Monday March 13, 4:01 pm Eastern Time
Company Press Release
SOURCE: Solectron Corp.
Solectron Reports Record Sales and Presplit Diluted EPS US$0.38 Before One-Time Charges for Second Quarter FY 2000
Second Quarter Revenue Increases 32.4%
MILPITAS, Calif., March 13 /PRNewswire/ -- Solectron Corporation (NYSE: SLR - news), the world's premier supply-chain facilitator for customized electronics technology, manufacturing and service solutions, today announced record sales for the second quarter of fiscal year 2000, ended Feb. 25, 2000. Net sales of US$2.9 billion increased 32.4% from the second quarter of fiscal year 1999.
As Solectron's stock split was effective March 8, 2000, but reported earnings for the second quarter ended Feb. 25, 2000, earnings per share information in this release reflects presplit data. In addition, the historical financial results presented reflects the acquisition of SMART Modular Technologies, Inc. (SMART) in the second quarter of fiscal year 2000 which was accounted for as a pooling of interests. Excluding one-time charges, Solectron reported US$0.38 diluted earnings per share on net income of US$116.9 million for the second quarter of fiscal year 2000 which was up 49.1% from the second quarter of fiscal year 1999. Including one-time charges, diluted earnings per share were US$0.32 and net income was US$99.9 million, up 27.4 % from the same quarter of fiscal year 1999.
These one-time charges of US$25.0 million included transaction and related costs of the SMART merger totaling US$20.3 and restructuring costs of US$4.7 million. Without one-time charges, Solectron's second quarter operating margin was 5.7% and its annualized return on equity was 14.1%. With one-time charges, the operating margin was 4.8% and its annualized return on equity was 12.0%.
To highlight Solectron's year-over-year and sequential growth, the following table presents historical Solectron on a prepooling basis versus the current quarter with SMART combined before non-recurring charges:
(US$ in millions except per share data) Pro Forma
Before SMART Combined with SMART
Increase Increase
Compared to Compared to
Q2 FY99 Q1 FY00 Q2 FY00 Q2 FY99 Q1 FY00
Sales $1,908.1 $2,501.8 $2,859.7 49.9% 14.3%
Net Income $65.5 $101.5 * $116.9 ** 78.5% 15.2%
Diluted EPS $0.26 $0.36 * $0.38 ** 46.2% 5.6%
* excludes cumulative effect of change in accounting principle for start-up
costs
** excludes one-time charges
About Solectron
Founded in 1977, Solectron Corporation (www.solectron.com) is the world's largest electronics manufacturing services company offering a full range of integrated supply-chain solutions for the world's leading electronics original equipment manufacturers. Solectron's integrated technology solutions, materials, manufacturing and operations, and global services offer customers competitive outsourcing advantages, such as access to advanced manufacturing technologies, shortened product time-to-market, reduced total cost of ownership and more effective asset utilization.
The company has received more than 210 quality and service awards from its customers in addition to the 1997 and 1991 Malcolm Baldrige National Quality Awards. Solectron is the first company to win the Baldrige Award for manufacturing twice in the 12-year history of the national program. Including the acquisition of Ericsson's operations in Longuenesse, France, and Ostersund, Sweden, the company has more than 46,000 associates in 40 locations worldwide, with more than 9 million square feet of capacity. Net sales for the first six months of fiscal year 2000 ended Feb. 25, 2000, reflecting the merger with SMART, were US$5.6 billion.
Additional financial information on Solectron's earnings can be found on the company's Web site at www.solectron.com/investor/index.html.
Consolidated statements of income and balance sheets follow.
SOLECTRON CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share data)
(Unaudited)
Three Months Ended Six Months Ended
February February February February
25, 26, 25, 26,
2000 1999* 2000 1999*
Net sales $2,859.7 $2,160.4 $5,635.3 $4,363.5
Cost of sales 2,583.6 1,949.8 5,087.3 3,947.0
Gross profit 276.1 210.6 548.0 416.5
Operating expenses:
Selling, general &
administrative 98.9 84.3 201.3 166.6
Research & development 14.3 10.3 29.0 20.7
Acquisition &
restructuring costs 25.0 -- 25.0 --
Operating income 137.9 116.0 292.7 229.2
Interest income 20.4 6.5 43.4 12.8
Interest expense (11.3) (9.4) (22.2) (15.0)
Income before income taxes
and cumulative effect of
change in accounting principle 147.0 113.1 313.9 227.0
Income taxes 47.1 34.7 100.5 72.6
Income before cumulative
effect of change in
accounting principle 99.9 78.4 213.4 154.4
Cumulative effect of change
in accounting principle
for start-up costs, net
of $1.6 income tax benefit -- -- (3.5) --
Net income $99.9 $78.4 $209.9 $154.4
Basic net income per share:
Income before cumulative
effect of change in
accounting principle $0.34 $0.30 $0.72 $0.59
Cumulative effect of
change in accounting
principle -- -- (0.01) --
Net income per share $0.34 $0.30 $0.71 $0.59
Diluted net income per share:
Income before cumulative
effect of change in
accounting principle $0.32 $0.28 $0.69 $0.56
Cumulative effect of change
in accounting principle -- -- (0.01) --
Net income per share $0.32 $0.28 $0.68 $0.56
Shares used in computation:
Basic 296.8 261.1 296.1 260.4
Diluted 309.7 285.3 309.2 283.7
* Restated to reflect the acquisition of SMART Modular Technologies, Inc.
in the second quarter of fiscal 2000 which was accounted
for as a pooling of interests.
SOLECTRON CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In millions)
(Unaudited)
February 25, August 27,
2000 1999
ASSETS
Current assets:
Cash, cash equivalents and
short-term investments $1,469.3 $1,881.6
Accounts receivable, net 1,464.7 1,237.9
Inventories 1,823.8 1,170.1
Prepaid expenses and other current assets 178.2 120.9
Total current assets 4,936.0 4,410.5
Net property and equipment 744.9 705.6
Other assets 240.9 203.2
Total assets $5,921.8 $5,319.3
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt $40.1 $21.4
Accounts payable 1,294.7 1,013.7
Accrued employee compensation 86.6 97.5
Accrued expenses 62.5 44.0
Other current liabilities 67.4 70.4
Total current liabilities 1,551.3 1,247.0
Long-term debt 955.4 922.6
Other long-term liabilities 15.2 9.2
Total liabilities 2,521.9 2,178.8
Stockholders' equity:
Common stock 0.3 0.3
Additional paid-in capital 2,130.2 2,057.6
Retained earnings 1,369.6 1,171.1
Accumulated other comprehensive losses (100.2) (88.5)
Total stockholders' equity 3,399.9 3,140.5
Total liabilities and
stockholders' equity $5,921.8 $5,319.3
CONTACT: media, Kimi Nishita, Corporate Communications, 408-956-6213 (U.S.), or kiminishita@ca.slr.com; or analysts, Len Zanoni, VP, Investor Relations, 408-956-6866 (U.S.), or lenzanoni@ca.slr.com, both of Solectron Corp.
SOURCE: Solectron Corp. |
