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Electronics Production | January 22, 2009

Sanmina-SCI post loss in Q1

Revenue for the 1Q/2009 (ending December 27, 2008) was $1.42 billion, compared to $1.78 billion in the same period a year ago. Revenue in the quarter was impacted by weakening market conditions across all the company's end-markets.
Non-GAAP gross profit in the first quarter was $95.9 million, or 6.7% of revenue, compared to gross profit of $130.9 million, or 7.4% of revenue, in the first quarter a year ago. Non-GAAP operating income was $31.2 million, or 2.2% of revenue in the quarter, compared to $41.1 million, or 2.3% of revenue, in the same period a year ago.

GAAP net loss in the first quarter was ($25.3) million, compared to a net loss of ($9.5) million, in the same period a year ago.

GAAP results for the first quarter were negatively impacted by the recent filings for bankruptcy reorganization by Nortel Networks and its affiliates in the United States and in various foreign jurisdictions. While these proceedings are in the early stages, the company estimated and recorded $10 million of charges in the quarter related thereto. As these proceedings develop, new factors may come to light that could materially change these estimates and require the company to record additional charges, or credits. (The company's non-GAAP results have excluded these charges.)

As of December 27, 2008, the ending cash and cash equivalents were $796.8 million compared to $869.8 million for the year ending September 27, 2008.

"We continue to experience weak demand and limited visibility across all of our market segments. To offset this decline, we remain focused on our efforts to reduce cost, improve operating efficiencies and deliver innovative technologies and solutions that offer value to our customers."

"Sanmina-SCI is financially sound with a strong cash position, adequate liquidity and a healthy debt maturity profile to weather these challenging market conditions. We have learned from our experience of difficult times in the past and are confident we will emerge as an operationally and financially stronger company when market conditions normalize," stated Jure Sola, Chairman and Chief Executive Officer.

Fiscal Second Quarter 2009 Goals
During this period of economic uncertainty, the company cannot confidently provide a meaningful range of guidance estimates as to its projected financial performance. However, the company's internal plans for its second quarter fiscal 2009 are for revenue of approximately $1.3 billion, non-GAAP earnings per share to be break-even and to generate positive free cash flow.

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