SAN JOSE, Calif., July 23, 2012 /PRNewswire/ -- Sanmina-SCI
Corporation ("Sanmina-SCI" or the "Company") (NASDAQ GS: SANM), a
leading global integrated manufacturing services company, today
reported financial results for the third fiscal quarter ended
June 30, 2012.
(Logo:
http://photos.prnewswire.com/prnh/20110707/SF30965LOGO)
Third Quarter Fiscal 2012 Summary
- Revenue of $1.55
billion
- GAAP operating margin 2.3 percent
- GAAP diluted earnings per share of $0.11
- Non-GAAP(1) operating margin of 2.8
percent
- Non-GAAP diluted earnings per share of $0.26
Revenue for the third quarter was $1.55
billion, compared to $1.46
billion in the prior quarter and $1.67 billion for the same period of fiscal 2011.
GAAP operating income in the third quarter was $35.4 million or 2.3 percent of revenue, compared
to $52.9 million or 3.2 percent of
revenue for the same period ended July
2, 2011. GAAP net income in the third quarter was
$8.9 million, compared to
$9.4 million for the same period a
year ago. GAAP diluted earnings per share for the quarter of
$0.11, compared to GAAP diluted
earnings per share of $0.11 in the
third quarter fiscal 2011.
Non-GAAP operating income in the third quarter was $44.1 million or 2.8 percent of revenue, compared
to $65.0 million or 3.9 percent of
revenue in the third quarter fiscal 2011. Non-GAAP net income
in the third quarter was $21.9
million, compared to $35.1
million in the same period a year ago. Non-GAAP diluted
earnings per share were $0.26,
compared to $0.42 for the same period
a year ago.
Cash and cash equivalents for the quarter ended June 30, 2012 were $394.9
million. Cash flow from operations was $47.6 million. Inventory turns improved to
6.8x from 6.1x in the prior quarter.
"Revenue for the third quarter was up six percent sequentially
as a result of growth in a number of our key markets.
However, weak demand in the components business negatively impacted
profitability," stated Jure Sola,
Chairman and Chief Executive Officer. "I continue to be
pleased with our focus on cash generation and capital structure,
including our redemption today of the remaining 2016 notes."
"The macro-environment remains challenging and it's difficult to
predict the future; however, based on new projects and forecasts
from our strategic customers, we expect modest revenue growth and
margin expansion in the fourth quarter," concluded Sola.
Fourth Quarter Fiscal 2012 Outlook
The following forecast is for the fourth fiscal quarter ending
September 29, 2012. These
statements are forward-looking and actual results may differ
materially.
- Revenue between $1.575 billion to $1.625
billion
- Non-GAAP diluted earnings per share between $0.32 to $0.38
Company Completes Full Redemption of 2016 Notes
The Company also announced that it has redeemed today
$150.0 million in aggregate principal
amount of its 8.125% Senior Subordinated Notes due 2016 (the
"Notes") using borrowings under the Company's credit facilities and
other financings. This follows the Company's call for
redemption of the Notes previously announced on June 22, 2012. As a result, none of the
Company's Notes remain outstanding.
(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 associated
with distressed customers, 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. Beginning in
the third quarter, in order to align our non-GAAP reporting
practices with those of certain of our competitors, we revised our
definition of unusual items to include charges associated with
distressed customers, not just customers who have declared
bankruptcy. 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
fiscal 2012 outlook 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 results for
the third quarter fiscal 2012 on Monday,
July 23, 2012 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
855-859-2056 and international 404-537-3406, access code is
10354407.
About Sanmina-SCI
Sanmina-SCI Corporation is a leading integrated manufacturing
services provider 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 outlook for future revenue and non-GAAP earnings per
share and expectations for revenue and margin expansion, 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;
inability of customers to pay for the Company's products due to
bankruptcy filings or otherwise, which could reduce the Company's
revenues, margins and net income; reduction or cancelation of
customer orders that would reduce revenues, margins and net income
; 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, which could result in
production delays or increases in manufacturing costs; the 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; 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)
|
|
|
|
|
June
30,
|
|
October
1,
|
|
|
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and
cash equivalents
|
|
$
394,862
|
|
$
640,288
|
|
Accounts
receivable, net
|
|
1,017,355
|
|
1,014,121
|
|
Inventories
|
|
826,725
|
|
891,325
|
|
Prepaid
expenses and other current assets
|
|
95,953
|
|
83,512
|
|
|
Total
current assets
|
|
2,334,895
|
|
2,629,246
|
|
|
|
|
|
|
|
Property,
plant and equipment, net
|
|
566,339
|
|
588,097
|
Other
non-current assets
|
|
131,687
|
|
136,630
|
|
|
Total
assets
|
|
$
3,032,921
|
|
$
3,353,973
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts
payable
|
|
$
895,859
|
|
$
984,014
|
|
Accrued
liabilities
|
|
116,525
|
|
109,478
|
|
Accrued
payroll and related benefits
|
|
115,070
|
|
112,193
|
|
Short-term
debt
|
|
30,000
|
|
60,200
|
|
|
Total
current liabilities
|
|
1,157,454
|
|
1,265,885
|
|
|
|
|
|
|
|
Long-term
liabilities:
|
|
|
|
|
|
Long-term
debt
|
|
940,016
|
|
1,182,308
|
|
Other
|
|
129,699
|
|
135,263
|
|
|
Total
long-term liabilities
|
|
1,069,715
|
|
1,317,571
|
|
|
|
|
|
|
|
Total
stockholders' equity
|
|
805,752
|
|
770,517
|
|
|
Total
liabilities and stockholders' equity
|
|
$
3,032,921
|
|
$
3,353,973
|
Sanmina-SCI Corporation
|
Condensed Consolidated Statements of
Operations
|
(In
thousands, except per share amounts)
|
(GAAP)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
Nine
Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
June
30,
|
|
July
2,
|
|
June
30,
|
|
July
2,
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
|
|
Net
sales
|
$
1,549,302
|
|
$
1,674,200
|
|
$
4,514,750
|
|
$
4,905,709
|
Cost of
sales
|
1,444,050
|
|
1,542,599
|
|
4,194,125
|
|
4,529,230
|
|
Gross
profit
|
105,252
|
|
131,601
|
|
320,625
|
|
376,479
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Selling,
general and administrative
|
60,965
|
|
67,043
|
|
183,046
|
|
187,726
|
|
Research
and development
|
5,587
|
|
5,797
|
|
15,643
|
|
14,877
|
|
Amortization of intangible assets
|
672
|
|
958
|
|
2,395
|
|
2,875
|
|
Restructuring and integration costs
|
3,932
|
|
6,336
|
|
13,472
|
|
15,885
|
|
Asset
impairment
|
-
|
|
-
|
|
2,077
|
|
85
|
|
Gain on
sales of long-lived assets
|
(1,298)
|
|
(1,440)
|
|
(1,298)
|
|
(3,465)
|
|
Total operating
expenses
|
69,858
|
|
78,694
|
|
215,335
|
|
217,983
|
|
|
|
|
|
|
|
|
|
Operating
income
|
35,394
|
|
52,907
|
|
105,290
|
|
158,496
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
369
|
|
356
|
|
1,095
|
|
1,490
|
|
Interest
expense
|
(16,131)
|
|
(24,843)
|
|
(58,361)
|
|
(77,773)
|
|
Other
income (expense), net
|
(6,835)
|
|
(14,767)
|
|
(13,194)
|
|
(11,489)
|
Interest
and other, net
|
(22,597)
|
|
(39,254)
|
|
(70,460)
|
|
(87,772)
|
|
|
|
|
|
|
|
|
|
Income
before income taxes
|
12,797
|
|
13,653
|
|
34,830
|
|
70,724
|
|
|
|
|
|
|
|
|
|
Provision
for income taxes
|
3,849
|
|
4,248
|
|
18,746
|
|
19,895
|
|
|
|
|
|
|
|
|
|
Net
income
|
$
8,948
|
|
$
9,405
|
|
$
16,084
|
|
$
50,829
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
income per share
|
$
0.11
|
|
$
0.12
|
|
$
0.20
|
|
$
0.63
|
|
Diluted
income per share
|
$
0.11
|
|
$
0.11
|
|
$
0.19
|
|
$
0.61
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares used in computing
|
|
|
|
|
|
|
|
|
per share
amounts:
|
|
|
|
|
|
|
|
|
Basic
|
81,519
|
|
80,579
|
|
81,213
|
|
80,223
|
|
Diluted
|
83,566
|
|
83,141
|
|
83,469
|
|
83,275
|
Sanmina-SCI Corporation
|
Reconciliation of GAAP to Non-GAAP
Measures
|
(in
thousands, except per share amounts)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
Nine
Months Ended
|
|
|
|
June
30,
|
|
March
31,
|
|
July
2,
|
|
June
30,
|
|
July
2,
|
|
|
|
2012
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Gross
Profit
|
|
$
105,252
|
|
$
106,348
|
|
$
131,601
|
|
$
320,625
|
|
$
376,479
|
|
GAAP
gross margin
|
|
6.8%
|
|
7.3%
|
|
7.9%
|
|
7.1%
|
|
7.7%
|
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
Stock
compensation expense (1)
|
|
706
|
|
983
|
|
1,773
|
|
2,596
|
|
3,825
|
|
Amortization of intangible assets
|
|
-
|
|
-
|
|
157
|
|
104
|
|
471
|
|
Customer
bankruptcy reorganization (2)
|
|
-
|
|
325
|
|
-
|
|
325
|
|
(759)
|
Non-GAAP Gross Profit
|
|
$
105,958
|
|
$
107,656
|
|
$
133,531
|
|
$
323,650
|
|
$
380,016
|
|
Non-GAAP gross margin
|
|
6.8%
|
|
7.4%
|
|
8.0%
|
|
7.2%
|
|
7.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
Operating Income
|
|
$
35,394
|
|
$
30,208
|
|
$
52,907
|
|
$
105,290
|
|
$
158,496
|
|
GAAP
operating margin
|
|
2.3%
|
|
2.1%
|
|
3.2%
|
|
2.3%
|
|
3.2%
|
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
Stock
compensation expense (1)
|
|
4,527
|
|
4,529
|
|
6,057
|
|
13,120
|
|
13,981
|
|
Amortization of intangible assets
|
|
672
|
|
767
|
|
1,115
|
|
2,499
|
|
3,346
|
|
Customer
bankruptcy reorganization (2)
|
|
-
|
|
2,794
|
|
-
|
|
2,794
|
|
(759)
|
|
Restructuring, acquisition and integration
costs
|
|
4,834
|
|
5,486
|
|
6,336
|
|
14,374
|
|
15,885
|
|
Gain on
sales of long-lived assets
|
|
(1,298)
|
|
-
|
|
(1,460)
|
|
(1,298)
|
|
(3,485)
|
|
Asset
impairment
|
|
-
|
|
1,024
|
|
-
|
|
2,077
|
|
85
|
Non-GAAP Operating Income
|
|
$
44,129
|
|
$
44,808
|
|
$
64,955
|
|
$
138,856
|
|
$
187,549
|
|
Non-GAAP operating margin
|
|
2.8%
|
|
3.1%
|
|
3.9%
|
|
3.1%
|
|
3.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Net
Income (Loss)
|
|
$
8,948
|
|
$
(1,439)
|
|
$
9,405
|
|
$
16,084
|
|
$
50,829
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income adjustments (see above)
|
|
8,735
|
|
14,600
|
|
12,048
|
|
33,566
|
|
29,053
|
|
Loss on
repurchase of debt (3)
|
|
4,236
|
|
6,461
|
|
16,098
|
|
10,697
|
|
16,098
|
|
Nonrecurring tax items
|
|
(16)
|
|
2,906
|
|
(2,425)
|
|
6,883
|
|
1,355
|
Non-GAAP Net Income
|
|
$
21,903
|
|
$
22,528
|
|
$
35,126
|
|
$
67,230
|
|
$
97,335
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
Income (Loss) Per Share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
0.11
|
|
$
(0.02)
|
|
$
0.12
|
|
$
0.20
|
|
$
0.63
|
|
Diluted
|
|
$
0.11
|
|
$
(0.02)
|
|
$
0.11
|
|
$
0.19
|
|
$
0.61
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Income Per Share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
0.27
|
|
$
0.28
|
|
$
0.44
|
|
$
0.83
|
|
$
1.21
|
|
Diluted
|
|
$
0.26
|
|
$
0.27
|
|
$
0.42
|
|
$
0.81
|
|
$
1.17
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares used in computing per share
amounts:
|
|
|
|
|
|
|
|
|
|
|
|
Basic -
GAAP
|
|
81,519
|
|
81,225
|
|
80,579
|
|
81,213
|
|
80,223
|
|
Diluted -
GAAP
|
|
83,566
|
|
81,225
|
|
83,141
|
|
83,469
|
|
83,275
|
|
Basic -
Non-GAAP
|
|
81,519
|
|
81,225
|
|
80,579
|
|
81,213
|
|
80,223
|
|
Diluted -
Non-GAAP
|
|
83,566
|
|
84,051
|
|
83,141
|
|
83,469
|
|
83,275
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Stock
compensation expense was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
Nine
Months Ended
|
|
|
|
June
30,
|
|
March
31,
|
|
July
2,
|
|
June
30,
|
|
July
2,
|
|
|
|
2012
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
Cost of
sales
|
|
$
706
|
|
$
983
|
|
$
1,773
|
|
$
2,596
|
|
$
3,825
|
|
Selling,
general and administrative
|
|
3,793
|
|
3,519
|
|
4,209
|
|
10,442
|
|
9,998
|
|
Research
and development
|
|
28
|
|
27
|
|
75
|
|
82
|
|
158
|
|
Stock
compensation expense - total company
|
|
$
4,527
|
|
$
4,529
|
|
$
6,057
|
|
$
13,120
|
|
$
13,981
|
|
|
|
|
|
|
|
|
|
|
|
|
(2)
|
Relates to
inventory and bad debt reserves associated with customer bankruptcy
reorganizations.
|
|
|
|
|
|
|
|
|
|
|
|
|
(3)
|
Represents
a loss, including write-off of unamortized debt issuance costs, on
debt redeemed or repurchased prior to maturity.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Schedule I
The commentary above includes non-GAAP measures of 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
distressed customer 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 associated with distressed customers
, 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 or 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