Sanmina Reports Second Quarter Fiscal 2013 Results

              Sanmina Reports Second Quarter Fiscal 2013 Results

PR Newswire

SAN JOSE, Calif., April 22, 2013

SAN JOSE, Calif., April 22, 2013 /PRNewswire/ -- Sanmina Corporation
("Sanmina" or the "Company") (NASDAQ GS: SANM), a leading integrated
manufacturing solutions company, today reported financial results for the
second fiscal quarter ended March 30, 2013.

(Logo: http://photos.prnewswire.com/prnh/20110707/SF30965LOGO)

Second Quarter Fiscal 2013 Summary

  oRevenue of $1.43 billion
  oGAAP ^ operating margin of 3.2 percent
  oGAAP diluted earnings per share of $0.25
  oNon-GAAP^(1) operating margin of 2.8 percent
  oNon-GAAP^(1) diluted earnings per share of $0.30

Revenue for the second quarter was $1.43 billion, compared to $1.49 billion in
the prior quarter and $1.46 billion for the second quarter of fiscal 2012. 

GAAP operating income in the second quarter was $45.8 million or 3.2 percent
of revenue, compared to $30.2 million or 2.1 percent of revenue for the second
quarter of fiscal 2012. GAAP net income in the second quarter was $21.2
million, compared to a GAAP net loss of $1.4 million for the second quarter of
fiscal 2012. GAAP diluted earnings per share for the quarter were $0.25,
compared to GAAP diluted loss per share of $0.02 in the second quarter of
fiscal 2012. GAAP net income and earnings per share for the second quarter of
fiscal 2013 included a one-time gain on the sale of real estate during the
quarter.

Non-GAAP operating income in the second quarter was $40.0 million or 2.8
percent of revenue, compared to $44.8 million or 3.1 percent of revenue in the
second quarter fiscal 2012. Non-GAAP net income in the second quarter was
$25.3 million, compared to $22.5 million in the second quarter of fiscal 2012.
Non-GAAP diluted earnings per share were $0.30, compared to $0.27 in the
second quarter of fiscal 2012. 

Cash and cash equivalents for the quarter ended March 30, 2013 were $411.9
million. Cash flow from operations was $64.7 million for the quarter.
Inventory turns were 6.7. Cash cycle days were 52.0 days.

"Our second quarter results were in line with our expectations as we continued
to manage through a soft market environment," stated Jure Sola, Chairman and
Chief Executive Officer. "We continue to invest in technology and services
that enhance the value we provide to our customers around the world. We
remain encouraged by new program ramps and increased forecasts from our
customers that should drive improvement in the second half of the year."

Third Quarter Fiscal 2013 Outlook
The following outlook is for the third fiscal quarter ending June 29, 2013.
These statements are forward-looking and actual results may differ
materially.

  oRevenue between $1.45 billion to $1.50 billion
  oNon-GAAP diluted earnings per share between $0.32 to $0.38

Company Conference Call Information
Sanmina will hold a conference call regarding results for the second quarter
fiscal year 2013 on Monday, April 22, 2013 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.com.Additional information
in the form of a slide presentation is available by logging onto Sanmina's
website at www.sanmina.com. A replay of the conference call will be available
for 48-hours.The access numbers are: domestic 855-859-2056 and international
404-537-3406, access code is 34594366.

^(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: gross profit, gross margin, operating income, operating margin, net
income and basic 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, gains and losses on sales
of assets and redemptions of debt, discrete tax events and deferred tax
changes), to the extent material or which we consider to be of a
non-operational nature in the applicable period.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.com. Sanmina provides third quarter fiscal 2013 outlook only on
a non-GAAP basis due to the inherent uncertainties associated with forecasting
the timing and amount of acquisitions, restructuring activities, asset
impairments and other unusual and infrequent items.

About Sanmina
Sanmina Corporation is a leading integrated manufacturing solutions provider
serving the fastest-growing segments of the global Electronics Manufacturing
Services (EMS) market. Recognized as a technology leader, Sanmina provides
end-to-end manufacturing solutions, delivering superior quality and support to
OEMs primarily in the communications, defense and aerospace, industrial and
semiconductor systems, medical, multimedia, computing and storage, automotive
and clean technology sectors. Sanmina has facilities strategically located in
key regions throughout the world. More information regarding the company is
available at www.sanmina.com.

Sanmina Safe Harbor Statement
Certain statements contained in this press release, including the Company's
expectations for business improvement for the second half of the year and
outlook for future revenue and non-GAAP earnings per share, 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 changes to or a deterioration in the markets for
the Company's customers' products; inability of customers to pay for the
Company's products due to insolvency or otherwise; the sufficiency of the
Company's cash position and other sources of liquidity to operate and expand
its business; any failure of the Company's Components, Products and Services
business to meet expectations; component shortages, which could result in
production delays or increases in manufacturing costs; 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.



Condensed Consolidated Balance Sheets
(In thousands)
(GAAP)
                                                 March 30,     September 29,
                                                 2013          2012
                                                 (Unaudited)
ASSETS
Current assets:
      Cash and cash equivalents                  $  411,942  $    409,618
      Accounts receivable, net                   870,905       1,001,543
      Inventories                                798,820       826,539
      Prepaid expenses and other current assets  74,680        88,599
            Total current assets                 2,156,347     2,326,299
Property, plant and equipment, net               547,850       569,365
Other                                            260,631       272,122
            Total assets                         $ 2,964,828   $  3,167,786
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
      Accounts payable                           $  851,767  $    937,737
      Accrued liabilities                       109,514       104,741
      Accrued payroll and related benefits       100,984       117,074
      Short-term debt                            170,216       59,995
            Total current liabilities            1,232,481     1,219,547
Long-term liabilities:
      Long-term debt                             574,046       837,364
      Other                                      143,795       147,094
            Total long-term liabilities          717,841       984,458
Total stockholders' equity                       1,014,506     963,781
            Total liabilities and stockholders'  $ 2,964,828   $  3,167,786
            equity



Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
(GAAP)
(Unaudited)
                            Three Months Ended        Six Months Ended
                            Mar. 30,     Mar. 31,     Mar. 30,     Mar. 31,
                            2013         2012         2013         2012
Net sales                   $ 1,427,642  $ 1,463,082  $ 2,922,587  $ 2,965,448
Cost of sales               1,327,338    1,356,734    2,725,355    2,750,075
 Gross profit               100,304      106,348      197,232      215,373
Operating expenses:
 Selling, general and       58,954       62,940       118,822      122,081
 administrative
 Research and development   6,020        5,923        11,415       10,056
 Amortization of intangible 474          767          948          1,723
 assets
 Restructuring and          6,925        5,486        10,872       9,540
 integration costs
 Asset impairments          1,100        1,024        1,100        2,077
 Gain on sales of           (18,967)     -            (23,185)     -
 long-lived assets
  Total operating       54,506       76,140       119,972      145,477
 expenses
Operating income            45,798       30,208       77,260       69,896
 Interest income            246          442          444          726
 Interest expense          (10,416)     (20,367)     (23,500)     (42,230)
 Other expense, net         (1,477)      (4,841)      (16,399)     (6,359)
Interest and other, net     (11,647)     (24,766)     (39,455)     (47,863)
Income before income taxes  34,151       5,442        37,805       22,033
Provision for income taxes 12,960       6,881        15,993       14,897
Net income (loss)           $          $          $          $   
                            21,191      (1,439)     21,812      7,136
 Basic income (loss) per    $        $         $        $    
 share                      0.26        (0.02)      0.27        0.09
 Diluted income (loss) per  $        $         $        $    
 share                      0.25        (0.02)      0.26        0.09
 Weighted-average shares
 used in computing per
 share amounts:
  Basic                    82,543       81,225       82,226       81,059
  Diluted                  84,683       81,225       84,369       83,511



Reconciliation of GAAP to Non-GAAP Measures
(in thousands, except per share amounts)
(Unaudited)
                            Three Months Ended              Six Months Ended
                            Mar. 30,  Dec. 29,   Mar. 31,   Mar. 30,  Mar. 31,
                            2013      2012       2012       2013      2012
GAAP Gross Profit           $         $         $          $         $
                            100,304  96,928    106,348   197,232  215,373
     GAAP gross margin      7.0%      6.5%       7.3%       6.7%      7.3%
Adjustments
     Stock compensation     1,291     1,340      983        2,631     1,890
     expense (1)
     Amortization of        -         -          -          -         104
     intangible assets
     Distressed customer    321       3,020      325        3,341     325
     charges (2)
Non-GAAP Gross Profit       $         $          $          $         $
                            101,916  101,288   107,656   203,204  217,692
     Non-GAAP gross margin  7.1%      6.8%       7.4%       7.0%      7.3%
GAAP Operating Income       $        $         $         $        $ 
                            45,798   31,462    30,208    77,260   69,896
     GAAP operating margin  3.2%      2.1%       2.1%       2.6%      2.4%
Adjustments
     Stock compensation     4,342     4,666      4,529      9,008     8,593
     expense (1)
     Amortization of        474       474        767        948       1,827
     intangible assets
     Distressed customer    321       5,091      2,794      5,412     2,794
     charges (2)
     Restructuring,
     acquisition and        6,925     3,947      5,486      10,872    9,540
     integration costs
     Gain on sales of       (18,967)  (4,218)    -          (23,185)  -
     long-lived assets
     Asset impairments      1,100     -          1,024      1,100     2,077
Non-GAAP Operating Income   $        $         $         $        $ 
                            39,993   41,422    44,808    81,415   94,727
     Non-GAAP operating     2.8%      2.8%       3.1%       2.8%      3.2%
     margin
GAAP Net Income (Loss)     $        $      $        $        $  
                            21,191   621        (1,439)    21,812   7,136
Adjustments:
     Operating income
     adjustments (see       (5,805)   9,960      14,600     4,155     24,831
     above)
     Loss on repurchases    1,401     -          6,461      1,401     6,461
     of debt (3)
     Loss on dedesignation
     of interest rate swap  -         14,903     -          14,903    -
     (4)
     Pro forma tax
     adjustment for         8,498     (1,245)    2,906      7,253     6,899
     non-GAAP items
Non-GAAP Net Income         $        $         $         $        $ 
                            25,285   24,239    22,528    49,524   45,327
GAAP Net Income (Loss) Per
Share:
     Basic                  $      $       $       $      $   
                            0.26     0.01      (0.02)     0.27     0.09
     Diluted                $      $       $       $      $   
                            0.25     0.01      (0.02)     0.26     0.09
Non-GAAP Net Income Per
Share:
     Basic                  $      $       $       $      $   
                            0.31     0.30      0.28      0.60     0.56
     Diluted                $      $       $       $      $   
                            0.30     0.29      0.27      0.59     0.54
Weighted-average shares
used in computing per
share amounts:
     Basic - GAAP           82,543    81,920     81,225     82,226    81,059
     Diluted - GAAP         84,683    84,011     81,225     84,369    83,511
     Basic - Non-GAAP       82,543    81,920     81,225     82,226    81,059
     Diluted - Non-GAAP     84,683    84,011     84,051     84,369    83,511
(1)  Stock compensation expense was as follows:
                            Three Months Ended              Six Months Ended
                            Mar. 30,  Dec. 29,   Mar. 31,   Mar. 30,  Mar. 31,
                            2013      2012       2012       2013      2012
     Cost of sales          $       $        $      $       $  
                            1,291    1,340     983        2,631    1,890
     Selling, general and   3,004     3,295      3,519      6,299     6,649
     administrative
     Research and           47        31         27         78        54
     development
     Stock compensation     $       $        $        $       $  
     expense - total        4,342    4,666     4,529     9,008    8,593
     company



(2) Relates to inventory and bad debt reserves / recoveries associated with
    distressed customers.
(3) Represents a loss, including write-off of unamortized debt issuance costs,
    on debt redeemed or repurchased prior to maturity.
(4) Represents a non-cash loss resulting from dedesignation of an interest
    rate swap.



Schedule I

The commentary and financial information above includes non-GAAP measures of
gross profit, gross margin, 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, to the extent
material or which we consider to be of a non-operational nature in the
applicable period, and as more fully described below.

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 the 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. 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 redemptions of debt, discrete tax events and
deferred tax changes), 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 Corporation

Website: http://www.sanmina.com
Contact: Paige Bombino, +1-408-964-3610, paige.bombino@sanmina.com
 
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