Sanmina-SCI Announces Third Quarter Results

Sanmina-SCI Announces Third Quarter Results

Sanmina-SCI Corporation (”the Company”) , a leading global electronics manufacturing services (EMS) company, today reported financial results for its third fiscal quarter ended June 30, 2007.

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.

Non-GAAP Financial Results for the Quarter (1)

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.

GAAP Financial Results for the 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. Diluted loss per share for the quarter was $0.05.

Cash Flow and Balance Sheet Metrics

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.