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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) December 18, 2000
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SOLECTRON CORPORATION
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(Exact name of registrant as specified in charter)
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<S> <C> <C>
DELAWARE 1-11098 94-2447045
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
777 GIBRALTAR DRIVE, MILPITAS, CALIFORNIA 95035
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(Address of principal executive offices) (Zip Code)
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Registrant's telephone number, including area code (408) 957-8500
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NOT APPLICABLE
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(Former name or former address, if changed since last report.)
ITEM 5. OTHER EVENTS
On December 18, 2000, the Registrant issued a press release regarding its fiscal
first quarter sales and net income. The press release in its entirety follows:
Media Contact: Analysts Contact:
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Kevin Whalen Thomas Alsborg
Solectron Corporation Solectron Corporation
+1 (408) 956 6854 (U.S.) +1 (408) 956 6614 (U.S.)
[email protected] [email protected]
SOLECTRON INCREASES SALES 101 PERCENT,
NET INCOME 74 PERCENT IN FISCAL FIRST QUARTER
- DILUTED CASH EPS* OF 31 CENTS EXCEEDS CONSENSUS ESTIMATES -
FOR IMMEDIATE RELEASE: DEC. 18, 2000
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MILPITAS, Calif. -- Solectron Corporation (NYSE: SLR), the world's leading
provider of electronics manufacturing and supply-chain management services,
today reported fiscal first-quarter sales of $5.7 billion, 100.9 percent higher
than the $2.8 billion reported in the year-earlier period. Diluted cash earnings
per share* in the quarter were 31 cents, up 63.2 percent from 19 cents in the
same quarter last year and above analysts' consensus estimates.
The company earned net income under U.S. Generally Accepted Accounting
Principles (GAAP) of $190.6 million, up 73.6 percent from $109.8 million in the
same period last year. Diluted GAAP earnings per share** increased 70.6 percent
to 29 cents from 17 cents a year ago, also above analysts' consensus estimates.
The fiscal 2001 first quarter was a 14-week period, versus a 13-week period last
year, because of the periodic calendar alignment required under the company's
fiscal-year schedule. On a normalized 13-week basis, first-quarter sales would
have been $5.3 billion -- exceeding the company's guidance, issued in September,
of first-quarter sales in a range of $4.8 billion to $5.1 billion.
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SUMMARY OF SALES AND EARNINGS PER SHARE
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<CAPTION>
Q1 2001 Q1 2000 % Change
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<S> <C> <C> <C>
Sales (in billions) $5.696 $2.835 100.9
Diluted Cash EPS* 31 cents 19 cents 63.2
(before one-time charges)
Diluted GAAP EPS 29 cents 18 cents 61.1
(before one-time charges)
Diluted GAAP EPS** 29 cents 17 cents 70.6
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* Diluted Cash EPS is calculated by adjusting diluted GAAP EPS to exclude
tax-effected amortization of goodwill and other intangible items, which
amounted to approximately $11.2 million and $3.3 million (after tax) in the
first fiscal quarters of 2001 and 2000, respectively. It is also before
one-time charges.
** Diluted GAAP EPS is the per-share calculation of net income as defined
under U.S. Generally Accepted Accounting Principles.
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"We generated a strong quarter from both an operational viewpoint and a
strategic perspective," said Koichi Nishimura, Solectron chairman, president and
chief executive officer. "Our ongoing businesses delivered solid sales and
earnings growth, exceeding analyst estimates and reflecting a continued increase
in customer demand for our services."
Business growth in the quarter came in part from the networking and
telecommunications market segments. The company said networking customers had
strong demand, and telecommunications grew partly through additional outsourcing
in that segment.
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Gross margin in the quarter was 8.5 percent, compared with 8.7 percent in the
fourth quarter of fiscal 2000. Margins continued to be affected by
higher-than-normal materials management costs.
Also in the quarter, Solectron announced two strategically important business
developments. The company entered a cooperative agreement with Sony Corporation
that includes the purchase of two Sony manufacturing sites, a
360,000-square-foot facility in Miyagi Prefecture, Japan, and a
130,000-square-foot site in Kaohsiung, Taiwan. Solectron also agreed to acquire
Singapore-based NatSteel Electronics (NEL), the sixth-largest electronics
manufacturing services company, in a deal valued at about $2.4 billion.
"Through the Sony relationship and the NatSteel Electronics acquisition, we are
significantly expanding our strategic presence in the Asia/Pacific region,"
Nishimura said. "Each gives us additional capacity, and each extends the skills,
capabilities and services that Solectron can offer to our customers."
COMPONENTS SITUATION BEGINS TO EASE
The company also said the constricted supply of components in the electronics
industry began to ease in the late stages of the quarter. While some component
categories remain constrained, overall lead times became shorter in recent
weeks.
"We are taking advantage of the changing conditions, and we expect to realize
the full benefits of the improving components environment going forward,"
Nishimura said. "We are working hard to return to our normal, just-in-time
business practices, and we are focused on actions to improve inventory metrics."
FORWARD-LOOKING GUIDANCE
The company expects to generate second-quarter sales of $5.4 billion to $5.7
billion and diluted cash EPS of 29 to 30 cents in the quarter ending March 2,
before any one-time charges related to acquisitions. The company said it expects
diluted GAAP EPS to be 24 cents to 25 cents in the quarter, before any one-time
charges.
The company's second-quarter guidance includes the effect of the acquisitions
from Sony and assumes the acquisition of 100 percent of NEL by late January. In
addition, Solectron said it expects the second quarter to include increased
integration and infrastructure costs associated with its new sites, partially
offset by operating efficiency and productivity improvements. Those costs are
expected to affect margins in the quarter and are reflected in the earnings
guidance.
The sales guidance reflects the typical seasonal pace and short-shipment days
for the various holidays that occur in the second quarter. The company said it
estimates incremental sales from Sony and NEL (based on its published guidance
to investors) to range from $290 million to $340 million.
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For all of fiscal 2001, Solectron said it expects to generate sales of more than
$23 billion, diluted cash EPS of $1.22 to $1.25 and diluted GAAP EPS of 99 cents
to $1.02, both before any one-time charges.
SAFE HARBOR
This news release contains forward-looking statements based on current
expectations, forecasts and assumptions that involve risks and uncertainties
that could cause actual outcomes and results to differ materially. These risks
and uncertainties include component availability, the ability to acquire and
effectively integrate the NatSteel Electronics business, the ability to complete
the asset transfer involving Sony Corporation, risk of price fluctuation,
reliance on major customers, fluctuations in operating results, changes in
technology, competition, the ability to manage rapid growth, the ability to
manage business integration, risks associated with international sales and
operations, interest rate risk, environmental regulations, market risk, segment
risk, the ability to retain key personnel and intellectual property rights
enforcement. For a further list and description of risks and uncertainties, see
the reports filed by Solectron with the Securities and Exchange Commission,
specifically forms 8-K, 10-Q, S-3 and 10-K. Solectron disclaims any intention or
obligation to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.
All monetary amounts are stated in U.S. dollars.
ABOUT SOLECTRON
Solectron (www.solectron.com), the world's leading supply-chain facilitator,
provides a full range of manufacturing and supply-chain management services to
the world's premier high-tech electronics companies. Solectron's offerings
include new product design and introduction services, materials management,
high-tech product manufacturing, and product warranty and end-of-life support.
The company, based in Milpitas, Calif., employs more than 71,000 people in 60
locations worldwide. In the fiscal year ended Aug. 31, 2000, the company
generated sales of $14.1 billion. Solectron was the first two-time winner of the
Malcolm Baldrige National Quality Award for manufacturing
# # #
Consolidated statements of income and balance sheets follow.
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SOLECTRON CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(US$ IN MILLIONS, EXCEPT PER SHARE DATA)
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<CAPTION>
THREE MONTHS ENDED
DECEMBER 1, NOVEMBER 26,
2000 1999
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<S> <C> <C>
Net sales $ 5,695.5 $ 2,834.6
Cost of sales 5,210.8 2,557.6
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Gross profit 484.7 277.0
Operating expenses:
Selling, general and administrative 190.3 107.0
Research and development 18.0 14.7
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Operating income 276.4 155.3
Interest income 36.6 23.0
Interest expense (32.7) (11.6)
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Income before income taxes and cumulative effect of 280.3 166.7
change in accounting principle
Income taxes 89.7 53.4
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Income before cumulative effect of change in accounting 190.6 113.3
principle
Cumulative effect of change in accounting principle for - (3.5)
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start-up costs, net of income tax benefit
Net income $ 190.6 $ 109.8
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Basic net income per share:
Income before cumulative effect of change in $ 0.31 $0.19
accounting principle
Cumulative effect of change in accounting principle - (0.01)
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Net income per share $ 0.31 $0.18
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Diluted net income per share:
Income before cumulative effect of change in $ 0.29 $0.18
accounting principle
Cumulative effect of change in accounting principle - (0.01)
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Net income per share $ 0.29 $ 0.17
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Weighted average number of shares:
Basic 610.3 594.5
Diluted 709.1 621.0
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Memo:
Diluted cash net income per share*:
Income before cumulative effect of change in $ 0.31 $ 0.20
accounting principle
Cumulative effect of change in accounting principle - (0.01)
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Net income per share $ 0.31 $ 0.19
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* Diluted cash net income per share is calculated by adjusting diluted net
income per share, or GAAP EPS, to exclude tax-effected amortization of goodwill
and other intangible items. Those excluded expenses amounted to approximately
$11.2 million and $3.3 million (after tax) in the first fiscal quarters of 2001
and 2000, respectively.
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SOLECTRON CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(US$ IN MILLIONS)
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<CAPTION>
DECEMBER 1, AUGUST 25,
2000 2000
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ASSETS
Current assets:
Cash, cash equivalents and short-term investments $ 4,518.7 $ 2,434.1
Accounts receivable, net 2,687.8 2,146.3
Inventories 4,584.0 3,787.3
Prepaid expenses and other current assets 275.3 260.5
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Total current assets 12,065.8 8,628.2
Net property and equipment 1,240.3 1,080.4
Other assets 720.4 667.0
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Total assets $ 14,026.5 $ 10,375.6
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt $ 118.5 $ 69.2
Accounts payable 2,961.1 2,694.1
Accrued employee compensation 187.9 179.8
Accrued expenses 197.6 262.5
Other current liabilities 475.1 11.2
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Total current liabilities 3,940.2 3,216.8
Long-term debt 4,893.9 3,319.5
Other long-term liabilities 41.1 37.2
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Total liabilities 8,875.2 6,573.5
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Stockholders' equity:
Common stock 0.6 0.6
Additional paid-in capital 3,469.2 2,259.1
Retained earnings 1,845.7 1,656.8
Accumulated other comprehensive losses (164.2) (114.4)
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Total stockholders' equity 5,151.3 3,802.1
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Total liabilities and stockholders' equity $ 14,026.5 $ 10,375.6
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SOLECTRON CORPORATION
(Registrant)
Date: December 20, 2000
/s/ Susan S. Wang
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Susan S. Wang
Senior Vice President,
Chief Financial Officer and Secretary
(Principal Financial and Accounting Officer)
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