SAN JOSE, Calif., April 22 /PRNewswire-FirstCall/ -- Sanmina-SCI
Corporation (the "Company")(NASDAQ:SANM), a leading global
Electronics Manufacturing Services (EMS) company, today reported
financial results for the second fiscal quarter ended March 28,
2009. Revenue for the second quarter was $1.2 billion, compared to
$1.4 billion in the prior quarter ended December 27, 2008. GAAP
Financial Results GAAP net loss in the second quarter was $37.5
million and diluted loss per share of 7 cents, compared to a net
loss of $25.3 million and diluted loss per share of 5 cents in the
prior quarter. Non-GAAP Financial Results(2) Non-GAAP gross profit
in the second quarter was $70.6 million, or 5.9 percent of revenue,
compared to gross profit of $95.9 million, or 6.7 percent of
revenue in the first quarter. Non-GAAP operating income was $11.4
million, or 1 percent of revenue in the quarter compared to $31.2
million, or 2.2 percent of revenue in the prior quarter. Non-GAAP
net loss in the second quarter was $30.9 million, a diluted loss
per share of 6 cents, compared to a net loss of $768 thousand and
break-even diluted earnings per share in the prior quarter. (In
thousands, except per share Q2:2009 Q1:2009 Q2:2008(1) data) GAAP:
Revenue $1,195,107 $1,419,264 $1,817,431 Net loss ($37,538)
($25,273) ($39,937) Loss per share ($0.07) ($0.05) ($0.08)
Non-GAAP*: Revenue $1,195,107 $1,424,264 $1,817,431 Gross profit
$70,590 $95,896 $126,051 Gross margin 5.9% 6.7% 6.9% Operating
income $11,441 $31,164 $44,862 Operating margin 1.0% 2.2% 2.5% Net
income (loss) ($30,949) ($768) $14,453 Earnings (loss) per share
($0.06) ($0.00) $0.03 * Please refer to "Non-GAAP Financial
Information" below for a discussion of how the above non-GAAP
financial measures are calculated and why we believe this
information is useful to investors. A reconciliation from GAAP to
non-GAAP results is contained in the financial statements provided
in this release and is available in the Investor Relations section
of our website at http://www.sanminasci.com/. Second Quarter
Balance Sheet Highlights -- Ending cash balance increased $55
million to $851.5 million -- Cash flow from operations was $97
million(3) -- Inventories improved $78 million -- Retired $34
million of outstanding debt and repurchased 23 million shares "The
difficult economic challenges we continued to face in the second
quarter impacted all of our market segments. Demand was weak in
January and February, but we did see signs of stabilization in
March. As we await further economic recovery, we are cautiously
optimistic that the third quarter will continue to stabilize,"
stated Jure Sola, Chairman and Chief Executive Officer. "We
continue to make progress in those areas we can control and I am
pleased with our ability to manage our working capital metrics and
generate cash in the second quarter. Our cash position increased
$55 million sequentially while we retired $34 million of debt in
the quarter. We are well positioned to weather the economic
uncertainties with a strong balance sheet and a healthy debt
maturity profile. We remain focused on cost reduction initiatives,
inventory management, positive cash flow generation, increased
liquidity and providing innovative technology to our customers."
Third Quarter Fiscal 2009 Outlook The following internal forecast
for the third fiscal quarter ending June 27, 2009 is based on
current market demand. These statements are forward-looking and
actual results may differ materially. -- Revenue between $1.175
billion to $1.250 billion -- Non-GAAP diluted loss per share
between ($0.04) to ($0.02) -- Expect to generate positive cash flow
from operations "Short-term visibility has improved slightly as we
enter the third quarter. We are taking aggressive actions to make
the company more efficient at the current revenue level which will
allow us to enhance our future financial performance as market
demand normalizes," concluded Sola. (1)Basis of Presentation for
Continuing Operations The Company completed the sale of the assets
of its personal computing business and associated logistics
services in two transactions that closed on June 2, 2008 and July
7, 2008, respectively. The Company has reported this line of
business as a discontinued operation in the financial statements
that accompany this press release. Therefore, results for the
second quarter fiscal 2008 are based on continuing operations.
(2)Non-GAAP Financial Information In the commentary set forth
above, we present the following non-GAAP financial measures:
revenue, gross profit, gross margin, operating income, operating
margin, net income and earnings per share. In computing each of
these non-GAAP financial measures, we exclude charges or gains
relating to: stock-based compensation expenses, restructuring costs
(including employee severance and benefits costs and charges
related to excess facilities and assets), integration costs
(consisting of costs associated with the integration of acquired
businesses into our operations), impairment charges for goodwill
and intangible assets, amortization expense and other infrequent or
unusual items, to the extent material or which we consider to be of
a non-operational nature in the applicable period. Management
excludes certain charges and expenses from the data it uses to
evaluate the condition of the business because, in its view, such
charges and expenses do not relate to the ongoing core operations
of the business. For example, the features and costs of products
and the locations of manufacture can change over time, and these
changes in some instances may require reorganization or closure of
certain plants and the layoffs of related employees. These actions,
in turn, generate restructuring expense applicable to the
particular plant reorganized or closed. Including these charges in
the operating results evaluated by management would prevent the
Company from discovering the underlying performance of individual
plants or business units which, but for changes in customer
requirements, would have continued operations. Such individual
plant-level information is consolidated to present to management a
view of the Company's operations as a whole. Similarly, since not
all employees hold equal numbers of stock options, inclusion of
stock compensation expense in operating results would decrease the
perceived performance of business units whose employees hold more
stock options compared to business units whose employees hold fewer
stock options. As a result, management can only discover long-term
trends in the Company's core business operations by evaluating key
operational expenses such as ongoing purchases of inventory for
assembly, payment of payroll obligations for continuing employees,
interest expense relating to the Company's debt obligations and
lease payments for operating facilities. Moreover, we believe the
exclusion of these charges provides for a more accurate comparison
of our results to those of our peers due to the varying available
valuation methodologies, subjective assumptions and variety of
award types. Therefore, we believe that presenting non-GAAP
financial measures in addition to GAAP results enables investors to
analyze the core financial and operating performance of our Company
in the manner utilized by management and to facilitate
period-to-period comparisons and analysis of operating trends. A
reconciliation from GAAP to non-GAAP results is included in the
financial statements contained in this release and is also
available on the Investor Relations section of our website at
http://www.sanmina-sci.com/. Sanmina-SCI provides third quarter
outlook information only on a non-GAAP basis due to the inherent
uncertainties associated with forecasting the timing and amount of
restructuring, impairment and other unusual and infrequent items.
The non-GAAP financial information presented in this release may
vary from non-GAAP financial measures used by other companies. In
addition, non-GAAP financial information should not be viewed as a
substitute for financial data prepared in accordance with GAAP.
(3)GAAP cash flow from operations equals internal operating cash
flow of $134 million, which includes $40 million from the factoring
of A/R, less cash restructuring payments of $21 million and a
payment related to the divesture of the PC business of $16 million.
Company Conference Call Information Sanmina-SCI will be holding a
conference call regarding this announcement on Wednesday, April 22,
2009 at 5:00 p.m. ET (2:00 p.m. PT). The access numbers are:
domestic 877-273-6760 and international 706-634-6605. The
conference will be broadcast live over the Internet. You can log on
to the live webcast at http://www.sanmina-sci.com/. Additional
information in the form of a slide presentation is available by
logging onto Sanmina-SCI's website at http://www.sanmina-sci.com/.
A replay of today's conference call will be available for 48-hours.
The access numbers are: domestic 800-642-1687 and international
706-645-9291, access code is 93674373. About Sanmina-SCI
Sanmina-SCI Corporation is a leading electronics contract
manufacturer serving leading segments of the global Electronics
Manufacturing Services (EMS) market. Recognized as a technology
leader, Sanmina-SCI provides end-to-end manufacturing solutions,
delivering superior quality and support to OEMs primarily in the
communications, defense and aerospace, industrial and medical
instrumentation, multimedia, enterprise computing and storage, and
automotive technology sectors. Sanmina-SCI has facilities
strategically located in key regions throughout the world. More
information regarding the company is available at
http://www.sanmina-sci.com/. Sanmina-SCI Safe Harbor Statement
Certain statements contained in this press release, including the
Company's expectations for future revenue, earnings per share and
cash flow constitute forward-looking statements within the meaning
of the safe harbor provisions of Section 21E of the Securities
Exchange Act of 1934. Actual results could differ materially from
those projected in these statements as a result of a number of
factors, including continued deterioration of the market for the
Company's customers' products and the global economy as a whole,
which could negatively impact the Company's revenue and the
Company's customers' ability to pay for the Company's products;
customer bankruptcy filings; the sufficiency of the Company's cash
position and other sources of liquidity to operate and expand its
business; impact of the restrictions contained in the Company's
credit agreements and indentures upon the Company's ability to
operate and expand its business; competition negatively impacting
the Company's revenues and margins; any failure of the Company to
effectively assimilate acquired businesses and achieve the
anticipated benefits of its acquisitions; the failure of the
Company's cost reduction efforts to be successful for any reason,
including the need to suspend such initiatives for business
reasons; and the other factors set forth in the Company's Quarterly
Report on Form 10-Q for the fiscal quarter ended December 27, 2008
filed with the Securities Exchange Commission ("SEC"). The Company
is under no obligation to (and expressly disclaims any such
obligation to) update or alter any of the forward-looking
statements made in this earnings release, the conference call or
the Investor Relations section of our website whether as a result
of new information, future events or otherwise, unless otherwise
required by law. Sanmina - SCI Corporation Condensed Consolidated
Balance Sheets (In thousands) (GAAP) March 28, September 27, 2009
2008 ---- ---- (Unaudited) ASSETS ------ Current assets: Cash and
cash equivalents $851,497 $869,801 Accounts receivable, net 710,087
986,312 Inventories 706,024 813,359 Prepaid expenses and other
current assets 69,743 100,399 Assets held for sale 46,121 43,163
------ ------ Total current assets 2,383,472 2,813,034 ---------
--------- Property, plant and equipment, net 574,692 599,908 Other
non-current assets 132,321 117,785 ------- ------- Total assets
$3,090,485 $3,530,727 ========== ========== LIABILITIES AND
STOCKHOLDERS' EQUITY ------------------------------------ Current
liabilities: Accounts payable $679,484 $908,151 Accrued liabilities
149,611 191,022 Accrued payroll and related benefits 98,389 139,522
------ ------- Total current liabilities 927,484 1,238,695 -------
--------- Long-term liabilities: Long-term debt 1,451,623 1,481,985
Other 99,339 114,089 ------ ------- Total long-term liabilities
1,550,962 1,596,074 --------- --------- Total stockholders' equity
612,039 695,958 ------- ------- Total liabilities and stockholders'
equity $3,090,485 $3,530,727 ========== ========== Sanmina - SCI
Corporation Condensed Consolidated Statements of Operations (In
thousands, except per share amounts) (GAAP) (Unaudited) Three
Months Ended Six Months Ended ------------------ ----------------
March March March March 28, 2009 29, 2008 28, 2009 29, 2008
-------- -------- -------- -------- Net sales $1,195,107 $1,817,431
$2,614,371 $3,595,571 Cost of sales 1,126,517 1,692,786 2,461,983
3,341,997 --------- --------- --------- --------- Gross profit
68,590 124,645 152,388 253,574 ------ ------- ------- -------
Operating expenses: Selling, general and administrative 57,055
79,336 120,042 168,414 Research and development 4,720 4,253 8,912
8,859 Amortization of intangible assets 1,023 1,650 2,673 3,300
Restructuring costs 15,574 48,019 24,809 54,798 Asset impairment
3,384 - 7,182 - ----- ----- ----- ----- Total operating expenses
81,756 133,258 163,618 235,371 ------ ------- ------- -------
Operating income (13,166) (8,613) (11,230) 18,203 Interest income
1,829 5,229 5,279 11,446 Interest expense (28,112) (31,611)
(57,295) (66,974) Other income (expense), net 4,923 4,272 5,476
(368) ----- ----- ----- ---- Interest and other expense, net
(21,360) (22,110) (46,540) (55,896) ------- ------- ------- -------
Loss from continuing operations before income taxes (34,526)
(30,723) (57,770) (37,693) Provision for income taxes 3,012 9,214
5,041 11,697 ----- ----- ----- ------ Net loss from continuing
operations (37,538) (39,937) (62,811) (49,390) Net income from
discontinued operations, net of tax - 15,523 - 32,892 ----- ------
----- ------ Net loss $(37,538) $(24,414) $(62,811) $(16,498)
======== ======== ======== ======== Basic and diluted income (loss)
per share from: Continuing operations $(0.07) $(0.08) $(0.12)
$(0.09) Discontinued operations $- $0.03 $- $0.06 Net income
$(0.07) $(0.05) $(0.12) $(0.03) Weighted-average shares used in
computing per share amounts: Basic and diluted 500,718 530,747
512,459 530,200 Sanmina - SCI Corporation Reconciliation of GAAP to
Non-GAAP Measures (in thousands, except per share amounts)
(Unaudited) Three Months Ended ------------------ March December
March 28, 2009 27, 2008 29, 2008 -------- --------- -------- GAAP
Revenue $1,195,107 $1,419,264 $1,817,431 Adjustments Customer
bankruptcy reorganization (1) - 5,000 - ----- ----- ----- Non-GAAP
Revenue $1,195,107 $1,424,264 $1,817,431 ========== ==========
========== GAAP Gross Profit $68,590 $83,798 $124,645 GAAP gross
margin 5.7% 5.9% 6.9% Adjustments Stock compensation expense (2)
2,000 1,865 1,581 Amortization of intangible assets - 233 233 Stock
option investigation costs - - (408) Customer bankruptcy
reorganization (1) - 10,000 - ----- ------ ----- Non-GAAP Gross
Profit $70,590 $95,896 $126,051 ======= ======= ======== Non-GAAP
gross margin 5.9% 6.7% 6.9% GAAP operating income (loss) $(13,166)
$1,936 $(8,613) GAAP operating margin -1.1% 0.1% -0.5% Adjustments
Stock compensation expense (2) 4,326 4,162 3,738 Amortization of
intangible assets 1,023 1,883 1,883 Stock option investigation and
integration 300 150 (165) Customer bankruptcy reorganization (1) -
10,000 - Restructuring costs 15,574 9,235 48,019 Impairment of
goodwill and other assets 3,384 3,798 - ----- ----- ----- Non-GAAP
operating income $11,441 $31,164 $44,862 ======= ======= =======
Non-GAAP operating margin 1.0% 2.2% 2.5% GAAP net loss $(37,538)
$(25,273) $(24,414) Adjustments Net income from discontinued
operations, net of tax - - (15,523) ------ ------ ------- GAAP net
loss - continuing operations (37,538) (25,273) (39,937) Adjustments
- continuing operations: Operating income adjustments (see above)
24,607 29,228 53,475 Net gain on derivative financial instruments
and other (3) - (4,993) - Impairment of long- term investment 1,000
- - (Gain) / loss on redemption of debt (4) (13,490) - - Tax effect
of above items (5,528) 270 915 ------ ----- ----- Non-GAAP net
income (loss) -continuing operations $(30,949) $(768) $14,453
======== ===== ======= Non-GAAP Basic Earnings (Loss) Per Share:
Continuing operations $(0.06) $- $0.03 Non-GAAP Diluted Earnings
(loss) Per Share: Continuing operations $(0.06) $- $0.03
Weighted-average shares used in computing Non- GAAP earnings per
share amounts: Basic 500,718 523,316 530,747 Diluted 500,718
523,316 530,895 Six Months Ended ---------------- March March 28,
2009 29, 2008 -------- -------- GAAP Revenue $2,614,371 $3,595,571
Adjustments Customer bankruptcy reorganization (1) 5,000 - -----
----- Non-GAAP Revenue $2,619,371 $3,595,571 ========== ==========
GAAP Gross Profit $152,388 $253,574 GAAP gross margin 5.8% 7.1%
Adjustments Stock compensation expense (2) 3,865 3,281 Amortization
of intangible assets 233 504 Stock option investigation costs -
(408) Customer bankruptcy reorganization (1) 10,000 - ------ ------
Non-GAAP Gross Profit $166,486 $256,951 ======== ======== Non-GAAP
gross margin 6.4% 7.1% GAAP operating income (loss) $(11,230)
$18,203 GAAP operating margin -0.4% 0.5% Adjustments Stock
compensation expense (2) 8,488 7,015 Amortization of intangible
assets 2,906 3,804 Stock option investigation and integration 450
2,098 Customer bankruptcy reorganization (1) 10,000 - Restructuring
costs 24,809 54,798 Impairment of goodwill and other assets 7,182 -
----- ----- Non-GAAP operating income $42,605 $85,918 =======
======= Non-GAAP operating margin 1.6% 2.4% GAAP net loss $(62,811)
$(16,498) Adjustments Net income from discontinued operations, net
of tax - (32,892) ------ ------- GAAP net loss - continuing
operations (62,811) (49,390) Adjustments - continuing operations:
Operating income adjustments (see above) 53,835 67,715 Net gain on
derivative financial instruments and other (3) (4,993) - Impairment
of long- term investment 1,000 - (Gain) / loss on redemption of
debt (4) (13,490) 2,237 Tax effect of above items (5,258) (1,004)
------ ------ Non-GAAP net income (loss) -continuing operations
$(31,717) $19,558 ======== ======= Non-GAAP Basic Earnings (Loss)
Per Share: Continuing operations $(0.06) $0.04 Non-GAAP Diluted
Earnings (loss) Per Share: Continuing operations $(0.06) $0.04
Weighted-average shares used in computing Non- GAAP earnings per
share amounts: Basic 512,459 530,200 Diluted 512,459 530,428 (1)
Relates to revenue reversal and inventory reserves associated with
a customer's bankruptcy reorganization announcement. (2) Stock
compensation expense was as follows: Three Months Ended
------------------ March December March 28, 2009 27, 2008 29, 2008
-------- --------- -------- Cost of sales $2,000 $1,865 $1,581
Selling, general and administrative 2,237 2,212 2,077 Research and
development 89 85 80 ----- ----- ----- Stock compensation expense -
continuing operations 4,326 4,162 3,738 Discontinued operations - -
140 ----- ----- ----- Stock compensation expense - total company
$4,326 $4,162 $3,878 ====== ====== ====== Six Months Ended
---------------- March March 28, 2009 29, 2008 -------- --------
Cost of sales $3,865 $3,281 Selling, general and administrative
4,449 3,557 Research and development 174 177 --- --- Stock
compensation expense - continuing operations 8,488 7,015
Discontinued operations - 270 ----- ------ Stock compensation
expense - total company $8,488 $7,285 ====== ====== (3) Relates
primarily to a gain on interest rate swaps not accounted for as
hedging instruments during a portion of the quarter due to
termination of a swap (4) Represents gain or loss, including
write-off of unamortized issuance costs, on debt redeemed prior to
maturity SANMF DATASOURCE: Sanmina-SCI Corporation CONTACT: Paige
Bombino, Director, Investor Relations of Sanmina-SCI,
+1-408-964-3610 Web Site: http://www.sanmina-sci.com/
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