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Celestica Posts 23% On-Year Revenue Drop in 3Q09
October 23, 2009 |Estimated reading time: 3 minutes
Celestica Inc., a global leader in the delivery of end-to-end product lifecycle solutions, has announced financial results for the third quarter ended September 30, 2009.
Revenue for the quarter was $1,556 million, compared to $2,031 million in the third quarter of 2008. GAAP net loss was $0.6 million, or $0.00 per share, compared to GAAP net earnings of $32.1 million, or $0.14 per share, for the same period last year. The year-over-year change reflects the impact of weaker end-market demand, as well as higher restructuring costs in 2009 associated with the company's previously announced restructuring program.
Adjusted net earnings for the quarter were $39.5 million, or $0.17 per share, compared to adjusted net earnings of $54.3 million, or $0.24 per share, for the same period last year. The term adjusted net earnings is a non-GAAP measure defined as net earnings before other charges, amortization of intangible assets (excluding amortization of computer software), option expense, gains or losses related to the repurchase of shares and debt, net of tax and significant deferred tax write-offs or recoveries.The company's revenue and adjusted net earnings for the third quarter of 2009 met the high end of the company's published guidance, announced on July 23, 2009, of revenue of $1.425 billion to $1.575 billion and adjusted net earnings per share of $0.11 to $0.17.
For the nine months ended September 30, 2009, revenue was $4,428 million, compared to $5,743 million for the same period in 2008. GAAP net earnings were $23.9 million, or $0.10 per share, compared to $101.7 million, or $0.44 per share, for the same period last year. Adjusted net earnings for the nine months ended September 30, 2009 were $93.8 million, or $0.41 per share, compared to $128.6 million, or $0.56 per share, for the same period in 2008.
"Celestica continues to deliver improved operating performance and financial results despite a very challenging and volatile business environment," said Craig Muhlhauser, President and CEO. "One of the company's goals during this downturn was to continue to deliver on our commitments to our customers and increase our return on invested capital even at the low point of an economic cycle. We are very pleased with the performance we have achieved thus far."
Debt Redemption
In September 2009, the company announced its intention to redeem all of its outstanding 7.875% Senior Subordinated Notes due 2011 (Notes), with an aggregate principal amount of $339.4 million. In accordance with the terms of the Notes, the company will redeem the Notes at a price of 101.969% of the principal amount, plus accrued and unpaid interest to the redemption date. The company will complete the redemption in the fourth quarter of 2009 and expects to record a gain of approximately $10 million on redemption.
The company plans to fund the redemption using existing cash resources. After giving effect to the completion of the Notes redemption as of September 30, 2009, the company's cash balance would have been $906 million, and our Senior Subordinated Notes due 2013 remains at $223 million. The company also estimates a reduction to its 2010 net interest expense of approximately $14 million.
Fourth Quarter Outlook
For the fourth quarter ending December 31, 2009, the company anticipates revenue to be in the range of $1.55 billion to $1.70 billion, and adjusted net earnings per share to range from $0.14 to $0.20.
Third Quarter Webcast
Management will host its quarterly results conference call today at 4:30 p.m. Eastern. The Webcast can be accessed at www.celestica.com.
About Celestica
Celestica is dedicated to delivering end-to-end product lifecycle solutions to drive our customers' success. Through the company's simplified global operations network and information technology platform, they are solid partners who deliver informed, flexible solutions that enable customers to succeed in the markets they serve. Committed to providing a truly differentiated customer experience, the company's agile and adaptive employees share a proud history of demonstrated expertise and creativity that provides customers with the ability to overcome any challenge. For further information, visit www.celestica.com.