SigmaTron International Inc.
Annual Report 2022

Plain-text annual report

SIGMATRON INTERNATIONAL, INC. ANNUAL REPORT 2022 About the Company For nearly three decades, SigmaTron International, Inc. (SII) continues as an Electronic Manufacturing Services (EMS) provider of printed circuit board assemblies (PCBAs) and complete box-build electronic products to customers in three diverse end-user markets: Industrial, Consumer and Medical/Life Sciences. In addition the Company provides IoT-enabled EMS for the pet technology market. We offer differentiated services through a global network of seven manufacturing facilities in the United States, Mexico, China and Vietnam, with a company- wide International Procurement Office (IPO) in Taiwan. The Company provides superior EMS value from engineering and design services to component sourcing, manufacturing, test and fulfillment. SIGMATRON INTERNATIONAL Y-TO-Y GROWTH Dollars in Millions PRE-TAX INCOME SALES REVENUES RESILIENT SigmaTron reports banner financial results for FY22, despite geopolitical and industry issues that confronted the EMS industry as a whole. We acknowledge our tenured leadership and teams who responded with resiliency to our customers from the five countries where we operate and embraced our long-held operating principles. $281M$278MFY21FY20$1MFY20$14MFY22$2MFY21$379MFY22To Our Stockholders, SigmaTron International, Inc. (SII) proudly reports that fiscal year 2022 (FY22) was a banner year with record financial results for the Company. With commitment forged at every level of the organization, our talented people applied our long-held operating principles to achieve this benchmark while facing formidable economic, supply chain, and geopolitical uncertainties that affected all electronic manufacturing services (EMS). From this year’s rigorous environment, SII served a highest ever number of finished products and technically sophisticated customer programs, and made many a foray into exciting new industrial markets: clean energy, industrial internet of things (IIoT), safety sensors, and pet technology (“pet tech”). SII’S RECORD FY22 FINANCIAL RESULTS For FY22, revenues increased to $379 million from $278 million in the prior fiscal year; net income increased to $9.9 million in FY22 compared with $1.5 million in FY21. Basic and diluted earnings per share (EPS) for the fiscal year were $2.04 and $1.92, respectively, compared to basic and diluted EPS of $0.36 each in FY21. These year-end results built upon positive trends that emerged in Q4 FY21 and accelerated throughout FY22. OUR Q3 ACQUISITION OF WAGZ INC. SII acquired Wagz Inc. (“Wagz”), a pet tech company, as a wholly-owned subsidiary on December 31, 2021. FY22 includes four months of operating results for Wagz which, as an emerging company, is continuing steps toward profitability. Following completion of the Wagz acquisition, the Company’s number of shares increased by 1.6 million. An innovator in the pet tech market, Wagz focuses on modernizing pet containment with its patented product array. Our combined companies drive synergies from Wagz’ expert, innovative pet tech products from which flow dedicated EMS revenues to SII. Longer-term, Wagz’ internet of things (IoT) infrastructure—when combined with SII’s total EMS solution—is expected to drive other income potential from industrial and consumer customers who require manufacturing expertise for the latest IoT and Internet 3.0-enhanced products. FY22 LEADERSHIP ANNOUNCEMENTS: BUILDING OUR FUTURE Amid significant growth and continuity in our commitment toward next generation EMS, SII made leadership announcements in FY22. Following over 30 years of dedicated service to the Company, most recently as CFO, Linda K. Frauendorfer announced her retirement in Q2, while maintaining her role as a SII Board of Directors member. Her replacement, James J. Reiman, CFO, was announced concurrently. In Q2, James E. Barnes, Executive Vice President and an 18-year Company veteran, was promoted to President of SII to lead our traditional EMS business. Also, in Q3 post-Wagz acquisition and to keep pace with growth and expansion, Gary R. Fairhead was named as Chairman of the Board of Wagz Inc., while continuing as CEO and Chairman of the Board of SII. Wagz founder, Terry B. Anderton, remains the subsidiary’s CEO and President. SII MANAGES INDUSTRYWIDE CHALLENGES IN FY22 With operating resilience, SII mitigated no fewer than four industrywide challenges. ■ Supply Chain Constraints – Demand, primarily in the semiconductor segment of the electronic component marketplace, continued to significantly exceed supply, creating pricing and availability issues. ■ The U.S. Economy – In FY22, the U.S. economy grew moderately as COVID-19 cases declined overall but was offset by the GDP’s sharp contraction. By Q3, inflation rose by +1.5% to 7.9%—a 40-year high. By Q4, the Federal Reserve tightened its sell-off with U.S. stimulus relief funding expected to drive unknown outcomes well into FY23. For this, SII plans to manage any volatility or risks posed to our customers and business. ■ Geopolitical Events – Certain global business disruptions followed Russia’s invasion of Ukraine and resulting sanctions. Currently, our main concerns are the impacts of war on our supply chain, namely neon and other noble gases essential to semiconductors, and other raw materials such as Russian-produced palladium. ■ COVID-19 and Variants – SII continued essential business status, complied with all local guidelines for our operations, and addressed global pandemic hotspots. In FY22, SII China faced its worst COVID-19 outbreak in two years with intensified lockdowns in multiple cities, especially Shanghai, a global transportation hub. In Q2 FY22, Asia’s lockdowns included SII Vietnam. Then in Q3, SII Mexico saw a temporary reduction in its operations. Going forward, should any of these industry factors persist, SII will respond accordingly. FY22 AR SIGMATRON INTERNATIONAL | 1 EMS MARKET’S STEADY GROWTH AND SII’S DIFFERENTIATION WITHIN IT The EMS market size grew at a CAGR of 7-8% in FY22 to reach $576 billion. Amid market dynamism in EMS and despite known challenges and purchase price variances (PPV), SII’s core strengths fueled Company growth above 7-8%, driving benefits to customers and employees alike. These strengths include: ■ High Quality, Reliable EMS – For our customers, it bears repeating that it is not our goal to be the largest EMS but to be the globally reliable EMS with the highest standards of personalized service for our customers. ■ Our Committed Teams – SII’s record year of financial growth and stockholder value is attributable to our highly-skilled and diverse workforce, our suppliers, supply chain partners, and professional networks. ■ Operating Flexibility – For nearly 30 years, we offer an agile production philosophy and technological efficiency from the seven places where we operate. ■ Differentiated Services – SII again advanced best-in-class technologies within our critically important Supply Chain, Design Services, Quality, and IT Systems (U.S. and Taiwan) —in direct response to market-leading customers’ most technically demanding programs in our history. ■ Diversified End Markets – We continued efforts to further balance our market mix, growing Industrial EMS to its largest segment by revenue in FY22. As a result, SII deepened our foray into EMS for renewable energy, safety sensors, IoT and Internet 3.0 applications. SIGMATRON'S DIVERSE END-USER MARKETS Providing manufacturing options to diverse markets is our reality today and for the future. Whether new or established, our customers represent industry sectors that are crucial in today’s global EMS and design services markets valued at $576 billion and growing. Below is the percentage of SII’s net sales to the principal end-user customer markets served in FY22. 55.2% INDUSTRIAL Gaming, controls, smart grid connectivity, IoT connectivity. CONSUMER Appliances/white goods, automotive vision systems, carbon monoxide detectors, pet technology. MEDICAL/ LIFE SCIENCES Operating tables, battery packs, dental equipment, sterilizers, dialysis. 2 | FY22 AR SIGMATRON INTERNATIONAL OUR GLOBALLY CONNECTED SERVICE ARRAY FY22 was characterized by persistent volatility in the electronic component marketplace, resulting in significant supply chain issues. Also, Russia’s war with Ukraine and other economic and geopolitical issues, many of which are systemic, are expected to continue through FY23. In such a year, SII’s agile, proprietary, and globally responsive IT, Supply Chain, and Design Services proved of ever-increasing value to customers, suppliers, and employees alike. SII Information Technology SII IT drove investments this year in numerous best-of-class systems that streamlined communications and helped secure materials, inventory, and ordering visibility for supply chain management (SCM), while deepening our interteam, remote meeting platforms. Our proprietary tools empowered our specialist teams to flexibly manage an increased volume of exception-driven programs, meeting customers’ time-to-market goals. As specific constraints developed in FY22, SII’s value chain of upgraded IT services signaled trends and sped shortage warnings to net greater efficiency for all EMS programs. This year, SII IT also enhanced purchasing automation, consignment inventory, iScoreTM and MRP Share data fields. We also upgraded Tango, our Manufacturing Execution System (MES). SII’s Decades-Experienced Supply Chain Responds Amid FY22 Challenges SII’s mission for customers focuses on helping them navigate uncertainty especially resonant in FY22’s periods of challenges. For a company its size and as the industry faces record supply and demand constraints, SII offers customers first-rate Supply Chain Management (SCM) and International Procurement Office (IPO) benefiting all divisions 24/7. Our SCM’s Dedicated Teams and Proprietary Tools SII continued as a valued SCM collaborator with a range of critically connected customer solutions every step of the way: ■ International Procurement Office, Taiwan – SII’s decades-experienced SCM teams liaise with Asian based suppliers to source high-quality supplies of globally allocated parts. Our SCM teams link supplier networks with customers’ needs, limiting production impacts. 38.7%6.1%SigmaTron helps empower GAMECHANGE SOLAR'S significant growth in North America with EMS for Genius Tracker TM. Established in 2012, GameChange Solar (GCS) has emerged as a North American leader in the dynamic solar photovoltaic (PV) tracker and fixed-tilt panel manufacturing market, now sized at $170 billion. Amid current explosive market expansion, GCS reports a continued increase in its market share and geographic footprint. GCS’ UL-listed and cost-effective solar tracker sys- tems provide up to 30 GW of production capacity, delivering over 3.5 GW in 2021 installations for customers in seven countries. Operating just 10 years, GCS already ranks fifth globally in market share, according to Wood Mackenzie. In 2018, GCS selected SII citing its exceptional manufacturing flexibility, reliability, and consistency. For the Genius Tracker’sTM master and node controllers—the satellite-empowered “brains” that mechanize the solar table—our Acuña, Mexico, facility relentlessly delivers high quality, low- to high-volume manufacturing. GameChange Solar’s Genius Tracker Since 2018, SII’s scalable EMS solutions produce TM node controllers. Our shipments are timed to arrive in the field on their precise date of installation. With EMS support that commences up to a year preceding an installation’s needs, GCS lauds SII’s production reliability as one key to success. Also, our Supply Chain and IT systems customize the steady flow and replenishment of components and materials. Vis-à-vis SII’s custom in-circuit and functional tests, GCS also met its goal of Six Sigma’s “Five Nines” reliability. Finally, SII’s just-in-time deliveries of GCS’ finished goods, dropped directly to its global matrix of installation sites, are of immediate and ongoing value; it ensures GCS’ “peace of mind” and untethers the Company to focus on new innovations and the operations itself. Ahead, SII plans EMS that helps support GCS renewable energy goals to expand customers served and heightened volumes of power generated. Photos: © 2022, GameChange Solar, Inc. Used with permission. All rights reserved. SII's full-service EMS helps secure an on-time launch for KNOX SAFETY’S smart Carbon Monoxide Detector with TRIOTM Warning System. KNOX SAFETY, INC. (KSI) is a subsidiary and the residential-facing, life safety division of The Knox Company (KC), the American-designed innovator of rapid access solutions for first responders since 1975. More than 15,000 U.S. fire, emergency medical, and law enforcement personnel gain fast, safe, and secure entry into over one million properties using KC products. In 2020, KSI chose SigmaTron (SII) to initially help plan and subsequently manufacture its latest, most innovative carbon monoxide alarms with TRIOTM Warning Systems. SII offered comprehensive EMS from new product introduction (NPI) and supply chain to cost effective, to scaled UL-compliant manufacturing and test at SII’s Acuña, Mexico, facility. KSI gained speed-to-market with quality that exceeds federal agency requirements while optimizing costs. The Knox Safety Carbon Monoxide Alarm is the only one available with the TRIOTM Warning System that offers more than 20 visual and voice alerts in English or Spanish.  Despite a condensed development cycle and aggressive start-up goals, SII delivered product on time for KSI’s Fall 2021 launch and chainwide promotion of these products at the world’s largest retailer: Walmart. With regional centers in common, SII’s decades-long, manufacturing in Acuña, Mexico, and logistics acumen and subsequent customs administration from SII’s Del Rio, Texas, warehouse led smooth, efficient product flows to KSI’s distribution center in the U.S. Ahead in FY23, SII’s reliable, expert assembly will allow KSI to confidently meet target for these and any future generations of product lines ongoing. Photos: © 2022, Knox Safety, Inc. Used with permission. All rights reserved. Our SCM Teams and Tools (continued) Engineering Expertise, Alternative Sourcing – Our flexible engineering teams intervene and support customers’ ongoing design cycles. Following design for manufacturability and test (DFx) evaluations and redesigns, SII identifies alternate materials, alleviating any residual needs. Our global network secures spot market inventories for certain unavailable parts. ■ Management Support – SII’s purchasing power is backed by the resources of SII management who communicate directly with our supply chain partners as a situation warrants and coordinate investment in pre-emptive inventory to ultimately mitigate the effects of known challenges. ■ Corporate Material Specialist Group – Amid expanded program requests, SII added purchasing agents who help locate one-off or difficult-to-source materials for all North American divisions. ■ Sustainability and Compliance Center (SCC) – Our SCC teams continue to facilitate immense quantities of requirements to ensure customers’ compliance with environmental, social, and government regulations. The following is a list of technologies, supplier relationships, or other service/leadership contributions that drive supply chain value to customers. ■ Forecasted Order Reliability – Placed orders for customers’ full, forecasted components demand. This occurs at the time of forecast and often 12 to 18 months preceding need. This process is expected to continue into FY23. ■ Communications and Contingency Planning – We offer collaborative and personalized customer service. Any supply challenges are conveyed to the customer and OEM partners, including assistance to secure alternate parts. ■ Real-Time Systems Visibility – The Company’s effective combination of ERP systems and its customer portal, Score, drives 24/7 customer visibility. ■ Supplier Identification and Auditing – We offer our customers a global list of alternative sources. NEAR-TERM OUTLOOK IN FY23 Many known industrywide supply chain issues are systemic, others fast changing, and still others unknown. In FY23, SII will continue to work with suppliers and customers to timely address challenges, close supply gaps for our customers and keep production running. SII DESIGN SERVICES CENTER, ELGIN, ILLINOIS This year, our Design Services Center (DSC) continued its decades-long reputation for high-quality services across the EMS lifecycle. In FY22, customers across markets increased their reliance on SII’s time-tested array of specialist engineering design and test development expertise. We empower analytical and enablement tools and service to bring optimal EMS results. While price competitive, DSC’s focus is to consistently deliver best-in-class design support, especially resonant for customers who value high field reliability over the long term. In FY22, DSC faced the same industrywide materials uncertainties, labor shortages, and geopolitical challenges as other EMS. Amid a tough business environment, many customers elected a survival versus a new product introduction (NPI) mindset. This year, DSC invested in latest 3D imaging technologies and increased the depth and breadth of DFx assessment and custom test development. Our engineers’ roles further expanded beyond the OEM consumer appliance market to nine industrial subcategories: automotive, commercial cooking, fluid controls, LED lighting, marine, pools, safety, monitoring sensors, and smart grid connectivity. SIGMATRON NORTH AMERICA SII’S STRENGTHS FUEL GLOBAL CUSTOMER EXPANSION SII North America (N.A.) targeted and significantly expanded its value-added services and complete box-build programs for customers across markets—many the most technologically complex in our history. Our long-held reputation for highly personalized, flexible, and reliable EMS is enhanced by our IT and Supply Chain systems that identify, manage, and respond to materials changes in mid-volumes and higher mix program demand, with timely progress updates to customers. Resilient to industrywide challenges, SII N.A. delivered a successful FY22, while fulfilling the robust program backlog predicted in FY21. In the U.S., each operation continued as essential businesses, managed any lingering effects of COVID-19 variant outbreaks, and maintained production. In Mexico, SII fully complied with strict federal guidelines for self-quarantining. Even as certain restrictions were winding down at year-end, we remained vigilant. While not a factor in FY22, we plan to monitor any potential logistical challenges that may arise on the U.S-Mexico border. Photos: © 2022, Knox Safety, Inc. Used with permission. All rights reserved. FY22 AR SIGMATRON INTERNATIONAL | 5 The SIGMATRON-WAGZ® merger creates synergies for both companies amid rapid expansion of the global pet tech market. Founded in 2015, Wagz Inc. has emerged as a leading-edge technology company in the burgeoning global pet tech market expected to grow to $24 billion by 2024. (Business Insider, 2021). In FY17, SigmaTron International, Inc. (SII) initiated electronic manufacturing services and the Wagz relationship, which culminated in the Company acquiring Wagz in Q3, FY22. Long known as an innovator, Wagz holds a noteworthy portfolio of patents and intellectual property that differentiates and speeds its strategic vision in pet tech. The Wagz® Freedom Smart Dog CollarTM is its centerpiece, through which future products are expected to evolve. For Lacie's owner and an expanding subscriber base, patented technologies developed by Wagz® use a cell phone to integrate with loT global platforms for a no-shock solution to pet containment and wellness. The Freedom Collar delivers a complete, satellite-connected pet lifestyle to a fast-growing subscriber base, tracking and humanely enforcing a dog’s location, feeding, and health. The Wagz acquisition enables SII to take advantage of the entire margin stream flowing from its pet tech hardware sales. As an IoT and Internet 3.0 product, these sales generate predictable, recurring revenue. Also, SII’s manufacturing footprint in four countries expedites Wagz time-to-market and aligns international sales opportunities. In parallel with their Wagz counterparts, SII’s decades-experienced engineering team helps optimize next-level design for manufacturing and test including RF products. SII’s global, supply chain systems support every aspect of Wagz business. Net/net, SII and Wagz unique postmerger synergies are expected to fuel innovation and competitive advantages in the vibrant pet tech market, now and well into FY23. Photos: © 2022. Photos (top) licensed by Getty Images and Wagz Inc. Used with permission. Photo (bottom) by Peter Cade Photography. A hallmark of personalized service, our N.A. divisions meet frequently to confirm schedules and priorities, adopt design engineering changes to circumvent less available parts, or adjust lead time expectations accordingly. Despite supply chain issues, N.A. remained ahead or on pace of program needs and proudly delivered a significant increase in finished-goods SKUs. Ahead in FY23, N.A. will continue to proactively flag and hedge any materials shortages with alternative components and spot buys to close any gaps. SIGMATRON UNITED STATES In FY22, our U.S. locations in our Elk Grove Village, Illinois (EGV) headquarters and manufacturing site and our West Coast operations in Union City, California (UC), provided world-class design service, rapid prototyping, and complete-build manufacturing through fulfillment. Building on prior years’ goals, EGV logged noteworthy customer gains: a deepened foray into industrial; clean energy EMS for solar and wind turbine pitch energy modules; and medium-to-higher volume assemblies for agriculture equipment. With FY22’s growth trajectory reported in these markets comes positive implications for SII in the near term. The division drove process efficiencies this year with expansion of its Tango MES system and several capital investments. For FY22, UC logged a significantly increased customer mix and volume across markets, but with a further lean into industrial and medical/life sciences. For one, UC gained a leading IIoT and global, semiconductor chip producer, growing it from initial consignment prototyping to full, turnkey production EMS. For its numerous divisions, UC led DFx and developed custom in-circuit tests (ICT)— each monitored remotely via the internet. SIGMATRON MEXICO In FY22, SII’s three manufacturing locations in Acuña, Chihuahua and Tijuana, Mexico, continue over three decades of EMS experience with skilled labor and technical acumen that align well with customers headquartered in N.A. The region has earned a track record of excelling in onboarding and quickly scaling new high-to-low production volumes and a mix of models, regardless of complexity. Mexico continues complete product build EMS including customized lots of packaged products shipped on schedule to varied third-party locations. With an excellent transport corridor and mature customs infrastructure, the region saw continued strength in customer business amid FY22’s reshoring trends. As SII Mexico’s programs deliver close to their point of consumption, added benefits flow from our critically aligned time zones and work schedules. The region faced the same industrywide issues as other divisions, but SII’s full suite of proprietary tools and our efficient Supply Chain processes minimized production impacts, with premium costs paid as warranted. In FY22, Mexico continues its valued full-service programs in OEM appliances, but saw expansion in equally desirable Industrial EMS: gaming, clean energy, and agricultural and commercial food equipment. In response, the region expanded its senior managers and engineering teams and honed its Lean Six Sigma process efficiency training to optimum time, materials, manufacturing, and packaging capacities. Engineering developed customized tests to support multiple, customer-driven product configurations, shipping them to individual global facilities. These customers gain standardization benefits, along with our worldwide purchasing power. The region increased its certification portfolio with U.K.’s Intertek product listing required to manufacture industrial (ballast) lighting. Also, a third location in Mexico achieved IATF 16949:2016 automotive systems compliance certification. Ahead, as of Q4 FY22, Mexico’s customer program demands were steadily building, which bodes well for continued revenue growth in FY23 and beyond. SIGMATRON ASIA Beginning in Q2 FY22, Asia’s expanded lockdowns brought challenges to its domestic economy and proffered risk to already strained supply chains. Amid this scenario, Asia leveraged SII’s global strengths and resiliency. This includes our Supply Chain teams who mitigated materials delays with spot-sourced goods and increased “safety stock,” supported by flows of working capital from SII Corporate. Also, SII saw certain air freight costs double, with a 500% increase in export container costs in just 18 months. In Asia, program managers’ personal and timely communications among customers and suppliers succeeded in meeting material requirements to maintain production. Adaptively, certain customers saw advantages from components sourced in SII Asia while flexibly availing of N.A.’s manufacturing footprint. Photos: © 2022. Photos (top) licensed by Getty Images and Wagz Inc. Used with permission. Photo (bottom) by Peter Cade Photography. FY22 AR SIGMATRON INTERNATIONAL | 7 In FY22, SII Suzhou, China, leveraged its formidable reputation for EMS excellence, competitive pricing, and technically experienced engineering and manufacturing teams to gain new and expanded customers, especially in the industrial market. Highly experienced and with SII resiliency, Suzhou doubled programs for domestic sales and key customers including an existing multibillion-dollar sensing technology company while gaining new manufacturing for global connectivity and semiconductor customers. In response this year, China invested in the latest automated equipment, next-level manufacturing execution systems, and other tools to optimize processes and maximize volumes. In FY22, SII Biên Hòa City, Vietnam (VN), continued its decades-long manufacturing operation within the country’s favorable business and regulatory environment. Valued within SII’s “Global Options,” SII VN’s strategic location offers a track record of cost-effective, high-quality EMS. In Q4 FY22, the government reopened Vietnam to visitors following Q2’s recurrence of COVID-19 and its Omicron variants, with lockdowns enforced off and on through Q3. Throughout, SII VN observed strict government measures to protect our employees’ health. SII lauds the commitment of employee groups who remained plant side during the division’s three-month lockdown, meeting all production. SII’s suite of IT tools and systems ensured connectedness among global work teams and customers. This year, the division maintained all quality certifications while further diversifying its program mix in industrial and expanded its range of solutions to continue specialized PCBAs. Building on SII VN’s reputation for personalized, flexible, and reliable manufacturing, the division drove new efficiencies to its production lines and balance. As in prior years, SII VN’s engineering teams collaborate in parallel with their U.S. counterparts to optimize DFx, streamline customized tests, and keep pace with production runs. CLOSING THOUGHTS AND A LOOK AHEAD From a founding strategy established decades ago and as we approach our 30th year of operation as a public company, SII today leverages an orchestrated ecosystem of valued services and reputation for collaborative, personalized EMS—one that vitally supports customers across the entire lifespan of their programs. In summary for FY22, SII’s operating philosophy, technologically advantaged services, and complete manufacturing for a targeted customer mix netted a banner year of accomplishments despite the myriad of economic and geopolitical events faced by all EMS. For this important benchmark, we acknowledge the ongoing support and commitment of our Board of Directors, management, employees, and supply chain professionals around the world. IN MEMORIAM On behalf of our entire Company, as we express gratitude to these stakeholders, we also commemorate the loss in Q4 FY22 of our Corporate Counsel Henry (“Hank”) J. Underwood. Hank was a consummate attorney who worked with countless companies, including SigmaTron. Across nearly four decades, we benefited from Hank’s legal expertise, respected his business acumen, and valued his support and friendship. CONTINUING OUR STRENGTHS AND RESILIENCY IN FY23 Ahead, SII is well poised to monetize new business opportunities and capture our share of our booming market potential—especially for increasingly complex engineering and in performance requirements including IoT-enhanced EMS. In this rigorous business environment, we plan to recommit to further transformation as a company—steadily moving toward a more resilient, innovative, and intelligent program mix. Given signals of ramping market demand, SII expects in FY23 to continue a growth path in the five countries where we operate. We expect opportunities to remain strong for both our traditional EMS and pet tech businesses—each aligned to deliver increased stockholder value. Sincerely, Gary R. Fairhead, Chief Executive Officer James E. Barnes, President SigmaTron International, Inc. August 22, 2022 8 | FY22 AR SIGMATRON INTERNATIONAL For an EMS provider its size, SigmaTron provides an extraordinary global footprint. With globally aligned locations in the U.S. and lower-cost manufacturing options in Asia and Mexico, our right blend of talent and technology tackles the most complex OEM programs, yet is flexible enough to partner closely with customers to meticulously drive programs from beginning to end. Our rapid response provides single-source efficiency that relentlessly meets the market demands of our increasingly sophisticated customers. MEXICO Manufacturing SigmaTron International, Inc. Mexico Operations: • Acuña Operations • Chihuahua Operations • Tijuana Operations UNITED STATES Manufacturing/Design SigmaTron International, Inc. Corporate Headquarters Midwest Operations Elk Grove Village, Illinois West Coast Operations Union City, California Wagz Inc. Portsmouth, New Hampshire Design Services Center Elgin, Illinois Warehouses • Del Rio, Texas • El Paso, Texas • San Diego, California ASIA Manufacturing/ Value-Added Services SigmaTron International, Inc. China Operations Suzhou, China SigmaTron International, Inc. Vietnam Operations Biên Hòa City, Vietnam International Procurement Offices SigmaTron International, Inc. Taiwan Procurement Office Taipei City, Taiwan Sustainability and Compliance Center Taipei City, Taiwan Information Technology Offices SigmaTron International, Inc. U.S. Information Technology Elk Grove Village, Illinois SigmaTron International, Inc. Asia Information Technology Taichung City, Taiwan m o c . s p a M r o t c e V e e r F © t h g i r y p o C m o c . s p a M r o t c e V e e r F © t h g i r y p o C Firm: Ackerly Communications, LLC Copywriting/Art Direction: Mary Ackerly Design: Tatjana Jovancevic Proofreading: Deborah Livingstone Printer: Dreamworks GC, LLC ONE SOURCE. GLOBAL OPTIONS. ® CORPORATE OFFICES SigmaTron International, Inc. SigmaTron International, Inc. 2201 Landmeier Road 2201 Landmeier Road Elk Grove Village, IL 60007 Elk Grove Village, IL 60007 Tel Tel 847.956.8000 847.956.8000 847.956.9801 FaxFax 847.956.9801 INVESTOR RELATIONS 800.700.9095 800.700.9095 www.sigmatronintl.com Daniel P. Camp* Vice President, Vice President, Acuña Operations Acuña Operations Rajesh B. Upadhyaya* Executive Vice President, Executive Vice President, West Coast Operations West Coast Operations Hom-Ming Chang* Vice President, China Operations Vice President, China Operations Curtis W. Campbell Vice President of Sales, Vice President of Sales, West Coast Operations West Coast Operations Dennis P. McNamara Vice President, Engineering Vice President, Engineering Thomas F. Rovtar Vice President, Vice President, Information Technology Information Technology Keith D. Wheaton Vice President, Vice President, Business Development Business Development West Coast Operations West Coast Operations *Executive Officers *Executive Officers Member of the Audit Committee 1 Member of the Audit Committee Member of the Compensation Committee 2 Member of the Compensation Committee Member of the Nominating Committee 3 Member of the Nominating Committee Lead Director 4 Lead Director Bruce J. Mantia2 Retired Partner Retired Partner Ernst & Young LLP Ernst & Young LLP Paul J. Plante 1,2 Director, Cardinal Vending Director, Cardinal Vending and Markets, LLC and Markets, LLC Thomas W. Rieck 1,3 Of Counsel, Rieck and Crotty, P.C. Of Counsel, Rieck and Crotty, P.C. Dilip S. Vyas 2,3,4 Independent Consultant Independent Consultant OFFICERS Gary R. Fairhead* Chairman of the Board Chairman of the Board and Chief Executive Officer and Chief Executive Officer James E. Barnes* President President James J. Reiman* Chief Financial Officer, Vice President, Chief Financial Officer, Vice President, Finance, Treasurer and Secretary Finance, Treasurer and Secretary Gregory A. Fairhead* Executive Vice President Executive Vice President and Assistant Secretary and Assistant Secretary John P. Sheehan* Vice President, Director of Supply Chain Vice President, Director of Supply Chain and Assistant Secretary and Assistant Secretary BOARD OF DIRECTORS Gary R. Fairhead Chairman of the Board Chairman of the Board and Chief Executive Officer, and Chief Executive Officer, SigmaTron International, Inc. SigmaTron International, Inc. Linda K. Frauendorfer Independent Consultant Independent Consultant Barry R. Horek1,3 Retired Partner Retired Partner Ernst & Young LLP Ernst & Young LLP CORPORATE INFORMATION SEC Counsel Greenberg Traurig, LLP Greenberg Traurig, LLP 77 West Wacker Drive 77 West Wacker Drive Chicago, Illinois 60601 Chicago, Illinois 60601 Corporate Counsel Howard & Howard Howard & Howard Attorneys PLLC Attorneys PLLC 200 South Michigan Avenue 200 South Michigan Avenue Chicago, Illinois 60604 Chicago, Illinois 60604 IN MEMORIAM: IN MEMORIAM: Henry J. Underwood Henry J. Underwood March 09, 2022 March 09, 2022 Corporate Counsel Corporate Counsel and Assistant Secretary, and Assistant Secretary, 1982-2022 1982-2022 Independent Public Accountants BDBDOO USA, LLP USA, LLP 330 North Wabash Avenue 330 North Wabash Avenue Chicago, Illinois 60611 Chicago, Illinois 60611 Form 10-K If you would like a free copy of If you would like a free copy of the Form 10-K report filed with the Form 10-K report filed with the Securities and Exchange the Securities and Exchange Commission, please call Commission, please call James J. Reiman at the James J. Reiman at the SigmaTron corporate office, SigmaTron corporate office, 1.800.700.9095. 1.800.700.9095. Stock Transfer Agent and Registrar American Stock Transfer American Stock Transfer & Trust Company, LLC & Trust Company, LLC 6201 15th Avenue 6201 15th Avenue Brooklyn, New York 11219 Brooklyn, New York 11219 Stock Information The Company’s common stock The Company’s common stock has been trading on the Nasdaq has been trading on the Nasdaq System under the symbol SGMA System under the symbol SGMA since the Company’s initial since the Company’s initial public offering in February 1994. public offering in February 1994. The Company has 6 million The Company has 6 million shares of common stock shares of common stock outstanding. outstanding. The Company has not paid The Company has not paid cash dividends on its common cash dividends on its common stock since completing its stock since completing its February 1994 initial public February 1994 initial public offering and does not intend offering and does not intend to pay any dividends in the to pay any dividends in the foreseeable future. foreseeable future. 

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