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SMTC Reports Q3

TORONTO — SMTC Corporation (Nasdaq: SMTX, TSE: SMX), a global electronics manufacturing services provider, today reported 2010 third quarter results. Revenue for the quarter increased by 48% to $65.4 million and net income for the quarter, at $2.6 million, was $2.4 million higher than the same quarter in the prior year.

Gross profit for the third quarter was $7.9 million or 12.0% of revenue, over double that of the comparable period in 2009 of $3.7 million or 8.5%; driven by increased revenue and leveraging the Company's cost structure. Gross margin of 12% was the highest, excluding one-time items, in over 10 years.

The Company generated cash of $4.6 million from operations in the third quarter which was largely used to reduce net debt to $18.0 million.

“Following record second quarter results, SMTC achieved another strong quarter with third quarter revenue increasing almost 50% over the comparable quarter of 2009. Eight of our ten top customers increased orders above the same quarter last year in response to end customer demand. We generated approximately $10 million in revenue from five new customers ramping production” stated John Caldwell, President and Chief Executive Officer. “Our solid earnings performance reflects the combination of higher revenue and leveraging our very efficient cost structure.”

“As a result of strong earnings our debt levels are approaching our record low. This was achieved despite carrying additional working capital resulting from continuing parts shortages and anticipation of continuing strong revenue in the fourth quarter,” stated Jane Todd, SVP Finance and Chief Financial Officer. “In the fourth quarter we expect to continue to generate cash and reduce debt levels through continued profitability and reduced working capital as supply chain issues ease.”

{complink 12834|SMTC Corp.}

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