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TMCNet:  Celestica Announces Fourth Quarter and Fiscal Year 2013 Financial Results

[January 31, 2014]

Celestica Announces Fourth Quarter and Fiscal Year 2013 Financial Results

(ENP Newswire Via Acquire Media NewsEdge) ENP Newswire - 31 January 2014 Release date- 30012014 - 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, 2013.

Fourth Quarter 2013 Highlights Revenue: $1.437 billion, within the range of our guidance of $1.4 to $1.5 billion (announced October 22, 2013), decreased 4% compared to the fourth quarter of 2012 IFRS EPS: $0.12 per share, compared to $0.04 per share for the fourth quarter of 2012 Adjusted EPS (non-IFRS): $0.24 per share, within the range of our guidance of $0.20 to $0.26 per share (announced October 22, 2013), compared to $0.25 per share for the fourth quarter of 2012 Free cash flow (non-IFRS): $23.7 million, compared to $90.2 million for the fourth quarter of 2012 Diversified end market: 27% of total revenue, increased from 23% of total revenue for the fourth quarter of 2012 Repurchased and cancelled 2.4 million subordinate voting shares under our Normal Course Issuer Bid (NCIB) Fiscal Year 2013 Highlights Revenue: $5.8 billion, down 11% from 2012 Revenue increased 1% on a non-IFRS basis compared to 2012 after excluding revenue from BlackBerry Limited for 2012 IFRS EPS: $0.64 per share, compared to $0.56 per share for 2012 Adjusted EPS (non-IFRS): $0.83 per share, compared to $0.98 per share for 2012 Free cash flow (non-IFRS): $98.1 million, compared to $211.4 million for 2012 Diversified end market: 25% of total revenue, increased from 20% of total revenue for 2012 Repurchased and cancelled 4.1 million subordinate voting shares under our NCIB 'Celestica delivered fourth quarter revenue and operating margin in-line with our guidance,' said Craig Muhlhauser, Celestica President and Chief Executive Officer. 'We continued to improve profitability throughout 2013, despite a challenging business environment. We also delivered value to our shareholders through share repurchases, while continuing to make the necessary investments in support of our long-term strategy.' 'We look forward to building on this positive momentum throughout 2014, with a focus on achieving profitable growth in our target markets and accelerating our time to value for our customers and shareholders.' Fourth Quarter and Fiscal Year 2013 Summary Three months ended December 31 Year ended December 31 2012 2013 2012 2013 Revenue (in millions).......................................................................

........

$ 1,496.2 $ 1,436.7 $ 6,507.2 $ 5,796.1 IFRS net earnings (in millions) (i)..........................................................

$ 7.2 $ 22.1 $ 117.7 $ 118.0 IFRS EPS(i)..........................................................................

.......................

$ 0.04 $ 0.12 $ 0.56 $ 0.64 Adjusted net earnings (non-IFRS) (in millions)(ii) ..............................

$ 50.3 $ 44.4 $ 205.8 $ 154.5 Adjusted EPS (non-IFRS)(i)(ii)...............................................................

...

$ 0.25 $ 0.24 $ 0.98 $ 0.83 Non-IFRS return on invested capital (ROIC)(ii)....................................

18.4 % 19.2 % 21.5 % 17.9 % Non-IFRS operating margin(ii)................................................................

3.1 % 3.3 % 3.3 % 3.0 % i. International Financial Reporting Standards (IFRS) net earnings for the fourth quarter of 2013 included an aggregate charge of $0.14 (pre-tax) per share for stock-based compensation, amortization of intangible assets (excluding computer software) and restructuring charges. This is slightly higher than the range we provided on October 22, 2013 of an aggregate charge of between $0.06 and $0.13 per share for these items due to higher than expected restructuring charges in the fourth quarter of 2013 (See the tables in Schedule 1 attached hereto for per-item charges). Included in the fourth quarter of 2013 adjusted EPS (non-IFRS) of $0.24 is a net income tax benefit of $0.02 per share arising primarily from changes to our tax provisions related to certain tax uncertainties. 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 therefore may not be comparable to similar measures presented by other companies using IFRS or other generally accepted accounting principles (GAAP). See 'Non-IFRS Supplementary Information' below for information on non-IFRS measures used herein, and Schedule 1 for, among other items, non-IFRS definitions and a reconciliation of non-IFRS to IFRS measures (where a comparable IFRS measure exists).

End Markets by Quarter as a Percentage of Total Revenue 2012 2013 Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Communications..............................................

33% 32% 37% 37% 35% 40% 42% 45% 41% 42% Consumer........................................................

23% 21% 15% 9% 18% 7% 7% 6% 6% 6% Diversified (i)....................................................

19% 19% 21% 23% 20% 24% 25% 26% 27% 25% Servers...........................................................

15% 16% 14% 17% 15% 16% 14% 9% 11% 13% Storage...........................................................

10% 12% 13% 14% 12% 13% 12% 14% 15% 14% Revenue (in billions)........................................

$1.69 $1.74 $1.58 $1.50 $6.51 $1.37 $1.50 $1.49 $1.44 $5.80 Our diversified end market is comprised of industrial, aerospace and defense, healthcare, solar, green technology, semiconductor equipment and other Restructuring Update Due to our disengagement from BlackBerry Limited (BlackBerry), formerly Research In Motion Limited, in 2012, and in response to the challenging demand environment, we announced in 2012 restructuring actions throughout our global network intended to reduce our overall cost structure and improve our margin performance. These restructuring actions are now complete. We recorded aggregate restructuring charges of $72.0 million, comprised of $44.0 million in 2012 and $28.0 million in 2013, including $17.5 million recorded in the fourth quarter of 2013 (fourth quarter of 2012 - $16.7 million). We had expected our total restructuring charges to be at the high end of our previously announced range of $55 million to $65 million. However, we exceeded our estimate as we decided to take additional restructuring actions in the fourth quarter of 2013 to further streamline and simplify our business and global operating network in response to the continuing challenging market environment.

Normal Course Issuer Bid (NCIB) During the fourth quarter of 2013, we paid $24.8 million (full year 2013 - $43.6 million), including transaction fees, to repurchase for cancellation 2.4 million (full year 2013 - 4.1 million) subordinate voting shares under our NCIB, which was accepted by the Toronto Stock Exchange (TSX) in August 2013. The NCIB allows us to repurchase, until the earlier of August 6, 2014 or the completion of purchases under the bid, up to approximately 9.8 million subordinate voting shares (representing approximately 5.3% of our total subordinate voting and multiple voting shares outstanding) in the open market or as otherwise permitted, subject to the normal terms and limitations of such bids. The maximum number of subordinate voting shares we are permitted to repurchase for cancellation under the NCIB is reduced by the number of subordinate voting shares we purchase for equity-based compensation plans.

First Quarter 2014 Outlook For the first quarter ending March 31, 2014, we anticipate revenue to be in the range of $1.3 billion to $1.4 billion, and non-IFRS adjusted net earnings per share to be in the range of $0.17 to $0.23. We expect a negative $0.05 to $0.09 per share (pre-tax) aggregate impact on net earnings on an IFRS basis for stock-based compensation and amortization of intangible assets (excluding computer software).

Fourth Quarter 2013 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.

Non-IFRS 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. 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. We believe investors use both IFRS and non-IFRS measures to assess our past, current and future decisions associated with strategy and allocation of capital, as well as to analyze how businesses operate in, or respond to, swings in economic cycles or to other events that impact core operations. See Schedule 1 - Supplementary Non-IFRS Measures for, among other items, non-IFRS definitions and a reconciliation of non-IFRS to IFRS measures (where a comparable IFRS measure exists).

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 complex challenges. For further information about Celestica, visit our website at www.celestica.com. Our 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 the electronics manufacturing services (EMS) industry; our financial or operational results including our quarterly revenue and earnings guidance; the impact of acquisitions and program wins or losses on our financial results and working capital requirements; anticipated expenses, charges, capital expenditures and/or benefits; our expected tax and litigation outcomes; our cash flows, financial targets and priorities; changes in our mix of revenue by end market; our ability to diversify and grow our customer base and develop new capabilities; the effect of the global economic environment on customer demand; and the number of subordinate voting shares and price thereof we repurchase under our NCIB. Such forward-looking statements may, without limitation, be preceded by, followed by, or include words such as 'believes', 'expects', 'anticipates', 'estimates', 'intends', 'plans', 'continues', 'project', 'potential', 'possible', 'contemplate', 'seek', or similar expressions, or may employ such future or conditional verbs as 'may', 'might', 'will', 'could', '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 applicable Canadian securities laws.

Forward-looking statements are provided for the purpose of assisting readers in understanding management's current expectations and plans relating to the future. Readers are cautioned that such information may not be appropriate for other purposes. Forward-looking statements are not guarantees of future performance and are subject to risks that could cause actual results to differ materially from conclusions, forecasts or projections expressed in such statements, including, among others, risks related to: our customers' ability to compete and succeed in the marketplace with the products we manufacture; price and other competitive factors generally affecting the EMS industry; managing our operations and our working capital performance during uncertain economic conditions; responding to rapid changes in demand and changes in our customers' outsourcing strategies, including the insourcing of programs; customer concentration and the challenges of diversifying our customer base and replacing revenue from lost programs or customer disengagements; changing commodity, material and component costs, as well as labor costs and conditions; disruptions to our operations, or those of our customers, component suppliers or logistics partners, including as a result of world or local events outside our control; retaining or expanding our business due to execution problems relating to the ramping of new programs; delays in the delivery and availability of components, services and materials; non-performance by counterparties; our financial exposure to foreign currency volatility; our dependence on industries affected by rapid technological change; managing our global operations; increasing income taxes, increased levels and scrutiny of tax audits globally, and defending our tax positions or meeting the conditions of tax incentives and credits; successfully implementing and completing our restructuring plans and integrating our acquisitions; computer viruses, malware, hacking attempts or outages that may disrupt our operations; any U.S. government shutdown or delay in the increase of the U.S. government debt ceiling; and compliance with applicable laws, regulations and social responsibility initiatives. These and other material risks and uncertainties are discussed in our public filings at www.sedar.com and www.sec.gov, including in our MD&A, 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 Administrators.

Our revenue, earnings and other financial guidance, as contained in this press release, are based on various assumptions many of which involve factors that are beyond our control. The material assumptions include those related to the following: production schedules from our customers, which generally 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; the stability of general economic and market conditions, currency exchange rates, and interest rates; our pricing, the competitive environment and contract terms and conditions; supplier performance, pricing and terms; compliance by third parties with their contractual obligations, the accuracy of their representations and warranties, and the performance of their covenants; components, materials, services, plant and capital equipment, labor, energy and transportation costs and availability; operational and financial matters including the extent, timing and costs of replacing revenue from lost programs or customer disengagements; technological developments; overall demand improvement in the semiconductor industry, and revenue growth and improved profitability in our semiconductor business; the timing and execution of our restructuring actions; and our ability to diversify our customer base and develop new capabilities. While management believes these assumptions to be reasonable under the current circumstances, they may prove to be inaccurate. 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.

All forward-looking statements attributable to us are expressly qualified by these cautionary statements.

Contacts: Celestica Global Communications (416) 448-2200 media@celestica.com Celestica Investor Relations (416) 448-2211 clsir@celestica.com (c) 2014 Electronic News Publishing -

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