<PAGE>   1

                                UNITED STATES
                     SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D.C. 20549
 
                                  FORM 10-K/A
                                AMENDMENT NO. 1
(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, 1998
     
                                     or

  X   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 and non-voting stock held by
nonaffiliates of the registrant as of June 30, 1998 (based on the closing sale
price as reported by Nasdaq National Market as of such date) was $14,467,478.

The number of outstanding shares of the registrant's Common Stock, as of June
30, 1998, 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 to be held September 18, 1998, which will be filed within 120 days
of the fiscal year ended April 30, 1998, are incorporated by reference into
Part III of this Form 10-K.



<PAGE>   2

--------------------------------------------------------------------------------

                                    PART I

-----------------------------------------------------------------------------

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 ("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.  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.

OVERVIEW

     The Company is an independent contract manufacturer of electronic
components, printed circuit board assemblies and completely assembled
(box-build) 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 box-build
electronic products.  The Company has the ability to produce assemblies
requiring mechanical as well as electronic capabilities.  The products
assembled by the Company are then incorporated into finished products sold in
various 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 and Taipei, Taiwan.
The Company provides warehousing services in Del Rio, Texas and Huntsville,
Alabama.  In addition, the Company's 42.5% owned affiliate, SMT Unlimited L.P.
(SMTU), provides contract manufacturing services in Fremont, California.



                                      2



<PAGE>   3



     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 that it makes available to customers which it believes will lead to
significant orders.

     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


                                      3

                                       

<PAGE>   4



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
"box-build" services which integrate its printed circuit board and other
manufacturing and assembly technologies into higher level sub-assemblies and
end products.

     Product Testing.  The Company has the ability to perform both in-circuit
and functional testing of its assemblies and finished products.  In-circuit
testing verifies that the correct components have been properly inserted and
that the electrical circuits are complete.  Functional testing determines if a
board or system assembly is performing to customer specifications.   The
Company 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, 1998, the Company had approximately 125 active
customers ranging from Fortune 500 companies to small, privately held
enterprises.

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


                                      4

                                       

<PAGE>   5


<TABLE>
<CAPTION>

=================================================================================
                                                         PERCENT OF NET SALES
---------------------------------------------------------------------------------
                                  TYPICAL              FISCAL    FISCAL   FISCAL
MARKETS                       OEM APPLICATION           1996      1997     1998
---------------------------------------------------------------------------------
<S>                     <C>                           <C>        <C>      <C>
Consumer Electronics    Carbon monoxide detectors       37.7%     38.0%    37.9%
                        dart board games
---------------------------------------------------------------------------------
Gaming                  Slot machines,                  21.6      21.8     22.0
                        lighting displays
---------------------------------------------------------------------------------
Industrial Electronics  Blower motors, elevators        20.1      18.3     14.2
---------------------------------------------------------------------------------
Fitness                 Treadmills, exercise bikes      11.0      12.1     13.3
---------------------------------------------------------------------------------
Telecommunications      Pagers, microphones and          5.0       5.1      5.1
                        modems
---------------------------------------------------------------------------------
Appliances              Irons, toasters, ranges and
                        dryers                           3.2       2.1      5.1
---------------------------------------------------------------------------------
Automotive              Automobile interior lighting     1.4       2.6      2.4
---------------------------------------------------------------------------------
Total                                                   100%      100%     100%
=================================================================================
</TABLE>

     For the fiscal year ended April 30, 1998, NSI and Life Fitness accounted
for 29.4% and 13.3% respectively, of the Company's net sales. In fiscal 1997
NSI, Bally Gaming and Life Fitness accounted for 29.8%, 13.5% and 10.8%,
respectively, of net sales.  In addition, NSI, Bally Gaming  and Life Fitness
accounted for 28.2%, 15.0% and 10.4%, respectively, of the Company's net sales
for the fiscal year ended April 30, 1996.  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 agreement with NSI calls for the Company to
function as the exclusive contract manufacturer for all models of NSI's
proprietary carbon monoxide detectors on a turnkey basis through June 1998.
The Company has agreed that during the term of the agreement and for three
months thereafter it will 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 1999 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


                                      5

                                       

<PAGE>   6



Company's net sales in fiscal 1999.  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 is 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.

SALES AND MARKETING

     The Company markets its services through 24 independent manufacturers'
representative organizations, that currently employ approximately 75 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 its 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 had an immaterial 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


                                      6



<PAGE>   7



impact on the financial results of the Company.  In fiscal 1998 the Company
funded approximately $8,160,000.

COMPETITION

     The electronic manufacturing services 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.


                                      7

                                       

<PAGE>   8



BACKLOG

     The Company's backlog as of April 30, 1998 was approximately $46,184,000.
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, 1998 backlog by the end of the 1999 fiscal
year.  Backlog as of April 30, 1997 totaled $38,108,380.  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 1,700 people as of April 30, 1998,
including 31 engaged in engineering, 1,554 in manufacturing and 115 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 January 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.


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.

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



                                      8



<PAGE>   9



<TABLE>
<CAPTION>
===========================================================
      LOCATION         SQUARE FEET     SERVICES OFFERED
-----------------------------------------------------------
<S>                    <C>          <C>
Elk Grove Village, IL    61,000     Corporate
                                    Headquarters, assembly
                                    and testing of PTH and
                                    SMT, box-build,
                                    prototyping
-----------------------------------------------------------
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.

     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, maintains 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 $1.63 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.



                                      9

                                       

<PAGE>   10



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 1998.

ITEM 4.(A) EXECUTIVE OFFICERS OF THE REGISTRANT

<TABLE>
<CAPTION>
NAME                        AGE                       POSITION
----                        ---                       ---------
<S>                         <C>         <C>
Gary R. Fairhead            46          President and Chief Executive Officer
                                        Gary R. Fairhead has been the President
                                        of the Company since January 1990.

Linda K. Blake              37          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            60          Vice President -- Domestic Operations
                                        Nunzio A. Truppa has been Vice President
                                        -- Domestic Operations for the Company,
                                        or held equivalent management positions
                                        with the Company's predecessor, since
                                        January 1987.

Gregory A. Fairhead         42          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             37          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.
</TABLE>


                                      10

                                       

<PAGE>   11

--------------------------------------------------------------------------------

                                   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, 1997 and 1998.

                           Common Stock as Reported
                                  by Nasdaq

<TABLE>
<CAPTION>

               Period            High       Low
               ------          ------  --------
               <C>             <C>     <C>
               Fiscal 1998:
               Fourth Quarter  10-7/8     7-3/4
               Third Quarter   13-7/8     9-1/4
               Second Quarter  17-1/2    11-5/8
               First Quarter   17-1/8  11-57/64

               Fiscal 1997:
               Fourth Quarter  25-3/8        14
               Third Quarter   23-1/8    10-3/4
               Second Quarter  12-1/2     8-3/4
               First Quarter   17-1/2     7-1/2
</TABLE>

     As of  June 30, 1998, there were approximately 145 holders of record of
the Company's common stock, which does not include shareholders whose stock is 
held through securities position listings.

     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.


                                      11

                                       

<PAGE>   12



ITEM 6.   SELECTED CONSOLIDATED FINANCIAL DATA

<TABLE>
<CAPTION>

                                                             Years Ended April 30
                                     ---------------------------------------------------------------------
                                     1994             1995           1996           1997           1998
                                     ----             ----           ----           ----           ----
                                                     (In thousands except per share data)
<S>                                   <C>            <C>            <C>            <C>            <C>            
Net Sales                             $36,690        $45,345        $69,558        $87,216        $85,651

Income before income tax
 expense                                2,389          3,032          3,752          5,161            837

Net Income                          (1) 1,862          1,891          2,367          3,255            526

Total Assets                           17,838         28,235         38,378         42,088         48,641

Long-term debt and capital
 lease obligations (including
 current maturities)                    4,716         12,763         16,528         18,593         20,975

Pro Forma Net income per
 common equivalent share
 (unaudited) - basic
 and assuming dilution              (2)  0.59              -              -              -              -

Net income per common and
 common equivalent share for
 the period from February 9,
 1994 to April 30, 1994 - basic
 and assuming dilution                  $0.04              -              -              -              -

Net income per common share-
 basic                                      -          $0.69          $0.86          $1.16          $0.18

Net income per common share-
 assuming dilution                          -          $0.69          $0.86          $1.11          $0.18
</TABLE>

(1)  Net income for the fiscal year 1994 reflects a charge of $527,000 for
     income tax expense.  Income tax expense includes a charge of approximately
     $262,000 to recognize the initial effect of adopting Financial Accounting
     Standards Board Statement No. 109 "Accounting for Income Taxes" (FAS No.
     109) and has been calculated based on earnings of the Company since
     February 8, 1994, the date of its reorganization from a limited
     partnership to a C-Corporation.  Prior to the reorganization, income was
     passed through to the partners of SigmaTron L.P., who were responsible for
     any federal and state income taxes due.

(2)  Pro-forma net income per share was determined assuming the reorganization
     from a limited partnership to a C-Corporation had occurred on May 1, 1993,
     resulting in the Company being a C- Corporation for tax purposes as of
     that date and to reflect the use of proceeds of the public offering to
     retire debt.


                                      12

                                       


<PAGE>   13



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 contract manufacturer of electronic
components, printed circuit board assemblies, and box-build (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.

     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 exclusive manufacturing
agreement with NSI relating to the production of carbon monoxide detection
systems.  Sales to NSI have accounted for a significant percentage of the
Company's net sales in fiscal 1996 through 1998.  Although there has been no
written extension of the agreement, the parties continue to operate under its
terms, however,


                                      13

                                       

<PAGE>   14



the Company expects sales to NSI will be significant in fiscal 1999.  The
amount of sales to NSI beyond fiscal 1999 remains unclear and  if the
relationship is not continued it could significantly impact the Company's
revenues and earnings.

RESULTS OF OPERATIONS:

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.   In addition, the Company's
fourth and first quarters have historically been the weakest periods and the
Company expects the first quarter of fiscal 1999 to be soft.

     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.  The Company's short term
objective is to increase sales to take advantage of the structure put in place,
which may lead to a stronger fiscal 1999.

     Selling and administrative expenses decreased from $5,624,346 in fiscal
1998 to $5,961,184 in fiscal 1998.  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 $.18 compared to $1.16 in fiscal 1997.  Diluted
earnings per share for fiscal 1998 was $.18.



                                      14



<PAGE>   15


FISCAL YEAR ENDED APRIL 30, 1997 COMPARED
TO FISCAL YEAR ENDED APRIL 30, 1996

     Net sales for fiscal year 1997 were $87,216,343 compared to $69,558,384
for fiscal year 1996.  The 25% increase in net sales was due to sales to new
and existing customers primarily in the consumer electronics, gaming and
fitness industries.  NSI accounted for approximately $25,952,000 or 29.8% of
the Company's fiscal 1997 net sales compared to $19,605,000 or 28.2% in fiscal
1996. The volatility of NSI orders may cause the Company's revenues and
earnings to fluctuate significantly on a seasonal basis.

     Gross profit  increased from $10,142,298 in fiscal year 1996 to
$12,639,082 in fiscal year 1997.  Gross profit as a percent of net sales was
14.5% and 14.6% for fiscal 1997 and 1996, respectively.

     Selling and administrative expenses increased from $4,943,478 in fiscal
year 1996 to $5,961,184 in fiscal year 1997.  The increase is due to the
increase in sales commissions attributable to the increase in net sales.  In
addition, insurance expense increased for general insurance requirements and
increased levels of product liability insurance.  Additional customer service
and material procurement personnel were added to support the growth of the
Company.  Selling and administrative expenses as a percent of net sales
decreased for the fiscal year ended April 30, 1997 to 6.8% from 7.1% for the
year ended 1996.

     Interest expense increased in fiscal 1997 to $1,846,928 from $1,630,238 in
fiscal 1996.  The overall increase was primarily due to the higher outstanding
balance on the Company's line of credit.  Interest expense as a percent of net
sales decreased from 2.3% in fiscal 1996 to 2.1% in fiscal 1997.

     Income tax expense increased from $1,385,000 in fiscal year 1996 to
$1,905,584 in fiscal year 1997.  The effective tax rate for fiscal years 1997
and 1996 was 36.9%.

     As a result of the foregoing, net income increased 37.5% from $2,366,822
in fiscal 1996 to $3,255,058 in fiscal 1997.  Basic earnings per share for the
year ended April 30, 1997 was $1.16 compared to $ .86 in fiscal 1996.  Diluted 
earnings per share for fiscal 1997 was $1.11 compared to $.86 in fiscal 1996.


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


                                      15

                                       

<PAGE>   16


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.


LIQUIDITY AND CAPITAL RESOURCES:

     In fiscal 1998 the Company financed its growth and operations through cash
flow  generated from borrowings from its secured lender and cash provided by
operations and a sale/leaseback transaction.  The Company had working capital
of $20,708,686 April 30, 1998 and $21,648,985 at April 30, 1997.  This
represents a current ratio of 2.8 and 4.1 for the years ended April 30, 1998
and 1997, 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, 1998, based upon
those percentages, there was approximately $2,334,000 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.  The maximum amount which could be
borrowed under the term loan was $111,108 which was the outstanding balance at
April 30, 1998.  The amount outstanding under the term loan is collateralized
by some of the Company's machinery and equipment located in the United States
and is payable in 60 monthly installments of approximately $13,890 plus accrued
interest due December 1998.  The outstanding principal under the term loan
bears interest at the bank's prime rate of interest.

     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 $8,160,000 for a typical 12 month period.  The
Company provides funding in U.S. dollars, which are exchanged for pesos as
needed.


                                      16

                                       

<PAGE>   17



     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 $2,557,000 at April 30, 1998, and an accumulated deficit of
approximately $1,795,000.  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 achieving operating income for the year ended April 30, 1998 .
While the management of SMTU expects sales to increase further in 1999 and also
expects these sales will lead to overall profitability, it is possible that
management's efforts in this regard will not be successful.  In January 1998,
the Company entered into a guaranty agreement with SMTU's leader 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 $4,169,000  at
April 30, 1998, and has been classified as long -term assets in the Company's
April 30, 1998 balance sheet.  SMTU was eleven months delinquent in their
equipment lease payments to the Company and therefore, due to the  uncertainty
surrounding the timing of collection of these future minimum rental, the
Company  has classified these equipment  lease receivables  as long-term at
April 30, 1998.  At April 30, 1998, SMTU was in violation of various covenants
under its revolving line of credit.  SMTU's management expects to be able to
renegotiate these covenants to prevent noncompliance and to obtain waivers for
all covenants violated in fiscal 1998.

     On August 1, 1995 the Company entered into a limited partnership agreement
forming Lighting Components L.P. ("LC").  The Company owns approximately 12% of
LC , which distributes a variety of electronic and molded plastic components
for use in the sign and lighting industries.  At April 30, 1998 the Company had
invested $280,000 in the venture.  The initial investment, subordinated
debentures, promissory notes, and accrued interest totaling approximately
$335,000 are included in other long-term assets in the consolidated balance
sheet as of April 30, 1998.  In addition, the Company also has miscellaneous
and trade receivables recorded in the consolidated  balance sheet at April 30,
1998 from LC totaling approximately $491,000.

The Company's  receivables from LC's are secured by a security interest in
substantially all of LC's assets.  At April 30, 1998, the assets recorded in
the Company's balance sheet were written down by approximately $360,000 to net
realizable value leaving approximately $466,000 of assets in the consolidated
balance sheet at April 30, 1998.

     The Company has formed a committee of Executive Officers and others to
examine Year 2000 compliance issues relating to the Company, and to plan for
implementation of changes appropriate to insure compliance in a timely manner.
The Company believes that its compliance with Year 2000 issues will not have
material impact on its business, operations or financial condition.

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



                                      17



<PAGE>   18
ITEM 7(a) QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

          Not applicable

ITEM 8.   FINANCIAL STATEMENT AND SUPPLEMENTARY DATA

           

                         SigmaTron International, Inc.

                       Consolidated Financial Statements




                                    Contents


<TABLE>
<S>                                                        <C>
Report of Independent Auditors............................. F-2

Consolidated Financial Statements

Consolidated Balance Sheets at April 30, 1998 and 1997..... F-3
Consolidated Statements of Income for the Years Ended
 April 30, 1998, 1997, and 1996............................ F-5
Consolidated Statements of Equity for the Years Ended
 April 30, 1998, 1997, and 1996............................ F-6
Consolidated Statements of Cash Flows for the Years Ended
 April 30, 1998, 1997, and 1996............................ F-7
Notes to Consolidated Financial Statements................. F-9

Schedule II
Valuation and Qualifying Accounts.........................  F-25
</TABLE>







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

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

<PAGE>   19

                         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, 1998 and 1997, and the related consolidated
statements of income, equity, and cash flows for each of the three years in the
period ended April 30, 1998.  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, 1998 and 1997, and the consolidated
results of its operations and its cash flows for each of the three years in the
period ended April 30, 1998, 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.


                                             Ernst & Young LLP

Chicago, Illinois
June 19, 1998,
except for Note 16, as to which the date is
July 1, 1998,
and Note 6, as to which the date is
July 14, 1998




                                      F-2
<PAGE>   20
                         SigmaTron International, Inc.

                          Consolidated Balance Sheets



<TABLE>
<CAPTION>



                                                                 April 30
                                                            1998           1997
                                                     ---------------------------
<S>                                                  <C>            <C>
Assets
Current assets:
   Cash                                              $   284,679     $  323,223
   Accounts receivable, less allowance for doubtful
   accounts of $80,000 at April 30, 1997              11,977,973      8,770,457
   Inventories                                        18,972,587     17,665,600
   Equipment lease receivables from SMTU                       -        892,435
   Prepaid expenses                                      418,464        225,780
   Refundable income taxes                                     -         98,666
   Deferred income taxes                                 218,788        231,245
   Other assets                                          331,461        512,206
                                                     ---------------------------
Total current assets                                  32,203,952     28,719,612

Machinery and equipment, net                          11,249,550     10,343,060

Due from SMTU:
   Investment and advances                               311,107        527,238
   Equipment lease receivables, less current portion   3,207,691      1,467,336
   Other receivables                                     650,695              -
                                                     ---------------------------
                                                       4,169,493      1,994,574

Other assets                                           1,018,211      1,031,193
                                                     ---------------------------
Total assets                                         $48,641,206    $42,088,439
                                                     ===========================
</TABLE>


                                      F-3
<PAGE>   21
<TABLE>                                                       
<CAPTION>
                                                              April 30
                                                         1998           1997
                                                    ---------------------------
<S>                                                   <C>          <C> 
Liabilities and stockholders' equity
Current liabilities:
   Notes payable - Banks                                $111,108       $166,668
   Notes payable - Related parties                             -         42,596
   Trade accounts payable                              6,751,886      3,244,537
   Trade accounts payable - Related parties              915,475        736,893
   Accrued expenses                                    1,575,434      1,680,721
   Income tax payable                                     60,025              -
   Capital lease obligations                           2,081,338      1,199,212
                                                     -------------------------- 
Total current liabilities                             11,495,266      7,070,627

Notes payable - Banks,  less current portion          15,177,695     14,714,943
Capital lease obligations, less current portion        3,604,793      2,469,372
Deferred income taxes                                    760,061        818,853
                                                     -------------------------- 
Total liabilities                                     31,037,815     25,073,795
                                                     
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 and 2,875,227 shares
     issued and outstanding at April 30, 1998 and
     1997, respectively                                   28,812         28,752
   Capital in excess of par value                      9,436,554      9,373,759
   Retained earnings                                   8,138,025      7,612,133
                                                    --------------------------- 
Total stockholders' equity                            17,603,391     17,014,644
                                                    --------------------------- 
Total liabilities and stockholders' equity           $48,641,206    $42,088,439
                                                    =========================== 
</TABLE>
See accompanying notes.


                                      F-4
<PAGE>   22
                         SigmaTron International, Inc.
 
                       Consolidated Statements of Income



<TABLE>
<CAPTION>
                                                     Year ended April 30
                                           1998             1997              1996
                                        ------------------------------------------------ 
<S>                                     <C>               <C>              <C>
Net sales                                 $85,650,598      $87,216,343       $69,558,384
Cost of products sold                      77,193,764       74,577,261        59,416,086
                                        ------------------------------------------------ 
                                            8,456,834       12,639,082        10,142,298
Selling and administrative expenses         5,624,346        5,961,184         4,943,478
                                        ------------------------------------------------ 
Operating income                            2,832,488        6,677,898         5,198,820
Equity in net loss of SMTU                   (216,131)         (75,036)         (242,677)
Interest expense - Banks and
  capital lease obligations                (1,898,488)      (1,836,967)       (1,598,705)
Interest expense - Related parties               (523)          (9,961)          (31,533)
Interest income - SMTU and LC                 479,508          404,708           425,917
Loss on investment and receivables
  with LC                                    (360,000)               -                 -
                                        ------------------------------------------------
                                     
Income before income tax expense              836,854        5,160,642         3,751,822
Income tax expense                           (310,962)      (1,905,584)       (1,385,000)
                                        ------------------------------------------------ 
Net income                                $   525,892      $ 3,255,058       $ 2,366,822
                                        ================================================ 
Net income per common share - Basic       $       .18      $      1.11       $       .86
                                        ================================================ 
Net income per common share
   -Assuming dilution                     $       .18      $      1.11       $       .86     
                                        =================================================
</TABLE>

See accompanying notes.


                                      F-5
<PAGE>   23
                         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, 1995         -        $-  2,737,500  $27,375  $8,384,089  $1,990,253    $10,401,717
 Net income                       -         -          -        -           -   2,366,822      2,366,822
                           -------------------------------------------------------------------------------
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
                           ===============================================================================
</TABLE>

See accompanying notes.


                                      F-6
<PAGE>   24
                        SigmaTron International, Inc.

                     Consolidated Statements of Cash Flows



<TABLE>
<CAPTION>
                                                       Year ended April 30
                                                 1998         1997         1996
                                             ---------------------------------------- 
<S>                                           <C>          <C>          <C>
Operating activities
Net income                                    $     525,892  $ 3,255,058  $ 2,366,822
Adjustments to reconcile net income to net
 cash provided by (used in) operating
 activities:
  Depreciation                                    1,262,297    1,047,262      766,467
  Equity in net loss of SMTU                        216,131       75,036      242,677
  Amortization                                       14,136       23,778       25,618
  Provision for doubtful accounts                   113,454            -      306,888
  Loss on investment and receivables with LC        360,000            -            -
  Deferred income taxes                             (46,335)     382,844      (57,509)
  Changes in operating assets and liabilities:
   Accounts receivable                           (3,400,970)   2,310,028   (3,410,538)
   Inventories                                   (1,306,987)  (2,811,550)  (5,567,159)
   Prepaid expenses                                (192,684)     (58,094)      40,823 
   Other assets                                    (751,104)    (418,761)    (252,497)
   Trade accounts payable                         3,507,349   (2,881,853)   3,439,734
   Trade accounts payable 
   Related parties                                  178,582      (57,417)      47,058
   Accrued expenses                                (105,287)     237,687      313,658
   Income taxes                                     179,546      353,645      201,009
                                             ----------------------------------------
Net cash provided by (used in) operating
 activities                                         554,020    1,457,663   (1,536,949)
Investing activities
Purchases of machinery and equipment               (934,692)  (2,950,725   (2,293,961)
Proceeds from the sale and leaseback of
 machinery                                        1,429,898            -            -
Proceeds from the sale of machinery and
 equipment                                                -            -       37,513
Proceeds from SMTU subleases                        196,895      424,412      378,367
Advances to SMTU                                          -     (100,000)     (50,000)
Proceeds from the sale of investment in SMTU              -          250            -
Notes receivable from SMTU                                -            -     (300,000)
                                             ---------------------------------------- 
Net cash provided by (used in) investing
 activities                                         692,101   (2,626,063)  (2,228,081)
</TABLE>


                                      F-7
<PAGE>   25
                         SigmaTron International, Inc.

               Consolidated Statements of Cash Flows (continued)



<TABLE>
<CAPTION>
                                              Year ended April 30
                                       1998           1997          1996
                                   ------------------------------------------
<S>                                <C>            <C>           <C>
Financing activities
Repayment of term loan and other
 notes payable                      $    (42,596)  $  (151,860)   $  (363,013)
Proceeds from exercise of stock
 options and warrants                     42,000       472,500              -
Net proceeds under line of credit        407,192     2,181,772      4,555,271
Net payments under capital lease
 obligations                          (1,691,261)   (1,013,289)      (427,228)
                                   ------------------------------------------- 
Net cash (used in) provided by
financing activities                  (1,284,665)    1,489,123      3,765,030
                                   ------------------------------------------- 
Change in cash                           (38,544)      320,723               -
Cash at beginning of period              323,223         2,500          2,500
                                   ------------------------------------------- 
Cash at end of period               $    284,679   $   323,223    $     2,500
                                   =========================================== 
Supplementary disclosure of cash
 flow information:
 Cash paid for interest             $  1,900,073   $ 1,834,946    $ 1,602,494
                                   ===========================================
Cash paid for income taxes          $    177,750   $ 1,169,854    $ 1,241,500
                                   ===========================================
Acquisition of machinery and
 equipment financed under capital
 leases                             $  1,234,095   $  $840,429    $   432,437
                                   ===========================================
</TABLE>

See accompanying notes.


                                      F-8
<PAGE>   26
                         SigmaTron International, Inc.
 
                   Notes to Consolidated Financial Statements


1.  Description of the Business

SigmaTron International, Inc. (the Company) was incorporated on November 16,
1993. The Company is an independent contract manufacturer of electronic
components, 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)
manual and automatic assembly and testing of 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 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 effect 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>   27
                         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

The liability method is used in accounting for income taxes.  Under this
method, 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.

Fair Value of Financial Instruments

The Company's financial instruments include trade accounts receivable,
long-term receivables, accounts payable, notes payable, capital lease
obligations, and accrued expenses.  The fair values of all financial
instruments were not materially different from their carrying values.

Revenue Recognition

The Company recognizes revenue at the time goods are shipped.

Reclassifications

Certain reclassifications were made to the 1997 and 1996 consolidated financial
statements to conform with the 1998 presentation.


                                      F-10
<PAGE>   28
                         SigmaTron International, Inc.

             Notes to Consolidated Financial Statements (continued)


3.  Inventories

Inventories consist of the following:


<TABLE>
<CAPTION>

                            April 30
                       1998          1997
                   ---------------------------
<S>                <C>           <C>
Finished products    $3,292,442    $2,966,415
Work in process       1,887,517     1,079,985
Raw materials        13,792,628    13,619,200
                   --------------------------
                    $18,972,587   $17,665,600
                   ==========================
</TABLE>

4.  Machinery and Equipment

Machinery and equipment consist of the following:


<TABLE>
<CAPTION>
                                        April 30
                                   1998          1997
                              ----------------------------
<S>                            <C>           <C>
Machinery and equipment          $7,225,671    $8,130,150
Office equipment                  1,090,763       896,408
Tools and dies                      123,251       123,251
Leasehold improvements            2,030,129     1,815,210
Equipment under capital lease     5,415,725     2,751,733
                              ----------------------------
                                 15,885,539    13,716,752
Less:  Accumulated
depreciation and
amortization, including
amortization of assets under
capital leases of $852,836
and $441,418 at April 30,
1998 and 1997, respectively       4,635,989     3,373,692
                              ----------------------------
                                $11,249,550   $10,343,060
                              ============================
</TABLE>


                                      F-11
<PAGE>   29
                         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 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, 1998, 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 $1,633,000 for SMTU.  The
Company has been indemnified by one of the other limited partners in the amount
of $816,500 for the guaranteed lease payments.  SMTU pays the Company a $12,500
monthly administrative fee for administrative services.  See also Note 12.

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 Company's investment and advances to and receivables from SMTU totalled
approximately $4,169,000 at April 30, 1998, and no amount was recorded by the
Company related to its guaranty of SMTU's revolving line of credit.  SMTU has
negative working capital of approximately $2,557,000 at April 30, 1998, and an
accumulated 


                                      F-12
<PAGE>   30
                         SigmaTron International, Inc.

             Notes to Consolidated Financial Statements (continued)


5.  Investment and Advances With SMTU (continued)

deficit of approximately $1,795,000 at April 30, 1998.  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 achieving operating income for the
year ended April 30, 1998.  While the management of SMTU expects sales to
increase further in 1999 and also expects these sales will lead to overall
profitability, it is possible that management's efforts in this regard will not
be successful.  At April 30, 1998, SMTU was in violation of various covenants
under its revolving line of credit.  SMTU's management expects to be able to
renegotiate these covenants to prevent future noncompliance and to obtain
waivers for all covenants violated in 1998.

6.  Notes Payable

Notes payable consist of the following:


<TABLE>
<CAPTION>
                                                                   April 30
                                                           1998                1997
                                                       -----------------------------------
<S>                                                 <C>                 <C>
Banks:
 Revolving line of credit, interest payable monthly        $15,177,695         $14,603,835
 Term loan, interest payable monthly at prime
   (8.50% at April 30, 1998 and 1997), due December
   1, 1998                                                      11,108             277,776
                                                       ----------------------------------- 
                                                            15,288,803          14,881,611
Less:  Current portion                                         111,108             166,668
                                                       ----------------------------------- 
                                                           $15,177,695         $14,714,943
                                                       =================================== 
Related Party:
 Subordinated, secured term loans, interest
  payable monthly at varying interest rates (9.25%
  to 9.77% at April 30, 1997), due at varying
  intervals through August 1, 1997                                  $-             $42,596
                                                       ----------------------------------- 
                                                                     -              42,596
Less:  Current portion                                               -              42,596
                                                       ----------------------------------- 
                                                                    $-             $     -
                                                       ===================================                                      
</TABLE>

The Company's credit facility included a revolving line-of-credit facility and
a term loan.  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
$8,000,000 or the amount of the inventory borrowing 


                                      F-13
<PAGE>   31
                         SigmaTron International, Inc.

             Notes to Consolidated Financial Statements (continued)


6.  Notes Payable
(continued)

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 (5.78% to 5.97% at April 30, 1998) plus 2% or at the prime rate (8.50% of
April 30, 1998) at the option of the Company.  At April 30, 1998, there was
approximately $2,334,000 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.

The term loan portion of the credit facility is payable in sixty (60) monthly
installments of approximately $13,890 and is collateralized by the Company's
domestically located machinery and equipment.

Aggregate annual maturities of notes payable as of April 30, 1998, are as
follows:


<TABLE>
<S>                                             <C>
1999                                              $111,108
2000                                                     -
2001                                            15,117,695
                                              -------------
                                               $15,228,803
                                              =============
</TABLE>                                      


                                      F-14
<PAGE>   32
                         SigmanTron International, Inc.

             Notes to Consolidated Financial Statements (continued)


7.  Accrued Expenses

Accrued expenses consist of the following:

<TABLE>
<CAPTION>
                         April 30
                      1998        1997
                   ------------------------
<S>                <C>         <C>
Payroll            $1,174,290   $  403,902
Bonuses                50,000      792,031
Interest payable      112,939      114,002
Commissions           142,791      116,044
Professional fees      95,414      120,492
Other                       -      134,250
                   ------------------------
                   $1,575,434   $1,680,721
                   ======================== 
</TABLE> 

Bonuses represent discretionary management and other employee bonuses, of which
$50,000 and $280,000 was accrued during the fourth quarter of 1998 and 1997,
respectively.

8.  Related Party Transactions and Commitments

During the years ended April 30, 1998, 1997, and 1996, 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
$6,380,000, $6,895,000, and $4,755,000, for the years ended April 30, 1998,
1997, and 1996, respectively.  The Company leases space in Elk Grove Village,
Illinois, owned by CSI at a base rental of $33,500 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 $486,000, $423,000, and $406,000 for
the years ended April 30, 1998, 1997, and 1996, respectively.

At April 30, 1998 and 1997, the Company had non-interest-bearing receivables of
approximately $190,000 and $205,000, respectively, 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, 1998.


                                      F-15
<PAGE>   33
                         SigmaTron International, Inc.

             Notes to Consolidated Financial Statements (continued)


8.  Related Party Transactions and Commitments (continued)

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 initial investment, subordinated debentures, promissory
notes, and accrued interest totaling approximately $335,000 are 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, 1998, totaling approximately
$491,000.

The Company's miscellaneous and trade receivables are secured by a security
interest in substantially all of LC's assets.  At April 30, 1998, the assets
recorded in the Company's balance sheet were written down by approximately
$360,000 to net realizable value leaving approximately $466,000 of assets in
the accompanying balance sheet at April 30, 1998.

9.  Income Taxes

The income tax provision for the years ended April 30, 1998, 1997, and 1996,
consists of the following:


<TABLE>
<CAPTION>
                                                   1998       1997        1996
                                                ------------------------------------- 
<S>                                               <C>          <C>         <C>
Current:
  Federal                                         $292,536     $1,231,639  $1,249,173
  State                                             64,761        291,101     193,336
Deferred:
  Federal                                          (40,395)       333,761     (50,195)
  State                                             (5,940)        49,083      (7,314)
                                                ------------------------------------- 
                                                  $310,962     $1,905,584  $1,385,000
                                               ======================================
</TABLE>


                                      F-16
<PAGE>   34
                         SigmaTron International, Inc.

             Notes to Consolidated Financial Statements (continued)


9.  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 taxes for the years ended April 30, 1998, 1997, and 1996, are as
follows:


<TABLE>
<S>                                             <C>       <C>         <C>
                                                  1998       1997        1996
                                                ---------------------------------
Income tax at statutory federal rate            $ 284,530  $1,754,618  $1,275,619
Effect of:
 State income taxes, net of federal tax 
  benefit                                          38,663     238,421     187,591
 Other, net                                       (12,231)    (87,455)    (78,210)
                                                ---------------------------------
                                                $310,962  $1,905,584  $1,385,000
                                                =================================
</TABLE>

Significant temporary differences which result in deferred tax assets and
deferred tax liabilities at April 30, 1998 and 1997, are as follows:


<TABLE>
<S>                                <C>            <C>
                                       1998           1997
                                     --------------------------
Allowance for doubtful accounts         $      -      $ 31,200
Inventory obsolescence reserve           129,285       129,285
Accruals not currently deductible         75,856        68,128
Inventory                                 58,891        55,213
Other                                    (45,244)      (52,581)
                                     --------------------------
Net deferred tax asset                  $218,788      $231,245
                                     ==========================
Machinery and equipment                 $835,556      $694,261
Other                                   (75,495)       124,592
                                     --------------------------
Net deferred tax liability              $760,061      $818,853
                                     ==========================
</TABLE>

10.  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 $32,904 and
$34,554 to the plan during the fiscal years ended April 30, 1998 and 1997,
respectively.  The Company made no contributions to the plan for the fiscal
year ended April 30, 1996; however, the Company paid total expenses of $13,500,
$8,000 and $8,000 for the fiscal years ended April 30, 1998, 1997, and 1996,
respectively, relating to costs associated with the Plan's administration.


                                      F-17
<PAGE>   35
                         SigmaTron International, Inc.

             Notes to Consolidated Financial Statements (continued)


11.  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, 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.  For the year ended April
30, 1996, three customers accounted for 28%, 15%, and 10% of net sales of the
Company, and 18%, 21%, and 3% of accounts receivable at April 30, 1996.

12.  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, 1998:


<TABLE>
<S>                                   <C>         <C>
                                      Capital     Operating
                                      Leases      Leases
                                   ---------------------------
1999                                  $2,543,640     $970,328
2000                                   1,939,122      966,828
2001                                   1,290,794      892,854
2002                                     718,853      420,984
2003                                     119,250      216,984
Thereafter                                     -      392,076
                                   ---------------------------
                                       6,611,659   $3,860,054
                                                  ============
Less:  Amounts representing interest     925,528
                                   --------------
                                       5,686,131
Less:  Current portion                 2,081,338
                                   --------------
                                      $3,604,793
                                   ==============
</TABLE>

The Company subleased the machinery and equipment relating to 11 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 7.850% to 10.57%) implicit in the
original lease to cover various administrative expenses 


                                      F-18
<PAGE>   36
                          SigmaTron International, Inc.

             Notes to Consolidated Financial Statements (continued)


12.  Leases (continued)

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:


<TABLE>
                            <S>                                    <C>
                               1999                                  $1,899,124
                               2000                                     813,430
                               2001                                     350,901
                               2002                                     299,184
                               2003                                      47,628
                                                                   --------------
                                                                      3,410,267
                               Less:  Amounts representing interest     202,576
                                                                   --------------
                                                                     $3,207,691
                                                                   ==============
</TABLE>

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, 1998.

Rent expense incurred under operating leases was $714,027, $557,456, and
$560,756 for the years ended April 30, 1998, 1997, and 1996, 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.

13.  Capital Stock

At April 30, 1998, authorized but unissued shares have been reserved for future
issuance as follows:


<TABLE>
                   <S>                                          <C>
                   Stock Option Plans                             698,500
                   Warrants                                        35,000
                                                               ------------
                                                                  733,500
                                                               ============
</TABLE>


                                      F-19
<PAGE>   37
                         SigmaTron International, Inc.

             Notes to Consolidated Financial Statements (continued)


14.  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:  (i) in the
case of the underwriters' warrants on February 9, 1994; (ii) in the case of the
consultant's warrant on February 16, 1994, and (iii) in the case of the
directors' warrants on August 9, 1994.  All warrants will terminate on February
9, 1999, and have an exercise price of $8.40 per share which was equal to the
fair market value of a share of the Company's common stock on the date of
grant.  As of April 30, 1998, 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, 1998 and 1997, management vested in options to
purchase 160,000 and 120,000 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 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 July 1, 1997, 352,000 service-based options were granted at
an exercise price equal to $12.25.


                                      F-20
<PAGE>   38
                         SigmaTron International, Inc.

             Notes to Consolidated Financial Statements (continued)


14.  Warrants and Stock Options (continued)

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.
Seventy-three thousand five hundred 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 1997, 35,000
options were granted under this new plan at an exercise price equal to $14.50.

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>
<S>                                      <C>       <C>         <C>
                                          1998       1997        1996
                                        ----------------------------------
Net income                               $525,892  $3,255,058  $2,366,822
Pro forma net income                      302,389   3,167,740   2,308,772
Basic earnings per share                     $.18       $1.16        $.86
Pro forma basic earnings per share           $.10       $1.13        $.84
</TABLE>


                                      F-21
<PAGE>   39
                         SigmaTron International, Inc.

                  Notes to Consolidated Financial (continued)


14.  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>
                                            1998     1997     1996
                                          ----------------------------
<S>                                        <C>      <C>      <C>
Expected dividend yield                         .0%      .0%      .0%
Expected stock price volatility              0.512    0.529    0.529
Risk-free interest rate                       6.31%    6.54%    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>   40
                         SigmaTron International, Inc.

             Notes to Consolidated Financial Statements (continued)


14.  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>

                                            1998                         1997                       1996
                               ---------------------------------------------------------------------------------------
                                            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    374,500           $  7.13    549,000           $  7.06   599,500             $7.06
Granted                            387,000             12.45     24,500             10.25    24,500              6.81
Exercised                           (6,000)             7.00    (99,000)             7.64         -                 -
Forfeited                                -                 -   (100,000)             7.00   (75,000)             7.00
Canceled                          (200,000)             7.00          -                 -         -                 -
                               -------------                  -----------                  -----------
Outstanding - End of year          555,500             10.88    374,500              7.13   549,000              7.06
                               =============                  ===========                  ===========
Exercisable at end of year         163,500              8.89     94,500              7.50   129,000              7.24

Weighted-average fair value of
options granted during the
year                                                    6.47                         5.40                        3.59
</TABLE>

Exercise prices for options outstanding as of April 30, 1998, ranged from $6.81
to $14.50 (352,000 of the options outstanding at April 30, 1998, have an
exercise price of $12.25 with a remaining contractual life of 9.2 years, and
35,000 of the options outstanding at April 30, 1998, have an exercise price of
$14.50 with a remaining contractual life of 9.4 years).  The weighted-average
remaining contractual life of all options outstanding at April 30, 1998, is 8.2
years.


                                      F-23
<PAGE>   41
                         SigmaTron International, Inc.

             Notes to Consolidated Financial Statements (continued)


15.  Earnings Per Share

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


<TABLE>

                                 1998            1997            1996
                              ----------------------------------------------
<S>                             <C>             <C>              <C>
Net income available to
  common stockholders           $  525,892      $3,255,058       $2,366,822
                              ==============================================
Weighted average shares:
  Basic                          2,881,128       2,808,848        2,737,500
  Effect of dilutive
  warrants and stock
  options                           91,264         131,441                -
                              ----------------------------------------------
Diluted                          2,972,392       2,940,289        2,737,500
                              ==============================================
Basic earnings per share        $      .18      $     1.16       $      .86
                              ==============================================
Diluted earnings per share      $      .18      $     1.11       $      .86
                              ==============================================
</TABLE>

Options to purchase 397,500 shares of common stock were outstanding during 1998
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.

Options and warrants to purchase 399,000 shares of common stock were
outstanding during 1996 but were not included in the computation of diluted
earnings per share 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 and 1996 were not considered common stock equivalents as the earnings
per share goals were not reached.

16.  Subsequent Event

On July 1, 1998, the Committee approved grants of options to certain employees
and members of the Company's management to purchase 52,000 shares of common
stock at an exercise price equal to $7.375.  These options will vest at a rate
of 20% each year following the date of grant, provided the optionee remains an
employee of the Company.


                                      F-24
<PAGE>   42
                         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, 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

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

Year ended April 30, 1996:
 Reserves and allowance
  deducted from asset accounts:
    Allowance for doubtful accounts  185,238      328,000           -       21,112        492,126
    Reserve for obsolete inventory   411,500            -           -            -        411,500
</TABLE>

     (1) Uncollectible accounts written off.


                                      F-25
<PAGE>   43

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, 1998 and 1997.

--------------------------------------------------------------------------------
                                   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, 1998.

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, 1998.

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, 1998.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     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, 1998.


                                      18

                                       
<PAGE>   44


--------------------------------------------------------------------------------
                                    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.


                                      19

                                       

<PAGE>   45


                              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 Reg. 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 Reg. 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 Reg. 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 Reg. 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 Reg. 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 Reg. 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  Form of Director's Stock Option Agreement for the Company's 1997
      Directors' Stock Option Plan and hereby incorporated by reference.

10.9  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.
      
10.10 Agreement between SigmaTron International, Inc. and Nighthawk Systems,
      Incorporated dated July 9, 1995 - Filed as Exhibit 10.33 to the Company's
      Form



                                      20

                                       

<PAGE>   46


       10-Q for the quarter ended July 31, 1995 and hereby incorporated by 
       reference.

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

10.12  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 and hereby incorporated by reference.

10.15  Lease Agreement # 97-054 between SigmaTron International, Inc. and
       International Financial Services dated June 6, 1997 and hereby 
       incorporated by reference.

10.16  Lease Agreement # 97-087 between SigmaTron International, Inc. and
       International Financial Services dated June 26, 1997 and hereby 
       incorporated by reference.

10.17  Lease Agreement # 97-097 between SigmaTron International, Inc. and
       International Financial Services dated August 11, 1997 and hereby 
       incorporated by reference.

10.18  Lease Agreement # 97-185 between SigmaTron International, Inc. and
       International Financial Services dated December 22, 1997 and hereby 
       incorporated by reference.

10.19  Lease Agreement # E002 between SigmaTron International, Inc. and G
       E Capital dated December 31, 1997 and hereby 
       incorporated by reference.

10.20  Guaranty and Surety Agreement between SigmaTron International,
       Inc. and HSBC Business Loans Inc. dated 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.

22.1   Subsidiaries of the Registrant - Filed as Exhibit 22.1 of the Company's
       Registration Statement on Form S-1 Reg. 33-72100 and hereby incorporated
       by reference.

23.1   Consent of Ernst & Young LLP.



                                      21

                                       

<PAGE>   47



27.1   Financial Data Schedule (EDGAR only)


       *  Indicates management contract or compensatory plan.

       (b) No reports on Form 8-K were filed during the 1998 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.


                                      22

                                       

<PAGE>   48


Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this amended 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 27, 1998

Pursuant to the requirements of the Securities Exchange Act of 1934, this
amended 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 27, 1998
--------------------
Franklin D. Sove

/s/ Gary R. Fairhead     President and Chief Executive Officer       July 27, 1998
--------------------
Gary R. Fairhead

/s/ Linda K. Blake       Chief Financial Officer, Secretary and      July 27, 1998
------------------       Treasurer (Principal Financial Officer and
Linda K. Blake           Principal Accounting Officer)
                         
/s/ D.S. Patel           Director                                    July 27, 1998
--------------
D.S. Patel

/s/ John P. Chen         Director                                    July 27, 1998
----------------
John P. Chen

/s/ Dilip S. Vyas        Director                                    July 27, 1998
-----------------
Dilip S. Vyas

/s/ William C. Mitchell  Director                                    July 27, 1998
-----------------------
William C. Mitchell

/s/ Thomas W. Rieck      Director                                    July 27, 1998
-------------------
Thomas W. Rieck

/s/ Steven Rothstein     Director                                    July 27, 1998
--------------------
Steven Rothstein
</TABLE>


                                      23