SAN JOSE, Calif., Oct. 30, 2012 /PRNewswire/ -- Sanmina-SCI
Corporation ("Sanmina-SCI" or the "Company") (NASDAQ GS: SANM), a
leading integrated manufacturing solutions company, today reported
financial results for the fourth quarter and fiscal year ended
September 29, 2012.
(Logo:
http://photos.prnewswire.com/prnh/20110707/SF30965LOGO)
Fourth Quarter Fiscal 2012 Summary
- Revenue of $1.58 billion
- GAAP operating margin 2.0 percent
- GAAP diluted earnings per share of $1.96, includes non-recurring tax benefit of
$1.90(1)
- Non-GAAP(2) operating margin of 3.5 percent
- Non-GAAP diluted earnings per share of $0.46
Fiscal Year 2012 Summary
- Revenue of $6.09 billion
- GAAP diluted earnings per share of $2.16, includes non-recurring tax benefit of
$1.90(1)
- Non-GAAP diluted earnings per share of $1.26
Revenue for the fourth quarter was $1.58
billion, compared to $1.55
billion in the prior quarter and $1.70 billion for the same period of fiscal 2011.
Revenue for fiscal year ended September 29, 2012 was $6.09 billion, down 7.7 percent compared to
$6.60 billion for the fiscal year
ended October 1, 2011.
GAAP operating income in the fourth quarter was $32.2 million or 2.0 percent of revenue, compared
to $53.5 million or 3.2 percent of
revenue for the same period a year ago. GAAP operating income
for fiscal year 2012 was $137.5
million, compared to $212.0
million in fiscal year 2011. GAAP net income in the
fourth quarter was $164.2 million,
compared to $18.1 million for the
same period a year ago. GAAP diluted earnings per share for
the quarter was $1.96, compared to
$0.22 in the same period a year
ago. GAAP net income for fiscal year 2012 was $180.2 million, compared to $68.9 million in fiscal year 2011. GAAP
diluted earnings per share was $2.16,
compared to $0.83 in fiscal year
2011.
Non-GAAP operating income in the fourth quarter was $56.0 million or 3.5 percent of revenue, compared
to $70.4 million or 4.1 percent of
revenue for the same period a year ago. Non-GAAP operating
income for the full fiscal year was $194.8
million, compared to $257.9
million for fiscal year 2011. Non-GAAP net income in
the fourth quarter was $38.0 million,
compared to $38.7 million for the
same period a year ago. Non-GAAP diluted earnings per share
was $0.46, compared to $0.47 in the fourth quarter 2011. Non-GAAP
net income for the full fiscal year was $105.3 million, compared to $136.0 million for fiscal year 2011. Fiscal
year 2012 non-GAAP diluted earnings per share was $1.26, compared to $1.64 in fiscal 2011.
Cash and cash equivalents for the quarter ended September 29, 2012 were $409.6 million. Cash flow from operations
was $121.1 million for the quarter
and $215.4 million for the full year.
Inventory turns were 7.1x. Cash cycle days were 51.9
days.
"I am pleased with our fourth quarter results and what we
accomplished in fiscal 2012 despite the challenging economic
environment. Modest revenue growth and expanded
operating margins in the quarter were in line with our
expectations. We generated very strong cash flow from operations of
$121 million for the quarter and
$215 million for the fiscal year,"
stated Jure Sola, Chairman and Chief
Executive Officer.
"We continue to invest in leading technology, products and
services which offer a distinct advantage to our customers.
We have the right strategy in place, with a strong customer base
and we are uniquely positioned for the future," Sola continued.
"Our first quarter fiscal 2013 guidance reflects continued
uncertainty in the market. Though the macro-environment is
challenging, we have taken action to position us for improved
performance in fiscal 2013," concluded Sola.
First Quarter Fiscal 2013 Outlook
The following forecast is for the first fiscal quarter ending
December 29, 2012. These
statements are forward-looking and actual results may differ
materially.
- Revenue between $1.5 billion to $1.55
billion
- Non-GAAP diluted earnings per share between $0.31 to $0.37
Restructuring Activities
Sanmina-SCI also announced a restructuring plan which impacts
two of its manufacturing facilities. This action will improve
the Company's operational cost structure, flexibility and capacity
utilization. As a result of this plan, the Company has
recorded charges in its fourth quarter of approximately
$11.9 million, consisting of
severance pay for affected employees and related asset
impairments. A total of $9.3
million of such expenses are expected to be cash and
$2.6 million are expected to be
non-cash in nature. Sanmina-SCI expects to complete the
actions being taken under the plan in fiscal 2013. The
Company will continue to evaluate its plans and further
restructuring actions may occur, which may cause the Company to
incur additional restructuring charges relating to this plan.
Upcoming Investor and Analyst Day
Sanmina-SCI will host an Investor and Analyst Day on
Thursday, November 15, 2012 in
New York, NY. The event will
begin at 9:00 a.m. ET and
conclude at approximately 1:00 p.m.
ET. Jure Sola, Chairman
and Chief Executive Officer, along with members of the management
team will provide a closer look into the Company's business units
and initiatives.
Financial analysts and institutional investors who are
interested in attending the event should contact Paige Bombino at (408) 964-3610 or email
paige.bombino@sanmina-sci.com. For other interested parties,
a webcast will be available on the company website at
www.sanmina-sci.com, in the investor relations section.
(1)Based on all available evidence, management
has concluded that it is more-likely-than-not that the Company will
realize a significant portion of its U.S. deferred tax assets, and
has therefore partially released the valuation allowance against
U.S. deferred tax assets.
(2)In the commentary set forth above and/or in
the financial statements included in this earnings release, we
present the following non-GAAP financial measures: operating
income, operating margin, net income and diluted earnings per
share. In computing each of these non-GAAP financial
measures, we exclude charges or gains relating to: stock-based
compensation expenses, restructuring costs (including employee
severance and benefits costs and charges related to excess
facilities and assets), acquisition and integration costs
(consisting of costs associated with the acquisition and
integration of acquired businesses into our operations), impairment
charges for goodwill and other assets, amortization expense and
other infrequent or unusual items (including charges associated
with distressed customers, litigation settlements, gains and losses
on sales of assets and redemptions of debt and discrete tax
events), to the extent material or which we consider to be of a
non-operational nature in the applicable period. See
Schedule 1 below for more information regarding our use of non-GAAP
financial measures, including the economic substance behind each
exclusion, the manner in which management uses non-GAAP measures to
conduct and evaluate the business, the material limitations
associated with using such measures and the manner in which
management compensates for such limitations. A reconciliation from
GAAP to non-GAAP results is included in the financial statements
contained in this release and is also available on the Investor
Relations section of our website at www.sanmina-sci.com.
Sanmina-SCI provides first quarter fiscal 2013 outlook only
on a non-GAAP basis due to the inherent uncertainties associated
with forecasting the timing and amount of acquisitions,
restructuring, impairment and other unusual and infrequent
items.
Company Conference Call Information
Sanmina-SCI will hold a conference call regarding results for
the fourth quarter fiscal year 2012 on Wednesday, October 31, 2012 at 8:30 a.m. ET (5:30 a.m.
PT). The access numbers are: domestic 877-273-6760 and
international 706-634-6605. The conference will also be
broadcast live over the Internet. You can log on to the live
webcast at www.sanmina-sci.com. Additional information in the
form of a slide presentation is available by logging onto
Sanmina-SCI's website at www.sanmina-sci.com. A replay of the
conference call will be available for 48-hours. The access
numbers are: domestic 855-859-2056 and international 404-537-3406,
access code is 53864373.
About Sanmina-SCI
Sanmina-SCI Corporation is a leading integrated manufacturing
solutions provider serving the fastest-growing segments of the
global Electronics Manufacturing Services (EMS) market. Recognized
as a technology leader, Sanmina-SCI provides end-to-end
manufacturing solutions, delivering superior quality and support to
OEMs primarily in the communications, defense and aerospace,
industrial and semiconductor systems, medical, multimedia,
enterprise computing and storage, automotive and clean technology
sectors. Sanmina-SCI has facilities strategically located in key
regions throughout the world. More information regarding the
company is available at www.sanmina-sci.com.
Sanmina-SCI Safe Harbor Statement
Certain statements contained in this press release, including
the Company's outlook for future revenue and non-GAAP earnings per
share, constitute forward-looking statements within the meaning of
the safe harbor provisions of Section 21E of the Securities
Exchange Act of 1934. Actual results could differ materially from
those projected in these statements as a result of a number of
factors, including a deterioration in the markets for the Company's
customers' products; inability of customers to pay for the
Company's products due to bankruptcy filings or otherwise, which
could reduce the Company's revenues, margins and net income;
reduction or cancelation of customer orders that would reduce
revenues, margins and net income ; the sufficiency of the
Company's cash position and other sources of liquidity to operate
and expand its business; an increase in short-term interest rates
that would increase the Company's interest expense; component
shortages, which could result in production delays or increases in
manufacturing costs; competition negatively impacting the Company's
revenues and margins; the need to adopt future restructuring plans
as a result of changes in the Company's business, which would
increase the Company's costs and decrease its net income; and the
other factors set forth in the Company's annual and quarterly
reports filed with the Securities Exchange Commission ("SEC").
The Company is under no obligation to (and expressly disclaims
any such obligation to) update or alter any of the forward-looking
statements made in this earnings release, the conference call or
the Investor Relations section of our website whether as a result
of new information, future events or otherwise, unless otherwise
required by law.
SANMF
Sanmina-SCI Corporation
|
Condensed Consolidated Balance
Sheets
|
(In
thousands)
|
(GAAP)
|
|
|
|
|
|
|
September
29,
|
|
October
1,
|
|
|
|
|
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
Cash and
cash equivalents
|
|
|
$
409,618
|
|
$
640,288
|
|
Accounts
receivable, net
|
|
|
1,001,543
|
|
1,014,121
|
|
Inventories
|
|
|
|
826,539
|
|
891,325
|
|
Prepaid
expenses and other current assets
|
|
88,599
|
|
83,512
|
|
|
Total
current assets
|
|
|
2,326,299
|
|
2,629,246
|
|
|
|
|
|
|
|
|
|
Property,
plant and equipment, net
|
|
|
569,365
|
|
588,097
|
Other
non-current assets
|
|
|
272,122
|
|
136,630
|
|
|
Total
assets
|
|
|
$
3,167,786
|
|
$
3,353,973
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Accounts
payable
|
|
|
$
937,737
|
|
$
984,014
|
|
Accrued
liabilities
|
|
|
104,741
|
|
109,478
|
|
Accrued
payroll and related benefits
|
|
117,074
|
|
112,193
|
|
Short-term
debt
|
|
|
59,995
|
|
60,200
|
|
|
Total
current liabilities
|
|
|
1,219,547
|
|
1,265,885
|
|
|
|
|
|
|
|
|
|
Long-term
liabilities:
|
|
|
|
|
|
|
Long-term
debt
|
|
|
837,364
|
|
1,182,308
|
|
Other
|
|
|
|
147,094
|
|
135,263
|
|
|
Total
long-term liabilities
|
|
|
984,458
|
|
1,317,571
|
|
|
|
|
|
|
|
|
|
Total
stockholders' equity
|
|
|
963,781
|
|
770,517
|
|
|
Total
liabilities and stockholders' equity
|
|
$
3,167,786
|
|
$
3,353,973
|
Sanmina-SCI Corporation
|
Condensed Consolidated Statements of
Operations
|
(In
thousands, except per share amounts)
|
(GAAP)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
Twelve
Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
Sept.
29,
|
|
Oct.
1,
|
|
Sept.
29,
|
|
Oct.
1,
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
|
|
Net
sales
|
$
1,578,584
|
|
$
1,696,702
|
|
$
6,093,334
|
|
$
6,602,411
|
Cost of
sales
|
1,463,427
|
|
1,562,830
|
|
5,657,552
|
|
6,092,060
|
|
Gross
profit
|
115,157
|
|
133,872
|
|
435,782
|
|
510,351
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Selling,
general and administrative
|
57,817
|
|
59,401
|
|
240,863
|
|
247,127
|
|
Research
and development
|
6,256
|
|
5,925
|
|
21,899
|
|
20,802
|
|
Amortization of intangible assets
|
672
|
|
956
|
|
3,067
|
|
3,831
|
|
Restructuring and integration costs
|
17,899
|
|
13,724
|
|
31,371
|
|
29,609
|
|
Asset
impairment
|
313
|
|
365
|
|
2,390
|
|
450
|
|
Gain on
sales of long-lived assets
|
-
|
|
-
|
|
(1,298)
|
|
(3,465)
|
|
Total operating
expenses
|
82,957
|
|
80,371
|
|
298,292
|
|
298,354
|
|
|
|
|
|
|
|
|
|
Operating
income
|
32,200
|
|
53,501
|
|
137,490
|
|
211,997
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
330
|
|
371
|
|
1,425
|
|
1,861
|
|
Interest
expense
|
(13,383)
|
|
(21,341)
|
|
(71,744)
|
|
(99,114)
|
|
Other
expense, net
|
(4,034)
|
|
(3,717)
|
|
(17,228)
|
|
(15,206)
|
Interest
and other, net
|
(17,087)
|
|
(24,687)
|
|
(87,547)
|
|
(112,459)
|
|
|
|
|
|
|
|
|
|
Income
before income taxes
|
15,113
|
|
28,814
|
|
49,943
|
|
99,538
|
|
|
|
|
|
|
|
|
|
Provision
for (Benefit from) income taxes
|
(149,037)
|
|
10,726
|
|
(130,291)
|
|
30,621
|
|
|
|
|
|
|
|
|
|
Net
income
|
$
164,150
|
|
$
18,088
|
|
$
180,234
|
|
$
68,917
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
income per share
|
$
2.01
|
|
$
0.22
|
|
$
2.22
|
|
$
0.86
|
|
Diluted
income per share
|
$
1.96
|
|
$
0.22
|
|
$
2.16
|
|
$
0.83
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares used in
computing per share amounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
81,578
|
|
80,713
|
|
81,284
|
|
80,345
|
|
Diluted
|
83,556
|
|
82,729
|
|
83,495
|
|
83,158
|
|
|
|
|
|
|
|
|
|
|
|
|
Sanmina-SCI Corporation
|
Reconciliation of GAAP to Non-GAAP
Measures
|
(in
thousands, except per share amounts)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
Twelve
Months Ended
|
|
|
|
Sept.
29,
|
|
June
30,
|
|
Oct.
1,
|
|
Sept.
29,
|
|
Oct.
1,
|
|
|
|
2012
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Gross
Profit
|
|
$
115,157
|
|
$
105,252
|
|
$
133,872
|
|
$
435,782
|
|
$
510,351
|
|
GAAP
gross margin
|
|
7.3%
|
|
6.8%
|
|
7.9%
|
|
7.2%
|
|
7.7%
|
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
Stock
compensation expense (1)
|
|
1,908
|
|
706
|
|
905
|
|
4,504
|
|
4,730
|
|
Amortization of intangible assets
|
|
-
|
|
-
|
|
156
|
|
104
|
|
627
|
|
Distressed
customer charges (recoveries) (2)
|
|
-
|
|
-
|
|
(2,332)
|
|
325
|
|
(3,091)
|
Non-GAAP Gross Profit
|
|
$
117,065
|
|
$
105,958
|
|
$
132,601
|
|
$
440,715
|
|
$
512,617
|
|
Non-GAAP gross margin
|
|
7.4%
|
|
6.8%
|
|
7.8%
|
|
7.2%
|
|
7.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
Operating Income
|
|
$
32,200
|
|
$
35,394
|
|
$
53,501
|
|
$
137,490
|
|
$
211,997
|
|
GAAP
operating margin
|
|
2.0%
|
|
2.3%
|
|
3.2%
|
|
2.3%
|
|
3.2%
|
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
Stock
compensation expense (1)
|
|
4,879
|
|
4,527
|
|
4,002
|
|
17,999
|
|
17,983
|
|
Amortization of intangible assets
|
|
672
|
|
672
|
|
1,112
|
|
3,171
|
|
4,458
|
|
Distressed
customer charges (recoveries) (2)
|
|
-
|
|
-
|
|
(2,332)
|
|
2,794
|
|
(3,091)
|
|
Restructuring, acquisition and integration
costs
|
|
17,899
|
|
4,834
|
|
13,724
|
|
32,273
|
|
29,609
|
|
Gain on
sales of long-lived assets
|
|
-
|
|
(1,298)
|
|
-
|
|
(1,298)
|
|
(3,485)
|
|
Asset
impairment
|
|
313
|
|
-
|
|
365
|
|
2,390
|
|
450
|
Non-GAAP Operating Income
|
|
$
55,963
|
|
$
44,129
|
|
$
70,372
|
|
$
194,819
|
|
$
257,921
|
|
Non-GAAP operating margin
|
|
3.5%
|
|
2.8%
|
|
4.1%
|
|
3.2%
|
|
3.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Net
Income
|
|
$
164,150
|
|
$
8,948
|
|
$
18,088
|
|
$
180,234
|
|
$
68,917
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income adjustments (see above)
|
|
23,763
|
|
8,735
|
|
16,871
|
|
57,329
|
|
45,924
|
|
Loss on
repurchase of debt (3)
|
|
6,240
|
|
4,236
|
|
-
|
|
16,937
|
|
16,098
|
|
Nonrecurring tax items
|
|
(156,114)
|
|
(16)
|
|
3,711
|
|
(149,231)
|
|
5,066
|
Non-GAAP Net Income
|
|
$
38,039
|
|
$
21,903
|
|
$
38,670
|
|
$
105,269
|
|
$
136,005
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
Income Per Share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
2.01
|
|
$
0.11
|
|
$
0.22
|
|
$
2.22
|
|
$
0.86
|
|
Diluted
|
|
$
1.96
|
|
$
0.11
|
|
$
0.22
|
|
$
2.16
|
|
$
0.83
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Income Per Share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
0.47
|
|
$
0.27
|
|
$
0.48
|
|
$
1.30
|
|
$
1.69
|
|
Diluted
|
|
$
0.46
|
|
$
0.26
|
|
$
0.47
|
|
$
1.26
|
|
$
1.64
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares used in computing per share
amounts:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
81,578
|
|
81,519
|
|
80,713
|
|
81,284
|
|
80,345
|
|
Diluted
|
|
83,556
|
|
83,566
|
|
82,729
|
|
83,495
|
|
83,158
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Stock
compensation expense was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
Twelve
Months Ended
|
|
|
|
Sept.
29,
|
|
June
30,
|
|
Oct.
1,
|
|
Sept.
29,
|
|
Oct.
1,
|
|
|
|
2012
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
Cost of
sales
|
|
$
1,908
|
|
$
706
|
|
$
905
|
|
$
4,504
|
|
$
4,730
|
|
Selling,
general and administrative
|
|
2,921
|
|
3,793
|
|
3,072
|
|
13,363
|
|
13,070
|
|
Research
and development
|
|
50
|
|
28
|
|
25
|
|
132
|
|
183
|
|
Stock
compensation expense - total company
|
|
$
4,879
|
|
$
4,527
|
|
$
4,002
|
|
$
17,999
|
|
$
17,983
|
|
|
|
|
|
|
|
|
|
|
|
|
(2)
|
Relates to
inventory and bad debt reserves / recoveries associated with
distressed customers.
|
|
|
|
|
|
|
|
|
|
|
|
|
(3)
|
Represents
a loss, including write-off of unamortized debt issuance costs, on
debt redeemed or repurchased prior to maturity.
|
Schedule I
The commentary above includes non-GAAP measures of operating
income, operating margin, net income and earnings per share.
Management excludes from these measures stock-based compensation,
restructuring, acquisition and integration expenses, impairment
charges, amortization charges and other infrequent items, including
distressed customer impacts, to the extent material or which we
consider to be of a non-operational nature in the applicable
period.
Management excludes these items principally because such charges
are not directly related to the Company's ongoing core business
operations. We use such non-GAAP measures in order to (1) make more
meaningful period-to-period comparisons of Company's operations,
both internally and externally, (2) guide management in assessing
performance of the business, internally allocating resources and
making decisions in furtherance of Company's strategic plan, (3)
provide investors with a better understanding of how management
plans and measures the business and (4) provide investors with a
better understanding of the ongoing, core business. The material
limitations to management's approach include the fact that the
charges and expenses excluded are nonetheless charges required to
be recognized under GAAP. Management compensates for these
limitations primarily by using GAAP results to obtain a complete
picture of the Company's performance and by including a
reconciliation of non-GAAP results back to GAAP in its earnings
releases.
Additional information regarding the economic substance of each
exclusion, management's use of the resultant non-GAAP measures, the
material limitations of management's approach and management's
methods for compensating for such limitations is provided
below.
Stock-based Compensation Expense, which consists of
non-cash charges for the estimated fair value of stock options and
unvested restricted stock units granted to employees, is excluded
in order to permit more meaningful period-to-period comparisons of
the Company's results since the Company grants different amounts
and value of stock options in each quarter. In addition, given the
fact that competitors grant different amounts and types of equity
award and may use different option valuation assumptions, excluding
stock-based compensation permits more accurate comparisons of the
Company's core results with those of its competitors.
Restructuring, Acquisition and Integration Expenses,
which consist of severance, lease termination, exit costs and other
charges primarily related to closing and consolidating
manufacturing facilities and those associated with the acquisition
and integration of acquired businesses, are excluded because such
charges (1) can be driven by the timing of acquisitions which are
difficult to predict, (2) are not directly related to ongoing
business results and (3) do not reflect expected future operating
expenses. In addition, given the fact that the Company's
competitors complete acquisitions and adopt restructuring plans at
different times and in different amounts than the Company,
excluding these charges permits more accurate comparisons of the
Company's core results with those of its competitors. Items
excluded by the Company may be different from those excluded by the
Company's competitors and restructuring and integration expenses
include both cash and non-cash expenses. Cash expenses reduce the
Company's liquidity. Therefore, management also reviews GAAP
results including these amounts.
Impairment Charges, which consist of non-cash charges,
are excluded because such charges are non-recurring and do not
reduce the Company's liquidity. In addition, given the fact that
the Company's competitors may record impairment charges at
different times, excluding these charges permits more accurate
comparisons of the Company's core results with those of its
competitors.
Amortization Charges, which consist of non-cash charges
impacted by the timing and magnitude of acquisitions of businesses
or assets, are also excluded because such charges do not reduce the
Company's liquidity or availability under its credit facilities. In
addition, such charges can be driven by the timing of acquisitions,
which is difficult to predict. Excluding these charges permits more
accurate comparisons of the Company's core results with those of
its competitors because the Company's competitors complete
acquisitions at different times and for different amounts than the
Company.
Other Items, which consist of other infrequent or unusual
items (including charges associated with distressed customers ,
litigation settlements, gains and losses on sales of assets and
redemptions of debt and discrete tax events), to the extent
material or non-operational in nature, are excluded because such
items are typically non-recurring, difficult to predict or not
directly related to the Company's ongoing core operations. However,
items excluded by the Company may be different from those excluded
by the Company's competitors. In addition, these expenses include
both cash and non-cash expenses. Cash expenses reduce the Company's
liquidity. Management compensates for these limitations by
reviewing GAAP results including these amounts.
SOURCE Sanmina-SCI Corporation