Good afternoon, my name is Candice, and I will be your conference operator today. At this time, I would like to welcome everyone to Celestica's 2012 Fourth Quarter Results Conference Call. [Operator Instructions] Thank you. Mr. Manny Panesar, Director of Investor Relations, you may begin your conference.

Thank you, Candice. Good afternoon, everyone, and thank you for joining us on Celestica's Fourth Quarter 2012 Earnings Conference Call. On the call today are Craig Muhlhauser, President and Chief Executive Officer; and Darren Myers, Chief Financial Officer. This conference call will last approximately 45 minutes. Darren and Craig will provide some brief comments on the quarter, and then we will open the call for Q&A. [Operator Instructions] Copies of supporting slides accompanying this webcast can be viewed at celestica.com. As a reminder, during this call, we make forward-looking statements related to our future growth, trends in our industry, our financial and operational results and performance, and financial targets that are based on current expectations, forecasts and assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially. We also refer you to our cautionary statements regarding forward-looking information in the company's various public filings including the Safe Harbor statement in today's press release. We refer you to the assumptions, risk factors and uncertainties discussed in the company's various public filings which contain identified factors that could cause actual results to differ materially from those contained in our projections or forward-looking statements. These filings include our Form 20-F, and subsequent reports on Form 6-K, filed with the Securities and Exchange Commission, which can be accessed at sedar.com and sec.gov. During this call, we'll refer to certain non-IFRS financial measures, which include adjusted gross margin, adjusted SG&A, adjusted operating margin or EBIAT, adjusted EPS, ROIC and free cash flow. These non-IFRS measures do not have any standardized meaning under IFRS and are not necessarily comparable with other non-GAAP or non-IFRS financial measures presented by other companies including our major North American competitors. We refer you to our press release, which is available at celestica.com. For more information about these non-IFRS measures, including the reconciliation of the non-IFRS measures to the corresponding IFRS measures as appropriate. Unless otherwise specified, all dollar amounts referred to in this call are U.S. dollars. I will now turn the call over to Darren Myers

Thank you, Manny, and good afternoon, everyone. It's a pleasure to be here today co-hosting my first quarterly results conference call with you. Celestica delivered revenue and operating profit within our guidance range, generating strong free cash flow in the fourth quarter despite the negative revenue impact from the wind down of RIM in a challenging demand environment. Fourth quarter revenue of $1.5 billion came in higher than the midpoint of our guidance range. Total revenue in the fourth quarter declined 5% sequentially and was down 15% on a year-over-year basis, predominantly as a result of the wind down of RIM. Excluding RIM, fourth quarter revenue was up 4% sequentially and grew 6% compared to the same period of 2011. Some additional highlights for the quarter include: adjusted earnings per share of $0.25 came in higher than our guidance range and included a onetime positive tax impact of $0.06 per share; non-IFRS operating margin of 3.1% was down 20 basis points sequentially on lower revenue; IFRS net earnings of $7.2 million or $0.04 per share were impacted by other charges totaling $34.5 million; we generated strong free cash flow of $90 million; we ended the quarter with a cash balance of $551 million, with $55 million drawn on our credit facility; we successfully completed our substantial issuer bid, returning $175 million to tendering shareholders and canceling 22.4 million or approximately 12% of the outstanding subordinate voting shares immediately prior to the bid. Before discussing the details of the fourth quarter, I would like to highlight some of the financial results for the full year. 2012 revenue of $6.5 billion was down 10% compared to 2011, primarily due to the wind down of RIM. Excluding RIM, 2012 revenue was down 1%, while diversified end markets grew 27% year-over-year. IFRS net earnings…

Good afternoon to everyone on the call, and Darren, thank you for providing the financial overview as our new Chief Financial Officer. Overall, Celestica's 2012 results can be characterized as mixed. While we're disappointed that we missed our revenue growth and operating profit expectations for 2012, we're very pleased to have delivered on our ROIC above 20% and free cash flow above our targeted range of $100 million to $200 million, while continuing to invest in the business and returning over $280 million to our shareholders through share repurchases. After the disengagement of a customer who historically represented up to 20% of our total revenue, our priorities are to achieve profitable growth, further increase the mix of diversified business and to accelerate the penetration of higher value-added services with our current and new customers. We remain confident in our strategy, which includes diversifying our revenue and customer base. We made considerable progress in 2012 toward this objective as evidenced by the strong annual revenue growth of 27% in our diversified end markets, where we have proved our share position. We're also very encouraged by the business wins from 2012 with new and existing customers that will ramp in the second half of this year and into 2014. As well, we're excited by the pipeline of new business opportunities that we have across all of our targeted business segments and expect to close in 2013. Every day, our team of talented and highly motivated employees are providing value to our customers using industry-leading tools, process technology and equipment, Information Technology and innovative business processes. In 2012, we were ranked #1 or #2 on over 90% of our top customer scorecards. We were recognized by a number of customers and industry groups with awards for operational excellence, for fostering innovative solutions and…

[Operator Instructions] And your first question comes from Wamsi Mohan from Bank of America Merrill Lynch.

Dan, Craig, this is actually Ruplu sitting in for Wamsi today. Just first, Craig, maybe I missed this, but did you give an outlook for the consumer segment, and now that without RIM, you still see that as approximately 5% of your revenues? And did you -- or could you give us some color on that end market?

Sure. We -- I did not, and I apologize for that. It's going to be roughly 5% to 10% of our total revenue mix.

And is that for the full year? Can we take that to be the case?

Yes.

Okay. And then, Dan, it seems that restructuring-wise, there's an incremental $15 million that you announced today. I was just wondering which end markets are you targeting for that restructuring and in total, what annual cost savings would you expect to see from the restructuring activities?

It's Darren here. In terms of the restructuring, they'll be across our -- across the overhead, no specific end markets that we would call out but really across the market or across our network. As we look at the impacts of that, previously, we've talked about revenue getting back to the 3% to 3.5% at $1.750 billion, this should drop the level, obviously, depending on a number of factors there. So we will start seeing additional savings as a result of this, it would probably be more the 1,700 number in order to get to the 3.5%, but that's going to obviously depend on another number of factors, but this will give us some extra momentum on the savings side.

. Great. That was quite helpful. And the last one for me, if I could, what was the ending share count as of December 31?

The ending share count is 182.7 million.

Your next question comes from Sherri Scribner with Deutsche Bank.

I just wanted to clarify on the different end markets. I don't know, it seemed that the commentary from Darren and Craig was slightly different. But I think Darren had said the diversified and the storage segments would be up sequentially, and the server and communications would be down sequentially, is that the right way to think about it, is that correct?

Sherri, it's Darren. No, my comment was around year-over-year. I mean, generally it's diversified. Most are going to have a seasonal decline as we go into the first quarter with the exception of diversified, more or less.

Okay. And then, thinking about the first quarter and that guidance you are guiding to, down about 8% at the midpoint for revenue, is most of that decline coming in communications or in server? Which segments are going to see the most, the biggest decline? And how will consumer impact that?

We're -- I wouldn't call out one specifically, I mean, consumer will most likely come down probably disproportionately more than the others, and then communications and the storage and server will be mixed across those, is what we would see. And we had a strong quarter, certainly, within storage and servers, so you start seeing that impact as we go into the first quarter.

Our next question comes from Jim Suva with Citi.

This is Nick Jones calling in for Jim Suva here. Now that the buyback is done, I guess, regarding [ph] your capital allocation, will there be another buyback program or will the focus be on M&A? And if so, what kind of segments would you be focusing in?

I think the focus, at least for the near term, is going to be on the M&A opportunity. So it's going to be building capabilities to support the continued growth and diversification into the diversified segment. And then, I think as we look later in the year, I mean, obviously, we're going to have another year of strong cash flow. If the opportunities are not there, we'll reevaluate that in the second half. But we've got a strong year of growth, capital spending should be in line with our historical levels. And as we see opportunities, obviously, or we consolidate market share with some of these emerging customers, they're looking for us to acquire more capabilities to increase our value added. So let's say, for the first half and the bulk of 2013 will be largely building capabilities through mergers and acquisitions.

And your next question comes from Brian Alexander with Raymond James. Brian G. Alexander - Raymond James & Associates, Inc., Research Division: I just wanted to touch on the server comment that you mentioned with the customer insourcing starting in the second quarter, is that $50 million per quarter? Is that the full impact that you're likely to see or will there be an incremental impact in the third quarter? And then, just a couple of related questions for that same issue. Are you the sole source for that customer? And then on the margin side, is this already reflected in the 2% to 2.5% operating margin target that you're providing, which I think is the same as what you provided last quarter. So basically, no effect from this lost revenue.

Brian, it's Darren here, I'd say first of all, the $50 million drop is what we currently see. We're only giving guidance out to the second quarter, but subject to -- this continues to be an important customer, so subject to how their programs do, we'll see how Q3, Q4 roll from there. In terms of the sole source, we won't give specifics, as I'm sure you can appreciate, on the actual customer and the programs. And then, the third point in terms of the margins, yes, this has been contemplated within the 2% to 2.5% margin. As Craig mentioned, this is really light-touch, low-margin business that is going away.

Yes, I mean, Brian, the customer in particular, has an existing system assembly operation and they've got underabsorption and excess capacity. So it is a low value-added, light touch, lower margin system assembly business and we're retaining a significant amount of the demand with that customer. So that's why the impact to the business is well within the guidance we've given in the prior call. Brian G. Alexander - Raymond James & Associates, Inc., Research Division: Got it. And then, Craig, maybe more strategic for you. You sounded a bit more excited about your pipeline than maybe you had in prior quarters. So I know you don't really quantify new program wins or the pipeline, but any way to put into more context relative to your existing revenue base, or relative to how you were tracking in prior quarters for new wins? Are things getting better on that front? Or maybe did you just sound more excited about it?

Well, I'm smiling here, Brian. I think, I guess, I come back from the holidays and I see the pipeline and I actually see the first quarter. We had a strong year, I'm very excited about the progress we made, 27% growth in a tough market, making a transition, but I am very excited about the front end of 2013 in terms of the number of opportunities that will close this year. And as a result of that, when I look at the book and bill, we need to make the revenue forecast, and I look at the momentum we've got on the front end, I am feeling very positive right now. Brian G. Alexander - Raymond James & Associates, Inc., Research Division: Can you just say how they're skewed relative to your existing mix, or are they disproportionately coming from the diversified segment?

I would say there are large scale opportunities in the diversified segment, but the skew is very encouraging as well in some of the higher-margin opportunities we've got in the communications and enterprise space. So it's pretty broad with some large scale opportunities, which typically are unusual in the diversified space, and they're right in front of us. And then we've had the fortunate -- been in a fortunate position to close a large-scale competitive takeaway with one of our major current customers in the fourth quarter, so that was key.

Your next question comes from Amit Daryanani with RBC Capital Markets.

Maybe just follow-up on that question. Given the optimism you have about your new programs that will ramp up in the back half, from the sound of it, could you maybe help us understand why are you increasing your researching initiative, because I would imagine you probably need that extra capacity if all these revenues are to ramp up? So are there some offsets that are leading you to actually include the restructuring plan?

Well, I think, in terms of -- I mean, this is the balance we're walking right now. I mean, I think we -- our quote in our pricing groups, our contracts groups, I mean, they're virtually at capacity or working very near capacity. So we're balancing the capacity. As you know, some of those facilities that we've got are dedicated to Centers of Excellence for diversified, some of which, we share with communications and Enterprise. So we are taking selective, I'll say, restructuring of various sites as we consolidate the business. And therein lies the skew in our margin profile over the course of the year. So predominately, the restructuring that we spend was around the RIM cost structure and reducing capacity associated with RIM. But I would say, it's more of a refinement, focusing the operating facilities, more aligned with the strategy and reducing the overhead in those facilities as opposed to the direct labor and the direct production costs.

Got it. And I just want to clarify that the one server customer that's going in-house, is that $30 million or $50 million from that IP [ph] ? I've got 2 different numbers? And then, is that just one specific product line that they're bringing in-house or are they kind of taking all the manufacturing back in-house?

No, no, no. They're not bringing all the manufacturing back in-house, they're bringing back in-house a system assembly capability to put into an existing facility they have that does system assembly that's underloaded. So it -- and the number that we are estimating in the second quarter based on their current forecast would be about a $50 million impact in revenue to our prior, I would say, the prior modeling, if you will, based on our base business. But we're retaining a large portion of that business and providing the higher value-added components to support those system assemblers.

Your next question comes from Matt Sheerin with Stifel, Nicolaus. Matthew Sheerin - Stifel, Nicolaus & Co., Inc., Research Division: Question regarding your commentary about getting back to the 3.5% operating margin number at $1.7 billion revenue run rate. Craig, you certainly do sound optimistic about pipeline. Do you have any visibility as to whether you think that pipeline will roll on fast enough to get to that number either in Q3 or Q4, because I know you've talked about the 2% to 2.5% margin target for the first half? How fast can you accelerate above that in the second half?

Matt, it's Darren here. Yes, as Craig's mentioned, we've got lot of exciting opportunities in front of us. We're ramping business and there are some positive signs as we look forward, but it's early in the year and what happens with the economy, what happens with demand, end market demand is certainly unclear to us as, I believe, it's unclear to most people. So it's hard for us to predict. We don't want to predict today when we will get there. There's just too many variables at play.

Yes, I mean, I think the biggest assumption, Matt, is the economic environment and the base erosion or deterioration of our base business. So if our base business holds in line with our current outlook, it's tough to say, we have to book the business before the first half to have an opportunity to execute it in the second half, but the big assumption here is the overall macroeconomic market and the impact that might have on our base demand. We have strong new pipeline, new opportunities, they will grow. But the question is, meeting that threshold will determine a lot by the overall economic environment right now, and it's too tough to predict, as Darren mentioned. Matthew Sheerin - Stifel, Nicolaus & Co., Inc., Research Division: Okay, fair enough. And then, just another question regarding your consumer market, which appears to be holding up better than expected given that RIM has gone away. Could you be more specific and give color on customer end markets there? And then, also the margin profile of that business, as your managing that?

Yes, it's Darren here. That business, is, I'd say, it's predominately aftermarket services customers. There's some other customers, this tends to -- targeted margins would be higher in this end market as it relates to the aftermarket.

Yes, the mix will be -- we've got some automated manufacturing services that we provide in this space. So that particular business is at a higher margin than some of our more traditional business and then, the bulk of the balance would be either aftermarket service-related or an the area of set-top box. Matthew Sheerin - Stifel, Nicolaus & Co., Inc., Research Division: Okay, so really deemphasizing the high volume -- the high velocity and really focusing on the value add? Got you.

Yes. For sure, we're really taking this opportunity to transform the company into the true niche -- the true opportunity that we have here, which is the value-added.

Your next question comes from Todd Coupland with CIBC.

Are you able to tell us who the 10% customers were in the fourth quarter?

Not in the fourth quarter. For the year, it's Cisco and RIM, Todd.

Okay. And then, when I think about the server line, roughly $250 million, so $50 million is actually quite a large impact to that business. What does that do to your footprint in terms of supporting that? Do you need to do a reset in the server area beyond what you've done for RIM, maybe just talk a little bit about that?

Well, the short answer is, a large part and the bulk of that will be backfilled with the communications customer, which is a similar type of capability. So the short answer is, no, we don't have to do a reset on the infrastructure. I think the message is, we have done a reset on the strategy. We're moving into a higher value-added play in the server space and the storage space, with joint design in manufacturing and we're starting to build more momentum in that. And then, some of the newer programs that we've won over the course of the last 18 -- 12 to 18 months, are beginning to move into production volume. So it will be an important segment. The bulk of what we're losing was little to no calories and in an area of the business that seems to be on the decline, frankly.

When we look at your guidance for Q1 and you take out the server business for Q2, should we anticipate a roughly flat revenue quarter? Or should there be some seasonality and some new programs even in this lackluster demand environment?

Todd, it's Darren here again. We'll leave the modeling to you, and flattish is probably a reasonable assumption. But we'll leave the modeling to you on that.

Your next question comes from Naser Iqbal with Salman Partners.

I guess, just following up on Todd's question. In terms of offsetting the $50 million in the second quarter, do you see any other positive headwinds, either just from some program ramps or just your positive pipeline that you're seeing right now?

Yes, I mean, I think offsetting the $50 million in the second quarter will be difficult based on this timing of ramp. So obviously, the good news is, the customers that we're winning, or the consolidation that this one customer is doing with their supply base on the communications side that we've won, they want to accelerate the timing of that, but it's all going to be gated by the ability to do it and do it well. So the short answer is, that's a headwind we're going to have to overcome as we go through the balance of the year. We will overcome it. Speed of the ramps, and the largest ramp we'll have going on will be probably in the communications space with this competitive takeaway. So overall, on a net-net basis, tough to overcome it by the end of the second quarter. Certainly, you'll see the opportunities, or you'll see the revenue impact, positive impact over the course of the second half.

Okay. And again, and just following on that, I guess my follow on would be, given how -- Craig, how positive you are in the pipeline on the back half, do you think that if the economic macro is where it is now that the program ramps could provide a good source of growth?

Sure. I mean, it's -- you're going to see growth rates in the diversified space. You see 27% this year. You're going to see continued growth. I mean, one of the important markets where we need to see a rebound in base demand, where we've had a very material impact negatively, is in the semiconductor capital equipment market. So if that starts to bounce back, and on top of the new program wins, which will be a little bit longer cycle program wins, that would underpin a very, very, very strong second half, frankly.

Your next question comes from Joe Wittine with Longbow Research.

With regards to the additional restructuring charges, I'm wondering if you could talk us through where you expect the operating expenses to trend beyond the first quarter. Do you expect them to go lower given the additional actions you're taking, and if so, how much?

Joe, it's Darren. I mean, in terms of beyond the first quarter, as Craig mentioned, I mean, we see a range of 2% to 2.5% for the first half and not giving guidance from there. As we also mentioned, we're investing in the business. So when you put on some growth on top of that investment and you start to get leverage on the fixed cost and the network, we see margins will start to accelerate. It's going to be a function of the growth, it's going to be a function of the semiconductor demand turning around. And then, putting on top of that, some restructuring, you'll start to see the margin really, really improve from where we are today.

Okay, got you. And then Craig, when you're talking about how you had a smile on your face after New Year, I just want to make sure I'm drawing the right conclusions. You had mentioned -- let me just ask, is it more a function of the bullishness in semi cap or is it more a function of the large comms program that you want, just so I'm not jumping to any conclusions here?

No, I think it's the breadth of opportunities that we're seeing across the pad [ph] . So the comms win was a great proof point but then, around that are opportunities in the communications enterprise, and then, we have major opportunities in the semicon space, but also we have opportunities in essentially every major market that we've got right now. So it's that breadth and that balance across the patch, it's the timing of those opportunities, they all look like they're going to be closing in the first half. And then, it's the fact that we seem to be winning with the winners in the markets, which is very encouraging.

Maybe just a final follow up on that comms business, is it your understanding that you won the entire piece that was up for bid or was it split between you and the other providers?

Yes, we don't comment on that. So I'll just leave that to other comps -- other people to explain.

Your next question comes from Gus Papageorgiou with Scotiabank.

I guess, kind of a longer term question. I mean, Craig, since you took over, you've done a great job at delivering a profitable organization with great cash flow and high ROIC, but in terms of the top line, it has been a challenge both macroeconomically and the loss of the RIM business. I'm just kind of wondering, with the strong balance sheet, how important is top line growth to you guys? Do you think it's something you really want to achieve or are you just happier to kind of use the balance sheet to grow the business slowly and improve the bottom line? So can you just kind of give us a sense of what your perspective is on growing the overall business?

Well, the first phase, I mean, if you're breaking it into 3 phases. First phase, Gus, will be to -- I'll say, to backfill the impact of RIM and get back to 3.5% to 4%. I'm very bullish on the strategy of the company and the ability to transform and grow and make money. So Phase 1 is to backfill RIM, get to the $1.7 billion and the 3.5% to 4% threshold as quickly as possible. Step 2 is to leverage the investments we're making to grow the company and increase the share of diversified from what will be 20-plus percent today, we'll be moving to 30, and hopefully one day be half of the business. And then, finally, it's to maintain the financial discipline so you have the trust and confidence that we're going to generate strong cash flow. We're not going to go for like double-digit, we're going to go for 6% to 8% growth rates, back to the original model, and we want to improve the, I'll say, the operational performance to drive even more cash flow and make this a very solid investment for the long-term. So I'm in it to transform it, I'm in it, but without compromising any aspect of our financial discipline and the credibility we've built. It's going to take a little bit longer than we thought, but we've got some really early indicators that make us feel very positive about the market wants a company like Celestica doing the things we're planning to do.

[Operator Instructions] And actually, we have no further questions at this time, so I'll turn the call back to our presenters.

Okay, Candice, thank you very much. And thanks everybody for your interest in calling in today and we look forward to continuing our conversation. Thank you very much for your support.

Thank you everyone.

And this concludes today's conference call. You may now disconnect.