GUIDANCE SUMMARY
Q1 2017 Guidance
Q4 2016 Guidance Q4 2016 Actual (2)
--------------------------------------------------
IFRS revenue (in
billions) (1) $1.5 to $1.6 $1.62 $1.4 to $1.5
3.8% at the mid-
Non-IFRS operating margin point of 3.8% 3.5%
(1) expectations
Non-IFRS adjusted EPS (1) $0.29 to $0.35 $0.41 $0.24 to $0.30
(1) Revenue of $1.62 billion for the fourth quarter of 2016 was above the high end of our guidance range primarily as a result of increased demand from our communications end market. Our non-IFRS operating margin of 3.8% was consistent with the mid-point of our expectations.
Non-IFRS adjusted EPS for the fourth quarter of 2016 was favorably impacted by a $0.07 per share net benefit related to income taxes, comprised of a $0.10 per share income tax recovery attributable to the resolution of certain previously disputed tax matters in Canada (including related refund interest income) and a $0.03 per share favorable deferred tax recovery, offset in part by a $0.06 per share income tax expense related to taxable foreign exchange impacts. See notes 12 and 14 to our Interim Financial Statements. The foregoing items arose in the fourth quarter of 2016, and were, therefore not factored into our guidance for this measure for that period. Non-IFRS adjusted EPS for the fourth quarter of 2016 would have been towards the high end of our guidance range for the quarter without the net income tax benefits referred to above.
(2) For the first quarter of 2017, we anticipate a negative $0.11 to $0.17 per share (pre-tax) aggregate impact on net earnings on an IFRS basis for employee stock-based compensation expense, amortization of intangible assets (excluding computer software) and restructuring charges. We cannot predict changes in currency exchange rates, the impact of such changes on our operating results, or the degree to which we will be able to manage such impacts.
CELESTICA INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(in millions of U.S. dollars)
(unaudited)
December 31 December 31
2015 2016
------------- -------------
Assets
Current assets:
Cash and cash equivalents (note 13) $ 545.3 $ 557.2
Accounts receivable (note 6) 681.0 790.5
Inventories (note 7) 794.6 890.6
Income taxes receivable 10.4 5.4
Assets classified as held-for-sale 27.4 28.9
Other current assets (note 5) 65.3 73.9
------------- -------------
Total current assets 2,124.0 2,346.5
Property, plant and equipment 314.6 302.7
Goodwill 19.5 23.2
Intangible assets 30.4 25.5
Deferred income taxes 40.1 36.4
Other non-current assets 83.4 88.0
------------- -------------
Total assets $ 2,612.0 $ 2,822.3
============= =============
Liabilities and Equity
Current liabilities:
Current portion of borrowings under credit
facility and finance lease obligations (notes
5 & 8) $ 29.1 $ 56.0
Accounts payable 801.4 876.9
Accrued and other current liabilities 257.7 261.7
Income taxes payable 25.0 32.4
Current portion of provisions 20.2 18.7
------------- -------------
Total current liabilities 1,133.4 1,245.7
Long-term portion of borrowings under credit
facility and finance lease obligations (notes 5
& 8) 250.6 188.7
Pension and non-pension post-employment benefit
obligations 83.2 86.0
Provisions and other non-current liabilities 28.0 28.3
Deferred income taxes 25.8 34.8
------------- -------------
Total liabilities 1,521.0 1,583.5
Equity:
Capital stock (note 9) 2,093.9 2,048.2
Treasury stock (note 9) (31.4) (15.3)
Contributed surplus 846.7 862.6
Deficit (1,785.4) (1,632.0)
Accumulated other comprehensive loss (32.8) (24.7)
------------- -------------
Total equity 1,091.0 1,238.8
------------- -------------
Total liabilities and equity $ 2,612.0 $ 2,822.3
============= =============
Contingencies (note 14)
The accompanying notes are an integral part of these unaudited interim
condensed consolidated financial statements.
CELESTICA INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(in millions of U.S. dollars, except per share amounts)
(unaudited)
Three months ended Year ended
December 31 December 31
------------------- ------------------
2015 2016 2015 2016
--------- --------- -------- ---------
Revenue $1,514.9 $1,623.7 $5,639.2 $6,016.5
Cost of sales (note 7) 1,413.6 1,511.8 5,248.1 5,588.9
--------- --------- -------- ---------
Gross profit 101.3 111.9 391.1 427.6
Selling, general and administrative
expenses (SG&A) 51.8 53.2 207.5 211.1
Research and development 6.5 6.7 23.2 24.9
Amortization of intangible assets 2.3 2.5 9.2 9.4
Other charges (note 11) 14.3 25.8 35.8 25.5
--------- --------- -------- ---------
Earnings from operations 26.4 23.7 115.4 156.7
Refund interest income (note 14) - (8.3) - (14.3)
Finance costs 2.6 2.7 6.3 10.0
--------- --------- -------- ---------
Earnings before income taxes 23.8 29.3 109.1 161.0
Income tax expense (recovery) (note
12):
Current 14.7 9.4 38.7 14.2
Deferred (3.0) (1.0) 3.5 10.5
--------- --------- -------- ---------
11.7 8.4 42.2 24.7
--------- --------- -------- ---------
Net earnings for the period $ 12.1 $ 20.9 $ 66.9 $ 136.3
========= ========= ======== =========
Basic earnings per share $ 0.08 $ 0.15 $ 0.43 $ 0.96
Diluted earnings per share $ 0.08 $ 0.15 $ 0.42 $ 0.95
Shares used in computing per share
amounts (in millions):
Basic 143.1 140.9 155.8 141.8
Diluted 145.2 143.4 157.9 143.9
The accompanying notes are an integral part of these unaudited interim
condensed consolidated financial statements.
CELESTICA INC.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(in millions of U.S. dollars)
(unaudited)
Three months ended Year ended
December 31 December 31
------------------- ------------------
2015 2016 2015 2016
--------- --------- --------- --------
Net earnings for the period $ 12.1 $ 20.9 $ 66.9 $ 136.3
Other comprehensive income (loss),
net of tax:
Items that will not be reclassified
to net earnings (loss):
Actuarial gains (losses) on pension
and non-pension post-employment
benefit plans (note 10) (7.0) 17.1 (7.0) 17.1
Items that may be reclassified to
net earnings:
Currency translation differences
for foreign operations (0.3) (2.6) (1.7) -
Changes from derivatives
designated as hedges 8.5 (10.6) (6.1) 8.1
--------- --------- --------- --------
Total comprehensive income for the
period $ 13.3 $ 24.8 $ 52.1 $ 161.5
========= ========= ========= ========
The accompanying notes are an integral part of these unaudited interim
condensed consolidated financial statements.
CELESTICA INC.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(in millions of U.S. dollars)
(unaudited)
Accumulated
other
Capital Treasury comprehen-
stock stock Contributed sive Total
(note 9) (note 9) surplus Deficit loss(a) equity
--------- --------- --------- ---------- --------- ---------
Balance --
January 1,
2015 $2,609.5 $ (21.4) $ 677.1 $(1,845.3) $ (25.0) $1,394.9
Capital
transactions
(note 9):
Issuance of
capital
stock 12.6 - (8.7) - - 3.9
Repurchase of
capital
stock for
cancellation (528.2) - 157.8 - - (370.4)
Purchase of
treasury
stock for
stock-based
plans - (28.9) - - - (28.9)
Stock-based
compensation
and other - 18.9 20.5 - - 39.4
Total
comprehensive
income:
Net earnings
for the
period - - - 66.9 - 66.9
Other
comprehensive
loss, net
of tax:
Actuarial
losses on
pension
and non-
pension
post-
employment
benefit
plans
(note 10) - - - (7.0) - (7.0)
Currency
translation
differences
for
foreign
operations - - - - (1.7) (1.7)
Changes
from
derivatives
designated
as hedges - - - - (6.1) (6.1)
--------- --------- --------- ---------- --------- ---------
Balance --
December 31,
2015 $2,093.9 $ (31.4) $ 846.7 $(1,785.4) $ (32.8) $1,091.0
Capital
transactions
(note 9):
Issuance of
capital
stock 6.4 - (2.3) - - 4.1
Repurchase of
capital
stock for
cancellation (52.1) - 17.8 - - (34.3)
Purchase of
treasury
stock for
stock-based
plans - (18.2) - - - (18.2)
Stock-based
compensation
and other - 34.3 0.4 - - 34.7
Total
comprehensive
income:
Net earnings
for the
period - - - 136.3 - 136.3
Other
comprehensive
income,
net of tax:
Actuarial
gains on
pension
and non-
pension
post-
employment
benefit
plans
(note 10). - - - 17.1 - 17.1
Changes
from
derivatives
designated
as hedges - - - - 8.1 8.1
--------- --------- --------- ---------- --------- ---------
Balance --
December 31,
2016 $2,048.2 $ (15.3) $ 862.6 $(1,632.0) $ (24.7) $1,238.8
========= ========= ========= ========== ========= =========
(a) Accumulated other comprehensive loss is net of tax.
The accompanying notes are an integral part of these unaudited interim
condensed consolidated financial statements.
CELESTICA INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(in millions of U.S. dollars)
(unaudited)
Three months ended Year ended
December 31 December 31
---------------------------------------
2015 2016 2015 2016
--------- ------------------- ---------
Cash provided by (used in):
Operating activities:
Net earnings for the period $ 12.1 $ 20.9 $ 66.9 $ 136.3
Adjustments to net earnings for
items not affecting cash:
Depreciation and amortization 17.8 20.3 68.3 75.6
Equity-settled stock-based
compensation 10.8 10.4 37.6 33.0
Other charges 12.6 19.0 16.3 21.2
Finance costs, net of refund
interest income 2.6 (5.6) 6.3 (4.3)
Income tax expense 11.7 8.4 42.2 24.7
Other (8.7) (2.2) (17.5) (1.1)
Changes in non-cash working capital
items:
Accounts receivable (37.3) (69.7) 12.5 (104.6)
Inventories 54.1 45.5 (75.6) (89.5)
Other current assets (2.5) 7.5 38.2 (5.3)
Accounts payable, accrued and
other current liabilities and
provisions 34.1 (11.1) 28.8 75.4
--------- ------------------- ---------
Non-cash working capital changes 48.4 (27.8) 3.9 (124.0)
Net income tax refund (paid),
including related interest (note
14) (15.3) 44.1 (27.7) 11.9
--------- --------- --------- ---------
Net cash provided by operating
activities 92.0 87.5 196.3 173.3
Investing activities:
Acquisition (note 4) - (14.9) - (14.9)
Purchase of computer software and
property, plant and equipment (16.0) (17.9) (62.8) (64.1)
Proceeds from sale of assets 0.6 0.1 2.8 1.0
Deposit on anticipated sale of real
property - - 11.2 -
Advances to solar supplier (note 5) (1.2) - (29.5) -
Repayments from solar supplier (note
5) 3.0 3.0 3.0 14.0
--------- ------------------- ---------
Net cash used in investing
activities (13.6) (29.7) (75.3) (64.0)
Financing activities:
Borrowings under credit facility
(note 8) - - 275.0 40.0
Repayments under credit facility
(note 8) (6.3) (31.3) (12.5) (75.0)
Finance lease payments (note 8) - (1.0) - (4.5)
Issuance of capital stock (note 9) 0.8 0.8 3.9 4.1
Repurchase of capital stock for
cancelation (note 9) (0.2) - (370.4) (34.3)
Purchase of treasury stock for
stock-based plans (note 9) (20.7) (8.7) (28.9) (18.2)
Finance costs paid (2.4) (2.4) (7.8) (9.5)
--------- ------------------- ---------
Net cash used in financing
activities (28.8) (42.6) (140.7) (97.4)
Net increase (decrease) in cash and
cash equivalents 49.6 15.2 (19.7) 11.9
Cash and cash equivalents, beginning
of period 495.7 542.0 565.0 545.3
--------- ------------------- ---------
Cash and cash equivalents, end of
period $ 545.3 $ 557.2 $ 545.3 $ 557.2
========= =================== =========
The accompanying notes are an integral part of these unaudited interim
condensed consolidated financial statements.
