8-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

(Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934)

Date of Report (Date of earliest event reported) December 16, 2006

SOLECTRON CORPORATION

(Exact name of registrant as specified in charter)

Delaware	1-11098	94-2447045
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)
847 Gibraltar Drive, Milpitas, California		95035
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (408) 957-8500

Not Applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425).

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12).

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)).

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)).

TABLE OF CONTENTS

EXHIBIT 99.1

ITEM 2.02 Results of Operations and Financial Condition

     On December 21, 2006, Solectron Corporation (“Solectron”) announced its results of operations for its fiscal quarter ended November 24, 2006. A copy of the Company’s press release announcing such results dated December 21, 2006 is attached hereto as Exhibit 99.1. This Form 8-K and the attached exhibit are furnished with the Securities and Exchange Commission (“SEC”).

     Solectron includes the use of a non-GAAP financial measure in the attached exhibit. In accordance with Item 10(e)(i) of Regulation S-K, Solectron is required to provide a statement disclosing the reasons why management believes that presentation of non-GAAP financial measures provides useful information to investors regarding the Company’s results of operations.

     Solectron management evaluates and makes certain operating decisions (e.g. inventory management, site locations, personnel decisions) using various operating measures. These measures are generally based on the revenues and certain costs of its operations, such as cost of goods sold and selling, general and administrative expenses. One such measure is non-GAAP net income (loss), which is a non-GAAP financial measure under Section 101 of Regulation G under the Securities Exchange Act of 1934, as amended. This measure consists of GAAP net income (loss) from continuing operations excluding, as applicable, restructuring charges (severance and benefits, excess facilities and asset-related charges), amortization of intangible assets, stock compensation expense, investment related losses (gains), impairment charges for goodwill, intangible assets and other long-lived assets, and losses (gains) on the extinguishment of debt and other debt-related charges. Non-GAAP net income (loss) is adjusted by the amount of additional taxes or tax benefit that the company would accrue if it used non-GAAP results instead of GAAP results to calculate the company’s tax liability.

     Management believes it is useful to exclude restructuring charges in measuring Solectron’s operations. Solectron has dramatically reduced headcount and facilities in recent years. As a result, Solectron’s GAAP statements of operations have included significant charges related to such restructurings. Furthermore, management believes amortization of intangible assets, stock compensation expense, investment related losses (gains), impairment charges for goodwill, intangible assets and other long-lived assets, and losses (gains) on the extinguishment of debt and other debt-related charges, are infrequent events, which make the results less comparable between reporting periods.

     Management believes that non-GAAP net income (loss) provides useful supplemental information to management and investors regarding the performance of the company’s business operations and facilitates comparisons to our historical operating results. Management also uses this information internally for forecasting and budgeting. Non-GAAP financial measures should not be considered as a substitute for measures of financial performance prepared in accordance with GAAP. Investors and potential investors are encouraged to review the reconciliation of non-GAAP financial measures contained within the attached press release with their most directly comparable GAAP financial results.

ITEM 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

     On December 16, 2006, Solectron and Warren Ligan, Senior Vice President and Chief Accounting Officer, entered into a Transition Agreement and General Release (the “Agreement”). The Agreement supercedes and replaces Mr. Ligan’s Employment Agreement dated July 13, 2005 (the “Original Employment Agreement”), which was filed as an exhibit to a Report on Form 8-K filed on July15, 2005.

     Pursuant to the Agreement, Mr. Ligan will continue in his current role until his successor is hired and subsequently trained to assume Mr. Ligan’s duties (such date of assumption of duties, the “Transition Date”). Mr. Ligan shall voluntarily resign from his current role on the Transition Date and shall thereafter serve as a Special Advisor to Solectron at his then current salary (and continued bonus eligibility, benefits and equity vesting) until no later than December 31, 2008.

     If Mr. Ligan is terminated prior to the Transition Date for other than cause, death or disability, he will receive severance benefits consistent with Solectron’s severance policy for similarly situated executives. If (i) Mr. Ligan remains employed through December 31, 2008 and his successor’s hiring has occurred on or before June 1, 2008, or (ii) Mr. Ligan is terminated following the Transition Date and prior to December 31, 2008 for other than cause, death or disability, Mr. Ligan will receive severance of continued payment of base salary for 12 months (subject to his execution of a release of claims).

     In the case of termination upon a change in control, Mr. Ligan will be entitled to the severance benefits set forth in Section 5(b) of the Original Employment Agreement, in lieu of any other severance benefits set forth in the Agreement, if he is terminated in a manner that would otherwise entitle him to such severance; provided, that, Mr. Ligan’s transition to Special Advisor under the Agreement will not entitle him to resign for Good Reason (as defined in the Employment Agreement) and receive any such severance benefits.

ITEM 9.01 Financial Statements and Exhibits

(c) Exhibits

Exhibit	Description
99.1	Press release dated December 21, 2006 announcing Solectron’s earnings for the fiscal quarter ended November 24, 2006.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: December 21, 2006	Solectron Corporation
	/s/ Todd DuChene
	Todd DuChene
	Executive Vice President, General Counsel and Secretary

Exhibit Index

Exhibit	Description
99.1	Press release dated December 21, 2006 announcing Solectron’s earnings for the fiscal quarter ended November 24, 2006.

EX-99.1

Exhibit 99.1

Solectron Announces First Quarter Financial Results

For Immediate Release: Dec. 21, 2006

MILPITAS, Calif. — Solectron Corporation (NYSE:SLR), a leading provider of electronics manufacturing and integrated supply chain services, today reported sales of $3.00 billion in the first quarter of fiscal 2007, an increase of 3.3 percent over fourth quarter fiscal 2006 revenues of $ 2.90 billion, and an increase of 22 percent over first quarter fiscal 2006 revenues of $2.46 billion.

The company reported GAAP profit after tax from continuing operations of $6.6 million, or $ 0.01per share, in the first quarter of fiscal 2007, compared with a GAAP profit after tax from continuing operations of $ 38.8million, or $ 0.04per share, in the fourth quarter of fiscal 2006. First quarter fiscal 2007 results include $34.6 million in charges related to a restructuring program announced in October 2006. In the first quarter of fiscal 2006, Solectron reported a GAAP profit after tax from continuing operations of $ 20.2million, or $ 0.02per share.

Non-GAAP profit after tax was $47.6 million, or $0.05 per share, in the first quarter of fiscal 2007, compared with non-GAAP profit after tax of $54.8 million, or $ 0.06per share, for the fourth quarter of fiscal 2006. In the first quarter of fiscal 2006, Solectron reported non-GAAP profit after tax of $ 28.1million, or $ 0.03per share. Non-GAAP financial results do not include restructuring costs, impairment charges, amortization of intangibles, stock-based compensation expenses, or other unusual or infrequent items. Please refer to “Non-GAAP Information” below for further information.

“I am pleased with the strength of our revenue in the first quarter,” said Mike Cannon, president and chief executive officer of Solectron. “While first quarter gross margin did not meet our expectations, we are committed to achieving the growth and profitability targets we have set for Fiscal 2007, and expect to show an improving trend in profitability in the second half of the year.”

Second Quarter 2007 Guidance

Fiscal second quarter guidance is for sales of $2.8 billion to $3.0 billion, and for non-GAAP EPS from continuing operations in a range of 4 cents to 6 cents, on a fully diluted basis.

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Non-GAAP Information

In addition to disclosing results determined in accordance with GAAP, Solectron also discloses non-GAAP results of operations that exclude certain items. By disclosing this non-GAAP information, management intends to provide investors with additional information to further analyze the company’s performance, core results and underlying trends. Management utilizes a measure of net income and earnings per share on a non-GAAP basis that excludes certain charges to better assess operating performance. Earnings guidance is provided only on a non-GAAP basis due to the inherent difficulty in forecasting such charges.

Consistent with industry practice, management has historically applied these non-GAAP measures when discussing earnings or earnings guidance and intends to continue doing so.

Non-GAAP information is not determined using GAAP. Therefore, the information is not necessarily comparable to other companies and should not be used to compare the company’s performance over different periods. Non-GAAP information should not be viewed as a substitute for, or superior to, net income or other data prepared in accordance with GAAP as measures of our profitability or liquidity. Users of this financial information should consider the types of events and transactions for which adjustments have been made. In addition, Solectron’s GAAP financial results often reflect one-time events and adjustments, and therefore a comparison of GAAP results over different periods can be difficult. See the tables at the end of this press release for a reconciliation of GAAP amounts to amounts reported under non-GAAP. A reconciliation from GAAP to non-GAAP results is contained in the attached financial summary and is available in the Investor Relations section of our website at www.solectron.com.

Webcast To Be Held Today

At 4:30 p.m. ET today, Solectron will hold a conference call to discuss its first quarter financial results. A live webcast can be accessed at www.solectron.com. Supplemental financial information related to the conference call will also be available in the Investor Relations section of this Web site. Following the live broadcast, the archived webcast will be available at www.solectron.com/investor/events.htm.

An audio replay will also be available December 21, 2006, two hours after the conclusion of the call. To access the replay, call +1 (800) 642 1687 from within the United States, or +1 (706) 645 9291 from outside the United States, and specify pass code 3302507.

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Safe Harbor

This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended regarding our financial outlook for the second quarter of fiscal 2007 and beyond. These forward-looking statements involve a number of risks and uncertainties, and are based on current expectations, forecasts and assumptions.

Actual outcomes and results could differ materially. These risks and uncertainties include: our ability to continue to win business and satisfy customers; reliance on major customers; the present and future strength of the worldwide economy overall, and in the telecommunications and other electronics technology sectors in particular; our ability to continue to improve our operating metrics; the accuracy of our projections of cash flows and capital requirements; incurring more restructuring-related charges than currently anticipated; our ability to complete our announced restructuring plan within the stated timeframe; the risk of price fluctuation; fluctuations in operating results; changes in technology; competition; variations in demand forecasts and orders that may give rise to operational challenges such as excess plant, equipment and materials; risks associated with international sales and operations; business disruptions; exposure to product warranty or liability claims; our ability to properly manage acquisitions; any unidentified weaknesses or deficiencies in our internal controls over financial reporting; interest rate risk; existing and new environmental regulations; market and segment risk; our ability to retain key personnel; unanticipated tax liabilities and adverse outcomes resulting from tax examinations; and the impact of our outstanding litigation and other contingent liabilities.

For a further list and description of risks and uncertainties, see the reports filed by Solectron with the Securities and Exchange Commission. Solectron disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Supplemental information, condensed consolidated balance sheets and statements of operations follow. All monetary amounts are stated in U.S. dollars.

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Q1’07
GAAP to Non-GAAP Reconciliation	Quarter Ended
(in millions)	November 30, 2006
Income on a GAAP Basis	$	6.0
Discontinued operations	$	(0.6	)
Income from continuing operations on a GAAP Basis	$	6.6
Restructuring and impairment charges	$	34.6
Amortization of intangibles	$	1.1
Stock compensation expense	$	6.1
Other	$	(0.8	)
Income from continuing operations on a non-GAAP Basis	$	47.6

GAAP to Non-GAAP Reconciliation: Earnings Per Share	Quarter Ended
(in millions, except per-share data)	November 30, 2006
Income on a GAAP Basis		0.01
Discontinued Operations		(0.00	)
Diluted net income per share from continuing operations on a GAAP basis		0.01
Restructuring and impairment charges, amortization of intangibles and stock compensation expense		0.04
Other		(0.00	)
Diluted net income per share from continuing operations on a non-GAAP basis		0.05
Number of shares (millions) used to compute diluted net income per share - GAAP and non-GAAP		897.4

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Q4’06
GAAP to Non-GAAP Reconciliation	Quarter Ended
(in millions)	August 31, 2006
Income on a GAAP Basis	$	36.8
Discontinued operations	$	(1.2	)
Cumulative effect of change in accounting principle, net	$	(0.8	)
Income from continuing operations on a GAAP Basis	$	38.8
Restructuring and impairment charges	$	4.9
Amortization of intangibles	$	1.1
Stock compensation expense	$	5.4
Taxes	$	(0.2	)
Other	$	4.8
Income from continuing operations on a non-GAAP Basis	$	54.8

GAAP to Non-GAAP Reconciliation: Earnings Per Share	Quarter Ended
(in millions, except per-share data)	August 31, 2006
Income on a GAAP Basis		0.04
Discontinued operations		(0.00	)
Cumulative effect of change in accounting principle, net		(0.00	)
Diluted net income per share from continuing operations on a GAAP basis		0.04
Restructuring and impairment charges, amortization of intangibles and stock compensation expense		0.01
Taxes		(0.00	)
Other		0.01
Diluted net income per share from continuing operations on a non-GAAP basis		0.06
Number of shares (millions) used to compute diluted net income per share - GAAP and non-GAAP		903.0

Q1'06
GAAP to Non-GAAP Reconciliation	Quarter Ended
(in millions)	November 30, 2005
Income on a GAAP Basis	$	24.0
Discontinued operations	$	3.8
Income from continuing operations on a GAAP Basis	$	20.2
Restructuring and impairment charges	$	0.9
Amortization of intangibles	$	2.3
Stock compensation expense	$	4.7
Income from continuing operations on a non-GAAP Basis	$	28.1

GAAP to Non-GAAP Reconciliation: Earnings Per Share	Quarter Ended
(in millions, except per-share data)	November 30, 2005
Income on a GAAP Basis		0.02
Discontinued operations		0.00
Diluted net income per share from continuing operations on a GAAP basis		0.02
Restructuring and impairment charges, amortization of intangibles and stock compensation expense		0.01
Diluted net income per share from continuing operations on a non-GAAP basis		0.03
Number of shares (millions) used to compute diluted net income per share - GAAP and non-GAAP		925.9

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Supplemental Data
Sales Percentage by Market Segment
Computing and Storage	31	%
Networking Equipment	26	%
Communications	20	%
Consumer	11	%
Industrial	8	%
Automotive	2	%
Other	2	%

About Solectron

Solectron Corporation (www.solectron.com) provides a full range of electronics manufacturing and supply chain management services to the world’s leading networking, telecommunications, computing, consumer, automotive, industrial and medical device firms. The company’s industry-leading Lean Six Sigma methodology (Solectron Production System™) provides OEMs with low cost, flexibility and quality that improves competitive advantage. Solectron’s service offerings include new product introduction, collaborative design, materials management, product manufacturing, product warranty repair and end-of-life support. Based in Milpitas, Calif., Solectron operates in more than 20 countries on five continents and had sales from continuing operations of $10.6 billion in fiscal 2006.

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Analyst Contacts:

Perry G. Hayes, Solectron Corporation, (408) 956-7543 (U.S.), perryhayes@solectron.com
Ed Lockwood, Solectron Corporation, (408) 956-6959 (U.S.), edlockwood@solectron.com

Media Contact:

Corey Olfert, Solectron Corporation, (408) 956-7552 (U.S.), coreyolfert@solectron.com

SOLECTRON CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(US$ in millions)
unaudited

	Nov. 30			Aug. 31
	2006			2006
ASSETS
Current assets:
Cash, cash equivalents and short-term investments*	$	1,061.6		$	1,180.5
Accounts receivable, net		1,500.8			1,429.3
Inventories		1,599.2			1,516.1
Prepaid expenses and other current assets		299.7			225.8
Total current assets		4,461.3			4,351.7
Property and equipment, net		739.2			673.4
Goodwill		155.1			155.2
Other assets		115.1			193.3
Total assets	$	5,470.7		$	5,373.6
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Short-term debt	$	23.1		$	89.5
Accounts payable		1,698.9			1,616.7
Accrued employee compensation		199.3			170.4
Accrued expenses and other current liabilities		475.8			427.6
Total current liabilities		2,397.1			2,304.2
Long-term debt		618.8			619.4
Other long-term liabilities		37.4			36.3
Total liabilities	$	3,053.3		$	2,959.9
Commitments and contingencies
Stockholders’ equity:
Common stock		0.9			1.0
Additional paid-in capital		7,581.8			7,585.2
Accumulated deficit		(5,067.3	)		(5,073.3	)
Accumulated other comprehensive loss		(98.0	)		(99.2	)
Total stockholders’ equity		2,417.4			2,413.7
Total liabilities and stockholders’ equity	$	5,470.7		$	5,373.6

* Includes $16.7 million and $31.6 million of restricted cash balances as of Nov. 30, 2006 and Aug. 31, 2006, respectively, and $20.5 million and $22.9 million of short-term investments as of Nov. 30, 2006 and Aug. 31, 2006, respectively.

SOLECTRON CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(in millions, except per-share data)
unaudited

	Three Months Ended Nov. 30
	2007			2006
Net sales	$	2,999.1		$	2,456.4
Cost of sales		2,849.7			2,330.8
Gross profit		149.4			125.6
Operating expenses:
Selling, general and administrative		109.8			107.4
Restructuring and impairment costs		34.6			0.9
Operating income		5.0			17.3
Interest income		10.2			12.1
Interest expense		(7.3	)		(6.7	)
Other (expense) income, net		(0.9	)		1.9
Operating income from continuing operations before income taxes		7.0			24.6
Income tax expense		0.4			4.4
Income from continuing operations	$	6.6		$	20.2
Discontinued operations:
(Loss) income from discontinued operations	$	(0.6	)	$	3.8
Income tax expense		—			—
(Loss) income from discontinued operations		(0.6	)		3.8
Net income	$	6.0		$	24.0
Basic net income per share:
Continuing operations	$	0.01		$	0.02
Discontinued operations		—			0.01
Basic net income per share	$	0.01		$	0.03
Diluted net income per share:
Continuing operations	$	0.01		$	0.02
Discontinued operations		—			0.01
Diluted net income per share	$	0.01		$	0.03
Shares used to compute basic net income per share		895.4			925.2
Shares used to compute diluted net income per share		897.4			925.9