Celestica announces adjustment to non-cash, deferred tax recovery reported in the second quarter ended June 30, 2007



    (All amounts in U.S. dollars.
    Per share information based on diluted shares outstanding unless noted
    otherwise.)

    TORONTO, Oct. 15 /CNW/ - Celestica Inc. (NYSE, TSX: CLS), a global
provider of innovative electronics manufacturing services (EMS), today
announced an adjustment to a non-cash, deferred tax recovery previously
reported in the second quarter ended June 30, 2007.
    The company has determined that the assumptions used in the second
quarter to record a non-cash, deferred tax recovery relating to a tax benefit
resulting from a previous year's write-down of an acquired and subsequently
restructured Canadian operation were incorrect. An error in the cost basis for
tax purposes of that Canadian acquisition led to the incorrect presumption
that a tax benefit could be realized in the second quarter. Accordingly,
deferred tax recovery and GAAP net earnings for the three and six months ended
June 30, 2007 have been adjusted downward by $44.1 million, respectively.
Basic and diluted GAAP earnings per share for the three and six months ended
June 30, 2007 have been adjusted from $0.11 and $(0.04), respectively to
$(0.08) and $(0.23), respectively. The company has adjusted its prior period
balances in accordance with accounting standards and is filing amended
financial statements to reflect the change.
    The change to the deferred tax recovery has no impact on reported
adjusted net earnings and adjusted net earnings per share for the second
quarter of 2007 of $4.9 million or $0.02 per share, respectively, and has no
impact on revenue, operating earnings or cash. (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).
    The company also reconfirmed its revenue outlook for the third quarter
ended September 30, 2007 of $2.0 billion to $2.2 billion, and its expected
adjusted net earnings per share of $0.04 to $0.12.
    The company's third quarter results will be released on Thursday, October
25, after markets close, followed by a webcast at 4:30 p.m. 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.
    The company's security filings can also be accessed at
http://www.sedar.com and http://www.sec.gov.

    Safe Harbour and Fair Disclosure Statement
    ------------------------------------------
    This news release contains forward-looking statements related to our
future growth, trends in our industry, our financial and or operational
results, and our financial or operational performance. Such forward-looking
statements are predictive in nature, and may be based on current expectations,
forecasts or assumptions involving risks and uncertainties that could cause
actual outcomes and results to differ materially from the forward-looking
statements themselves. Such forward-looking statements may, without
limitation, be preceded by, followed by, or include words such as "believes",
"expects", "anticipates", "estimates", "intends", "plans", or similar
expressions, or may employ such future or conditional verbs as "may", "will",
"should" or "would", or may otherwise be indicated as forward-looking
statements by grammatical construction, phrasing or context.. The risks and
uncertainties referred to above include, but are not limited to: variability
of operating results among periods; inability to retain or grow our business
due to execution problems resulting from significant headcount reductions,
plant closures and product transfer associated with major restructuring
activities; the effects of price competition and other business and
competitive factors generally affecting the EMS industry; the challenges of
effectively managing our operations during uncertain economic conditions; our
dependence on a limited number of customers; our dependence on industries
affected by rapid technological change; the challenge of responding to
lower-than-expected customer demand; our ability to successfully manage our
international operations; and delays in the delivery and/or general
availability of various components used in the manufacturing process. These
and other risks and uncertainties and factors are discussed in the Company's
various public filings at www.sedar.com and www.sec.gov, including our Form
20-F and subsequent reports on Form 6-K filed with the Securities and Exchange
Commission.

    
    RECONCILIATION OF GAAP TO
    ADJUSTED NET EARNINGS
    (in millions of
    U.S. dollars)              2006                          2007
                  ----------------------------- -----------------------------
    Three months      GAAP   Adjust-  Adjusted      GAAP   Adjust-  Adjusted
    ended June 30             ments                         ments
                  --------- --------- --------- ---------- -------- ---------
                                                   Resta-   Resta-
                                                  ted (a)  ted (a)

    Revenue       $2,223.5   $    -   $2,223.5  $1,937.0   $    -   $1,937.0
    Cost of
     sales (1)     2,098.8     (0.4)   2,098.4   1,846.4     (0.9)   1,845.5
                  --------- --------- --------- ---------- -------- ---------
    Gross profit     124.7      0.4      125.1      90.6      0.9       91.5
    SG&A (1)          75.9      0.1       76.0      71.0     (0.5)      70.5
    Amortization
     of intangible
     assets            7.1     (7.1)         -       5.1     (5.1)         -
    Integration
     costs relating
     to acquisitions   0.2     (0.2)         -         -        -          -
    Other charges     53.4    (53.4)         -      (0.9)     0.9          -
                  --------- --------- --------- ---------- -------- ---------
    Operating
     earnings (loss)
     - EBIAT         (11.9)    61.0       49.1      15.4      5.6       21.0
    Interest
     expense, net     15.2        -       15.2      15.3        -       15.3
                  --------- --------- --------- ---------- -------- ---------
    Net earnings
     (loss) before
     tax             (27.1)    61.0       33.9       0.1      5.6        5.7
    Income tax
     expense
     (recovery)        3.2      1.6        4.8      19.3    (18.5)       0.8
                  --------- --------- --------- ---------- -------- ---------
    Net earnings
     (loss)       $  (30.3)  $ 59.4      $29.1  $  (19.2)  $ 24.1   $    4.9
                  --------- --------- --------- ---------- -------- ---------
                  --------- --------- --------- ---------- -------- ---------
    W.A. No. of
     shares (in
     millions)
     - diluted       227.1               227.9     229.0               229.2
    Earnings (loss)
     per share
     - diluted    $  (0.13)           $   0.13  $  (0.08)           $   0.02


                               2006                          2007
                  -----------------------------------------------------------
    Six months        GAAP   Adjust-  Adjusted      GAAP   Adjust-  Adjusted
    ended June 30             ments                         ments
                  --------- --------- --------- ---------- -------- ---------
                                                   Resta-   Resta-
                                                  ted (a)  ted (a)

    Revenue       $4,157.5   $    -   $4,157.5  $3,779.3   $    -   $3,779.3
    Cost of
     sales (1)     3,927.0     (1.9)   3,925.1   3,610.1     (1.9)   3,608.2
                  --------- --------- --------- --------- --------- ---------
    Gross profit     230.5      1.9      232.4     169.2      1.9      171.1
    SG&A (1)         150.4     (1.2)     149.2     145.4     (1.1)     144.3
    Amortization
     of intangible
     assets           13.7    (13.7)         -      11.1    (11.1)         -
    Integration
     costs relating
     to acquisitions   0.7     (0.7)         -       0.1     (0.1)         -
    Other charges     70.4    (70.4)         -       6.2     (6.2)         -
                  --------- --------- --------- ---------- -------- ---------
    Operating
     earnings (loss)
     - EBIAT          (4.7)    87.9       83.2       6.4     20.4       26.8
    Interest
     expense, net     29.1        -       29.1      31.7        -       31.7
                  --------- --------- --------- ---------- -------- ---------
    Net earnings
     (loss) before
     tax             (33.8)    87.9       54.1     (25.3)    20.4       (4.9)
    Income tax
     expense
     (recovery)       13.9     (6.3)       7.6      28.2    (28.9)      (0.7)
                  --------- --------- --------- ---------- -------- ---------
    Net earnings
     (loss)       $  (47.7)  $ 94.2   $   46.5  $  (53.5)  $ 49.3   $   (4.2)
                  --------- --------- --------- ---------- -------- ---------
                  --------- --------- --------- ---------- -------- ---------
    W.A. No. of
     shares (in
     millions)
     - diluted       226.9               227.9     228.7               228.7
    Earnings (loss)
     per share
     - diluted    $  (0.21)           $   0.20  $  (0.23)           $  (0.02)

    (1) Non-cash option expense included in cost of sales and SG&A is added
        back for adjusted net earnings

    (a) See note 2 to the Restated Consolidated Financial Statements

    GUIDANCE SUMMARY
                          2Q 07 Guidance    2Q 07 Actual   3Q 07 Guidance (2)
                          ---------------   ------------   ------------------
    Revenue               $1.85B - $2.05B       $1.94B       $2.0B - $2.2B
    Adjusted net EPS      $(0.03) - $0.05       $0.02        $0.04 - $0.12

    (2) Guidance for the third quarter is provided only on an adjusted net
        earnings basis. This is due to the difficulty in forecasting the
        various items impacting GAAP net earnings, such as the amount and
        timing of our restructuring activities.
    

    %SEDAR: 00010284E




For further information:

For further information: Laurie Flanagan, Celestica Global
Communications, (416) 448-2200, media@celestica.com; Paul Carpino, Celestica
Investor Relations, (416) 448-2211, clsir@celestica.com

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