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Solectron Corporation (NYSE:SLR), a leading provider of electronics manufacturing and integrated supply chain services, today reported sales of $3.00 billion in the first quarter of fiscal 2007, an increase of 3.3 percent over fourth quarter fiscal 2006 revenues of $2.90 billion, and an increase of 22 percent over first quarter fiscal 2006 revenues of $2.46 billion.
The company reported GAAP profit after tax from continuing operations of $6.6 million, or $0.01 per share, in the first quarter of fiscal 2007, compared with a GAAP profit after tax from continuing operations of $38.8 million, or $0.04 per share, in the fourth quarter of fiscal 2006. First quarter fiscal 2007 results include $34.6 million in charges related to a restructuring program announced in October 2006. In the first quarter of fiscal 2006, Solectron reported a GAAP profit after tax from continuing operations of $20.2 million, or $0.02 per share.
Non-GAAP profit after tax was $47.6 million, or $0.05 per share, in the first quarter of fiscal 2007, compared with non-GAAP profit after tax of $54.8 million, or $0.06 per share, for the fourth quarter of fiscal 2006. In the first quarter of fiscal 2006, Solectron reported non-GAAP profit after tax of $28.1 million, or $0.03 per share. Non-GAAP financial results do not include restructuring costs, impairment charges, amortization of intangibles, stock-based compensation expenses, or other unusual or infrequent items. Please refer to "Non-GAAP Information" below for further information.
"I am pleased with the strength of our revenue in the first quarter," said Mike Cannon, president and chief executive officer of Solectron. "While first quarter gross margin did not meet our expectations, we are committed to achieving the growth and profitability targets we have set for Fiscal 2007, and expect to show an improving trend in profitability in the second half of the year."
Second Quarter 2007 Guidance
Fiscal second quarter guidance is for sales of $2.80 billion to $3.00 billion, and for non-GAAP EPS from continuing operations in a range of 4 cents to 6 cents, on a fully diluted basis.
In addition to disclosing results determined in accordance with GAAP, Solectron also discloses non-GAAP results of operations that exclude certain items. By disclosing this non-GAAP information, management intends to provide investors with additional information to further analyze the company's performance, core results and underlying trends. Management utilizes a measure of net income and earnings per share on a non-GAAP basis that excludes certain charges to better assess operating performance. Earnings guidance is provided only on a non-GAAP basis due to the inherent difficulty in forecasting such charges.
Consistent with industry practice, management has historically applied these non-GAAP measures when discussing earnings or earnings guidance and intends to continue doing so.
Non-GAAP information is not determined using GAAP. Therefore, the information is not necessarily comparable to other companies and should not be used to compare the company's performance over different periods. Non-GAAP information should not be viewed as a substitute for, or superior to, net income or other data prepared in accordance with GAAP as measures of our profitability or liquidity. Users of this financial information should consider the types of events and transactions for which adjustments have been made. In addition, Solectron's GAAP financial results often reflect one-time events and adjustments, and therefore a comparison of GAAP results over different periods can be difficult. See the tables at the end of this press release for a reconciliation of GAAP amounts to amounts reported under non-GAAP. A reconciliation from GAAP to non-GAAP results is contained in the attached financial summary and is available in the Investor Relations section of our website at www.solectron.com.
Webcast To Be Held Today
At 4:30 p.m. ET today, Solectron will hold a conference call to discuss its first quarter financial results. A live webcast can be accessed at www.solectron.com. Supplemental financial information related to the conference call will also be available in the Investor Relations section of this Web site. Following the live broadcast, the archived webcast will be available at www.solectron.com/investor/events.htm.
An audio replay will also be available December 21, 2006, two hours after the conclusion of the call. To access the replay, call +1 (800) 642 1687 from within the United States, or +1 (706) 645 9291 from outside the United States, and specify pass code 3302507.