Celestica Announces Second Quarter Financial Results

July 23, 2010

TORONTO, Canada - Celestica Inc. (NYSE, 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, 2010.

Second Quarter and YTD Results
Revenue for the quarter was $1.59 billion, compared to $1.40 billion in the second quarter of 2009. GAAP net loss was $(6.1) million, or $(0.03) per share, compared to GAAP net earnings of $5.3 million, or $0.02 per share, for the same period last year. 

Adjusted net earnings for the quarter were $48.3 million, or $0.21 per share, compared to adjusted net earnings of $31.1 million, or $0.14 per share, for the same period last year. The term adjusted net earnings is a non-GAAP measure defined as net earnings before stock-based compensation, amortization of intangible assets (excluding computer software), restructuring and other charges, and gains or losses related to the repurchase of shares or debt, net of tax adjustment and significant deferred tax write-offs or recoveries. Detailed GAAP financial statements and supplementary information related to adjusted net earnings and other non-GAAP measures appear at the end of this press release.

For the six months ended June 30, 2010, revenue was $3.10 billion, compared to $2.87 billion for the same period in 2009. GAAP net earnings were $19.8 million, or $0.09 per share, compared to $24.5 million, or $0.11 per share, for the same period last year. Adjusted net earnings for the six months ended June 30, 2010 were $91.4 million, or $0.39 per share, compared to $64.7 million, or $0.28 per share, for the same period in 2009.

Second Quarter Results Compared to Guidance
The company’s revenue and adjusted net earnings per share for the second quarter of 2010 were within the company’s published guidance, announced on April 22, 2010, of revenue of $1.50 billion to $1.60 billion, and adjusted net earnings per share of $0.19 to $0.23.

“Celestica’s year-over-year increase in revenue reflects the progress the company is making toward achieving its revenue growth objectives in its targeted end markets,” said Craig Muhlhauser, President and Chief Executive Officer.  “Recent wins in our consumer, computing, industrial segments, and the after-market services business, are expected to further contribute to our revenue growth in the fourth quarter.”

Celestica to expand healthcare capabilities through acquisition of Allied Panels Entwicklungs-und Produktions GmbH (Allied Panels)
Celestica announced it has signed a definitive agreement to acquire Allied Panels, a medical engineering and manufacturing service provider, offering concept-to-full-production solutions in medical devices, with a core focus on diagnostic imaging products. The acquisition will expand Celestica’s capabilities in the healthcare diagnostic and imaging market. Allied Panels’ customers include GE Healthcare, Siemens Healthcare, Sonosite and SuperSonic Imagine. Allied Panels’ headquarters and main development and production centre is located in Frankenburg, Austria, with an additional engineering and manufacturing services center in Madison, Wisconsin, USA. With annual revenue of approximately 40 million euros, Allied Panels currently employs 130 people. This transaction is expected to close in the third quarter of 2010.

Celestica announces share repurchase plan
Celestica announced its intention to launch a Normal Course Issuer Bid (NCIB), subject to the approval of the Toronto Stock Exchange.  If approved, the company expects to be authorized to repurchase, at its discretion during the next 12 months, up to approximately 18 million, or 9%, of its subordinate voting shares on the open market subject to the normal terms and limitations of such bids.  The number of subordinate voting shares which may be purchased will be reduced by the number of subordinate voting shares purchased for employee equity-based incentive programs.  Any subordinate voting shares purchased by Celestica under the NCIB will be cancelled.

Third Quarter of 2010 Outlook
For the third quarter ending September 30, 2010, the company anticipates revenue to be in the range of $1.55 billion to $1.65 billion, and adjusted net earnings per share to be in the range of $0.20 to $0.24.  The company expects a negative $0.06 to $0.11 per share impact on a GAAP basis for the following items: quarterly stock-based compensation, amortization of intangible assets (excluding computer software) and restructuring charges.

Second Quarter Webcast
Management will host its quarterly results conference call today at 8:00 a.m. Eastern. The webcast 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 provides supplementary non-GAAP measures to consider in evaluating the company’s operating performance.  See Schedule I.

Management uses adjusted net earnings and other non-GAAP measures to assess operating performance and the effective use and allocation of resources; to provide more meaningful period-to-period comparisons of operating results, both internally and against operating results of competitors; to enhance investors’ understanding of the core operating results of our business; and to set management incentive targets.

About Celestica

Celestica 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 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 Harbor 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 including those relating to the redemption of our Senior Subordinated Notes and the expected benefits of such redemption, 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. 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 in any applicable Canadian securities legislation. Forward looking statements are not guarantees of future performance. You should understand that the following important factors could affect our future results and could cause those results to differ materially from those expressed in such forward looking statements: the challenges of effectively managing our operations during uncertain economic conditions, including significant changes in demand from our customers as a result of an uncertain or weak economic environment; the risk of potential non-performance by counterparties, including but not limited to financial institutions, customers and suppliers; the effects of price competition and other business and competitive factors generally affecting the EMS industry, including changes in the trend for outsourcing; our dependence on a limited number of customers; variability of operating results among periods; the challenge of managing our financial exposures to foreign currency fluctuations; the challenge of responding to changes in customer demand; our inability to retain or grow our business due to execution problems resulting from significant headcount reductions, plant closures and product transfers associated with restructuring activities; our dependence on industries affected by rapid technological change; our ability to successfully manage our international operations; and the delays in the delivery and/or general availability of various components and materials used in our manufacturing process. These and other risks and uncertainties, as well as other information related to the company, are discussed in the Company's various public filings at www.sedar.com and www.sec.gov, including our Annual Report on Form 20-F and subsequent reports on Form 6-K filed with the Securities and Exchange Commission and our Annual Information Form filed with the Canadian Securities Commissions. Forward-looking statements are provided for the purpose of providing information about management’s current expectations and plans relating to the future. Readers are cautioned that such information may not be appropriate for other purposes. Except as required by applicable law, 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.

As of its date, this press release contains any material information associated with the Company’s financial results for the fourth quarter ended December 31, 2009 and revenue and adjusted net earnings guidance for the first quarter ending March 31, 2010. Revenue and earnings guidance is reviewed by the Company’s Board of Directors. Our revenue and earnings guidance is based on various assumptions which management believes are reasonable under the current circumstances, but may prove to be inaccurate, and many of which involve factors that are beyond the control of the Company. The material assumptions may include the following: forecasts from our customers, which range from 30 to 90 days; timing and investments associated with ramping new business; general economic and market conditions; currency exchange rates; pricing and competition; anticipated customer demand; supplier performance and pricing; commodity, labor, energy and transportation costs; operational and financial matters; technological developments; and the timing and execution of our restructuring plan. These assumptions are based on management’s current views with respect to current plans and events, and are and will be subject to the risks and uncertainties referred to above. It is Celestica’s policy that revenue and earnings guidance is effective on the date given, and will only be updated through a public announcement.

To view full financial details, please visit our Investor's Section.

Contacts: