SMTC Refinances Debt, Lowers Interest Costs



    TORONTO, Aug. 6 /CNW/ - SMTC Corporation (Nasdaq:   SMTX, TSE: SMX), a
global electronics manufacturing services provider, today announced it has
signed new five year loan agreements with Wachovia Capital Finance Corporation
and Monroe Capital LLC to refinance the Corporation's short and long term
debt.
    Under the new banking arrangements, Wachovia will provide a new
asset-backed $40 million revolving credit facility to provide the Corporation
with a larger revolver facility providing greater flexibility to manage
working capital requirements. This new credit facility replaces a previous $35
million asset backed revolving facility and a term loan also provided by
Wachovia and will be used for working capital and general purposes. In
addition, Monroe will provide $21.5 million in term debt which is amortized
over seven years. The Monroe term loan primarily replaces two tranches of
subordinated term debt held by a syndicate of lenders aggregating $21 million
which were to mature on December 31, 2007 and December 31, 2008.
    "The refinancing of SMTC's debt is an important step in supporting the
Company's overall strategy for growth," stated Jane Todd Senior Vice President
Finance and Chief Financial Officer. "Not only do the new increased revolver
and term loan facilities provide greater flexibility, the Company also will
achieve lower interest expense of an estimated $1 million on an annualized
basis."

    About SMTC Corporation: SMTC Corporation, founded in 1985, is a mid-size
provider of end-to-end electronics manufacturing services (EMS) including PCBA
production, systems integration and comprehensive testing services, enclosure
fabrication, as well as product design, sustaining engineering and supply
chain management services. SMTC facilities span a broad footprint in the
United States, Canada, and Mexico, and a partnering relationship in China,
with over 1300 full time employees. SMTC services extend over the entire
electronic product life cycle from the development and introduction of new
products through to the growth, maturity and end-of-life phases. SMTC offers
fully integrated contract manufacturing services with a distinctive approach
to global original equipment manufacturers (OEMs) and emerging technology
companies primarily within industrial, computing and communication market
segments.
    SMTC is a public company incorporated in Delaware with its shares traded
on the Nasdaq National Market System under the symbol SMTX and on the Toronto
Stock Exchange under the symbol SMX. For further information on SMTC
Corporation, please visit our website at www.smtc.com (http://www.smtc.com/).

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





For further information:

For further information: Jane Todd, Senior Vice President Finance and
Chief Financial Officer, (905) 413-1300, jane.todd@smtc.com

Organization Profile

SMTC CORPORATION

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