Pemstar reports fiscal 2006 Q2 results

Reduces net loss before restructuring by 55% compared to prior quarter.  Restructuring plan for improved financial performance is on track

PEMSTAR Inc. (Nasdaq: PMTR) announced financial results for its fiscal 2006 second quarter ended September 30, 2005.
 
Revenue from continuing operations for the three months ended September 30, 2005 increased to $211.1 million, compared to $157.9 million in the same quarter a year ago. The increase included approximately $65 million of additional revenue resulting from the full turnkey operation with a wireless handset customer, which was in our guidance going into the quarter.

Net loss from continuing operations for the fiscal 2006 second quarter ended September 30, 2005 was $(13.4) million or $(0.30) per share, compared to net loss of $(3.4) million or ($0.07) per share in the same quarter a year ago. Results from continuing operations for the second quarter include adjustments for certain Americas locations of $(8.8) million or $(0.20) per share, comprised of restructuring charges of $(7.9) million, $(0.5) million of accounts receivable and inventory reserves primarily related to restructured sites and $(0.4) million due to consulting fees. Other than these adjustments, the net loss from continuing operations resulted primarily from reduced gross margins related to volume reduction and product mix changes in the semiconductor capital equipment and wireless hand set production combined with the low capacity utilization being addressed by the restructuring efforts.

Revenues from discontinued operations in our Guadalajara facility for the fiscal second quarter were $1.0 and $8.5 million for fiscal 2006 and 2005, respectively. Loss from discontinued operations for the fiscal second quarter totaled $(0.08) million or $(0.00) per share. Expenses contributing to the second quarter fiscal 2006 loss included $(0.3) million or $(0.00) per share of adjustments comprised of restructuring charges of $(0.7) million and adjustments to reserves of $0.4 million.

Excluding the above-mentioned adjustments of $(8.8) million for continuing operations and $(0.3) million for discontinued operations totaling $(0.20) per share, the adjusted net loss for the fiscal second quarter of 2006, was $(4.3) million or $(0.10) per share, which is in-line with prior guidance.