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Sanmina Announces Third Quarter 2001 Results

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    SAN JOSE, Calif., July 18 /PRNewswire/ --
 Sanmina Corporation (Nasdaq:   SANM), a leading supplier of integrated design
 and electronics manufacturing solutions (EMS), today reported financial
 results for the third quarter and nine months ended June 30, 2001. Results for
 prior periods have been restated to reflect the company's March 1, 2001
 acquisition of Segerstrom & Svensson, a leading global supplier of integrated
 enclosure systems. Earnings per share for the prior periods have been restated
 to reflect the company's two-for-one stock splits effective January 8, 2001
 and March 22, 2000.
 
     Third quarter fiscal 2001 highlights:
 
     -- Diluted earnings per share on a GAAP basis of $0.10 excluding one-time
        charges
     -- Solid balance sheet with $1.4 billion in cash and equivalents
     -- Worldwide TL9000 certification achieved by PCB operations
 
     Summary of Financial Results (excluding one-time charges):
     (Thousands, except
      per share data)         Q3:01         Q3:00       9MOS01        9MOS00
 
     Revenues              $776,602    $1,086,182   $3,453,311    $2,871,895
     Operating margin          6.1%         10.8%        11.8%         10.1%
     Operating income       $47,621      $117,635     $405,811      $289,137
     Net income             $31,932       $68,982     $262,773      $174,767
     EPS -- basic             $0.10         $0.22        $0.82         $0.58
     EPS -- diluted           $0.10         $0.21        $0.77         $0.55
     Cash EPS -- basic        $0.11         $0.23        $0.86         $0.61
     Cash EPS -- diluted      $0.11         $0.22        $0.81         $0.58
 
     Summary of Financial Results (including one-time charges):
     (Thousands, except
      per share data)         Q3:01         Q3:00       9MOS01        9MOS00
 
     Revenues              $776,602    $1,086,182   $3,453,311    $2,871,895
     Operating margin          5.8%          2.5%         9.2%          6.9%
     Operating income       $44,662       $27,517     $317,940      $199,019
     Net income             $30,097        $6,891     $208,293      $112,676
     EPS -- basic             $0.09         $0.02        $0.65         $0.37
     EPS -- diluted           $0.09         $0.02        $0.62         $0.36
     Cash EPS -- basic        $0.11         $0.03        $0.69         $0.42
     Cash EPS -- diluted      $0.10         $0.03        $0.66         $0.40
 
     Revenues for the third quarter of fiscal 2001 were $776.6 million down
 from $1.09 billion in the third quarter of fiscal 2000. The decrease in
 revenues reflects the slowdown in the economy and our customer end-markets.
 Selling, general and administrative expenses for the quarter decreased to
 $42.1 million from $53.2 million excluding charges related to merger and
 restructuring costs and other one-time charges in the third quarter last year.
 The decrease in this expense reflects Sanmina's ability to respond quickly to
 marketplace challenges and cost effectively scale back manufacturing
 operations. Excluding one-time charges for both years, Sanmina's operating
 margin was 6.1%, compared to 10.8% in the same quarter last year. Sanmina
 reported operating income of $47.6 million in the third quarter this year,
 compared to $117.6 million in last year's third quarter. Excluding one-time
 charges, net income for the third quarter was $31.9 million, or $0.10 diluted
 earnings per share on a GAAP basis. This compares to $69.0 million, or
 $0.21 diluted earnings per share on a GAAP basis in the third quarter of
 fiscal 2000. Results for the periods have been restated to give effect to
 Sanmina's acquisition of Segerstrom and Svensson, which was completed on
 March 1, 2001. Earnings per share for the prior periods have been restated to
 reflect the company's two-for-one stock splits effective January 8, 2001 and
 March 22, 2000.
 
     Company Continues to Achieve Solid Profitability
     "Despite the ongoing challenges of the economy and the slowdown in our
 customer end-markets, we are pleased that we continue to achieve solid
 profitability," said Jure Sola, Chairman and Chief Executive Officer of
 Sanmina. "This is one of the most difficult economic times in the history of
 the EMS business, and we are proud of our management's ongoing ability to
 respond to the demands of our customers. We believe our focus on the design
 and manufacture of complex, advanced technology products, our cost control
 measures, our emphasis on continuous improvement in manufacturing processes
 and yields, as well as our vertical integration has served us well in this
 uncertain market environment. Clearly we remain steadfast in our promise to
 customers of delivering excellence in performance, flexibility and technology
 and on exceeding our customers' expectations in quality, delivery and service.
 A key element in this promise is our achievement as the first EMS company to
 receive TL9000 certification in our worldwide printed circuit board (PCB)
 operations.
     "As we look to the future, we expect our business to continue to benefit
 from the trend in outsourcing as our customers concentrate on achieving
 further efficiencies in their operating models. Our strategic focus is very
 simple:  continue to diversify our customer base, expand our global footprint,
 provide leading-edge technology and offer our customers a full service
 solution. Our plan is to leverage our current strategic advantages so that we
 are well positioned to accelerate our growth when the market improves. Our
 recently announced agreement to merge with SCI Systems, another leading
 contract manufacturer, complements our effort and advances our objective to be
 the premier EMS company in the industry," Sola concluded.
     As of June 30, 2001, the company had $1.4 billion in cash and investments.
 The company has a current ratio of 5.5, working capital of $2.1 billion and
 shareholders' equity of $2.0 billion.
 
     Company Conference Call
     Sanmina will be holding a conference call regarding this announcement on
 Wednesday, July 18, 2001 at 5:00 p.m. EDT (2:00 p.m. PDT). The conference call
 will be broadcast live over the Internet. Log onto the live webcast at
 http://www.videonewswire.com/event.asp?id=163 .
 
     Company Profile
     Founded in 1980, Sanmina Corporation (www.sanmina.com) provides a
 cost-efficient, design and manufacturing solution to the world's leading
 original equipment manufacturers (OEMs) in the communications, medical,
 industrial instrumentation, and high-end computer sectors. Sanmina's
 end-to-end solution includes design engineering and product development, new
 product introduction, global materials management, PCB and backplane
 fabrication and assembly, custom memory and DSP modules, enclosure systems,
 cable assembly, complete system integration and test, global order fulfillment
 and distribution, and end-of-life product services. OEMs benefit from this
 model by dealing with a single-source supply-chain and global supply-base,
 which helps them achieve cost efficiencies in material acquisition as well as
 flexibility to reduce lead times.
 
     Safe Harbor Statement
     The foregoing, including the discussion regarding the company's future
 prospects contains certain forward-looking statements that involve risks and
 uncertainties, including uncertainties associated with economic conditions in
 the electronics industry, particularly in the principal industry sectors
 served by the company, changes in customer requirements and in the volume of
 sales to principal customers, the ability of the company to assimilate
 acquired businesses and to achieve the anticipated benefits of such
 acquisitions, and competition and technological change. The company's actual
 results of operations may differ significantly than those contemplated by such
 forward-looking statements as a result of these and other factors, including
 factors set forth in the company's 2000 Annual Report on Form 10-K filed with
 the Securities Exchange Commission on December 18, 2000, the company's most
 recent quarterly 10-Q Report dated May 11, 2001, and the company's Form 8-K
 dated May 14, 2001.
 
                              Sanmina Corporation
                     Condensed Consolidated Balance Sheets
                                 (in thousands)
 
                                                    Sept. 30,       June 30,
                                                      2000           2001
                                                                 (unaudited)
     ASSETS
 
     Current Assets:
      Cash and short-term investments              $1,263,550     $1,395,319
      Accounts receivable, net                        714,509        553,954
      Inventories, net                                608,434        550,535
      Deferred income taxes                            87,187         90,282
      Prepaid and other                                30,077         29,681
 
       Total current assets                         2,703,757      2,619,771
 
     Property, plant and equipment, net               700,718        723,881
     Goodwill and intangibles, net                    347,018        323,974
     Long-term investments                             55,917         78,954
     Deposits and other                                28,190         25,562
 
       Total assets                                $3,835,600     $3,772,142
 
     LIABILITIES AND STOCKHOLDERS' EQUITY
 
     Current liabilities:
      Accounts payable                               $541,268       $363,175
      Accrued liabilities and other                   248,872        113,220
 
       Total current liabilities                      790,140        476,395
 
     Long-term liabilities
      Convertible subordinate debentures            1,108,973      1,129,174
      Long-term debt and other                        177,694        160,715
 
     Total stockholders' equity                     1,758,793      2,005,858
       Total liabilities and stockholders'
        equity                                     $3,835,600     $3,772,142
 
                              Sanmina Corporation
       Consolidated Statements of Operations (Excluding One-time Charges)
                   (in thousands, except for per share data)
                                  (unaudited)
 
                                                    Q3
                              Three Months Ending       Nine Months Ending
                            June 30,       July 1,     June 30,      July 1,
                               2001        2000          2001         2000
 
     Net sales             $776,602    $1,086,182   $3,453,311    $2,871,895
     Cost of sales          680,231       909,694    2,851,645     2,418,625
 
     Gross profit            96,371       176,488      601,666       453,270
 
     Selling, general
      and administrative     42,069        53,239      175,507       147,549
     Amortization of
      goodwill and
      intangibles             6,681         5,614       20,348        16,584
 
     Total operating
      expenses               48,750        58,853      195,855       164,133
 
     Operating income        47,621       117,635      405,811       289,137
 
     Other income
      (expense), net          3,881          (92)       16,869       (6,653)
 
     Income before
      provision for
      income taxes           51,502       117,543      422,680       282,484
 
     Provision for
      income taxes           19,570        48,561      159,907       107,717
 
     Net income             $31,932       $68,982     $262,773      $174,767
 
     Earnings per share:
      Basic EPS               $0.10         $0.22        $0.82         $0.58
      Diluted EPS             $0.10         $0.21        $0.77         $0.55
 
     Shares used in
      computing
      per share amounts:
      Basic                 321,011       312,892      318,824       301,655
      Diluted               333,231       345,458      349,266       333,480
 
     Dilutive interest
      add back                   13         2,480        7,819         7,847
     Dilutive shares
      add back                  143        16,121       15,949        16,128
 
 
     CASH EPS -
      Supplemental
      Information:
     Income before taxes,
      goodwill
      amortization
      and write down
      of long-lived
      assets                $58,183      $123,157     $443,028      $299,068
     Provision for
      income taxes           22,109        50,880      167,605       114,041
     Cash net income
      before goodwill
      amortization and
      write down of
      long-lived assets     $36,074       $72,277     $275,423      $185,027
      Amortization of
       goodwill, net of tax   4,142         3,295       12,650        10,260
      Write down of
       long-lived assets,
       net of tax                --            --           --            --
 
     Net income             $31,932       $68,982     $262,773      $174,767
 
     CASH earnings
      per share:
      Cash basic eps          $0.11         $0.23        $0.86         $0.61
      Cash diluted eps        $0.11         $0.22        $0.81         $0.58
 
     Shares used in
      computing
      per share amounts:
      Cash basic shares     321,011       312,892      318,824       301,655
      Cash diluted shares   333,231       345,458      349,266       333,480
 
     Cash dilutive
      interest add back         $13        $2,480       $7,819        $7,847
     Cash dilutive shares
      add back                  143        16,121       15,949        16,128
 
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SOURCE Sanmina Corporation

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