SigmaTron International, Inc. Reports Amended Credit Agreement With JPMorgan Chase Bank, N.A., and New Term Loan With The Private Credit Group of TCW Asset Management Company LLC, as Agent

Rhea-AI Summary

SigmaTron International, Inc. (SGMA) has amended its credit agreement with JPMorgan Chase, extending its duration to July 18, 2027, and boosting its revolving credit line to $70 million. Additionally, it secured a new 5-year term loan of $40 million from TCW Asset Management for working capital, addressing supply chain challenges and fostering growth in its electronic manufacturing services and Wagz, Inc. pet technology segments. CEO Gary Fairhead expressed optimism about future opportunities, emphasizing the support from both financial institutions.

Positive

• Credit agreement amended to extend to July 18, 2027.
• Maximum revolving credit line increased to $70 million.
• Secured new term loan of $40 million for working capital.

Negative

• None.

ELK GROVE VILLAGE, Ill., July 21, 2022 (GLOBE NEWSWIRE) -- SigmaTron International, Inc. (NASDAQ, SGMA), an electronic manufacturing services company (the “Company”), today reported that it amended its existing credit agreement with JPMorgan Chase Bank, N.A. (“JPMorgan Chase”) and signed a new term loan with The Private Credit Group of TCW Asset Management Company LLC, as Administrative Agent, and the lenders parties thereto (collectively, “TCW”). Both agreements and a related intercreditor agreement were entered into on July 18, 2022.

Regarding the amendment with JPMorgan Chase, the credit agreement was extended and now expires in 5 years on July 18, 2027. In addition, the maximum revolving line of credit available has been increased to $70,000,000 based on the current borrowing base and eligible collateral.

Regarding the new term loan with TCW, the principal amount is $40,000,000 and has a term of 5 years.

Both facilities are secured by assets of the Company and certain of its subsidiaries. The parties entered into an intercreditor agreement to govern the lenders’ respective lien priorities, rights and remedies.

Commenting on the amended credit agreement and the new term loan, Gary R. Fairhead, Chief Executive Officer and Chairman of the Board, said, “I am pleased to report these developments as we head into fiscal 2023. The proceeds from the new term loan are for working capital requirements that have been created in our industry because of supply chain issues and resultant inventory growth, and will support both new customers and new programs from existing customers in our core electronic manufacturing services business, as well as the anticipated growth from Wagz, Inc., our wholly owned pet technology company.

“We appreciate the confidence and support of the Company shown by both JPMorgan Chase and TCW. We have many exciting opportunities in both business segments and look forward to pursuing them.”

About SigmaTron International, Inc.

Headquartered in Elk Grove Village, Illinois, SigmaTron International, Inc. is an electronic manufacturing services company that provides printed circuit board assemblies and completely assembled electronic products. SigmaTron International, Inc. operates manufacturing facilities in Elk Grove Village, Illinois; Acuna, Chihuahua, and Tijuana Mexico; Union City, California; Suzhou, China, and Biên Hòa City, Vietnam. SigmaTron International, Inc. maintains engineering and materials sourcing offices in Elgin, Illinois and Taipei, Taiwan.

Forward-Looking Statements

Note: This press release contains forward-looking statements. 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 (including the December 31, 2021 transaction with Wagz); 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 impact acts of war may have on the supply chain; 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; 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 disruption to the Company’s global supply chain, and caused plant closings or reduced operations thus reducing output at those facilities; the continued availability of scarce raw materials, exacerbated by global supply chain disruptions, necessary for the manufacture of products by the Company; the stability of the U.S., Mexican, Chinese, Vietnamese and Taiwanese economic, labor and political systems and conditions; global business disruption caused by the Russian invasion in Ukraine and related sanctions; 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.

For Further Information Contact:
SigmaTron International, Inc.
James J. Reiman
1-800-700-9095

FAQ

What is the latest credit agreement amendment for SGMA?

SigmaTron amended its credit agreement with JPMorgan Chase, extending it to July 18, 2027 and increasing its revolving credit line to $70 million.

How much is SigmaTron's new term loan and its purpose?

SigmaTron secured a new term loan of $40 million with TCW Asset Management to address working capital needs due to supply chain issues.

What are the implications of SigmaTron's financing agreements?

These agreements provide SigmaTron with increased financial flexibility to support growth and operational needs amid supply chain challenges.