UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTION, D.C. 20549

 

 

FORM 8-K

 

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported)

February 2, 2004

 

MANUFACTURERS’ SERVICES LIMITED

(Exact name of registrant as specified in charter)

 

 

Registrant’s telephone number, including area code (978) 287-5630

 

NOT APPLICABLE

(Former name or former address, if changed since last report.)

 

 

ITEM 5.  OTHER EVENTS AND REGULATION FD DISCLOSURE

 

On February 2, 2004 the registrant released its financial results for the fourth quarter of fiscal 2003 and for fiscal year 2003 as a whole.

 

Revenues for the quarter were $293.4 million, a sequential increase of 55% compared to the third quarter of 2003 and an increase of 40% from the same period a year ago.  Net loss under Generally Accepted Accounting Principles (GAAP) for the fourth quarter of 2003 was $8.8 million, compared to a net loss of $5.2 million in the third quarter of 2003 and a net loss of $5.3 million in the comparable period of the prior year.  Including the impact of accretion and dividends on its convertible preferred stock, the Registrant reported a GAAP net loss applicable to common stockholders of $10.2 million, or $0.30 per share in the fourth quarter of 2003 as compared to a net loss of $6.5 million or $0.19 per share in the third quarter of 2003 and a net loss of $6.3 million, or $0.19 per share in the comparable period of the prior year.

 

At December 31, 2003, the Registrant had a cash balance of $53.6 million, which exceeded by $27.8 million its total debt, as compared to cash in excess of debt of $30.6 million at September 28, 2003 and $25.3 million at December 31, 2002.  Net working capital days at December 31, 2003 were 29.5, a decrease of 13.3 days from 42.8 days at September 28, 2003.  The Registrant used approximately $2.2 million in cash from operations during the quarter in connection with ramping new business in the fourth quarter.  The Registrant recorded $5.2 million in restructuring charges primarily related to a lease termination and severance costs incurred in connection with the closure of the Athlone site and $4.4 million of merger related expenses in the quarter.

 

For the year ended December 31, 2003, revenues were $826 million, a 3% decrease from $854 million in 2002.  The GAAP net loss applicable to common stockholders was $18.3 million, or $0.54 per share in 2003 as compared to a net loss of $23.4 million, or $0.72 per share in 2002.

 

2

 

MANUFACTURERS’ SERVICES, LTD.
GAAP - CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(unaudited)

 

		Three Months Ended						Twelve Months Ended
		Dec 31, 2003			Dec 31, 2002			Dec 31, 2003			Dec 31, 2002
Net sales		$	293,406		$	208,955		$	825,937		$	853,745
Cost of goods sold		275,083			191,575			764,529			778,133
Gross profit		18,323			17,380			61,408			75,612
Operating expenses:
Selling, general and administrative		19,492			20,902			58,944			67,437
Amortization expense		63			—			108			3,706
Restructuring and asset writedowns		5,197			(1,163		)	10,790			13,488
Other operating (income) expense		—			—			—			(800		)
Loss from operations		(6,429		)	(2,359		)	(8,434		)	(8,219		)
Interest expense, net		(1,257		)	(783		)	(4,359		)	(6,979		)
Loss from extinguishment of debt		—			—			—			(4,031		)
Gain (loss) on change in fair value of derivative		(500		)	(1,640		)	(200		)	530
Foreign exchange gain (loss)		49			80			477			115
Loss before income taxes		(8,137		)	(4,702		)	(12,516		)	(18,584		)
Provision for income taxes		663			646			1,369			2,144
Net loss		$	(8,800	)	$	(5,348	)	$	(13,885	)	$	(20,728	)
Net loss applicable to common stockholders		$	(10,189	)	$	(6,283	)	$	(18,292	)	$	(23,390	)
Basic loss per share
Net loss applicable to common stockholders		$	(0.30	)	$	(0.19	)	$	(0.54	)	$	(0.72	)
Weighted average shares outstanding		34,156			33,054			33,748			32,622
Diluted loss per share
Net loss applicable to common stockholders		$	(0.30	)	$	(0.19	)	$	(0.54	)	$	(0.72	)
Weighted average shares outstanding		34,156			33,054			33,748			32,622
Net loss		$	(8,800	)	$	(5,348	)	$	(13,885	)	$	(20,728	)
Dividends on convertible preferred stock		(878		)	(610		)	(2,707		)	(1,642		)
Accretion on convertible preferred stock		(511		)	(325		)	(1,700		)	(1,020		)
Net loss available to common stockholders		$	(10,189	)	$	(6,283	)	$	(18,292	)	$	(23,390	)

 

3

 

MANUFACTURERS’ SERVICES, LTD.
CONSOLIDATED BALANCE SHEETS
(In thousands)

 

		(Unaudited) December 31, 2003			December 31, 2002
ASSETS
Current assets:
Cash and cash equivalents		$	53,604		$	48,955
Accounts receivable, net		166,750			109,083
Inventories		140,173			98,827
Prepaid expenses and other current assets		19,935			21,945
Total current assets		380,462			278,810
Property and equipment, net		44,956			34,659
Goodwill, net		6,447			8,441
Other intangible assets, net		839			—
Other assets		10,270			9,497
Total assets		$	442,974		$	331,407
LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY
Current liabilities
Current portion of long-term debt and capital lease obligations		$	3,226		$	5,654
Accounts payable		204,849			127,085
Accrued expenses and other current liabilities		46,680			39,157
Total current liabilities		254,755			171,896
Long-term debt and capital lease obligations		22,614			18,003
Other liabilities		7,025			5,260
Total liabilities		284,394			195,159
Convertible preferred stock		59,029			35,551
Stockholders’ equity		99,551			100,697
Total liabilities, convertible preferred stock and stockholders’ equity		$	442,974		$	331,407

 

4

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized:

 

	MANUFACTURERS’ SERVICES LIMITED
	(Registrant)
	Date:		February 3, 2004
	By:	/s/ Albert A. Notini
			Albert A. Notini
			Executive Vice President and
			Chief Financial Officer

 

5