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SI

SIGMATRON INTERNATIONAL INC (SGMA)·Q3 2024 Earnings Summary

Executive Summary

  • Q3 FY2024 revenue was $95.9M (+3% YoY), but margins compressed and net income from continuing operations fell to $0.6M ($0.10 diluted EPS) vs $2.7M ($0.44) in Q3 FY2023; pre-tax profit was $676,742 as mix and cost structure pressured margins .
  • Sequentially, revenue declined modestly vs Q2 ($98.7M → $95.9M), but profitability improved from breakeven to $0.10 diluted EPS as operating leverage and mix effects stabilized quarter-on-quarter .
  • Management emphasized continued soft near‑term demand and short‑term backlog softness; several new programs slipped in timing but remain on track, implying a better setup into FY2025; inventory was reduced by $30M in the first nine months, improving working capital discipline .
  • No formal numerical guidance was provided; management cited modest supply chain improvement yet continued macro/geopolitical uncertainty, signaling likely stock narrative sensitivity to updates on new program ramps, backlog recovery, and margin trajectory in coming quarters .
  • Wall Street consensus (S&P Global) for Q3 FY2024 was unavailable via our data connection (missing CIQ mapping), so we cannot quantify beat/miss vs estimates; monitor future disclosures for Street reset and FY2025 ramp cadence (Estimates unavailable via S&P Global).*

What Went Well and What Went Wrong

What Went Well

  • Profitability in seasonally weak quarter; pre‑tax profit of $676,742 despite a soft backlog entering Q3: “I’m pleased to report pre‑tax profits of $676,742 for our third quarter of fiscal 2024…our third quarter historically is our weakest quarter” .
  • Working capital execution: inventory reduced by $30M in the first nine months, improving balance sheet flexibility and lowering carrying costs .
  • Supply chain easing: “There are still supply chain issues but there have been some modest improvements,” supporting more predictable production and potentially better cost control over time .

What Went Wrong

  • Margin compression YoY: management cited mix and cost structure factors; gross margin approximated ~10.4% in Q3 FY2024 vs ~12.0% in Q3 FY2023; operating margin ~3.4% vs ~5.2% YoY (derived from reported gross profit/operating income and net sales) .
  • Demand softness persists: “There is a general softness from our customer base overall…short‑term backlog was soft” and likely to continue near‑term .
  • Timing delays: “Several new projects have not come to market as anticipated…remain on track to launch but just further out,” deferring revenue/margin benefits into FY2025 .

Financial Results

Headline Metrics (Sequential Trend)

MetricQ1 2024 (Jul 31, 2023)Q2 2024 (Oct 31, 2023)Q3 2024 (Jan 31, 2024)
Revenue ($USD)98,130,356 98,691,684 95,919,888
Gross Profit ($USD)9,651,220 9,687,755 9,926,960
Gross Margin (%)9.8% (9,651,220/98,130,356) 9.8% (9,687,755/98,691,684) 10.4% (9,926,960/95,919,888)
Operating Income ($USD)2,808,415 3,074,121 3,243,472
EBIT Margin (%)2.9% (2,808,415/98,130,356) 3.1% (3,074,121/98,691,684) 3.4% (3,243,472/95,919,888)
Net Income – Continuing Ops ($USD)262,099 28,262 599,006
Net Margin – Continuing Ops (%)0.3% (262,099/98,130,356) 0.0% (28,262/98,691,684) 0.6% (599,006/95,919,888)
Diluted EPS – Continuing Ops ($)0.04 0.00 0.10

YoY Comparison (Q3 FY2024 vs Q3 FY2023)

MetricQ3 2023 (Jan 31, 2023)Q3 2024 (Jan 31, 2024)
Revenue ($USD)92,736,725 95,919,888
Gross Profit ($USD)11,160,905 9,926,960
Gross Margin (%)12.0% (11,160,905/92,736,725) 10.4% (9,926,960/95,919,888)
Operating Income ($USD)4,802,314 3,243,472
EBIT Margin (%)5.2% (4,802,314/92,736,725) 3.4% (3,243,472/95,919,888)
Net Income – Continuing Ops ($USD)2,696,211 599,006
Diluted EPS – Continuing Ops ($)0.44 0.10

Notes: Management attributes YoY margin pressure to adverse mix and cost structure dynamics in Q3 FY2024 .

Segment Disclosure

  • SigmaTron operates in one reportable segment: Electronic Manufacturing Services (EMS) . No segment revenue or margin breakdowns are provided.

Selected KPIs and Balance Sheet Items

KPI / Balance Sheet ItemQ3 2024Reference / Prior
Inventory reduction (first 9 months FY2024)$30,000,000 reduction YTD —
Current Assets$194,481,791 (Jan 31, 2024) $220,466,442 (Apr 30, 2023)
Long‑term Obligations$88,986,827 (Jan 31, 2024) $48,227,573 (Apr 30, 2023)
Stockholders’ Equity$69,367,743 (Jan 31, 2024) $68,091,027 (Apr 30, 2023)
Weighted Avg Diluted Shares6,120,317 (Q3 2024) 6,071,288 (Q3 2023)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueNear‑term (Q3→Q4 FY2024)As of Q2: “We expect the third quarter to be difficult and believe revenue levels will start to increase during our fourth quarter.” As of Q3: backlog remains soft; several new projects delayed; cautious on next quarter or two Maintained caution; timing of recovery pushed to later quarters (qualitative)
MarginsNear‑termNot quantifiedLower YoY in Q3 due to mix and cost structure; continued near‑term volatility Maintained caution (qualitative)
New project rampsFY2025“Awarded several new contracts with significant upside” “Several new projects…remain on track to launch but just further out…should bode well for fiscal 2025” Timing deferred to FY2025

No formal numerical ranges for revenue, margins, opex, OI&E, or tax rate were disclosed in Q3 materials .

Earnings Call Themes & Trends

(We did not find a Q3 FY2024 earnings call transcript; themes below synthesize management commentary across Q1–Q3 press releases.)

TopicPrevious Mentions (Q1 & Q2 FY2024)Current Period (Q3 FY2024)Trend
Demand & BacklogQ1: Short‑term demand softness; mixed customer trends . Q2: Short‑term backlog soft into Q3; expecting Q4 improvement .Continued softness; short‑term backlog soft; profitability maintained despite seasonality .Near‑term cautious; stabilization expected later.
Supply ChainQ1: Modest improvement with slowing economy . Q2: Modest improvements; some semis >52‑week lead times .“Still supply chain issues but…modest improvements” .Gradually easing, not fully normalized.
Inventory / Working CapitalQ1: Focus on reducing inventory . Q2: Progress in reducing on‑hand inventory .Inventory reduced by $30M YTD .Sustained progress.
New Programs / PipelineQ1: Several new opportunities . Q2: Awarded several new contracts with significant upside .Several projects delayed but still on track; benefit shifted to FY2025 .Positive pipeline; timing pushed right.
Macro / GeopoliticsQ1: Economic uncertainty; China trade tensions; regional strategy shift . Q2: Uncertainty from elections and geopolitical conflicts .Uncertainty remains (geopolitics & elections); near‑term volatility expected .Ongoing headwinds.

Management Commentary

  • “I’m pleased to report pre‑tax profits of $676,742 for our third quarter of fiscal 2024…our short‑term backlog was soft and our third quarter historically is our weakest quarter…We did see a modest increase in revenue…but at lower margins…related to both mix and cost structure.”
  • “The Company has reduced inventory by $30 million during the first nine months of our fiscal year.”
  • “Several new projects have not come to market as anticipated…They all remain on track to launch but just further out…This should bode well for fiscal 2025.”
  • “There are still supply chain issues but there have been some modest improvements…The uncertainty related to the geopolitical situations as well as the upcoming elections have negatively affected the overall economy…there will definitely be some short‑term volatility for the next quarter or two.”

Q&A Highlights

  • No Q3 FY2024 earnings call transcript was identified in our document repository or public filings; consequently, no Q&A details or clarifications beyond the press release are available for this quarter.

Estimates Context

  • S&P Global (Capital IQ) consensus for SGMA’s Q3 FY2024 EPS and revenue was unavailable via our data connection due to a missing CIQ company mapping; therefore, we cannot determine beat/miss vs Street for this quarter (Estimates unavailable via S&P Global).*

Key Takeaways for Investors

  • Operating discipline amid a soft backdrop: SigmaTron delivered a modest profit in a seasonally weak quarter while reducing inventory by $30M YTD—supportive for cash conversion and de‑risking working capital .
  • Mix and cost structure dampened margins YoY; watch for margin recovery signs as supply chain continues to normalize and higher‑margin programs launch in FY2025 .
  • Near‑term narrative hinges on backlog rebuild and timing of new program ramps; management’s commentary pushes more meaningful revenue upside into FY2025 .
  • Absent formal guidance, qualitative tone remains cautious for the next 1–2 quarters given macro/geopolitical uncertainty; traders should expect sensitivity to incremental color on demand inflections and backlog .
  • Sequential stabilization: despite lower sales vs Q2, EPS improved to $0.10 from near‑breakeven; sustaining this trajectory would support the case for a gradual earnings recovery .
  • With Street estimates unavailable, price discovery may pivot more on company-specific updates (new contract timing, margin mix, working capital progress) until broader coverage re‑anchors expectations (Estimates unavailable via S&P Global).*

*Estimates unavailable via S&P Global. All quantitative results in this report are sourced from company filings and press releases as cited.