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Electronics Production | April 25, 2007

Sanmina-SCI announce weak second quarter

For the second quarter ended March 31, 2007, Sanmina-SCI reported revenue of $2.61 billion, down from $2.78 billion in the first quarter of fiscal 2007 ended December 31, 2006 and modestly down from $2.67 billion reported in the second quarter of fiscal 2006 ended April 1, 2006.
Net income for the second fiscal quarter of 2007 was $793 thousand, down from the first quarter net income of $34.7 million. Diluted earnings per share for the quarter was break-even, compared to $0.07 in the prior quarter. Operating income was $40.2 million or 1.5% of revenue, compared to $70.6 million, or 2.5% of revenue in the prior quarter and $66.3 million, or 2.5% of revenue in the same period a year ago. Gross profit was $139.2 million or 5.3% of revenue, compared to $169.9 million, or 6.1% in the prior quarter. For the second quarter of fiscal 2007, the Company reported a net loss of $26.1 million, versus net income of $28.3 million for the first quarter fiscal 2007 and a net loss of $76.1 million for the same period a year ago. Diluted loss per share for the quarter was $0.05.

In the second quarter ended March 31, 2007, financial management ratios strengthened over the first quarter ended December 31, 2006 as inventory decreased $111.0 million from the prior quarter with inventory turns improving to 8.1x. Cash flow from operations was $134.3 million in the quarter. At March 31, 2007, the Company reported $664.1 million in cash and cash equivalents a $125.3 million increase over the prior quarter. At quarter-end, the Company also reported a current ratio of 1.4, working capital of $1.0 billion, and stockholders' equity of $2.3 billion.

"As previously announced, our second quarter revenues were below expectations. While the second quarter has historically been a seasonally weak quarter for us, profitability was further impacted by an unfavorable product-mix with a higher than anticipated decline in demand from the communications and high-end computing markets. Demand in the third quarter continues to be weaker than traditional levels, but we do see signs of improvement that should contribute positively in the second half of the calendar year," stated Jure Sola, Chairman and Chief Executive Officer.

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