SigmaTron International Inc. Annual Report 2009

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FY2009 Annual Report · SigmaTron International Inc.

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2009 Annual Report

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OUR STRATEGIC LOCATIONS:

Acuna,

MEXICO

Suzhou–Wujiang,

CHINA

Hayward,

California, U.S.A.

Elk Grove Village,

Illinois, U.S.A.

Tijuana,

MEXICO

Taipei,

TAIWAN

Del Rio,

Texas, U.S.A.

S I G M A T R O N I N T E R N A T I O N A L I N C . • 2 0 0 9 A N N U A L R E P O R T

SIGMATRON INTERNATIONAL:

WHERE GLOBAL MANUFACTURING

AND SERVICE MEET.

GLOBAL PRESENCE
A global approach, a single source. What does that mean for
our customers? Our expanding number of strategic locations
in the U.S., Mexico and Asia strengthen their supply chain.
Yet they work with just one partner, SigmaTron.

FLEXIBLE MANUFACTURING
Versatility counts. SigmaTron’s flexible, global locations
support everything from prototype and short-run to high-
volume. Manufacturing is transferred with ease to the best
facility for the job.

INTERNATIONAL PROCUREMENT
Led by our international purchasing office in Taiwan,
SigmaTron’s worldwide procurement network from various
locations delivers world-class quality, reduced costs and
accelerated time-to-market.

MARKETS SERVED
Diverse and growing, that’s our customer base. Appliances,
industrial and consumer electronics, ﬁtness and gaming as well
as telecommunications and life sciences – each are industries
that rely on SigmaTron for electronic manufacturing services.

DESIGN
Creative solutions? You bet. In fact, our expanding in-house
design capabilities, along with strong, long-term outside
engineering relationships, mean more and better alternatives
to design services.

PERSONAL SERVICE
Everyone says it. We mean it. It started on day one,
and has never changed. We have worldwide operations,
but we’re still structured regionally, with a local Project
Manager for every account. It’s the best of both worlds.

Quality, Delivery and Price.

That’s just the beginning…

…SigmaTron delivers more.

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S I G M A T R O N I N T E R N A T I O N A L I N C . • 2 0 0 9 A N N U A L R E P O R T

CORPORATE INFORMATION

OFFICERS

Gary R. Fairhead*
President and
Chief Executive Ofﬁcer

Linda K. Frauendorfer*
Chief Financial Ofﬁcer, Vice
President Finance,
Treasurer and Secretary

Gregory A. Fairhead*
Executive Vice President
and Assistant Secretary

John P. Sheehan*
Vice President,
Director of Supply Chain
and Assistant Secretary

Daniel P. Camp*
Vice President,
Acuna Operations

Rajesh B. Upadhyaya*
Executive Vice President,
West Coast Operations

Hom-Ming Chang*
Vice President,
China Operations

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Curtis Campbell
Vice President of Sales
West Coast Operations

Yousef M. Heidari
Vice President, Engineering

Donald G. Madsen
Vice President, Customer Service
Hayward Operations

Dennis P. McNamara
Vice President, Engineering

Stephen H. McNulty
Vice President,
Sales

Thomas F. Rovtar
Vice President,
Information Technology

Keith D. Wheaton
Vice President, Business Development
West Coast Operations

* Executive Ofﬁcers

G
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BOARD OF DIRECTORS

Franklin D. Sove1
Chairman of the Board,
SigmaTron International, Inc.;
Former Vice President,
Tang Industries, Inc.

Gary R. Fairhead
President and Chief Executive Ofﬁcer,
SigmaTron International, Inc.

John P. Chen2,3
President
SKD Automotive Group

Carl A. Zemenick2,3
Former President and CEO,
GF Ofﬁce Furniture, LTD LP

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Thomas W. Rieck1,2
Partner,
Rieck and Crotty, P.C.

Dilip S. Vyas1,3
Independent consultant

1 Member of the Audit Committee

2 Member of the Compensation

Committee

3 Member of the Nominating Committee

SEC Counsel
Seyfarth Shaw LLP
131 South Dearborn Street
Chicago, Illinois 60603

Corporate Counsel
Defrees & Fiske LLC
200 South Michigan Avenue
Chicago, Illinois 60604

Independent Public Accountants
BDO Seidman, LLP
233 North Michigan Avenue
Chicago, Illinois 60601

Form 10-K
If you would like a free copy
of the Form 10-K report ﬁled
with the Securities and
Exchange Commission,
please call Linda K. Frauendorfer
at the SigmaTron corporate ofﬁce,
1.800.700.9095.

Stock Transfer Agent

and Registrar
American Stock Transfer
& Trust Company
59 Maiden Lane
New York, New York 10038

Stock Information
The Company’s common stock has
been trading on the Nasdaq
System under the symbol SGMA
since the Company’s initial
public offering in February 1994.
The Company has more than
3.9 million shares of common
stock outstanding.

The Company has not paid cash
dividends on its common stock
since completing its February
1994 initial public offering and
does not intend to pay any dividends
in the foreseeable future.

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www.sgmaintl.com

CORPORATE OFFICES
2201 Landmeier Road
Elk Grove Village, IL 60007

Tel 847.956.8000
Fax 847.956.9801
Investor Relations 800.700.9095

To Our Stockholders

Fiscal 2009 was a tale of two halves. During the first six months of the year, our
operational and financial performance was excellent, building on the positive momentum
we established in fiscal 2008.

We were growing along with our existing customers and we added several new
customers who are producing leading-edge, environmentally friendly products. Each of
our operations was heading in the right direction. Then, at the very beginning of the third
quarter, our sales plummeted, cash became tight, our backlog was volatile, and we had
to take drastic action, which included lay-offs and salary reductions.

Clearly, the worldwide economic slowdown has affected our customer base dramatically.
Regardless of the end market served, demand has softened and become more volatile.
We are fortunate that less than one percent of our sales are to the automobile market. In
addition, our customers appear to have the financial ability to ride out the storm and
none has filed for bankruptcy. Some of our newer customers require equity capital to
accelerate their market penetration but the financial markets are not working in their
favor. Future demand remains uncertain at best, and growth will probably be slower in all
of the markets we serve.

Given the current economic climate, we have focused on cost reductions. At the end of
the third quarter we instituted salary reductions for our non-union U.S. payroll employees
and Significant lay-offs were necessary. Some of our plants went to reduced work
weeks, and we had further lay-offs in April, May, and June as demand continued to fall.
In response to the dramatic reduction in revenue, we were able to lower our costs in the
third and fourth quarters. The result was a nominal loss for the last six months of fiscal
2009, which I believe was an excellent result given the circumstances. However, we
clearly face ongoing challenges, and we need to continue to reduce our cost structure
until the overall economy turns around.

Following are updates on activities at our various plants:

Elk Grove Village, Illinois
Our Elk Grove Village plant had a good year, although the trend is currently negative.
Lower revenue led to lay-offs in January and pricing pressures are making it necessary
for us to move production to our offshore locations. On the positive side, Elk Grove
acquired several new customers who have the potential to become significant. For
several of our longstanding customers, Elk Grove continues to serve as a gateway to our
offshore locations and as such is a valuable asset. The challenge for Elk Grove in 2010
will be to maintain its financial performance while confronting pressures to downsize the
scope of its operations.

Acuña, Mexico and Del Rio, Texas
Acuña remains our largest operation, although it too has reduced its production hours
and number of employees. Nevertheless, we will launch several new customer programs
this summer. This new activity, together with business that will move from Elk Grove to
Acuña and the assembly services we expanded during fiscal 2009, gives us reason to
expect that Acuña will to continue to perform well during fiscal 2010.

Suzhou—Wujiang, China
Our plant in Wujiang remains busy, with the number of employees holding steady. As a
result of its current backlog and new programs scheduled to begin during fiscal 2010, I
expect Wujiang to perform well during fiscal 2010. Our plans to expand the plant were
put on hold last December, but we remain prepared to turn the project back on if
demand makes it necessary.

Hayward, California
Our Hayward plant had an excellent fiscal 2009, but, like our other U.S. plants, ended
the year in trouble. Demand remains 50ft, although new projects are scheduled to begin
soon. Because of pricing pressures, some work from Hayward has migrated to Tijuana.
Hayward shares with Elk Grove the same challenges for fiscal 2010.

Tijuana, Mexico
Tijuana’s financial performance remains our biggest challenge and significant lay-offs
and reduced work-weeks have been necessary. We have acquired several new
customers, but ramp-up remains slow.

Taipei, Taiwan
Our international purchasing office in Taipei continues to be a significant asset, allowing
us to be cost-competitive, responsive, and flexible in managing our largest expense—
raw material.

In summary, as we find ourselves in difficult and uncertain times heading into fiscal
2010, our focus remains on performance and cost reduction. When the economy
recovers, we believe we will be well positioned to take advantage of many opportunities.
Our international footprint remains integral to our future success. I want to thank our
supply chain partners, our customers, our bank, Bank of America, and our employees for
working together to meet these challenges head-on. I also want to thank our
stockholders for their continuing support as we work our way through the challenges of
the current economy. Finally, I want to thank Frank Sove, who has served as our
Chairman since we went public and recently decided to retire from our Board of
Directors. We appreciate his sage advice and his dedication and support of SigmaTron
over the past fifteen years. He will be missed and we wish him well in retirement.

Sincerely,

Gary R. Fairhead
President and Chief Executive Officer

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(Mark One)

Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934.

For the fiscal year ended April 30, 2009.

Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934.

For the transition period from to .

Commission file number 0-23248

SIGMATRON INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction
of incorporation or organization)

2201 Landmeier Rd., Elk Grove Village, IL

(Address of principal executive offices)

36-3918470

(I.R.S. Employer
Identification Number)

60007

(Zip Code)

Registrant’s telephone number, including area code: 847-956-8000

Securities registered pursuant to Section 12(g) of the Act:

Common Stock $0.01 par value per share

Title of each class

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act. o Yes þ No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the
Act. o Yes þ No

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. þ Yes o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any,
every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§229.405 of this
chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post
such files). þ Yes o No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. þ

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a
smaller reporting company. See definition of “accelerated filer” “large accelerated filer” and “smaller reporting company”
in Rule 12b-2 of the Exchange Act.

Large accelerated filer o Accelerated filer o

Non-accelerated filer o
(Do not check if a smaller reporting company)

Smaller reporting company þ

Indicate by check mark whether registrant is a shell company (as defined in Rule 12b-2 of the Act.) o Yes þ No

The aggregate market value of the voting common equity held by non-affiliates of the registrant as of October 31, 2008
(the last business day of the registrant’s most recently completed second fiscal quarter) was $10,320,226 based on the
closing sale price of $3.34 per share as reported by Nasdaq Capital Market as of such date.

The number of outstanding shares of the registrant’s Common Stock, as of July 13, 2009, was 3,822,556.

DOCUMENTS INCORPORATED BY REFERENCE

Certain sections or portions of the definitive proxy statement of SigmaTron International, Inc., for use in connection with
its 2009 annual meeting of stockholders, which the Company intends to file within 120 days of the fiscal year ended
April 30, 2009, are incorporated by reference into Part III of this Form 10-K.

TABLE OF CONTENTS

BUSINESS
RISK FACTORS
UNRESOLVED STAFF COMMENTS

PROPERTIES

LEGAL PROCEEDINGS

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
SELECTED FINANCIAL DATA
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

PART I

ITEM 1.
ITEM 1A.
ITEM 1B.
ITEM 2.
ITEM 3.
ITEM 4.

PART II

ITEM 5.

ITEM 6.

ITEM 7.
ITEM 7A.
ITEM 8.
ITEM 9.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
ITEM 9A(T). CONTROLS AND PROCEDURES
ITEM 9B.

OTHER INFORMATION

PART III

ITEM 10.
ITEM 11.
ITEM 12.

ITEM 13.
ITEM 14.

PART IV

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
EXECUTIVE COMPENSATION

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
PRINCIPAL ACCOUNTANT FEES AND SERVICES

ITEM 15.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

SIGNATURES
EX-23.1
EX-31.1
EX-31.2
EX-32.1
EX-32.2

3
9
13
13
14
14

14
15

15
22
22

22
22
23

23
23

23
24

Table of Contents

ITEM 1. BUSINESS

CAUTIONARY NOTE:

PART 1

In addition to historical financial information, this discussion of the business of SigmaTron International, Inc., its
wholly-owned subsidiaries Standard Components de Mexico S.A., and AbleMex S.A. de C.V., SigmaTron International
Trading Co., and its wholly-owned foreign enterprise Wujiang SigmaTron Electronics Co., Ltd. (“SigmaTron China”), and
its procurement branch SigmaTron Taiwan (collectively the “Company”) and other Items in this Annual Report on Form
10-K 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 risks and uncertainties inherent in the Company’s business including
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 our 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
our operating results; the results of long-lived assets impairment testing; the variability of our customers’ requirements;
the availability and cost of necessary components and materials; the ability of the Company and our customers to keep
current with technological changes within our industries; regulatory compliance; the continued availability and sufficiency
of our credit arrangements; changes in U.S., Mexican, Chinese or Taiwanese regulations affecting the Company’s
business; the current turmoil in the global economy and financial markets; the stability of the U.S., Mexican, Chinese and
Taiwanese economic systems, labor and political 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 and 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.

Overview

The Company operates in one business segment as an independent provider of electronic manufacturing services
(“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) design,
manufacturing and test engineering support; (4) warehousing and shipment services; and (5) 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 and Taiwan.

The Company provides manufacturing and assembly services ranging from the assembly of individual components to
the assembly and testing of box-build electronic products. The Company has the ability to produce assemblies requiring
mechanical as well as electronic capabilities. The products assembled by the Company are then incorporated into finished
products sold in various industries, particularly appliance, consumer electronics, gaming, fitness, industrial electronics, life
sciences, semiconductor, telecommunications and automotive.

The Company operates manufacturing facilities in Elk Grove Village, Illinois; Hayward, California; Acuna and
Tijuana, Mexico; and Suzhou-Wujiang, China. The Company maintains materials sourcing offices

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in Elk Grove Village, Illinois; Hayward, California; and Taipei, Taiwan. The Company also has a warehouse in Del Rio,
Texas.

The Company is a Delaware corporation, which was organized on November 16, 1993, and commenced operations
when it became the successor to all of the assets and liabilities of SigmaTron L.P., an Illinois limited partnership, through a
reorganization on February 8, 1994.

Products and Services

The Company provides a broad range of manufacturing related outsourcing solutions for its customers on both a
turnkey basis (material purchased by the Company) and consignment basis (material provided by the customer). These
solutions incorporate the Company’s knowledge and expertise in the EMS industry to provide its customers with advanced
manufacturing technologies and high quality, responsive and flexible manufacturing services. The Company’s EMS
solutions provide services from product inception through the ultimate delivery of a finished good. Such technologies and
services include the following:

Supply Chain Management. The Company is primarily a turnkey manufacturer and directly sources all, or a substantial
portion, of the components necessary for its product assemblies, rather than receiving the raw materials from its customers
on consignment. Turnkey services involve a greater investment in resources and an increased inventory risk compared to
consignment services. Supply chain management includes the purchasing, management, storage and delivery of raw
components required for the manufacture or assembly of a customer’s product based upon the customer’s orders. The
Company procures components from a select group of vendors which meet its standards for timely delivery, high quality
and cost effectiveness, or as directed by its customers. Raw materials used in the assembly and manufacture of printed
circuit boards and electronic assemblies are generally available from several suppliers, unless restricted by the customer.
The Company does not enter into purchase agreements with the majority of its major or single-source suppliers. The
Company believes ad-hoc negotiations with its suppliers provides the flexibility needed to source inventory based on the
needs of its customers.

The Company believes that its ability to source and procure competitively priced, quality components is critical to its
ability to effectively compete. In addition to obtaining materials in North America, the Company uses its Taiwanese
procurement office and agents to source materials from the Far East. The Company believes this office allows it to more
effectively manage its relationships with key suppliers in the Far East by permitting it to respond more quickly to changes
in market dynamics, including fluctuations in price, availability and quality.

Assembly and Manufacturing. The Company’s core business is the assembly of printed circuit board assemblies
through the automated and manual insertion of components onto raw printed circuit boards. The Company offers its
assembly services using both pin-through-hole (“PTH”) and surface mount (“SMT”) interconnect technologies at all of its
manufacturing locations. SMT is an assembly process which allows the placement of a higher density of components
directly on both sides of a printed circuit board. The SMT process is an advancement over the mature PTH technology,
which normally permits electronic components to be attached to only one side of a printed circuit board by inserting the
component into holes drilled through the board. The SMT process allows Original Equipment Manufacturers (“OEMs”)
advanced circuitry, while at the same time permitting the placement of a greater number of components on a printed circuit
board without having to increase the size of the board. By allowing increasingly complex circuits to be packaged with the
components in closer proximity to each other, SMT greatly enhances circuit processing speed, and, thus, board and system
performance.

The Company performs PTH assembly both manually and with automated component insertion and soldering
equipment. Although SMT is a more sophisticated interconnect technology, the Company intends to continue providing
PTH assembly services for its customers as the Company’s customers continue to require both PTH and SMT capabilities.
The Company is also capable of assembling fine pitch and ball grid array (“BGA”) components. BGA is used for more
complex circuit boards required to perform at higher speeds.

Manufacturing and Related Services. The Company offers restriction of hazardous substances (“RoHS”) assembly
services in compliance with the European Union environmental mandate at each of its

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manufacturing locations. The Company also provides quick turnaround, turnkey prototype services at all of its locations.
In Elk Grove Village, the Company offers touch screen / LCD assembly services in a clean room environment. In Acuna,
Mexico, the Company offers parylene coating services. In Tijuana, Mexico, the Company offers diagnostic, repair and
rework services for power supplies. In all locations, the Company offers box-build services, which integrate its printed
circuit board and other manufacturing and assembly technologies into higher level sub-assemblies and end products.

Product Testing. The Company has the ability to perform both in-circuit and functional testing of its assemblies and
finished products. In-circuit testing verifies that the correct components have been properly inserted and that the electrical
circuits are complete. Functional testing determines if a board or system assembly is performing to customer
specifications. The Company seeks to provide customers with highly sophisticated testing services that are at the forefront
of current test technology.

Warehousing and Distribution. In response to the needs of select customers, the Company has the ability to provide
in-house warehousing, shipping and receiving and customer brokerage services in Del Rio, Texas for goods manufactured
or assembled in Acuna, Mexico. The Company also has the ability to provide custom-tailored delivery schedules and
services to fulfill the just-in-time inventory needs of its customers.

Markets and Customers

The Company’s customers are in the appliance, gaming, industrial electronics, fitness, life sciences, semiconductor,
telecommunications, consumer electronics and automotive industries. As of April 30, 2009, the Company had
approximately 105 active customers ranging from Fortune 500 companies to small, privately held enterprises.

The following table shows, for the periods indicated, the percentage of net sales to the principal end-user markets it
serves.

Typical
OEM Application

Household appliance controls
Motor controls, power supplies
Treadmills, exercise bikes, cross trainers
Routers
Slot machines, lighting displays
Clinical diagnostic systems and instruments

Process control and yield management equipment for
semiconductor productions

Battery backup sump pumps, electric bikes
Automobile lighting

Markets
Appliances
Industrial Electronics
Fitness
Telecommunications
Gaming
Life Sciences
Semiconductor
Equipment
Consumer Electronics
Automotive

Total

Percent of Net Sales

Fiscal
2008

35.8%
27.3
20.6
6.1
2.9
3.7

2.6
0.7
0.3

Fiscal
2009
40.9%
27.0
18.2
6.5
2.4
1.7

2.2
1.0
0.1

100%

For the fiscal year ended April 30, 2009, Spitfire Controls, Inc. and Life Fitness accounted for 27.5% and 18.2%,
respectively, of the Company’s net sales. For the fiscal year ended April 30, 2008, Spitfire Controls, Inc. and Life Fitness
accounted for 23.0% and 20.6%, respectively, of the Company’s net sales.

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Although the Company does not have long term contracts with these two customers, the Company expects that these
customers will continue to account for a significant percentage of the Company’s net sales, although the individual
percentages may vary from period to period.

Sales and Marketing

The Company markets its services through 13 independent manufacturers’ representative organizations that together
currently employ approximately 36 sales personnel in the United States and Canada. Independent manufacturers’
representative organizations receive variable commissions based on orders received by the Company and are assigned
specific accounts, not territories. The members of the Company’s senior management are actively involved in sales and
marketing efforts, and the Company has 5 direct sales employees.

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 (consignment and turnkey) 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 levels. However, the Company does not believe that such variations are a meaningful indicator of the Company’s
gross margins. Consignment orders accounted for less than 5% of the Company’s revenues for each of the fiscal years
ended April 30, 2009 and 2008.

In the past, the timing and rescheduling of orders has caused the Company to experience significant quarterly
fluctuations in its revenue and earnings; such fluctuations may continue.

Mexico and China Operations

The Company’s wholly-owned subsidiary, Standard Components de Mexico, S.A, a Mexican corporation, is located in
Acuna, Coahuila Mexico, a border town across the Rio Grande River from Del Rio, Texas, and is 155 miles west of San
Antonio. Standard Components de Mexico, S.A. was incorporated and commenced operation in 1968. The Company’s
wholly-owned subsidiary, AbleMex S.A. de C.V., a Mexican corporation, is located in Tijuana, Baja California Mexico, a
border town south of San Diego, California. AbleMex S.A. de C.V. was incorporated and commenced operations in 2000.
The Company believes that one of the key benefits to having operations in Mexico is its access to cost-effective labor
resources while having geographic proximity to the United States.

The Company’s wholly-owned foreign enterprise, Wujiang SigmaTron Electronics Co., Ltd., is located in Wujiang,
China. Wujiang is located approximately 15 miles south of Suzhou, China and 60 miles west of Shanghai, China. The
Company has entered into an agreement with governmental authorities in the economic development zone of Wujiang,
Jiangsu Province, Peoples Republic of China, pursuant to which the Company became the lessee of a parcel of land of
approximately 100 Chinese acres. The term of the land lease is 50 years. The Company built a manufacturing plant, office
space and dormitories on this site during 2004. The manufacturing plant and office space is approximately 80,000 square
feet, which can be expanded if conditions require. The Company decided to postpone the planned expansion of the China
facility announced in July 2008 in response to the current economic conditions. SigmaTron China operates at this site as
the Company’s wholly-owned foreign enterprise. At April 30, 2009, this operation had 207 employees.

The Company provides funds for salaries, wages, overhead and capital expenditure items as necessary to operate its
wholly-owned Mexican and Chinese subsidiaries and the Taiwan procurement branch. The Company provides funding in
U.S. dollars, which are exchanged for Pesos, Renminbi, and New Taiwan dollars as needed. 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 fluctuation for

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the fiscal year ended April 30, 2009 resulted in approximately $135,000 in income. In fiscal year 2009, the Company’s
U.S. operations paid approximately $15,100,000 to its foreign subsidiaries for services provided.

Competition

The EMS industry is highly competitive and subject to rapid change. Furthermore, both large and small companies
compete in the industry, and many have significantly greater financial resources, more extensive business experience and
greater marketing and production capabilities than the Company. The significant competitive factors in this industry
include price, quality, service, timeliness, reliability, the ability to source raw components, and manufacturing and
technological capabilities. The Company believes it can competitively address all of these factors.

In addition, the Company may be operating at a cost disadvantage compared to manufacturers who have greater direct
buying power with component suppliers or who have lower cost structures. Current and prospective customers continually
evaluate the merits of manufacturing products internally and will from time to time offer manufacturing services to third
parties in order to utilize excess capacity. During downturns in the electronics industry, OEMs may become more price
sensitive.

There can be no assurance that competition from existing or potential competitors will not have a material adverse
impact on the Company’s business, financial condition or results of operations. The introduction of lower priced
competitive products, significant price reductions by the Company’s competitors or significant pricing pressures from its
customers could adversely affect the Company’s business, financial condition, and results of operations, as would the
introduction of new technologies which render the Company’s manufacturing process technology less competitive or
obsolete.

Consolidation

The consolidated financial statements include the accounts and transactions of the Company, its wholly-owned
subsidiaries, Standard Components de Mexico, S.A. and AbleMex S.A. de C.V., SigmaTron International Trading Co., its
wholly-owned foreign enterprise Wujiang SigmaTron Electronics Co., Ltd. and its procurement branch, SigmaTron
Taiwan. The functional currency of the Mexican subsidiaries, Chinese foreign enterprise and Taiwanese procurement
branch is the U.S. dollar.

As a result of consolidation and other transactions involving competitors and other companies in the Company’s
markets, the Company occasionally reviews potential transactions relating to its business, products and technologies. Such
transactions could include mergers, acquisitions, strategic alliances, joint ventures, licensing agreements, co-promotion
agreements, financing arrangements or other types of transactions. In the future, the Company may choose to enter into
other transactions at any time depending on available sources of financing, and such transactions could have a material
impact on the Company, its business or operations.

Governmental Regulations

The Company’s operations are subject to certain foreign, federal, state and local regulatory requirements relating to
environmental, waste management, labor and health and safety matters. Management believes that the Company’s
business is operated in material compliance with all such regulations. To date, the cost to the Company of such compliance
has not had a material impact on the Company’s business, financial condition or results of operations. However, there can
be no assurance that violations will not occur in the future as a result of human error, equipment failure or other causes.
Further, the Company cannot predict the nature, scope or effect of environmental legislation or regulatory requirements
that could be imposed or how existing or future laws or regulations will be administered or interpreted. Compliance with
more stringent laws or regulations, as well as more vigorous enforcement policies of regulatory agencies, could require
substantial expenditures by the Company and could have a material impact on the Company’s business, financial condition
and results of operations. In addition, effective mid-2006, the Company’s customers were required to be in compliance
with the European Standard of RoHS directive for all of their products that ship to the European marketplace. The
Company has RoHS-dedicated manufacturing capabilities at all of its manufacturing operations.

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Backlog

The Company’s backlog as of April 30, 2009, was approximately $36,200,000. The Company currently expects to ship
substantially all of the April 30, 2009 backlog by the end of the 2010 fiscal year. Backlog as of April 30, 2008, totaled
approximately $49,100,000. Variations in the magnitude and duration of contracts, forecasts and purchase orders received
by the Company and delivery requirements generally may result in substantial fluctuations in backlog from period to
period. Because customers may cancel or reschedule deliveries, backlog may not be a meaningful indicator of future
revenue.

Employees

The Company employed approximately 1,700 people as of April 30, 2009, including 129 engaged in engineering or
engineering related services, 1,316 in manufacturing and 255 in administrative and marketing functions.

The Company has a labor contract with Production Workers Union Local No. 10, AFL-CIO, covering the Company’s
workers in Elk Grove Village, Illinois which expires on November 30, 2009. The Company’s Mexican subsidiary,
Standard Components de Mexico S.A., has a labor contract with Sindicato De Trabajadores de la Industra Electronica,
Similares y Conexos del Estado de Coahuila, C.T.M. covering the Company’s workers in Acuna, Mexico which expires on
February 1, 2010. The Company’s subsidiary located in Tijuana Mexico, has a labor contract with Sindicato Mexico
Moderno De Trabajadores De La, Baja California, C.R.O.C. The contract does not have an expiration date.

Since the time the Company commenced operations, it has not experienced any union-related work stoppages. The
Company believes its relations with both unions and its other employees are good.

Executive Officers of the Registrants

Name

Gary R. Fairhead

Linda K.
Frauendorfer

Age

Gregory A. Fairhead

Position

President and Chief Executive Officer. Gary R. Fairhead has been the President of the
Company since January 1990. Gary R. Fairhead is the brother of Gregory A. Fairhead.

Chief Financial Officer, Vice President Finance, Treasurer and Secretary since
February 1994.

Executive Vice President and Assistant Secretary. Gregory A. Fairhead has been
Executive Vice President since February 2000 and Assistant Secretary since 1994.
Mr. Fairhead was Vice President — Acuna Operations for the Company from
February 1990 to February 2000. Gregory A. Fairhead is the brother of Gary R.
Fairhead.

John P. Sheehan

Vice President, Director of Supply Chain and Assistant Secretary since February 1994.

Daniel P. Camp

Vice President, Acuna Operation since 2007. Vice President — China Operations from
2003 to 2007. General Manager / Vice President of Acuna Operations from 1994 to
2003.

Raj B. Upadhyaya

Executive Vice President, West Coast Operations since 2005. Mr. Upadhyaya was the
Vice President of the Fremont Operation from 2001 until 2005.

Hom-Ming Chang

Vice President, China Operation since 2007. Vice President — Hayward Materials /
Test / IT from 2005 — 2007. Vice President of Fremont Operation from 2001 to 2005.

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ITEM 1A. RISK FACTORS

The following risk factors should be read carefully in connection with evaluating our business and the forward-looking
information contained in this Annual Report on Form 10-K. Any of the following risks could materially adversely affect
our business, operations, industry or financial position or our future financial performance. While the Company believes it
has identified and discussed below the key risk factors affecting its business, there may be additional risks and
uncertainties that are not presently known or that are not currently believed to be significant that may adversely affect its
business, operations, industry, financial position and financial performance in the future.

The Company’s ability to secure and maintain sufficient credit arrangements is key to its continued operations.

The Company has a revolving credit facility under which the Company may borrow up to the lesser of (i) $32 million
or (ii) an amount equal to the sum of 85% of the receivable borrowing base and the lesser of $16 million or a percentage of
the inventory borrowing base. As of April 30, 2009, $18,746,696 was outstanding under the revolving credit facility.
There was approximately $7.8 million of unused availability under the revolving credit facility as of April 30, 2009. In
June 2008, the Company amended the revolving credit facility to extend the term of the agreement until September 30,
2010 from September 30, 2009 and amended certain financial covenants.

The Company was in compliance with the required financial covenants as of April 30, 2009. Historically, the Company
has renegotiated its financial covenants for the current fiscal year during the first quarter of that fiscal year in connection
with the Company’s annual budgeting process. As of July 10, 2009, the Company is in the preliminary stages of
negotiating revised financial covenants for fiscal 2010. The existing financial covenants remain in place until a new
agreement has been reached. The Company is currently working with its lender to amend the financial covenants for its
revolving credit facility, based upon the Company’s most recent projections for the 2010 fiscal year. At this time, it is
possible that the Company would not be in compliance with an existing financial covenant for the quarter ended July 31,
2009. Therefore, if the Company is not successful in amending its financial covenants, the Company could be in violation
of its revolving credit facility agreement at that time. In the event the Company was unable to amend the required financial
covenants or obtain alternative financing, the Company may be unable to access lines of credit and its debt obligations
could be accelerated. These events would likely have a material adverse effect on the Company’s future results of
operations, financial position and liquidity.

The Company also has a term loan with an outstanding balance of $2 million and $3 million as of April 30, 2009 and
2008, respectively with quarterly principal payments of $250,000 due each quarter through the quarter ending June 30,
2011. Borrowings under the term loan bear an interest rate of LIBOR plus 2%, which ranged from 2.41% to 6.47% during
fiscal year 2009. During fiscal year 2008, borrowings under the term loan were at an interest rate of 6.47%.

The financial crisis affecting the banking system and capital markets have resulted in a tightening in the credit markets,
a low level of liquidity in many financial markets and extreme volatility in credit. Disruptions in the capital and credit
markets as a result of uncertainty, changing or increased regulations, reduced alternatives, or failures of significant
financial institutions could adversely affect the Company’s ability to secure, maintain or renew sufficient credit
arrangements to support its working capital requirements to continue operations.

The financial crisis and global economic slowdown could negatively impact the Company’s business, results of
operations and financial condition.

The Company’s sales and gross margins depend significantly on market demand for its customers’ products. A
continued slow down in the global economy and the related decline in demand for our customers’ products in any industry
has resulted in decreasing sales levels and gross margins which have negatively impacted the Company’s business, results
of operations and financial conditions and this trend may continue.

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The Company experiences variable operating results.

The Company’s results of operations have varied and may continue to fluctuate significantly from period to period,
including on a quarterly basis. Consequently, results of operations in any period should not be considered indicative of the
results for any future period, and fluctuations in operating results may also result in fluctuations in the price of the
Company’s common stock.

The Company’s quarterly and annual results may vary significantly depending on numerous factors, many of which are
beyond the Company’s control. These factors include:

•

Changes in sales mix to customers

Changes in availability and cost of components

Volume of customer orders relative to capacity

Market demand and acceptance of our customers’ products

Price erosion within the EMS marketplace

Capital equipment requirements needed to remain technologically competitive

Volatility of the global economy and financials markets

The Company’s customer base is concentrated.

Sales to the Company’s five largest customers accounted for 63% of net sales for the fiscal years ended April 30, 2009
and 2008. The Company’s two largest customers accounted for 27.5% and 18.2% of net sales for the fiscal year ended
April 30, 2009 compared to 23.0% and 20.6% of net sales for the fiscal year ended April 30, 2008. Significant reduction in
sales to any of the Company’s major customers or the loss of a major customer could have a material impact on the
Company’s operations. If the Company cannot replace canceled or reduced orders, sales will decline, which could have a
material impact on the results of operations. There can be no assurance that the Company will retain any or all of its large
customers. This risk may be further complicated by pricing pressures and intense competition prevalent in our industry.

There is variability in the requirements of the Company’s customers.

The Company does not generally obtain long-term purchase contracts. The timing of purchase orders placed by the
Company’s customers is affected by a number of factors, including variation in demand for the customers’ products,
regulatory changes affecting customer industries, customer attempts to manage inventory, changes in the customers’
manufacturing strategies and customers’ technical problems or issues. Many of these factors are outside the control of the
Company. If the Company cannot replace canceled or reduced orders, sales will decline, which could have a material
impact on the results of operations.

The Company and its customers may be unable to keep current with the industry’s technological changes.

The market for the Company’s manufacturing services is characterized by rapidly changing technology and continuing
product development. The future success of the Company’s business will depend in large part upon its customers’ ability
to maintain and enhance their technological capabilities, develop and market manufacturing services which meet changing
customer needs and successfully anticipate or respond to technological changes in manufacturing processes on a
cost-effective and timely basis.

Effective mid-2006, the Company’s customers were required to be in compliance with the European Standard of RoHS
for all products shipped to the European marketplace. The purpose of the directive is to restrict the use of hazardous
substances in electrical and electronic equipment and to contribute to the environmentally sound recovery and disposal of
electrical and electronic equipment waste. In addition, electronic component manufacturers must produce electronic
components which are lead-free. The Company relies on numerous third-party suppliers for components used in the

Company’s production process. Customers’ specifications may require the Company to obtain components from a single
source or a small number of suppliers. The inability to utilize any such suppliers could have a material impact on the
Company’s results of operations.

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The Company faces intense industry competition and downward pricing pressures.

The EMS industry is highly fragmented and characterized by intense competition. Many of the Company’s competitors
have substantially greater experience, as well as greater manufacturing, purchasing, marketing and financial resources than
the Company.

The Company has foreign operations that may pose additional risks.

A substantial part of the Company’s manufacturing operations is based in Mexico. Therefore, the Company’s business
and results of operations are dependent upon numerous related factors, including the stability of the Mexican economy, the
political climate in Mexico and Mexico’s relations with the United States, prevailing worker wages, the legal authority of
the Company to own and operate its business in Mexico, and the ability to identify, hire, train and retain qualified
personnel and operating management in Mexico.

The Company has an operation in China. Therefore, the Company’s business and results of operations are dependent
upon numerous related factors, including the stability of the China economy, the political climate in China and China’s
relations with the United States, prevailing worker wages, the legal authority of the Company to own and operate its
business in China, and the ability to identify, hire, train and retain qualified personnel and operating management in China.

The Company obtains many of its materials and components through its office in Taipei, Taiwan and, therefore, the
Company’s access to these materials and components is dependent on the continued viability of its Asian suppliers.

The Company may be unable to manage its growth.

The Company may not effectively manage its growth and successfully integrate the management and operations of its
acquisitions. Acquisitions involve significant financial and operating risks that could have a material adverse effect on the
Company’s results of operations.

Disclosure and internal controls may not detect all errors or fraud.

The Company’s management, including the Chief Executive Officer and Chief Financial Officer, do not believe that the
Company’s disclosure controls and internal controls will prevent all errors and all fraud. Controls can provide only
reasonable assurance that the procedures will meet the control objectives. Controls are limited in their effectiveness by
human error, including faulty judgments in decision-making. Further, controls can be circumvented by collusion of two or
more people or by management override of controls. Because of the limitations of a cost effective control system, error
and fraud may occur and not be detected.

There is a risk of fluctuation of various currencies integral to the Company’s operations.

The Company purchases some of its material components and funds some of its operations in foreign currencies. From
time to time the currencies fluctuate against the U.S. dollar. Such fluctuations could have a measurable impact on the
Company’s results of operations and performance. The impact of currency fluctuation for the year ended April 30, 2009
resulted in approximately $135,000 in income. These fluctuations are expected to continue. The Company did not utilize
derivatives or hedge foreign currencies to reduce the risk of such fluctuations.

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The availability of raw components may affect the Company’s operations.

The Company is dependent on key personnel.

The Company depends significantly on its President and Chief Executive Officer, Gary R. Fairhead, and on other
executive officers. The loss of the services of any of these key employees could have a material impact on the Company’s
business and results of operations. In addition, despite significant competition, continued growth and expansion of the
Company’s EMS business will require that it attract, motivate and retain additional skilled and experienced personnel. The
inability to satisfy such requirements could have a negative impact on the Company’s ability to remain competitive in the
future.

Favorable labor relations are important to the Company.

The Company currently has labor union contracts with its employees constituting approximately 45% of its workforce.
Although the Company believes its labor relations are good, any labor disruptions, whether union-related or otherwise,
could significantly impair the Company’s business, substantially increase the Company’s costs or otherwise have a
material impact on the Company’s results of operations.

Failure to comply with environmental regulations could subject the Company to liability.

The Company is subject to a variety of environmental regulations relating to the use, storage, discharge and disposal of
hazardous chemicals used during its manufacturing process. Any failure by the Company to comply with present or future
regulations could subject it to future liabilities or the suspension of production which could have a material negative
impact on the Company’s results of operations.

The price of the Company’s stock is volatile.

The price of the Company’s common stock historically has experienced significant volatility due to fluctuations in the
Company’s revenue and earnings, other factors relating to the Company’s operations, the market’s changing expectations
for the Company’s growth, overall equity market conditions and other factors unrelated to the Company’s operations. In
addition, the limited float of the Company’s common stock and the limited number of market makers also affect the
volatility of the Company’s common stock. Such fluctuations are expected to continue in the future.

Being a public company increases the Company’s administrative costs.

The Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”), as well as rules subsequently implemented by the Securities and
Exchange Commission and listing requirements subsequently adopted by Nasdaq in response to Sarbanes-Oxley, have
required changes in corporate governance practices, internal control policies and audit committee practices of public
companies. These rules and regulations could also make it more difficult for us to attract and retain qualified members for
our board of directors, particularly to serve on our audit committee. In addition, if the Company receives a qualified
opinion on the adequacy of its internal control over financial reporting, shareholders and the Company’s lenders could lose
confidence in the reliability of the Company’s financial statements. This could have a material adverse impact on the value
of the Company’s stock and the Company’s liquidity.

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ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

At April 30, 2009, the Company had manufacturing facilities located in Elk Grove Village, Illinois, Hayward,
California, Acuna and Tijuana, Mexico and Suzhou-Wujiang, China. In addition, the Company provides inventory
management services through its Del Rio, Texas, warehouse facilities and materials procurement services through its Elk
Grove Village, Illinois; Acuna, Mexico; Hayward, California; and Taipei, Taiwan offices.

Certain information about the Company’s manufacturing, warehouse and purchasing facilities is set forth below:

Location
Suzhou-Wujiang, China

Square
Feet
147,500

Hayward, CA

126,000

Elk Grove Village, IL

118,000

Acuna, Mexico

115,000

Services Offered

High volume assembly, and testing of PTH
and SMT, box-build, BGA

Assembly and testing of PTH, SMT and
BGA, box-build, prototyping, warehousing

Corporate headquarters, assembly and testing
of PTH, SMT and BGA, box-build,
prototyping, warehousing

High volume assembly, and testing of PTH
and SMT, box-build, transformers

Las Vegas, NV

38,250

N/A

Del Rio, TX

44,000

Warehouse, portion of which is bonded

Tijuana, Mexico

67,700

Taipei, Taiwan

2,900

High volume assembly, and testing of PTH
and SMT, box-build

Materials procurement, alternative sourcing
assistance and quality control

Owned/
Leased
*

Leased

Owned

Owned
**

Leased
***

Leased

The Company’s Suzhou-Wujiang, China building is owned by the Company and the land is leased from the Chinese
government for a 50 year term.

** A portion of the facility is leased.

*** During fiscal year 2006, the Las Vegas operation was sold. The Company continues to be obligated under the primary
lease agreement for the facility and sublets the property to other occupants. The Company will not renew this lease
when it expires in October 2009.

The Hayward, California and Tijuana, Mexico properties and a portion of the Del Rio, Texas properties are occupied
pursuant to leases of the premises. The lease agreements for the Nevada and California properties expire October 2009 and
September 2010, respectively. The lease agreements for the Del Rio, Texas properties expire April 2011 and
December 2015. The Tijuana, Mexico leases expire June 2011. The Company’s manufacturing facilities located in Acuna,

Mexico and Elk Grove Village, Illinois are owned by the Company, except for a portion of the facility in Mexico, which is
leased. The property in Elk Grove Village, Illinois is financed under a separate mortgage agreement, which matures in
April 2013. The Company leases the purchasing and engineering office in Taipei, Taiwan to coordinate Far East
purchasing activities. The Company believes its current facilities are adequate to meet its current needs. In addition, the
Company believes it can find alternative facilities to meet its needs in the future, if required.

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ITEM 3. LEGAL PROCEEDINGS

As of April 30, 2009, the Company was not a party to any material legal proceedings.

From time to time the Company is involved in legal proceedings, claims or investigations that are incidental to the
conduct of the Company’s business. In future periods, the Company could be subjected to cash cost or non-cash charges to
earnings if any of these matters are resolved on unfavorable terms. However, although the ultimate outcome of any legal
matter cannot be predicted with certainty, based on present information, including management’s assessment of the merits
of any particular claim, the Company does not expect that these legal proceedings or claims will have any material adverse
impact on its future consolidated financial position or results of operations.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matter was submitted to a vote of security holders in the fourth quarter of fiscal year 2009.

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND

ISSUER PURCHASES OF EQUITY

PART II

SECURITIES

Market Information

The Company’s common stock is traded on the NASDAQ Capital Market System under the symbol SGMA. The
following table sets forth the range of quarterly high and low sales price information for the common stock for the periods
ended April 30, 2009, and 2008.

Common Stock as Reported
by NASDAQ

Period

Fiscal 2009:
Fourth Quarter
Third Quarter
Second Quarter
First Quarter

Fiscal 2008:
Fourth Quarter
Third Quarter
Second Quarter
First Quarter

High

Low

$ 2.60
3.48
7.15
7.29

$ 7.85
12.50
13.37
11.64

$1.27
1.58
2.82
5.00

$5.25
6.88
8.44
8.95

As of July 13, 2009, there were approximately 61 holders of record of the Company’s common stock, which does not
include shareholders whose stock is held through securities position listings. The Company estimates there to be
approximately 1,595 beneficial owners of the Company’s common stock.

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Dividend Information

The Company has not paid cash dividends on its common stock since completing its February 1994 initial public
offering and does not intend to pay any dividends in the foreseeable future. So long as any indebtedness remains unpaid
under the Company’s revolving loan facility, the Company is prohibited from paying or declaring any dividends on any of
its capital stock, except stock dividends, without the written consent of the lender under the facility.

Equity Compensation Plan Information

Information concerning securities authorized for issuance under our equity compensation plans is set forth in Part III,
Item 12 of this Annual Report, under the caption “Securities Authorized for Issuance under Equity Compensation Plans”
and that information is incorporated herein by reference.

ITEM 6. SELECTED FINANCIAL DATA

As a smaller reporting company, as defined in Rule 12b-2 of the Securities Exchange Act of 1934, we are not required
to provide the information required by this item.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

OPERATIONS

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) design,

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manufacturing and test engineering support; (4) warehousing and shipment services; and (5) 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 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, and the
Company may be required to operate at a cost disadvantage compared to competitors who have greater direct buying
power from suppliers. The Company does not enter into purchase agreements with major or single-source suppliers. The
Company believes that ad-hoc negotiations with its suppliers provides flexibility, given that the Company’s orders are
based on the needs of its customers, which constantly change.

The Sarbanes-Oxley Act, as well as rules subsequently implemented by the Securities and Exchange Commission and
listing requirements subsequently adopted by Nasdaq in response to Sarbanes-Oxley, have required changes in corporate
governance practices, internal control policies and audit committee practices of public companies. These rules and
regulations could also make it more difficult for us to attract and retain qualified members for our board of directors,
particularly to serve on our audit committee. In addition, if the Company receives a qualified opinion on the adequacy of
its internal control over financial reporting, shareholders and the Company’s lenders could lose confidence in the
reliability of the Company’s financial statements. This could have a material adverse impact on the value of the
Company’s stock and the Company’s liquidity.

In the past, the timing and rescheduling of orders have caused the Company to experience significant quarterly
fluctuations in its revenues and earnings, and the Company expects such fluctuations to continue. The uncertainty
associated with the worldwide economy in general and the United States economy specifically make forecasting difficult.
All of the Company’s customer’s markets remain volatile. The Company believes it will continue to see lower revenues
and more volatility until at least the fall of 2009.

Critical Accounting Policies:

Management Estimates and Uncertainties — The preparation of consolidated financial statements in conformity with
accounting principles generally accepted in the United States of America requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at
the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting
period. Significant estimates made in preparing the consolidated financial statements include depreciation and
amortization periods, the allowance for doubtful accounts, reserves for inventory and valuation of long-lived assets. Actual
results could materially differ from these estimates.

Revenue Recognition — Revenues from sales of the Company’s electronic manufacturing services business are
recognized when the product is shipped to the customer. In general, it is the Company’s policy to

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recognize revenue and related costs when the order has been shipped from our facilities, which is also the same point that
title passes under the terms of the purchase order except for consignment inventory. Consignment inventory is shipped
from the Company to an independent warehouse for storage or shipped directly to the customer and stored in a segregated
part of the customer’s own facility. Upon the customer’s request for inventory, the consignment inventory is shipped to the
customer if the inventory was stored offsite or transferred from the segregated part of the customer’s facility for
consumption, or use, by the customer. The Company recognizes revenue upon such transfer. The Company does not earn a
fee for storing the consignment inventory. The Company generally provides a 90 day warranty for workmanship only and
does not have any installation, acceptance or sales incentives, although the Company has negotiated longer warranty terms
in certain instances. The Company assembles and tests assemblies based on customers’ specifications. Historically, the
amount of returns for workmanship issues has been de minimis under the Company’s standard or extended warranties.
Any returns for workmanship issues received after each period end are accrued in the respective financial statements.

Inventories — Inventories are valued at the lower of cost or market. Cost is determined by the first-in, first-out method.
The Company establishes inventory reserves for valuation, shrinkage, and excess and obsolete inventory. The Company
records provisions for inventory shrinkage based on historical experience to account for unmeasured usage or loss. Actual
results differing from these estimates could significantly affect the Company’s inventories and cost of products sold. The
Company records provisions for excess and obsolete inventories for the difference between the cost of inventory and its
estimated realizable value based on assumptions about future product demand and market conditions. Actual product
demand or market conditions could be different than that projected by management.

Impairment of Long-Lived Assets — The Company reviews its long-lived assets for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An asset is considered
impaired if its carrying amount exceeds the future undiscounted net cash flow the asset is expected to generate. If such
asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying
amount of the asset exceeds its fair market value.

Goodwill and Other Intangibles — In December 2007, the Financial Accounting Standards Board (“FASB”) issued
Statement of Financial Accounting Standard (“SFAS”) No. 141(R), Accounting Standards Codification (“ASC”)
(805-10-10-1) “Business Combinations” (“SFAS 141(R)”) which replaces SFAS No. 141, “Business Combinations.” The
FASB has since codified FASB 141(R) as Accounting Standards Codification (“ASC”) 805-10-10-1. This Statement
retains the fundamental requirements in SFAS No. 141 that the acquisition method of accounting (formerly referred to as
purchase method) is to be used for all business combinations and that an acquirer is identified for each business
combination. This Statement defines the acquirer as the entity that obtains control of one or more businesses in the
business combination and establishes the acquisition date as of the date that the acquirer achieves control. This Statement
requires an acquirer to recognize the assets acquired, the liabilities assumed, and any noncontrolling interest in the acquire
at the acquisition date, measured at their fair values. This Statement requires the acquirer to recognize acquisition-related
costs and restructuring costs separately from the business combination as period expense. This Statement is effective for
business combinations for which the acquisition date is on or after the beginning of the first annual reporting period
beginning on or after December 15, 2008. The Company will implement SFAS No. 141(R) for any business combinations
occurring subsequent to April 30, 2009.

In January 2008, the Company changed the date of its annual goodwill impairment test from the last day of the fiscal
year to the first day of the fiscal fourth quarter. The impairment test procedures were carried out during the fourth quarter
of fiscal year 2008 and up to the time of the filing of the Company’s Form 10-K for fiscal year 2008, which allowed the
Company additional time to complete the required analysis. The Company believes that the resulting change in accounting
principle related to the annual testing date did not delay, accelerate or avoid an impairment charge. The Company
determined that the change in accounting principle related to the annual testing date was preferable under the
circumstances and did not result in adjustments to the Company’s financial statements when applied retrospectively.
During the fiscal year 2008, the Company performed its annual goodwill impairment testing and the carrying value of the
Company’s reporting unit exceeded the fair value indicating a goodwill impairment. The Company completed the second
step of the goodwill impairment test used to measure the amount of the impairment loss by comparing the implied fair
value of the reporting unit goodwill with the carrying amount of the goodwill. As a result of this

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impairment analysis, the Company recorded an impairment charge for the full amount of goodwill ($9.3 million) during
the fiscal year ended April 30, 2008. The impairment was due to continuing customer pricing pressures and uncertain
economic conditions as well as the Company’s declining stock price during fiscal 2008.

New Accounting Standards:

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (“SFAS 157”), (ASC 820-10-05-1),
which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and
expands disclosures about fair value measurements. SFAS 157 is effective for the Company beginning on May 1, 2008. In
November 2007, the FASB agreed to a one-year deferral of the effective date of SFAS 157 for all non-financial assets and
liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis. There
was no significant impact from adoption of SFAS 157 for financial assets and liabilities on the Company’s financial
statements and none are expected when SFAS 157 is adopted for non-financial assets and liabilities.

In February 2007, the FASB issued SFAS No. 159 “The Fair Value Options for Financial Assets and Financial
Liabilities” (“SFAS No. 159”), (ASC 820-10-10-1). SFAS 159 permits entities to choose to measure many financial assets
and financial liabilities at fair value. Unrealized gains and losses on items for which the fair value option has been elected
are reported in earnings. SFAS No. 159 was effective for fiscal years beginning after November 15, 2007. The Company
did not elect the fair value option pursuant to SFAS 159.

In December 2007, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting
Standard (“SFAS”) No. 141(R), Accounting Standards Codification (“ASC”) (805-10-10-1) “Business Combinations”
(“SFAS 141(R)”) which replaces SFAS No. 141, “Business Combinations.” The FASB has since codified FASB 141(R) as
Accounting Standards Codification (“ASC”) 805-10-10-1. This Statement retains the fundamental requirements in SFAS
No. 141 that the acquisition method of accounting (formerly referred to as purchase method) is to be used for all business
combinations and that an acquirer is identified for each business combination. This Statement defines the acquirer as the
entity that obtains control of one or more businesses in the business combination and establishes the acquisition date as of
the date that the acquirer achieves control. This Statement requires an acquirer to recognize the assets acquired, the
liabilities assumed, and any noncontrolling interest in the acquire at the acquisition date, measured at their fair values. This
Statement requires the acquirer to recognize acquisition-related costs and restructuring costs separately from the business
combination as period expense. This Statement is effective for business combinations for which the acquisition date is on
or after the beginning of the first annual reporting period beginning on or after December 15, 2008. The Company will
implement SFAS No. 141(R) for any business combinations occurring subsequent to April 30, 2009.

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling interests in Consolidated Financial
Statements—an amendment of Accounting Research Bulletin No. 51” (“SFAS 160”), (ASC 810-10-65-1). SFAS 160
establishes accounting reporting standards for ownership interests in subsidiaries held by parties other than the parent, the
amount of consolidated net income attributable to the parent and to the noncontrolling interest, changes in a parent’s
ownership interest, and the valuation of retained noncontrolling equity investments when a subsidiary is deconsolidated.
SFAS 160 also establishes disclosure requirements that clearly identify and distinguish between the interests of the parent
and the interests of the noncontrolling owners. SFAS 160 is effective for fiscal years beginning after December 15, 2008.
The Company has determined that SFAS 160 will not have a material impact on its consolidated results of operations and
financial condition.

Results of Operations:

FISCAL YEAR ENDED APRIL 30, 2009 COMPARED
TO FISCAL YEAR ENDED APRIL 30, 2008

Net sales decreased 20.3% to $133,744,642 in fiscal year 2009 from $167,810,994 in the prior year. The Company’s
sales decreased in fiscal year 2009 in the industrial electronics, fitness, telecommunications, life sciences, appliance,
gaming and semiconductor marketplaces as compared to the prior year. The decrease in revenue for the fiscal year end
2009 is a result of our customers’ decreased demand for product based on

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their forecast, which we believe is attributable to the global economic slowdown and the recent financial crisis. The
Company anticipates sales will remain soft in the first quarter of fiscal year 2010 and anticipates sales to slowly increase
in late calendar 2009.

The Company’s sales in a particular industry are driven by the fluctuating forecasts and end-market demand of the
customers within that industry. Sales to customers are subject to variations from period to period depending on customer
order terminations, the life cycle of customer products and product transition. Sales to the Company’s five largest
customers accounted for 63% of net sales for fiscal years 2009 and 2008.

Gross profit decreased to $15,974,902 or 11.9% of net sales in fiscal year 2009 compared to $19,563,390 or 11.7% of
net sales in the prior year. The decrease in the Company’s gross profit in total dollars is due to decreased revenue levels
and decreased plant capacity utilization. The Company has continued to lower its cost structure during the fourth quarter
of fiscal year 2009 and will continue cost cutting initiatives based on customer’s demand for product. During the third and
fourth quarters of fiscal year 2009, the Company reduced its worldwide headcount, through attrition and lay-offs. Further
the Company implemented salary reductions for all non-union U.S. employees beginning February 2009. There can be no
assurance that sales levels or gross margins will not continue to decrease in future periods.

Selling and administrative expenses decreased in fiscal year 2009 to $11,591,440 or 8.7% of net sales compared to
$12,375,458 or 7.4% of net sales in fiscal year 2008. The decrease in total dollars is primarily due to a decrease in sales
commissions, insurance expense, amortization expense, bonus expense, legal fees and other professional fees. This
decrease in total dollars was partially offset by an increase in sales and IT salaries in fiscal year 2009 compared to the
prior year. The increase in selling and administrative expenses as a percent of net sales in fiscal year 2009 is due to the
20% decrease in net sales.

During fiscal year 2008, the Company performed its annual goodwill impairment testing and the carrying value of the
Company’s reporting unit exceeded the fair value indicating a goodwill impairment. The Company completed the second
step of the goodwill impairment test used to measure the amount of impairment loss by comparing the implied fair value
of the reporting unit goodwill with the carrying amount of the goodwill. As a result of this impairment analysis, the
Company recorded an impairment charge for the full amount of goodwill ($9.3 million) during the year ended April 30,
2008. The impairment was due to continuing customer pricing pressures and uncertain economic conditions as well as the
Company’s declining stock price during fiscal 2008.

Interest expense decreased to $1,710,817 in fiscal year 2009 compared to $2,667,473 in fiscal year 2008. The interest
expense decreased due to decreased borrowings under its revolving credit facility, term loan and capital leases and lower
interest rates. Interest expense for fiscal year 2010 may increase if interest rates or borrowings increase during fiscal year
2010.

In fiscal year 2009, the income tax expense from operations was $936,278 compared to $1,655,518 in income tax
expense in fiscal year 2008. The effective tax rate for the year ended April 30, 2009 was 32%. The lower effective tax rate
was a result of the tax holiday for the China operation. The Company recorded income tax expense in fiscal 2008 despite a
pre-tax loss due primarily to the fact that the goodwill impairment charge of $9.3 million related to non-deductible
goodwill which is treated as a permanent difference between book and tax income (loss).

The Company reported net income of $1,955,847 in fiscal year 2009. Basic and diluted earnings per share was $0.51
for fiscal year 2009 compared to basic and diluted loss per share of ($1.69) for the year ended April 30, 2008. Excluding
the goodwill impairment charge, net income was $2,842,109 for fiscal year 2008, which resulted in diluted earnings per
share of $0.74 for fiscal year 2008 compared to $0.51 for the fiscal year ended April 30, 2009. We believe the Non-Gaap
measure is a meaningful disclosure of the operating performance of the Company as it is an alternative measure utilized by
investors, management and the Board of Directors. See the following Non-Gaap Reconciliation.

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Income (loss) Reconciliation:

Net income before goodwill impairment

2,842,109

Non-Gaap Reconciliation*
Twelve Months
Ended
April 30, 2008

Goodwill impairment charge

Net loss

EPS Reconciliation:

Net income per common share — assuming dilution before goodwill impairment

Goodwill impairment charge

Net loss per common share — assuming dilution

9,298,945

($6,456,836)

0.74

($2.43)

($1.69)

Weighted average number of common equivalent shares outstanding — assuming dilution

3,811,832

* A non-GAAP financial measure is a numerical measure of a company’s performance, financial position, or cash
flows that either excludes or includes amounts that are not normally excluded or included in the most directly
comparable measure calculated and presented in accordance with GAAP.

Liquidity and Capital Resources:

Operating Activities.

Cash flow provided by operating activities was $10,844,265 for the year ended April 30, 2009, compared to $4,163,469
for the prior fiscal year. Cash flow provided by operating activities in fiscal year 2009 was primarily the result of a
$9,944,685 decrease in accounts receivable, a reduction in inventory levels, the result of the non-cash effect of
depreciation and amortization and net income. Net cash provided by operations in fiscal year 2009 was partially offset by
a $9,190,622 reduction in accounts payable. The decrease in accounts payable and accounts receivable is due to payments
in the ordinary course of business, coupled with the Company’s reduced sales in fiscal year 2009. The decrease in
inventory was the result of our customers’ decreased demand for product based on their forecasts, which we believe is
attributable to the global economic slowdown and financial crisis. The Company’s working capital requirements have
decreased primarily as a result of the decrease in sales volume during fiscal 2009.

Cash flow provided by operating activities was $4,163,469 for the year ended April 30, 2008. Cash provided by
operating activities was primarily the result of net income (excluding the goodwill impairment charge) net of the non-cash
effect of depreciation and amortization and an increase in trade accounts payable. Trade accounts payable increased due to
timing of payment to vendors. Cash provided by operating activities in 2008 was partially offset by an increase in accounts
receivable of $6,530,677 due to timing of cash receipts from a significant customer. The Company’s inventories increased

by $1,774,698. The primary reason for the increase in inventories was customer safety stock requirements and the startup
of new programs with new and existing customers.

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Investing Activities.

During fiscal year 2009, the Company purchased approximately $1,180,000 in machinery and equipment for various
operating facilities. The Company executed a five year capital lease to finance approximately $360,000 of these
acquisitions in fiscal year 2009. The Company decided to postpone the planned expansion of the China facility announced
in July 2008 in response to the current economic conditions. The Company anticipates that it will make additional
machinery and equipment purchases in fiscal year 2010 of approximately $2 million.

In fiscal year 2008, the Company purchased approximately $2,400,000 in machinery and equipment. The Company
executed a five year sale lease back agreement for approximately $615,000 for certain acquisitions made during fiscal year
2008, which has been treated for accounting purposes as a capital lease.

Financing Activities.

The Company also has a term loan with an outstanding balance of $2 million as of April 30, 2009 with quarterly
principal payments of $250,000 due each quarter through the quarter ending June 30, 2011. Borrowings under the term
loan bear an interest rate of LIBOR plus 2%, which ranged from 2.41% to 6.47% during fiscal year 2009. During fiscal
year 2008, borrowings under the term loan were at an interest rate of 6.47%.

On November 19, 2003, the Company purchased the property that serves as the Company’s corporate headquarters and
its Midwestern manufacturing facility. The Company executed a note and mortgage with LaSalle Bank N.A., (now Bank
of America) in the amount of $3,600,000. The Company refinanced the property on April 30, 2008. The new note bears a
fixed interest rate of 5.59% and is payable in sixty monthly installments. A final payment of approximately $2,115,438 is
due on or before April 30, 2013. At April 30, 2009, $2,661,438 and at April 30, 2008, $2,805,000 was outstanding.

In May 2002, the Company acquired a plant in Acuna, Mexico through seller financing. The loan of $1,950,000 was
payable in equal monthly installments of approximately $31,000 over six and a half years at a rate of 7% interest per
annum. Prior to acquiring that plant, the Company rented the facility. At April 30, 2008 there was $183,372 outstanding
under the loan. The loan was paid in full in October 2008.

Cash used in financing activities was $10,093,987 for the year ended April 30, 2009, compared to $711,871 in fiscal
year 2008. Cash used in financing activities was primarily the result of net payments made

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to reduce the balance outstanding under the Company’s revolving credit facility by $7,129,559. Cash used in financing
activities also was due to payments under the Company’s lease agreements, term loan, and building mortgage obligations.

The impact of inflation for the past three fiscal years has been minimal.

Off-balance Sheet Transactions:

The Company has no off-balance sheet transactions.

Contractual Obligations and Commercial Commitments:

As a smaller reporting company, as defined in Rule 12b-2 of the Securities Exchange Act of 1934, we are not required
to provide the information required by this item.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

As a smaller reporting company, as defined in Rule 12b-2 of the Securities Exchange Act of 1934, we are not required
to provide the information required by this item.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The response to this item is included in Item 15(a) of this Report.

ITEM 9. CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL

DISCLOSURE

Not applicable.

ITEM 9A (T). CONTROLS AND PROCEDURES

Our management, including our President and Chief Executive Officer and Chief Financial Officer, evaluated the
effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act
Rules 13a-15(e) and 15d-15(e)) as of April 30, 2009. Our disclosure controls and procedures are designed to ensure that
information required to be disclosed by the Company in the reports filed by the Company under the Securities Exchange
Act of 1934 (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in
the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated
to our management, including our President and Chief Executive Officer and Chief Financial Officer, as appropriate to
allow timely decisions regarding required disclosure. Based on this evaluation, our President and Chief Executive Officer
and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of
April 30, 2009.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting.
Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief
Financial Officer, we conducted an evaluation of the effectiveness of our internal

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control over financial reporting based on the framework in Internal Control — Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation, our management
concluded that our internal control over financial reporting was effective as of April 30, 2009. This report does not include
an attestation report of the Company’s registered public accounting firm regarding internal control over financial
reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm
pursuant to temporary rules of the SEC that permit the Company to provide only management’s report in this annual
report.

There has been no change in our internal control over financial reporting during the quarter ended April 30, 2009, that
has materially affected or is reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

Not Applicable.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required under this item is incorporated herein by reference to the Company’s definitive proxy
statement, to be filed with the Securities and Exchange Commission not later than 120 days after the close of the
Company’s fiscal year ended April 30, 2009.

ITEM 11. EXECUTIVE COMPENSATION

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND

RELATED STOCKHOLDER MATTERS

ITEM 13. CERTAIN RELATIONSHIPS, RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

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ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

PART IV

(a) 1

The financial statements, including required supporting schedule, are listed in the Index to Financial Statements filed as
part of this Annual Report on Form 10-K beginning on Page F-1.

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Index to Exhibits

(a) 2

3.1

3.2

10.1

10.2

10.3

10.4

10.5

10.6

10.7

10.8

10.9

10.10

10.11

Certificate of Incorporation of the Company, incorporated herein by reference to Exhibit 3.1 to Registration
Statement on Form S-1, File No. 33-72100, dated February 9, 1994.

Amended and Restated By-laws of the Company, adopted on September 24, 1999, filed as Exhibit 3.2 to the
Company’s Form 10-K for the fiscal year ended April 30, 2000, and hereby incorporated by reference.

Form of 1993 Stock Option Plan — filed as Exhibit 10.4 to the Company’s Registration Statement on Form S-1,
File No. 33-72100, and hereby incorporated by reference. *

Form of Incentive Stock Option Agreement for the Company’s 1993 Stock Option Plan — filed as Exhibit 10.5
to the Company’s Registration Statement on Form S-1, File No. 33-72100, and hereby incorporated by
reference. *

Form of Non-Statutory Stock Option Agreement for the Company’s 1993 stock Option Plan — filed as
Exhibit 10.6 to the Company’s Registration Statement on Form S-1, File No. 33-72100, and hereby incorporated
by reference. *

2000 Outside Directors’ Stock Option Plan and hereby incorporated by reference — filed as Appendix 1 to the
Company’s 2000 Proxy Statement filed on August 21, 2000*.

Loan and Security Agreement between SigmaTron International, Inc. and LaSalle National Bank dated
August 25, 1999, filed as Exhibit 10.26 to the Company’s Form 10-Q for the quarter ended October 31, 1999,
and hereby incorporated by reference.

2004 Directors’ Stock Option Plan and hereby incorporated by reference — filed as Appendix C to the
Company’s 2004 Proxy Statement filed on August 16, 2004. *

2004 Employee Stock Option Plan and hereby incorporated by reference — filed as Appendix B to the
Company’s 2004 Proxy Statement filed on August 16, 2004. *

Change in Control Plan dated May 30, 2002, filed as Exhibit 10.15 to the Company’s Form 10-K for the fiscal
year ended April 30, 2005, and hereby incorporated by reference.*

Tenth Amendment to Loan and Security Agreement between SigmaTron International, Inc. and LaSalle Bank
National Association, dated July 14, 2005, filed as Exhibit 10.18 to the Company’s Form 10-Q for the quarter
ended October 31, 2005, and hereby incorporated by reference.

Eleventh Amendment to Loan and Security Agreement between SigmaTron International, Inc. and LaSalle Bank
National Association, dated September 12, 2005, filed as Exhibit 10.19 to the Company’s Form 10-Q for the
quarter Ended October 31, 2005, and hereby incorporated by reference.

Twelfth Amendment to Loan and Security Agreement between SigmaTron International, Inc. and LaSalle Bank
National Association, dated July 31, 2006, filed as Exhibit 10.21 to the Company’s Form 10-Q for the quarter
ended July 31, 2006, and hereby incorporated by reference.

10.12

10.13

Thirteen Amendment to Loan and Security Agreement between SigmaTron International, Inc. and LaSalle Bank
National Association, dated October 20, 2006, filed as Exhibit 10.22 to the Company’s Form 10-Q for the
quarter ended October 31, 2006, and hereby incorporated by reference.

Fourteenth Amendment to Loan and Security Agreement between SigmaTron International, Inc. and LaSalle
Bank National Association, dated January 2007, filed as Exhibit 10.23 to the Company’s Form 10-Q for the
quarter ended January 31, 2007, and hereby incorporated by reference.

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10.14

10.15

10.16

Amended and Restated Mortgage Note between SigmaTron International, Inc. and LaSalle Bank National
Association dated April 30, 2008, and hereby incorporated by reference.

Sixteenth Amendment to Loan and Security Agreement between SigmaTron International, Inc. and LaSalle
Bank National Association, dated March 7, 2008, and hereby incorporated by reference.

Seventeenth Amendment to Loan and Security Agreement between SigmaTron International, Inc. and LaSalle
Bank National Association, dated June 25, 2008, filed as Exhibit 10.17 to the Company’s Form 10-Q for the
quarter ended July 31, 2008, and hereby incorporated by reference.

21.0

Subsidiaries of the Registrant to the Company’s Form 10-K for the fiscal year ended April 30, 2007, and hereby
incorporated by reference.

23.1

Consent of BDO Seidman, LLP.**

31.1

31.2

32.1

32.2

Certification of Principal Executive Officer of the Company Pursuant to Rule 13a-14(a) under the Exchange
Act, as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.**

Certification of Principal Financial Officer of the Company Pursuant to Rule 13a-14(a) under the Exchange Act,
as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.**

Certification by the Principal Executive Officer of SigmaTron International, Inc. Pursuant to Rule 13a-14(b)
under the Exchange Act and Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).**

Certification by the Principal Financial Officer of SigmaTron International, Inc. Pursuant to Rule 13a-14(b)
under the Exchange Act and Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).**

* Indicates management contract or compensatory plan.

** Filed herewith

The Company hereby files as exhibits to this Report the exhibits listed in Item 15(a)(3) above, which are attached hereto
or incorporated herein.

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Pursuant to the requirements of Section 13 or 15(d) 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.

SIGNATURES

SIGMATRON INTERNATIONAL, INC.

By: /s/ Gary R. Fairhead

Gary R. Fairhead, President and Chief
Executive Officer, Principal Executive
Officer and Director

Dated: July 17, 2009

KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned directors and officers of SigmaTron
International, Inc., a Delaware corporation, which is filing an Annual Report on Form 10-K with the Securities and
Exchange Commission under the provisions of the Securities Exchange Act of 1934 as amended, hereby constitute and
appoint Gary R. Fairhead and Linda K. Frauendorfer, and each of them, each of their true and lawful attorneys-in fact and
agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in all capacities, to sign
any or all amendments to the report to be filed with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all intents and purposes as each of them might or
could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following
persons on behalf of the Registrant and in the capacities, and on the dates indicated.

Signature

Title

Date

/s/ Franklin D. Sove

Chairman of the Board of Directors

July 17, 2009

Franklin D. Sove

/s/ Gary R. Fairhead

Gary R. Fairhead

President and Chief Executive Officer,
(Principal Executive Officer) and Director

July 17, 2009

/s/ Linda K. Frauendorfer

Linda K. Frauendorfer

Chief Financial Officer, Secretary and Treasurer
(Principal Financial Officer and Principal Accounting
Officer)

July 17, 2009

/s/ John P. Chen

John P. Chen

Director

July 17, 2009

/s/ Thomas W. Rieck

Director

July 17, 2009

Thomas W. Rieck

/s/ Dilip S. Vyas

Director

July 17, 2009

Dilip S. Vyas

/s/ Carl Zemenick

Director

July 17, 2009

Carl Zemenick

INDEX TO FINANCIAL STATEMENTS

SigmaTron International, Inc. and Subsidiaries

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEETS ASSETS

LIABILITIES AND STOCKHOLDERS’ EQUITY
CONSOLIDATED STATEMENTS OF OPERATIONS
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
CONSOLIDATED STATEMENTS OF CASH FLOWS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Financial statement schedules not listed above are omitted because they are not applicable or required.

F-1

Page

F-2

F-3
F-4
F-5
F-6
F-7
F-8

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders
SigmaTron International, Inc.
Elk Grove, Illinois

We have audited the accompanying consolidated balance sheets of SigmaTron International, Inc. as of April 30, 2009 and
2008 and the related consolidated statements of operations, changes in stockholders’ equity and cash flows for the years
then ended. These consolidated financial statements are the responsibility of the Company’s management. Our
responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a
basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such
opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial
position of SigmaTron International, Inc. at April 30, 2009 and 2008 and the results of its operations and its cash flows for
the years then ended, in conformity with accounting principles generally accepted in the United States of America.

/s/ BDO Seidman, LLP
Chicago, Illinois
July 10, 2009

F-2

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SigmaTron International, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
April 30,

ASSETS

2009

2008

CURRENT ASSETS

Cash and cash equivalents
Accounts receivable, less allowance for doubtful accounts of $167,788 and

$213,000 at April 30, 2009 and 2008, respectively

Inventories, net
Prepaid expenses and other assets
Deferred income taxes
Other receivables

$ 3,781,252

3,833,627

16,785,079
36,230,555
923,911
1,560,425
341,310

26,747,552
42,146,770
1,039,607
1,453,007
38,783

Total current assets

59,622,532

75,259,346

PROPERTY, MACHINERY AND EQUIPMENT, NET

26,200,578

29,354,623

LONG-TERM ASSETS

Other assets
Intangible assets, net of amortization of $2,161,113 and $1,811,931 at April 30,

2009 and 2008, respectively

699,379

1,034,155

608,887

958,069

Total long-term assets

TOTAL ASSETS

1,308,266

1,992,224

$87,131,376

$106,606,193

The accompanying notes are an integral part of these statements.

F-3

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SigmaTron International, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS — CONTINUED
April 30,

LIABILITIES AND STOCKHOLDERS’ EQUITY

2009

2008

CURRENT LIABILITIES
Trade accounts payable
Accrued expenses
Accrued payroll
Income taxes payable
Notes payable — bank
Notes payable — buildings
Capital lease obligations

$10,531,553
1,602,913
1,555,736
272,750
1,000,000
140,250
951,983

$ 19,722,175
2,297,601
2,583,379
555,380
1,000,000
326,935
1,595,931

Total current liabilities

16,055,185

28,081,401

NOTES PAYABLE — BANK, LESS CURRENT PORTION

19,746,696

27,876,255

NOTES PAYABLE — BUILDINGS, LESS CURRENT PORTION

2,521,188

2,661,437

CAPITAL LEASE OBLIGATIONS, LESS CURRENT PORTION

1,490,773

2,125,692

DEFERRED INCOME TAXES

1,915,649

2,446,449

Total liabilities

41,729,491

63,191,234

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS’ EQUITY

Preferred stock, $.01 par value; 500,000 shares authorized, none issued and

outstanding

Common stock, $.01 par value; 12,000,000 shares authorized, 3,822,556 shares

issued and outstanding at April 30, 2009 and 2008

Capital in excess of par value
Retained earnings

—

38,226
19,630,580
25,733,079

38,226
19,599,501
23,777,232

Total stockholders’ equity

45,401,885

43,414,959

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$87,131,376

$106,606,193

The accompanying notes are an integral part of these statements.

F-4

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SigmaTron International, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
Years ended April 30,

Net sales
Cost of products sold

Gross profit
Selling and administrative expenses
Goodwill impairment charge

Operating income (loss)

Other (income) expense
Interest expense

Income (loss) before income tax expense
Income tax expense

2009

2008

$133,744,642
117,769,739

$167,810,994
148,247,604

15,974,903
11,591,440
—

19,563,390
12,375,458
9,298,945

4,383,463
(219,479)
1,710,817

2,892,125
936,278

(2,111,013)
22,832
2,667,473

(4,801,318)
1,655,518

NET INCOME (LOSS)

1,955,847

$ (6,456,836)

Earnings (loss) per common share

Basic

Diluted

Weighted-average shares of common stock outstanding

Basic

Diluted

The accompanying notes are an integral part of these statements.

F-5

0.51

(1.69)

3,822,556

3,811,832

3,859,526

3,811,832

Table of Contents

SigmaTron International, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
Two years ended April 30, 2009 and 2008

Balance at May 1, 2007
Adjustment to initially apply FIN 48,
Accounting for Uncertainty in
Income Taxes
Exercise of options
Stock-based compensation
Net loss

Balance at April 30, 2008
Stock-based compensation
Net income

Preferred
stock

Common
stock

Capital in

excess of par

value

Retained
earnings

Total
stockholders’
equity

$ —

$37,950

$19,315,104

$30,387,968

$49,741,022

—
—
—
—

—
—
—

—
276
—
—

—
252,816
31,581
—

(153,900)
—
—
(6,456,836)

(153,900)
253,092
31,581
(6,456,836)

38,226
—
—

19,599,501
31,079
—

23,777,232
—
1,955,847

43,414,959
31,079
1,955,847

Balance at April 30, 2009

$ —

$38,226

$19,630,580

$25,733,079

$45,401,885

The accompanying notes are an integral part of these statements.

F-6

Table of Contents

SigmaTron International, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended April 30,

Cash flows from operating activities

Net income (loss)
Adjustments to reconcile net income (loss) to net cash provided by operating

activities

Depreciation and amortization
Goodwill impairment charge
Stock-based compensation
Provision for doubtful accounts
Provision for inventory obsolescence
Deferred income tax benefit
Amortization of intangible assets
Loss from sale of machinery and equipment

Changes in operating assets and liabilities

Accounts receivable
Inventories
Prepaid expenses and other assets
Trade accounts payable
Accrued expenses and wages
Income taxes

2009

2008

$ 1,955,847

$(6,456,836)

4,035,804
—
31,079
17,788
157,000
(518,981)
349,182
279,521

4,004,108
9,298,945
31,581
63,000
477,719
(490,787)
503,703
—

9,944,685
5,759,215
147,945
(9,190,622)
(1,722,331)
(401,867)

(6,530,677)
(1,774,698)
406,977
4,248,515
26,057
355,862

Net cash provided by operating activities

10,844,265

4,163,469

Cash flows from investing activities

Proceeds from sale of machinery and equipment
Purchases of machinery and equipment

18,052
(820,705)

12,396
(2,400,020)

Net cash used in investing activities

(802,653)

(2,387,624)

Cash flows from financing activities

Proceeds from exercise of options
Payments under building notes payable
Proceeds under sale lease back agreements
Payments under capital lease obligations
Payments under term loan
Net (payments) proceeds under lines of credit

—
(326,934)
—
(1,637,494)
(1,000,000)
(7,129,559)

253,092
(528,092)
615,855
(1,709,966)
(1,000,000)
1,657,240

Net cash used in financing activities

(10,093,987)

(711,871)

(DECREASE) INCREASE IN CASH

(52,375)

1,063,974

Cash and cash equivalents at beginning of year

3,833,627

2,769,653

Cash and cash equivalents at end of year

$ 3,781,252

$ 3,833,627

Supplementary disclosures of cash flow information

Cash paid for interest
Cash paid for income taxes, net of (refunds)
Purchase of machinery and equipment financed under capital lease

obligations

Purchase of machinery and equipment financed under sale lease back

agreements

The accompanying notes are an integral part of these statements.

F-7

$ 1,810,000
1,560,243

$ 2,512,453
1,594,771

358,627

—

615,855

Table of Contents

SigmaTron International, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
April 30, 2009 and 2008

NOTE A — DESCRIPTION OF THE BUSINESS

SigmaTron International, Inc. and its subsidiaries (the “Company”) operate in one business segment as an independent
provider of electronic manufacturing services (“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) design, manufacturing and test engineering support; (4) warehousing and shipment
services; and (5) 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 North America, China and
Taiwan. Approximately 10% and 9% of the consolidated non-current assets of the Company are located in foreign
jurisdictions outside the United States as of April 30, 2009 and 2008, respectively.

NOTE B — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Consolidation Policy

The consolidated financial statements include the accounts and transactions of the Company, its wholly-owned
subsidiaries, Standard Components de Mexico, S.A., and AbleMex S.A. de C.V., SigmaTron International Trading Co., its
wholly-owned foreign enterprise Wujiang SigmaTron Electronics Co. Ltd. (“SigmaTron China”), and its procurement
branch, SigmaTron Taiwan. The functional currency of the Mexican and Chinese subsidiaries and procurement branch is
the U.S. dollar.

Use of Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the
United States of America requires management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements
and the reported amounts of revenues and expenses during the reporting period. Significant estimates made in preparing
the consolidated financial statements include depreciation and amortization periods, the allowance for doubtful accounts,
reserves for inventory and valuation of long-lived assets. Actual results could materially differ from these estimates.

F-8

Table of Contents

SigmaTron International, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED
April 30, 2009 and 2008

NOTE B — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — Continued

Cash and Cash Equivalents

Cash and cash equivalents include cash and all highly liquid short-term investments maturing within twelve months of the
purchase date.

Accounts Receivable

The majority of the Company’s accounts receivable are due from companies in the consumer electronics, gaming, fitness,
industrial electronics, life sciences, semiconductor, telecommunications, appliance and automotive industries. Credit is
extended based on evaluation of a customer’s financial condition, and, generally, collateral is not required. Accounts
receivable are due in accordance with agreed upon terms, and are stated at amounts due from customers net of an
allowance for doubtful accounts. Accounts outstanding longer than the contractual payments terms are considered past
due. The Company writes off accounts receivable when they are determined to be uncollectible.

Allowance for Doubtful Accounts

The Company’s allowance for doubtful accounts relates to receivables not expected to be collected from our customers.
This allowance is based on management’s assessment of specific customer balances, considering the age of receivables
and financial stability of the customer and a five year average of prior uncollectible amounts. If there is an adverse change
in the financial condition of the Company’s customers, or if actual defaults are higher than provided for, an addition to the
allowance may be necessary.

Inventories

Inventories are valued at the lower of cost or market. Cost is determined by the first-in, first-out method. The Company
establishes inventory reserves for valuation, shrinkage, and excess and obsolete inventory. Actual results differing from
these estimates could significantly affect the Company’s inventories and cost of products sold. The Company records
provisions for excess and obsolete inventories for the difference between the cost of inventory and its estimated realizable
value based on assumptions about future product demand and market conditions. Actual product demand or market
conditions could be different than that projected by management.

F-9

Table of Contents

SigmaTron International, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED
April 30, 2009 and 2008

NOTE B — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — Continued

Inventory Policies

The Company’s inventories include parts and components that may be specialized in nature or subject to customers’ future
usage requirements. The Company has programs to minimize the required inventories on hand and actively monitors
customer purchase orders, forecasts and backlog. The Company uses estimated allowances to reduce recorded amounts to
market values; such estimates could change in the future.

Property, Machinery and Equipment

Property, machinery and equipment are valued at cost. The Company provides for depreciation and amortization using the
straight-line method over the estimated useful life of the assets:

Buildings
Machinery and equipment
Office equipment
Tools and dies
Leasehold improvements

Income Taxes

20 years
5-12 years
5 years
12 months
term of lease

Deferred income tax assets and liabilities are determined based on differences between financial reporting and tax bases of
assets and liabilities, and are measured using the enacted tax rates and laws that will be in effect when the differences are
expected to reverse. Valuation allowances are established when necessary to reduce deferred income tax assets to an
amount more likely than not to be realized.

Earnings per Share

Basic earnings per share are computed by dividing income (loss) available to common stockholders (the numerator) by the
weighted-average number of common shares outstanding (the denominator) for the period. The computation of diluted
earnings per share is similar to the computation of basic earnings per share, except that the denominator is increased to
include the number of additional common shares that would have been outstanding if the potentially dilutive common
shares had been issued. At April 30, 2009 and 2008, there were 413,090 and 498,707 anti-dilutive shares, respectively.

F-10

Table of Contents

SigmaTron International, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED
April 30, 2009 and 2008

NOTE B — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — Continued

Revenue Recognition

Revenues from sales of the Company’s electronic manufacturing services business are recognized when the product is
shipped to the customer. In general, it is the Company’s policy to recognize revenue and related costs when the order has
been shipped from our facilities, which is also the same point that title passes under the terms of the purchase order except
for consignment inventory. Consignment inventory is shipped from the Company to an independent warehouse for storage
or shipped directly to the customer and stored in a segregated part of the customer’s own facility. Upon the customer’s
request for inventory, the consignment inventory is shipped to the customer if the inventory was stored offsite or
transferred from the segregated part of the customer’s facility for consumption, or use, by the customer. The Company
recognizes revenue upon such transfer. The Company does not earn a fee for storing the consignment inventory. The
Company generally provides a 90 day warranty for workmanship only and does not have any installation, acceptance or
sales incentives, although the Company has negotiated longer warranty terms in certain instances. The Company
assembles and tests assemblies based on customers’ specifications. Historically, the amount of returns for workmanship
issues has been de minimis under the Company’s standard or extended warranties. Any returns for workmanship issues
received after each period end are accrued in the respective financial statements.

Shipping and Handling Costs

The Company records shipping and handling costs within selling and administrative expenses. Customers are typically
invoiced for shipping costs. Shipping and handling costs were not material to the financial statements for fiscal years 2009
or 2008.

Fair Value of Financial Instruments

The Company’s financial instruments include receivables, debt, accounts payable, and accrued expenses. The fair values
of financial instruments are not materially different from their carrying values, due to the short-term nature of receivables,
accounts payable and accrued expenses and the market interest rates charged on the Company’s long-term debt.

Long-Lived Assets

The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. An asset is

F-11

Table of Contents

SigmaTron International, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED
April 30, 2009 and 2008

NOTE B — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — Continued

Long-Lived Assets — Continued

considered impaired if its carrying amount exceeds the future undiscounted net cash flow the asset is expected to generate.
If such asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the
carrying amount of the asset exceeds its fair market value.

Goodwill and Other Intangibles

In January 2008, the Company changed the date of its annual goodwill impairment test from the last day of the fiscal year
to the first day of the fiscal fourth quarter. The impairment test procedures were carried out during the fourth quarter and
up to the time of the filing of the Company’s Form 10-K for fiscal year 2008, which allowed the Company additional time
to complete the required analysis. The Company believes that the resulting change in accounting principle related to the
annual testing date did not delay, accelerate or avoid an impairment charge. The Company determined that the change in
accounting principle related to the annual testing date was preferable under the circumstances and did not result in
adjustments to the Company’s financial statements when applied retrospectively. During the fiscal year 2008, the
Company performed its annual goodwill impairment testing and the carrying value of the Company’s reporting unit
exceeded the fair value indicating a goodwill impairment. The Company completed the second step of the goodwill
impairment test used to measure the amount of the impairment loss by comparing the implied fair value of the reporting
unit goodwill with

F-12

Table of Contents

SigmaTron International, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED
April 30, 2009 and 2008

NOTE B — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — Continued

Goodwill and Other Intangibles — Continued

the carrying amount of the goodwill. As a result of this impairment analysis, the Company recorded an impairment charge
for the full amount of goodwill ($9.3 million) during the fiscal year ended April 30, 2008. The impairment was due to
continuing customer pricing pressures and uncertain economic conditions as well as the Company’s declining stock price
during fiscal 2008.

The following are the changes in the carrying amount of intangible assets, net of accumulated amortization:

Balance as of May 1, 2007
Amortization expense 2008

Balance as of April 30, 2008
Amortization expense 2009

Balance as of April 30, 2009

Amortization period

Non-
competes and
Backlog

5,826
(5,826)

Customer
Relationships
$1,455,946
(497,877)

Total
$1,461,772
(503,703)

—
—

958,069
(349,182)

—

$ 608,887

2 years

8 years

N/A

The estimated intangible amortization expenses for the next five years are as follows:

Years Ended April 30,

2010
2011
2012
2013
2014

The Company’s intangible assets are amortized utilizing accelerated amortization methods.

F-13

$245,216
163,998
112,746
75,850
11,077

$608,887

Table of Contents

SigmaTron International, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED
April 30, 2009 and 2008

NOTE B — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — Continued

Stock Incentive Plans

Under the Company’s stock option plans, options to acquire shares of common stock have been made available for grant to
certain employees and directors. Each option granted has an exercise price of not less than 100% of the market value of
the common stock on the date of grant. The contractual life of each option is generally 10 years. The vesting of the grants
varies according to the individual options granted. The Company measures the cost of employee services received in
exchange for an equity award based on the grant date fair value.

New Accounting Standards

In February 2007, the FASB issued SFAS No. 159 “The Fair Value Options for Financial Assets and Financial
Liabilities” (“SFAS No. 159”). (ASC 820-10-10-1) SFAS 159 permits entities to choose to measure many financial assets
and financial liabilities at fair value. Unrealized gains and losses on items for which the fair value option has been elected
are reported in earnings. SFAS No. 159 was effective for fiscal years beginning after November 15, 2007. The Company
did not elect the fair value option pursuant to SFAS 159.

F-14

Table of Contents

SigmaTron International, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED
April 30, 2009 and 2008

NOTE B — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — Continued

New Accounting Standards — Continued

acquisition-related costs and restructuring costs separately from the business combination as period expense. This
Statement is effective for business combinations for which the acquisition date is on or after the beginning of the first
annual reporting period beginning on or after December 15, 2008. The Company will implement SFAS No. 141(R) for any
business combinations occurring subsequent to April 30, 2009.

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling interests in Consolidated Financial Statements—an
amendment of Accounting Research Bulletin No. 51” (“SFAS 160”), (ASC 810-10-65-1). SFAS 160 establishes
accounting reporting standards for ownership interests in subsidiaries held by parties other than the parent, the amount of
consolidated net income attributable to the parent and to the noncontrolling interest, changes in a parent’s ownership
interest, and the valuation of retained noncontrolling equity investments when a subsidiary is deconsolidated. SFAS 160
also establishes disclosure requirements that clearly identify and distinguish between the interests of the parent and the
interests of the noncontrolling owners. SFAS 160 is effective for fiscal years beginning after December 15, 2008. The
Company has determined that SFAS 160 will not have a material impact on its consolidated results of operations and
financial condition.

NOTE C — ALLOWANCE FOR DOUBTFUL ACCOUNTS

Changes in the Company’s allowance for doubtful accounts are as follows:

Beginning balance
Bad debt expense
Write-offs

2009

2008

$213,000
17,788
(63,000)

$150,000
63,000
—

$167,788

$213,000

F-15

Table of Contents

SigmaTron International, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED
April 30, 2009 and 2008

NOTE D — INVENTORIES

Inventories consist of the following at April 30:

Finished products
Work in process
Raw materials

Less obsolescence reserve

Changes in the Company’s inventory obsolescence reserve are as follows:

Beginning balance
Provision for obsolescence
Write-offs

F-16

2009

2008

$11,644,129
2,391,559
23,993,727

$18,735,846
2,542,762
22,591,181

38,029,415

43,869,789

1,798,860

1,723,019

$36,230,555

$42,146,770

2009

2008

$1,723,019
157,000
(81,159)

$1,245,300
477,719
—

$1,798,860

$1,723,019

Table of Contents

SigmaTron International, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED
April 30, 2009 and 2008

NOTE E — PROPERTY, MACHINERY AND EQUIPMENT, NET

Property, machinery and equipment consist of the following at April 30:

Land and buildings
Machinery and equipment
Office equipment
Tools and dies
Leasehold improvements
Equipment under capital leases

Less accumulated depreciation and amortization, including amortization of assets
under capital leases of $1,218,393 and $1,631,488 at April 30, 2009 and 2008,
respectively

2009

2008

$12,021,913
38,670,381
3,947,899
288,598
3,089,065
4,899,539

$11,920,435
36,046,726
3,764,374
288,598
3,019,545
7,445,202

62,917,395

62,484,880

36,716,817

33,130,257

Property, machinery and equipment, net

$26,200,578

$29,354,623

Depreciation and amortization expense was $4,035,804 and $4,004,108 for the years ended April 30, 2009 and 2008,
respectively.

NOTE F — LONG-TERM DEBT

Note Payable — Bank

The Company has a revolving credit facility under which the Company may borrow up to the lesser of (i) $32 million or
(ii) an amount equal to the sum of 85% of the receivable borrowing base and the lesser of $16 million or a percentage of
the inventory borrowing base. As of April 30, 2009 and 2008, $18,746,696 and $25,876,255, respectively, was outstanding
under the revolving credit facility. Borrowings under this revolving credit facility bear interest at either prime rate less
0.25% (3% at April 30, 2009) or LIBOR plus 2% (3.12% at April 30, 2009), as elected by the Company. The Company
must also pay an unused commitment fee equal to 0.20% on the revolving credit facility. There was approximately
$7.8 million of unused

F-17

Table of Contents

SigmaTron International, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED
April 30, 2009 and 2008

NOTE F — LONG TERM DEBT — Continued

Note Payable — Bank — Continued

availability under the revolving credit facility as of April 30, 2009. In June 2008, the Company amended the revolving
credit facility to extend the term of the agreement until September 30, 2010 from September 30, 2009 and amended certain
financial covenants.

The revolving credit facility and term loan are collateralized by substantially all of the domestically located assets of the
Company and contain certain financial covenants, including specific covenants pertaining to the maintenance of minimum
tangible net worth and net income. The agreement also restricts annual lease rentals and capital expenditures and the
payment of dividends.

Note Payable — Buildings

F-18

Table of Contents

SigmaTron International, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED
April 30, 2009 and 2008

NOTE F — LONG TERM DEBT — Continued

Note Payable — Buildings — Continued

is payable in sixty monthly installments. A final payment of approximately $2,115,438 is due on or before April 30, 2013.
At April 30, 2009, $2,661,438 and at April 30, 2008, $2,805,000 was outstanding.

The aggregate amount of debt maturing (excluding capital lease obligations) in each of the next four fiscal years is as
follows:

Fiscal Year

2010
2011
2012
2013

$ 1,140,250
19,886,946
140,250
2,240,688

$23,408,134

F-19

Table of Contents

SigmaTron International, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED
April 30, 2009 and 2008

NOTE G — ACCRUED EXPENSES AND WAGES

Accrued expenses and wages consist of the following at April 30:

Wages
Bonuses
Interest payable
Commissions
Professional fees
Foreign payroll accruals
Other

2009

2008

$1,555,736
—
41,101
36,514
228,161
708,433
588,704

$1,638,659
944,720
144,046
42,298
335,202
734,790
1,021,265

$3,158,649

$4,860,980

F-20

Table of Contents

SigmaTron International, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED
April 30, 2009 and 2008

NOTE H — INCOME TAXES

The income tax provision (benefit) for the years ended April 30 consists of the following:

Current

Federal
State
Foreign

Deferred

Federal
State

2009

2008

$1,037,422
179,311
238,526

$1,707,890
242,740
195,675

(452,450)
(66,531)

(438,236)
(52,551)

$ 936,278

$1,655,518

The differences between the income tax provision and the amounts computed by applying the statutory Federal income tax
rates to income (loss) before income tax expense for the years ended April 30 are as follows:

Income tax at
Federal rate
State income tax, net of federal
Goodwill impairment charge
Benefit of Chinese tax holiday
Other, net

2009

2008

$983,322
51,814
—
(81,438)
(17,420)

$(1,632,448)
(143,867)
3,626,589
—
(194,756)

$936,278

$ 1,655,518

F-21

Table of Contents

SigmaTron International, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED
April 30, 2009 and 2008

NOTE H — INCOME TAX — Continued

U.S. and foreign income (loss) before income tax expense for the years ended April 30 are as follows:

U.S.
Foreign

Total

2009

2008

$1,857,492
1,034,633

$(5,513,683)
712,365

$2,892,125

$(4,801,318)

Significant temporary differences that result in deferred tax assets and (liabilities) at April 30, are as follows:

Allowance for doubtful accounts
Inventory obsolescence reserve
Accruals not currently deductible
Inventory

Current deferred tax asset

Prepaid insurance

2009

2008

65,436
701,546
461,619
402,765

83,069
671,969
325,478
402,539

1,631,366

1,483,055

(70,941)

(30,048)

Current deferred tax liability

(70,941)

(30,048)

Net current deferred tax asset

$1,560,425

$1,453,007

Intangible assets
Machinery and equipment
Other

2009

2008

$ (237,463)
(1,670,023)
(8,163)

$ (373,642)
(2,072,807)
—

Net long-term deferred tax liability

$(1,915,649)

$(2,446,449)

F-22

Table of Contents

SigmaTron International, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED
April 30, 2009 and 2008

NOTE H — INCOME TAX — Continued

The Company’s wholly-owned foreign enterprise, SigmaTron China, is subject to a reduction in income taxes within
China due to its foreign investment. The reduction in taxes is for a five year period commencing in the period the
operation becomes profitable, but not in effect after December 31, 2009.

In June 2006, the FASB issued an interpretation of FASB Statement No. 109 (“FIN 48”), (ASC 740-10-05-06) that
clarifies the accounting and recognition for income tax positions taken or expected to be taken in the Company’s tax
returns. The Company adopted FIN 48 on May 1, 2007. The Company recorded the cumulative effect of a change in
accounting principle by recording an increase in the liability for uncertain tax positions of $153,900 that was accounted for
as a debit to opening retained earnings. The entire amount of the consolidated worldwide liability for uncertain tax
positions could affect the Company’s effective tax rate upon favorable resolution of the uncertain tax positions. Absent
new experience in defending these uncertain tax positions in the various jurisdictions to which they relate, the Company
cannot currently estimate a range of possible change of the April 30, 2009 liability over the next twelve months.

A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding interest and penalties, is as
follows:

Balance at May 1,
Additions based on tax positions related to current year
Additions for tax positions in prior years
Reductions for tax positions of prior years

Balance at April 30,

2009

2008

$145,591
—
—
—

$153,900
—
6,494
(14,803)

$145,591

Interest related to tax positions taken in the Company’s tax returns are recorded in income tax expense in the Consolidated
Statements of Operations.

F-23

Table of Contents

SigmaTron International, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED
April 30, 2009 and 2008

NOTE H — INCOME TAX — Continued

The Company files a U.S. income tax return and tax returns in various states. The Company’s subsidiaries also file tax
returns in various foreign jurisdictions. In addition to the U.S., the Company’s major taxing jurisdictions include China
and Mexico. In the U.S., fiscal years 2006 through 2009 are open under the statue of limitations. The Company’s Chinese
enterprise operated under a tax holiday, resulting in no uncertain tax positions for that entity for the 2005 and 2006 tax
year. The Company’s Chinese enterprise operates under a 50% tax holiday for tax years 2007 through 2009, which tax
years are open under the statue of limitations. In Mexico, tax years from 2005 through 2009 remain open.

NOTE I — 401(k) RETIREMENT SAVINGS PLAN

The Company sponsors 401(k) retirement savings plans, which are available to all non-union U.S. employees. The
Company may elect to match participant contributions up to $300 annually. The Company contributed $95,569 and
$96,905 to the plans during the fiscal years ended April 30, 2009 and 2008, respectively. The Company paid total
expenses of $9,400 and $8,830 for the fiscal years ended April 30, 2009 and 2008, respectively, relating to costs associated
with the administration of the plans.

NOTE J — MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK

Financial instruments that potentially subject the Company to concentration of credit risk consist principally of
uncollateralized accounts receivable. For the fiscal year ended April 30, 2009, two customers accounted for 27.5% and
18.2% of net sales of the Company, and 49.1% and 6.9% of accounts receivable at April 30, 2009. For the year ended
April 30, 2008, two customers accounted for 23.0% and 20.6% of net sales of the Company, and 33.7% and 17.5% of
accounts receivable at April 30, 2008.

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Table of Contents

SigmaTron International, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED
April 30, 2009 and 2008

NOTE K — LEASES

The Company leases certain facilities under various operating leases. The Company also leases various machinery and
equipment under capital leases.

Future minimum lease payments under leases with terms of one year or more are as follows at April 30, 2009:

Years ending April 30,

2010
2011
2012
2013
2014
Thereafter

Less amounts representing interest

Less current portion

Capital
leases

Operating

leases

$1,088,826
857,245
514,047
200,934
27,856
—

$1,503,348
819,889
101,994
10,800
10,800
18,000

2,688,908

$2,464,831

246,152

2,442,756

951,983

$1,490,773

Rent expense incurred under operating leases was approximately $1,533,000 and $1,505,000 for the years ended April 30,
2009 and 2008, respectively.

F-25

Table of Contents

SigmaTron International, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED
April 30, 2009 and 2008

NOTE L — STOCK OPTIONS

The Company has stock option plans (“Option Plans”) under which certain employees and outside non-employee directors
may acquire up to 1,603,500 shares of common stock. Options available for grant under the employee plans total
1,207,500, with the non-employee director plans allowing for a total of 396,000 options available for grant. At April 30,
2009, the Company has 53,464 shares available for future issuance to employees under the Option Plans. The Option
Plans are interpreted and administered by the Compensation Committee of the Board of Directors. The maximum term of
options granted under the Option Plans is generally 10 years. Options granted under the Option Plans are either incentive
stock options or nonqualified options. Options forfeited under the Option Plans are available for reissuance. Options
granted under these plans are granted at an exercise price equal to the fair market value of a share of the Company’s
common stock on the date of grant.

The weighted-average grant date fair value of the options granted during fiscal years 2009 and 2008 was $5.40 and
$11.56, respectively.

The fair value of each option grant is estimated on the grant date using the Black-Scholes option pricing model with the
following assumptions:

Expected dividend yield
Expected stock price volatility
Average risk-free interest rate
Weighted-average expected life of options

2009

2008

.750
1.70%

.750
3.91%

6.5 years

Option-valuation models require the input of highly subjective assumptions. Because the Company’s employee stock
options have characteristics significantly different from those of traded options, and because changes in the subjective
input assumptions can materially affect the fair value estimate, in management’s opinion the existing method does not
necessarily provide a reliable single measure of the fair value of the Company’s employee stock options. The Company
used the U.S. Treasury yield in effect at the time of the option grant to calculate the risk-free interest rate. The weighted-
average expected life of options was calculated using the simplified method, due to limited history. The expected volatility
and forfeitures of options is based on historical experience and expected future results.

F-26

Table of Contents

SigmaTron International, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED
April 30, 2009 and 2008

NOTE L — STOCK OPTIONS — Continued

The table below summarizes option activity through April 30, 2009:

Number of
options

Weighted-
average
exercise
price

Number of
options
exercisable
at end
of year

Outstanding at April 30, 2007

531,307

$ 8.00

502,701

Options granted during 2008
Options exercised during 2008
Options forfeited during 2008
Options expired during 2008

Outstanding at April 30, 2008

Options granted during 2009

Outstanding at April 30, 2009

2,500
(27,600)
(4,400)
(3,100)

498,707

5,000

503,707

11.56
9.17
9.17
12.25

7.92

5.40

7.89

477,847

496,671

The aggregate intrinsic value is calculated as the difference between the market price of the Company’s common stock and
the exercise price of the underlying options. During the fiscal years ended April 30, 2009 and 2008, the aggregate intrinsic
value of options exercised was $0 and $67,620, respectively. The aggregate intrinsic value of in the money options
outstanding was $0 as of April 30, 2009.

F-27

Table of Contents

SigmaTron International, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED
April 30, 2009 and 2008

NOTE L — STOCK OPTIONS — Continued

Information with respect to stock options outstanding and stock options exercisable at April 30, 2009, follows:

Range of exercise prices

$2.20 - 5.63
9.17 - 11.56

Range of exercise prices

$2.20 - 5.63
9.17 - 11.56

Number
outstanding at
April 30, 2009

Options outstanding
Weighted-average
remaining

contractual life

108,515
395,192

3.64 years
6.82 years

503,707

Weighted-
average
exercise price

2.64
9.34

7.89

Options exercisable

Number

exercisable at
April 30, 2009

Weighted-
average
exercise price

104,765
391,906

496,671

2.54
9.22

7.82

The Company granted 5,000 and 2,500 options to non-executive employees and recognized approximately $31,000 and
$32,000 in stock compensation expense in fiscal years 2009 and 2008, respectively. The Company recognized a tax benefit
of approximately $12,000 in fiscal years 2009 and 2008.

As of April 30, 2009, there was approximately $28,850 of unrecognized compensation cost related to the Company’s stock
option plans. Compensation cost of $7,120 is being amortized over a three-year vesting period using a straight-line basis
and compensation cost of $21,730 is being amortized over a four year vesting period using a straight-line basis.

F-28

Table of Contents

SigmaTron International, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED
April 30, 2009 and 2008

NOTE M — SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

The following is a summary of unaudited quarterly financial data for fiscal year 2009:

2009

Net sales

First
quarter

Second
quarter

Third
quarter

Fourth
quarter

$38,478,118

$41,132,728

$26,970,927

$27,162,869

Income (loss) before income tax expense

977,903

2,070,389

(160,585)

4,418

Net income (loss)

579,324

1,505,316

(265,458)

136,665

Earnings (loss) per share-Basic

Earnings (loss) per share-Diluted

0.15

0.39

(0.07)

0.04

Total shares-Basic

3,822,556

Total shares-Diluted

3,884,075

3,874,643

3,822,556

F-29

Table of Contents

SigmaTron International, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED
April 30, 2009 and 2008

NOTE M — SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) — Continued

The following is a summary of unaudited quarterly financial data for fiscal year 2008:

2008

Net sales

First
quarter

Second
quarter

Third
quarter

Fourth
quarter

$39,843,813

$42,815,107

$41,131,744

$44,020,330

Income (loss) before income tax expense

1,276,100

1,070,014

517,023

(7,664,455)

Net income (loss)

826,988

693,274

312,464

(8,289,562)

Earnings (loss) per share-Basic

Earnings (loss) per share-Diluted

0.22

0.21

0.18

0.08

(2.17)

Total shares-Basic

3,794,956

3,807,492

3,822,556

Total shares-Diluted

3,889,274

3,962,531

3,897,314

3,822,556

F-30

Table of Contents

SigmaTron International, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED
April 30, 2009 and 2008

NOTE N — LITIGATION

As of April 30, 2009, the Company was not a party to any material legal proceedings.

From time to time the Company is involved in legal proceedings, claims or investigations that are incidental to the conduct
of the Company’s business. In future periods, the Company could be subjected to cash cost or non-cash charges to
earnings if any of these matters are resolved on unfavorable terms. However, although the ultimate outcome of any legal
matter cannot be predicted with certainty, based on present information, including management’s assessment of the merits
of any particular claim, the Company does not expect that these legal proceedings or claims will have any material adverse
impact on its future consolidated financial position or results of operations.

F-31