News
The agreement was announced by the companies today. Other details were not disclosed.
Boucher will also lead the EMS company's Lean Manufacturing initiatives.
Boucher was head of manufacturing for Celestica in North and South America.
Prior to joining Celestica in March, Boucher was corporate vice president of global supply chain management for MSL, which Celestica acquired. He also worked for Circuit Test Inc. and Digital Equipment Corp.
Revenue from so-called volume high-end servers grew 18.2% and continues to drive the server market. Midrange enterprise server sales declined 10.2%, the third straight quarterly decline. High-end enterprise servers grew 1.9%, the forth consecutive quarter of growth.
"IT spending remained strong overall in the third quarter as customers continued to refresh and expand their IT infrastructures," said Matt Eastwood, program director of global enterprise server solutions at IDC. "Although customers continue to target data center simplification initiatives, investment in strategic IT initiatives - including new workloads - are also growing significantly once again."
IBM retained the top spot worldwide with 31.7% market share, up 6.3%. HP, the shipments leader, was second in revenues (26.8% share), up 2.9%. Sun and Dell were third at 10.2% and 10.1%, respectively. Dell grew 14.1% year-over-year while Sun was flat at 0.1%.
Top 5 OEMs, Worldwide Server Systems Factory Revenue (millions)
- IBM $3,659 31.7%
- Hewlett-Packard $3,094 26.8%
- Sun $1,176 10.2%
- Dell $1,170 10.1%
- Fujitsu/Fujitsu Siemens $714 6.2%
- Others $1,733 15%
McKinsey & Co. said today that although contract assemblers can leverage economies-of-scale and have generated tremendous value for their customers, "they have proved less adept at capturing value for themselves" and further restructuring awaits unless the sector adopts better habits.
In the McKinsey Quarterly, published today, the firm asserted, "Fierce competition, the economic downturn and an outdated pricing model have combined to produce razor-thin or nonexistent margins for most of the industry's top-tier players. The takeaway EMS players must learn to stand up to their powerful OEM customers, just as suppliers in the automotive industry have done. They can no longer afford to offer generous terms simply to fill up their factories.
"A bright future awaits these companies only if
they adopt a small-business mind-set by charging for every service they
provide on the OEMs' behalf and by closely monitoring their pricing and
collection processes," McKinsey wrote.
HONG KONG, Nov. 11 -- VTech Holdings Ltd. today announced higher revenues but lower profits for its fiscal 2005 first-half, ended Sept. 30. Revenue rose 13.1% to $457.1 million but profits fell 51.1% to $8.5 million, $3.3 million for a one-time settlement of indemnification claims.
VTech attributed the drop to underperformance in the North American telecommunication market.
VTech, which designs and builds consumer products and performs contract manufacturing, said business revenue from the North American market fell 10.7% to $251.4 million versus last year. Sales to businesses makes up 82.7% of VTech's telecom revenue. Overall telecom sales rose 1.7% to $304 million.
Sales of electronic learning products rebounded sharply, up 66.8% to $95.1 million. Sales in North America were up 129.4% to $31.2 million, while sales in Europe grew 40.3% to $56.1 million.
Revenues from EMS services were up 20.6% to $58 million. Profits were stable, despite pressure on margins from higher raw materials prices. Growth was especially strong in Europe and Japan, which accounted for 46.7% and 20%, respectively, of the firm's EMS services. North America's share declined slightly to 29.1%. Switching mode power supplies and professional audio equipment accounted for 32.2% and 26%, respectively, followed by home appliances at 18.3% and wireless products at 12.1%.
VTech guided for improved telecom sales in the second half, but lower year-on-year profits. "The second half of the financial year 2005 will remain challenging for VTech," said Allan Wong, chairman and group CEO.VTech said sales growth is expected in Europe, where it has gained a major new ODM customer.
Contract manufacturing services are expected to see further revenue growth and stable profitability as the worldwide EMS market continues to rebound. VTech said it will seek reduced costs through more local sources of supply.
NEWARK, NY -- IEC Electronics Corp. reported net income of $62,000 on revenue of $7.7 million for its fourth quarter ended Sept. 30. Both figures were down from last year, when IEC reported net income of $575,000 ($260,000 in non-operating income) on revenue of $9.1 million.
ALBUQUERQUE, NM, Nov. 19 -- Sparton Electronics today opened an EMS operation in Albuquerque in a building formerly owned by Honeywell.
The 110,000 sq. ft. facility, in which Honeywell built control products, is now center of operations for Sparton in the southwestern U.S.
As part of the move, Sparton closed and sold a smaller, older facility located in Rio Rancho, NM.
Indianapolis, IN, Nov.19, 2004 -- Specialty Coating Systems (SCS), a business unit of Cookson Electronics, recently opened SCS Shanghai, a full-service Parylene conformal coating facility in China.
The expansion into China comes as SCS has purchased the assets of their former service partner Cycad Specialty Coatings Technology Co. Ltd. The Shanghai staff includes 20 experienced employees led by China Business Manager, Lu Bo.
China Assembly, part of the Cycad group, will continue in their partnership with SCS as the distributor of SCS Parylene deposition systems in China.
Parylene is applied via a vapor deposition polymerization process, for ultra-thin, pinhole-free conformal coating. Applications include circuit boards, ferrite cores, electronic components, medical devices, medical device components and rubber parts in the electronics, automotive, military and medical device industries.
The DIN EN ISO 9001:2000-certified Shanghai facility joins SCS Singapore, Parylene Japan K.K. and Parylene Korea in providing Parylene coating services to Asia.
Clinton, NY -- GPS has become the newest distributor for Indium Corp. of America in the European market, covering Germany, Croatia and Slovenia.
GPS has many years of experience in the electronic assembly industry and will be responsible for selling Indium's line of solder pastes and wave solder fluxes.
According to Indium's European Sales Manager, Tony Howard, "GPS is a good match to our company and we are very pleased to be working with such a strong team. We look forward to growing our business together."
The operating loss rose 45.2% to $2.2 million. The company took a $1.65 million restructuring charge in the quarter due to asset writeoffs and severance costs primarily related to the departure of the previous CEO.
For the quarter SG&A expenses increased 49.1% to $3.2 million year-on-year.
Year-to-date net sales are up 98.2% to $41 million. Gross profit is up 98.2% to $9.4 million. Operating losses are 25.1% lower, at $4 million.
The company attributed the rise to higher demand for SMT and semiconductor packaging products.
For the quarter, as a percent of total revenues, sales in the U.S. rose 8.9%, Europe was up 0.2% and Asia Pacific was down 9.6%. For the year, the percentage of net sales from the U.S. is down 6.1%, but up 1.5% in Europe and 5% in Asia Pacific.
As of Oct. 3, BTU had $800,000 in cash and cash equivalents. As a result of the firm's decrease in tangible net worth following the $1.6 million restructuring charge writeoff and higher borrowings during the third quarter, the company was out of compliance with its total liabilities to tangible net worth covenant. Terms of a waiver are under discussion.
Sales for the quarter climbed 35% to $48.6 million while net earnings jumped 33% to $5.2 million.
In a statement president and CEO Ronald M. Moquist said that the company's Engineered Films division was "the big driver" in the just-concluded quarter, shipping approximately $4 million in reinforced plastic sheeting to hurricane-damaged parts of the U.S.
The company's Electronic Systems Division's sales climbed 34% to $14 million while operating income was up 2% to $1.6 million. "We saw steady improvement in operating efficiencies and throughput during the third quarter but this division still has room to improve profitability," Moquist said.
For the past nine months, ESD's sales were $34.8 million, up 8%, and operating income totaled $3.1 million, down 28% from the nine months a year earlier.
BOSTON, Nov. 17 -- When Ray Sharpe abruptly stepped down as chief executive of Cookson Electronics last May, it opened a huge cans of worms over who was next in line to run one of the world's largest suppliers of electronics assembly materials. Sharpe's departure (he is now chief executive of Isola) was just one of a string of top-level changes: Stephen Howard, chairman of Cookson Group, Cookson Electronics' parent company, had already announced plans to retire.
It took some months, but the pieces are being put back together. One question was addressed in July, when Nick Salmon was named the new chairman. And another was answered in October, as the company promoted Steve Corbett, head of its wildly successful specialty chemistries division, to the top spot.
Since 2002 Corbett has headed Enthone, the $450 million chemicals business Cookson acquired in 2000. In past 12 months, the division's operating profit improved 60%, and return on sales doubled to 13%, from 6% in 2002. Corbett is a Cookson veteran, having previously managed its semiconductor packaging materials and Alpha Metals divisions. (He was also general manager of Heraeus Cermalloy Inc. in the 1980s.) Still, he has his work cut out as he tries to rearrange Cookson Electronics, a $786 million division in 2003 that also includes Polyclad Technologies. In October he spoke with Circuits Assembly's Mike Buetow. Excerpts.
CA: Why do you think you were tapped for this job?
SC: [Laughs] You'll have to ask my boss [Cookson Group chairman] Nick Salmon. My slant is, the process that Cookson Group went through was fairly long. They looked at both internal and external candidates. The decision to bring in an insider was one part of the requirement to have someone who was familiar with the businesses, in order to shorten the learning curve. That, and there is always a desire to promote from within. As far as why me among the internal candidates probably has more to do with the performance of the Enthone business. It has improved significantly in very, very difficult market conditions. This year, the markets are picking up and it's doing even better.
CA: Why has Enthone performed so well?
SC: Enthone has gotten healthier through organizational changes. I structured the business under a global structure, which allowed us to focus efforts in R&D on the right markets, the right regions, and the right products, as opposed to parochial R&D organizations that were focused on the U.S. and Europe. Now we're launching more products per unit of time and taking those products into high growth areas like Asia much more quickly.
CA: Your predecessor, Ray Sharpe, was following a one-stop shopping strategy. The announcements, with Polyclad having a direct line to Nick Salmon, suggest a different approach.
SC: There's a lot of discussion over Polyclad and I wouldn't read too much into that. The reality behind the laminates business reporting to Nick, if you look at the financial analyst community and you didn't know better you would conclude that the only thing Cookson has is laminates. Precious Metals, Ceramics - our other businesses - get very little press. There's this fever over [Polyclad]. To answer the analysts, Nick felt he needed to have firsthand knowledge of what was going on, and firsthand influence over the business. He felt he wouldn't be comfortable talking to the financial community if he didn't walk the talk. This period where Nick will manage it will not be one of long duration. As for the one-stop shopping, we're going to do what our customers value. I'm not going to say that none of our customers value it, but I will say that's not a common thread in our marketplace. Our customers want the best technology, at the best price point. That's not always Cookson's strong point where it touches the customer. That's probably the fundamental difference between our philosophies: I'm not going to push it where it doesn't fit.
CA: So will we see changes to sales and distribution?
SC: Probably no specific changes in sales and distribution. For board fabrication, for example, Enthone is the sales arm for Alpha products like solder for HASL. Alpha makes them, Enthone sells them; [Enthone is] the touch point for that market. In some parts of the world, Enthone sells laminate because it's the proper customer base. Much of business is relationship driven, and so we want to build on that when it's there.
CA: Jason Maupin, speaking at TMRC in October, advocated the principles of TASTE - truth accountability, support, trust, enthusiasm. Is this a mantra at Enthone, and will it be worked into the broader Cookson Electronic culture?
SC: It is one of the principles of Enthone. I think we've got good businesses. We need something like that to show people they are working for a top-shelf organization.
CA: Who will succeed you at Enthone?
SC: [Laughs] Are you looking for a job? We just started the succession process. We have a number of candidates. I hope I have enough internal candidates.
CA: Are any other changes expected in the management ranks, at Alpha or Polyclad?
SC: No short-term plans.
CA: Is Polyclad being packaged for a possible sale?
SC: It's no secret that the laminates business is hurting. Polyclad is doing well in Asia. We're treading water in Europe and suffering in the U.S. That business needs to be fixed. I would put the prospects of a sale as pretty low. Cookson doesn't have the appetite to take another haircut like they did on Speedline. Everything is for sale at the right price, of course. If someone offered us $1 billion for Polyclad, it would be looked at.
CA: What's your top priority right now?
SC: We're in the middle of our budgeting process for 2005. I worked at Alpha and am comfortable in assembly materials space. Even though Polyclad reports to Nick, I'll handle the budgeting process for Polyclad. Also, I'll travel the world of Cookson, listening to employees and customers and trying to develop a plan. I certainly want to go back and touch ground zero and reassure myself that the existing strategic plans are sensible and I can see where the lines intersect between customers and our plans.
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