Celestica Announces Second Quarter 2016 Financial Results

TORONTO, ON--(Marketwired - July 21, 2016) - Celestica Inc. (NYSE: CLS) (TSX: CLS), a global leader in the delivery of end-to-end product lifecycle solutions, today announced financial results for the second quarter ended June 30, 2016. Second Quarter 2016 Highlights Revenue: $1.49 billion, at the high end of our previously provided guidance range of $1.4 to $1.5 billion, increased 10% sequentially and 5% compared to the second quarter of 2015 Revenue from our diversified end market grew 13% compared to the second quarter of 2015, and represented 30% of total revenue, up from 28% of total revenue for the second quarter of 2015 IFRS EPS: $0.25 per share, compared to $0.14 per share for the second quarter of 2015 Adjusted EPS (non-IFRS): $0.29 per share ($0.31 per share had we excluded a $0.02 per share income tax expense resulting from taxable foreign exchange impacts), within our previously provided guidance range of $0.25 to $0.31 per share, compared to $0.25 per share for the second quarter of 2015 Operating margin (non-IFRS): 3.8%, compared to 3.4% for the second quarter of 2015 ROIC (non-IFRS): 20.9%, compared to 19.6% for the second quarter of 2015 Free cash flow (non-IFRS): negative $23.8 million, compared to positive $2.4 million for the second quarter of 2015 Repurchased and cancelled 2.8 million subordinate voting shares for $30.0 million pursuant to a previously disclosed program share repurchase funded in March 2016 "Celestica delivered 5% year over year revenue growth in the second quarter with revenue and adjusted earnings per share above the midpoint of our guidance," said Rob Mionis, Celestica's President and Chief Executive Officer. "We also delivered sequential and year-over-year improvements in operating margin, return on invested capital and earnings per share." "We are pleased with our momentum in delivering three consecutive quarters of year-over-year revenue growth, led by strength in our Diversified end market and certain programs in our Communications end market. Overall, we remain focused on further diversifying our business while delivering value to our customers and shareholders through strong operational and financial performance." Board of Directors Appointment

Today, the company also announced that Joe Natale, who has been a director since January 2012 has been appointed Vice-Chair of the Board of Directors.

Second Quarter and Year-to-Date                                             
                                  Three months ended     Six months ended   
                                        June 30               June 30       
                                 --------------------  -------------------- 
                                    2015       2016       2015       2016   
                                 ---------  ---------  ---------  --------- 
Revenue (in millions)            $ 1,417.3  $ 1,485.5  $ 2,715.8  $ 2,838.8 
IFRS net earnings (in                                                       
 millions)(i)                    $    24.2  $    36.2  $    43.9  $    61.8 
IFRS earnings per share (i)      $    0.14  $    0.25  $    0.26  $    0.43 
Non-IFRS adjusted net earnings                                              
 (in millions) (i) (ii)          $    41.7  $    41.8  $    74.7  $    79.4 
Non-IFRS adjusted EPS(i) (ii)    $    0.25  $    0.29  $    0.44  $    0.55 
Non-IFRS return on invested                                                 
 capital (ROIC)(ii)                   19.6%      20.9%      18.2%      19.3%
Non-IFRS operating margin(ii)          3.4%       3.8%       3.3%       3.6%
          i.  International  Financial  Reporting  Standards  (IFRS)  EPS  for  the            
          second  quarter  of  2016  included  an  aggregate  charge  of  $0.09  (pre-tax)  
          per  share  for  employee  stock-based  compensation  expense,  amortization    
          of  intangible  assets  (excluding  computer  software)  and  restructuring      
          charges.  This  aggregate  charge  is  within  the  range  we  provided  on  April
          21,  2016  of  an  aggregate  charge  of  between  $0.07  to  $0.12  per  share  for
          these  items  (see  the  tables  in  Schedule  1  attached  hereto  for  per-item  
          charges).  IFRS  EPS  and  adjusted  EPS  (non-IFRS)  for  the  second  quarter    
          of  2016  were  negatively  impacted  by  a  $0.02  per  share  net  income  tax      
          expense  related  to  the  unfavorable  impact  of  taxable  foreign  exchange    
          related  to  the  weakening  of  the  Malaysian  ringgit  and  Chinese  renminbi.
          Our  guidance  for  adjusted  EPS  (non-IFRS)  for  the  second  quarter  of  2016
          excluded  the  potential  impact  of  taxable  foreign  exchange.                          
          In  addition,  the  calculation  of  our  weighted  average  number  of  shares    
          (used  to  determine  our  IFRS  EPS  and  non-IFRS  adjusted  EPS)  for  the          
          second  quarter  and  first  half  of  2016  reflected  the  full  impact  of  the  
          reduction  in  our  subordinate  voting  shares  as  a  result  of  our  share        
          repurchases  and  cancellations  in  2015  pursuant  to  our  $350.0  million      
          substantial  issuer  bid  completed  in  June  2015,  as  well  as  our  previous  
          normal  course  issuer  bid  (NCIB)  that  expired  in  September  2015.                
          Accordingly,  the  positive  effect  of  reduced  weighted  average  number  of  
          shares  on  our  IFRS  EPS  and  non-IFRS  adjusted  EPS  for  the  second  quarter
          and  first  half  of  2016  was  greater  as  compared  to  the  prior  year              
          ii.  Non-IFRS  measures  do  not  have  any  standardized  meaning  prescribed    
          by  IFRS  and  therefore  may  not  be  comparable  to  similar  measures                
          presented  by  other  public  companies  that  use  IFRS  or  other  generally      
          accepted  accounting  principles  (GAAP).  See  "Non-IFRS  Supplementary          
          Information"  below  for  information  on  our  rationale  for  the  use  of  non-
          IFRS  measures,  and  Schedule  1  for,  among  other  items,  non-IFRS  measures
          included  in  this  press  release,  as  well  as  their  definitions,  uses,  and
          a  reconciliation  of  non-IFRS  to  IFRS  measures  (where  a  comparable  IFRS  
          measure  exists).                                                                                                              
End  Markets  by  Quarter  as  a                                                                                                  
  Percentage  of  Total  Revenue                                                                                                
                                                                                      2015                                          2016        
                                                        ----------------------------------  -------------
                                                            Q1          Q2          Q3          Q4          FY          Q1          Q2    
                                                        ------  ------  ------  ------  ------  ------  ------
Communications                                40%        40%        41%        38%        40%        38%        41%  
Consumer                                            3%          3%          3%          3%          3%          3%          3%    
Diversified(i)                                28%        28%        30%        30%        29%        34%        30%  
Servers                                              11%        10%        8%          10%        10%        9%          9%    
Storage                                              18%        19%        18%        19%        18%        16%        17%  
Revenue  (in  billions)                $1.30    $1.42    $1.41    $1.51    $5.64    $1.35    $1.49
          i.  Our  diversified  end  market  is  comprised  of  aerospace  and  defense,      
          industrial,  healthcare,  energy,  and  semiconductor  equipment.                      

Third Quarter 2016 OutlookFor the third quarter ending September 30, 2016, we anticipate revenue to be in the range of $1.475 billion to $1.575 billion, and non-IFRS adjusted earnings per share to be in the range of $0.27 to $0.33. We expect a negative $0.07 to $0.12 per share (pre-tax) aggregate impact on net earnings on an IFRS basis for employee stock-based compensation expense, amortization of intangible assets (excluding computer software) and restructuring charges. We cannot predict changes in currency exchange rates, the impact of such changes on our operating results, or the degree to which we will be able to manage such impacts. Second Quarter 2016 WebcastManagement will host its second quarter 2016 results conference call today at 5:00 p.m. Eastern Daylight Time. The webcast can be accessed at www.celestica.com. Non-IFRS Supplementary InformationIn addition to disclosing detailed operating results in accordance with IFRS, Celestica provides supplementary non-IFRS measures to consider in evaluating the company's operating performance. Management uses adjusted net earnings and other non-IFRS measures to assess operating performance and the effective use and allocation of resources; to provide more meaningful period-to-period comparisons of operating results; to enhance investors' understanding of the core operating results of Celestica's business; and to set management incentive targets. We believe investors use both IFRS and non-IFRS measures to assess management's past, current and future decisions associated with our priorities and our allocation of capital, as well as to analyze how our business operates in, or responds to, swings in economic cycles or to other events that impact our core operations. See Schedule 1 - Supplementary Non-IFRS Measures for, among other items, non-IFRS measures provided herein, non-IFRS definitions, and a reconciliation of non-IFRS to IFRS measures (where a comparable IFRS measure exists). About CelesticaCelestica is dedicated to delivering end-to-end product lifecycle solutions to drive our customers' success. Through our simplified global operations network and information technology platform, we are solid partners who deliver informed, flexible solutions that enable our customers to succeed in the markets they serve. Committed to providing a truly differentiated customer experience, our agile and adaptive employees share a proud history of demonstrated expertise and creativity that provides our customers with the ability to overcome complex challenges. For further information about Celestica, visit our website at www.celestica.com. Our securities filings can also be accessed at www.sedar.com and www.sec.gov. Cautionary Note Regarding Forward-looking StatementsThis news release contains forward-looking statements related to our future growth; trends in the electronics manufacturing services (EMS) industry; our anticipated financial or operational results, including our quarterly revenue, non-IFRS operating margin and earnings guidance; the impact of acquisitions and program wins or losses on our financial results and working capital requirements; anticipated expenses, restructuring actions and charges, capital expenditures and/or benefits; our expected tax and litigation outcomes; our cash flows, financial targets and priorities; changes in our mix of revenue by end market; our ability to diversify and grow our customer base and develop new capabilities; the effect of the global economic environment on customer demand; the possibility of future impairments of property, plant and equipment, goodwill or intangible assets; the timing and extent of the expected recovery of cash advances made to a particular solar cell supplier; the impact of the Term Loan (as defined herein), on our liquidity, future operations and financial condition; and the number of subordinate voting shares and price thereof we may repurchase under our current NCIB. Such forward-looking statements may, without limitation, be preceded by, followed by, or include words such as "believes", "expects", "anticipates", "estimates", "intends", "plans", "continues", "project", "potential", "possible", "contemplate", "seek", or similar expressions, or may employ such future or conditional verbs as "may", "might", "will", "could", "should" or "would", or may otherwise be indicated as forward-looking statements by grammatical construction, phrasing or context. For those statements, we claim the protection of the safe harbor for forward-looking statements contained in the U.S. Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws. Forward-looking statements are provided for the purpose of assisting readers in understanding management's current expectations and plans relating to the future. Readers are cautioned that such information may not be appropriate for other purposes. Forward-looking statements are not guarantees of future performance and are subject to risks that could cause actual results to differ materially from conclusions, forecasts or projections expressed in such statements, including, among others, risks related to: our customers' ability to compete and succeed in the marketplace with the services we provide and the products we manufacture; price and other competitive factors generally affecting the EMS industry; managing our operations and our working capital performance during uncertain market and economic conditions; responding to changes in demand, rapidly evolving and changing technologies, and changes in our customers' business and outsourcing strategies, including the insourcing of programs; customer concentration and the challenges of diversifying our customer base and replacing revenue from completed or lost programs, or customer disengagements; changing commodity, material and component costs, as well as labor costs and conditions; disruptions to our operations, or those of our customers, component suppliers or logistics partners, including as a result of global or local events outside our control, including as a result of the June 2016 referendum by British voters advising for the exit of the United Kingdom from the European Union (Brexit); retaining or expanding our business due to execution issues relating to the ramping of new or existing programs or new offerings; the incurrence of future impairment charges; recruiting or retaining skilled personnel; transitions associated with our new CEO, our Global Business Services initiative, our Organizational Design initiative, and/or other changes to our company's operating model; current or future litigation and/or governmental actions; improving operating performance and financial results in our semiconductor and solar businesses; delays in the delivery and availability of components, services and materials, including from suppliers upon which we are dependent for certain components; non-performance by counterparties; our financial exposure to foreign currency volatility, including stock market volatility and currency exchange rate fluctuations resulting from the Brexit; our dependence on industries affected by rapid technological change; the variability of revenue and operating results; managing our global operations and supply chain; increasing income taxes, tax audits, and challenges of defending our tax positions, and obtaining, renewing or meeting the conditions of tax incentives and credits; completing restructuring actions, including achieving the anticipated benefits therefrom, and integrating any acquisitions; defects or deficiencies in our products, services or designs; computer viruses, malware, hacking attempts or outages that may disrupt our operations; any failure to adequately protect our intellectual property or the intellectual property of others; compliance with applicable laws, regulations and social responsibility initiatives; our having sufficient financial resources and working capital to fund currently anticipated financial obligations and to pursue desirable business opportunities; the potential that conditions to closing the sale of our real property in Toronto and related transactions (collectively, the "Toronto Real Property Transactions") may not be satisfied on a timely basis or at all; and if the Toronto Real Property Transactions are completed, our ability to secure on commercially acceptable terms an alternate site for our existing Toronto manufacturing operations, and the costs, timing and/or execution of such relocation proving to be other than anticipated. The foregoing and other material risks and uncertainties are discussed in our public filings at www.sedar.com and www.sec.gov, including in our MD&A, our most recent Annual Report on Form 20-F filed with, and subsequent reports on Form 6-K furnished to, the U.S. Securities and Exchange Commission, and our Annual Information Form filed with the Canadian Securities Administrators. Our revenue, earnings and other financial guidance, as contained in this press release, are based on various assumptions, many of which involve factors that are beyond our control. Our material assumptions include those related to the following: production schedules from our customers, which generally range from 30 days to 90 days and can fluctuate significantly in terms of volume and mix of products or services; the timing and execution of, and investments associated with, ramping new business; the success in the marketplace of our customers' products; the stability of general economic and market conditions, currency exchange rates, and interest rates; our pricing, the competitive environment and contract terms and conditions; supplier performance, pricing and terms; compliance by third parties with their contractual obligations, the accuracy of their representations and warranties, and the performance of their covenants; the costs and availability of components, materials, services, plant and capital equipment, labor, energy and transportation; operational and financial matters including the extent, timing and costs of replacing revenue from completed or lost programs, or customer disengagements; technological developments; overall demand improvement in the semiconductor industry; revenue growth and improved financial results in our semiconductor and solar businesses; the timing, execution and effect of restructuring actions; our having sufficient financial resources and working capital to fund our currently anticipated financial obligations and to pursue desirable business opportunities; and our ability to diversify our customer base and develop new capabilities. While management believes these assumptions to be reasonable under the current circumstances, they may prove to be inaccurate. Forward-looking statements speak only as of the date on which they are made, and we disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. All forward-looking statements attributable to us are expressly qualified by these cautionary statements. Schedule 1 Supplementary Non-IFRS Measures

1 | 2 | 3 | 4 | 5 | 6 | 7 | 8  Next Page »

Review Article Be the first to review this article
Featured Video
Latest Blog Posts
Akio Moriwaki3DEXPERIENCE Construction
by Akio Moriwaki
The productization effect in construction
Alex Carrick, Chief Economist at ConstructConnectThe AEC Lens
by Alex Carrick, Chief Economist at ConstructConnect
Cost-Push, Demand-Pull, Easy-Money, Fiscal-Excess Inflation
Engineering / Software Sales Representative for Azore CFD Software at Livonia, Michigan
Fluid Dynamic Engineer / CFD Developer for Azore CFD Software at Livonia, Michigan
GIS Analyst for New Mexico Gas Company, Inc. at Albuquerque -New Mexico, Wyoming
Upcoming Events
Digital Built Week Americas at Anaheim CA - Jun 14, 2022 - Dec 31, 1969
Utopian and Sacred Architecture Studies (USAS) - 2nd Edition at University Way, Dockland Campus London, E16 2RD, UK London --Choose One-- United Kingdom - Jun 14 - 15, 2022
HxGN LIVE Global 2022 - Future of Manufacturing at Las Vegas NV - Jun 20 - 23, 2022
Building Innovation 2022 at Mayflower Hotel MD - Sep 26 - 28, 2022

© 2022 Internet Business Systems, Inc.
670 Aberdeen Way, Milpitas, CA 95035
+1 (408) 882-6554 — Contact Us, or visit our other sites:
TechJobsCafe - Technical Jobs and Resumes EDACafe - Electronic Design Automation GISCafe - Geographical Information Services  MCADCafe - Mechanical Design and Engineering ShareCG - Share Computer Graphic (CG) Animation, 3D Art and 3D Models
  Privacy PolicyAdvertise