This report contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act"). These statements relate to our expectations for future events and time periods. All statements other than statements of historical fact are statements that could be deemed to be forward-looking statements, including any statements regarding trends in future revenues or results of operations, gross margin or operating margin, expenses, earnings or losses from operations, synergies or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements concerning developments, performance or industry ranking; any statements regarding future economic conditions or performance; any statements regarding pending investigations, claims or disputes; any statements regarding the financial impact of customer bankruptcies; any statements regarding future cash outlays for acquisitions; any statements concerning the adequacy of our liquidity; any statements of expectation or belief; and any statements of assumptions underlying any of the foregoing. Generally, the words "anticipate," "believe," "plan," "expect," "future," "intend," "may," "will," "should," "estimate," "predict," "potential," "continue" and similar expressions identify forward-looking statements. Our forward-looking statements are based on current expectations, forecasts and assumptions and are subject to the risks and uncertainties contained in or incorporated from Part II, Item 1A of this report. As a result, actual results could vary materially from those suggested by the forward-looking statements. We undertake no obligation to publicly disclose any revisions to these forward-looking statements to reflect events or circumstances occurring subsequent to filing this report with the Securities and Exchange Commission.

Overview

We are a leading independent global provider of customized, integrated electronics manufacturing services, or EMS. Our revenue is generated from sales of our services primarily to original equipment manufacturers, or OEMs, in the communications, enterprise computing and storage, multimedia, industrial and semiconductor capital equipment, defense and aerospace, medical and automotive industries.

Since the fall of 2008, the business environment has become challenging due to adverse global economic conditions. These conditions have slowed global economic growth and have resulted in recessions in many countries, including the U.S., Europe and certain countries in Asia. As a consequence, many of the industries to which we provide products have experienced significant financial difficulty, with some entities filing for bankruptcy. Such significant financial difficulty, if experienced by one or more of our customers, may negatively affect our business due to the decreased demand from these financially distressed customers, the potential inability of these companies to make full payment on amounts owed to us, or both.

We exited our PC and associated logistics services business ("PC Business") in 2008 and have reflected this business as a discontinued operation in the condensed consolidated statements of operations for all prior periods presented.

Unless otherwise noted, all references to our operating results in this Management's Discussion and Analysis of Financial Condition and Results of Operations pertain only to our continuing operations and all references to years refer to our fiscal years ending on the last Saturday of each year closest to September 30. Fiscal 2009 will be a 53 week year, with the additional week included in the fourth quarter.

A relatively small number of customers have historically generated a significant portion of our net sales. Sales to our ten largest customers represented 47.5% and 48.3% of our net sales for the three and nine months ended June 27, 2009, respectively. Sales to our ten largest customers represented 48.5% and 48.3% of our net sales for the three and nine months ended June 28, 2008, respectively. No customer represented 10% or more of our net sales for any of these periods.

We typically generate a significant portion of our net sales from international operations. Sales from international operations during the three months ended June 27, 2009 and June 28, 2008 were 74.5% and 71.6%, respectively, of our total net sales. During the nine months ended June 27, 2009 and June 28, 2008, 73.2% and 69.1%, respectively, of our total net sales were derived from international operations. The concentration of international operations has resulted from a desire on the part of many of our customers to source production in lower cost locations such as Asia, Latin America and Eastern Europe. We expect this trend to continue.

Historically, we have had substantial recurring sales to existing customers. We generally do not obtain firm, long-term commitments from our customers. Orders are placed by our customers using purchase orders, some of which are governed by supply agreements. These agreements generally have terms ranging from three to five years and cover the manufacture of a range of products. Under these agreements, a customer typically agrees to purchase its requirements for particular products in particular geographic areas from us. These agreements generally do not obligate the customer to purchase minimum quantities of products.

Critical Accounting Policies and Estimates

Management's discussion and analysis of our financial condition and results of operations are based upon our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. We review the accounting policies used in reporting our financial results on a regular basis. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, net sales and expenses and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate the process used to develop estimates for certain reserves and contingent liabilities, including those related to product returns, accounts receivable, inventories, investments, intangible assets, income taxes, warranty obligations, environmental matters, restructuring, contingencies and litigation. We base our estimates on historical experience and on various other assumptions that we believe are reasonable for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Our actual results may differ materially from these estimates.

For a complete description of our key critical accounting policies and estimates, refer to our 2008 Annual Report on Form 10-K filed with the Securities and Exchange Commission on November 24, 2008.

Results of Operations

Key operating results

                                               Three Months Ended               Nine Months Ended
                                            June 27,        June 28,        June 27,        June 28,
                                              2009            2008            2009            2008
                                                                 (In thousands)
Net sales                                  $ 1,209,150     $ 1,903,253     $ 3,823,521     $ 5,498,824
Gross profit                               $    75,760     $   139,641     $   228,148     $   393,215
Operating income (loss)                    $    (1,147 )   $    39,738     $   (12,377 )   $    57,941
Net income/(loss) from continuing
operations                                 $   (41,126 )   $    11,969     $  (103,937 )   $   (37,421 )
Income from discontinued operations, net
of tax                                     $         -     $     3,359     $         -     $    36,251
Net income/(loss)                          $   (41,126 )   $    15,328     $  (103,937 )   $    (1,170 )

Net loss from continuing operations includes restructuring costs of $14.1 million and $13.3 million for the three months ended June 27, 2009 and June 28, 2008, respectively, and $38.9 million and $68.1 million for the nine months ended June 27, 2009 and June 28, 2008, respectively. Additionally, net loss for the nine months ended June 27, 2009 includes a $10 million reduction in gross profit associated with Nortel Networks' petition for reorganization under bankruptcy law. Lastly, net loss for the nine months ended June 27, 2009 includes a gain on repurchase of debt of $13.5 million.

Key performance measures

                                                    Three Months Ended
                              June 27,       March 28,      December 27,       September 27,
                                2009           2009             2009               2008
 Days sales outstanding (1)        52             54               57                  51
 Inventory turns (2)              6.5             6.4              6.8                7.7
 Accounts payable days (3)         57             55               53                  52
 Cash cycle days (4)               51             56               57                  46

(1) Days sales outstanding, or DSO, is calculated as the ratio of ending accounts receivable, net, to average daily net sales for the quarter.

(2) Inventory turns (annualized) are calculated as the ratio of four times our cost of sales for the quarter to inventory at period end.

(3) Accounts payable days is calculated as the ratio of 365 days divided by accounts payable turns, in which accounts payable turns is calculated as the ratio of four times our cost of sales for the quarter to accounts payable at period end.

(4) Cash cycle days is calculated as the ratio of 365 days to inventory turns, plus days sales outstanding minus accounts payable days.

Net Sales

Net sales for the three months ended June 27, 2009 decreased 36.5%, from $1.9 billion in the third quarter of 2008 to $1.2 billion in the third quarter of 2009. The decrease was primarily the result of the weakening economy which reduced demand across all of our end markets. Due to the weakening economy, sales decreased $300 million in our communications end market, $161 million in our high-end computing end market, $120 million in our multi-media end market, $86 million in our automotive, defense and aerospace, and industrial and semiconductor capital equipment end markets, and $27 million in our medical end market.

Net sales for the nine months ended June 27, 2009 decreased by 30.5% to $3.8 billion, from $5.5 billion for the nine months ended June 28, 2008. The decrease was primarily the result of the weakening economy which reduced demand across all of our end markets. Due to the weakening economy, sales decreased $622 million in our communications end market, $408 million in our high-end computing end market, $350 million in our multi-media end market, $242 million in our automotive, defense and aerospace, and industrial and semiconductor capital equipment end markets, and $53 million in our medical end market.

Gross Margin

Gross margin decreased from 7.3% for the three months ended June 28, 2008 to 6.3% for the three months ended June 27, 2009, and from 7.2% for the nine months ended June 28, 2008 to 6.0% for the nine months ended June 27, 2009. The decreases for the three and nine month periods were primarily a result of significantly lower business volume in 2009, as discussed above, partially offset by improved margins as a result of cost reduction initiatives.

We expect gross margins to continue to fluctuate based on overall production and shipment volumes and changes in the mix of products demanded by our major customers. Fluctuations in our gross margins may also be caused by a number of other factors, some of which are outside of our control, including (a) greater competition in the EMS industry and pricing pressures from OEMs due to greater focus on cost reduction; (b) provisions for excess and obsolete inventory that we are not able to charge back to a customer or sales of inventories previously written down; (c) changes in operational efficiencies; (d) pricing pressure on electronic components resulting from economic conditions in the electronics industry, with EMS companies competing more aggressively on cost to obtain new or maintain existing business; and (e) our ability to transition manufacturing and assembly operations to lower cost regions in an efficient manner.

Operating Expenses

Selling, general and administrative

Selling, general and administrative expenses decreased $19.5 million, from $77.4 million, or 4.1% of net sales, for the three months ended June 28, 2008, to $57.9 million, or 4.8% of net sales, for the three months ended June 27, 2009. For the nine months ended June 27, 2009, selling, general and administrative expenses decreased to $177.9 million, or 4.7% of net sales, from $245.8 million, or 4.5% of net sales, for the nine months ended June 28, 2008. The decrease for both the three and nine month periods was attributable to cost reduction initiatives, primarily reductions in staffing related costs, across the Company.

Research and Development

Research and development expenses decreased $2.1 million, from $5.9 million, or 0.3% of net sales, in the third quarter of 2008, to $3.8 million, or 0.3% of net sales, in the third quarter of 2009. For the nine months ended June 27, 2009, research and development expenses decreased to $12.7 million from $14.7 million for the nine months ended June 28, 2008. The decrease for the three months and nine months ended June 27, 2009 was the result of cost reduction initiatives throughout the first nine months of 2009.

Restructuring costs

Costs associated with restructuring activities, other than those activities related to business combinations, are accounted for in accordance with SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal Activities", or SFAS No. 112, "Employers' Accounting for Postemployment Benefits", as applicable. Pursuant to SFAS No. 112, restructuring costs related to employee severance are recorded when probable and estimable based on our severance policy with respect to severance payments. For restructuring costs other than employee severance accounted for under SFAS No. 112, a liability is recognized in accordance with SFAS No. 146 only when incurred. Costs associated with restructuring activities related to business combinations are accounted for in accordance with EITF 95-3, "Recognition of Liabilities in Connection with a Purchase Business Combination".

2009 Restructuring Plan

During the first quarter of 2009, we initiated a restructuring plan as a result of the slowdown in the global electronics industry and worldwide economy. The plan is designed to improve capacity utilization levels and reduce costs by consolidating manufacturing and other activities in locations with higher efficiencies and lower costs. Costs associated with this plan are expected to include employee severance, costs related to owned and leased facilities and equipment that are no longer in use, and other costs associated with the exit of certain contractual arrangements due to facility closures. Actions under this plan are expected to be initiated during 2009 and total costs for this plan are expected to be in the range of $35 million to $40 million. We expect actions under this plan to increase our gross and operating margins and be cash flow positive over the next 12 to 24 months as cash outlays for severance and facility closures will be recovered by cost savings and asset sales resulting from actions under the plan. However, there can be no assurance that these benefits will be achieved due to changes in the restructuring plan that increase costs or any failure of anticipated asset sales to generate projected amounts. Below is a summary of restructuring costs associated with facility closures and other consolidation efforts implemented under this plan:

                                              Employee           Leases and
                                            Termination          Facilities          Impairment
                                              Severance         Shutdown and        of Assets or
                                             and Related        Consolidation        Redundant
                                              Benefits              Costs              Assets
                                                Cash                Cash              Non-Cash          Total
                                                                         (In thousands)
Balance at September 27, 2008              $             -     $             -     $            -     $       -
Charges to operations                                7,009                 482                  -         7,491
Charges utilized                                    (2,229 )              (482 )                -        (2,711 )
Balance at December 27, 2008                         4,780                   -                  -         4,780
Charges to operations                                7,524               1,160                  -         8,684
Charges utilized                                    (5,662 )            (1,160 )                -        (6,822 )
Balance at March 28, 2009                            6,642                   -                  -         6,642
Charges to operations                                6,121               3,954                570        10,645
Charges utilized                                    (6,109 )            (3,583 )             (570 )     (10,262 )
Reversal of accrual                                   (321 )                 -                  -          (321 )
Balance at June 27, 2009                   $         6,333     $           371     $            -     $   6,704

During the three and nine months ended June 27, 2009, we recorded restructuring charges of $5.8 million and $20.3 million, respectively, for employee termination costs, of which $14.0 million has been utilized and $6.3 million is expected to be paid during the remainder of 2009. These costs were provided for approximately 1,200 and 3,000 terminated employees for the three and nine months ended June 27, 2009, respectively.

Restructuring Plans - Prior Years

Below is a summary of restructuring costs associated with facility closures and
other consolidation efforts that were implemented in prior fiscal years:



--------------------------------------------------------------------------------


                                              Employee
                                            Termination             Leases and            Impairment
                                              Severance        Facilities Shutdown       of Assets or
                                             and Related        and Consolidation         Redundant
                                              Benefits                Costs                 Assets
                                                Cash                   Cash                Non-Cash          Total
                                                                           (In thousands)
Balance at September 30, 2006              $        21,349     $              9,804     $            -     $  31,153
Charges (recovery) to operations                    35,169                   11,195               (831 )      45,533
Charges recovered (utilized)                       (47,873 )                (12,132 )              831       (59,174 )
Reversal of accrual                                 (2,505 )                   (441 )                -        (2,946 )
Balance at September 29, 2007                        6,140                    8,426                  -        14,566
Charges to operations                               64,126                   16,519              2,456        83,101
Charges utilized                                   (45,248 )                (19,765 )           (2,456 )     (67,469 )
Reversal of accrual                                   (833 )                   (892 )                -        (1,725 )
Balance at September 27, 2008                       24,185                    4,288                  -        28,473
Discontinued operations                              5,607                        -                  -         5,607
Balance at September 27, 2008, including
discontinued operations                             29,792                    4,288                  -        34,080
Charges to operations                                3,222                    1,989                644         5,855
Charges utilized                                   (11,651 )                 (2,587 )             (644 )     (14,882 )
Reversal of accrual                                 (4,067 )                    (44 )                -        (4,111 )
Balance at December 27, 2008                        17,296                    3,646                  -        20,942
Charges to operations                                2,953                    2,905              1,121         6,979
Charges utilized                                   (11,299 )                 (2,839 )           (1,121 )     (15,259 )
Reversal of accrual                                    (89 )                      -                  -           (89 )
Balance at March 28, 2009                            8,861                    3,712                  -        12,573
Charges to operations                                1,944                      925                819         3,688
Charges utilized                                    (3,673 )                 (2,460 )             (819 )      (6,952 )
Reversal of accrual                                      -                     (123 )                -          (123 )
Balance at June 27, 2009                   $         7,132     $              2,054     $            -     $   9,186

During the three and nine months ended June 27, 2009, we recorded restructuring charges of $1.9 million and $4.0 million, respectively, for employee termination costs. These costs were provided for approximately 400 and 1,600 terminated employees for the three and nine months ended June 27, 2009, respectively. In connection with restructuring actions we have already implemented under these restructuring plans, we expect to pay remaining facilities related restructuring liabilities of $2.1 million through 2010 and the majority of severance costs of $7.1 million through the remainder of 2009. We have substantially completed our actions under these prior year restructuring plans.

All Restructuring Plans

In connection with all of our restructuring plans, restructuring costs of $15.9 million were accrued as of June 27, 2009, of which $15.7 million was included in accrued liabilities and $0.2 million was included in other long-term liabilities on the condensed consolidated balance sheet.

The recognition of restructuring charges requires us to make judgments and estimates regarding the nature, timing, and amount of costs associated with planned exit activities, including estimating sublease income and the fair values, less selling costs, of property, plant and equipment to be disposed of. Our estimates of future liabilities may change, requiring us to record additional restructuring charges or reduce the amount of liabilities already recorded.

Asset Impairment

During the three months ended June 27, 2009 and June 28, 2008, we recorded impairment charges of zero and $1.7 million, respectively. During the nine months ended June 27, 2009 and June 28, 2008, we recorded impairment charges of $7.2 million and $1.7 million, respectively, which related primarily to a decline in the fair value of certain properties held for sale.

Interest Income and Expense

Interest income decreased from $3.6 million for the three months ended June 28, 2008 to $0.8 million for the three months ended June 27, 2009, and from $15.0 million for the nine months ended June 28, 2008 to $6.0 million for the nine months ended June 27, 2009. The decreases were primarily attributable to lower interest rates during 2009 as a result of weakening economic conditions and uncertainty and volatility in the financial markets.

Interest expense decreased to $29.4 million for the three months ended June 27, 2009, from $30.0 million for the three months ended June 28, 2008, and to $86.7 million for the nine months ended June 27, 2009 from $96.9 million for the nine months ended June 28, 2008. The decrease is related to a significant reduction in LIBOR during 2009 as a result of uncertainty and volatility in the financial markets, which reduced interest expense on our variable rate debt. In addition, our average debt balance was lower due to the repurchase of $33.7 million of debt in the second quarter of 2009.

The decrease for the nine month period was primarily attributable to the termination of our hedging relationships for our 6.75% Notes during the second quarter of 2009, which caused the interest rate on these notes to become fixed at 6.75%, which was lower than the variable rate in effect when the hedging relationships were in place. In addition, LIBOR was significantly lower in 2009 as a result of uncertainty and volatility in the financial markets, which reduced interest expense on our variable rate notes, and our average debt balance was lower due to debt repurchases, as noted above.

Other Income (Expense), net

Other income (expense), net was $2.7 million and $5.9 million for the three
months ended June 27, 2009 and June 28, 2008, respectively, and $8.2 million and
$5.5 million for the nine months ended June 27, 2009 and June 28, 2008,
respectively. The following table presents the major components of other income
(expense), net:

                                               Three Months Ended             Nine Months Ended
                                            June 27,        June 28,       June 27,       June 28,
                                              2009            2008           2009           2008
                                                                (In thousands)
Foreign exchange gains (losses)            $    1,916      $    3,561     $   (6,990 )   $    6,692
Gain/(loss) on extinguishment of debt               -               -         13,490         (2,237 )
Other, net                                        792           2,334          1,684          1,072
Total other income (expense), net          $    2,708      $    5,895     $    8,184     $    5,527

We reduce our exposure to currency fluctuations through the use of foreign currency hedging instruments; however, hedges are established based on forecasts of foreign currency transactions. To the extent actual amounts differ from forecasted amounts, we will have exposure to currency fluctuations, resulting in foreign exchange gains or losses.

During the second quarter of 2009, we repurchased $4.3 million and $29.4 million of our 2010 and 2014 Notes, respectively. Upon repurchase, holders of the notes received $19.6 million, including accrued interest of $0.3 million. In connection with these repurchases, we recorded a gain of $13.5 million, net of unamortized debt issuance costs of $0.6 million that were expensed upon repurchase of the notes. During the first quarter of 2008, we redeemed $120 million of debt that was due in 2010. In connection with this redemption, $2.2 . . .