<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended January 31, 1999
Commission File Number 0-23248
SigmaTron International, Inc.
- -------------------------------------------------------------------------------
(Exact Name of Registrant, as Specified in its Charter)
Delaware 36-3918470
- -------------------------------------------------------------------------------
(State or other Jurisdiction of Incorporation (I.R.S. Employer
or Organization) Identification Number)
2201 Landmeier Road, Elk Grove Village, Illinois 60007
- -------------------------------------------------------------------------------
(Address of Principal Executive Offices)
Registrant's Telephone Number, Including Area Code: (847) 956-8000
No Change
- -------------------------------------------------------------------------------
(Former Name, Address, or Fiscal Year, if Changed Since Last Reports)
Indicate, by check mark, whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No___
On March 12, 1999 there were 2,881,227 shares of the Registrant's Common Stock
outstanding.
<PAGE> 2
SigmaTron International, Inc.
Index
PART 1. FINANCIAL INFORMATION: Page No.
--------
Item 1. Condensed Consolidated Financial Statements
Condensed Consolidated Balance Sheets--January 31, 1999
and April 30, 1998 3
Condensed Consolidated Statements of Income--
Nine Months Ended January 31, 1999 and 1998 4
Condensed Consolidated Statements of Cash Flows--
Nine Months Ended January 31, 1999 and 1998 5
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 8
Item 3. Quantitative and Qualitative Disclosures About Market Risks 11
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 12
<PAGE> 3
SIGMATRON INTERNATIONAL, INC.
Consolidated Balance Sheets
<TABLE>
<CAPTION>
JANUARY 31 April 30,
1999 1998
----------- -----------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash $ 46,426 $ 284,679
Accounts receivable 21,447,645 11,977,973
Inventories 19,513,315 18,972,587
Prepaid expenses 1,170,279 418,464
Deferred incomes taxes 218,788 218,788
Other assets 2,391,107 331,461
----------- -----------
Total current assets 44,787,560 32,203,952
Machinery and equipment, net 13,270,880 11,249,550
Due from SMTU:
Investment and advances 221,172 311,107
Equipment lease receivable 3,368,011 3,207,691
Other receivable 1,322,478 650,695
----------- -----------
4,911,661 4,169,493
Other assets 1,133,489 1,018,211
----------- -----------
Total assets $64,103,590 $48,641,206
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable 690,865 111,108
Trade accounts payable 14,518,291 6,751,886
Trade accounts payable - Related parties 267,079 915,475
Accrued expenses 1,399,755 1,575,434
Income tax payable 563,125 60,025
Capital lease obligations 2,354,033 2,081,338
----------- -----------
Total current liabilities 19,793,148 11,495,266
Notes payable - Banks, less current portion 21,955,062 15,177,695
Capital lease obligations, less
current portion 3,307,091 3,604,793
Deferred income taxes 760,061 760,061
Stockholders' equity:
Preferred stock, $.01 par value;
500,000 shares authorized, none issued
and outstanding - -
Common stock, $.01 par value; 6,000,000
shares authorized, 2,881,227 shares
issued and outstanding 28,812 28,812
at January 31, 1999 and April 30, 1998
Capital in excess of par value 9,436,554 9,436,554
Retained earnings 8,822,862 8,138,025
----------- -----------
Total stockholders' equity 18,288,228 17,603,391
Total liabilities and stockholders' equity $64,103,590 $48,641,206
=========== ===========
</TABLE>
See accompanying notes.
3
<PAGE> 4
SIGMATRON INTERNATIONAL, INC.
Condensed Consolidated Statements of Income
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS Three Months NINE MONTHS Nine Months
ENDED Ended ENDED Ended
JANUARY 31, 1999 January 31, 1998 JANUARY 31, 1999 January 31, 1998
---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Net sales $ 23,019,878 $ 22,632,041 $ 64,584,094 $ 65,534,233
Cost of products sold 21,171,334 20,740,001 58,661,723 59,387,383
------------- ------------- ------------- -------------
1,848,544 1,892,040 5,922,371 6,146,850
Selling and administrative expenses 1,484,456 1,367,459 4,078,296 4,139,505
------------- ------------- ------------- -------------
Operating income 364,088 524,581 1,844,075 2,007,345
Equity in net loss (income) of affiliate (4,404) 131,004 89,935 142,426
Interest expense - banks and capital lease obligations 547,401 514,788 1,498,509 1,428,191
Interest expense - related party - - - 523
Interest income - related party (148,094) (138,891) (448,836) (352,671)
Gain on flood proceeds (436,948) - (436,948) -
------------- ------------- ------------- -------------
(37,641) 375,897 612,725 1,076,043
Income before income taxes 406,133 17,680 1,141,415 788,876
Income taxes 162,456 7,072 456,578 316,576
------------- ------------- ------------- -------------
Net income $ 243,677 $ 10,608 $ 684,837 $ 472,300
============= ============= ============= =============
Net income per common share - basic $ 0.08 $ 0.00 $ 0.24 $ 0.16
============= ============= ============= =============
Weighted average number of common
shares outstanding - basic 2,881,227 2,881,227 2,881,227 2,881,097
============= ============= ============= =============
Net income per common share - diluted $ 0.08 $ 0.00 $ 0.24 $ 0.16
============= ============= ============= =============
Weighted average number of common shares and
common equivalent shares outstanding - diluted 2,881,227 2,951,210 2,881,227 2,987,930
============= ============= ============= =============
</TABLE>
See accompanying notes.
4
<PAGE> 5
SIGMATRON INTERNATIONAL, INC.
Condensed Consolidated Statements of Cash Flow
(Unaudited)
<TABLE>
<CAPTION>
NINE MONTHS ENDED JANUARY 31,
1999 1998
------------ ------------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 684,837 $ 472,300
Adjustments to reconcile net income
to net cash (used in) operating activities:
Depreciation 1,116,472 917,194
Equity in net loss of affiliate 89,935 142,426
Amortization - 14,136
Provision for doubtful accounts 250,000 130,502
Write-off or uncollectable accounts - (195,502)
Changes in operating assets and liabilities:
Accounts receivable (9,719,674) (5,832,863)
Inventories (688,793) 328,809
Prepaid expenses (751,815) (164,456)
Other assets (2,846,705) (538,806)
Trade accounts payable 7,766,405 4,343,304
Trade accounts payable - related parties (648,396) (441,630)
Accrued expenses (175,679) (342,603)
Income tax payable 503,100 40,159
------------ ------------
Net cash (used in) operating activities (4,420,313) (1,127,030)
INVESTING ACTIVITIES:
Purchase of machinery and equipment (2,021,098) (797,246)
Proceeds from sale and leaseback of
machinery and equipment - 1,429,899
Proceeds from affiliate subleases - 263,999
Proceeds from insurance advances 5,500,000 -
Proceeds from gain on insurance 563,318 -
------------ ------------
Net cash provided by investing activities 4,042,220 896,652
FINANCING ACTIVITIES:
Repayment of term loan and other
notes payable - 42,596
Net payments under capital
lease obligations (1,717,284) (1,158,756)
Issuance of common stock - 42,000
Net proceeds under line of credit 1,857,124 1,288,888
------------ ------------
Net cash provided by financing activities 139,840 129,536
Change in cash (238,253) (100,842)
Cash at beginning of period 284,679 323,223
------------ ------------
Cash at end of period $ 46,426 $ 222,381
============ ============
</TABLE>
See accompanying notes.
5
<PAGE> 6
SigmaTron International, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
January 31, 1999
NOTE A -- BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the nine-month period ended January 31,
1999 are not necessarily indicative of the results that may be expected for the
year ending April 30, 1999. For further information, refer to the consolidated
financial statements and footnotes thereto included in the Company's Annual
Report for the year ended April 30, 1998.
NOTE B -- INVENTORIES
The components of inventory consist of the following:
January 31, April 30,
1999 1998
------------ ------------
Finished products $ 1,134,981 $ 3,292,442
Work-in-process 1,672,263 1,887,517
Raw materials 16,706,071 13,792,628
------------ ------------
$ 19,513,315 $ 18,972,587
============ ============
NOTE C -- FLOOD DAMAGE IN DEL RIO, TEXAS AND ACUNA, MEXICO
In late August, 1998 the Company's warehousing operation in Del Rio, Texas and
one of its manufacturing operations in Acuna, Mexico were significantly damaged
by a flash flood. The Company expedited replacement machinery and equipment and
inventory to its damaged facilities. The damaged equipment used in the
manufacturing process was replaced with new or upgraded equipment. The
manufacturing operation in Acuna has run pre-flood levels and all raw material
issues created by the flood have been resolved.
In January, 1999 the Company settled the U.S. insurance claim, for its
warehousing operation in Del Rio Texas which resulted in a nominal net book
gain. The Company has continued to negotiate the claim for damage at its Mexican
facility. In January, 1999 the Company
6
<PAGE> 7
recorded a net gain of approximately $563,000. The gain included approximately
$415,000 and $148,000 for machinery and equipment and inventory, respectively
for Mexico. The gain on the inventory segment has been recorded as a reduction
to cost of products sold. The gain on machinery and equipment has been recorded
as a gain on flood proceeds. As of January 31, 1999, the extra expense and
business interruption segments of the claim have not been finalized. The results
for the nine months ended January 31, 1999 include expenses and a reduction in
revenues that management believes will be covered by its extra expense and
business interruption insurance. Since there has been no agreement with the
insurance company as to these issues, the Company has recorded nothing for the
extra expense or business interruption claims. The Company believes the final
settlement will not have a negative impact on the financial statements. The
Company will continue to work diligently with its insurance adjusters and
insurance companies to finalize a settlement.
NOTE D - SMT UNLIMITED L.P.
The Company owns 42.5% of SMT Unlimited L.P., ("SMTU") an affiliate located in
Fremont California. At January 31, 1999 the Company has amounts due from SMTU of
approximately $4,911,000. SMTU recorded a nominal profit for the quarter ended
January 31, 1999. SMTU's management believes sales will increase in the fourth
fiscal quarter of 1999 and result in overall profitability for fiscal 1999. At
April 30, 1999 the Company will review SMTU's progress and determine if the
amounts past due are recoverable.
NOTE E -- LINE OF CREDIT
The Company and SMTU currently utilize the same lender for their respective
lines of credit. In recent months SMTU'S growth has required additional working
capital, which is not available through the current line of credit. The Company
and SMTU's management believe it is in the best interest of both companies to
reassess their current banking relationships.
In March, 1999 both companies selected a replacement lender. Due diligence
audits by the prospective lender began in early March, 1999 and the Company
believes it will finalize the transaction for both companies by early April,
1999.
NOTE F -- LIGHTING COMPONENTS
The Company has an equity interest of 12% in Lighting Components. At April 30,
1998 the Company recorded a write off of $360,000 related to the investment. The
Company has amounts due from Lighting Components of approximately $795,000 at
January 31, 1999. In January, 1999 the Company recorded a $250,000 allowance for
doubtful accounts for possible uncollectable receivables owed to the Company by
Lighting Components. If Lighting Components fails to make progress and
management believes that some or all of the remaining Lighting Component
receivables are not recoverable at April 30, 1999, the Company may recognize
additional losses.
7
<PAGE> 8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
NOTE: To the extent any statements in this quarterly report may be deemed to be
forward looking, such statements should be evaluated in the context of the risks
and uncertainties inherent in the Company's business, including the receipt of
insurance proceeds; the Company's continuing dependence on certain major
customers; the Companys ability to obtain financing; the availability and cost
of components; the anticipated seasonality of its business; the timing and
rescheduling of customer orders for SigmaTron International, Inc. and SMT
Unlimited and other risks and uncertainties set forth in the Company's periodic
reports filed with the Securities and Exchange Commission.
RESULTS OF OPERATIONS:
Net sales increased for the three month period ended January 31, 1999 to
$23,019,878 from $22,632,041 for the three month period ended January 31,1998.
During the first nine months of fiscal 1999 net sales decreased to $64,584,094
from $65,534,233 compared to the same period in the prior year. The Company's
operations in Texas and Mexico were hit by a flash flood in late August, 1998.
The Company's damaged operations were operating at pre-flood levels by the end
of the second fiscal quarter of 1999. However, the results for the nine months
ended January 31, 1999 include expenses and a reduction in revenues related to
the flood. Management believes they will be covered by insurance but has not
accrued any revenue to date. Historically the timing and rescheduling of orders
has caused the Company to experience significant quarterly fluctuations in its
revenue and earnings and the Company expects such fluctuations to continue.
Gross profit decreased during the three month period ended January 31, 1999 to
$1,848,544 or 8.0% of net sales, compared to $1,892,040 or 8.4% of net sales for
the same period in the prior fiscal year. For the nine month period ended
January 31, 1999 gross profit decreased from $6,146,850 or 9.4% of net sales to
$5,922,371 or 9.1% of net sales. The variation in gross profit for the nine
months ended January 31, 1999 compared to the same period in the prior year is
primarily related to expenses and a reduction in revenues related to the flood.
Management believes the expenses and reduction in revenues will be covered by
its extra expense and business interruption insurance. The Company believes the
insurance settlement will not have a material negative impact on the financial
statements.
Selling and administrative expenses increased to $1,484,456 or 6.4% of net sales
for the three month period ended January 31, 1999 compared to $1,367,459 or 6.0%
of net sales in the third quarter of fiscal 1998. The increase is primarily due
to a $250,000 reserve for allowance for doubtful accounts due from Lighting
Components. Selling and administrative expense for the nine month period ended
January 31, 1999 decreased to $4,078,296 compared to $4,139,505 in the same
period in the prior fiscal year.
8
<PAGE> 9
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
- -con't
Interest expense for bank debt and capital lease obligations for the three month
period ended January 31, 1999 was $547,401 compared to $514,788 for the same
period in the prior year. For the nine month period ended January 31, 1999
interest expense for bank and capital lease obligations increased to $1,498,509
compared to $1,428,191 for the same period in fiscal 1998. This increase was
attributable to a higher outstanding balance on the line of credit and interest
expense for increased capital lease obligations.
In January, 1999 the Company settled the U.S. insurance claim which resulted in
a nominal gain. The Company also recorded a net book gain of approximately
$545,000, which included the inventory and machinery and equipment segments of
its claim for damage at its Mexican facilities.
As of this date the extra expense and business interruption segments of the
claim have not been settled with the insurance company. The results for the nine
months ended January 31, 1999 includes expenses and a reduction in revenues,
which the Company believes will be covered by its insurance. The Company
believes the insurance settlement will not have a material negative impact on
its financial condition. Management continues to work closely with its insurance
adjusters and insurance companies to settle the claim.
As a result of the factors described above, net income increased to $243,677 for
the three month period ended January 31, 1999 from $10,608 for the same period
in the prior year. Basic earnings per share for the third fiscal quarter of 1999
were $0.08 compared to $0.00 for the same period in the prior year. For the
first nine months of fiscal 1999 net income increased to $684,837 compared to
$472,300 for the same period in the prior year. Basic earnings per share for the
nine month period ended January 31, 1999 were $0.24 compared to $0.16 for the
same period in fiscal 1998.
LIQUIDITY AND CAPITAL RESOURCES:
For the nine months ended January 31, 1999 the primary source of liquidity was
cash provided by borrowings from the Company's secured lender, advances from the
insurance company and net income from operations. The net cash used in
operations was $4,420,313 for the nine months ended January 31, 1999 compared to
net cash used for operations of $1,127,030 for the same period in the prior
year.
Net cash provided by investing activities was $4,042,220, which was due to the
cash advances for the insurance claim and proceeds from the gain on insurance.
For the same period in the prior year net cash provided by investing activities
was $896,652.
9
<PAGE> 10
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
- -con't
Net cash provided by financing activities was $139,840 for the nine month period
ended January 31, 1999 compared to $129,536 in the prior year. Net proceeds
under the line of credit increased to $1,857,124 for the nine months ended
January 31, 1999 from $1,288,888 for the nine months ended January 31, 1998.
To the extent that the Company provides funds for salaries, wages, overhead and
capital expenditure items necessary to operate its Mexican operations, the
amount of funds available for use in the Company's domestic operations may be
depleted. The funds, which ordinarily derive from the Company's cash from
operations and borrowings under its revolving credit facility, total
approximately $5,885,000 for the first nine months of fiscal 1999. The Company
provides funding in U.S. dollars, which are exchanged to pesos as needed.
YEAR 2000 COMPLIANCE:
The Company has formed a committee of executive officers and others to examine
Year 2000 compliance issues. The scope of the program is focused on the
Company's primary business applications. The Company is in the process of
executing a strategy to evaluate and enhance its information technology systems.
In addition, the Company is reviewing other systems including production
equipment, to determine possible risk. Based on assurances received to date
provided by vendors, the Company does not believe significant modifications to
production equipment or information systems will be required. However, the
Company cannot verify assurances it has been provided by third parties.
The Company has implemented a review process to ensure that the delivery of raw
material and services will not be disrupted due to non-compliance by a key third
party supplier. Initial communication with these suppliers have been favorable.
However, non-compliance by any key supplier could have an adverse effect on the
Company and its results of operations or financial condition.
In addition, the Company cannot anticipate if a significant portion of its key
customers will be Year 2000 compliant. The Company's customers inability to
process timely payments could have an adverse effect on the Company's cash flow
and liquidity.
Based on its internal review the Company does not anticipate that current or
future costs related to the Year 2000 issue will have a material impact on its
financial condition. The Company intends to develop a contingency plan which
will be implemented in the event of any problems.
The foregoing is a Year 2000 readiness disclosure entitled to protection as
provided in the Year 2000 Information and Readiness Disclosure Act.
10
<PAGE> 11
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS:
Not applicable
11
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SIGMATRON INTERNATIONAL, INC.
PART II - OTHER INFORMATION
January 31, 1999
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit 10.42 - Lease Agreement between the Company and General
Electric Capital Corporation dated November 10, 1998.
Exhibit 27 - Financial Data schedule (EDGAR version only)
(b) No report on Form 8-K was filed during the quarter ended
January 31, 1999.
12
<PAGE> 13
SIGNATURES:
- -----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
SIGMATRON INTERNATIONAL, INC.
/s/ Gary R. Fairhead 3/12/99
- ------------------------------------------------- -------------------
Gary R. Fairhead Date
President and CEO (Principal Executive Officer)
/s/ Linda K. Blake 3/12/99
- ------------------------------------------------- -------------------
Linda K. Blake Date
Chief Financial Officer, Secretary and Treasurer
(Principal Financial Officer and Principal
Accounting Officer)
<PAGE> 1
Exhibit 10.42
EQUIPMENT SCHEDULE
------------------
(QUASI LEASE-FIXED RATE)
SCHEDULE NO. E003
DATED THIS NOVEMBER 10, 1998
TO MASTER LEASE AGREEMENT
DATED AS OF MARCH 27, 1997
LESSOR & MAILING ADDRESS: LESSEE & MAILING ADDRESS:
GENERAL ELECTRIC CAPITAL CORPORATION SIGMATRON INTERNATIONAL, INC.
7700 IRVINE CENTER DRIVE SUITE 400 2201 LANDMEIER RD.
IRVINE, CA 92718 ELK GROVE VILLAGE, IL 60007
Capitalized terms not defined herein shall have the meanings assigned to them
in the Master Lease Agreement identified above ("AGREEMENT", said Agreement and
this Schedule being collectively referred to as "LEASE").
A. EQUIPMENT
---------
Pursuant to the terms of Lease, Lessor agrees to acquire and lease to lessee
the Equipment listed to Annex A attached hereto and made a part hereof.
B. FINANCIAL TERMS
---------------
1. Advance Rent (if any): $34,023.81.
2. Capitalized Lessor's Cost: $1,091,483.47.
3. Basic Term Lease Rate Factor: 3.117208.
4. Daily Lease Rate Factor: 0.00103907.
5. Basic Term (No. of Months): 36.
6. Basic Term Commencement Date: NOVEMBER 10, 1998.
7. Equipment Location: STANDARD COMPONENTS DE MEXICO, S.A., ACUNA, MEXICO.
8. Lessee Federal Tax ID No: 363918470
9. Supplier: UNIVERSAL INSTRUMENTS CORPORATION.
10. Last Delivery Date: DECEMBER 31, 1998.
11. First Termination or Purchase Date: BASIC TERM COMMENCEMENT DATE
12. Interest Rate: 8.10% PER ANNUM.
13. Lessee agrees and acknowledges that the Capitalized Lessor's Cost of the
Equipment as stated on the Schedule is equal to the fair market value of
the Equipment on the date hereof.
14. Option Payment: $1.00.
C. TERM AND RENT
-------------
1. Interim Rent. For the period from and including the lease Commencement
Date to the Basic Term Commencement Date ("INTERIM PERIOD"), Lessee shall pay
as rent ("INTERIM RENT") for each unit of Equipment, the product of the Daily
Lease Rate Factor times the Capitalized Lessor's Cost of such unit times the
number of days in the Interim Period. Interim Rent shall be due on N/A.
2. Basic Term Rent. Commencing on November 10, 1998 and on the same day of
each month thereafter (each, a "RENT PAYMENT DATE') during the Basic Term,
Lessee shall pay as rent ("BASIC TERM RENT") the product of the Basic Term
Lease Rate Factor times the Capitalized Lessor's Cost of all Equipment on
this Schedule.
<PAGE> 2
3. Adjustment to Capitalized Lessor's Cost. Lessee hereby irrevocably
authorizes Lessor to adjust the Capitalized Lessor's cost up or down by no
more than 10% to account for equipment change orders, equipment returns,
invoicing errors, and similar matters. Lessee acknowledges and agrees that
the Rent shall be adjusted as a result of such change in the Capitalized
Lessor's Cost (pursuant to paragraphs 1 and 2 above). Lessor shall send
Lessee a written notice stating the final Capitalized Lessor's Cost, if
different from that disclosed on this Schedule.
D. INSURANCE
---------
1. Public liability: $1,000,000 total liability per occurrence.
2. Casualty and Property Damage: An amount equal to the higher of the
Stipulated Loss Value or the full replacement cost of the Equipment.
E. INTEREST RATE: Interest shall accrue from the Lease Commencement Date
through and including the date of termination of the Lease.
F. MISCELLANEOUS: Lessor, Lessee and GE Capital Bank, S.A. Institution de Banca
Multiple, Grupo Financiero GE Capital ("Trustee) are parties to the
Administration Trust Agreement, dated November 10, 1998, to secure Lessee's
obligations to Lessor under this Agreement. Lessor agrees not to give any
instructions to the Trustee to relocate or assert control over the equipment
unless Lessee is in default under the terms of the Lease. Lessee further
agrees that it will not raise the absence of formal determination of default
by a court or other tribunal as a defense to any action by the Trustee
following a default by Lessee under the Lease. Lessor and Lessee further
agree that the terms of the Lease shall govern the resolution of any dispute
between Lessor and Lessee relating to the equipment.
Except as expressly modified hereby, all terms and provisions of the
Agreement shall remain in full force and effect. This Schedule is not binding
or effective with respect to the Agreement until executed on behalf of Lessor
and Lessee by Authorized representatives of Lessor and Lessee, respectively.
IN WITNESS WHEREOF, Lessee and Lessor have caused this Schedule to be
executed by their duly authorized representatives as of the date first above
written.
LESSOR: LESSEE:
General Electric Capital Corporation SIGMATRON INTERNATIONAL, INC.
By:/s/GENERAL ELECTRIC CAPITAL CORPORATION By:/s/SIGMATRON INTERNATIONAL, INC
--------------------------------------- -------------------------------
Name: Name:
------------------------------------- -----------------------------
Title: Title:
------------------------------------ ----------------------------
Attest
By:
-------------------------------
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AS OF 1/31/99 AND CONSOLIDATED EARNINGS FOR THE
QUARTER ENDED AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> APR-30-1999
<PERIOD-START> MAY-01-1998
<PERIOD-END> JAN-31-1999
<CASH> 46,426
<SECURITIES> 0
<RECEIVABLES> 21,697,645
<ALLOWANCES> 250,000
<INVENTORY> 19,513,315
<CURRENT-ASSETS> 44,787,560
<PP&E> 18,959,927
<DEPRECIATION> 5,689,047
<TOTAL-ASSETS> 64,103,590
<CURRENT-LIABILITIES> 19,793,148
<BONDS> 0
0
0
<COMMON> 28,812
<OTHER-SE> 18,259,416
<TOTAL-LIABILITY-AND-EQUITY> 64,103,590
<SALES> 23,019,878
<TOTAL-REVENUES> 23,019,878
<CGS> 21,171,334
<TOTAL-COSTS> 1,484,456
<OTHER-EXPENSES> (42,045)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 406,133
<INCOME-TAX> 162,456
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 243,677
<EPS-PRIMARY> 0.08
<EPS-DILUTED> 0.08
</TABLE>
