SAN JOSE, Calif., July 25, 2011 /PRNewswire/ -- Sanmina-SCI
Corporation ("Sanmina-SCI" or the "Company") (NASDAQ GS: SANM), a
leading global Electronics Manufacturing Services company, today
reported financial results for the third quarter ended July 2, 2011.
(Logo:
http://photos.prnewswire.com/prnh/20110707/SF30965LOGO)
Third Quarter Fiscal 2011 Highlights
- Revenue of $1.67 billion, a
6.7 percent sequential improvement
- GAAP operating margin of 3.2 percent, a 40 basis point
sequential improvement
- GAAP diluted earnings per share of $0.09
- Non-GAAP(1) operating margin of 3.9 percent, a 50 basis
point sequential improvement
- Non-GAAP diluted earnings per share of $0.42, a $0.12
sequential improvement
Revenue for the third quarter was up 6.7 percent to $1.67 billion, compared to $1.57 billion in the prior quarter and up 3.0
percent compared to $1.63 billion for
the same period of fiscal 2010.
GAAP operating income in the third quarter was $52.9 million or 3.2 percent of revenue, compared
to $61.7 million or 3.8 percent of
revenue in the third quarter fiscal 2010. GAAP net income in
the third quarter was $7.2 million, a
diluted earnings per share of $0.09,
compared to $21.6 million, a diluted
earnings per share of $0.26 for the
same period of fiscal 2010.
Non-GAAP operating income in the third quarter was $65.0 million or 3.9 percent of revenue, compared
to $64.2 million or 3.9 percent of
revenue in the third quarter fiscal 2010. Non-GAAP net income
in the third quarter was $35.1
million, a diluted earnings per share of $0.42, compared to $26.6
million, a diluted earnings per share of $0.32 for the same period a year ago.
During the third quarter, the Company issued $500 million in principal amount 7% senior notes
due in 2019. The proceeds of the offering, together with
$80 million of cash on hand, were
used to fund the full redemption of the $380
million of debt due in 2013 and $200
million of debt due in 2016. During the quarter, the
Company swapped the 2019 notes from a fixed to floating rate. The
net effect of these transactions increased the average life of our
debt from 3.4 to 5.7 years as of July 2,
2011 and is expected to reduce the Company's net interest
expense in the future.
Cash and cash equivalents for the quarter ended July 2, 2011 were $582.8
million compared to $654.7
million in the prior quarter. Cash flow from
operations was $51.3 million.
Inventory turns were 7.2x. Cash cycle days were 51
days.
"We delivered nice growth in the third quarter and are pleased
with our ability to expand our margins despite continued softness
in the defense and aerospace market. Based on our customer
forecasts, we believe demand in the short-term remains stable,"
stated Jure Sola, Chairman and Chief
Executive Officer. "We are confident our strategy focused on
higher value added services, diversified markets and innovative
technologies will continue to allow us to capitalize on
opportunities with new and existing customers, and positions
Sanmina-SCI for long-term growth and margin expansion."
Fourth Quarter Fiscal 2011 Outlook
The following forecast is for the fourth fiscal quarter ending
October 1, 2011. These
statements are forward-looking and actual results may differ
materially.
- Revenue between $1.65 billion to $1.70
billion
- Non-GAAP diluted earnings per share between $0.40 to $0.44
(1) In the commentary set forth above and/or in the
financial statements included in this earnings release, we present
the following non-GAAP financial measures: operating income,
operating margin, net income and diluted 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), acquisition and integration costs (consisting of costs
associated with the acquisition and integration of acquired
businesses into our operations), impairment charges for goodwill
and other assets, amortization expense and other infrequent or
unusual items (including charges for customer bankruptcy
reorganizations, litigation settlements and discrete tax events),
to the extent material or which we consider to be of a
non-operational nature in the applicable period. See Schedule
1 below for more information regarding our use of non-GAAP
financial measures, including the economic substance behind each
exclusion, the manner in which management uses non-GAAP measures to
conduct and evaluate the business, the material limitations
associated with using such measures and the manner in which
management compensates for such limitations. 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 www.sanmina-sci.com.
Sanmina-SCI provides fourth quarter outlook information only
on a non-GAAP basis due to the inherent uncertainties associated
with forecasting the timing and amount of acquisitions,
restructuring, impairment and other unusual and infrequent
items.
Company Conference Call Information
Sanmina-SCI will hold a conference call regarding this
announcement on Monday, July 25, 2011
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 also be broadcast live over the Internet. You can log on
to the live webcast at www.sanmina-sci.com. Additional
information in the form of a slide presentation is available by
logging onto Sanmina-SCI's website at 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 84212586.
About Sanmina-SCI
Sanmina-SCI Corporation is a leading electronics contract
manufacturer serving the fastest-growing segments of the global
Electronics Manufacturing Services (EMS) market. Recognized as a
technology leader, Sanmina-SCI provides end-to-end manufacturing
solutions and delivers superior quality and support to OEMs
primarily in the communications, defense and aerospace, industrial
and medical instrumentation, multimedia, enterprise computing and
storage, clean-tech 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 demand, growth and interest
cost and the Company's outlook for future revenue and non-GAAP
earnings per share, 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 a deterioration in the markets for
the Company's customers' products and a resulting decrease in the
Company's customers' ability to pay for the Company's products and
which therefore could reduce the Company's revenue; customer
bankruptcy filings, which could cause the Company to record charges
to its earnings; reduction or cancelation of customer orders that
reduces forecasts for the quarter; the sufficiency of the
Company's cash position and other sources of liquidity to operate
and expand its business; an increase in short-term rates that would
increase the Company's interest expense; component shortages,
including those arising from the natural disaster in Japan; 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 need to adopt
future restructuring plans as a result of changes in the Company's
business, which would increase the Company's costs and decrease its
net income; and the other factors set forth in the Company's annual
and quarterly reports 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.
SANMF
Sanmina-SCI
Corporation
|
|
Condensed
Consolidated Balance Sheets
|
|
(In
thousands)
|
|
(GAAP)
|
|
|
|
|
July
2,
|
|
October
2,
|
|
|
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
$
582,816
|
|
$
592,812
|
|
|
Accounts receivable,
net
|
1,042,092
|
|
1,018,612
|
|
|
Inventories
|
885,502
|
|
844,347
|
|
|
Prepaid expenses and other
current assets
|
78,251
|
|
81,191
|
|
|
Assets held for sale
|
46,954
|
|
53,047
|
|
|
|
Total current assets
|
2,635,615
|
|
2,590,009
|
|
|
|
|
|
|
|
|
Property, plant and equipment,
net
|
562,766
|
|
570,258
|
|
Other non-current
assets
|
118,247
|
|
141,529
|
|
|
|
Total assets
|
$ 3,316,628
|
|
$ 3,301,796
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Accounts payable
|
$
958,075
|
|
$
923,038
|
|
|
Accrued liabilities
|
134,483
|
|
140,371
|
|
|
Accrued payroll and related
benefits
|
125,636
|
|
122,934
|
|
|
Short-term debt
|
60,400
|
|
65,000
|
|
|
|
Total current
liabilities
|
1,278,594
|
|
1,251,343
|
|
|
|
|
|
|
|
|
Long-term
liabilities:
|
|
|
|
|
|
Long-term debt
|
1,154,129
|
|
1,240,666
|
|
|
Other
|
136,851
|
|
148,186
|
|
|
|
Total long-term
liabilities
|
1,290,980
|
|
1,388,852
|
|
|
|
|
|
|
|
|
Total stockholders'
equity
|
747,054
|
|
661,601
|
|
|
|
Total liabilities and
stockholders' equity
|
$ 3,316,628
|
|
$ 3,301,796
|
|
|
|
|
|
|
|
Sanmina-SCI
Corporation
|
|
Condensed
Consolidated Statements of Operations
|
|
(In
thousands, except per share amounts)
|
|
(GAAP)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
July
2,
|
|
July
3,
|
|
July
2,
|
|
July
3,
|
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$ 1,674,200
|
|
$ 1,625,170
|
|
$ 4,905,709
|
|
$ 4,630,923
|
|
Cost of sales
|
1,542,599
|
|
1,501,055
|
|
4,529,230
|
|
4,279,644
|
|
|
Gross profit
|
131,601
|
|
124,115
|
|
376,479
|
|
351,279
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
67,043
|
|
65,392
|
|
187,726
|
|
191,364
|
|
|
Research and
development
|
5,797
|
|
3,057
|
|
14,877
|
|
9,407
|
|
|
Amortization of intangible
assets
|
958
|
|
926
|
|
2,875
|
|
3,163
|
|
|
Restructuring and integration
costs
|
6,336
|
|
6,196
|
|
15,885
|
|
13,405
|
|
|
Asset impairment
|
-
|
|
600
|
|
85
|
|
1,100
|
|
|
Gain on sales of long-lived
assets
|
(1,440)
|
|
(13,796)
|
|
(3,465)
|
|
(13,796)
|
|
|
Total operating
expenses
|
78,694
|
|
62,375
|
|
217,983
|
|
204,643
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
52,907
|
|
61,740
|
|
158,496
|
|
146,636
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
356
|
|
558
|
|
1,490
|
|
1,536
|
|
|
Interest expense
|
(24,843)
|
|
(27,119)
|
|
(77,773)
|
|
(80,476)
|
|
|
Other income (expense),
net
|
(17,013)
|
|
(2,046)
|
|
(13,735)
|
|
37,729
|
|
Interest and other,
net
|
(41,500)
|
|
(28,607)
|
|
(90,018)
|
|
(41,211)
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
11,407
|
|
33,133
|
|
68,478
|
|
105,425
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
4,248
|
|
11,570
|
|
19,895
|
|
14,389
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
7,159
|
|
$
21,563
|
|
$
48,583
|
|
$
91,036
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic income per
share
|
$
0.09
|
|
$
0.27
|
|
$
0.61
|
|
$
1.15
|
|
|
Diluted income per
share
|
$
0.09
|
|
$
0.26
|
|
$
0.58
|
|
$
1.10
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares used in
computing
|
|
|
|
|
|
|
|
|
|
per share amounts:
|
|
|
|
|
|
|
|
|
|
Basic
|
80,579
|
|
79,544
|
|
80,223
|
|
79,040
|
|
|
Diluted
|
83,141
|
|
83,693
|
|
83,275
|
|
82,404
|
|
|
|
|
|
|
|
|
|
|
Sanmina-SCI
Corporation
|
|
Reconciliation of GAAP to
Non-GAAP Measures
|
|
(in
thousands, except per share amounts)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
|
|
July
2,
|
|
April
2,
|
|
July
3,
|
|
July
2,
|
|
July
3,
|
|
|
|
|
2011
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Revenue
|
|
$ 1,674,200
|
|
$ 1,569,058
|
|
$ 1,625,170
|
|
$ 4,905,709
|
|
$ 4,630,923
|
|
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
Customer bankruptcy
reorganization (1)
|
|
-
|
|
-
|
|
570
|
|
-
|
|
570
|
|
Non-GAAP Revenue
|
|
$ 1,674,200
|
|
$ 1,569,058
|
|
$ 1,625,740
|
|
$ 4,905,709
|
|
$ 4,631,493
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Gross Profit
|
|
$
131,601
|
|
$
116,831
|
|
$
124,115
|
|
$
376,479
|
|
$
351,279
|
|
|
GAAP gross margin
|
|
7.9%
|
|
7.4%
|
|
7.6%
|
|
7.7%
|
|
7.6%
|
|
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock compensation expense
(2)
|
|
1,773
|
|
1,013
|
|
487
|
|
3,825
|
|
4,593
|
|
|
Amortization of intangible
assets
|
|
157
|
|
157
|
|
-
|
|
471
|
|
-
|
|
|
Contingency item expected to
reverse in a future period (3)
|
|
-
|
|
-
|
|
3,039
|
|
-
|
|
3,039
|
|
|
Customer bankruptcy
reorganization (1)
|
|
-
|
|
(759)
|
|
1,329
|
|
(759)
|
|
1,329
|
|
Non-GAAP Gross
Profit
|
|
$
133,531
|
|
$
117,242
|
|
$
128,970
|
|
$
380,016
|
|
$
360,240
|
|
|
Non-GAAP gross
margin
|
|
8.0%
|
|
7.5%
|
|
7.9%
|
|
7.7%
|
|
7.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating income
|
|
$
52,907
|
|
$
44,634
|
|
$
61,740
|
|
$
158,496
|
|
$
146,636
|
|
|
GAAP operating
margin
|
|
3.2%
|
|
2.8%
|
|
3.8%
|
|
3.2%
|
|
3.2%
|
|
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock compensation expense
(2)
|
|
6,057
|
|
4,237
|
|
2,367
|
|
13,981
|
|
12,371
|
|
|
Contingency item expected to
reverse in a future period (3)
|
|
-
|
|
-
|
|
3,039
|
|
-
|
|
3,039
|
|
|
Amortization of intangible
assets
|
|
1,115
|
|
1,116
|
|
926
|
|
3,346
|
|
3,163
|
|
|
Customer bankruptcy
reorganization (1)
|
|
-
|
|
(759)
|
|
1,937
|
|
(759)
|
|
1,937
|
|
|
Restructuring, acquisition and
integration costs
|
|
6,336
|
|
4,510
|
|
7,390
|
|
15,885
|
|
14,599
|
|
|
Gain on sales of long-lived
assets
|
|
(1,460)
|
|
(398)
|
|
(13,796)
|
|
(3,485)
|
|
(13,796)
|
|
|
Asset impairment
|
|
-
|
|
-
|
|
600
|
|
85
|
|
1,100
|
|
Non-GAAP operating
income
|
|
$
64,955
|
|
$
53,340
|
|
$
64,203
|
|
$
187,549
|
|
$
169,049
|
|
|
Non-GAAP operating
margin
|
|
3.9%
|
|
3.4%
|
|
3.9%
|
|
3.8%
|
|
3.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income
|
|
$
7,159
|
|
$
13,065
|
|
$
21,563
|
|
$
48,583
|
|
$
91,036
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income adjustments
(see above)
|
|
12,048
|
|
8,706
|
|
2,463
|
|
29,053
|
|
22,413
|
|
|
Gain on sale of
business
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(3,710)
|
|
|
Loss on repurchase of debt
(4)
|
|
18,344
|
|
-
|
|
369
|
|
18,344
|
|
1,197
|
|
|
Gain from litigation settlement
(5)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(35,556)
|
|
|
Nonrecurring tax
items
|
|
(2,425)
|
|
3,157
|
|
2,222
|
|
1,355
|
|
(6,258)
|
|
Non-GAAP net
income
|
|
$
35,126
|
|
$
24,928
|
|
$
26,617
|
|
$
97,335
|
|
$
69,122
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Income Per
Share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
0.09
|
|
$
0.16
|
|
$
0.27
|
|
$
0.61
|
|
$
1.15
|
|
|
Diluted
|
|
$
0.09
|
|
$
0.16
|
|
$
0.26
|
|
$
0.58
|
|
$
1.10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Income Per
Share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
0.44
|
|
$
0.31
|
|
$
0.33
|
|
$
1.21
|
|
$
0.87
|
|
|
Diluted
|
|
$
0.42
|
|
$
0.30
|
|
$
0.32
|
|
$
1.17
|
|
$
0.84
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares used in
computing per share amounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
80,579
|
|
80,242
|
|
79,544
|
|
80,223
|
|
79,040
|
|
|
Diluted
|
|
83,141
|
|
83,940
|
|
83,693
|
|
83,275
|
|
82,404
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Relates to revenue reversal and
inventory and bad debt reserves associated with customer bankruptcy
reorganization announcements.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2)
|
Stock compensation expense was
as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
|
|
July
2,
|
|
April
2,
|
|
July
3,
|
|
July
2,
|
|
July
3,
|
|
|
|
|
2011
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
$
1,773
|
|
$
1,013
|
|
$
487
|
|
$
3,825
|
|
$
4,593
|
|
|
Selling, general and
administrative
|
|
4,209
|
|
3,184
|
|
2,215
|
|
9,998
|
|
7,910
|
|
|
Research and
development
|
|
75
|
|
40
|
|
(335)
|
|
158
|
|
(132)
|
|
|
Stock compensation expense -
total company
|
|
$
6,057
|
|
$
4,237
|
|
$
2,367
|
|
$
13,981
|
|
$
12,371
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3)
|
Represents a non-recurring
contingency that the Company expects to resolve favorably in future
periods. However, there can be no assurance of the exact
amount or timing of this recovery.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4)
|
Represents gain or loss,
including write-off of unamortized debt issuance costs, on debt
redeemed or repurchased prior to maturity.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5)
|
Represents cash received in
connection with a litigation settlement.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Schedule
I
|
|
The commentary above includes
non-GAAP measures of gross profit, gross margin,
operating income, operating margin, net income and earnings per
share. Management excludes from these
measures stock-based compensation, restructuring, acquisition and
integration expenses, impairment charges, amortization charges and
other infrequent items, including customer bankruptcy
impacts, to the extent material or which
we consider to be of a non-operational nature in the applicable
period.
|
|
|
|
Management excludes these items
principally because such charges are not directly related
to the Company's ongoing core business operations. We use such
non-GAAP measures in order to (1) make more meaningful
period-to-period comparisons of Company's operations, both
internally and externally, (2) guide management in assessing
performance of the business, internally allocating resources and
making decisions in furtherance of Company's strategic plan, (3)
provide investors with a better understanding of how management
plans and measures the business and (4) provide investors with a
better understanding of the ongoing, core business. The material
limitations to management's approach include the fact that the
charges and expenses excluded are nonetheless charges required to
be recognized under GAAP. Management compensates for these
limitations primarily by using GAAP results to obtain a complete
picture of the Company's performance and by including a
reconciliation of non-GAAP results back to GAAP in its earnings
releases.
|
|
|
|
Additional information regarding
the economic substance of each exclusion, management's use of the
resultant non-GAAP measures, the material limitations of
management's approach and management's methods for compensating for
such limitations is provided below.
|
|
|
|
Stock-based Compensation
Expense, which consists of non-cash
charges for the estimated fair value of stock options and unvested
restricted stock units granted to employees, is excluded in order
to permit more meaningful period-to-period comparisons of the
Company's results since the Company grants different amounts and
value of stock options in each quarter. In addition, given the fact
that competitors grant different amounts and types of equity award
and may use different option valuation assumptions, excluding
stock-based compensation permits more accurate comparisons of the
Company's core results with those of its competitors.
|
|
|
|
Restructuring, Acquisition and
Integration Expenses, which consist of severance,
lease termination, exit costs and other charges primarily related
to closing and consolidating manufacturing facilities and
those associated with the acquisition
and integration of acquired businesses, are excluded because such
charges (1) can be driven by the timing of acquisitions which are
difficult to predict, (2) are not directly related to ongoing
business results and (3) do not reflect expected future operating
expenses. In addition, given the fact that the Company's
competitors complete acquisitions and adopt restructuring plans at
different times and in different amounts than the Company,
excluding these charges permits
more accurate comparisons of the Company's core results with those
of its competitors. Items excluded by the Company
may be different from those excluded by the Company's competitors
and restructuring and integration expenses include both cash and
non-cash expenses. Cash expenses reduce the Company's liquidity.
Therefore, management also reviews GAAP results including these
amounts.
|
|
|
|
Impairment
Charges, which consist of non-cash
charges, are excluded because such charges are non-recurring and do
not reduce the Company's liquidity. In addition,
given the fact that the Company's competitors may record impairment
charges at different times, excluding these charges permits
more accurate comparisons of the Company's core results with those
of its competitors.
|
|
|
|
Amortization
Charges, which consist of non-cash
charges impacted by the timing and magnitude of acquisitions of
businesses or assets, are also excluded because such charges do not
reduce the Company's liquidity or availability under its credit
facilities. In addition, such charges can be driven by the timing
of acquisitions, which is difficult to predict. Excluding
these charges permits more accurate comparisons of the Company's
core results with those of its competitors because
the Company's competitors
complete acquisitions at different times and for different amounts
than the Company.
|
|
|
|
Other
Items, which consist of
other infrequent or unusual
items (including charges for customer bankruptcy reorganizations,
litigation settlements, gains and losses on sales of assets and
discrete tax events), to the extent material or non-operational in
nature, are excluded because such items are typically
non-recurring, difficult to predict and generally not directly
related to the Company's ongoing core operations. However, items
excluded by the Company may be different from those excluded by the
Company's competitors. In addition, these expenses include both
cash and non-cash expenses. Cash expenses reduce the Company's
liquidity. Management compensates for these limitations by
reviewing GAAP results including these amounts.
|
|
|
SOURCE Sanmina-SCI Corporation