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Celestica Announces Third Quarter 2007 Financial Results
October 26, 2007 | PRNewswireEstimated reading time: 3 minutes
Celestica Inc., a global provider of innovative electronics manufacturing services (EMS), today announced financial results for the third quarter ended September 30, 2007.
Revenue was $2,081 million, down 13% from $2,392 million in the third quarter of 2006. Net earnings on a GAAP basis for the third quarter were $51.5 million or $0.22 per share, compared to GAAP net loss of ($42.1) million or ($0.19) per share for the same period last year. Included in the third quarter 2007 earnings are restructuring charges of $2.7 million compared to restructuring charges of $82.4 million in the third quarter last year.
Adjusted net earnings for the quarter were $29.3 million or $0.13 per share compared to adjusted net earnings of $40.5 million or $0.18 per share for the same period last year. The term adjusted net earnings is defined as net earnings before amortization of intangible assets, gains or losses on the repurchase of shares and debt, integration costs related to acquisitions, option expense, option exchange costs and other charges, net of tax and significant deferred tax write-offs or recovery (detailed GAAP financial statements and supplementary information related to adjusted net earnings appear at the end of this press release). These results compare with the company's guidance for the third quarter, announced on July 26, 2007, of revenue in the range of $2.0 billion to $2.2 billion and adjusted net earnings per share in the range of $0.04 to $0.12.
For the nine months ended September 30, 2007, revenue was $5,860 million compared to $6,550 million for the same period in 2006. Net loss on a GAAP basis was ($2.0) million or ($0.01) per share compared to net loss of ($89.8) million or ($0.40) per share last year. Adjusted net earnings for the first nine months of 2007 were $25.1 million or $0.11 per share compared to adjusted net earnings of $87.0 million or $0.38 per share for the same period in 2006.
"Our third quarter results reflect the significant progress we are making with respect to the turnaround plans we put in place at the beginning of this year," said Craig Muhlhauser, President and Chief Executive Officer, Celestica.
"On a sequential basis, revenue grew 7%, operating margins almost doubled, inventory turns improved to 8.3x and we generated more than $200 million in free cash flow. We are encouraged by our progress to date and believe that significant opportunity remains throughout the business. Although we continue to manage through nearer-term volatility as we complete our turnaround plans, our entire team remains confident in our ability to drive further improvements as we strive to build a solid foundation for Celestica's future growth and profitability."
Outlook
For the fourth quarter ending December 31, 2007, the company expects revenue to be in the range of $2.0 billion to $2.15 billion, and adjusted net earnings per share to range from $0.10 to $0.16.
Third Quarter Results Webcasts
Management will host its quarterly results conference call today at 4:30 p.m. Eastern Time which can be accessed at www.celestica.com.
Supplementary Information
In addition to disclosing detailed results in accordance with Canadian generally accepted accounting principles (GAAP), Celestica also provides supplementary non-GAAP measures as a method to evaluate the company's operating performance.
Management uses adjusted net earnings as a measure of enterprise-wide performance. As a result of acquisitions made by the company, restructuring activities, securities repurchases and the adoption of fair value accounting for stock options, management believes adjusted net earnings is a useful measure for the company as well as its investors to facilitate period-to-period operating comparisons and allow the comparison of operating results with its competitors in the U.S. and Asia. Adjusted net earnings excludes the effects of acquisition-related charges (most significantly, amortization of intangible assets and integration costs related to acquisitions), other charges (most significantly, restructuring costs and the write-down of goodwill and long-lived assets), gains or losses on the repurchase of shares or debt, option expense and option exchange costs, and the related income tax effect of these adjustments and any significant deferred tax write-offs or recovery. Adjusted net earnings does not have any standardized meaning prescribed by GAAP and is not necessarily comparable to similar measures presented by other companies. Adjusted net earnings is not a measure of performance under Canadian or U.S. GAAP and should not be considered in isolation or as a substitute for net earnings (loss) prepared in accordance with Canadian or U.S. GAAP. The company has provided a reconciliation of adjusted net earnings (loss) to Canadian GAAP net earnings (loss) below.
About Celestica
Celestica is dedicated to providing innovative electronics manufacturing services that accelerate our customers' success. Through our efficient global manufacturing and supply chain network, we deliver competitive advantage to companies in the computing, communications, consumer, industrial, and aerospace and defense end markets. Our employees share a proud history of proven expertise and creativity that provides our customers with the flexibility to overcome any challenge.
For further information on Celestica, visit its website at http://www.celestica.com.