Celestica Inc. : Announces Fourth Quarter And Fiscal Year 2012 Financial Results

January 22, 2013

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 fourth quarter and fiscal year ended December 31, 2012.

Fourth Quarter 2012 Highlights

• Revenue:  $1.50 billion, within the range of our guidance of $1.425 to $1.525 billion (announced October 23, 2012)
• IFRS EPS:  $0.04 per share, compared to $0.32 per share for the fourth quarter of 2011
• Adjusted EPS (non-IFRS):  $0.25 per share, above our guidance of $0.15 to $0.21 per share (announced October 23, 2012) and includes a $0.06 per share net income tax recovery
• Free cash flow (non-IFRS):  $90.2 million, compared to $89.0 million for the fourth quarter of 2011
• Diversified end markets: 23% of total revenue, increased from 18% of total revenue for the fourth quarter of 2011

Fiscal Year 2012 Highlights

• Revenue:  $6.51 billion, down 10% from 2011
• IFRS EPS:  $0.56 per share, compared to $0.89 per share for 2011
• Adjusted EPS (non-IFRS):  $0.98 per share, compared to $1.11 per share for 2011
• Free cash flow (non-IFRS):  $211.4 million, up 47% from prior year
• Diversified end markets: 20% of total revenue, increased from 14% of total revenue for 2011
• Repurchased and cancelled 22.4 million subordinate voting shares under a substantial issuer bid for $175 million
• Repurchased and cancelled 13.3 million subordinate voting shares under a Normal Course Issuer Bid for $113.8 million
• Recorded $44.0 million of restructuring charges and $17.7 million of asset impairment charges
• Acquired D&H Manufacturing Company for $71 million in September 2012

"Celestica delivered revenue and operating profit consistent with our guidance, and generated strong free cash flow in the fourth quarter, despite continued softness in end market demand." said Craig Muhlhauser, Celestica President and Chief Executive Officer. "We overcame a challenging environment in 2012 and posted solid financial results, while continuing to invest in the business and returning over $280 million to our shareholders through share repurchases during the year. 

"We are entering 2013 with a solid foundation to execute our strategy and capitalize on the opportunities before us.  We remain focused on driving profitable growth and creating superior value for our customers and our shareholders."

Fourth Quarter and Fiscal Year  2012 Summary

	Three months ended December 31								Fiscal year ended December 31
	2011				2012				2011				2012
Revenue (in millions).......................................................................	$	1,753.4			$	1,496.2			$	7,213.0			$	6,507.2
IFRS net earnings (in millions) (i)..................................................	$	69.2			$	7.2			$	195.1			$	117.7
IFRS EPS(i).........................................................................................	$	0.32			$	0.04			$	0.89			$	0.56
Adjusted net earnings (non-IFRS) (in millions)(ii) ......................	$	71.1			$	50.3			$	241.9			$	205.8
Adjusted EPS (non-IFRS)(i)(ii)..........................................................	$	0.33			$	0.25			$	1.11			$	0.98
Non-IFRS return on invested capital (ROIC)(ii)............................	27.5		%		18.4		%		27.5		%		21.5		%
Non-IFRS operating margin(ii)........................................................	3.8		%		3.1		%		3.6		%		3.3		%

i.                      International Financial Reporting Standards (IFRS) net earnings for the fourth quarter of 2012 included an aggregate charge of $0.13 (pre-tax) per share for stock-based compensation, amortization of intangible assets (excluding computer software) and restructuring charges. This is within the range we provided on October 23, 2012 of a charge between $0.08 and $0.14 per share. IFRS net earnings for the fourth quarter of 2012 also included a $0.09 (pre-tax) per share impairment charge, primarily against goodwill. Included in the fourth quarter of 2012 adjusted EPS (non-IFRS) of $0.25 was a net income tax benefit of $0.06 per share arising from a corporate tax reorganization involving certain of our European subsidiaries and changes to our tax provisions related to certain tax uncertainties.

ii.                     Non-IFRS measures do not have any standardized meaning prescribed by IFRS and are not necessarily comparable to similar measures presented by other companies using IFRS or other generally accepted accounting principles (GAAP). See Schedule 1 for non-IFRS definitions and a reconciliation of non-IFRS to IFRS measures.

End Markets by Quarter as a Percentage of Total Revenue

	2011															2012
	Q1			Q2			Q3			Q4			FY			Q1			Q2			Q3			Q4			FY
Communications (i)....................................	36	%		34	%		34	%		33	%		35	%		33	%		32	%		37	%		37	%		35	%
Consumer.................................................	26	%		25	%		25	%		26	%		25	%		23	%		21	%		15	%		9	%		18	%
Diversified (ii)............................................	11	%		13	%		16	%		18	%		14	%		19	%		19	%		21	%		23	%		20	%
Servers....................................................	15	%		17	%		14	%		13	%		15	%		15	%		16	%		14	%		17	%		15	%
Storage....................................................	12	%		11	%		11	%		10	%		11	%		10	%		12	%		13	%		14	%		12	%

Revenue (in billions).................................

$

1.80

$

1.83

$

1.83

$

1.75

$

7.21

$

1.69

$

1.74

$

1.58

$

1.50

$

6.51

i.    We combined enterprise communications and telecommunications for reporting purposes effective the first quarter of 2012. Prior period percentages were also combined.

ii.  Our diversified end market is comprised of industrial, aerospace and defense, healthcare, green technology, semiconductor equipment and other.

Wind Down of Manufacturing Services for Research In Motion Limited (RIM) and Restructuring Update

In June 2012, we announced that we would wind down our manufacturing services for RIM.  We completed our manufacturing services for RIM and the related transition activities by the end of 2012. Revenue from RIM was minimal in the fourth quarter of 2012 and it represented 12% of our total revenue in full year 2012 (full year 2011 - 19%).

Due to the historical significance of RIM to our operations and in order to improve our margin performance,  we announced that we would take restructuring actions throughout our global network to reduce our overall cost structure. In July 2012, we estimated total restructuring charges of between $40 million and $50 million. Our current estimate of the total restructuring charges to complete our planned actions, which we expect to complete by the end of June 2013, is between $55 million and $65 million, taking into account additional actions in response to the continued challenging demand environment. Of this amount, we recorded $16.7 million in the fourth quarter of 2012 and $44.0 million in 2012.

Substantial Issuer Bid (SIB)

During the fourth quarter of 2012, we launched and successfully completed a SIB to repurchase for cancellation $175 million of our subordinate voting shares. We repurchased for cancellation approximately 22.4 million subordinate voting shares at a price of $7.80 per share, representing approximately 12% of the subordinate voting shares issued and outstanding prior to completion of the SIB. We funded the share repurchases using a combination of cash on hand and cash from our revolving credit facility.

First Quarter 2013 Outlook

For the first quarter ending March 31, 2013, we anticipate revenue to be in the range of $1.325 to $1.425 billion, and adjusted net earnings per share to be in the range of $0.11 to $0.17.  We expect a negative $0.07 to $0.13 per share (pre-tax) aggregate impact on an IFRS basis for the following items: stock-based compensation, amortization of intangible assets (excluding computer software) and restructuring charges.

Fourth Quarter Webcast

Management will host its fourth quarter results conference call today at 4:30 p.m. Eastern Standard Time. The webcast can be accessed at www.celestica.com.

Supplementary Information

In addition to disclosing detailed results in accordance with IFRS, Celestica provides supplementary non-IFRS measures to consider in evaluating the company's operating performance. See Schedule 1. Management uses adjusted net earnings and other non-IFRS measures to assess operating performance and the effective use and allocation of resources; to provide more meaningful period-to-period comparisons of operating results; to enhance investors' understanding of the core operating results of Celestica's 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 www.celestica.com. The company's securities filings can also be accessed at www.sedar.com and 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 or operational results including our quarterly earnings and revenue guidance; the impact of acquisitions and program wins or losses on our financial results and working capital requirements; anticipated expenses, restructuring charges, capital expenditures or benefits; our expected tax outcomes; our cash flows, financial targets and priorities; changes in our mix of revenue by end markets; our ability to diversify and grow our customer base and develop new capabilities; and the effect of the global economic environment on customer demand. 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", "continues", 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 applicable Canadian provincial and territorial securities legislation. Forward-looking statements are not guarantees of future performance. Readers should understand that the following important factors, among others, could affect our future results and could cause those results to differ materially from those expressed in such forward-looking statements: our dependence on a limited number of customers and on our customers' ability to compete and succeed in their marketplace for the products we manufacture; the effects of price competition and other business and competitive factors generally affecting the electronics manufacturing services (EMS) industry; the challenges of effectively managing our operations and our working capital performance during uncertain economic conditions, including responding to significant changes in demand and changes in the outsourcing strategies of our customers, including the insourcing of programs by them; the challenges of diversifying our customer base, including the extent and timing of replacement business for lost programs or customer disengagements; the challenges of managing changing commodity costs as well as labor costs and conditions; disruptions to our operations, or those of our customers, component suppliers, or our logistics partners, resulting from local events including natural disasters, political instability, local labor conditions and social unrest, criminal activity and other risks present in the jurisdictions in which we operate; our inability to retain or expand our business due to execution problems relating to the ramping of new programs; the delays in the delivery and/or general availability of various components and materials used in our manufacturing process; the challenge of managing our financial exposure to foreign currency volatility; our dependence on industries affected by rapid technological change; variability of operating results among periods; our ability to successfully manage our international operations; increasing income taxes and our ability to successfully defend tax audits or meet the conditions of tax incentives; the challenges of completing  our restructuring activities or integrating our acquisitions; and the risk of potential non-performance by counterparties, including but not limited to financial institutions, customers and suppliers. These and other risks and uncertainties, as well as other information related to Celestica, are discussed herein and in our 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 U.S. Securities and Exchange Commission and our Annual Information Form filed with the Canadian securities regulators. 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.

Our revenue, earnings and other financial guidance, as contained in this press release, 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 and can fluctuate significantly in terms of volume and mix of products or services; the timing and execution of, and investments associated with, ramping new business; the success in the marketplace of our customers' products; 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; the timing and execution of our restructuring actions; and our ability to diversify our customer base and develop new capabilities. These assumptions and estimates 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 our guidance is effective on the date given, and will only be updated through a public announcement. 

Contacts:

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