<PAGE>   1
                                      
                                UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549
                                      
                                 FORM 10-K405



(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, 1997
                                      
                                      or

            Transition Report pursuant to Section 13 or 15(d) of the Securities
----------- Exchange Act of 1934.
            For the transition period from            to             .
                                           -----------   ------------
                                      
                        Commission file number 0-23248
                                      
                        SIGMATRON INTERNATIONAL, INC.
                        -----------------------------
            (Exact name of registrant as specified in its charter)
                                      
                      Delaware                           36-3918470
         ---------------------------------    -------------------------------
         (State or other jurisdiction         (I.R.S. Employer Identification
         of incorporation or organization)     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__

<PAGE>   2

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, 1997 (based on the closing sale
price as reported by Nasdaq National Market as of such date) was 22,597,380.

The number of outstanding shares of the registrant's Common Stock, as of June
30, 1997, 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 19, 1997, which will be filed within 120 days
of the fiscal year ended April 30, 1997, are incorporated by reference into
Part III of this Form 10-K.


                                      2

<PAGE>   3
                                      
                                    PART 1
                                      

ITEM 1.   BUSINESS

CAUTIONARY NOTE:

     In addition to historical financial information, this discussion of
SigmaTron International, Inc. ("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; and
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) manual and automatic assembly and testing
of products, (2) material sourcing, 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, including automotive, fitness, consumer electronics,
telecommunications, gaming, home appliances and industrial electronics.
                                      
                                      3


<PAGE>   4

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

     The Company is a Delaware corporation which was organized on November 16,
1993 and commenced business when it became the successor to all of the assets
and liabilities of SigmaTron L.P., an Illinois limited partnership, through a
reorganization on February 8, 1994.  On February 9, 1994, the Company and
certain stockholders commenced an initial public offering for the sale of
1,265,000 shares of common stock.

PRODUCTS AND SERVICES

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

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

     Materials Procurement.  Since the Company is primarily a turnkey
manufacturer it 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 

                                      4
                                      

<PAGE>   5

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 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.  SigmaTron also
possesses BGA technology, which is used for more complex circuit boards
required to perform at higher speeds.  The Company believes that OEMs with
products not limited by internal space constraints will continue to favor PTH
over SMT.  Together with PTH and SMT, the Company and its affiliate SMTU also
provide more advanced interconnect technologies, such as BGA and fine pitch
SMT.

     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 


                                      5
                                      
<PAGE>   6

its affiliate SMTU.  Usually, 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, 1997, the Company had approximately 115 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.


<TABLE>
<CAPTION>
================================================================================
                                                       PERCENT OF NET SALES
--------------------------------------------------------------------------------
                                SELECTIVE            FISCAL    FISCAL   FISCAL
MARKETS                      OEM APPLICATION          1995      1996     1997
-------                 --------------------------  ---------  -------  -------
--------------------------------------------------------------------------------
<S>                     <C>                         <C>        <C>      <C>

Consumer Electronics    Carbon monoxide detectors
                        dart board games              13.8      37.3     38.0

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

Gaming                  Slot machines,
                        lighting displays             35.9      21.6     21.8

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

Industrial
Electronics             Blower motors, elevators      11.0      20.1     18.3

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

Fitness                 Treadmills, exercise bikes    16.4      11.0     12.1
                        

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

Telecommunications      Pagers, microphones and
                        modems                        16.1       5.0      5.1

================================================================================
</TABLE>
                                      
                                      6

<PAGE>   7

<TABLE>
<CAPTION>
=====================================================================
-cont'd                                      PERCENT OF NET SALES
---------------------------------------------------------------------
                                           FISCAL    FISCAL   FISCAL
MARKETS           OEM APPLICATION           1995      1996     1997
-------     ----------------------------  ---------  -------  -------
<S>         <C>                           <C>        <C>      <C>
---------------------------------------------------------------------

Automotive  Automobile interior lighting     2.6       1.4      2.6

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

Appliances  Irons, toasters, ranges and
            dryers                           4.2       3.2      2.1

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

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

     For the fiscal year ended April 30, 1997, Nighthawk, Bally Gaming, and
Life Fitness accounted for 29.8%, 13.5% and 10.8%, respectively, of the
Company's net sales as compared to 28.2%, 15.0% and 10.4%, respectively, of the
Company's net sales for the fiscal year ended April 30, 1996.  In addition,
Bally Gaming, Life Fitness and Four Star Tool accounted for 33.7%, 16.4% and
12.5%, respectively, of the Company's net sales for the fiscal year ended April
30, 1995.  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 current 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.  The Company expects that sales to NSI will continue to account
for a significant percentage of the Company's net sales.  Sales to NSI are
seasonal due to the nature of the product and the Company experiences stronger
sales to NSI in the fall and winter months.  The NSI market is an emerging
market which could lead to volatility in its forecast.  The volatility of NSI
orders may cause the Company's revenues to fluctuate significantly on a
seasonal basis.

SALES AND MARKETING

     The Company markets its services through seven independent
manufacturers' representative organizations, that currently employ
approximately thirty-five 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.  The Company has a media program in place.  In addition, the Company
attends trade shows related to its industry and its major customer industries.

                                      
                                      7

<PAGE>   8

     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.

     Standard Components is a maquiladora, which is the status afforded a
corporation under a trade agreement between the United States of America and
Mexico.  Standard Components' operations have resulted in an immaterial profit
each year, since the Company acquired it in 1994.

     In 1995 the Mexican Ministry of Finance and Public Credit (Hacienda)
adopted rules which would require arms length pricing for transactions between
maquiladoras and their U.S. affiliated companies.  The Company is currently
assessing the impact of these rules on its operations and would expect to
report additional profit in Mexico in the future.

     The Company believes that one of the key benefits to having operations in
Mexico is its access to cost effective labor resources.

     The Company believes economic events effecting the Mexican economy and the
implementation of NAFTA have not had a material effect on the Company or its
financial position.

     The Company provides the funds 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, without
an equal or greater increase in Mexican inflation, has not had a material
impact on the financial results of the Company.  In fiscal 1997 the Company
funded approximately $5,970,000.

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 may have significantly greater financial resources,
more extensive business 


                                      8
                                      
<PAGE>   9


experience and greater marketing and production capabilities than the
Company.  Also, foreign companies, especially companies with production
operations in the Far East, may have substantially lower costs and thus may be
able to offer their services at lower prices.  The significant competitive
factors in this industry include price, quality, service, timeliness,
reliability, the ability to source raw components, and manufacturing and
technological capabilities.  The Company believes it can competitively provide
all of these services.

     In addition, the Company may be operating at a cost disadvantage compared
to manufacturers who have greater direct buying power with component suppliers
or who have lower cost structures.  Current and prospective customers
continually evaluate the merits of manufacturing products internally and will
from time to time offer manufacturing services to third parties in order to
utilize excess capacity.  During downturns in the electronics industry, OEMs
may become more price sensitive.

     There can be no assurance that competition from existing or potential
competitors will not have a material adverse effect on the Company's business,
financial condition, or results of operations.  The introduction of lower
priced competitive products or significant price reductions by the Company's
competitors could result in price reductions that would adversely affect the
Company's business, financial condition, and results of operations, as would
the introduction of new technologies which render the Company's manufacturing
process technology less competitive or obsolete.

GOVERNMENTAL REGULATIONS

     The Company's operations are subject to certain foreign, federal, state
and local regulatory requirements relating to environmental, waste management
and health and safety matters.  Management believes that the Company's business
is operated in material compliance with all such regulations.  The cost to the
Company of such compliance to date has not materially affected the Company's
business, financial condition or results of operations.  However, there can be
no assurance that violations will not occur in the future as a result of human
error, equipment failure or other causes.  The Company cannot predict the
nature, scope or effect of environmental legislation or regulatory requirements
that could be imposed or how existing or future laws or regulations will be
administered or interpreted.  Compliance with more stringent laws or
regulations, as well as more vigorous enforcement policies of regulatory
agencies, could require substantial expenditures by the Company and could
adversely affect the Company's business, financial condition and results of
operations.

BACKLOG

     The Company's backlog as of April 30, 1997 was approximately $38,108,380.
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, 1997 backlog by the end of the 1998 fiscal
year.  Backlog as of April 30, 1996 totaled 


                                      9
                                      
<PAGE>   10


$35,029,850.  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 1,461 people as of April 30, 1997,
including 31 engaged in engineering, 1,315 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, 1997.  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, 1998.

     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:


                                      10
                                      
<PAGE>   11

<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
                                    box-build, transformers

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

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

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

Las Vegas, NV            15,000     Automatic insertion
                                    and cable assembly

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

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 this service
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 expects to enter into a lease to
combine its Las Vegas facilities into one 33,000 square foot facility starting
in fall 1997.  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 $1.83 million for SMTU, and has been indemnified by one of the
SMTU limited partners to the extent of 50% of the lease payment guarantees.

                                      
                                      11

<PAGE>   12

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.

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 1997.

     4. (a)  Executive Officers of the Registrant

<TABLE>
<CAPTION>
NAME                   AGE                POSITION
----                   ---                --------
<S>                    <C>  <C>
Gary R. Fairhead        45  President and Chief Executive Officer
                            Gary R. Fairhead has been the President of the 
                            Company since January 1990 and prior to January 
                            1990 was the Executive Vice President of the 
                            Company's predecessor.
                            
Linda K. Blake          36  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        59  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     41  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         36  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>
                                      
                                      
                                      12


<PAGE>   13
                                      
                                   PART II
                                      
ITEM 5.   MARKET FOR THE REGISTRANT'S COMMON EQUITY AND
          RELATED STOCKHOLDER MATTERS

     The Company's Common Stock is traded on the National Association of
Securities Dealers 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, 1996 and 1997.

                           Common Stock as Reported
                                  by NASDAQ


<TABLE>
<CAPTION>

                Period            High     Low
                ------          ------  ------
                <S>             <C>     <C>
                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
                Fiscal 1996:
                Fourth Quarter   7-7/8   5-1/2
                Third Quarter    7-7/8   6-1/8
                Second Quarter  7-9/32       6
                First Quarter    7-1/2   6-3/8
</TABLE>

     As of  June 30, 1997, there were approximately 165 holders of record of
the Company's common stock.

     The Company has not paid cash dividends on its Common Stock since
completing its February 1994 initial public offering and does not intend to pay
any dividends in the foreseeable future.  So long as any indebtedness remains
unpaid under the Company's revolving loan facility, the Company is prohibited
from paying or declaring any cash or other dividends on any of its capital
stock, except stock dividends, without the written consent of the lender under
the facility.
                                      
                                      13

<PAGE>   14

ITEM 6



<TABLE>
<CAPTION>
                                                                Years Ended April 30,
                                                                ---------------------
Selected Consolidated Financial Data                     (In thousands except per share data)


                                                   1993           1994       1995      1996      1997
                                                   ----           ----       ----      ----      ----
<S>                                            <C>         <C>            <C>       <C>       <C>
Net Sales                                       $29,800        $36,690    $45,345   $69,558   $87,216
Income before income tax expense                  1,383          2,389      3,032     3,752     5,160
Net Income                                        1,383          1,862      1,891     2,367     3,255
Total Assets                                     12,591    (1)  17,838     28,235    38,315    42,088
Long-term debt and capital lease
  obligations (including current maturities)      6,548          4,716     12,763    16,528    18,593
Pro Forma Net income per common
  equivalent share (unaudited)                        -    (2)   $0.59          -         -         -
Net income per common and common
  equivalent share for the period from  
  February 9, 1994 to April 30, 1994                  -          $0.04          -         -         -
Net income per common and common
  equivalent share                                    -              -      $0.69     $0.86     $1.11
Net income per common and common
  equivalent share-assuming full dilution             -              -          -         -     $1.08
</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.






                                      14


<PAGE>   15


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) manual and automatic 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.

     During the three fiscal year period ended April 30, 1997 revenues, net
income and earnings per share increased at compounded annual rates of 39%, 31%,
and 27%, respectively.  To date, the Company has accomplished this growth
primarily by satisfying the growing demands of the Company's existing customers
for its products and services, as well by targeting new customers in industries
and markets that the Company believes will undergo substantial future growth.

     The Company believes that recent trends in the Electronic Manufacturing
Services (EMS) industry have created additional opportunities for the Company
to market its products and services.  Such trends include new and emerging
markets for electronic components, greater demand for complex electronic
products, consolidation in the EMS industry, increasing market penetration by
EMS providers, the sale of captive OEM plants, an increased emphasis on quality
assurance and a reduction in the vendor base utilized by OEMs.

     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



                                       15


<PAGE>   16

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 this large
material content which are competitively priced.   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 and 1997, and the Company expects sales to
NSI will be significant in fiscal 1998.

RESULTS OF OPERATIONS:

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


                                      16

                                       
<PAGE>   17

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.  Primary earnings per share for
the year ended April 30, 1997 was $1.11 compared to $ .86 in fiscal 1996.
Fully diluted earnings per share for fiscal 1997 was $1.08.

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 several of
the Company's customers.  In particular, NSI's sales of carbon monoxide
detectors generally coincides with the heating season, and several other
customers have sales tied to the holidays.  This trend has caused the Company
to experience revenue and earnings seasonality, resulting in generally stronger
second and third quarters in each fiscal year.  Regardless of seasonal
fluctuations, there can be no assurance that the Company will be profitable in
any particular quarter.

     The Company's results of operations have varied significantly and may
continue to fluctuate from quarter to quarter.  Operating results are affected
by a number of factors, including timing of orders from and shipments to major
customers, availability of materials and components, the volume of orders as
related to the Company's capacity, timing of expenditures in anticipation of
future sales, the gain or loss of significant customers and variations in the
demand for products in the industries served by the Company's services.  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 quickly enough 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

                                      17

<PAGE>   18

backlog from period to period.  Accordingly, the Company believes that backlog
cannot be considered a meaningful indicator of future operating results.

FISCAL YEAR ENDED APRIL 30, 1996 COMPARED
TO FISCAL YEAR ENDED APRIL 30, 1995

     Net sales for fiscal year 1996 were $69,558,384 compared to $45,344,903
for fiscal year 1995.  The 53% increase in net sales was primarily due to sales
to a new customer, NSI.  NSI accounted for approximately $19,605,000 or 28.2% of
the Company's fiscal 1996 net sales.  The Company anticipates NSI will account
for a significant percentage of the Company's net sales in fiscal 1997. Sales to
NSI are expected to be seasonal due to the nature of the product and the Company
anticipates strong sales to NSI in the fall and winter months.  However, the
Company did not start manufacturing for NSI until August 1995 and their market
is an emerging market which could lead to volatility in its forecast.  The
volatility of NSI orders may cause the Company's revenues and earnings to
fluctuate significantly on a seasonal basis.  Also, contributing to the increase
in net sales for fiscal 1996 were sales to existing customers in the fitness and
telecommunications industries and several new customers.

     Gross profit  increased from $8,411,771 in fiscal year 1995 to $10,142,298
in fiscal year 1996.  Gross profit as a percent to net sales decreased from
18.6% in fiscal 1995 to 14.6% in fiscal 1996.  The decrease , as a percent of
net sales, is primarily due to lower gross margin on sales to NSI which were
offered due to the high volume.

     Selling and administrative expenses increased from $4,379,987 in fiscal
year 1995 to $4,943,478 in fiscal year 1996.  The increase is due to the
increase in sales commissions attributable to the increase in net sales.  In
addition, employees were hired in the customer service and material procurement
departments to support the additional revenue volume.  Also, additional
insurance expense was incurred due to the NSI contact and approximately $48,000
was paid to the Hacienda for transfer pricing taxes in Mexico.  Selling and
administrative expenses as a percent of net sales for the fiscal year ended
April 30, 1996 were 7.1% compared to 9.7% for the prior fiscal year.  In
addition to the increase in net sales, the decrease in selling and
administrative as a percent to net sales was partially the result of reversing
a $300,000 accrual for payables to creditors of a predecessor company.

     Interest expense increased in fiscal year 1996.  Interest expense
increased from $743,374 or 1.6% of net sales in 1995 to $1,204,321 or 1.7% of
net sales in fiscal 1996.  The overall increase is primarily due to the higher
outstanding balance on the line of credit and higher interest rates.
     Income before income tax expense increased from $3,031,611 in fiscal year
1995 to $3,751,822 in fiscal year 1996.  Net income increased from $1,890,611
in fiscal year 1995 to $2,366,822 in fiscal year 1996 which resulted in net
earnings per share of $ 0.86 in fiscal year 1996 compared to $0.69 in fiscal
1995. Income tax expense in fiscal year 1996 was $1,385,000 compared to
$1,141,000 in the prior fiscal year.

                                       18

<PAGE>   19

LIQUIDITY AND CAPITAL RESOURCES:

     In fiscal 1997 the Company financed its growth and operations through
cash flow  generated by profitable operations and borrowings from its secured
lender.  The Company had working capital of $21,648,985 at April 30, 1997 and
$18,284,525 at April 30, 1996.  The increase in working capital generally
parallels the Company's increase in inventory, which resulted from an increase
in orders.

     In fiscal 1997 the primary sources of cash provided by operations were
net income and borrowings from its secured lender.  In fiscal year 1997 the net
cash provided by operations of  $1,457,663 included net income of $3,255,058
which was decreased by $2,731,550 for net cash used for inventories.

     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, 1997, based upon
those percentages, there was approximately $1,297,000 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, 1998, and automatically renews from year to
year thereafter, unless otherwise terminated at the option of the Company or
the lending bank.  The maximum amount which could be borrowed under the term
loan was $277,776 which was the outstanding balance at April 30, 1997.  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.  The
outstanding principal under the term loan bears interest at the Company's
option of either the LIBOR plus 2.0% or the bank's prime rate of interest.  The
interest rates were renegotiated in June of 1996.  The interest rate for
outstanding borrowings on the revolving loan facility and term loan facility
decreased from prime plus .5% to the lower of LIBOR plus 2.0% or the bank's
prime rate of interest.

     To the extent that the Company provides the funds necessary to run 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, equal approximately $5,970,000 for a typical 12 month period.  The
Company provides funding in U.S. dollars, which are exchanged for pesos as
needed.


                                       19


<PAGE>   20

     The Company is a 42.5% limited partner in SMTU, a California limited
partnership, based in Fremont, California.  SMTU has a negative working capital
of approximately $1,161,000 at April 30, 1997, and an accumulated deficit of
approximately $1,187,000.  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 approaching profitability during 1997.  Management of SMTU
expects sales to increase further in 1998 and also expects these sales will
lead to overall profitability.  At April 30, 1997, SMTU was in violation of
various covenants under their 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 1997.

     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, 1997 the Company had
invested $230,000 in the venture.  This includes $60,000 in subordinated
debentures and $170,000. LC and the Company have also executed a manufacturing
agreement whereby the Company will perform manufacturing services for LC as
long as the Company remains competitive in price and quality.

     In fiscal year 1996 the Company financed its growth and operations by
borrowings from its secured lender.  The Company had working capital of
$18,859,747 at April 30, 1996 and $13,292,754 at April 30, 1995.  The increase
in working capital generally parallels the Company's increase in inventory and
accounts receivable, which resulted from an increase in net sales.

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

ITEM 7(a) QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

     Not applicable

ITEM 8.   FINANCIAL STATEMENT AND SUPPLEMENTARY DATA

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


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

     There have been no changes in or disagreements with accountants on
accounting or financial disclosure matters during the Company's fiscal years
ended April 30, 1997, 1996 and 1995.

                                      
                                      20
                                      

<PAGE>   21
                                      
                                   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, 1997.

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, 1997.

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, 1997.

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, 1997.


                                   PART IV
                                      

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND
          REPORTS ON FORM 10-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.
                                      
                                      
                                      21
                                      
<PAGE>   22


                               INDEX TO EXHIBITS
       (a)(3)
   
4.1    Certificate of Incorporation and 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   Industrial Real Estate Lease dated September 17, 1992 between the
       Company and Howard Hughes Properties, Limited Partnership - Filed as
       Exhibit 10.2 to the Company's Registration Statement on Form S-1 Reg.
       33-72100 and hereby incorporated by reference. 
*
10.3   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.
*      
10.4   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.
*
10.5   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. 
* 
10.6   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.
       
10.7   Term Promissory Note and Security Agreement dated as of July 1, 1991 in
       the amount of $514,792 payable to Electro, assigned to NMLP - Filed as
       Exhibit 10.12 to the Company's Registration Statement on Form S-1 Reg.
       33-72100 and hereby incorporated by reference.
*
10.10  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.

10.16  Organization Agreement between the Company and other Partners of SMT
       Unlimited L.P. dated September 15, 1994 - Filed as Exhibit 10.23 to the


                                      22

<PAGE>   23

       Company's Form 10-K for the fiscal year ended April 30, 1995 and hereby
       incorporated by reference.

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

10.25  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.

10.31  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.

10.32  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.

10.33  Second Amended and Restated Loan and Security Agreement between
       SigmaTron International, Inc., as Agent, and HSBC Business Loans, Inc.,
       in the amount of $25 million dated March 20, 1997.

11.1   Statement of per share earnings.

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.

27.1   Financial Data Schedule (EDGAR only)

       * Indicates management contract or compensatory plan.

       (b)  No reports on Form 8-K were filed during the 1997 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.



                                       23

                                       
<PAGE>   24


(d)  Financial Statements Schedules

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

                                      
                                      24
                                      










<PAGE>   25

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                 SigmaTron International, Inc.


                                 By:    Gary R. Fairhead            
                                     -----------------------------  
                                     Gary R. Fairhead, President    
                                     and Chief Executive Officer    
                                                                    
                                 Dated: July 17, 1997               

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities, and on the dates indicated.


<TABLE>
<CAPTION>
     Signature                     Title                              Date
     ---------                     -----                              ----
<S>                  <C>                                         <C>
Franklin D. Sove     Chairman of the Board of Directors          July 17, 1997
----------------
Franklin D. Sove

Gary R. Fairhead     President and Chief Executive Officer       July 17, 1997
----------------
Gary R. Fairhead

Linda K. Blake       Chief Financial Officer, Secretary and      July 17, 1997
--------------       Treasurer (Principal Financial Officer and
Linda K. Blake       Principal Accounting Officer)             

D.S. Patel           Director                                    July 17, 1997
----------
D.S. Patel

John P. Chen         Director                                    July 17, 1997
------------
John P. Chen

Dilip S. Vyas        Director                                    July 17, 1997
-------------
Dilip S. Vyas

William C. Mitchell  Director                                    July 17, 1997
-------------------
William C. Mitchell

Thomas W. Rieck      Director                                    July 17, 1997
---------------
Thomas W. Rieck

Steven Rothstein     Director                                    July 17, 1997
----------------
Steven Rothstein
</TABLE>


                                      25

<PAGE>   26








                                       Consolidated Financial Statements      
                                                                              
                                         SigmaTron International, Inc.        
                                                                              
                                   Years ended April 30, 1997, 1996, and 1995 
                                      with Report of Independent Auditors     




<PAGE>   27

                         SigmaTron International, Inc.

                       Consolidated Financial Statements




                                    Contents


Report of Independent Auditors..........................................F-2
                                                                 
Consolidated Financial Statements                                
                                                                 
Consolidated Balance Sheets at April 30, 1997 and 1996..................F-3
Consolidated Statements of Income for the Years Ended            
 April 30, 1997, 1996, and 1995.........................................F-5
Consolidated Statements of Equity for the Years Ended            
 April 30, 1997, 1996, and 1995.........................................F-6
Consolidated Statements of Cash Flows for the Years Ended        
 April 30, 1997, 1996, and 1995.........................................F-7
Notes to Consolidated Financial Statements..............................F-9
                                                                 
Schedule II                                                      
Valuation and Qualifying Accounts......................................F-23







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





                                     F-1

<PAGE>   28


                         Report of Independent Auditors

The Board of Directors and Stockholders
SigmaTron International, Inc.

We have audited the accompanying consolidated balance sheets of SigmaTron
International, Inc., as of April 30, 1997 and 1996, and the related
consolidated statements of income, equity, and cash flows for each of the three
years in the period ended April 30, 1997.  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, 1997 and 1996, and the consolidated
results of its operations and its cash flows for each of the three years in the
period ended April 30, 1997, in conformity with generally accepted accounting
principles.  Also, in our opinion, the related financial statement schedule,
when considered in relation to the basic financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.


                                                    /s/ Ernst & Young LLP

Chicago, Illinois
June 20, 1997,
except for Note 16, as to which the date is
July 1, 1997



                                     F-2

<PAGE>   29


                         SigmaTron International, Inc.

                          Consolidated Balance Sheets



<TABLE>
<CAPTION>
                                                        April 30
                                                  1997            1996
                                              ----------------------------
<S>                                           <C>              <C>
Assets
Current assets:
  Cash                                        $   323,223      $     2,500
  Accounts receivable, less allowance for    
   doubtful accounts of $80,000 and $492,126  
   at April 30, 1997 and 1996, respectively     8,770,457       11,080,485
  Inventories                                  17,665,600       14,854,050
  Equipment lease receivables from affiliate      892,435          655,913
  Notes receivable from affiliate                       -          300,000
  Prepaid expenses                                225,780          167,686
  Refundable income taxes                          98,666                -
  Deferred income taxes                           231,245          446,871
  Other assets                                    512,206          439,084
                                              ----------------------------
Total current assets                           28,719,612       27,946,589

Machinery and equipment, net                   10,343,060        7,599,168
Intangible assets, net of amortization of
  $178,119 and $154,341 at April 30, 1997
  and 1996, respectively                           14,136           37,914
Equipment lease receivables from
  affiliate, less current portion               1,467,336        1,920,876
Investment and advances with affiliate            527,238          202,524
Other assets                                    1,017,057          671,418




                                              ----------------------------
Total assets                                  $42,088,439      $38,378,489
                                              ============================

</TABLE>





                                     F-3


<PAGE>   30

<TABLE>
<CAPTION>
                                                                April 30
                                                           1997         1996
                                                       ------------------------
<S>                                                    <C>          <C>
Liabilities and stockholders' equity
Current liabilities:
  Notes payable - Banks                                $   166,668  $   166,668
  Notes payable - Related parties                           42,596      151,860
  Trade accounts payable                                 3,244,537    6,126,390
  Trade accounts payable - Related parties                 736,893      794,310
  Accrued expenses                                       1,680,721    1,443,034
  Income tax payable                                             -       66,236
  Capital lease obligations                              1,199,212      913,566
                                                       ------------------------
Total current liabilities                                7,070,627    9,662,064

Notes payable - Banks,  less current portion            14,714,943   12,533,171
Notes payable - Related parties, less current portion            -       42,596
Capital lease obligations, less current portion          2,469,372    2,720,484
Deferred income taxes                                      818,853      651,635
                                                       ------------------------
Total liabilities                                       25,073,795   25,609,950

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, 2,875,227 and 2,737,500 shares issued                            
   and outstanding at April 30, 1997 and 1996,                                  
   respectively                                             28,752       27,375
  Capital in excess of par value                         9,373,759    8,384,089
  Retained earnings                                      7,612,133    4,357,075
                                                       ------------------------
Total stockholders' equity                              17,014,644   12,768,539
                                                       ------------------------
Total liabilities and stockholders' equity             $42,088,439  $38,378,489
                                                       ========================
</TABLE>

See accompanying notes.





                                      F-4

<PAGE>   31


                         SigmaTron International, Inc.

                       Consolidated Statements of Income



<TABLE>
<CAPTION>
                                                        Year ended April 30
                                            1997              1996              1995
                                         -----------------------------------------------
<S>                                      <C>               <C>               <C>
Net sales                                $87,216,343       $69,558,384       $45,344,903
Cost of products sold                     74,577,261        59,416,086        36,933,132
                                         -----------------------------------------------
                                          12,639,082        10,142,298         8,411,771
Selling and administrative expenses        5,961,184         4,943,478         4,379,987
                                         -----------------------------------------------
Operating income                           6,677,898         5,198,820         4,031,784
Equity in net loss of affiliate              (75,036)         (242,677)         (256,799)
Interest expense - Banks and
  capital lease obligations               (1,836,967)       (1,598,705)         (759,973)
Interest expense - Related parties            (9,961)          (31,533)          (79,534)
Interest income - Related parties            404,708           425,917            96,133
                                         -----------------------------------------------
Income before income tax expense           5,160,642         3,751,822         3,031,611
Income tax expense                        (1,905,584)       (1,385,000)       (1,141,000)
                                         -----------------------------------------------
Net income                               $ 3,255,058       $ 2,366,822       $ 1,890,611
                                         ===============================================

Net income per common and common
  equivalent share                       $      1.11       $       .86       $       .69
Weighted-average number of common        ===============================================
  and common equivalent shares
  outstanding                              2,940,289         2,737,500         2,758,099
                                         ===============================================

Net income per common and common
  equivalent share - fully diluted       $      1.08
                                         ===========
Weighted average number of common
  and common equivalent shares -
  fully diluted                            3,000,680
                                         ===========
</TABLE>

See  accompanying notes.







                                      F-5

<PAGE>   32

                         SigmaTron International, Inc.

                       Consolidated Statements of Equity



<TABLE>
<CAPTION>
                                                                     Capital
                                                                    in Excess                     Total
                              Preferred Stock      Common Stock       of Par      Retained    Stockholders'
                              Shares    Amount   Shares    Amount     Value       Earnings       Equity
                              ----------------------------------------------------------------------------
<S>                           <C>       <C>    <C>        <C>      <C>           <C>           <C>
Balance at April 30, 1994        -        $-   2,737,500  $27,375  $8,384,089    $   99,642    $ 8,511,106
Net income                       -         -           -        -           -     1,890,611      1,890,611
                              ----------------------------------------------------------------------------
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
                              ============================================================================
</TABLE>

See accompanying notes.











                                     F-6

<PAGE>   33

                         SigmaTron International, Inc.

                     Consolidated Statements of Cash Flows


<TABLE>
<CAPTION>
                                                 Year ended April 30
                                           1997         1996         1995
                                        ------------------------------------
<S>                                     <C>          <C>          <C>
Operating activities
Net income                              $3,255,058   $2,366,822   $1,890,611
Adjustments to reconcile net income
  to net cash provided by (used in)
  operating activities:
    Depreciation                         1,047,262      766,467      566,179
    Equity in net loss of affiliate         75,036      242,677      256,799
    Amortization                            23,778       25,618       52,332
    Provision for doubtful accounts              -      306,888       12,632
    Provision for obsolete inventory             -            -      235,000
    Gain on sale of machinery and         
      equipment                                  -            -       (1,394)
    Deferred income taxes                  382,844      (57,509)         842
    Changes in operating assets and       
      liabilities:                          
        Accounts receivable              2,310,028   (3,410,538)    (839,991)
        Inventories                     (2,811,550)  (5,567,159)  (3,594,229)
        Prepaid expenses                   (58,094)      40,823      (15,960)
        Refundable income taxes            419,881      134,773     (134,773)
        Other assets                      (418,761)    (252,497)    (356,196)
        Trade accounts payable          (2,881,853)   3,439,734      268,532
        Trade accounts payable -          
          Related parties                  (57,417)      47,058      368,782
        Accrued expenses                   237,687      313,658      (64,129)
        Income tax payable                 (66,236)      66,236     (265,569)
                                        ------------------------------------
Net cash provided by (used in)
  operating activities                   1,457,663   (1,536,949)  (1,620,532)

Investing activities
Purchases of machinery and equipment    (2,950,725)  (2,293,961)  (1,567,656)
Proceeds from the sale of machinery
  and equipment                                  -       37,513       93,800
Proceeds from affiliate subleases          424,412      378,367      136,677
Advances to affiliate                     (100,000)     (50,000)    (600,000)
Proceeds from the sale of investment
  in affiliate                                 250            -            -
Investment in affiliate                          -            -      (52,000)
Notes receivable from affiliate                  -     (300,000)           -
Net cash used in investing activities   (2,626,063)  (2,228,081)  (1,989,179)
</TABLE>

                                      F-7
                                       
<PAGE>   34

                         SigmaTron International, Inc.

               Consolidated Statements of Cash Flows (continued)



<TABLE>
<CAPTION>
                                                          Year ended April 30             
                                                   1997          1996           1995      
                                               -----------------------------------------
<S>                                            <C>             <C>            <C>         
Financing activities                                                                      
Repayment of term loan and other notes                                                    
  payable                                      $  (151,860)    $ (363,013)    $ (893,679) 
Proceeds from exercise of stock options                                                   
  and warrants                                     472,500              -              -  
Net proceeds under line of credit                2,181,772      4,555,271      4,956,003  
Net payments under capital lease obligations    (1,013,289)      (427,228)      (452,613) 
                                               -----------------------------------------  
Net cash provided by financing activities        1,489,123      3,765,030      3,609,711  
                                               -----------------------------------------  
Change in cash                                     320,723              -              -  
Cash at beginning of period                          2,500          2,500          2,500  
                                               -----------------------------------------
Cash at end of period                          $   323,223     $    2,500     $    2,500  
                                               =========================================
                                                                                          
Supplementary disclosure of cash flow                                                     
  information                                                                             
Cash paid for interest                         $ 1,834,946     $1,602,494     $  717,688  
                                               =========================================  

Cash paid for income taxes                     $ 1,169,854     $1,241,500     $1,540,500  
                                               =========================================  
Acquisition of machinery and equipment                                                    
  financed under capital leases                $   840,429     $  432,437     $1,345,750  
                                               =========================================
</TABLE>

See accompanying notes.








                                      F-9


<PAGE>   35

                         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.  Investments in affiliates which are at least 20% owned are
carried at cost plus equity in undistributed earnings or losses since
acquisition.

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.

Machinery and Equipment



                                     F-10

<PAGE>   36

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 asset.


















                                     F-11

<PAGE>   37

                         SigmaTron International, Inc.

           Notes to Consolidated Financial Statements (continued)

2.  Summary of Significant Accounting Policies (continued)

Intangible Assets

Intangible assets consist primarily of deferred financing costs and
organizational costs.  These items are being amortized by the straight-line
method over the estimated useful lives of the assets, which range from one to
five 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 February 1997, the Financial Accounting Standards Board issued Statement No.
128, Earnings Per Share, which is required to be adopted on December 31, 1997.
At that time, the Company will be required to change the method currently used
to compute earnings per share and to restate all prior periods.  Under the new
requirements for calculating primary earnings per share, the dilutive effect of
stock options will be excluded.  The impact is expected to result in a $.05
increase in primary earnings per share for the year ended April 30, 1997 and no
effect on primary earnings per share for the years ended April 30, 1996 and
1995.  The impact of Statement 128 on the calculation of fully diluted earnings
per share for 1997 is not material.

Fair Value of Financial Instruments

The Company's financial instruments include trade accounts receivable, notes
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.




                                     F-12
<PAGE>   38

                         SigmaTron International, Inc.

           Notes to Consolidated Financial Statements (continued)


2.  Summary of Significant Accounting Policies (continued)

Reclassifications

Certain reclassifications were made to the 1996 and 1995 consolidated financial
statements to conform with the 1997 presentation.

3.  Inventories

Inventories consist of the following:


<TABLE>
<CAPTION>                                          April 30
                                              1997          1996
                                          --------------------------
<S>                                       <C>            <C>
Finished products                         $ 2,966,415    $   556,157
Work in process                             1,079,985      1,407,996
Raw materials                              13,619,200     12,889,897
                                          --------------------------
                                          $17,665,600    $14,854,050
                                          ==========================
</TABLE>

4.  Machinery and Equipment

Machinery and equipment consist of the following:


<TABLE>                                       
<CAPTION>                                          April 30    
                                               1997         1996
                                          -------------------------
<S>                                       <C>          <C>
Machinery and equipment                   $ 8,130,150   $5,895,335 
Office equipment                              896,408      646,391 
Tools and dies                                123,251      121,649 
Leasehold improvements                      1,815,210    1,350,472 
Equipment under capital lease               2,751,733    1,911,751 
                                          -------------------------
                                           13,716,752    9,925,598
Less:  Accumulated depreciation and 
   amortization, including amortization 
   of assets under capital leases of 
   $441,418 and  $243,188 at April 30, 
   1997 and 1996, respectively             (3,373,692)  (2,326,430)
                                          -------------------------
                                          $10,343,060   $7,599,168
                                          =========================
</TABLE>





                                     F-13
<PAGE>   39

                         SigmaTron International, Inc.

           Notes to Consolidated Financial Statements (continued)

5.  Investment and Advances With Affiliate

The Company's investment in affiliate 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,
$50,000, and $600,000 in 1997, 1996, and 1995, respectively.  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,
1997 bear interest at 8%, and are to be repaid on December 31, 1999.  The
remaining $400,000 of these debentures bear interest at 12% and are to be
repaid on December 31, 2001.  The Company guarantees lease payments of
approximately $1,831,000 for SMTU.  The Company has been indemnified by one of
the other limited partners in the amount of $915,500 for the guaranteed lease
payments.  SMTU pays the Company a $12,500 monthly administrative fee for
administrative services.
        
SMTU has negative working capital of approximately $1,161,000 at April  30,
1997, and an accumulated deficit of approximately $1,187,000 at April 30, 1997.
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 near
break-even profitability during 1997.  Management of SMTU expects sales to
increase further in 1998 and also expects these sales will lead to overall
profitability.  At April 30, 1997, SMTU was in violation of various covenants
under their 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 1997.







                                     F-14
<PAGE>   40

                         SigmaTron International, Inc.

           Notes to Consolidated Financial Statements (continued)

6.  Notes Payable

Notes payable consist of the following:


<TABLE>
<CAPTION>                                                     April 30
                                                        1997            1996
                                                    ---------------------------
<S>                                                 <C>             <C>
Banks:
 Revolving line of credit, interest payable     
 monthly                                            $14,603,835     $12,255,395
 Term loan, interest payable monthly at prime
  and at 1.0% above prime at April 30, 1997
  and 1996 (8.50% and 9.25% at April 30, 1997
  and 1996, respectively), due December 1, 1998         277,776         444,444
                                                    ---------------------------
                                                     14,881,611      12,699,839
Less:  Current portion                                  166,668         166,668
                                                    ---------------------------
                                                    $14,714,943     $12,533,171
                                                    ===========================
Related Party:
 Subordinated, secured term loans, interest
   payable monthly at varying interest rates (9.25%
   to 9.77% at April 30, 1997 and 1996), due at
   varying intervals through August 1, 1997         $    42,596     $   194,456
                                                    ---------------------------
                                                         42,596         194,456
 Less:  Current portion                                  42,596         151,860
                                                    ---------------------------
                                                    $         -     $    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 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 (5.69% at April 30, 






                                     F-15
<PAGE>   41
                         SigmaTron International, Inc.

           Notes to Consolidated Financial Statements (continued)


6. Notes Payable (continued)

1997) plus 2% or at the prime rate (8.50% of April 30, 1997) at the option of
the Company.  At April 30, 1997, there was approximately $1,297,000 of unused
credit available under the terms of the agreement.  The revolving
line-of-credit currently matures on September 30, 1998.

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, 1997, are as
follows:


<TABLE>
                    <S>                                      <C>        
                    1998                                     $   209,264
                    1999                                      14,714,943
                                                             ----------- 
                                                             $14,924,207
                                                             =========== 
</TABLE>

7.  Accrued Expenses

Accrued expenses consist of the following:

<TABLE>
<CAPTION>                          
                                                        April 30        
                                                   1997          1996
                                               -------------------------    
                    <S>                        <C>            <C> 
                    Payroll                    $  403,902     $  528,879 
                    Bonuses                       792,031        580,000 
                    Interest payable              114,002        102,019 
                    Commissions                   116,044        135,490 
                    Professional fees             120,492         88,607 
                    Other                         134,250          8,039 
                                               --------------------------
                                               $1,680,721     $1,443,034 
                                               ==========================
</TABLE>





                                     F-16
<PAGE>   42

                         SigmaTron International, Inc.

           Notes to Consolidated Financial Statements (continued)


7.  Accrued Expenses (continued)

Bonuses represent discretionary management and other employee bonuses, of which
$280,000 and $580,000 was accrued during the fourth quarter of 1997 and 1996,
respectively.

8.  Related Party Transactions and Commitments

During the years ended April 30, 1997, 1996, and 1995, 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
$6,895,000 and $4,754,800, and $3,252,000, for the years ended April 30, 1997,
1996, and 1995, respectively.  The Company also leases space in a building in
Elk Grove Village, Illinois, owned by CSI at a base rental of $30,000 per
month, with an additional $7,000 per month for property taxes.  The lease
requires the Company to pay maintenance and utility expenses.  The lease
expires in February 2001 and contains an option to renew for an additional
five-year period.  Rent and property tax expense totaled approximately
$423,000, $406,000, and $408,000 for the years ended April 30, 1997, 1996, and
1995, respectively.

At April 30, 1997 and 1996, the Company had non-interest bearing receivables of
approximately $205,000 and $223,000, 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, 1997.

9.  Income Taxes

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

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




                                     F-17
<PAGE>   43
                         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, 1997 and 1996, are as
follows:


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

Significant temporary differences which result in deferred tax assets and
deferred tax liabilities at April 30, 1997 and 1996, are as follows:


<TABLE>
       <S>                                              <C>         <C>
                                                         1997          1996
                                                      -----------------------
       Allowance for doubtful accounts                $  31,200     $ 191,929
       Inventory obsolescence reserve                   129,285       160,485
       Accruals not currently deductible                 68,128        92,030
       Inventory                                         55,213        48,075
       Other                                            (52,581)      (45,648)
                                                       ----------------------
       Net deferred tax asset                         $ 231,245     $ 446,871
                                                      =======================

       Machinery and equipment                        $ 694,261     $ 619,490
       Other                                            124,592        32,145
                                                      -----------------------
       Net deferred tax liability                     $ 818,853     $ 651,635
                                                      =======================

</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 $34,554 to the
plan during the fiscal year ended April  30, 1997.  The Company made no
contributions to the plan for the fiscal years ended April 30, 1996, and 1995;
however, the Company paid total expenses 


                                     F-18
<PAGE>   44

                         SigmaTron International, Inc.

           Notes to Consolidated Financial Statements (continued)

of $8,000 for the fiscal years ended April 30, 1997 and 1996, and none in 
fiscal year ended April 30, 1995, relating to costs associated with the Plan's 
administration.





                                     F-19

<PAGE>   45

                         SigmaTron International, Inc.

           Notes to Consolidated Financial Statements (continued)


11.  Major Customers and Concentration of Credit Risks

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

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.  For the year ended April 30, 1995,
three customers accounted for 34%, 16%, and 13% of net sales of the Company,
and 39%, 12%, and 1% of accounts receivable at April 30, 1995.

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, 1997:

<TABLE>
<S>                                   <C>         <C>
                                       Capital      Operating
                                        Leases       Leases
                                    ---------------------------
                                                               
        1998                          $1,519,080   $  844,884
        1999                           1,519,080      793,737
        2000                           1,099,070      760,632
        2001                             299,415      686,660
        2002                              94,841      214,800
        Thereafter                             -       93,600
                                     --------------------------
                                       4,531,486   $3,394,313
                                                   ============
        Less:  Amounts representing      
               interest                  862,902
                                     ------------
                                       3,668,584
        Less:  Current portion         1,199,212
                                     ------------
                                      $2,469,372
                                     ============
</TABLE>

The Company subleased the machinery and equipment relating to six 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 8.25% to 10.12%) implicit in the
original lease to cover various administrative expenses of the Company.  The
equipment lease receivables are collateralized by the underlying machinery and
equipment.  Management believes the machinery and equipment would be able to be
readily used in the Company's manufacturing operations if necessary.


                                     F-20

<PAGE>   46

                         SigmaTron International, Inc.

           Notes to Consolidated Financial Statements (continued)

12.  Leases (continued)

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


<TABLE>
                     <S>                                    <C>
                     1998                                   $  900,660
                     1999                                      900,660
                     2000                                      666,200
                     2001                                       67,080
                     2002                                       14,942
                                                            ----------
                                                             2,549,542
                     Less:  Amounts representing 
                            interest                           189,771
                                                            ----------
                                                             2,359,771
                     Less:  Current portion                    892,435
                                                            ----------
                                                            $1,467,336
                                                            ==========

</TABLE>

Rent expense incurred under operating leases was $557,456, $560,756, and
$513,688 for the years ended April 30, 1997, 1996, and 1995, respectively.

13.  Capital Stock

At April 30, 1997, authorized but unissued shares have been reserved for future
issuance as follows:


<TABLE>
                      <S>                                  <C>
                      Stock Option Plans                     599,500
                      Warrants                                35,000
                                                            --------
                                                             634,500
                                                            ========
</TABLE>

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.  As of April 30, 1997,
115,000 warrants have been exercised.


                                     F-21
<PAGE>   47

                         SigmaTron International, Inc.

           Notes to Consolidated Financial Statements (continued)


14.  Warrants and Stock Options (continued)

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 are 10 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.

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 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, 1997
and 1996, management vested in options to purchase 120,000 and 80,000 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, 1996, or 1995 as the
earnings per share level goal was not met, and options to purchase 100,000,
75,000, and 50,000 shares were forfeited in 1997, 1996, and 1995, respectively.
On June 11, 1997, options to purchase up to 425,000 shares of common stock
were canceled and return to the pool of ungranted options to be granted as
service based options at a date to be determined by the committee.

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.  Each eligible director in office at
the adjournment of the first three annual meetings of stockholders held after
February 9, 1994, was granted an option to purchase 3,500 shares of the
Company's Common Stock at an exercise price per share equal to the fair market
value of a share of the Company's Common Stock on the date of grant.  As of
April 30, 1997, all options reserved for issuance under this plan have been
granted.  An option may be exercised at any time within 10 years from the date
of grant.  On June 11, 1997, a new outside nonmanagement director option plan
was adopted subject to shareholder approval, to grant options to purchase up to
105,000 shares of common stock in a manner similar to the old plan.



                                     F-22
<PAGE>   48

                        SigmaTron International, Inc.
                                      
            Notes to Consolidated Financial Statements (continued)


14.  Warrants and Stock Options (continued)

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 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 has accounted for its
employee stock options granted subsequent to December 31, 1994, under the fair
value method of that Statement.  For purposes of pro forma disclosures, the
estimated fair value of the options is amortized to expense over the options
vesting period.

The Company's pro forma information follows:

<TABLE>
Caption>
                                            1997        1996
                                         ----------------------
<S>                                      <C>         <C>
Net income                               $3,255,058  $2,366,822
Pro forma net income                      3,167,740   2,308,772
Earnings per share                            $1.11        $.86
Pro forma earnings per share                  $1.08        $.84
</TABLE>

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


<TABLE>
<CAPTION>
                                            1997     1996
                                        ----------------------
<S>                                        <C>      <C>
Expected dividend yield                         0%       0%
Expected stock price volatility              0.529    0.529
Risk-free interest rate                      6.54%    6.54%
Weighted-average expected life of options  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 


                                     F-23

<PAGE>   49
                                      
                        SigmaTron International, Inc.
                                      
            Notes to Consolidated Financial Statements (continued)
                                      

necessarily provide a reliable single measure of the fair value of its  
employee stock options.


                                     F-24









<PAGE>   50
                                      
                        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>
                                            1997                         1996                        1995
                                 -----------------------------------------------------------------------------------
                                            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    549,000       $7.06         599,500       $7.06         625,000       $7.00 
Granted                             24,500       10.25          24,500        6.81          24,500        8.44 
Exercised                          (99,000)       7.64               -           -               -           - 
Forfeited                         (100,000)       7.00         (75,000)       7.00         (50,000)       7.00 
                                 -----------------------------------------------------------------------------------
Outstanding - End of year          374,500       $7.13         549,000       $7.06         599,500       $7.06 
                                   =======                     =======                     =======             
Exercisable at end of year          94,500       $7.50         129,000       $7.24          64,500       $7.55 
Weighted-average fair value of                                                          
options granted during the                                                              
year                                             $5.40                       $3.59      
</TABLE>

Exercise prices for options outstanding as of April 30, 1997 ranged from $6.81
to $10.25 (343,000 of the options outstanding at April 30, 1997 have an
exercise price of $7.00).  The weighted-average remaining contractual life of
those options is 6.9 years.


                                     F-25

<PAGE>   51
                        SigmaTron International, Inc.
                                      
            Notes to Consolidated Financial Statements (continued)
                                      
                                      
15.  Net Income Per Common and Common Equivalent Share

Net income per common and common equivalent share is computed based upon the
weighted-average number of shares outstanding.  When dilutive, stock options
and warrants are included as share equivalents using the treasury stock method.
The 425,000 shares reserved for issuance under the management stock option
plan are not considered common stock equivalents in 1997, 1996, and 1995 as the
earnings per share goals were not reached. Fully diluted net income per common
and common equivalent share is not materially different from primary net income
per common and common equivalent share in 1996 and 1995.

16.  Subsequent Event

On July 1, 1997, the Committee approved grants of options to certain employees
and members of the Company's management to purchase 352,000 shares of common
stock at an exercise price equal to $12.25.  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-26

<PAGE>   52
                                      
                        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, 1997:
 Reserves and allowance
 deducted from asset accounts:
  Allowance for doubtful accounts  $492,126     $80,000          $-  (1) $492,126     $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
Year ended April 30, 1995:
 Reserves and allowance
 deducted from asset accounts:
  Allowance for doubtful accounts   172,606      12,632           -             -     185,238
  Reserve for obsolete inventory    176,500     235,000           -             -     411,500
</TABLE>

(1) Uncollectible accounts written off.


                                     F-27