SAN JOSE, Calif., Jan 23, 2008 /PRNewswire-FirstCall via COMTEX News Network/ -- Sanmina-SCI Corporation (Nasdaq: 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 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 30384378.
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 http://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.
Sanmina - SCI Corporation Condensed Consolidated Balance Sheets (In thousands) (GAAP) December 29, September 29, 2007 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 Condensed Consolidated Statements of Operations (In thousands, except per share amounts) (GAAP) (Unaudited) Three Months Ended December 29, December 30, 2007 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 Sanmina - SCI Corporation Reconciliation of GAAP to Non-GAAP Measures (in thousands, except per share amounts) (Unaudited) Three Months Ended December 29, December 30, 2007 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, December 30, 2007 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.
SOURCE Sanmina-SCI Corporation
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