Sanmina-SCI announces Q2 results

Sanmina-SCI Corporation (Nasdaq: SANM) reported financial results for its second quarter ended March 27, 2004. A reconciliation from pro forma to GAAP results is contained in the attached financials and is available on the Investor Relations section of our website at www.sanmina-sci.com.

    Second Quarter Fiscal 2004 Highlights Include:    -- REVENUES OF $2.86 BILLION IN LINE WITH COMPANY GUIDANCE OF        $2.75-$2.9 BILLION    -- PRO FORMA EPS OF $0.05 AT THE HIGH-END OF COMPANY GUIDANCE    -- NEWISYS ODM SERVERS STARTING TO SHIP IN VOLUME, VALIDATING COMPANY'S       ODM INITIATIVES    -- IMPROVEMENT IN HIGH-END TECHNOLOGY END-MARKETS PROVIDES SANMINA-SCI       WITH FAVORABLE MIX    -- 3Q04 GUIDANCE, Sales-$2.90B-$3.10B, EPS-$0.05-$0.07

Summary of Pro Forma Financial Results

• (Excludes restructuring, integration, impairment, other infrequent or unusual items and non-cash interest and amortization expense. Please note that we have excluded non-cash interest and amortization expense from our pro forma operating results to enhance comparability with other companies in the EMS industry.)

    (In thousands, except    per share data)          Q2:04        Q2:03       6MOS04       6MOS03    Revenue             $2,862,386   $2,443,553   $5,832,667   $4,980,514    Operating Margin          2.0%         1.1%         2.0%         1.1%    Operating Income       $56,775      $27,498     $114,021      $53,163    Net Income             $26,619       $1,119      $52,769       $7,892    Earnings per share     - diluted               $0.05        $0.00        $0.10        $0.02

Summary of GAAP Financial Results

• (Includes restructuring, integration, impairment, other infrequent or unusual items and non-cash interest and amortization expense.)

    (In thousands, except    per share data)          Q2:04        Q2:03       6MOS04       6MOS03    Revenue             $2,862,386   $2,443,553   $5,832,667   $4,980,514    Operating Margin     (loss)                 (1.1)%       (0.7)%         0.3%       (0.6)%    Operating Income     (loss)              $(31,461)    $(18,042)      $14,728    $(30,475)    Net Income (loss)    $(43,856)    $(31,821)    $(28,087)    $(39,330)    Earnings (loss) per     share - basic         $(0.09)      $(0.06)      $(0.05)      $(0.08)    Earnings (loss) per     share - diluted       $(0.09)      $(0.06)      $(0.05)      $(0.08)

Pro Forma Financial Performance in the Second Quarter

For the second quarter ended March 27, 2004, Sanmina-SCI reported revenues of $2.86 billion, an increase of 17%, from $2.44 billion in the second quarter ended March 29, 2003. Pro forma net income for the second quarter this year was $26.6 million, or $0.05 pro forma diluted earnings per share, compared to pro forma net income of $1.1 million, or $0.00 pro forma diluted earnings per share for the same period a year ago. Pro forma financial results do not include restructuring, integration, impairment, other infrequent or unusual items and non-cash interest and amortization expense.

Cash provided by operations was approximately $46 million for the second quarter. At March 27, 2004, the Company reported $1.1 billion in cash and short-term investments. At quarter-end, the Company reported a current ratio of 2.0, working capital of $2.1 billion and shareholders' equity of $3.3 billion.

Jure Sola, Chairman and Chief Executive Officer of Sanmina-SCI, said, "In reviewing this quarter, which traditionally is a seasonally slow time for the EMS industry, we are encouraged by the improved revenues we are seeing in our target markets of communications infrastructure, medical, defense and industrial. The revenue increase in these faster growing markets resulted in a more favorable mix of business in high-end, complex-product programs. We believe our strengthening performance in these sectors validates our customer- focused initiative of emphasizing key end-markets and providing complete end- to-end manufacturing solutions. The high-end programs also helped to improve Sanmina-SCI's operating margin this quarter.

"Looking forward we remain optimistic that we will achieve our strategic growth goals. Our revenue outlook reflects increasing momentum as the economy in our end-markets recovers. We expect our operating margins to continue to improve helped by our optimization of our manufacturing operations and expanding customer relationships. Customers who are striving to be industry leaders are increasingly taking advantage of our cost-effective, comprehensive portfolio of end-to-end manufacturing capabilities and our commitment to flawless execution. By leveraging our key strengths in support of our customers, Sanmina-SCI is well positioned for expanding growth and profitability," Sola concluded.

Company Outlook

Sanmina-SCI projects third quarter fiscal 2004 revenue to be approximately $2.9 billion to $3.1 billion, and pro forma diluted earnings per share to be between $0.05 to $0.07 before integration, restructuring and impairment charges, other infrequent or unusual items and non-cash interest and amortization expense.

Pro Forma Financial Information

In addition to disclosing operating results determined in accordance with generally accepted accounting principles (GAAP), Sanmina-SCI also provides pro forma operating results that exclude certain items. Management utilizes pro forma operating results as a performance measure and furnishes the information in order to provide investors with additional information to analyze the Company's operating results and facilitate period-to-period comparisons.

Company Conference Call Information

Sanmina-SCI helda conference call regarding this announcement on Tuesday, April 20, 2004 at 5:00 p.m. EDT (2:00 p.m. PDT). A replay of the conference call will be available for 48-hours. The access numbers are: domestic 800-642-1687 and international: 706-645-9291, access code: 6513899.

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 2003 Annual Report on Form 10-K filed on December 9, 2003 and 10-Q filed on February 9, 2004, with the Securities Exchange Commission.

                    Consolidated Statements of Operations                    (In thousands, except per share data)                                 (Unaudited)                                           Three Months Ended March 27, 2004                                                         Pro forma                                          Pro forma (1)  Adjustments   GAAP    Net sales                              $2,862,386        $--   $2,862,386    Cost of sales                           2,717,287         --    2,717,287       Gross profit                           145,099         --      145,099    Operating expenses:       Selling, general and        administrative                         81,304         --       81,304       Research and development                 7,020         --        7,020       Amortization of intangibles                 --      2,281        2,281       Integration costs                           --      2,051        2,051       Restructuring costs                         --     83,904       83,904         Total operating expenses              88,324     88,236      176,560    Operating income (loss)                    56,775    (88,236)     (31,461)    Other income (expense), net               (20,310)    (6,013)     (26,323)    Income (loss) before provision for     income taxes                              36,465    (94,249)     (57,784)    Provision (benefit) for income taxes        9,846    (23,774)     (13,928)    Net income (loss)                         $26,619   $(70,475)    $(43,856)    Earnings (loss) per share:       Basic                                    $0.05                   (0.09)       Diluted                                  $0.05                   (0.09)    Shares used in computing per share     amounts:       Basic                                  514,924                 514,924       Diluted                                533,465                 514,924                                          Three Months Ended March 29, 2003                                                         Pro forma                                          Pro forma (1)  Adjustments   GAAP    Net sales                              $2,443,553         --   2,443,553    Cost of sales                           2,338,830         --   2,338,830       Gross profit                           104,723         --     104,723    Operating expenses:       Selling, general and        administrative                         74,223         --      74,223       Research and development                 3,002         --       3,002       Amortization of intangibles                         1,628       1,628       Integration costs                           --      3,963       3,963       Restructuring costs                         --     39,949      39,949         Total operating expenses              77,225     45,540     122,765    Operating income (loss)                    27,498    (45,540)    (18,042)    Other income (expense), net               (25,828)    (3,624)    (29,452)    Income (loss) before provision for     income taxes                               1,670    (49,164)    (47,494)    Provision (benefit) for income taxes          551    (16,224)    (15,673)    Net income (loss)                          $1,119   $(32,940)   $(31,821)    Earnings (loss) per share:       Basic                                      $--                 $(0.06)       Diluted                                    $--                 $(0.06)    Shares used in computing per share     amounts:       Basic                                  509,735                509,735       Diluted                                511,726                509,735     (1)  Pro forma results of operations exclude restructuring and          integration costs, impairment and other infrequent or unusual          charges and non-cash interest and amortization expense.                    Consolidated Statements of Operations                    (In thousands, except per share data)                                 (Unaudited)                                            Six Months Ended March 27, 2004                                                         Pro forma                                          Pro forma (1)  Adjustments   GAAP    Net sales                              $5,832,667        $--   $5,832,667    Cost of sales                           5,546,377         --    5,546,377       Gross profit                           286,290         --      286,290    Operating expenses:       Selling, general and        administrative                        158,350         --      158,350       Research and development                13,919         --       13,919       Amortization of intangibles                 --      4,401        4,401       Integration costs                           --      3,782        3,782       Restructuring costs                         --     91,110       91,110        Total operating expenses              172,269     99,293      271,562    Operating income (loss)                   114,021    (99,293)      14,728    Other income (expense), net               (41,736)   (12,002)     (53,738)    Income (loss) before provision for     income taxes                              72,285   (111,295)     (39,010)    Provision (benefit) for income taxes       19,516    (30,439)     (10,923)    Net income (loss)                         $52,769   $(80,856)    $(28,087)    Earnings (loss) per share:       Basic                                    $0.10                  $(0.05)       Diluted                                  $0.10                  $(0.05)    Shares used in computing per share     amounts:       Basic                                  514,152                 514,152       Diluted                                529,911                 514,152                                            Six Months Ended March 29, 2003                                                         Pro forma                                          Pro forma (1)  Adjustments   GAAP    Net sales                              $4,980,514         --   $4,980,514    Cost of sales                           4,766,834         --    4,766,834       Gross profit                           213,680         --      213,680    Operating expenses:       Selling, general and        administrative                        155,324         --      155,324       Research and development                 5,193         --        5,193       Amortization of intangibles                 --      3,237        3,237       Integration costs                           --      6,359        6,359       Restructuring costs                         --     74,042       74,042        Total operating expenses              160,517     83,638      244,155    Operating income (loss)                    53,163    (83,638)     (30,475)    Other income (expense), net               (41,384)    13,158      (28,226)    Income (loss) before provision for     income taxes                              11,779    (70,480)     (58,701)    Provision (benefit) for income taxes        3,887    (23,258)     (19,371)    Net income (loss)                          $7,892   $(47,222)    $(39,330)    Earnings (loss) per share:       Basic                                    $0.02                  $(0.08)       Diluted                                  $0.02                  $(0.08)    Shares used in computing per share     amounts:       Basic                                  509,651                 509,651       Diluted                                511,191                 509,651     (1)  Pro forma results of operations exclude restructuring and          integration costs, impairment and other infrequent or unusual          charges and non-cash interest and amortization expense.                    Condensed Consolidated Balance Sheets                                (In thousands)                                    (GAAP)                                                March 27,       September 27,                                                   2004              2003                                               (Unaudited)      (Derived from                                                                    audited    ASSETS                                                        financials)    Current assets:         Cash and short-term investments        $1,128,505        $1,082,988         Accounts receivable, net                1,544,232         1,576,392         Inventories, net                        1,165,231           977,799         Deferred income taxes                     428,308           421,478         Prepaid and other current assets           92,109           109,862              Total current assets               4,358,385         4,168,519    Property, plant and equipment, net             844,979           902,868    Goodwill                                     2,236,896         2,223,422    Long-term investments                           27,817            15,614    Deposits and other                             156,978           139,833              Total assets                      $7,625,055        $7,450,256    LIABILITIES AND STOCKHOLDERS' EQUITY    Current liabilities:         Current portion of long-term          debt                                      $1,256            $3,489         Accounts payable                        1,713,047         1,506,998         Accrued liabilities and other             347,571           394,906         Accrued payroll and related          benefits                                 166,997           130,660              Total current liabilities          2,228,871         2,036,053    Long-term liabilities:         Convertible subordinated          debentures                             1,116,107         1,103,537         Long-term debt                            813,865           822,093         Deferred income taxes                      89,334            90,294         Other                                      72,876            75,025    Total stockholders' equity                   3,304,002         3,323,254              Total liabilities and               stockholders' equity             $7,625,055        $7,450,256                           Forward Looking Guidance                       Three Months Ended June 26, 2004                   (in billions, except per share amounts)     Net sales                          $2.90 - $3.10     Pro forma earnings per share (1)   $0.05 - $0.07     (1)  Forward looking guidance for the quarter ended June 26, 2004 is          provided only on a pro forma basis.  The comparable GAAP earnings or          loss per share amount is not accessible due to inherent difficulties          in predicting certain expenses and gains affecting GAAP earnings or          loss, such as the amount and timing of Sanmina-SCI's restructuring          costs, as well as debt security repurchases, if any, that could          result in gains or losses reported in GAAP earnings.