SMTC Corporation (Nasdaq: SMTX, TSE: SMX), a global electronics manufacturing services provider, today reported 2008 third quarter revenue of $60.1 million and net income of $0.1 million, or $0.01 per share, after absorbing a $0.6 million write off of certain deferred financing costs.
This compares with revenue of $54.0 million and a net loss of $1.2 million, or $0.08 per share, for the 2007 third quarter. In the second quarter of 2008, the Company reported revenue of $66.3 million and net loss of $6.3 million, or $0.43 per share after a $5.7 million restructuring charge.
Gross profit for the third quarter of 2008 was $4.8 million, or 8.0% of revenue, compared with $4.5 million, or 6.8% of revenue, for the previous quarter and $3.4 million, or 6.3% of revenue, for the third quarter of 2007.
"Third quarter results while positive, did not meet our internal targets in large part due to production delays as we transferred certain customer volumes from our Mexico to China site in the quarter. However, we ended the quarter with a strong order backlog", stated John Caldwell, President and Chief Executive officer. "Despite lower than expected revenue, we remained profitable, reflecting the effect of restructuring activities in the second quarter and other cost containment measures. The net debt level was reduced to the lowest level in ten years."
During the quarter SMTC signed amendments to its loan agreements improving certain covenants and other terms as well as lowering the effective interest rate on overall indebtedness. "We generated $8.1 million in cash from operations in the third quarter and $5.3 million year to date. This cash was primarily applied for debt reduction", stated Jane Todd, Senior Vice President Finance and Chief Financial Officer. "In the quarter, we successfully closed a bank refinancing with a four year term and at lower interest rates, to support our customers and our long term growth requirements."
"We expect fourth quarter revenue at or above the third quarter and higher earnings in part due to a stronger U.S. dollar", stated John Caldwell, President and Chief Executive Officer. -- www.cnxmarketlink.com
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