 million and a net loss of $0.1 million, or $0.01 per share. This compares with revenue of $244.6 million and net income of $0.6 million, or $0.05 per share, for the fiscal year ended December 31, 2004.
Gross profit for the fourth quarter of 2005 was $4.9 million, or 8.4% of revenue, compared with $5.5 million or 8.5% of revenue for the previous quarter and $1.5 million, or 3.1% of revenue, for the fourth quarter of 2004. Gross profit for the fourth quarter of 2004 includes net restructuring and other charges of $0.6 million, or 1.3% of revenue.
In the fourth quarter of 2005, the Company applied the $7.0 million in cash generated from operations to reduce long-term debt and capital lease obligations by $6.8 million and invested $0.2 million in capital assets. Cash generated from operations for fiscal year 2005 was $8.4 million, compared to $5.1 million for fiscal year 2004. The amount outstanding under the Company's $40 million revolving credit facility at December 31, 2005 was $2.0 million compared with $8.1 million at October 2, 2005 and $4.3 million at December 31, 2004.
"We anticipate that 2006 will be a year of growth in both revenue and earnings. However, given the unpredictability of customer order patterns that can affect quarterly results, we intend to provide annual directional guidance only that will be updated on a quarterly basis," stated John Caldwell, President and Chief Executive Officer.
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(1) Expressed in U.S. dollars
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About the Company: SMTC Corporation is a global provider of advanced electronic manufacturing services. The Company's electronics manufacturing centers are located in; Boston, Massachusetts; San Jose, California; Toronto, Canada; and Chihuahua, Mexico with a third party facility in Chang An, China. SMTC offers technology companies and electronics OEMs a full range of value- added services. SMTC supports the requirements of a growing, diversified OEM customer base primarily within the industrial, networking, communications and computing markets. SMTC is a public company incorporated in Delaware with its shares traded on the Nasdaq National Market System under the symbol SMTX and on The Toronto Stock Exchange under the symbol SMX. Visit SMTC's web site, www.smtc.com, for more information about the Company.
Note for Investors: The statements contained in this release that are not purely historical are forward-looking statements which involve risk and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. These statements may be identified by their use of forward-looking terminology such as "believes", "expect", "may", "should", "would", "will", "intends", "plans", "estimates", "anticipates" and similar words, and include, but are not limited to, statements regarding the expectations, intentions or strategies of SMTC Corporation. For these statements, we claim the protection of the safe harbor for forward-looking statements provisions contained in the Private Securities Litigation Reform Act of 1995. Risks and uncertainties that may cause future results to differ from forward-looking statements include the challenges of managing quickly expanding operations and integrating acquired companies, fluctuations in demand for customers' products and changes in customers' product sources, competition in the EMS industry, component shortages, and others discussed in the Company's most recent filings with securities regulators in the United States and Canada. The forward-looking statements contained in this release are made as of the date hereof and the Company assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ materially from those projected in the forward-looking statements.
Company Financials To Follow
SMTC CORPORATION
Consolidated Unaudited Statements of Earnings (Loss)
(US dollars, in thousands, except share and per share data)
Three months ended Year ended
December 31, December 31,
2005 2004 2005 2004
------------------------- -------------------------
Revenue $ 58,061 $ 48,018 $ 228,766 $ 244,596
Cost of sales 53,155 46,508 211,619 221,563
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Gross profit 4,906 1,510 17,147 23,033
Selling, general
and administrative
expenses 2,908 3,576 13,139 16,037
Amortization - - - 2,330
Restructuring charges
(reversals) 20 526 87 (142)
------------ ------------ ------------ ------------
Operating earnings
(loss) 1,978 (2,592) 3,921 4,808
Interest 1,190 966 4,589 4,521
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Earnings (loss)
before income taxes
and discontinued
operations 788 (3,558) (668) 287
Income tax expense
(recovery) (629) (362) (556) 506
------------ ------------ ------------ ------------
Earnings (loss) from
continuing operations 1,417 (3,196) (112) (219)
Earnings from
discontinued
operations - - - 837
------------ ------------ ------------ ------------
Net earnings (loss) $ 1,417 $ (3,196) $ (112) $ 618
------------ ------------ ------------ ------------
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Net earnings (loss)
per share:
Basic from
continuing
operations $ 0.10 $ (0.22) $ (0.01) $ (0.02)
Earnings from
discontinued
operations $ - $ - $ - $ 0.07
------------ ------------ ------------ ------------
Basic $ 0.10 $ (0.22) $ (0.01) $ 0.05
Diluted $ 0.10 $ (0.22) $ (0.01) $ 0.05
------------ ------------ ------------ ------------
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Weighted average
number of shares
outstanding:
Basic 14,641,345 14,641,345 14,641,345 10,943,763
Diluted 14,838,754 14,641,345 14,641,345 10,943,763
SMTC CORPORATION
Consolidated Balance Sheets
(US dollars, in thousands)
December 31, December 31,
2005 2004
------------ ------------
Accounts receivable $ 26,899 $ 23,856
Inventories 33,168 33,025
Prepaid expenses 1,698 1,702
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61,765 58,583
Capital assets 25,651 29,269
Other assets 2,010 4,729
Deferred income taxes 619 135
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$ 90,045 $ 92,716
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Accounts payable $ 30,939 $ 25,943
Accrued liabilities 13,849 13,738
Income taxes payable 1,203 1,571
Current portion of long-term debt 4,633 3,800
Current portion of capital lease obligations 1,542 1,897
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52,166 46,949
Long-term debt 23,857 30,091
Capital lease obligations - 1,542
Shareholders' equity 14,022 14,134
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$ 90,045 $ 92,716
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AI
