Celestica cut profit

The company has determined that the assumptions used in the second quarter to record a non-cash, deferred tax recovery relating to a tax benefit resulting from a previous year's write-down of an acquired and subsequently restructured Canadian operation were incorrect. An error in the cost basis for tax purposes of that Canadian acquisition led to the incorrect presumption that a tax benefit could be realized in the second quarter. Accordingly, deferred tax recovery and GAAP net earnings for the three and six months ended June 30, 2007 have been adjusteddownward by $44.1 million, respectively. Basic and diluted GAAP earnings per share for the three and six months ended June 30, 2007 have been adjusted from $0.11 and $(0.04), respectively to $(0.08) and $(0.23), respectively. The company has adjusted its prior period balances in accordance with accounting standards and is filing amended financial statements to reflect the change. The change to the deferred tax recovery has no impact on reported adjusted net earnings and adjusted net earnings per share for the second quarter of 2007 of $4.9 million or $0.02 per share, respectively, and has no impact on revenue, operating earnings or cash. (Adjusted net earnings is defined as net earnings before amortization of intangible assets, gains or losses on the repurchase of shares and debt, integration costs related to acquisitions, option expense, option exchange costs and other charges, net of tax and significant deferred tax write-offs or recovery).