SANMINA-SCI CORPORATION 
By
Revenue for the first quarter was
Non-GAAP Financial Results(2)
Non-GAAP gross profit in the first quarter was
Non-GAAP net loss in the first quarter was
GAAP Financial Results
GAAP net loss in the first quarter was
GAAP results for the first quarter were negatively impacted by the recent
filings for bankruptcy reorganization by Nortel Networks, Inc. and its
affiliates in
As of
(In thousands,
except per
share data) Q1:2009 Q4:2008(1) Q1:2008(1)
GAAP:
Revenue $1,419,264 $1,703,579 $1,778,140
Net loss ($25,273) $(473,915) $(9,453)
Loss per share ($0.05) ($0.89) $(0.02)
Non-GAAP*:
Revenue $1,424,264 $1,703,579 $1,778,140
Gross profit $95,896 $132,828 $130,900
Gross margin 6.7% 7.8% 7.4%
Operating income $31,164 $59,305 $41,056
Operating margin 2.2% 3.5% 2.3%
Net income (loss) ($768) $24,027 $5,105
Earnings (loss) per share ($0.00) $0.05 $0.01
* 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.sanmina-sci.com.
"We continue to experience weak demand and limited visibility across all of our market segments. To offset this decline, we remain focused on our efforts to reduce cost, improve operating efficiencies and deliver innovative technologies and solutions that offer value to our customers."
"Sanmina-SCI is financially sound with a strong cash position, adequate
liquidity and a healthy debt maturity profile to weather these challenging
market conditions. We have learned from our experience of difficult times in
the past and are confident we will emerge as an operationally and financially
stronger company when market conditions normalize," stated
Fiscal Second Quarter 2009 Goals
During this period of economic uncertainty, the company cannot confidently
provide a meaningful range of guidance estimates as to its projected financial
performance. However, the company's internal plans for its second quarter
fiscal 2009 are for revenue of approximately
(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
(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.
We have furnished these non-GAAP financial measures because we believe they provide useful supplemental information to investors in that they eliminate certain financial items that are of a non-recurring, unusual or infrequent nature or are not related to the Company's regular, ongoing business. Our management also uses this information internally for forecasting, budgeting and other analytical purposes. 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 second quarter plan 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.
Company Conference Call Information
Sanmina-SCI will be holding a conference call regarding this announcement
on
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, 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 and the future financial condition of the Company 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 negatively impacting the Company's revenue and the Company's customers' ability to pay for the Company's products; additional 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 fiscal year 2008 Annual Report on Form 10-K 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)
December 27, September 27,
2008 2008
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $796,774 $869,801
Accounts receivable, net 892,107 986,312
Inventories 784,002 813,359
Prepaid expenses and other
current assets 88,505 100,399
Assets held for sale 46,183 43,163
Total current assets 2,607,571 2,813,034
Property, plant and equipment, net 587,503 599,908
Other non-current assets 145,244 117,785
Total assets $3,340,318 $3,530,727
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $781,920 $908,151
Accrued liabilities 200,068 191,022
Accrued payroll and related
benefits 111,032 139,522
Total current
liabilities 1,093,020 1,238,695
Long-term liabilities:
Long-term debt 1,485,614 1,481,985
Other 135,426 114,089
Total long-term
liabilities 1,621,040 1,596,074
Total stockholders' equity 626,258 695,958
Total liabilities and
stockholders' equity $3,340,318 $3,530,727
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
(GAAP)
(Unaudited)
Three Months Ended
December 27, December 29,
2008 2007
Net sales $1,419,264 $1,778,140
Cost of sales 1,335,466 1,649,211
Gross profit 83,798 128,929
Operating expenses:
Selling, general and
administrative 62,987 89,078
Research and development 4,192 4,606
Amortization of intangible
assets 1,650 1,650
Restructuring costs 9,235 6,779
Asset impairment 3,798 -
Total operating expenses 81,862 102,113
Operating income 1,936 26,816
Interest income 3,450 6,217
Interest expense (29,183) (35,363)
Other income (expense), net 553 (4,640)
Interest and other expense, net (25,180) (33,786)
Loss from continuing operations
before income taxes (23,244) (6,970)
Provision for income taxes 2,029 2,483
Net loss from continuing operations (25,273) (9,453)
Net income from discontinued
operations, net of tax - 17,369
Net income (loss) $(25,273) $7,916
Basic income (loss) per share
from:
Continuing operations $(0.05) $(0.02)
Discontinued operations $- $0.03
Net income $(0.05) $0.01
Diluted income (loss) per share
from:
Continuing operations $(0.05) $(0.02)
Discontinued operations $- $0.03
Net income $(0.05) $0.01
Weighted-average shares used in
computing per share amounts:
Basic 523,316 529,652
Diluted 523,316 529,962
Sanmina - SCI Corporation
Reconciliation of GAAP to Non-GAAP Measures
(in thousands, except per share amounts)
(Unaudited)
Three Months Ended
December 27, September 27, December 29,
2008 2008 2007
GAAP Revenue $1,419,264 $1,703,579 $1,778,140
Adjustments
Customer bankruptcy
reorganization (1) 5,000 - -
Non-GAAP Revenue $1,424,264 $1,703,579 $1,778,140
GAAP Gross Profit $83,798 $130,891 $128,929
GAAP gross margin 5.9% 7.7% 7.3%
Adjustments
Stock compensation expense
(2) 1,865 1,704 1,700
Amortization of intangible
assets 233 233 271
Customer bankruptcy
reorganization (1) 10,000 - -
Non-GAAP Gross Profit $95,896 $132,828 $130,900
Non-GAAP gross margin 6.7% 7.8% 7.4%
GAAP operating income (loss) $1,936 $(442,101) $26,816
GAAP operating margin 0.1% -26.0% 1.5%
Adjustments
Stock compensation expense (2) 4,162 3,735 3,276
Amortization of intangible
assets 1,883 1,883 1,921
Stock option investigation and
integration 150 467 2,264
Customer bankruptcy
reorganization (1) 10,000 - -
Restructuring costs 9,235 13,322 6,779
Impairment of goodwill and other
assets 3,798 481,999 -
Non-GAAP operating income $31,164 $59,305 $41,056
Non-GAAP operating margin 2.2% 3.5% 2.3%
GAAP net income (loss) $(25,273) $(485,179) $7,916
Adjustments
Net loss (income) from
discontinued operations,
net of tax - 11,264 (17,369)
GAAP net loss - continuing
operations (25,273) (473,915) (9,453)
Adjustments - continuing
operations:
Operating income adjustments
(see above) 29,228 501,406 14,240
Net gain on derivative financial
instruments and other (3) (4,993) - -
Loss on redemption of debt (4) - - 2,237
Tax effect of above items 270 (3,464) (1,919)
Non-GAAP net income (loss) -
continuing operations $(768) $24,027 $5,105
Non-GAAP Basic Earnings (Loss) Per
Share:
Continuing operations $(0.00) $0.05 $0.01
Non-GAAP Diluted Earnings (loss) Per
Share:
Continuing operations $(0.00) $0.05 $0.01
Weighted-average shares used in
computing Non-GAAP earnings
per share amounts:
Basic 523,316 531,222 529,652
Diluted 523,316 531,652 529,962
(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
December 27, September 27, December 29,
2008 2008 2007
Cost of sales $1,865 $1,704 $1,700
Selling, general and
administrative 2,212 1,951 1,479
Research and development 85 80 97
Stock compensation expense -
continuing operations 4,162 3,735 3,276
Discontinued operations - 51 129
Stock compensation expense -
total company $4,162 $3,786 $3,405
(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) Write-off of prepaid financing fees related to debt that was repaid
prior to maturity.
SANMF
SOURCE Sanmina-SCI Corporation
