SMTC Reports First Quarter Results

SMTC Reports First Quarter Results

  *Reports first quarter results of $65.4 million in revenue, net income of
    $1.2 million, $2.3 million in adjusted EBITDA, and $0.04 adjusted EPS.
  *Reports quarter end total debt net of cash of $31.4 million, up from $18.2
    million in the fourth quarter of 2012.
  *Revises 2013 revenue guidance from $275 - $290 million to $260 - $275
    million, adjusted EBITDA guidance from $14 - $15 million to $11 - $13
    million, adjusted EPS from $0.45- $0.55 to $0.35- $0.40, and total net
    debt from $15 - $16 million to $16 - $18 million.
  *On track to discontinue Canadian manufacturing operations in the second
    quarter 2013, with an estimated $1.8 million in total non-recurring
    charges associated with the closure for Q1 and Q2 2013.

TORONTO, May 9, 2013 (GLOBE NEWSWIRE) -- SMTC Corporation (Nasdaq:SMTX)
("SMTC"), a global electronics manufacturing services provider, today
announced first quarter 2013 unaudited results.

Revenue for the quarter was $65.4 million, an 11% decrease sequentially from
the fourth quarter of 2012, and a 10% decrease over the first quarter of 2012.
Adjusted EBITDA remained consistent with the prior quarter at $2.3 million and
gross margins improved to 10.6% compared to 7.8% in the prior quarter.
However, when removing the effects of unrealized foreign exchange on
derivative financial instruments gross margins were 9.1% in the first quarter
compared to 8.4% in the prior quarter. Adjusted EPS for the quarter was $0.04,
down from $0.20 (including a $0.15 per share gain related to the expected
future usage of certain tax loss carry-forwards recorded in Q4 2012) in the
prior quarter. Total debt net of cash increased to $31.4 million, up from
$18.2 million in the fourth quarter of 2012.

"Compared to expectations, we experienced a reduction of $14 million in first
quarter orders largely fromtwo customers which led to lower revenues and
higher inventories for the quarter. Our margins continued to improve this
quarter, and partially offset the impact of the revenue decline. We expect to
consume much of this excess inventory in the second quarter, and for debt
levels to decline accordingly," stated Co-Chief Executive Officer, Alex
Walker.

Co-Chief Executive Officer Claude Germain stated, "We have reduced our full
year guidance to reflect the revenue softening we have seen across certain
customers. Our focus for the remainder of 2013 is on diversified organic
revenue growth, gross margin improvements and improved operating cash flow. We
expect our margins and profitability to continue to improve and debt levels to
decline throughout the year."

Adjusted EBITDA and adjusted EPS are non-GAAP measures. Adjusted EBITDA is
computed as net income from continuing operations excluding depreciation,
restructuring charges, loss on extinguishment of debt, unrealized foreign
exchange gains/losses on derivative financial instruments, acquisition
expenses, interest and income tax expense. Adjusted EPS is GAAP EPS excluding
the effect of restructuring charges and unrealized foreign exchange
gains/losses on derivative financial instruments. SMTC Corporation has
provided in this release non-GAAP calculations of adjusted EBITDA and adjusted
EPS as supplemental information regarding the operational performance of SMTC
Corporation's core business. Management uses these non-GAAP financial measures
internally in analyzing SMTC Corporation's financial results to assess
operational performance and liquidity as well as to provide a consistent
method of comparison to historical periods and to the performance of
competitors and peer group companies. SMTC Corporation believes that both
management and investors benefit from referring to these non-GAAP financial
measures in assessing SMTC Corporation's performance and when planning,
forecasting and analyzing future periods. SMTC Corporation believes these
non-GAAP financial measures are useful to investors because they allow for
greater transparency with respect to key financial metrics we use in making
operating decisions and because our investors and analysts use them to help
assess the health of our business. Non-GAAP measures are subject to material
limitations as these measures are not in accordance with or an alternative
for, Generally Accepted Accounting Principles and may be different from
non-GAAP measures used by other companies. Because of these limitations,
investors should consider adjusted EBITDA and adjusted EPS along with other
financial performance measures, including revenue, net income and SMTC
Corporation's financial results presented in accordance with GAAP.

Note for Investors: The statements contained in this release that are not
purely historical are forward-looking statements which involve risk and
uncertainties that could cause actual results to differ materially from those
expressed in the forward-looking statements. These statements may be
identified by their use of forward-looking terminology such as "believes,"
"expect," "may," "should," "would," "will," "intends," "plans," "estimates,"
"anticipates" and similar words, and include, but are not limited to,
statements regarding the expectations, intentions or strategies of SMTC
Corporation. For these statements, we claim the protection of the safe harbor
for forward-looking statements provisions contained in the Private Securities
Litigation Reform Act of 1995. Risks and uncertainties that may cause future
results to differ from forward looking statements include the challenges of
managing quickly expanding operations and integrating acquired companies,
fluctuations in demand for customers' products and changes in customers'
product sources, competition in the EMS industry, component shortages, and
others discussed in the Company's most recent filings with securities
regulators in the United States and Canada. The forward-looking statements
contained in this release are made as of the date hereof and the Company
assumes no obligation to update the forward-looking statements, or to update
the reasons why actual results could differ materially from those projected in
the forward-looking statements.

The first quarter results teleconference will be held on Thursday, May 9, 2013
at 5:00 p.m. EDT. Those wishing to listen to the teleconference should access
the webcast at the investor relations section of SMTC's website www.smtc.com.
A rebroadcast of the webcast will be available on SMTC's website following the
teleconference.

Participants should ensure that they have a current version of Microsoft
Windows Media Player before accessing the webcast.

Members of the investment community wishing to ask questions during the
teleconference may access the teleconference by dialing 877-878-2794 or
615-800-6849 ten minutes prior to the scheduled start time. A rebroadcast will
be available for up to one week following the teleconference by dialing
855-859-2056 or 1-800-585-8367, Conference ID 33517560.

About SMTC Corporation: SMTC Corporation, founded in 1985, is a mid-size
provider of end-to-end electronics manufacturing services (EMS) including PCBA
production, systems integration and comprehensive testing services, enclosure
fabrication, as well as product design, sustaining engineering and supply
chain management services. SMTC facilities span a broad footprint in the
United States, Canada, Mexico, and China, with more than 2,300 employees. SMTC
services extend over the entire electronic product life cycle from the
development and introduction of new products through to the growth, maturity
and end-of-life phases. SMTC offers fully integrated contract manufacturing
services with a distinctive approach to global original equipment
manufacturers (OEMs) and emerging technology companies primarily within
industrial, computing and communication market segments. SMTC was recognized
in 2012 by Frost & Sullivan with the Global EMS Award for Product Quality
Leadership and 2013 with the North American Growth Leadership Award in the EMS
industry, as one of the fastest growth companies in 2012.

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

The SMTC Corporation logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=9800

                                                               
Consolidated Statements of Operations and Comprehensive Income
(Unaudited)                                                     
                                                 Three months ended
                                                               
(Expressed in thousands of U.S. dollars, except   March 31, 2013 April 1, 2012
number of shares and per share amounts)
                                                               
Revenue                                           $65,447      $72,457
Cost of sales                                     58,503        64,932
Gross profit                                      6,944         7,525
Selling, general and administrative expenses      4,514         3,969
Restructuring charges                             452           451
Operating earnings                                1,978         3,105
Interest expense                                  384           463
Earnings before income taxes                      1,594         2,642
Income tax expense (recovery)                                   
Current                                           461           253
Deferred                                          (33)          (46)
                                                 428           207
Net earnings, also being comprehensive income     $1,166       $2,435
                                                               
Basic earnings per share                          $0.07        $0.15
Diluted earnings per share                        $0.07        $0.15
                                                               
Weighted average number of shares outstanding                   
Basic                                             16,344,193     16,228,666
Diluted                                           16,408,579     16,350,977
                                                               

                                                      
Consolidated Balance Sheets                            
(Unaudited)                                            

(Expressed in thousands of U.S. dollars)     March 31,  December 30,
                                             2013       2012
Assets                                                 
                                                      
Current assets:                                        
Cash                                         $3,384   $2,203
Accounts receivable - net                    39,998    36,301
Inventories                                  58,794    54,806
Prepaid expenses                             3,510     2,431
Income taxes receivable                      300       357
Current portion of deferred income taxes     2,237     2,237
                                            108,223   98,335
Property, plant and equipment                19,395    19,410
Deferred financing costs                     473       564
Deferred income taxes                        3,431     3,398
                                            $131,522 $121,707
                                                      
Liabilities and Shareholders' Equity                   
                                                      
Current liabilities:                                   
Accounts payable                             $43,282  $48,766
Accrued liabilities                          8,769     9,220
Income taxes payable                         668       566
Revolving credit facility                    27,852    12,896
Current portion of long-term debt            3,473     4,631
Current portion of capital lease obligations 1,887     1,628
                                            85,931    77,707
                                                      
Capital lease obligations                    1,617     1,292
                                                      
Shareholders' equity:                                  
Capital stock                                389       389
Additional paid-in capital                   263,524   263,424
Deficit                                      (219,939) (221,105)
                                            43,974    42,708
                                            $131,522 $121,707
                                                      

                                                               
Consolidated Statements of Cash Flows                           
(Unaudited)                                                     
                                                 Three months ended
(Expressed in thousands of U.S. dollars)          
Cash provided by (used in):                       March 31, 2013 April 1, 2012
Operations:                                                     
Net earnings                                      $1,166       $2,435
Items not involving cash:                                       
Depreciation                                      909           752
Unrealized gain on derivative financial           (1,019)       (462)
instrument
Deferred income taxes                             (33)          (46)
Non-cash interest                                 91            104
Stock-based compensation                          100           101
Change in non-cash operating working capital:                   
Accounts receivable                               (3,697)       (4,562)
Inventories                                       (3,988)       (2,310)
Prepaid expenses                                  (29)          (834)
Income taxes payable                              159           (319)
Accounts payable                                  (5,484)       (4,015)
Accrued liabilities                               (191)         (425)
                                                 (12,016)      (9,581)
Financing:                                                      
Increase in revolving debt                        14,956        12,136
Repayment of term facility                        (1,158)       (1,235)
Principal payment of capital lease obligations    (641)         (502)
Proceeds from sale and leaseback                  988           170
Proceeds from issuance of common stock            --            193
Payment of contingent consideration               (291)         --
Deferred financing costs                          --            --
                                                 13,854        10,762
Investing:                                                      
Purchase of property, plant and equipment         (657)         (1,699)
                                                 (657)         (1,699)
Increase (decrease) in cash                       1,181         (518)
Cash, beginning of period                         2,203         2,635
Cash, end of the period                           $3,384       $2,117
                                                               

                                                              
Supplementary Information:                                     
                                                              
Reconciliation of Adjusted EBITDA                              

                                                    Three months ended
                                                    March 31,  April 1, 2012
                                                     2013
                                                              
Net earnings                                         $1,166   $2,435
Add:                                                           
Interest                                             384       463
Unrealized foreign exchange (gain)/loss on           (1,019)    (462)
derivative financial instruments
Income tax expense                                   428       207
Depreciation                                         909       752
Restructuring charges                                452       451
Adjusted EBITDA                                      2,320     3,846
                                                              
Reconciliation of Adjusted EPS                                 

                                                    Three months ended
                                                    March 31,  April 1, 2012
                                                     2013
                                                              
Net earnings                                         $1,166   $2,435
Add:                                                           
Unrealized foreign exchange (gain)/loss on           (1,019)    (462)
derivative financial instruments
Restructuring charges                                452       451

Adjusted net earnings                                599       2,424
                                                              
Weighted average number of shares outstanding                  
Basic                                                16,344,193 16,228,666
                                                              
Basic earnings per share                             $0.07    $0.15
Adjusted EPS                                         $0.04    $0.15
                                                              

CONTACT: For further information:
         Alex Walker
         President and Co-Chief Executive Officer, SMTC Corporation
         (905) 413.1190
         Email: investorrelations@smtc.com

         Investor Relations Information:
         Alex Walker
         President and Chief Executive Officer
         Telephone: (905) 413.1272
         Email: investorrelations@smtc.com
        
         or
        
         John Nesbett / Jennifer Belodeau
         Institutional Marketing Services (IMS)
         Telephone: (203) 972-9200
         Email: jnesbett@institutionalms.com
        
         Public Relations Information:
         Tom Reilly
         Director of Marketing
         Telephone: (905) 413.1188
         Email: publicrelations@smtc.com

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