EX-99.1 2 a08-3479_1ex99d1.htm EX-99.1

Exhibit 99.1

 

 

FOR IMMEDIATE RELEASE

 

SANMINA-SCI ANNOUNCES FIRST QUARTER FINANCIAL RESULTS

 

SAN JOSE, CA (January 23, 2008) – Sanmina-SCI Corporation (Nasdaq NM: SANM), a leading global Electronics Manufacturing Services (EMS) company, today reported financial results for its first fiscal quarter ended December 29, 2007.

 

First Quarter Fiscal 2008 Highlights:

 

·                  REVENUE OF $2.53 BILLION, GUIDANCE WAS $2.5-2.65 BILLION

·                  NON-GAAP GROSS MARGIN OF 6.1%, EXCEEDING GUIDANCE OF 5.7%-5.9%

·                  NON-GAAP DILUTED EARNINGS PER SHARE OF $0.04, GUIDANCE WAS $0.02-$0.04

·                  GAAP DILUTED EARNINGS PER SHARE OF $0.01

 

Sanmina-SCI reported revenue of $2.53 billion for the first fiscal quarter ended December 29, 2007.  This is compared to $2.51 billion in the fourth fiscal quarter ended September 29, 2007 and $2.78 billion in the first fiscal quarter ended December 30, 2006.   The Company’s core business met expectations with revenue of $1.79 billion.  The PC business experienced weakness in the quarter and delivered below expectation with revenue of $740 million.

 

Non-GAAP Results for the Quarter

 

Net income for the first quarter of fiscal 2008 was $21.0 million, $0.04 diluted earnings per share, compared to $10.2 million, a diluted earnings per share of $0.02, for the fourth fiscal quarter ended September 29, 2007, and $34.7 million, $0.07 diluted earnings per share for the first fiscal quarter of 2007.

 

Gross profit for the first fiscal quarter was $155.1 million, 6.1 percent of revenue, compared to $134.1 million, 5.4 percent of revenue for the prior quarter, and $169.9 million, 6.1 percent of revenue in the same period a year ago. Operating income for the quarter was $61.2 million, compared to $42.8 million in the prior quarter and $70.6 million for the same period a year ago (see Non-GAAP Financial Information).

 

GAAP Results for the Quarter

 

For the first quarter of fiscal 2008, the Company reported net income of $7.9 million, $0.01 diluted earnings per share versus a net loss of $1.1 billion, $2.10 diluted loss per share for the fourth quarter of fiscal 2007 and net income of $28.2 million, $0.05 diluted earnings per share for the same period a year ago.

 

Cash Flow and Balance Sheet Metrics

 

Free cash flow during the first quarter of fiscal 2008 (cash flow from operating and investing activities), amounted to $121.9 million. Other balance sheet results included:

 

·                  Cash and cash equivalents at quarter-end were $941 million;

·                  Cash cycle days of 25 represented a 4 day improvement quarter-over-quarter and a 20 day improvement year-over-year; and

·                  Redeemed $120 million of long-term debt

 

“I am pleased with the progress we made during the quarter.  Our Technology Components Group made significant operational and financial improvements and our core business met our profitability expectations. Strength in the quarter was driven by the communications,

 



 

defense and aerospace and enterprise computing and storage end-markets,” stated Jure Sola, Chairman and Chief Executive Officer.

 

“Our second quarter has historically been seasonally down, but we are cautiously optimistic about our outlook based on what we currently have in the pipeline from new and existing customers.  We expect to continue to strengthen our results, improve profitability and generate free cash flow throughout fiscal 2008,” continued Sola.

 

Second Quarter Fiscal 2008 Outlook

 

The following guidance is based on current expectations. These statements are forward-looking and actual results may differ materially. The Company provides the following guidance with respect to the second fiscal quarter ending March 29, 2008:

 

·                  Revenue is expected to be in the range of $2.4 billion to $2.5 billion

·                  Non-GAAP diluted earnings per share to be between $0.03 to $0.05

 

Non-GAAP Financial Information

 

In the commentary set forth above, we present the following non-GAAP financial measures: 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, the non-GAAP financial measures enable investors to analyze the core financial and operating performance of our Company and to facilitate period-to-period comparisons and analysis of operating trends. A reconciliation from GAAP to non-GAAP results is contained in the attached financial summary and is available on the Investor Relations section of our website at www.sanmina-sci.com. Sanmina-SCI provides earnings guidance 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 Wednesday, January 23, 2008 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. 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 30384378.

 

About Sanmina-SCI

 

Sanmina-SCI Corporation (NASDAQ: SANM) 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 large OEMs primarily in the communications, defense and aerospace, industrial and medical instrumentation, computer technology and multimedia sectors. Sanmina-SCI has facilities strategically located in key regions throughout the world. Information about Sanmina-SCI is available at www.sanmina-sci.com.

 

Sanmina-SCI Safe Harbor Statement

 

The foregoing, including the discussion regarding the Company’s future prospects, contains certain forward-looking statements that involve risks and uncertainties, including uncertainties associated with economic conditions in the electronics industry, particularly in the principal industry sectors served by the Company, changes in customer requirements and in the volume of sales to principal customers, the ability of Sanmina-SCI to effectively assimilate acquired businesses and achieve the anticipated benefits of its acquisitions, and competition and technological change. The Company’s actual results of operations may differ significantly from those contemplated by such forward-looking statements as a result of these and other factors, including factors set forth in the Company’s fiscal year 2007 Annual Report on Form 10-K filed on November 28, 2007 and the other reports, including quarterly reports on Form 10-Q and current reports on Form 8-K, that the Company files with the Securities Exchange Commission.

 



 

Press Release Financials

SANMINA-SCI

2700 North First Street

San Jose, CA 95134

Tel: 408-964-3610

 

Sanmina - SCI Corporation

Condensed Consolidated Balance Sheets

(In thousands)

(GAAP)

 

 

 

December 29,
2007

 

September 29,
2007

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

941,197

 

$

933,424

 

Accounts receivable, net

 

1,251,997

 

1,218,375

 

Inventories

 

1,077,618

 

1,059,856

 

Prepaid expenses and other current assets

 

194,002

 

203,802

 

Total current assets

 

3,464,814

 

3,415,457

 

 

 

 

 

 

 

Property, plant and equipment, net

 

591,645

 

609,394

 

Other intangible assets, net

 

20,297

 

22,218

 

Goodwill

 

512,635

 

510,669

 

Other non-current assets

 

114,487

 

112,217

 

Total assets

 

$

4,703,878

 

$

4,669,955

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

$

1,587,290

 

$

1,450,705

 

Accrued liabilities

 

199,326

 

203,941

 

Accrued payroll and related benefits

 

130,110

 

142,436

 

Total current liabilities

 

1,916,726

 

1,797,082

 

 

 

 

 

 

 

Long-term liabilities:

 

 

 

 

 

Long-term debt

 

1,477,632

 

1,588,072

 

Other

 

128,710

 

111,654

 

Total long-term liabilities

 

1,606,342

 

1,699,726

 

 

 

 

 

 

 

Total stockholders’ equity:

 

1,180,810

 

1,173,147

 

Total liabilities and stockholders’ equity

 

$

4,703,878

 

$

4,669,955

 

 



 

Press Release Financials

SANMINA-SCI

2700 North First Street

San Jose, CA 95134

Tel: 408-964-3610

 

Condensed Consolidated Statements of Operations

(In thousands, except per share amounts)

(GAAP)

(Unaudited)

 

 

 

Three Months Ended

 

 

 

December 29,
2007

 

December 30,
2006

 

Net sales

 

$

2,532,926

 

$

2,778,790

 

Cost of sales

 

2,379,880

 

2,610,112

 

Gross profit

 

153,046

 

168,678

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

Selling, general and administrative

 

93,200

 

96,318

 

Research and development

 

4,606

 

8,962

 

Amortization of intangible assets

 

1,650

 

1,650

 

Restructuring costs

 

7,296

 

3,215

 

Total operating expenses

 

106,752

 

110,145

 

Operating income

 

46,294

 

58,533

 

 

 

 

 

 

 

Interest income

 

6,217

 

10,900

 

Interest expense

 

(35,363

)

(43,331

)

Other income (expense), net

 

(4,640

)

10,961

 

Interest and other expense, net

 

(33,786

)

(21,470

)

Income before income taxes

 

12,508

 

37,063

 

Provision for income taxes

 

4,592

 

8,814

 

Net income

 

$

7,916

 

$

28,249

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

Basic

 

$

0.01

 

$

0.05

 

Diluted

 

$

0.01

 

$

0.05

 

 

 

 

 

 

 

 

 

Weighted-average shares used in computing per share amounts:

 

 

 

 

 

Basic

 

529,652

 

527,110

 

Diluted

 

529,962

 

528,298

 

 



 

Press Release Financials

SANMINA-SCI

2700 North First Street

San Jose, CA 95134

Tel: 408-964-3610

 

 

Sanmina - SCI Corporation

 

Reconciliation of GAAP to Non-GAAP Measures

 

(in thousands, except per share amounts)

 

(Unaudited)

 

 

 

Three Months Ended

 

 

 

December 29,
2007

 

December 30,
2006

 

GAAP Gross Profit

 

$

153,046

 

$

168,678

 

GAAP gross margin

 

6.0

%

6.1

%

Adjustments:

 

 

 

 

 

Stock compensation expense (1)

 

1,820

 

1,042

 

Amortization of intangible assets

 

271

 

221

 

Non-GAAP Gross Profit

 

155,137

 

169,941

 

Non-GAAP gross margin

 

6.1

%

6.1

%

 

 

 

 

 

 

GAAP operating income

 

$

46,294

 

$

58,533

 

GAAP operating margin

 

1.8

%

2.1

%

Adjustments:

 

 

 

 

 

Stock compensation expense (1)

 

3,406

 

2,638

 

Amortization of intangible assets

 

1,921

 

1,871

 

Stock option investigation and integration

 

2,263

 

4,374

 

Restructuring costs

 

7,296

 

3,215

 

 

 

 

 

 

 

Non-GAAP operating income

 

$

61,180

 

$

70,631

 

Non-GAAP operating margin

 

2.4

%

2.5

%

 

 

 

 

 

 

GAAP net income

 

$

7,916

 

$

28,249

 

Adjustments:

 

 

 

 

 

Operating income adjustments (see above)

 

14,886

 

12,098

 

Gain on sale of surplus real estate

 

 

(6,840

)

Loss on redemption of debt (2)

 

2,237

 

 

Tax effect of above items

 

(4,001

)

1,145

 

Non-GAAP net income

 

$

21,038

 

$

34,652

 

 

 

 

 

 

 

Non-GAAP Earnings Per Share:

 

 

 

 

 

Basic

 

$

0.04

 

$

0.07

 

Diluted

 

$

0.04

 

$

0.07

 

 

 

 

 

 

 

Weighted-average shares used in computing Non-GAAP earnings per share amounts:

 

 

 

 

 

Basic

 

529,652

 

527,110

 

Diluted

 

529,962

 

528,298

 

 


(1) Stock compensation expense for the three months ended December 29, 2007 and December 30, 2006 was as follows:

 

 

 

Three Months Ended

 

 

 

December 29,
2007

 

December 30,
2006

 

 

 

(In millions)

 

Cost of sales

 

$

1.8

 

$

1.0

 

Selling, general and administrative

 

1.5

 

1.5

 

Research and development

 

0.1

 

0.1

 

 

 

$

3.4

 

$

2.6

 

 


(2) Write-off of prepaid financing fees related to debt that was repaid prior to maturity.