Circuits Assembly Online Magazine - Features

ST. PETERSBURG, FL, Dec. 20 -- Electronics manufacturing services provider Jabil Circuit Inc. today reported record first-quarter net revenue rose 21% to $1.83 billion year-over-year.

For the quarter ended Nov. 30, GAAP net income increased to $55.9 million, from $42.5 million last year.

In a press statement, president and chief executive Tim Main said, "While the end-markets and the economy are just beginning to show signs of improvement, Jabil clearly has the strong trend for electronics companies to outsource in its favor."

Jabil guided for second quarter net revenue of $1.65 million to $1.75 billion and core earnings per share of 26 to 28 cents per diluted share. Estimated GAAP earnings per share are 22 to 24 cents per diluted share. The February quarter is typically hurt by lower consumer spending.

First quarter core earnings -- core earnings as GAAP net income before one-time charges and amortization of intangibles -- increased 26% to $65 million.

Gross profit for the first quarter of fiscal 2005 increased 16% to $154.9 million or 8.4% of net revenue.

On a GAAP basis, operating income rose 32% to $70.3 million.

The company expects to end the February quarter with significantly less inventory, officials said on a conference call with analysts.

Cash flow from operations was lower, at $35 million. Inventory turns were nine. Capital expenditures were $55 million, up nearly 100% over the second quarter. The company said it would stabilize R&D spending at that levels.

Return on invested capital rose to 17% during the quarter. Officials said they aim for ROIC of 15 to 20% longterm.

Three customers made up more than 10% each of Jabil's Q1 sales. Main said the firm plans to reduce its dependence on its top 10 customers.

The company is not ruling out future acquisitions. "We could do deals; we've got the bandwidth and the money to do it," Main said. "There are opportunities in the pipeline."

Jabil maintained previous fiscal 2005 guidance of net revenue of $7.2 billion to $7.4 billion and core earnings per share to be in a range of $1.20 to $1.24 per diluted share. "We're looking for end-markets to grow in the 4 to 5% range," the firm said. It said it expects gains from vertically integrated industrial OEMs who are considering outsourcing manufacturing.

MINNEAPOLIS, Dec. 17 -- EMS provider Nortech Systems today provided improved guidance for its fourth-quarter and fiscal 2004 revenue, saying that it expects sales of $19 million to $20 million. However, the company lowered its year-end earnings outlook, citing diminished margins and expenses for labor and raw materials.

Last year, Nortech reported fourth-quarter revenue of $15.6 million.

The firm guided for earnings of $0.05 to $0.07 per diluted share for the quarter ending Dec. 31, compared to a loss of $0.06 per diluted share last year.

Year-end revenue is expected to increase by 21 to 24% over 2003, to $70 million to $72 million, slightly above previous guidance. Nortech guided for fiscal year earnings to be in the range of $0.20 to $0.22. It previously guided for $0.26 to $0.29 expected earlier. Last year Nortech Systems earned $0.25 per diluted share.

"While we're pleased with our sustained revenue growth, we continue to face margin pressures impacting our profitability," says Mike Degen, President and CEO. "The fourth quarter earnings are being negatively impacted by a mix of lower-margin product, material cost increases and higher than anticipated labor costs and expenses related to some of our domestic and international operations."

SAN JOSE, Dec. 17 -- The 90-day-moving average orders for North American-based semiconductor gear manufacturers was $1.35 billion in November, 2% below the revised October levels, but 46% above last year.

"Total orders for semiconductor equipment have declined about 16% from the peak observed in June, though they remain well above levels reported one year ago," said Stanley T. Myers, president and CEO of SEMI. "The North American equipment book-to-bill ratio increased in November as billings declined at a steeper pace than bookings based on a three-month average."

The orders average matched the 90-day average for shipments, good for a book-to-bill ratio of 1.0, said the trade group SEMI.

The three-month average of worldwide billings in November was $1.34 billion, down 6% from the revised October level and up 53% from November 2003.

The SEMI book-to-bill is a ratio of three-month moving averages of worldwide bookings and billings for North American-based semiconductor equipment manufacturers. Billings and bookings figures are in millions of U.S. dollars.

JASPER, IN, Dec. 16 -- Kimball Electronics Group today named Steve Korn subsidiary vice president, business development, responsible for new customers.

Korn has spent the last 17 years with Sanmina-SCI, where he has held positions as engineering manager, marketing manager, production manager and vice president and plant manager.

Korn has a bachelor's in mechanical engineering from the South Dakota School of Mines and Technology.

Kimball is a contract electronics manufacturing services company with manufacturing operations located in Indiana, Mexico, Poland and Thailand.

MELVILLE, NY, Dec. 15 -- Components distributor Nu Horizons Electronics Corp. today said it has expanded its agreement with Clare Inc. to cover sales of solid-state relays and high voltage ICs in Asia.

The new deal covers Malaysia, China, the Philippines, Singapore and Thailand.

The companies have an existing pact covering North America distribution.

"Nu Horizons has built a successful demand creation model and stable Asian distribution program, which were the two key factors in expanding our partnership," said Mark Heisig, vice president and general manager of Clare. "We look forward to collaborating to improve our product design capabilities, while broadening our global distribution network."

LAFOX, IL, Dec. 17 -- Richardson Electronics has acquired assets from Evergreen Trading Co. Ltd., a distributor of power components in China.

"Evergreen has been able to realize exponential growth in the Chinese power conversion market through their longstanding relationships with customers in the UPS and industrial markets," said Murray Kennedy, executive vice president and general manager of Richardson's Industrial Power Group, in a statement.

Richardson provides power components.

Evergreen supplies power components and devices to small- to medium-sized companies in China.