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Sanmina-SCI's CEO Discusses F2Q 2012 Results - Earnings Call Transcript

Our gross margin came in at 7.4%, which was up 10 basis points from the first quarter. Operating margin declined 20 basis points from the first quarter to 3.1%. Non-GAAP EPS was $0.27, which was at the midpoint of our guidance for the quarter. This was based on 84.1 million shares outstanding on a fully diluted basis.

Finally, cash generation was strong this quarter, with cash flow from operations of $60 million and free cash flow at $46 million. I’ll discuss cash in more detail in a few minutes. Please turn to slide four.

Revenue was down 2.6% or $39 million from Q1 to $1.46 billion. From a GAAP perspective, we reported a net loss of approximately $1 million, which results in earnings per share of negative $0.02. This was down relative to last quarter by $0.12. The GAAP loss included a $6.5 million charge for the call premium and unamortized issuance costs associated with the redemption of $150 million of debt during the quarter. There was also a $2.8 million reserve that was taken for a customer that declared bankruptcy during the quarter.

Restructuring costs totaled $5.5 million for Q2. The cost primarily reflects what we’ve been recognizing as expenses are incurred related to real estate. Looking forward, we will continue to see some ongoing restructuring charges on our GAAP P&L of approximately $4 million to $5 million per quarter that primarily relate to real estate which is being held for sale.

My remaining comments will focus on the non-GAAP financials for the second quarter. At $108 million, gross profit was down $2 million from the prior quarter. Gross margin came in at 7.4%, which was 10 basis points higher than the previous quarter. Gross margin was towards the high end of the range that we had anticipated for the quarter.

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