Solectron Announces Third Quarter Financial Results

Business Wire, June 28, 2007

MILPITAS, Calif. -- Solectron Corporation (NYSE:SLR), a leading provider of integrated electronic supply chain services including design, manufacturing and aftermarket services, today reported sales of $2.99 billion in the third quarter of fiscal 2007, an increase of 3 percent over second quarter fiscal 2007 revenues of $2.90 billion, and an increase of 10 percent over third quarter fiscal 2006 revenues of $2.70 billion.

The company reported GAAP profit after tax from continuing operations of $12.2 million, or $0.01 per share, in the third quarter of fiscal 2007, compared with a GAAP profit after tax from continuing operations of $15.6 million, or $0.02 per share, in the second quarter of fiscal 2007. In the third quarter of fiscal 2006, Solectron reported a GAAP profit after tax from continuing operations of $42.4 million, or $0.05 per share.

Non-GAAP profit after tax from continuing operations was $50.2 million, or $0.06 per share, in the third quarter of fiscal 2007, compared with non-GAAP profit after tax from continuing operations of $41.0 million, or $0.05 per share, for the second quarter of fiscal 2007. In the third quarter of fiscal 2006, Solectron reported non-GAAP profit after tax from continuing operations of $38.9 million, or $0.04 per share. Non-GAAP financial results do not include restructuring costs, impairment charges, amortization of intangibles, or stock-based compensation expenses. Please refer to "Non-GAAP Information" below for further information.

Recent Announcement of Acquisition

On June 4, 2007 Solectron Corporation and Flextronics International Ltd. ("Flextronics") (NASDAQ:FLEX) announced that the two companies have entered into a definitive agreement for Flextronics to acquire Solectron. The merger agreement has been filed with the SEC. The transaction is expected to close in the fourth calendar quarter of 2007.

Non-GAAP Information

In addition to disclosing results determined in accordance with GAAP, Solectron also discloses non-GAAP results of operations that exclude certain items. By disclosing this non-GAAP information, management intends to provide investors with additional information to further analyze the company's performance, core results and underlying trends. Management utilizes a measure of net income and earnings per share on a non-GAAP basis that excludes certain charges to better assess operating performance.

Consistent with industry practice, management has historically applied these non-GAAP measures when discussing earnings or earnings guidance and intends to continue doing so.

Non-GAAP information is not determined using GAAP. Therefore, the information is not necessarily comparable to other companies and should not be used to compare the company's performance over different periods. Non-GAAP information should not be viewed as a substitute for, or superior to, net income or other data prepared in accordance with GAAP as measures of our profitability or liquidity. Users of this financial information should consider the types of events and transactions for which adjustments have been made. In addition, Solectron's GAAP financial results often reflect one-time events and adjustments, and therefore a comparison of GAAP results over different periods can be difficult. See the tables at the end of this press release for a reconciliation of non-GAAP amounts to amounts reported under GAAP. A reconciliation from non-GAAP to GAAP results is contained in the attached financial summary and is available in the Investor Relations section of our website at www.solectron.com.

Webcast To Be Held Today

At 4:30 p.m. ET today, Solectron will hold a conference call to discuss its third quarter financial results. A live webcast can be accessed at www.solectron.com. Supplemental financial information related to the conference call will also be available in the Investor Relations section of this Web site. Following the live broadcast, the archived webcast will be available at www.solectron.com/investor/events.htm.> An audio replay will also be available two hours after the conclusion of the call. To access the replay, call 1 (800) 642 1687 from within the United States, or 1 (706) 645 9291 from outside the United States, and specify pass code 2379358.

Safe Harbor

This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended regarding the expected closing date of the transaction with Flextronics. This forward-looking statement involves a number of risks and uncertainties, and are based on current expectations, forecasts and assumptions.

Actual outcomes and results could differ materially. These risks and uncertainties include the possibility that the acquisition may not be completed as planned or at all, and that the parties may experience difficulties or delays in obtaining regulatory or shareholder approvals for the proposed transaction.

For a further list and description of risks and uncertainties, see the reports filed by Solectron with the Securities and Exchange Commission. Solectron disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Supplemental information, condensed consolidated balance sheets and statements of operations follow. All monetary amounts are stated in U.S. dollars.