SMTC Reports Third Quarter Results

• Reports third quarter revenue of $55.5 million compared to $58.0 million in the second quarter.
• Reports $2.0 million in adjusted EBITDA compared to $1.5 million in the second quarter.
• Gross profit was 8.5% compared to 10.0% in the second quarter. Excluding unrealized foreign exchange impacts, gross profit was 9.9% compared to 8.6% in the prior quarter.
• Net loss reported of $0.6 million compared to net earnings of $0.03 million in prior quarter.
• During the quarter, a new three-year extension to the revolving credit facility was signed with PNC.

TORONTO, Nov. 6, 2014 (GLOBE NEWSWIRE) -- SMTC Corporation (Nasdaq:SMTX) ("SMTC"), a global electronics manufacturing services provider, today announced third quarter 2014 unaudited results.

Revenue for the third quarter was $55.5 million compared to $58.0 million in the second quarter. The decrease in revenue was mainly attributable to lower demand from one customer.

A net loss of $0.6 million was incurred in the current quarter compared to net earnings of $0.03 million in prior quarter. However, when excluding the unrealized foreign exchange loss of $0.8 million, net earnings were $0.2 million compared to a net loss of $0.8 million in the second quarter when excluding the unrealized foreign exchange gain of $0.8 million.  

Chief Executive Officer Sushil Dhiman stated "I am pleased with the continued margin and cost improvements. While our revenue declined from the prior quarter, I look forward to our fourth quarter results where we expect to see our new customer wins ramp up leading to greater revenue levels in 2015."

Adjusted EBITDA is a non-GAAP measure. Adjusted EBITDA is computed as net earnings (loss) from continuing operations excluding depreciation, restructuring charges, unrealized foreign exchange gains/losses on foreign exchange forward contracts, interest and income tax expense. SMTC Corporation provides adjusted EBITDA as a measure of the operational performance of SMTC's core business. A reconciliation of adjusted EBITDA to net earnings (loss) is included in the attachment. Management uses this non-GAAP financial measure internally in analyzing SMTC's financial results to assess operational performance and liquidity as well as to provide a consistent method of comparison to historical periods and to the performance of competitors and peer group companies. SMTC believes that both management and investors benefit from referring to this non-GAAP financial measure in assessing SMTC's performance and when planning, forecasting and analyzing future periods. SMTC believes this non-GAAP financial measure is useful to investors because it allows for greater transparency with respect to key financial metrics we use in making operating decisions and because our investors and analysts use it to help assess the health of our business. Non-GAAP measures are subject to material limitations as these measures are not in accordance with, or an alternative for, Generally Accepted Accounting Principles and may be different from similar non-GAAP measures used by other companies. Because of these limitations, investors should consider adjusted EBITDA along with other financial performance measures, including revenue, gross profit and net earnings (loss), presented in accordance with GAAP.

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. For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Risks and uncertainties that may cause future results to differ from these 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 electronic manufacturing services ("EMS") industry, component shortages, our ability to remediate our previous disclosed internal control weaknesses and others discussed in SMTC's periodic reports filed with the SEC. The forward-looking statements contained in this release are made as of the date hereof and SMTC assumes no obligation to update the forward-looking statements.

About SMTC Corporation: SMTC Corporation, founded in 1985, is a mid-size provider of end-to-end EMS including PCBA production, systems integration and comprehensive testing services, enclosure fabrication, as well as product design, sustaining engineering and supply chain management services. SMTC facilities span a broad footprint in the United States, Mexico, and China, with more than 1,500 employees. SMTC services extend over the entire electronic product life cycle from the development and introduction of new products through to the growth, maturity and end-of-life phases. SMTC offers fully integrated contract manufacturing services with a distinctive approach to global original equipment manufacturers (OEMs) and emerging technology companies primarily within industrial, computing and communication market segments.

SMTC is a public company incorporated in Delaware with its shares traded on the Nasdaq National Market System under the symbol SMTX. For further information on SMTC Corporation, please visit our website at www.smtc.com (http://www.smtc.com/).

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