<PAGE>   1
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

(Mark One)

  X         Annual Report pursuant to Section 13 or 15(d) of the Securities
 ---        Exchange Act of 1934. For the fiscal year ended April 30, 1999
                                       or
 ---        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                                                             36-3918470
--------                                                             ----------
(State or other jurisdiction                                    (I.R.S. Employer
of incorporation or organization)                         Identification Number)

2201 Landmeier Rd., Elk Grove Vlge., IL                                    60007
---------------------------------------                                    -----
(Address of principal executive offices)                              (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 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. Yes X  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 (X).
          ---

The aggregate market value of the voting stock held by nonaffiliates of the
registrant as of July 19, 1999 (based on the closing sale price as reported by
Nasdaq National Market as of such date) was approximately $12,555,000.

The number of outstanding shares of the registrant's Common Stock, as of July
19, 1999, was 2,881,227.

                       DOCUMENTS INCORPORATED BY REFERENCE

Those sections or portions of the definitive proxy statement of SigmaTron
International, Inc., for use in connection with its annual meeting of
stockholders, which will be filed within 120 days of the fiscal year ended April
30, 1999, are incorporated by reference into Part III of this Form 10-K.

<PAGE>   2




                                TABLE OF CONTENTS

<TABLE>
PART I
<S>                                                                        <C>
         ITEM 1.  BUSINESS................................................   3
         ITEM 2.  PROPERTIES..............................................  11
         ITEM 3.  LEGAL PROCEEDINGS.......................................  12
         ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.....  13
         ITEM 4A. EXECUTIVE OFFICERS OF THE REGISTRANT....................  13

PART II

         ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON EQUITY AND
                    RELATED STOCKHOLDER MATTERS...........................  14
         ITEM 6.  SELECTED CONSOLIDATED FINANCIAL DATA....................  15
         ITEM 7.  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
                    CONDITIONS AND RESULTS OF OPERATIONS..................  15
         ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES
                    ABOUT MARKET RISKS....................................  21
         ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.............  21
         ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
                    ACCOUNTING AND FINANCIAL DISCLOSURE...................  21

PART III

         ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT......  21
         ITEM 11. EXECUTIVE COMPENSATION..................................  21
         ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
                    AND MANAGEMENT........................................  21
         ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS..........  21

PART IV

         ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS
                    ON FORM 8-K...........................................  22

SIGNATURES    ............................................................  26
</TABLE>


<PAGE>   3

--------------------------------------------------------------------------------
                                     PART 1
--------------------------------------------------------------------------------


ITEM 1.  BUSINESS

CAUTIONARY NOTE:

     In addition to historical financial information, this discussion of
SigmaTron International, Inc.'s ("Company") business and other Items in this
Annual Report on Form 10-K contain forward-looking statements concerning the
Company's business or results of operations. These 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, including Nighthawk Systems, Incorporated/Kidde Safety
("NSI"); the continued market acceptance of products and services offered by the
Company and its customers; the activities of competitors, some of which may have
greater financial or other resources than the Company; the variability of the
Company's operating results; the availability and cost of necessary components;
the continued availability and sufficiency of the Company's credit arrangements;
changes in U.S. or Mexican regulations affecting the Company's business; the
continued stability of the Mexican economic, labor and political conditions and
the ability of the Company to manage its growth and secure financing. These and
other factors which may affect the Company's future business and results of
operations are identified throughout this Annual Report on Form 10-K and in the
prospectus issued in connection with the Company's February 1994 initial public
offering of securities (Registration No. 33-72100), 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 this report and the Company
undertakes no obligation to update such statements in light of future events or
otherwise.

OVERVIEW

     The Company is an independent provider of electronic manufacturing services
("EMS"), which includes printed circuit board assemblies and completely
assembled (boxbuild) electronic products. Included among the wide range of
services the Company offers its customers are (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 approvals from governmental
and other regulatory bodies. The Company provides these services through
facilities located in North America and the Far East.

     The Company provides manufacturing and assembly services ranging from the
assembly of individual components to the assembly and testing of boxbuild
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
marketplaces, particularly consumer electronics, gaming, fitness, industrial
electronics, telecommunications, home appliances and automotive.

     The Company operates manufacturing facilities in Elk Grove Village,
Illinois; Las Vegas, Nevada; and Acuna, Mexico. The Company maintains materials
sourcing offices in Elk Grove Village, Illinois, Las Vegas, Nevada and Taipei,
Taiwan. The Company provides warehousing services in Del Rio, Texas and
Huntsville, Alabama. In addition, the Company's 42.5% owned



                                       3
<PAGE>   4

affiliate, SMT Unlimited L.P. (SMTU), provides electronic manufacturing services
in Fremont, California.

     The Company is a Delaware corporation which was organized on November 16,
1993 and commenced business 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. On February 9, 1994, the Company and certain
stockholders commenced an initial public offering for the sale of 1,265,000
shares of Common Stock.

PRODUCTS AND SERVICES

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

     Manufacturing and Related Services. As its customers experience greater
competition and shorter product life cycles in their respective industries, the
Company has responded by expanding its prototype services. The Company also
provides quick-turnaround, turnkey prototype services from dedicated resources
located within the Company's Elk Grove Village facility and through SMTU, its
affiliate.

     Materials Procurement. 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. Material procurement 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 material 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 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 utilizes its
Taiwanese procurement office and agents to source materials from the Far East.
SigmaTron believes this office allows the Company to more effectively manage its
relationships with key suppliers in the Far East by allowing the Company 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 boards 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. 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 a more recent 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



                                       4
<PAGE>   5


holes drilled through the board. The SMT process allows original equipment
manufacturers ("OEMs") to use 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 newer and more
sophisticated interconnect technology, the Company intends to continue providing
PTH assembly services for its customers because it believes that SMT will not
entirely eliminate the need for PTH technology. The Company believes that OEMs
with products not limited by internal space constraints will continue to favor
PTH over SMT. Through SMTU, SigmaTron possesses ball grid array ("BGA")
technology and fine pitch SMT, which is used for more complex circuit boards
required to perform at higher speeds.

     In addition to printed circuit board assemblies, the Company also
manufactures DC-to-AC inverters, coils, transformers and cable and harness
assemblies. These products are manufactured using both automated and
semi-automated preparation and insertion equipment and manual assembly
techniques.

     In response to the needs of its OEM customers, the Company also offers
"boxbuild" 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 provides
X-ray laminography services through its affiliate SMTU. Generally, the Company
either designs or procures test fixtures. 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 for goods manufactured or assembled in
Mexico and for goods manufactured for a customer in Huntsville, Alabama. The
Company also has the ability to provide custom-tailored delivery schedules to
fulfill the just-in-time inventory needs of its customers.

MARKETS AND CUSTOMERS

     SigmaTron's customers are in the consumer electronics, gaming, industrial
electronics, fitness, telecommunications, automotive and home appliance
industries. As of April 30, 1999, the Company had approximately 125 active
customers ranging from Fortune 500 companies to small, privately held
enterprises.



                                       5
<PAGE>   6


     The following table shows, for the periods indicated, the percentage of net
sales to the principal end-user markets it serves.
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
                                                                                     PERCENT OF NET SALES
--------------------------------------------------------------------------------------------------------------------
                                               TYPICAL                       FISCAL         FISCAL          FISCAL
MARKETS                                    OEM APPLICATION                    1997           1998            1999
-------                                    ---------------                    ----           ----            ----
--------------------------------------------------------------------------------------------------------------------
<S>                            <C>                                          <C>             <C>            <C>
Consumer Electronics           Carbon monoxide detectors,                    38.0%           37.9%          39.0%
                               dart board games
--------------------------------------------------------------------------------------------------------------------

Gaming                         Slot machines, lighting displays               21.8           22.0            18.9
--------------------------------------------------------------------------------------------------------------------

Industrial Electronics         Blower motors, elevators                       18.3           14.2            16.8
--------------------------------------------------------------------------------------------------------------------

Fitness                        Treadmills, exercise bikes                     12.1           13.3            13.7
--------------------------------------------------------------------------------------------------------------------

Telecommunications             Pagers, microphones and modems                 5.1             5.1            3.9
--------------------------------------------------------------------------------------------------------------------

Appliances                     Irons, toasters, ranges and dryers             2.1             5.1            5.0
--------------------------------------------------------------------------------------------------------------------

Automotive                     Automobile interior lighting                   2.6             2.4            2.7
--------------------------------------------------------------------------------------------------------------------

Total                                                                         100%           100%            100%
                                                                              ----           ----            ----
-------------------------------------------------------------------------------------------------------------------
</TABLE>

     For the fiscal year ended April 30, 1999, NSI and Life Fitness accounted
for 36.2% and 13.7% respectively, of the Company's net sales. In fiscal 1998 NSI
and Life Fitness accounted for 29.4% and 13.3% respectively, of net sales. In
addition, NSI, Bally Gaming and Life Fitness accounted for 29.8%, 13.5% and
10.8%, respectively, of the Company's net sales for the fiscal year ended April
30, 1997. The Company expects that these customers as a group will continue to
account for a significant percentage of the Company's net sales, although the
individual percentages may vary from period to period.

     NSI is a leading U.S. manufacturer of residential carbon monoxide detection
systems. The Company's original agreement with NSI called for the Company to
function as a contract manufacturer for all models of NSI's proprietary carbon
monoxide detectors on a turnkey basis through June 1998. The Company agreed that
during the term of the agreement and for three months thereafter it would not
produce carbon monoxide detectors for any other customer. Although there has
been no written extension of the agreement, the parties continue to operate
under its terms. The amount of sales to NSI beyond fiscal 2000 remains unclear
and if the relationship is not continued it could significantly impact the
Company's revenues and earnings. However, the Company expects that sales to NSI
will continue to account for a significant percentage of the Company's net sales
in fiscal 2000. Sales to NSI are seasonal due to the nature of the product and
the Company experiences stronger sales to NSI in the second and third fiscal
quarters. The NSI market continues to be an emerging market which could lead to
volatility in NSI's forecast, having the effect of causing the Company's
revenues to fluctuate significantly on a seasonal basis.


                                       6
<PAGE>   7


SALES AND MARKETING

     The Company markets its services through 28 independent manufacturers'
representative organizations, that together currently employ approximately 88
sales personnel in the United States and Canada. Independent manufacturers'
representative organizations receive variable commissions based on orders
received by the Company. The members of the Company's senior management are
actively involved in sales and marketing efforts. In addition, the Company
attends trade shows related to the Company's industry and its major customer
industries.

     Sales volume and gross profit margins can vary considerably among customers
and products depending on the type of services rendered by the Company.
Specifically, variations in orders for turnkey services versus consignment
services and variations in the number of orders for products with high raw
material costs can lead to significant fluctuations in the Company's operating
results. Further, customers' orders can be delayed, rescheduled or canceled at
any time, which can significantly impact the operating results of the Company.
The ability to replace such delayed or lost sales in a short period of time is
not assured.

MEXICAN OPERATIONS

     The Company's wholly-owned subsidiary, Standard Components de Mexico, S.A.
("Standard Components"), a Mexican corporation, is located in Acuna, Mexico, a
border town along the Rio Grande River next to Del Rio, Texas, which is 155
miles west of San Antonio. Standard Components was incorporated and commenced
operation in 1969. The Company believes that one of the key benefits to having
operations in Mexico is its access to cost effective labor resources.

     Standard Components is a maquiladora, which is the status afforded a
corporation under a trade agreement between the United States of America and
Mexico. The Company believes economic events affecting the Mexican economy and
the implementation of NAFTA have not had a material effect on the Company or its
financial position.

     In 1995 the Mexican Ministry of Finance and Public Credit (Hacienda)
adopted rules which require arms length pricing for transactions between
maquiladoras and their U.S. affiliated companies. The impact of these
regulations requires Standard Components to allocate costs and profits on an
arms length basis. Its operating results continue to be consolidated with the
Company's financial results. The effect of the rules did not have an impact on
the Company's consolidated results.

     The Company provides funds for salaries, wages, overhead and capital
expenditure items as necessary to operate Standard Components. Since the Company
provides funding to Standard Components in U.S. dollars, which are exchanged for
pesos as needed, the devaluation of the peso from time to time, without an equal
or greater increase in Mexican inflation, has not had a material impact on the
financial results of the Company. In fiscal 1999 the Company provided funding of
approximately $8,175,000 to Standard Components.

     In late August 1998, the Company's warehousing operation in Del Rio, Texas,
and one of its manufacturing operations in Acuna, Mexico, were significantly
damaged by a flash flood. The Company expedited replacement machinery and
equipment and inventory to its damaged facilities. The majority of the damaged
equipment used in the manufacturing process was replaced with new



                                       7
<PAGE>   8

equipment. The manufacturing operation in Acuna was running at preflood levels
and all raw material issues created by the flood were resolved by December 1998.

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.
Also, foreign companies, especially companies with production operations in the
Far East, have substantially lower costs and thus are able to offer their
services at lower prices. 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 provide all of these services.

     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 effect on the Company's business,
financial condition, or results of operations. The introduction of lower priced
competitive products or significant price reductions by the Company's
competitors could result in price reductions that would 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.

GOVERNMENTAL REGULATIONS

         The Company's operations are subject to certain foreign, federal, state
and local regulatory requirements relating to environmental, waste management
and health and safety matters. Management believes that the Company's business
is operated in material compliance with all such regulations. The cost to the
Company of such compliance to date has not materially affected 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. 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 adversely affect the
Company's business, financial condition and results of operations.

BACKLOG

The Company's backlog as of April 30, 1999 was approximately $38,999,000.
Backlog consists of contracts or purchase orders with delivery dates scheduled
within the next twelve months. The Company currently expects to ship
substantially all of the April 30, 1999 backlog by the end of the


<PAGE>   9

2000 fiscal year. Backlog as of April 30, 1998 totaled $46,184,000. Variations
in the magnitude and duration of contracts 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
financial results.

EMPLOYEES

         The Company employed approximately 1,970 people as of April 30, 1999,
including 27 engaged in engineering, 1,770 in manufacturing and 173 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, 2000. The Company's Mexican subsidiary 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 15, 2000.

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

RISK FACTORS

         In addition to the other risks identified herein, the Company's
business is subject to the following risks:

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.

COMPANY'S CUSTOMER BASE IS CONCENTRATED

         The Company's customer base is concentrated, for the fiscal year ended
April 30, 1999, two customers accounted for 36.2% and 13.7% of the Company's net
sales, respectively. The loss of any such customer or a reduction in business
levels could adversely affect the Company's results of operations.

VARIABILITY OF CUSTOMER REQUIREMENTS

         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.




                                       9
<PAGE>   10



COMPANY MUST 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.

COMPANY HAS STEEP INDUSTRY COMPETITION

         The electronics manufacturing services 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.

FOREIGN OPERATION 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 factors, including the stability of the Mexican economy,
the political climate in Mexico, 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 obtains many of its materials and components in Taipei and
therefore, the Company's access to these materials and components is dependent
on the continued success of these Asian suppliers. It is uncertain whether these
suppliers will continue to be able to serve as a supplier to the Company.

RISK OF FLUCTUATION OF VARIOUS CURRENCIES INTEGRAL TO THE COMPANY'S OPERATIONS

         The Company purchases many of its materials and components 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 operations and
performance. These fluctuations are expected to continue.

SEASONALITY OF RESULTS

         The Company currently experiences seasonality in quarterly results,
with stronger net sales and demand for its products and services historically in
its second and third fiscal quarters.

AVAILABILITY OF RAW COMPONENTS MAY AFFECT OPERATIONS

         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 adversely affect the Company's results of operations.



                                       10
<PAGE>   11

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 these key employees could have material adverse effect on the
Company's business and results of operations. In addition, despite significant
competition, continued growth and expansion of the Company's contract
manufacturing business will require that it attract, motivate, and retain
additional skilled and experienced personnel.

FAVORABLE LABOR RELATIONS IS IMPORTANT

         The Company currently has labor contracts with certain of its
employees. 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
adversely affect the Company's results of operations.

FAILURE TO COMPLY WITH ENVIRONMENTAL REGULATIONS COULD SUBJECT 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 adverse effect on the
Company's results of operations.

VOLATILITY OF STOCK PRICE

         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
markers also affect the volatility of the Company's Common Stock. Such
fluctuations are expected to continue.

ITEM 2.  PROPERTIES

         The Company, in combination with its wholly-owned subsidiary and
affiliate, has manufacturing facilities located in Elk Grove Village, Illinois,
Las Vegas, Nevada, Fremont, California and Acuna, Mexico. In addition, the
Company provides inventory management services through its Del Rio, Texas,
warehouse facilities and materials procurement services through its Taipei,
Taiwan office.



                                       11
<PAGE>   12


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

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------
              LOCATION                           SQUARE FEET                       SERVICES OFFERED
-------------------------------------------------------------------------------------------------------------
<S>                                                 <C>                   <C>
Elk Grove Village, IL                               79,300                Corporate Headquarters, assembly
                                                                          and testing of PTH and SMT,
                                                                          box-build, prototyping,
                                                                          warehousing
-------------------------------------------------------------------------------------------------------------
Acuna, Mexico                                      156,000                High volume assembly,  and
                                                                          testing of PTH and SMT,
                                                                          box-build, transformers
-------------------------------------------------------------------------------------------------------------
Las Vegas, NV                                       33,360                Automatic insertion and cable
                                                                          assembly
-------------------------------------------------------------------------------------------------------------
Del Rio, TX                                         25,000                Warehouse, portion of which is
                                                                          bonded
-------------------------------------------------------------------------------------------------------------
Fremont, CA                                         24,030                High volume assembly and testing
                                                                          of both PTH and SMT and ball grid
                                                                          array ("BGA")
-------------------------------------------------------------------------------------------------------------
Taipei, Taiwan                                      2,900                 Materials procurement,
                                                                          alternative sourcing assistance
                                                                          and quality control

-------------------------------------------------------------------------------------------------------------
Huntsville, AL                                        *                   Just-in-time inventory
                                                                          management and delivery
-------------------------------------------------------------------------------------------------------------
</TABLE>


* There is no lease for this facility. The Company has entered into a service
agreement whereby contracted warehouse personnel provide services for the
Company and its customer.

All of the above properties are occupied pursuant to leases of the premises
except for the Huntsville facility. The Company leases its executive offices and
manufacturing facility in Elk Grove Village, Illinois from Circuit Systems, Inc.
("CSI"), a significant shareholder of the Company. The Company, through an
agent, leases the purchasing and engineering office in Taipei, Taiwan to
coordinate Far East purchasing and design activities. In addition, the Company's
affiliate, SMTU, leases the facility in Fremont, California. The Company has
guaranteed lease payments of approximately $1.41 million for SMTU, and has been
indemnified by one of the SMTU limited partners to the extent of 50% of the
lease payment guaranty.


ITEM 3.  LEGAL PROCEEDINGS

         To the Company's knowledge, there are no pending legal proceedings to
which it is a party or to which any of its property is subject.


                                       12
<PAGE>   13

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 1999.


ITEM 4A. EXECUTIVE OFFICERS OF THE REGISTRANT

<TABLE>
<CAPTION>
NAME                                     AGE                      POSITION
----                                     ---                      --------
<S>                                      <C>         <C>
Gary R. Fairhead                           47        President and Chief Executive Officer.
                                                     Gary R. Fairhead has been the President
                                                     of the Company since January 1990.

Linda K. Blake                             38        Chief Financial Officer, Vice President-
                                                     Finance, Treasurer and Secretary.
                                                     Linda K. Blake is the Company's Vice
                                                     President of Finance, Treasurer,
                                                     Secretary and Chief Financial Officer
                                                     and was Controller of the Company from
                                                     June 1991 to February 1994.

Nunzio A. Truppa                           61        Vice President -- Las Vegas Operations.
                                                     Nunzio A. Truppa has been Vice President
                                                     -- Las Vegas Operations for the Company,
                                                     or held equivalent management positions
                                                     with the Company's predecessor, since
                                                     January 1987.

Gregory A. Fairhead                        43        Vice President Mexican Operations and
                                                     Assistant Secretary.
                                                     Gregory A. Fairhead has
                                                     been Vice President --
                                                     Mexican Operations for the
                                                     Company since February 1990
                                                     and is Assistant Secretary.

John P. Sheehan                            38        Vice President -- Director of Materials
                                                     and Assistant Secretary.
                                                     John P. Sheehan has been Vice President
                                                     --Director of Materials of the Company
                                                     since April 1990 and is Assistant
                                                     Secretary.

Andrew J. Saarnio                          51        Vice President -- Elk Grove Operations.
                                                     Andrew J. Saarnio has been Vice President --
                                                     Elk Grove Operations since November 1998.

</TABLE>



                                       13
<PAGE>   14

--------------------------------------------------------------------------------
                                     PART II
--------------------------------------------------------------------------------


ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
         MATTERS

         The Company's Common Stock is traded on the Nasdaq National Market
System under the symbol SGMA. The following table sets forth the range of
quarterly high and low bid information for the Common Stock for the periods
ended April 30, 1998 and 1999.

                            Common Stock as Reported
                                    by Nasdaq

<TABLE>
<CAPTION>
            Period                          High            Low
            ------                          ----            ---
<S>                                       <C>            <C>
            Fiscal 1999:
            Fourth Quarter                 5.875          2.125
            Third Quarter                  3.750          2.500
            Second Quarter                 8.625          0.938
            First Quarter                  9.000          5.500

            Fiscal 1998:
            Fourth Quarter                10.875         10.750
            Third Quarter                 13.875          9.250
            Second Quarter                17.500         11.625
            First Quarter                 17.125         11.891
</TABLE>


         As of July 19, 1999, there were approximately 128 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 3,000 beneficial owners of the Company's Common Stock.

         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 cash or other dividends on any of its capital
stock, except stock dividends, without the written consent of the lender under
the facility.



                                       14
<PAGE>   15


ITEM 6.  SELECTED CONSOLIDATED FINANCIAL DATA


<TABLE>
<CAPTION>
                                                              Years Ended April 30
                                                              --------------------
                                                     (In thousands except per share data)

                                                   1995          1996         1997          1998        1999
                                                   ----          ----         ----          ----        ----

<S>                                             <C>           <C>          <C>           <C>         <C>
Net Sales                                       $45,345       $69,558      $87,216       $85,651     $88,160

Income before income tax                          3,032         3,752        5,161           837       2,750
 Expense

Net Income                                        1,891         2,367        3,255           526       1,697

Total Assets                                     28,235        38,378       42,088        48,641      55,276

Long-term debt and capital                       12,763        16,528       18,593        20,975      23,194
  lease obligations (including
  current maturities)

Net income per common share-                      $0.69         $0.86        $1.16         $0.18       $0.59
 Basic

Net income per common share-                      $0.69         $0.86        $1.11         $0.18       $0.59
 assuming dilution

</TABLE>


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

CAUTIONARY NOTE:

         The following discussion provides an analysis of the Company's
financial condition and results of operations, and should be read in conjunction
with the Selected Consolidated Financial Data and the Consolidated Financial
Statements of the Company, and the Notes thereto, appearing in this Annual
Report on Form 10-K, as well as in conjunction with the cautionary note
concerning forward-looking information which appears at the beginning of Item 1.

OVERVIEW

         The Company is an independent provider of EMS, which includes, printed
circuit board assemblies, and boxbuild (completely assembled) electronic
products. Included among the wide range of services the Company offers its
customers are (1) automatic and manual assembly and testing of customer
products, (2) material sourcing, procurement and control, (3) design,
manufacturing and test engineering support, (4) warehousing and shipment
services, and (5) assistance in obtaining product approvals from governmental
and other regulatory bodies. The Company provides these services through
facilities located in North America and the Far East.


                                       15
<PAGE>   16

         Sales volume and gross profit margins can vary considerably among
customers and products depending on the type of services rendered by the
Company. Specifically, variations in orders for turnkey services versus
consignment services and variations in the number of orders for products with
high raw material costs can lead to significant fluctuations in the Company's
operating results. Further, customers' orders can be delayed, rescheduled or
canceled at any time, which can significantly impact the operating results of
the Company. In addition, the ability to replace such delayed or lost sales in a
short period of time cannot be assured.

         As a manufacturing company, the Company includes all fixed
manufacturing overhead in cost of goods sold. The inclusion of fixed
manufacturing overhead in cost of goods sold magnifies the fluctuations in gross
profit margin percentages caused by fluctuations in net sales and capital
expenditures. Specifically, fluctuations in the mix of consignment and turnkey
contracts could have an effect on the cost of goods sold and the resulting gross
profit as a percentage of net sales. 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. However, turnkey contracts
typically have lower gross margins due to the large material content.
Historically, more than 90% of the Company's sales have been from turnkey
orders.

         In June 1995, the Company signed a three-year manufacturing agreement
with NSI relating to the production of carbon monoxide detection systems. Sales
to NSI accounted for a significant percentage of the Company's net sales from
fiscal 1996 through 1999. Although there has been no written extension of the
agreement, the parties continue to operate under its terms, and the Company
expects sales to NSI will be significant in fiscal 2000. The amount of sales to
NSI beyond fiscal 2000 remains unclear and if the relationship is not continued
it could significantly impact the Company's revenues and earnings.

         In the past, the timing and rescheduling of orders has caused the
Company to experience significant quarterly fluctuations in its revenues and
earnings and the Company expects such fluctuations to continue. In addition, the
Company's fourth and first quarters have historically been the weakest periods.

RESULTS OF OPERATIONS:

Fiscal Year Ended April 30, 1999 Compared
to Fiscal Year Ended April 30, 1998

         Net sales for fiscal 1999 were $88,159,189 compared to $85,650,598 for
fiscal 1998. The 3% increase in net sales was due to additional sales to some of
the Company's key customers. NSI accounted for approximately $31,894,500 or
36.2% of the Company's fiscal 1999 net sales compared to $25,191,000 or 29.4% in
fiscal 1998.

         Gross profit increased to $8,921,091 in fiscal 1999 from $8,456,834 in
fiscal 1998. Gross profit as a percent of net sales was 10.1% and 9.9% for
fiscal 1999 and 1998, respectively. The increase in gross profit for the fiscal
year ended April 30, 1999 compared to the same period in the prior year is
primarily due to product mix.


                                       16
<PAGE>   17

         Selling and administrative expenses increased from $5,704,346 in fiscal
1998 to $5,890,752 in fiscal 1999. The increase is generally consistant with the
increase in net sales, but is also due to a write down of $462,000 for Lighting
Components, L.P. ("LC") receivables in fiscal 1999. LC distributes a variety of
electronic and molded plastic components for use in the sign and lighting
industries. The Company owns approximately 12% of LC. Selling and administrative
expenses as a percent of net sales remained at 6.7% for fiscal 1999 and fiscal
1998.

         Interest expense increased in fiscal 1999 to $2,049,396 from $1,898,488
in fiscal 1998. The overall increase was primarily due to the higher outstanding
balance on the Company's line of credit due to the Company's increased working
capital requirements. Interest expense as a percent of net sales increased from
2.2% in fiscal 1998 to 2.3% in fiscal 1999.

         A gain of approximately $1,391,000 was recognized on settlement of the
insurance reimbursement related to the flood at the Del Rio, Texas and Acuna,
Mexico locations. This gain is reported as a reduction of cost of products sold
of $259,000 and gain on insurance reimbursement of $1,132,000 in the
accompanying 1999 statements of income. The inventory, machinery, and equipment
and building contents segments of the loss have been settled in full. In June
1999, the Company collected the total flood insurance receivable of $2,453,000
which was included on the April 30, 1999 balance sheet. The business
interruption and extra expense segments of the claim have not been finalized.
The results for the year ended April 30, 1999, include expenses and a reduction
in revenue that management believes is covered by its business interruption
insurance. Since there is no agreement with the insurance company on the
business interruption and extra expense segments of the loss, the Company has
not recognized any net proceeds related to these items. The settlement of the
business interruption and extra expense claim is expected to result in
additional income for fiscal 2000.

         Income tax expense increased to $1,052,784 in fiscal 1999 from $310,962
in fiscal 1998. The effective tax rate for fiscal 1999 and 1998 was 38.3% and
37.2%, respectively.

         As a result of the foregoing, net income increased to $1,697,101 in
fiscal 1999 from $525,892 in fiscal 1998. Basic earnings per share for the year
ended April 30, 1999 was $0.59 compared to $.18 in fiscal 1998.
Diluted earnings per share for fiscal 1999 was $0.59.

FISCAL YEAR ENDED APRIL 30, 1998 COMPARED
TO FISCAL YEAR ENDED APRIL 30, 1997

         Net sales for fiscal 1998 were $85,650,598 compared to $87,216,343 for
fiscal 1997. The 2% decrease in net sales was due to softer sales to some of the
Company's key customers. NSI accounted for approximately $25,191,000 or 29.4% of
the Company's fiscal 1998 net sales compared to $25,952,000 or 29.8% in fiscal
1997. Timing and rescheduling of orders has caused the Company to experience
significant quarterly fluctuations in its revenues and earnings and the Company
expects such fluctuations to continue.

         Gross profit decreased to $8,456,834 in fiscal 1998 from $12,639,082 in
fiscal 1997. Gross profit as a percent of net sales was 9.9% and 14.5% for
fiscal 1998 and 1997, respectively. The decrease is partly due to the increase
in the Company's overhead structure over the past 18 months and partly due to
the lower sale volume. This expansion included increased manufacturing space,
manufacturing personnel and equipment which was necessary in order to
competitively position the Company for the future.



                                       17
<PAGE>   18

         Selling and administrative expenses decreased from $5,704,346 in fiscal
1998 to $5,961,184 in fiscal 1997. The decrease is due to a reduction in bonus
accruals and a decrease in commission expense related to the lower sales volume.
Selling and administrative expenses as a percent of net sales decreased for
fiscal 1998 to 6.6% from 6.8% for fiscal 1997.

         Interest expense increased in fiscal 1998 to $1,898,488 from $1,836,967
in fiscal 1997. The overall increase was primarily due to the higher outstanding
balance on the Company's line of credit due to the Companys increased working
capital requirements. Interest expense as a percent of net sales increased from
2.1% in fiscal 1997 to 2.2% in fiscal 1998.

         The Company recorded a $360,000 loss in investment and receivables for
LC in fiscal 1998. LC distributes a variety of electronic and molded plastic
components for use in the sign and lighting industries.
The Company owns approximately 12% of LC.

         Income tax expense decreased to $310,962 in fiscal 1998 from $1,905,584
in fiscal 1997. The effective tax rate for fiscal 1998 and 1997 was 37.2% and
36.9%, respectively.

         As a result of the foregoing, net income decreased to $525,892 in
fiscal 1998 from $3,255,058 in fiscal 1997. Basic earnings per share for the
year ended April 30, 1998 was $0.18 compared to $1.16 in fiscal 1997.
Diluted earnings per share for fiscal 1998 was $0.18

QUARTERLY RESULTS AND SEASONALITY

         Historically, the Company's highest levels of sales are achieved in its
second and third quarters. This is due to the seasonal nature of the business
for several of the Company's customers. In particular, NSI's sales of carbon
monoxide detectors generally coincide with the heating season, and several other
customers have sales tied to the holidays. This trend has caused the Company to
experience generally stronger second and third quarters in each fiscal year.
However, regardless of seasonal fluctuations, there can be no assurance that the
Company will be profitable in any particular quarter.

         The Company's results of operations have varied significantly and may
continue to fluctuate from quarter to quarter. Operating results are affected by
a number of factors, including timing of orders from and shipments to major
customers, availability of materials and components, the volume of orders as
related to the Company's capacity, timing of expenditures in anticipation of
future sales, the gain or loss of significant customers and variations in the
demand for products in the industries served by the Company. A significant
portion of the Company's expenses are relatively fixed in nature and planned
expenditures are based in part on anticipated orders. The inability to adjust
expenditures to compensate for a decline in net sales may magnify the adverse
impact of such decline in the Company's results of operations. The Company's
customers generally require short delivery cycles. In the absence of substantial
backlog, quarterly sales and operating results depend on the volume and timing
of orders received during the quarter, which can be difficult to forecast. In
addition, variations in the size and delivery schedules of purchase orders
received by the Company, as well as changes in customers' delivery requirements
or the rescheduling or cancellations of orders and commitments, may result in
substantial fluctuations in backlog from period to period. Accordingly, the
Company believes that backlog cannot be considered a meaningful indicator of
future operating results.



                                       18
<PAGE>   19

LIQUIDITY AND CAPITAL RESOURCES:

         In fiscal 1999 the Company financed its growth and operations through
cash flow generated from borrowings from its secured lender and cash provided by
operating activities. The Company had working capital of $20,666,932 as of April
30, 1999 and $20,708,686 at April 30, 1998. This represents a current ratio of
2.5 and 2.8 for the years ended April 30, 1999 and 1998, respectively.

         The Company has a credit arrangement in place which is comprised of a
revolving loan facility and a term loan. Under the revolving loan facility, the
Company may borrow certain percentages of the Company's accounts receivable and
inventory, up to a maximum of $25.0 million. At April 30, 1999, based upon those
percentages, there was approximately $1,406,000 of unused credit available under
the revolving loan facility. Outstanding borrowings under the revolving loan
facility bear interest at the Company's option of either the London Interbank
Offered Rate ("LIBOR") plus 2.0% or the bank's prime rate of interest. The
revolving loan facility is collateralized under a loan and security agreement by
substantially all of the domestically located assets of the Company. The
agreement contains certain financial covenants pertaining to the maintenance of
tangible net worth and net income. The revolving loan facility matures on
September 30, 2000 and automatically renews from year to year thereafter, unless
otherwise terminated at the option of the Company or the lender in writing with
at least 90 days notice.

         To the extent that the Company provides funds for salaries, wages,
overhead and capital expenditure items necessary to operate its Mexican
operations, the amount of funds available for use in the Company's domestic
operations may be depleted. The funds, which ordinarily derive from the
Company's cash from operations and borrowings under its revolving credit
facility, is approximately $8,175,000 for a typical 12 month period. The Company
provides funding in U.S. dollars, which are exchanged for pesos as needed.

         The Company is a 42.5% limited partner in SMTU, a California limited
partnership, based in Fremont, California. SMTU has negative working capital of
approximately $3,324,000 as of April 30, 1999, and an accumulated deficit of
approximately $1,472,000. From the formation of SMTU in September 1994 until
January 1995, SMTU had no sales. Since fiscal 1995, sales have increased so that
SMTU was profitable for the year ended April 30, 1999 . In January 1998, the
Company entered into a guaranty agreement with SMTU's lender to guaranty the
obligation of SMTU under its revolving line of credit to a maximum of $500,000
plus interest and related costs associated with the enforcement of the guaranty.
The Company has been indemnified by one of the limited partners for 50% of the
obligation under this guaranty. The Company's investment and advances to and
receivables from SMTU totaled approximately $6,162,000 at April 30, 1999, which
has been classified as long-term assets in the Company's April 30, 1999 balance
sheet. At April 30, 1999, SMTU was in violation of various covenants under its
revolving line of credit, which were waived by its lender. The SMTU credit
facility expires July 31, 1999.

         During 1996, the Company invested $1,200 in exchange for a 12% limited
partnership interest in LC and invested $1,300 in LC, which is the general
partner of LC, in exchange for 13% of its capital stock. At April 30, 1998, the
Company had also made advances to LC in exchange for subordinated debentures and
promissory notes totaling $280,000. Approximately $60,000 in subordinated
debentures are due at various dates beginning on October 15, 2000, and
approximately $220,000 of promissory notes are due on August 1, 2000. Both the
subordinated debentures and promissory notes bear interest at 12% with interest
payments beginning on August 1, 2000. The



                                       19
<PAGE>   20

subordinated debentures and promissory notes totaling $280,000 had been written
down at April 30, 1998. The accrued interest on these subordinated debentures
and promissory notes totaling approximately $88,000 is included in other
long-term assets in the accompanying balance sheet. In addition, the Company
also has miscellaneous and trade receivables recorded in the accompanying
balance sheet from LC at April 30, 1999, totaling approximately $889,000.

         The Company's miscellaneous and trade receivables are secured by a
security interest in substantially all of LC assets. At April 30, 1999, the
Company adjusted the carrying value of assets recorded in the Company's balance
sheet by approximately $550,000 leaving approximately $339,000 of assets in the
accompanying balance sheet at April 30, 1999.

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

YEAR 2000 COMPLIANCE:

         In early 1998 the Company formed a committee of executive officers and
others to examine Year 2000 compliance issues. The scope of the program is
focused on the Company's primary business applications, including both IT and
non-IT applications. This stage has been completed and management believes that
these systems are currently Year 2000 compliant. In addition, the Company has
reviewed other systems including production equipment, to determine possible
risk. Based on assurances received to date provided by vendors, the Company does
not believe significant modifications to production equipment or information
systems is required. However, the Company cannot verify assurances it has been
provided by third parties.

         The Company has implemented a review process to ensure that the
delivery of raw material and services will not be disrupted due to
non-compliance by a key third party supplier. Communications with these
suppliers have been favorable. The Company is receiving assurances that no
interruptions of delivery for product or services will occur; however, the
Company cannot ensure third parties will be compliant. Non-compliance by any
supplier of products or services for a prolonged period could have an adverse
effect on the Company and its results of operations or financial condition.

         The Company has developed a limited contingency plan as third party
suppliers for components are customer mandated. There can be no assurance that
such plans will fully mitigate any problems. Furthermore, there may be certain
suppliers, such as utilities, telecommunication companies, or material vendors
where alternative resources are limited or unavailable.

         In addition, the Company cannot anticipate if a significant portion of
its key customers will be Year 2000 compliant. The Company's customers inability
to process timely payments could have an adverse effect on the Company's cash
flow and liquidity.

         Based on its internal review the Company does not anticipate that
current or future costs related to the Year 2000 issue will have a material
impact on its financial condition. To date the Company has incurred
approximately $20,000 in Year 2000 compliance costs.

         The foregoing is a Year 2000 readiness disclosure entitled to
protection as provided in the Year 2000 Information and Readiness Disclosure
Act.


                                       20
<PAGE>   21

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

                  Not applicable


ITEM 8.  FINANCIAL STATEMENT AND SUPPLEMENTARY DATA

         The response to this item is included in Item 14(a) of this Report.


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

         There have been no changes in or disagreements with accountants on
accounting or financial disclosure matters during the Company's fiscal years
ended April 30, 1999 and 1998.


--------------------------------------------------------------------------------
                           PART III
--------------------------------------------------------------------------------



ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         The information required under this item is incorporated herein by
reference to the Company's definitive proxy statement, filed with the Commission
not later than 120 days after the close of the Company's fiscal year ended April
30, 1999.


ITEM 11. EXECUTIVE COMPENSATION

         The information required under this item is incorporated herein by
reference to the Company's definitive proxy statement, filed with the Commission
not later than 120 days after the close of the Company's fiscal year ended April
30, 1999.


ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The information required under this item is incorporated herein by
reference to the Company's definitive proxy statement, filed with the Commission
not later than 120 days after the close of the Company's fiscal year ended April
30, 1999.


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         The information required under this item is incorporated herein by
reference to the



                                       21
<PAGE>   22

Company's definitive proxy statement, filed with the Commission not later than
120 days after the close of the Company's fiscal year ended April 30, 1999.


--------------------------------------------------------------------------------
                                     PART IV
--------------------------------------------------------------------------------



ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K


(a)(1) and (a)(2)

         The financial statements, including required supporting schedule, are
listed in the index to Consolidated Financial Statements and Financial Schedule
filed as part of the Form 10-K on Page F-1.






                                       22
<PAGE>   23

                                INDEX TO EXHIBITS

      (a)(3)

3.1   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.

3.2   By-laws of the Company, incorporated herein by reference to Exhibit 3.2 to
      Registration Statement on Form S-1, File No. 33-72100 dated February 9,
      1994.

10.1  Lease Agreement dated as of February 13, 1990 between the Company and CSI
      and amendments and addenda thereto - Filed as Exhibit 10.1 to the
      Company's Registration Statement on Form S-1, File No. 33-72100 and hereby
      incorporated by reference.

*
10.2  401(K) Retirement Savings Plan of the Company - Filed as Exhibit 10.3 to
      the Company's Registration Statement on Form S-1, File No. 33-72100 and
      hereby incorporated by reference.
*
10.3  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.

*
10.4  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.

*
10.5  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.

*
10.6  1994 Outside Directors Stock Option Plan - Filed as Exhibit 10.15 to the
      Company's Registration Statement on Form S-1, File No. 33-72100 and hereby
      incorporated by reference.

10.7  The Company's 1997 Directors' Stock Option Plan - filed as Exhibit A to
      the Company's 1997 Proxy Statement filed on August 18, 1997 and hereby
      incorporated by reference.

10.8  Organization Agreement between the Company and other Partners of SMT
      Unlimited L.P. dated September 15, 1994 - Filed as Exhibit 10.23 to the
      Company's Form 10-K for the fiscal year ended April 30, 1995 and hereby
      incorporated by reference.

10.9  Agreement between SigmaTron International, Inc. and Nighthawk Systems,
      Incorporated dated July 9, 1995 - Filed as Exhibit 10.33 to the Company's
      Form 10-Q for the quarter ended July 31, 1995 and hereby incorporated by
      reference.

10.10 Putnam Flexible 401(K) and Profit Sharing Plan Agreement #001 dated March
      22, 1996 between SigmaTron International, Inc. and Putnam Defined


                                       23
<PAGE>   24

      Contribution Plans - Filed as Exhibit 10.35 to the Company's Form 10-Q for
      the quarter ended July 31, 1996 and hereby incorporated by reference.

10.11 Amended 401(k) plan agreement between the Company and Putnam Investments
      dated May 1, 1996 filed as Exhibit 10.35 to the Company's Form 10-Q for
      the quarter ended July 31, 1996 and hereby incorporated by reference.

10.12 Amended and Restated Agreement between SigmaTron International, Inc. and
      Nighthawk Systems, Incorporated dated November 15, 1996 - filed as Exhibit
      10.41 to the Company's Form 10-Q for the quarter ended January 31, 1997
      and hereby incorporated by reference.

10.13 Lease Agreement between SigmaTron International, Inc. and Industrias Irvin
      DeMexico S.A. dated January 15, 1997 and filed as Exhibit 10.42 to the
      Company's Form 10-Q for the quarter ended January 31, 1997 and hereby
      incorporated by reference.

10.14 Lease Agreement between SigmaTron International, Inc. and G. E. Capital
      dated July 14, 1997 filed as Exhibit 10.34 to the Company's Form 10-Q for
      the quarter ended July 31, 1997 and hereby incorporated by reference.

10.15 Lease Agreement # 97-054 between SigmaTron International, Inc. and
      International Financial Services dated June 6, 1997 filed as Exhibit 10.37
      to the Company's Form 10-Q for the quarter ended October 31, 1996 and
      hereby incorporated by reference.

10.16 Lease Agreement # 97-087 between SigmaTron International, Inc. and
      International Financial Services dated June 26, 1997 filed as Exhibit
      10.36 to the Company's Form 10-Q for the quarter ended October 31, 1997
      and hereby incorporated by reference.

10.17 Lease Agreement # 97-097 between SigmaTron International, Inc. and
      International Financial Services dated August 11, 1997 filed as Exhibit
      10.37 to the Company's Form 10-Q for the quarter ended October 31, 1997
      and hereby incorporated by reference.

10.18 Lease Agreement # 97-185 between SigmaTron International, Inc. and
      International Financial Services dated December 22, 1997 filed as Exhibit
      10.38 to the Company's Form 10-Q for the quarter ended January 31, 1998
      and hereby incorporated by reference.

10.19 Lease Agreement # E002 between SigmaTron International, Inc. and G. E.
      Capital dated December 31, 1997 filed as Exhibit 10.39 to the Company's
      Form 10-Q for the quarter ended January 31, 1998 and hereby incorporated
      by reference.

10.20 Guaranty and Surety Agreement between SigmaTron International, Inc. and
      HSBC Business Loans Inc. dated January 31, 1998 filed as Exhibit 10.40 to
      the Company's Form 10-Q for the quarter ended January 31, 1998 and hereby
      incorporated by reference.

10.21 Lease Agreement # 98-10 between SigmaTron International, Inc. and
      International Financial Services dated February 2, 1998 filed as Exhibit
      10.21 to the Company's Form 10-K for fiscal year ended April 30, 1998 and
      hereby incorporated by reference.



                                       24
<PAGE>   25

10.22 Lease Agreement # 98-106 between SigmaTron International, Inc. and
      International Financial Services dated June 30, 1998 and hereby
      incorporated by reference filed as Exhibit 10.42 to the Company's Form
      10-Q for the quarter ended July 31, 1998.

10.23 Lease Agreement # E003 between SigmaTron International, Inc. and G.E.
      Capital dated November 10, 1998 filed as Exhibit 10.42 to the Company's
      Form 10-Q for the quarter ended January 31, 1999 and hereby incorporated
      by reference.

10.24 Lease Agreement # 99-048 between SigmaTron International, Inc. and
      International Financial Services dated April 30, 1999.

10.25 Lease Agreement between the Company and International Financial Services #
      96-049 dated April 18, 1996 filed as Exhibit 10.36 to the Company's Form
      10-Q for the quarter ended October 31, 1996 and hereby incorporated by
      reference.

22.1  Subsidiaries of the Registrant - Filed as Exhibit 22.1 of the Company's
      Registration Statement on Form S-1, File No. 33-72100 and hereby
      incorporated by reference.

23.1  Consent of Ernst & Young LLP.

27.1  Financial Data Schedule (EDGAR only)

      *  Indicates management contract or compensatory plan.

     (b) No reports on Form 8-K were filed during the 1999 fiscal year.

     (c) Exhibits

         The Company hereby files as exhibits to this Report the exhibits listed
         in Item 14 (a)(3) above, which are attached hereto.

     (d) Financial Statements Schedules

         The Company hereby files a schedule to this Report the financial
         schedule in Item 14, which are attached hereto.



                                       25
<PAGE>   26


                                   SIGNATURES

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.

                          SIGMATRON INTERNATIONAL, INC.

                                    By:      /s/ Gary R. Fairhead
                                       -----------------------------------------

                                       Gary R. Fairhead, President
                                       and Chief Executive Officer

                              Dated: July 28, 1999

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.


<TABLE>
<CAPTION>

      Signature                                        Title                                   Date
      ---------                                        -----                                   ----

<S>                                 <C>                                                       <C>
/s/ Franklin D. Sove                Chairman of the Board of Directors                        July 28, 1999
--------------------------
Franklin D. Sove


/s/ Gary R. Fairhead                President and Chief Executive Officer                     July 28, 1999
--------------------------          (Principal Executive Officer)
Gary R. Fairhead


/s/ Linda K. Blake                  Chief Financial Officer, Secretary and                    July 28, 1999
--------------------------          Treasurer (Principal Financial Officer and
Linda K. Blake                      Principal Accounting Officer)



/s/ D.S. Patel                      Director                                                  July 28, 1999
--------------------------
D.S. Patel


/s/ John P. Chen                    Director                                                  July 28, 1999
--------------------------
John P. Chen


/s/ Dilip S. Vyas                   Director                                                  July 28, 1999
--------------------------
Dilip S. Vyas


/s/ William C. Mitchell             Director                                                  July 28, 1999
--------------------------
William C. Mitchell


/s/ Thomas W. Rieck                 Director                                                  July 28, 1999
--------------------------
Thomas W. Rieck


/s/ Steven Rothstein                Director                                                  July 28, 1999
--------------------------
Steven Rothstein

</TABLE>



                                       26
<PAGE>   27



                          SigmaTron International, Inc.

                        Consolidated Financial Statements




                                    Contents

Report of Independent Auditors..............................................F-2

Consolidated Financial Statements

Consolidated Balance Sheets at April 30, 1999 and 1998......................F-3
Consolidated Statements of Income for the Years Ended
   April 30, 1999, 1998, and 1997...........................................F-5
Consolidated Statements of Equity for the Years Ended
   April 30, 1999, 1998, and 1997...........................................F-6
Consolidated Statements of Cash Flows for the Years Ended
   April 30, 1999, 1998, and 1997...........................................F-7
Notes to Consolidated Financial Statements..................................F-9

Schedule II
Valuation and Qualifying Accounts..........................................F-25






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






                                       F-1

<PAGE>   28




                         Report of Independent Auditors

The Board of Directors and Stockholders
SigmaTron International, Inc.

We have audited the accompanying consolidated balance sheets of SigmaTron
International, Inc. as of April 30, 1999 and 1998, and the related consolidated
statements of income, equity, and cash flows for each of the three years in the
period ended April 30, 1999. Our audits also included the financial statement
schedule listed in the Index at Item 14(a). These financial statements and
schedule are the responsibility of the Company's management. Our responsibility
is to express an opinion on these financial statements and schedule based on our
audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe 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 consolidated financial position of
SigmaTron International, Inc., at April 30, 1999 and 1998, and the consolidated
results of its operations and its cash flows for each of the three years in the
period ended April 30, 1999, in conformity with generally accepted accounting
principles. Also, in our opinion, the related financial statement schedule, when
considered in relation to the basic financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.



/s/ Ernst & Young LLP

Chicago, Illinois
June 25, 1999



                                      F-2

<PAGE>   29

                          SigmaTron International, Inc.

                           Consolidated Balance Sheets


<TABLE>
<CAPTION>
                                                                                 April 30
                                                                           1999             1998
                                                                       -----------------------------
<S>                                                                    <C>              <C>
Assets
Current assets:
   Cash                                                                $   280,071      $   284,679
   Accounts receivable, less allowance for doubtful accounts
     of $575,000 at April 30, 1999                                      13,563,836       11,977,973
   Inventories                                                          16,240,502       18,972,587
   Prepaid and other assets                                                864,895          706,771
   Deferred income taxes                                                   147,514          218,788
   Receivable from insurance reimbursement                               2,453,235                -
   Other receivables                                                     1,013,982           43,154
                                                                       -----------------------------
Total current assets                                                    34,564,035       32,203,952

Machinery and equipment, net                                            13,434,789       11,249,550

Due from SMTU:
   Investment and advances                                                 448,545          311,107
   Equipment lease receivables                                           4,201,823        3,207,691
   Other receivables                                                     1,511,372          650,695
                                                                       -----------------------------
                                                                         6,161,740        4,169,493



Other assets                                                             1,115,893        1,018,211
                                                                       -----------------------------
Total assets                                                           $55,276,457      $48,641,206
                                                                       =============================
</TABLE>






                                      F-3

<PAGE>   30


<TABLE>
<CAPTION>
                                                                                 April 30
                                                                           1999             1998
                                                                       -----------------------------
<S>                                                                    <C>              <C>
Liabilities and stockholders' equity
Current liabilities:
   Notes payable - Banks                                               $         -      $   111,108
   Trade accounts payable                                                8,003,377        6,751,886
   Trade accounts payable - Related parties                              1,256,000          915,475
   Accrued expenses                                                      1,721,932        1,575,434
   Income tax payable                                                      644,101           60,025
   Capital lease obligations                                             2,271,693        2,081,338
                                                                       -----------------------------
Total current liabilities                                               13,897,103       11,495,266

Notes payable - Banks,  less current portion                            17,382,681       15,177,695
Capital lease obligations, less current portion                          3,538,721        3,604,793
Deferred income taxes                                                    1,157,460          760,061
                                                                       -----------------------------
Total liabilities                                                       35,975,965       31,037,815

Stockholders' equity:
   Preferred stock, $.01 par value; 500,000 shares
     authorized, none issued and outstanding                                     -                -
   Common stock, $.01 par value; 6,000,000 shares
     authorized, 2,881,227 shares issued and outstanding                    28,812           28,812
   Capital in excess of par value                                        9,436,554        9,436,554
   Retained earnings                                                     9,835,126        8,138,025
                                                                       -----------------------------
Total stockholders' equity                                              19,300,492       17,603,391
                                                                       -----------------------------
Total liabilities and stockholders' equity                             $55,276,457      $48,641,206
                                                                       =============================
</TABLE>

See accompanying notes.





                                      F-4

<PAGE>   31


                          SigmaTron International, Inc.

                        Consolidated Statements of Income


<TABLE>
<CAPTION>
                                                                    Year ended April 30
                                                         1999              1998             1997
                                                     -----------------------------------------------
<S>                                                  <C>               <C>              <C>
Net sales                                            $88,159,189       $85,650,598      $87,216,343
Cost of sales                                         79,238,098        77,193,764       74,577,261
                                                     -----------------------------------------------
                                                       8,921,091         8,456,834       12,639,082
Selling and administrative expenses                    5,890,752         5,704,346        5,961,184
                                                     -----------------------------------------------
Operating income                                       3,030,339         2,752,488        6,677,898
Equity in net income (loss) of SMTU                      137,439          (216,131)         (75,036)
Interest expense - Banks and capital lease
   obligations                                        (2,049,396)       (1,898,488)      (1,836,967)
Interest expense - Related parties                             -              (523)          (9,961)
Interest income - SMTU and LC                            587,304           479,508          404,708
Loss on investment and receivables with LC
                                                         (88,000)         (280,000)               -
Gain on insurance reimbursement                        1,132,199                 -                -
                                                     -----------------------------------------------
Income before income tax expense                       2,749,885           836,854        5,160,642
Income tax expense                                    (1,052,784)         (310,962)      (1,905,584)
                                                     -----------------------------------------------
Net income                                           $ 1,697,101       $   525,892      $ 3,255,058
                                                     ===============================================

Net income per common share - Basic                  $       .59       $       .18      $      1.16
                                                     ===============================================

Net income per common share - Assuming
   dilution                                          $       .59       $       .18      $      1.11
                                                     ===============================================
</TABLE>

See accompanying notes.









                                      F-5

<PAGE>   32


                          SigmaTron International, Inc.

                        Consolidated Statements of Equity


<TABLE>
<CAPTION>
                                                                                     Capital
                                                                                    in Excess                     Total
                                  Preferred Stock             Common Stock            of Par      Retained    Stockholders'
                                Shares       Amount       Shares       Amount         Value       Earnings        Equity
                             ----------------------------------------------------------------------------------------------
<S>                          <C>              <C>        <C>           <C>          <C>          <C>           <C>
Balance at April 30, 1996          -          $ -        2,737,500     $27,375      $8,384,089   $4,357,075    $12,768,539
Issuance of common stock
  for exercise of options
  and warrants                     -            -          137,727       1,377         471,123            -        472,500
Net income                         -            -                -           -               -    3,255,058      3,255,058
Tax benefit from options and
  warrants exercised               -            -                -           -         518,547            -        518,547
                             ----------------------------------------------------------------------------------------------
Balance at April 30, 1997          -            -        2,875,227      28,752       9,373,759    7,612,133     17,014,644
Issuance of common stock for
  exercise of options              -            -            6,000          60          41,940            -         42,000
Net income                         -            -                -           -               -      525,892        525,892
Tax benefit from options
  exercised                        -            -                -           -          20,855            -         20,855
                             ----------------------------------------------------------------------------------------------
Balance at April 30, 1998          -            -        2,881,227      28,812       9,436,554    8,138,025     17,603,391
Net income                         -            -                -           -               -    1,697,101      1,697,101
                             ----------------------------------------------------------------------------------------------
Balance at April 30, 1999          -          $ -        2,881,227     $28,812      $9,436,554   $9,835,126    $19,300,492
                             ==============================================================================================
</TABLE>

See accompanying notes.











                                      F-6

<PAGE>   33


                          SigmaTron International, Inc.

                      Consolidated Statements of Cash Flows


<TABLE>
<CAPTION>
                                                                              Year ended April 30
                                                                   1999              1998              1997
                                                          ------------------------------------------------------
<S>                                                            <C>              <C>                <C>
OPERATING ACTIVITIES
Net income                                                      $1,697,101       $   525,892        $3,255,058
Adjustments to reconcile net income to net cash provided
   by operating activities:
     Depreciation                                                1,481,336         1,262,297         1,047,262
     Equity in net (income) loss of SMTU                          (137,439)          216,131            75,036
     Amortization                                                        -            14,136            23,778
     Gain on insurance reimbursement                            (1,391,124)                -                 -
     Provision for doubtful accounts                                     -           113,454                 -
     Loss on investment and receivables with LC                    550,000           360,000                 -
     Deferred income taxes                                         468,673           (46,335)          382,844
     Changes in operating assets and liabilities:
       Accounts receivable                                      (2,135,863)       (3,400,970)        2,310,028
       Inventories                                               2,732,085        (1,306,987)       (2,811,550)
       Prepaid expenses and other assets                        (2,087,347)         (943,788)         (476,855)
       Trade accounts payable                                    1,251,491         3,507,349        (2,881,853)
       Trade accounts payable - Related parties                    340,525           178,582           (57,417)
       Accrued expenses                                            146,498          (105,287)          237,687
       Income taxes                                                584,113           179,546           353,645
                                                          ------------------------------------------------------
Net cash provided by operating activities                        3,500,049           554,020         1,457,663

INVESTING ACTIVITIES
Insurance reimbursement - Net                                      485,011                 -                 -
Purchases of machinery and equipment                            (3,765,490)         (934,692)       (2,950,725)
Proceeds from the sale and leaseback of machinery                        -         1,429,898                 -
Proceeds from SMTU subleases                                             -           196,895           424,412
Advances to SMTU                                                         -                 -          (100,000)
Proceeds from the sale of investment in SMTU                             -                 -               250
                                                          ------------------------------------------------------
Net cash provided by (used in) investing
   activities                                                   (3,280,479)          692,101        (2,626,063)
</TABLE>





                                      F-7

<PAGE>   34


                          SigmaTron International, Inc.

                Consolidated Statements of Cash Flows (continued)


<TABLE>
<CAPTION>
                                                                         Year ended April 30
                                                              1999              1998             1997
                                                     ------------------------------------------------------
<S>                                                       <C>               <C>              <C>
FINANCING ACTIVITIES
Repayment of term loan and other notes
   payable                                                $         -       $   (42,596)     $  (151,860)
Proceeds from exercise of stock options and
   warrants                                                         -            42,000          472,500
Net proceeds under line of credit                           2,093,878           407,192        2,181,772
Net payments under capital lease obligations               (2,318,056)       (1,691,261)      (1,013,289)
                                                     ------------------------------------------------------
Net cash (used in) provided by financing
   activities                                                (224,178)       (1,284,665)       1,489,123
                                                     ------------------------------------------------------
Change in cash                                                 (4,608)          (38,544)         320,723
Cash at beginning of period                                   284,679           323,223            2,500
                                                     ------------------------------------------------------
Cash at end of period                                     $   280,071       $   284,679      $   323,223
                                                     ======================================================

Supplementary disclosure of cash flow information:
     Cash paid for interest                               $ 2,038,638       $ 1,900,073      $ 1,834,946
                                                     ======================================================

     Cash paid for income taxes                           $         -       $   177,750      $ 1,169,854
                                                     ======================================================

     Acquisition of machinery and equipment financed
       under capital leases                               $ 2,526,088       $ 1,234,095      $   840,429
                                                     ======================================================
</TABLE>

See accompanying notes.








                                      F-8

<PAGE>   35

                          SigmaTron International, Inc.

                   Notes to Consolidated Financial Statements


1.  Description of the Business

SigmaTron International, Inc. (the Company), is an independent electronic
manufacturing services provider, which includes printed circuit board assemblies
and completely assembled (boxbuild) electronic products. Included among the wide
range of services the Company, its wholly owned subsidiary, Standard Components
de Mexico, S.A., and its affiliate, SMT Unlimited L.P. (SMTU), offer their
customers are: (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 services through an international network of facilities
located in North America and the Far East.

2.  Summary of Significant Accounting Policies

Consolidation Policy

The consolidated financial statements include the accounts and transactions of
the Company and its wholly owned subsidiary, Standard Components de Mexico, S.A.
Significant intercompany accounts and transactions have been eliminated in
consolidation.

Use of Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.

Inventories

Inventories are stated at the lower of cost or market. Cost is determined by the
first in, first out (FIFO) method.





                                      F-9

<PAGE>   36

                          SigmaTron International, Inc.

             Notes to Consolidated Financial Statements (continued)


2.  Summary of Significant Accounting Policies (continued)

Machinery and Equipment

Machinery and equipment are stated at cost. The Company provides for
depreciation and amortization using the straight-line method over the estimated
useful life of the assets which range from 3 to 15 years.

Income Taxes

Deferred 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.

Earnings Per Share

In 1997, the Financial Accounting Standards Board issued Statement No. 128,
Earnings Per Share. Statement 128 replaced the calculation of primary and fully
diluted earnings per share with basic and diluted earnings per share. Unlike
primary earnings per share, basic earnings per share excludes any dilutive
effects of options, warrants, and convertible securities. Diluted earnings per
share is very similar to the previously reported fully diluted earnings per
share. All earnings per share amounts for all periods have been presented and,
where appropriate, restated to conform to the Statement 128 requirements.

Revenue Recognition

The Company's net sales are comprised of product sales and service revenue.
Revenue from product sales is recognized upon shipment of goods. Service revenue
is recognized as the services are performed.

Reclassifications

Certain reclassifications were made to the 1998 consolidated financial
statements to conform with the 1999 presentation.






                                      F-10

<PAGE>   37

                          SigmaTron International, Inc.

             Notes to Consolidated Financial Statements (continued)


3.  Inventories

Inventories consist of the following:

<TABLE>
<CAPTION>
                                                                                   April 30
                                                                             1999             1998
                                                                       --------------------------------

<S>                                                                      <C>              <C>
Finished products                                                        $ 1,359,207      $ 3,292,442
Work in process                                                            1,709,482        1,887,517
Raw materials                                                             13,171,813       13,792,628
                                                                       --------------------------------
                                                                         $16,240,502      $18,972,587
                                                                       ================================
</TABLE>

4.  Machinery and Equipment

Machinery and equipment consist of the following:

<TABLE>
<CAPTION>
                                                                                   April 30
                                                                             1999             1998
                                                                       --------------------------------

<S>                                                                      <C>              <C>
Machinery and equipment                                                  $11,475,094      $ 7,225,671
Office equipment                                                           1,266,844        1,090,763
Tools and dies                                                               115,362          123,251
Leasehold improvements                                                     1,643,626        2,030,129
Equipment under capital leases                                             5,051,188        5,415,725
                                                                       --------------------------------
                                                                          19,552,114       15,885,539
Less:  Accumulated depreciation and amortization, including
   amortization of assets under capital leases of $1,038,187 and
   $852,836 at April 30, 1999 and 1998, respectively
                                                                           6,117,325        4,635,989
                                                                       --------------------------------
                                                                         $13,434,789      $11,249,550
                                                                       ================================
</TABLE>







                                      F-11

<PAGE>   38

                          SigmaTron International, Inc.

             Notes to Consolidated Financial Statements (continued)


5.  Investment and Advances With SMTU

The Company's investment in SMTU consists of a 42.5% ownership interest in SMTU,
which was formed on September 15, 1994, in Fremont, California, as a joint
venture to provide surface mount technology assembly services primarily to
electronic original equipment manufacturers. During fiscal year 1995, the
Company invested $49,500 in exchange for a 45% limited partnership interest in
SMTU and $2,500 in SMT Unlimited, Inc. (SMT, Inc.), which is the general partner
of SMTU, in exchange for 50% of its capital stock. During fiscal year 1997, the
Company sold 2.5% of its interest to a key employee of SMTU. One of the limited
partners of SMTU is also an equal shareholder of SMT, Inc., along with the
Company. The Company made advances to SMTU in exchange for subordinated
debentures in the face amount of $100,000 and $50,000 in 1997 and 1996,
respectively (none in 1999 or 1998). In 1996, the Company also made advances to
SMTU in exchange for promissory notes in the face amount of $300,000. These
promissory notes were converted into subordinated debentures during 1997.
Debentures totaling $650,000 outstanding at April 30, 1999, bear interest at 8%,
and are to be repaid on December 31, 1999. The remaining $400,000 of these
debentures bears interest at 12% and is to be repaid on December 31, 2001. The
Company guarantees lease payments of approximately $1,410,000 for SMTU. The
Company has been indemnified by one of the other limited partners in the amount
of $705,000 for the guaranteed lease payments. SMTU incurs a $12,500 monthly
administrative fee for administrative services provided by the Company. See also
Note 13.

The investment in SMTU is carried at cost plus equity in undistributed earnings
or losses since acquisition. The Company has recorded its share of the losses in
SMTU first as a reduction of the investment in SMTU and then as a reduction in
the carrying value of the subordinated debentures.

In January 1998, the Company entered into a guaranty agreement with SMTU's
lender to guaranty the obligation of SMTU under its revolving line of credit to
a maximum of $500,000 plus interest and related costs associated with the
enforcement of the guaranty. The Company may be released from its guaranty
within 120 days of any fiscal year-end if SMTU attains $500,000 of net profit
after partnership distributions and specific cash flow levels as defined in the
agreement. The Company has been indemnified by one of the limited partners for
50% of the obligation under this guaranty. The SMTU credit facility expires July
31, 1999.

The Company's investment and advances to and receivables from SMTU totaled
approximately $6,162,000 at April 30, 1999, and no amount was recorded by the
Company related to its guaranty of SMTU's revolving line of credit. SMTU has
negative

                                      F-12

<PAGE>   39

                          SigmaTron International, Inc.

             Notes to Consolidated Financial Statements (continued)


5.  Investment and Advances With SMTU (continued)

working capital of approximately $3,324,000 at April 30, 1999, and an
accumulated deficit of approximately $1,472,000 at April 30, 1999. From the
formation of SMTU in September 1994 until January 1995, SMTU had no sales. Since
fiscal 1995, sales have increased so that SMTU was profitable for the year ended
April 30, 1999.

6.  Flood Damage in Del Rio, Texas, and Acuna, Mexico

In late August 1998, the Company's warehousing operation in Del Rio, Texas, and
one of its manufacturing operations in Acuna, Mexico, were significantly damaged
by a flash flood. The Company expedited replacement machinery and equipment and
inventory to its damaged facilities. The majority of the damaged equipment used
in the manufacturing process was replaced with new equipment. The manufacturing
operation in Acuna was running at preflood levels, and all raw material issues
created by the flood were resolved by December 1998.

A gain of approximately $1,391,000 was recognized on settlement of a portion of
the insurance reimbursement and is reported as a reduction of cost of sales of
$259,000 and gain on insurance reimbursement of $1,132,000 in the accompanying
1999 statements of income. The inventory, machinery, and equipment and building
contents segments of the loss have been settled in full. In June 1999, the
Company collected the total flood insurance receivable of $2,453,000 recorded as
of April 30, 1999. The business interruption and extra expense segments of the
claim have not been finalized. The results for the year ended April 30, 1999,
include expenses and a reduction in revenue that management believes is covered
by its business interruption insurance. Since there is no agreement with the
insurance company on the business interruption and extra expense segments of the
loss, the Company has not recognized any future net proceeds related to these
items. The business interruption and extra expense claim, if any, may result in
additional income for fiscal 2000.

7.  Notes Payable

Notes payable consist of the following:

<TABLE>
<CAPTION>
                                                                     April 30
                                                                1999          1998
                                                            -------------------------
<S>                                                         <C>           <C>
Banks:
   Revolving line of credit, interest payable monthly       $17,382,681   $15,177,695
   Term loan, paid December 1, 1998                                   -       111,108
                                                            -------------------------
                                                             17,382,681    15,288,803
Less:  Current portion                                                -       111,108
                                                            -------------------------
                                                            $17,382,681   $15,177,695
                                                            =========================
</TABLE>


                                      F-13

<PAGE>   40

                          SigmaTron International, Inc.

             Notes to Consolidated Financial Statements (continued)


7.  Notes Payable (continued)

The Company's amended and restated loan and security agreement allow the maximum
borrowing limit under the revolving line-of-credit agreement to be limited to
the lesser of: (i) $25,000,000; or (ii) an amount equal to the sum of up to 85%
of the receivables borrowing base and the lesser of $9,000,000 or the amount of
the inventory borrowing base, as defined.

Under the current terms, borrowings under the revolving line of credit bear
interest at rates equal to the London Interbank Offered Rate (4.97% to 5.81% at
April 30, 1999) plus 2% or at the prime rate (7.75% of April 30, 1999) at the
option of the Company. At April 30, 1999, there was approximately $1,406,000 of
unused credit available under the terms of the agreement. On July 14, 1998, the
Company entered into an amendment to their loan and security agreement whereby
the maturity date of the revolving line of credit was extended to September 30,
2000, and automatically renews from year to year thereafter, unless otherwise
terminated at the option of the Company or the lender in writing with at least
90 days' notice.

The revolving line-of-credit facility is collateralized by substantially all of
the assets of the Company, except for the machinery and equipment acquired from
a related party, machinery and equipment acquired through capital leases, and
inventory and machinery and equipment located outside the United States. The
agreement contains certain financial covenants, including specific covenants
pertaining to the maintenance of minimum tangible net worth and net income. The
agreement restricts annual lease rentals and capital expenditures and the
payment of dividends or distributions of any cash or other property on any of
its capital stock, except that common stock dividends may be distributed by a
stock split or dividends pro rata to its stockholders.

8.  Accrued Expenses

Accrued expenses consist of the following:
                                                      April 30
                                               1999              1998
                                            ----------------------------

          Payroll                           $1,028,804        $1,174,290
          Bonuses                              352,000            50,000
          Interest payable                     126,993           112,939
          Commissions                           94,119           142,791
          Professional fees                    120,016            95,414
                                            ----------------------------
                                            $1,721,932        $1,575,434
                                            ============================


                                      F-14

<PAGE>   41

                          SigmaTron International, Inc.

             Notes to Consolidated Financial Statements (continued)


8.  Accrued Expenses (continued)

Bonuses represent discretionary management and other employee bonuses, of which
$250,000 and $50,000 was accrued during the fourth quarter of 1999 and 1998,
respectively.

9.  Related Party Transactions and Commitments

During the years ended April 30, 1999, 1998, and 1997, the Company was involved
in transactions with Circuit Systems, Inc. (CSI), a shareholder of the Company.
These transactions primarily involved the purchase of raw materials and the
leasing of operating space. Purchases of raw materials were approximately
$6,325,000, $6,380,000, and $6,895,000, for the years ended April 30, 1999,
1998, and 1997, respectively. The Company leases space in Elk Grove Village,
Illinois, owned by CSI at a base rental of $30,000 per month, with an additional
$7,000 per month for property taxes. The lease requires the Company to pay
maintenance and utility expenses. The lease expires in February 2001 and
contains an option to renew for an additional five-year period. Rent and
property tax expense totaled approximately $466,000, $486,000, and $423,000 for
the years ended April 30, 1999, 1998, and 1997, respectively.

At April 30, 1999 and 1998, the Company had non-interest-bearing receivables of
approximately $190,000 for advances to a company in which an officer of the
Company is an investor. The balance has been recorded as an other long-term
asset at April 30, 1999 and 1998. This outstanding receivable has been
guaranteed by an officer of the Company.

During 1996, the Company invested $1,200 in exchange for a 12% limited
partnership interest in Lighting Components, L.P. (LC) and invested $1,300 in
Lighting Components, Inc., which is the general partner of LC, in exchange for
13% of its capital stock. At April 30, 1998, the Company had also made advances
to LC in exchange for subordinated debentures and promissory notes totaling
$280,000. Approximately $60,000 in subordinated debentures are due at various
dates beginning on October 15, 2000, and approximately $220,000 of promissory
notes are due on August 1, 2000. Both the subordinated debentures and promissory
notes bear interest at 12% with interest payments beginning on August 1, 2000.
The subordinated debentures and promissory notes totaling $280,000 were reserved
to a net realizable value of $0 at April 30, 1998. The accrued interest on these
subordinated debentures and promissory notes totaling approximately $88,000 is
included in other long-term assets in the accompanying balance sheet. In
addition, the Company also has miscellaneous and trade receivables recorded in


                                      F-15

<PAGE>   42

                          SigmaTron International, Inc.

             Notes to Consolidated Financial Statements (continued)


the accompanying balance sheet from LC at April 30, 1999, totaling approximately
$889,000.

9.  Related Party Transactions and Commitments (continued)

The Company's miscellaneous and trade receivables are secured by a security
interest in substantially all of LC's assets. At April 30, 1999, the Company
reduced the carrying value of assets recorded in the Company's balance sheet by
approximately $550,000 to net realizable value. Accordingly, net assets in the
accompanying balance sheet at April 30, 1999 and April 30, 1998, were:

<TABLE>
<CAPTION>
                                                               Subordinated           Miscellaneous
                                                              Debentures and      and Trade Receivables
                                                             Promissory Notes
                                                            --------------------------------------------
<S>                                                              <C>                    <C>
April 30, 1998:
   Gross                                                         $ 280,000              $ 546,000
   Reserve                                                        (280,000)               (80,000)
                                                            --------------------------------------------
   Net                                                           $       -              $ 466,000
                                                            ============================================

April 30, 1999:
   Gross                                                         $ 280,000              $ 889,000
   Reserve                                                        (280,000)              (550,000)
                                                            --------------------------------------------
   Net                                                           $       -              $ 339,000
                                                            ============================================
</TABLE>

10. Income Taxes

The income tax provision for the years ended April 30, 1999, 1998, and 1997
consists of the following:

<TABLE>
<CAPTION>
                                                          1999               1998             1997
                                                     ---------------------------------------------------
<S>                                                    <C>                 <C>             <C>
Current:
   Federal                                             $  463,766          $292,536        $1,231,639
   State                                                   71,790            64,761           291,101
Deferred:
   Federal                                                450,917           (40,395)          333,761
   State                                                   66,311            (5,940)           49,083
                                                     ---------------------------------------------------
                                                       $1,052,784          $310,962        $1,905,584
                                                     ===================================================
</TABLE>


                                      F-16

<PAGE>   43

                          SigmaTron International, Inc.

             Notes to Consolidated Financial Statements (continued)


10. Income Taxes (continued)

The reasons for the differences between the income tax provision and the amounts
computed by applying the statutory federal income tax rates to income before
income tax expense for the years ended April 30, 1999, 1998, and 1997 are as
follows:

<TABLE>
<CAPTION>
                                                           1999            1998              1997
                                                     --------------------------------------------------
<S>                                                     <C>              <C>              <C>
Income tax at statutory federal rate                    $  934,960       $284,530         $1,754,618
Effect of:
   State income taxes, net of federal tax benefit          127,046         38,663            238,421
   Other, net                                               (9,222)       (12,231)           (87,455)
                                                     --------------------------------------------------
                                                        $1,052,784       $310,962         $1,905,584
                                                     ==================================================
</TABLE>

Significant temporary differences which result in deferred tax assets and
deferred tax liabilities at April 30, 1999 and 1998 are as follows:

<TABLE>
<CAPTION>
                                                                             1999             1998
                                                                       -------------------------------

<S>                                                                      <C>                <C>
Allowance for doubtful accounts                                          $   (21,450)       $      -
Inventory obsolescence reserve                                               129,285         129,285
Accruals not currently deductible                                             58,824          75,856
Inventory                                                                     64,914          58,891
Other                                                                        (84,059)        (45,244)
                                                                       -------------------------------
Net deferred tax asset                                                   $   147,514        $218,788
                                                                       ===============================

Gain on involuntary conversion                                           $  (441,480)       $      -
Machinery and equipment                                                   (1,002,926)        835,556
Other                                                                        286,946         (75,495)
                                                                       -------------------------------
Net deferred tax liability                                               $(1,157,460)       $760,061
                                                                       ===============================
</TABLE>

11.  401(k) Retirement Savings Plan

The Company sponsors a 401(k) retirement savings plan which is available to all
nonunion employees who complete 1,000 hours of service annually. Participants
are allowed to contribute up to 15% of their annual compensation, and the
Company may elect to match participant contributions up to the greater of 6% of
the participant's compensation or $300. The Company contributed $46,954,
$32,904, and $34,554 to the plan during the fiscal years ended April 30, 1999,
1998, and 1997, respectively. The Company paid total expenses of $10,960,
$13,500, and $8,000 for the fiscal years ended


                                      F-17

<PAGE>   44

                          SigmaTron International, Inc.

             Notes to Consolidated Financial Statements (continued)


April 30, 1999, 1998, and 1997, respectively, relating to costs associated with
the Plan's administration.

12. Major Customers and Concentration of Credit Risks

Financial instruments which potentially subject the Company to concentration of
credit risk consist principally of uncollateralized accounts receivable.

For the year ended April 30, 1999, two customers accounted for 36% and 14% of
net sales of the Company, and 32% and 4% of accounts receivable at April 30,
1999. For the year ended April 30, 1998, four customers accounted for 9%, 13%,
29%, and 9% of net sales of the Company, and 21%, 4%, 24%, and 11% of accounts
receivable at April 30, 1998. For the year ended April 30, 1997, three customers
accounted for 30%, 14%, and 11% of net sales of the Company, and 20%, 10%, and
4% of accounts receivable at April 30, 1997.

13. Leases

The Company leases its 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, 1999:

<TABLE>
<CAPTION>
                                                         Capital          Operating
                                                         Leases            Leases
                                                     --------------------------------

            <S>                                        <C>               <C>
            2000                                       $2,690,004        $1,036,884
            2001                                        2,073,782           895,662
            2002                                        1,202,863           423,792
            2003                                          429,306           219,792
            2004                                          144,607           219,792
            Thereafter                                          -           176,496
                                                     --------------------------------
                                                        6,540,562        $2,972,418
                                                                   ==================
            Less:  Amounts representing interest          730,148
                                                     ---------------
                                                        5,810,414
            Less:  Current portion                      2,271,693
                                                     ---------------
                                                       $3,538,721
                                                     ===============
</TABLE>




                                      F-18

<PAGE>   45

                          SigmaTron International, Inc.

             Notes to Consolidated Financial Statements (continued)


13. Leases (continued)

The Company subleased the machinery and equipment relating to 13 of the above
capital lease agreements to its affiliate, SMTU. These sublease agreements
contain the same maturity dates as the original underlying lease agreements. The
effective interest rates on these leases are approximately 2% higher than the
effective interest rates (ranging from 9.85% to 12.35%) implicit in the original
lease to cover various administrative expenses of the Company. The equipment
lease receivables are collateralized by the underlying machinery and equipment.
Management believes the machinery and equipment would be readily usable in the
Company's manufacturing operations, if necessary.

Future minimum rentals to be received under subleases with SMTU with terms of
one year or more are as follows:

                2000                                             $  1,230,768
                2001                                                  630,775
                2002                                                  526,908
                2003                                                  308,845
                2004                                                  213,308
                                                                 ------------
                                                                    2,910,604
                Less:  Amounts representing interest                  447,639
                                                                 ------------
                                                                 $  2,462,965
                                                                 ============

As a result of the uncertainty surrounding the timing of collection of these
future minimum rentals, the Company has classified these equipment lease
receivables as long-term at April 30, 1999.

Rent expense incurred under operating leases was $1,118,901, $714,027, and
$557,456 for the years ended April 30, 1999, 1998, and 1997, respectively.

In July 1997, the Company refinanced some machinery and equipment under a
sale/leaseback arrangement. The equipment was sold for approximately $1.4
million in cash. The Company has the option to purchase the equipment at the end
of the lease term for $1. The transaction has been accounted for as a financing
lease, wherein the property remains on the balance sheet and will continue to be
depreciated, and a financing obligation equal to the proceeds has been recorded.






                                      F-19

<PAGE>   46

                          SigmaTron International, Inc.

             Notes to Consolidated Financial Statements (continued)


14. Capital Stock

At April 30, 1999, authorized but unissued shares have been reserved for future
issuance as follows:

                Stock Option Plans                                  698,500
                                                                 =============

15. Warrants and Stock Options

On February 9, 1994, the Company sold warrants, for nominal consideration, to
purchase up to an aggregate of 55,000, 25,000, and 70,000 shares of common stock
to certain underwriters, consultants, and directors, respectively. All warrants
are exercisable during the five-year period commencing February 9, 1994. As of
April 30, 1999, 35,000 warrants have expired and 115,000 warrants have been
exercised.

On February 8, 1994, the stockholders of the Company approved the formation of
two stock option plans (Option Plans) under which certain members of management
and outside nonmanagement directors may acquire up to 698,500 shares of common
stock of the Company. The Option Plans are interpreted and administered by the
Compensation Committee (the Committee). The maximum term of options granted
under the Option Plans generally is ten 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 Committee approved grants to certain members of the Company's management
effective February 9, 1994, of options to purchase all of the 625,000 shares of
common stock available under the management option plan at an exercise price
equal to $7.00. Of the options granted to management, options to purchase up to
200,000 shares of common stock will vest at a rate of 20% each year following
the date of grant provided the optionee remains an employee of the Company. As
of April 30, 1999 and 1998, management vested in options to purchase 200,000 and
160,000 shares, respectively. The remaining options to purchase up to 425,000
shares of common stock will vest only on the Company's attainment of certain
earnings per share levels over the five fiscal years beginning with fiscal year
1995. None of these options became exercisable during fiscal year 1997 or 1996
as the earnings per share level goal was not met, and options to purchase
100,000 and 75,000 shares were forfeited in 1997 and 1996, respectively. On



                                      F-20

<PAGE>   47

                          SigmaTron International, Inc.

             Notes to Consolidated Financial Statements (continued)


15. Warrants and Stock Options (continued)

June 11, 1997, options to purchase up to 425,000 shares of common stock were
canceled (225,000 of these options had been forfeited prior to April 30, 1998)
and returned to the pool of ungranted options to be granted as service-based
options at a date to be determined by the Committee. On December 18, 1998, July
1, 1998, and July 1, 1997, 7,500, 50,500, and 352,000 service-based options,
respectively, were granted at an exercise price of $7.38, $7.38, and $12.25,
respectively.

The Company also has a stock option plan for the benefit of directors who are
not salaried employees of the Company or full-time consultants to the Company.
73,500 shares of common stock were reserved for issuance upon exercise of such
options. As of April 30, 1998, all options reserved for issuance under this plan
have been granted. An option may be exercised at any time within ten years from
the date of grant. On June 11, 1997, a new outside nonmanagement director option
plan was adopted and later obtained shareholder approval to grant options to
purchase up to 105,000 shares of common stock in a manner similar to the old
plan. In September 1998 and 1997, 35,000 options were granted under this new
plan at an exercise price equal to $4.25 and $14.50, respectively.

The Company has elected to follow Accounting Principles Board Opinion No. 25,
Accounting for Stock Issued to Employees (APB 25), in accounting for its
employee stock options because, as discussed below, the alternative fair value
accounting method provided for under FASB Statement No. 123, Accounting for
Stock-Based Compensation, requires the use of option-valuation models that were
not developed for use in valuing employee stock options. Under APB 25, because
the exercise price of the Company's employee stock options approximates the
market price of the underlying stock on the date of grant, no compensation
expense is recognized. Pro forma information regarding net income and earnings
per share is required by Statement 123 as if the Company had accounted for its
employee stock options granted subsequent to December 31, 1994, under the fair
value method of that Statement. For purposes of pro forma disclosures, the
estimated fair value of the options is amortized to expense over the options
vesting period.

The Company's pro forma information follows:

<TABLE>
<CAPTION>
                                                          1999               1998            1997
                                                     ------------------------------------------------
<S>                                                    <C>                 <C>            <C>
Net income                                             $1,697,101          $525,892       $3,255,058
Pro forma net income                                    1,558,152           302,389        3,167,740
Basic earnings per share                               $      .59          $    .18       $     1.16
Pro forma basic earnings per share                     $      .51          $    .10       $     1.13
</TABLE>

                                      F-21

<PAGE>   48

                          SigmaTron International, Inc.

             Notes to Consolidated Financial Statements (continued)


15. Warrants and Stock Options (continued)

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

<TABLE>
<CAPTION>
                                                        1999              1998             1997
                                                     ----------------------------------------------

<S>                                                    <C>               <C>              <C>
Expected dividend yield                                 .0%               .0%              .0%
Expected stock price volatility                        0.608             0.512            0.529
Risk-free interest rate                                5.43%             6.31%            6.54%
Weighted-average expected life of options              5 years           5 years          5 years
</TABLE>

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.
















                                      F-22

<PAGE>   49

                          SigmaTron International, Inc.

             Notes to Consolidated Financial Statements (continued)


15. Warrants and Stock Options (continued)

A summary of the Company's stock option activity and related information for the
years ended April 30 follows:

<TABLE>
<CAPTION>
                                             1999                             1998                           1997
                                  -----------------------------------------------------------------------------------------------
                                                Weighted-Average                 Weighted-Average               Weighted-Average
                                    Options      Exercise Price      Options      Exercise Price      Options    Exercise Price
                                  -----------------------------------------------------------------------------------------------
<S>                               <C>              <C>            <C>               <C>            <C>             <C>
Outstanding - Beginning of year     555,500         $10.88           374,500         $  7.13          549,000       $  7.06
Granted                              93,000           6.20           387,000           12.45           24,500         10.25
Exercised                                 -                           (6,000)           7.00          (99,000)         7.64
Forfeited                                 -                                -               -         (100,000)         7.00
Canceled                                  -                         (200,000)           7.00                -             -
                                  -----------                     -------------                    ------------
Outstanding - End of year           648,500          10.20           555,500           10.88          374,500          7.13
                                  ===========                     =============                    ============

Exercisable at end of year          207,100           8.77           163,500            8.89           94,500          7.50

Weighted-average  fair value of
options granted during the year                       3.50                              6.47                           5.40
</TABLE>

Exercise prices for options outstanding as of April 30, 1999, ranged from $4.25
to $14.50 (50,500 and 7,500 of the options outstanding at April 30, 1999, have
an exercise price of $7.38 with a remaining contractual life of 9.2 and 9.6
years, respectively, and 35,000 of the options outstanding at April 30, 1999,
have an exercise price of $4.25 with a remaining contractual life of 9.4 years).
The weighted-average remaining contractual life of all options outstanding at
April 30, 1999, is 7.5 years.



                                      F-23

<PAGE>   50

                          SigmaTron International, Inc.

             Notes to Consolidated Financial Statements (continued)


16. Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per
share:

<TABLE>
<CAPTION>
                                                           1999              1998             1997
                                                     ---------------------------------------------------
<S>                                                     <C>               <C>              <C>
Net income available to common stockholders             $1,697,101        $  525,892       $3,255,058
                                                     ===================================================

Weighted-average shares:
   Basic                                                 2,881,128         2,881,128        2,808,848
   Effect of dilutive warrants and stock options             3,600            91,264          131,441
                                                     ---------------------------------------------------
   Diluted                                               2,884,728         2,972,392        2,940,289
                                                     ===================================================

Basic earnings per share                                $      .59        $      .18       $     1.16
                                                     ===================================================

Diluted earnings per share                              $      .59        $      .18       $     1.11
                                                     ===================================================
</TABLE>

Options to purchase 648,500 and 397,500 shares of common stock were outstanding
during 1999 and 1998, respectively, but were not included in the computation of
diluted earnings per share for all or part of the year because the options
exercise price was greater than the average market price of the common shares
and, therefore, the effect would be antidilutive.

The 425,000 shares reserved for issuance under the management stock option plan
in 1997 were not considered common stock equivalents as the earnings per share
goals were not reached.










                                      F-24

<PAGE>   51



                          SigmaTron International, Inc.

                 Schedule II - Valuation and Qualifying Accounts



<TABLE>
<CAPTION>
                                                    Balance at       Charges to       Charges to                      Balance at
                                                    Beginning         Costs and         Other                           End of
                Description                         of Period         Expenses         Accounts       Deductions        Period
----------------------------------------------------------------------------------------------------------------------------------
<S>                                                 <C>               <C>                <C>          <C>              <C>
Year ended April 30, 1999:
   Reserves and allowance deducted from asset
     accounts:
       Allowance for doubtful accounts              $      -          $575,000           $ -          $      -         $575,000
       Reserve for obsolete inventory                331,500                 -             -                 -          331,500
       Reserve against note receivable               280,000                 -             -                 -          280,000

Year ended April 30, 1998:
   Reserves and allowance deducted from asset
     accounts:
       Allowance for doubtful accounts                80,000                 -             -            80,000 (1)            -
       Reserve for obsolete inventory                331,500                 -             -                 -          331,500
       Reserve against note receivable                     -           280,000             -                 -          280,000

Year ended April 30, 1997:
   Reserves and allowance deducted from asset
     accounts:
       Allowance for doubtful accounts               492,126            80,000             -           492,126 (1)       80,000
       Reserve for obsolete inventory                411,500           (80,000)            -                 -          331,500
</TABLE>


(1) Uncollectible accounts written off.


                                      F-25