Electronics Production | July 26, 2007
Sanmina-SCI narrows loss
For the third quarter ended June 30, 2007, Sanmina-SCI reported revenue of $2.5 billion, down from $2.6 billion in the second quarter of fiscal 2007 ended March 31, 2007 and down from $2.7 billion reported in the third quarter of fiscal 2006 ended July 1, 2006.
For the third quarter of fiscal 2007, the Company reported a net loss of $22.8 million, compared to net income of $0.8 million in the second quarter. The reported loss for the quarter included $23.5 million tax related matters primarily attributable to the company's profitable operations which could not be offset by losses incurred at other operations within the company. The pre- tax loss was $2.4 million. Results for the third quarter were also adversely impacted by poor performance in the Company's components business as a result of weaker demand and operational efficiencies. Diluted loss per share for the quarter was $0.04, compared to break-even in the prior quarter. Operating income was $29.1 million or 1.2% of revenue, compared to $40.2 million, or 1.5% of revenue in the prior quarter and $69.1 million, or 2.6% of revenue in the same period a year ago. Gross profit was $120.3 million or 4.8%, versus $139.2 million, or 5.3% in the prior quarter. For the third quarter of fiscal 2007, the Company reported a net loss of $27.6 million, versus net loss of $26.1 million for the second quarter of fiscal 2007 and a net loss of $54.8 million for the same period a year ago. Cash flow from operations amounted to $240.7 million for the third quarter and $364.7 million fiscal year-to-date. Working capital ratios continued to strengthen as cash cycle days improved to 35 days, a 7 day improvement compared to the prior quarter. Inventory decreased $84.6 million compared to the prior quarter and was down approximately $185.8 million fiscal year-to- date. Inventory turns improved to 8.4x. During the quarter the Company paid down approximately $100 million of debt and as of June 30, 2007 reported $780.5 million in cash and cash equivalents, an increase of $116.4 million over the prior quarter and up $288.6 million fiscal year-to-date. At quarter-end, the Company also reported a current ratio of 1.9, working capital of $1.6 billion, and stockholders' equity of $2.3 billion. "We are clearly disappointed that our revenue and earnings results fell below our expectations for the quarter. These results were primarily impacted by continued weak demand and operational efficiencies in our components business. We remain focused on improving our component operations and anticipate that the recent addition of Walt Hussey as President of our Technology Components Group will help us get this business back on track. We are, however, pleased with the improvements in our cash flow from operations and working capital ratios. We expect to continue to generate positive cash flow from operations," stated Jure Sola, Chairman and Chief Executive Officer.