Sanmina-SCI announce first quater results
Jan 22, 2003
Sanmina-SCI Corporation (NASDAQ NM: SANM), a leading supplier of integrated design and electronics manufacturing solutions (EMS), reported financial results for its first quarter ended December 28, 2002. Results for the quarter ended December 29, 2001 are stated on a proforma basis to reflect the company’s December 6, 2001 acquisition of SCI Systems, Inc for the full quarter. First quarter fiscal 2003 highlights include:* COMPANY MEETS REVENUE GUIDANCE AT $2.5 BILLION* CASH EARNINGS PER SHARE OF $0.01, EXCLUDING CHARGES, IN LINE WITH GUIDANCE* CASH FLOW FROM OPERATIONS APPROXIMATELY $123 MILLION* CASH CYCLE DAYS IMPROVE TO 41 DAYS, INVENTORY TURNS RISE TO 9 TURNS* APPROXIMATELY $160 MILLION OF CONVERTIBLE DEBT REPURCHASED* $1.025 BILLION FINANCING COMPLETED* COMPANY EXPANDS MARKET LEADERSHIP IN KEY TECHNOLOGY SECTORSFor the first quarter ended December 28, 2002, Sanmina-SCI reported revenues of $2.537 billion, compared to proforma (giving the effect to the combination of Sanmina and SCI) revenues of $2.406 billion for the first quarter ended December 29, 2001. Proforma net income for the first quarter this year was $1.380 million, or $0.01 diluted cash earnings per share. This compares to proforma net income of $7.302 million, or $0.03 diluted cash earnings per share for first quarter last year. Proforma financial results do not include merger and integration, restructuring and other infrequent or unusual charges.Company Further Strengthens Balance Sheet, Completes Financing, Extends the Average Maturity of Debt and Reduces the Outstanding Amounts of its Convertible BondsFor the quarter ended December 28, 2002, Sanmina-SCI reported $1.6 billion in cash and short-term investments. Cash provided by operations this quarter was approximately $123 million. The company continues to improve cash cycle days and increase inventory turns. At December 28, 2002, cash cycle days were reduced to 41 days, and inventory turns increased to 9.0 turns. At quarter-end, the company had a current ratio of 2.4, working capital of $2.6 billion and shareholders’ equity of $3.4 billion.During the quarter, the company repurchased at a discount approximately $151 million of its 4_% Convertible Notes, Zero Coupon Convertible Subordinated Notes and 3% Convertible Notes (convertible debt). After taking into account interest accruals associated with the Zero Coupon Subordinated Notes, upon exercise of redemption rights by Zero Coupon Note holders, the debt reduction of the convertible debt was approximately $160 million. Since the beginning of September the company has reduced its shorter term bond debt coming due in 2004 and 2005 approximately $337 million, or approximately 27%. The balance sheet reflects the company's completion of $1.025 billion in financing, including an offering of $750 million in senior secured notes in a private placement to qualified investors and a $275 million senior secured credit facility.Company Expands Market Leadership in Target MarketsJure Sola, Chairman and Chief Executive Officer of Sanmina-SCI, said, "We continue to focus our resources on increasing our market leadership in our target markets. As a result of our commitment to advanced technology and manufacturing excellence, another of our quick-turn assembly and volume manufacturing facilities has been certified by the military. During the quarter, we also announced the acquisition of an Israeli manufacturer of high-end complex medical systems and other high-end industrial products, expanding our capabilities in the global medical technology industry. This facility enables us to deliver leading-edge CT and nuclear medicine systems to key OEM’s globally."In addition to the defense and medical markets, we are also capitalizing on growth opportunities within the computing sector. In early January, we announced an expanded strategic partnership with IBM. The agreement expands the range of manufacturing services Sanmina-SCI provides IBM in North America and Europe. Sanmina-SCI is now positioned to be the leading EMS provider in the global server manufacturing and distribution market."Commenting further, Sola said, "In addition to expanding our growth opportunities, which have diversified our revenues, we have also further rationalized our operations, realigning our operations to be market focused. We believe our market-focus strategy will increase our operating efficiencies and enable us to better serve our customers from the early stage of product development to volume production. The goal in everything we do is customer satisfaction."Although the market continues to be challenging, we believe by emphasizing excellence in performance and by providing our customers innovative, cost-effective solutions and superb global supply management, Sanmina-SCI is solidifying its industry leadership."Company OutlookSanmina-SCI projects second quarter fiscal 2003 revenue to be approximately $2.3 to $2.5 billion, and cash earnings per share to be between ($0.01) to $0.01 before merger, restructuring and other infrequent or unusual charges, and after adjustment for financing costs. Company Conference Call InformationSanmina-SCI will be holding a conference call regarding this announcement on Tuesday, January 21, 2003 at 5:00 p.m. EDT (2:00 p.m. PDT). Dial-in numbers for the teleconference: domestic 877-273-6760; international 706-634-6605. The conference will also be broadcast live over the Internet. Log onto the live webcast at http://www.firstcallevents.com/service/ajwz371866546gf12.html.A replay of the conference call will be available for 48 hours. The access numbers are: domestic 800-642-1687, international 706-645-9291, and conference ID 7519999.