In addition to historical financial information, this discussion of the business
of SigmaTron International, Inc. ("SigmaTron"), its wholly-owned subsidiaries
Standard Components de Mexico S.A., AbleMex, S.A. de C.V., Digital Appliance
Controls de Mexico, S.A. de C.V., Spitfire Controls (Vietnam) Co. Ltd., Spitfire
Controls (Cayman) Co. Ltd., wholly-owned foreign enterprises Wujiang SigmaTron
Electronics Co., Ltd. and SigmaTron Electronic Technology Co., Ltd.
(collectively, "SigmaTron China") and international procurement office SigmaTron
Taiwan branch (collectively, the "Company") and other Items in this Quarterly
Report on Form 10-Q contain forward-looking statements concerning the Company's
business or results of operations. Words such as "continue," "anticipate,"
"will," "expect," "believe," "plan," and similar expressions identify
forward-looking statements. These forward-looking statements are based on the
current expectations of the Company. Because these forward-looking statements
involve risks and uncertainties, the Company's plans, actions and actual results
could differ materially. Such statements should be evaluated in the context of
the direct and indirect risks and uncertainties inherent in the Company's
business including, but not necessarily limited to, the risks inherent in any
merger, acquisition or business combination; the Company's continued dependence
on certain significant customers; the continued market acceptance of products
and services offered by the Company and its customers; pricing pressures from
the Company's customers, suppliers and the market; the activities of
competitors, some of which may have greater financial or other resources than
the Company; the variability of the Company's operating results; the results of
long-lived assets impairment testing; the ability to achieve the expected
benefits of acquisitions as well as the expenses of acquisitions; the collection
of aged account receivables; the variability of the Company's customers'
requirements; the impact of inflation on the Company's operating results; the
availability and cost of necessary components and materials; the ability of the
Company and its customers to keep current with technological changes within its
industries; regulatory compliance, including conflict minerals; the continued
availability and sufficiency of the Company's credit arrangements, including the
phase-out of LIBOR; the ability to meet the Company's financial and restrictive
covenants under its loan agreements; changes in U.S., Mexican, Chinese,
Vietnamese or Taiwanese regulations affecting the Company's business; the
turmoil in the global economy and financial markets; the spread of COVID-19 and
variants (commonly known as "COVID-19") which has threatened the Company's
financial stability by causing a decrease in consumer revenues, caused a
disruption to the Company's global supply chain, caused plant closings or
reduced operations thus reducing output at those facilities; the stability of
the U.S., Mexican, Chinese, Vietnamese and Taiwanese economic, labor and
political systems and conditions; currency exchange fluctuations; and the
ability of the Company to manage its growth. These and other factors which may
affect the Company's future business and results of operations are identified
throughout the Company's Annual Report on Form 10-K, and as risk factors, may be
detailed from time to time in the Company's filings with the Securities and
Exchange Commission. These statements speak as of the date of such filings, and
the Company undertakes no obligation to update such statements in light of
future events or otherwise unless otherwise required by law.
?
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SigmaTron International, Inc.
October 31, 2021
Overview:
The Company operates in one business segment as an independent provider of EMS,
which includes printed circuit board assemblies and completely assembled
(box-build) electronic products. In connection with the production of assembled
products, the Company also provides services to its customers, including (1)
automatic and manual assembly and testing of products; (2) material sourcing and
procurement; (3) manufacturing and test engineering support; (4) design
services; (5) warehousing and distribution services; and (6) assistance in
obtaining product approval from governmental and other regulatory bodies. The
Company provides these manufacturing services through an international network
of facilities located in the United States, Mexico, China, Vietnam and Taiwan.
The Company relies on numerous third-party suppliers for components used in the
Company's production process. Certain of these components are available only
from single-sources or a limited number of suppliers. In addition, a customer's
specifications may require the Company to obtain components from a single-source
or a small number of suppliers. The loss of any such suppliers could have a
material impact on the Company's results of operations. Further, the Company
could operate at a cost disadvantage compared to competitors who have greater
direct buying power from suppliers. The Company does not enter into long-term
purchase agreements with major or single-source suppliers. The Company believes
that short-term purchase orders with its suppliers provides flexibility, given
that the Company's orders are based on the changing needs of its customers.
Sales can be a misleading indicator of the Company's financial performance.
Sales levels can vary considerably among customers and products depending on the
type of services (turnkey versus consignment) rendered by the Company and the
demand by customers. Consignment orders require the Company to perform
manufacturing services on components and other materials supplied by a customer,
and the Company charges only for its labor, overhead and manufacturing costs,
plus a profit. In the case of turnkey orders, the Company provides, in addition
to manufacturing services, the components and other materials used in assembly.
Turnkey contracts, in general, have a higher dollar volume of sales for each
given assembly, owing to inclusion of the cost of components and other materials
in net sales and cost of goods sold. Variations in the number of turnkey orders
compared to consignment orders can lead to significant fluctuations in the
Company's revenue and gross margin levels. Consignment orders accounted for less
than 1% of the Company's revenues for the three and six month periods ended
October 31, 2021 and October 31, 2020. Further, sales for the six months ended
October 31,2021 included significant premiums of approximately 10% of net sales
related to raw materials charges to the Company's customers with roughly the
same amount included in cost of products sold.
The Company's international footprint provides our customers with flexibility
within the Company to manufacture in China, Mexico, Vietnam or the U.S. We
believe this strategy will continue to serve the Company well as its customers
continuously evaluate their supply chain strategies.
The Company reported record quarterly sales and operating results for the
quarter ended October 31, 2021. The results were driven by strong and growing
demand from existing customers and several new customers. Backlog remains
strong. Unfortunately, the volatility of the electronics marketplace remains and
is not improving. The Company continues to experience shortages that affected
final production for the Company's customers causing them to push out
consumption of assemblies from the Company. Accordingly, the Company continues
to be negatively affected by the disruptions in the component marketplace. There
is no predictability regarding when theses disruptions will occur and it is a
challenge in terms of reacting to these disruptions.
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SigmaTron International, Inc.
October 31, 2021
Results of Operations:
The following table sets forth selective financial data as a percentage of net
sales for the periods indicated.
Three Months Ended Six Months Ended
October 31, October 31, October 31, October 31,
2021 2020 2021 2020
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Net sales 100.0% 100.0% 100.0% 100.0%
Operating expenses:
Cost of products sold 88.2 90.3 88.5 91.5
Selling and administrative expenses 6.8 7.8 6.9 8.1
Total operating expenses 95.0 98.1 95.4 99.6
Operating income 5.0% 1.9% 4.5% 0.4%
Net Sales
Net sales increased for the three month period ended October 31, 2021, to
$100,216,614 from $69,618,424 for the three month period ended October 31, 2020.
Net sales increased for the six month period ended October 31, 2021, to
$185,956,048 from $130,143,380 for the six month period ended October 31, 2020.
The Company's sales increased for the three and six month periods ended October
31, 2021, as compared to the prior year in the consumer electronics, industrial
electronics and medical/life science marketplaces. Sales for the three and six
month periods increased due to increasing demand from existing and new
customers.
Gross Profit
Gross profit dollars increased during the three month period ended October 31,
2021, to $11,777,586 or 11.8% of net sales compared to $6,759,542 or 9.7% of net
sales for the same period in the prior fiscal year. Gross profit dollars
increased during the six month period ended October 31, 2021, to $21,360,064 or
11.5% of net sales compared to $11,031,733 or 8.5% of net sales for the same
period in the prior fiscal year. The increase in gross profit for the three and
six month periods ended October 31, 2021, was the result of lower operating
costs and product mix compared to the same period in the prior year.
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SigmaTron International, Inc.
October 31, 2021
Selling and Administrative Expenses
Selling and administrative expenses increased to $6,805,756 or 6.8% of net sales
for the three month period ended October 31, 2021, compared to $5,421,739 or
7.8% of net sales for the same period in the prior fiscal year. The net increase
in selling and administrative expenses for the three month period ended October
31, 2021, was attributable to an increase in bonus expense and accounting
professional fees. The increase in the foregoing expenses was partially offset
by a decrease in general insurance and miscellaneous taxes. Selling and
administrative expenses increased to $12,916,771 or 6.9% of net sales for the
six month period ended October 31, 2021, compared to $10,481,264 or 8.1% of net
sales for the same period in the prior fiscal year. The net increase in selling
and administrative expenses for the six month period ended October 31, 2021, was
attributable to an increase in bonus expense and miscellaneous taxes. The
increase in the foregoing expenses was partially offset by a decrease in legal
professional fees and general insurance.
Interest Expense
Interest expense increased to $344,675 for the three month period ended October
31, 2021, compared to $308,613 for the same period in the prior fiscal year.
Interest expense decreased to $582,591 for the six month period ended October
31, 2021, compared to $646,877 for the same period in the prior fiscal year. The
increase in interest expense for the three month period ended October 31, 2021,
was due to the increased borrowings under the Company's banking arrangements.
The decrease in interest expense for the six month period ended October 31,
2021, was due to the lower interest rates from the Company's banking
arrangements.
Income Tax Expense
The income tax expense was $1,513,512 for the three month period ended October
31, 2021, compared to an income tax expense of $442,943 for the same period in
the prior fiscal year. The Company's effective tax rate was 32.45% and 41.40%
for the quarters ended October 31, 2021 and 2020, respectively. The income tax
expense was $2,270,457 for the six month period ended October 31, 2021, compared
to an income tax expense of $222,109 for the same period in the prior fiscal
year. The Company's effective tax rate was 15.97% and (429.63)% for the six
month period ended October 31, 2021 and 2020, respectively. The increase in
income tax expense for the three month period ended October 31, 2021 compared to
the same period in the previous year is due to increased income recognized in
the current quarter compared to the previous year. The decrease in effective tax
rate is due to variations in income earned by jurisdiction in the current period
compared to the same period in the previous year. The increase in income tax
expense for the six month period ended October 31, 2021 compared to the same
period in the previous year is due to increased income recognized in the current
year compared to the previous year. The change in effective tax rate for the six
month period ended October 31, 2021 is due to an increase in income and
variations in income earned by jurisdiction in the current period compared to
the same period in the previous year.
Net Income
Net income increased to $3,150,205 for the three month period ended October 31,
2021, compared to a net income of $626,858 for the same period in the prior
fiscal year. Net income increased to $11,946,921 for the six month period ended
October 31, 2021, compared to a net loss of $273,808 for the same period in the
prior fiscal year. A substantial part of the increase in net income for the six
month period ended October 31, 2021 was attributable to the one-time gain
recorded upon the extinguishment of the PPP Loan debt during the three month
period ending July 31, 2021. Basic and
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SigmaTron International, Inc.
October 31, 2021
diluted earnings per share for the second quarter of fiscal year 2022 were $0.73
and $0.69 respectively, compared to basic and diluted earnings per share of
$0.15 each for the same period in the prior fiscal year. Basic and diluted
earnings per share for the six month period ended October 31, 2021 were $2.78
and $2.69, respectively, compared to basic and diluted loss per share of $0.06
each for the same period in the prior fiscal year.
Liquidity and Capital Resources:
Operating Activities.
Cash flow used in operating activities was $10,669,736 for the six months ended
October 31, 2021. During the first six months of fiscal year 2022, cash flow
used in operating activities was primarily the result of an increase in both
inventory and accounts receivable in the amount of $35,078,520 and $16,341,244,
respectively. Cash flow from operating activities was offset by an increase in
accounts payable and deferred revenue in the amount of $24,062,801 and
$6,366,871, respectively. The increase in inventory is the result of an increase
in inventory purchases to satisfy customer orders. Further, capacity issues in
the component industry made it difficult to obtain some components to complete
assemblies for shipping. The increase in accounts payable is the result of more
favorable payment terms with vendors and increased inventory purchases.
Cash flow provided by operating activities was $3,531,711 for the six months
ended October 31, 2020. During the first six months of fiscal year 2021, cash
flow provided by operating activities was primarily the result of a decrease in
accounts receivable and inventory of $6,171,838 and $3,239,189, respectively.
Cash flow provided by operating activities was partially offset by the result of
a decrease in accounts payable of $11,288,257. The decrease in accounts payable
was primarily the result of the timing of payments.
Investing Activities.
Cash used in investing activities was $7,069,854 for the six months ended
October 31, 2021. During the first six months of fiscal year 2022 the Company
purchased $3,107,854 in machinery and equipment to be used in the ordinary
course of business. The Company has received forecasts from current customers
for increased business that would require additional investment in capital
equipment and facilities. To the extent that these forecasts come to fruition,
the Company anticipates that it will make additional machinery and equipment
purchases up to $3,400,000 in fiscal year 2022. The Company anticipates
purchases will be funded by lease transactions. However, there is no assurance
that such increased business will be obtained or that the Company will be able
to obtain funding for leases at acceptable terms, if at all, in the future.
During the first six months of fiscal year 2022 the Company made advances of
$3,962,000 to Wagz. As more fully described in Note H - Significant Accounting
Policies, on July 19, 2021, the Company signed a Definitive Agreement for a
proposed business combination with Wagz. The advances were made in conjunction
with the proposed business combination.
Cash used in investing activities was $5,083,220 for the six months ended
October 31, 2020. During the first six months of fiscal year 2021, the Company
purchased $2,470,920 in machinery and equipment used in the ordinary course of
business. The Company made additional machinery and equipment purchases of
$2,276,396 during the balance of fiscal year 2021. During the first six months
of fiscal year 2021 the Company made advances of $2,612,300 to Wagz.
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SigmaTron International, Inc.
October 31, 2021
Financing Activities.
Cash provided by financing activities of $16,650,707 for the first six months
ended October 31, 2021, was primarily the result of net borrowings under the
line of credit.
Cash used in financing activities of $271,898 for the first six months ended
October 31, 2020, was primarily the result of net payments under the line of
credit.
Financing Summary.
Notes Payable - Banks
Prior to January 29, 2021, the Company had a senior secured credit facility with
U.S. Bank National Association ("U.S. Bank"). The revolving credit facility
allowed the Company to borrow up to the lesser of (i) $45,000,000 (the
"Revolving Line Cap") less reserves or (ii) the Borrowing Base, but no more than
80% of the Company's Revolving Line Cap. Prior to its payoff and termination,
the U.S. Bank senior secured credit facility was due to expire on March 31,
2022. On January 29, 2021, the Company paid the balance outstanding under the
senior secured credit facility in the amount of $25,574,733. The unamortized
deferred financing costs of $158,476 were expensed in fiscal year 2021 upon
extinguishment of the debt.
On January 29, 2021, the Company entered into a Credit Agreement (the
"Agreement") with JPMorgan Chase Bank, N.A. ("Lender"), pursuant to which Lender
has agreed to provide the Company with a secured credit facility maturing on
January 29, 2026, of which (a) up to $50,000,000 is available on a revolving
loan basis, and (b) an aggregate of $6,500,000 was borrowed pursuant to two term
loans (the "Facility"). The Facility is secured by substantially all of the
Company's assets including mortgages on its two Illinois properties.
The Facility allows the Company to choose among interest rates at which it may
borrow funds for revolving loans: "CBFR Loans," the interest on which is based
on (A) the "REVLIBOR30 Rate" (as defined in the Agreement) unless the REVLIBOR30
Rate is not available, in which case the interest is generally the rate of
interest last quoted by The Wall Street Journal as the "Prime Rate" in the U.S.,
plus (B) an applicable margin of 2.0% (effectively 2.25% per annum at October
31, 2021); or "Eurodollar Loans," the interest on which is based on (X) an
interest rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%)
equal to the LIBO Rate (as defined in the Agreement) for any interest period
multiplied by the Standard Reserve Rate (as defined in the Agreement) plus (Y)
an applicable margin of 2.0%. Under the revolving portion of the Facility, the
Company may borrow up to the lesser of (i) $50,000,000 or (ii) an amount equal
to a percentage of the eligible receivable borrowing base plus a percentage of
the inventory borrowing base. The Facility is collateralized by a lien on
substantially all of the assets of the Company. Under the Agreement, a minimum
Fixed Charge Coverage Ratio ("FCCR") financial covenant of 1.10x is applicable
only during an FCCR trigger period which occurs when (i) an event of default (as
defined in the Agreement) has occurred and is continuing, and Lender has elected
to impose a FCCR trigger period upon notice to the Company or (ii) availability
falls below the greater of (a) 10% of the revolving commitment and (b) the
outstanding principal amount of the term loans. The Company was not in a FCCR
trigger period as of October 31, 2021. Deferred financing costs of $361,734 were
capitalized during the fiscal year ended April 30, 2021 and will be amortized
over the term of the Agreement. As of October 31, 2021, there was $41,769,338
outstanding and $10,797,328 of unused availability under the revolving Facility
compared to an outstanding balance of $24,967,668 and $15,947,990
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SigmaTron International, Inc.
October 31, 2021
unused availability at April 30, 2021. As of October 31, 2021 and April 30,
2021, the unamortized amount offset against outstanding debt was $307,688 and
$343,890, respectively.
On November 17, 2021, the Company and JPMorgan Chase Bank, N.A. entered into an
amendment of the Facility. The amended Facility allows the Company to borrow up
to the lesser of (i) $53,000,000 or (ii) an amount equal to a percentage of the
eligible receivable borrowing base plus a percentage of the inventory borrowing
base. Further, the Facility was amended to allow in some circumstances customer
deposits to be deemed eligible for collateral purposes.
On April 23, 2020, the Company received a PPP loan from U.S. Bank, as lender,
pursuant to the Paycheck Protection Program of the CARES Act, as administered by
the SBA in the amount of $6,282,973. The Company submitted its loan forgiveness
application on March 26, 2021. The Company was notified of the forgiveness of
the PPP Loan by the SBA on July 9, 2021 and it covers all principal and accrued
interest. The accounting for the forgiveness is reflected in the Company's
Statement of Operations as a non-cash gain upon extinguishment of long-term
debt. Under the terms of all PPP Loans, all aspects of the PPP Loan remain
subject to review by the SBA. While the Company is not aware of any issues, if
it is later determined that it violated applicable laws or was otherwise
ineligible to receive the PPP Loan, the Company will be required to repay the
PPP Loan in its entirety in a lump sum and may be subject to additional
penalties.
On March 15, 2019, the Company's wholly-owned subsidiary, SigmaTron Electronic
Technology Co., Ltd., entered into a credit facility with China Construction
Bank. On January 26, 2021, the agreement was amended. Under the agreement
SigmaTron Electronic Technology Co., Ltd. can borrow up to 9,000,000 Renminbi,
approximately $1,408,296 as of October 31, 2021, and the facility is
collateralized by Wujiang SigmaTron Electronics Co., Ltd.'s manufacturing
building. Interest is payable monthly and the facility bears a fixed interest
rate of 3.85%. The term of the facility extends to January 6, 2022. There was
$805,859 outstanding under the facility at October 31, 2021 compared to an
outstanding balance of $824,159 at April 30, 2021.
Notes Payable - Buildings
The Company entered into a mortgage agreement on December 21, 2017, in the
amount of $5,200,000, with U.S. Bank to refinance the property that serves as
the Company's corporate headquarters and its Illinois manufacturing facility in
Elk Grove Village, Illinois. The note required the Company to pay monthly
principal payments in the amount of $17,333, bore interest at a fixed rate of
4.0% per year and was payable over a fifty one month period. Deferred financing
costs of $74,066 were capitalized in fiscal year 2018 which were amortized over
the term of the agreement. On January 29, 2021, the Company repaid its U.S. Bank
mortgage in the amount outstanding of $4,576,000, using proceeds from the
Facility extended by Lender. The Company recorded a prepayment penalty of
$120,842 in fiscal year 2021. The remaining deferred financing costs of $21,365
were expensed in fiscal year 2021.
The Company entered into a mortgage agreement on December 21, 2017, in the
amount of $1,800,000, with U.S. Bank to refinance the property that serves as
the Company's engineering and design center in Elgin, Illinois. The note
required the Company to pay monthly principal payments in the amount of $6,000,
bore interest at a fixed rate of 4.0% per year and was payable over a fifty one
month period. Deferred financing costs of $65,381 were capitalized in the fiscal
year 2018 which were amortized over the term of the agreement. On January 29,
2021, the Company repaid its U.S. Bank mortgage in the amount outstanding of
$1,584,000, using proceeds from the Facility extended
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SigmaTron International, Inc.
October 31, 2021
by Lender. The Company recorded a prepayment penalty of $41,830 in fiscal year
2021. The remaining deferred financing costs of $18,859 were expensed in fiscal
year 2021.
The Company's Facility with Lender, entered into on January 29, 2021, also
included two term loans, in the aggregate principal amount of $6,500,000. The
loans require the Company to pay aggregate principal payments in the amount of
$36,111 per month for 60 months, plus monthly payments of interest thereon at
(A) the REVLIBOR30 Rate, unless the REVLIBOR30 Rate is not available, in which
case the interest is generally the rate of interest last quoted by The Wall
Street Journal as the "Prime Rate" in the U.S., plus (B) an applicable margin of
2.5%; (effectively 2.75% per annum at October 31, 2021); or "Eurodollar Loans,"
the interest on which is based on (X) an interest rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to the LIBO Rate (as
defined in the Agreement) for any interest period multiplied by the Standard
Reserve Rate (as defined in the Agreement) plus (Y) an applicable margin of
2.5%. Deferred financing costs of $10,050 were capitalized during fiscal year
2021 which are amortized over the term of the agreement. As of October 31, 2021,
the unamortized amount included as a reduction to long-term debt was $8,542. A
final aggregate payment of approximately $4,368,444 is due on or before January
29, 2026. The outstanding balance was $6,211,111 at October 31, 2021 compared to
an outstanding balance of $6,427,778 at April 30, 2021.
The Company entered into a mortgage agreement on March 3, 2020, in the amount of
$556,000, with The Bank and Trust SSB to finance the purchase of the property
that serves as the Company's warehousing and distribution center in Del Rio,
Texas. The note requires the Company to pay monthly installment payments in the
amount of $6,103. Interest accrues at a fixed rate of 5.75% per year until March
3, 2025, and adjusts thereafter, on an annual basis, equal to 1.0% over the
Prime Rate as published by The Wall Street Journal. The note is payable over a
120 month period. The outstanding balance was $487,763 and $509,985 at October
31, 2021 and April 30, 2021, respectively.
Notes Payable - Equipment
The Company routinely enters into secured note agreements with Engencap Fin S.A.
DE C.V. to finance the purchase of equipment. The terms of these secured note
agreements mature from November 1, 2021 through May 1, 2023, with quarterly
installment payments ranging from $11,045 to $37,941 and a fixed interest rate
ranging from 6.65% to 8.00%.
The Company routinely enters into secured note agreements with FGI Equipment
Finance LLC to finance the purchase of equipment. The terms of these secured
note agreements mature from March 1, 2025 through October 1, 2026, with
quarterly installment payments ranging from $10,723 to $71,326 and a fixed
interest rate of 8.25%.
Finance Lease and Sales Leaseback Obligations
The Company enters into various finance lease and sales leaseback agreements.
The terms of the lease agreements mature through September 1, 2025, with monthly
installment payments ranging from $1,455 to $40,173 and a fixed interest rate
ranging from 3.75% to 12.73%.
Other
The Company provides funds for salaries, wages, overhead and capital expenditure
items as necessary to operate its wholly-owned Mexican, Vietnamese and Chinese
subsidiaries and the Taiwan IPO. The
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SigmaTron International, Inc.
October 31, 2021
Company provides funding in U.S. Dollars, which are exchanged for Pesos, Dong,
Renminbi, and New Taiwan dollars. The fluctuation of currencies from time to
time, without an equal or greater increase in inflation, could have a material
impact on the financial results of the Company. The impact of currency
fluctuations for the six month period ended October 31, 2021, resulted in net
foreign currency transaction losses of $121,400 compared to net foreign currency
losses of approximately $165,209 for the same period in the prior year. During
the six months of fiscal year 2022, the Company paid approximately $29,870,000
to its foreign subsidiaries for manufacturing services. All intercompany
balances have been eliminated upon consolidation.
The Company has not changed its plans to indefinitely reinvest the earnings of
the Company's foreign subsidiaries. The cumulative amount of unremitted earnings
for which U.S. income taxes have not been recorded is $5,091,000 as of October
31, 2021.
Conditions surrounding COVID-19 change rapidly and additional impacts of which
the Company is not currently aware may arise. Based on past performance and
current expectations, the Company believe's that the existing sources of
liquidity, including current cash, will provide sufficient resources to meet
known capital requirements and working capital needs through the next twelve
months.
The impact of inflation on the Company's net sales, revenues and income from
operations for the past two fiscal years has been minimal.
Off-balance Sheet Transactions:
The Company has no off-balance sheet transactions.
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SigmaTron International, Inc.
October 31, 2021
Tabular Disclosure of Contractual Obligations:
As a smaller reporting company, as defined in Item 10(f)(1) of Regulation S-K
under the Exchange Act, the Company is not required to provide the information
required by this item.
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SIGMATRON INTERNATIONAL, INC. 
