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, firstname.lastname@example.org
Sanmina Reports Second Quarter Fiscal 2013 Results
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