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| Solectron Reports First-Quarter Results in Line With Guidance |
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Solectron (www.solectron.com), the world's leading supply-chain facilitator, provides a full range of manufacturing and supply-chain management services to the world's premier high-tech electronics companies. Solectron's offerings include new-product design and introduction services, materials management, high-tech product manufacturing, and product warrantyand end-of-life support. Solectron, based in Milpitas, Calif., is the first two-time winner of the Malcolm Baldrige National Quality Award for manufacturing. (PRNewsFoto)[AG JL] MILPITAS, CA USA | |||
MILPITAS, Calif., Dec. 18 /PRNewswire/ -- Solectron Corporation (NYSE: SLR), the world's leading provider of electronics manufacturing and supply-chain management services, today reported fiscal first-quarter sales of $3.2 billion and cash earnings per share* of 5 cents. These results are consistent with the guidance the company had provided. (Photo: http://www.newscom.com/cgi-bin/prnh/20001201/SLRLOGO ) Separately, the company issued three additional releases today discussing planned changes in its capital structure, plans to raise new capital and Solectron's intention to use cash to settle the 2019 zero-coupon senior convertible notes that holders may require us to repurchase in January. In the quarter ended Nov. 30, the company reported a net loss of $52.5 million, or 8 cents per diluted share. During the quarter, Solectron incurred restructuring charges of $72.9 million, or 8 cents per share, after tax. In the same period last year, Solectron had sales of $5.7 billion, cash EPS of 31 cents, net income of $190.6 million and net income per diluted share of 29 cents. "We made good progress on a number of fronts during the quarter," said Koichi Nishimura, Solectron chairman, president and chief executive officer. "Our inventory levels decreased by more than $450 million, our cash balance increased to $2.9 billion and we continued taking tough actions to align our cost structure with current revenue levels. These actions, which include reducing employment levels and production capacity, are painful but necessary to keep the company healthy. "We remain cautious about the near-term direction of the economy and its impact on the end markets we serve. While we expect second-quarter sales to be influenced by this environment and typical seasonal softness, we are optimistic about the prospect of stronger sales in the second half of the year, driven by new business wins," he said. "For the second quarter, we expect sales of $2.7 billion to $3.2 billion and EPS of break-even to a 3-cent loss per diluted share, before restructuring and one-time charges." The company said its second-quarter guidance equates to expected cash EPS of 1 to 4 cents. In the first quarter, Solectron had several new business wins, including agreements to provide: -- Build-to-order/configure-to-order manufacturing, final test and fulfillment for service, workstation and storage products for NEC Corporation in Japan; -- Quality assurance and repair services for Microsoft's new Xbox game console; -- Manufacturing, test and systems assembly for ARRIS; and -- Design support, prototype, pilot and volume manufacturing for wireless data products from Sierra Wireless. Webcast To Be Held This Morning At 8 a.m. EST today, Solectron will hold a conference call to discuss this earnings report. A live Internet broadcast of the conference call can be joined by going to http://www.videonewswire.com/event.asp?id=2455 . Following the live broadcast, replays of the call will be available at http://www.solectron.com. In addition, audio replays of the call will be available from 11 a.m. EST Tuesday through 11 a.m. EST Jan. 1. To access the audio replay, call 800-633-8284 in the United States or 858-812-6440 from outside the United States. In both cases specify reservation number 20048102. Earnings Release Dates Solectron plans to announce fiscal 2002 second-quarter results Thursday, March 21; third-quarter results Thursday, June 20; and fourth-quarter results Monday, Sept. 23. All monetary amounts are stated in U.S. dollars. * Cash earnings per share (EPS) is presented as supplemental information for illustrative purposes only and is not prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP). It is intended to help investors understand the earnings impact of certain non-cash items, restructuring and impairment costs and other one-time and non-recurring charges, and zero-coupon convertible debt. The weighted average number of shares used to calculate cash EPS is based on the weighted average number of shares used to calculate diluted net income (loss) per share adjusted for the assumed conversion of convertible debt, except the 2019 notes, when not already presumed. A following table reconciles cash EPS with diluted EPS. ** Diluted EPS is the per-diluted-share calculation of net income (loss) as defined under U.S. Generally Accepted Accounting Principles (GAAP). About Solectron Solectron (http://www.solectron.com) provides a full range of global manufacturing and supply-chain management services to the world's premier high-tech electronics companies. Solectron's offerings include new-product design and introduction services, materials management, high-tech product manufacturing, and product warranty and end-of-life support. Solectron, based in Milpitas, Calif., is the first two-time winner of the Malcolm Baldrige National Quality Award. The company had sales of $18.7 billion in fiscal 2001. Safe Harbor This news release contains forward-looking statements regarding our outlook for the future, including the reference proposed offerings, our financial outlook for the second quarter, our expectations regarding stronger sales in the second half of the fiscal year, and our new business wins. Our statements are based on current expectations, forecasts and assumptions involving risks and uncertainties that could cause actual outcomes and results to differ materially. These risks and uncertainties include the length and severity of the current economic downturn overall and in the electronics technology sector; our ability to manage customer demand through the downturn; the ability to effectively integrate recent acquisitions, including Iphotonics, Stream International and C-MAC Industries; the impact of events occurring Sept. 11, 2001; the risk of price fluctuation; reliance on major customers; fluctuations in operating results; changes in technology; competition; risks associated with international sales and operations; interest rate risk; environmental regulations; market risk; segment risk; the ability to retain key personnel; and intellectual property rights enforcement. For a further list and description of risks and uncertainties, see the reports filed by Solectron with the Securities and Exchange Commission, specifically forms 8-K, 10-Q, S-3, S-4 and 10-K. Solectron disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Supplemental information, consolidated statements of income and consolidated balance sheets follow. CONTACT: analysts, Thomas Alsborg, +1-408-956-6614, or thomasalsborg@ca.slr.com, or media, Kevin Whalen, +1-408-956-6854, or kevinwhalen@ca.slr.com, both of Solectron Corporation. Selected Financial Data Analytical Data (Dollars in millions) Q1 - FY02 Q4 - FY01 Q1 - FY01 Net Sales $3,152.2 $3,594.9 $5,695.5 Sales by Region Americas $1,505.2 $1,993.0 $3,545.7 Asia/Pacific $1,096.0 $1,015.8 $1,021.0 Europe $551.0 $586.1 $1,128.8 Sales by Business Unit Technology Solutions $154.5 $186.4 $495.5 Manufacturing & Operations $2,855.9 $3,320.7 $5,137.3 Printed Circuit Board 73.8% 70.8% 78.2% Systems 26.2% 29.2% 21.8% Global Services $141.8 $87.8 $62.7 Sales % by Market Segment Networking Equipment 26.3 20.4 28.7 Mobile Communications 11.3 13.2 12.4 Telecommunications 16.3 18.3 22.0 PCs/Notebooks 20.6 22.8 9.4 Computer Peripherals 4.5 4.5 6.7 Workstations & Servers 5.5 5.7 7.7 Other 15.5 15.1 13.1 Earnings Per Share Summary Q1 - FY02 Q4 - FY01 Q1 - FY01 Cash EPS* $0.05 $0.06 $0.31 Diluted EPS** $(0.08) $(0.38) $0.29 Diluted EPS before acquisition, restructuring and impairment charges $0.00 $(0.10) $0.29 Asset Management Metrics (Dollars in millions) Q1 - FY02 Q4 - FY01 Cash, cash equivalents and short-term investments $2,886.8 $2,790.0 Inventories $2,751.5 $3,209.9 Inventory turns 4.0 3.7 Accounts receivable, net $2,013.8 $2,443.5 Days sales outstanding 64 61 Q1 FY02 Q4 FY01 Q1 FY01 Net (loss) income $(52.5) $(225.8)* $190.6 Restructuring and acquisition costs net of tax $51.7 $138.7 -- Credit reserve and other one time cost net of tax -- $44.2 -- Goodwill amortization, net of tax -- $49.0 $0.9 Intangible asset amortization, net of tax $14.5 $13.3 $10.3 Non-cash interest expense net of tax $22.3 $23.7 $17.0 Cash earnings $36.0 $43.1 $218.8 Shares used for cash earnings per share 753,923 773,379 709,093 Cash earnings per share $0.05 $0.06 $0.31 * Net loss at 33 percent tax rate. Selected Financial Data (Dollars in millions) Q1 - FY02 Q4 - FY01 Amortization of goodwill -- $53.8 Amortization of other intangible assets $20.6 $18.9 Capital expenditures $62.7 $81.9 Depreciation expense $82.0 $73.6 Consolidated statements of income and balance sheets follow. SOLECTRON CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF OPERATIONS (US$ in millions, except per share data) Three Months Ended November 30, December 1, 2001 2000 Net sales $3,152.2 $5,695.5 Cost of sales 2,951.1 5,210.8 Gross profit 201.1 484.7 Operating expenses: Selling, general and administrative 164.2 190.3 Research and development 12.5 18.0 Restructuring and impairment costs 72.9 -- Operating (loss) income (48.5) 276.4 Interest income 19.9 36.6 Interest expense (42.7) (32.7) (Loss) income before income taxes and cumulative effect (71.3) 280.3 of change in accounting principle Income taxes (20.8) 89.7 (Loss) income before extraordinary loss (50.5) 190.6 principle Extraordinary Loss, net of income tax (2.0) -- Net (loss) income $(52.5) $190.6 Basic net (loss) income per share: (Loss) income before extraordinary loss $(0.08) $0.31 Extraordinary Loss, net of income tax -- -- Net (loss) income per share $(0.08) $0.31 Diluted net (loss) income per share: (Loss) income before extraordinary loss $(0.08) $0.29 Extraordinary Loss, net of income tax -- -- Net (loss) income per share $(0.08) $0.29 Weighted average number of shares: Basic 663.7 610.3 Diluted 663.7 709.1 SOLECTRON CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (US$ in millions) November 30, August 31, 2001 2001 ASSETS Current assets: Cash, cash equivalents and short- term investments $2,886.8 $2,790.1 Accounts receivable, net 2,013.8 2,443.6 Inventories 2,751.5 3,209.9 Prepaid expenses and other current assets 292.5 260.5 Total current assets 7,944.6 8,704.1 Net property and equipment 1,287.2 1,304.7 Other assets 901.6 934.4 Goodwill 2,370.8 1,987.2 Total assets $12,504.2 $12,930.4 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Short-term debt $888.5 $306.2 Accounts payable 1,522.5 1,786.1 Accrued employee compensation 199.7 166.5 Accrued expenses 420.6 363.7 Other current liabilities 16.3 66.8 Total current liabilities 3,047.6 2,689.3 Long-term debt 4,234.3 5,027.5 Other long-term liabilities 81.7 62.9 Total liabilities 7,363.6 7,779.7 Stockholders' equity: Common stock 0.7 0.7 Additional paid-in capital 3,997.5 3,877.6 Retained earnings 1,478.8 1,531.6 Accumulated other comprehensive losses (336.4) (259.2) Total stockholders' equity 5,140.6 5,150.7 Total liabilities and stockholders' equity $12,504.2 $12,930.4SOURCE Solectron Corporation
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