SAN
JOSE, Calif., July 29,
2024 /PRNewswire/ -- Sanmina Corporation ("Sanmina"
or the "Company") (NASDAQ: SANM), a leading integrated
manufacturing solutions company, today reported financial results
for the fiscal third quarter ended June 29,
2024 and outlook for its fiscal fourth quarter ending
September 28, 2024.
Third Quarter Fiscal 2024 Financial Highlights
- Revenue: $1.84 billion
- GAAP operating margin: 4.5%
- GAAP diluted EPS: $0.91
- Non-GAAP(1) operating margin: 5.3%
- Non-GAAP(1) diluted EPS: $1.25
- Cash flow from operations: $90
million
- Ending cash and cash equivalents: $658
million
(1) See Schedule 1 below for information
regarding the items excluded from and our use of non-GAAP financial
measures. A reconciliation of the non-GAAP financial information
contained in this release to their most directly comparable GAAP
measures is included in the financial statements furnished with
this release.
"We delivered third quarter results in line with our outlook. We
are starting to see stabilization and demand improve going into our
fourth quarter, and we expect to see growth in fiscal 2025," stated
Jure Sola, Chairman and Chief
Executive Officer. "We continue to execute our strategy, which is
to deliver profitable growth and free cash flow generation while
maintaining our strong balance sheet and returning value to
shareholders."
Fourth Quarter Fiscal 2024 Outlook
The following
outlook is for the fiscal fourth quarter ending September 28, 2024. These statements are
forward-looking and actual results may differ materially.
- Revenue between $1.9 billion to
$2.0 billion
- GAAP diluted earnings per share between $1.02 to $1.12
- Non-GAAP diluted earnings per share between $1.30 to $1.40
Safe Harbor Statement
The statements above including
our financial outlook for the fourth quarter fiscal 2024 and
expectations for growth in fiscal 2025 generally, constitute
forward-looking statements within the meaning of the safe harbor
provisions of Section 21E of the Securities Exchange Act of 1934.
Actual results could differ materially from those projected in
these statements as a result of a number of factors, including
adverse changes to the key markets we target; significant
uncertainties that can cause our future sales and net income to be
variable; reliance on a small number of customers for a substantial
portion of our sales; risks arising from our international
operations; geopolitical uncertainty, including from the war in
Ukraine and conflict in the
Middle East; and the other risk
factors set forth in the Company's annual and quarterly reports
filed with the Securities Exchange Commission.
The Company is under no obligation to (and expressly disclaims
any such obligation to) update or alter any of the forward-looking
statements made in this earnings release, the conference call or
the Investor Relations section of our website whether as a result
of new information, future events or otherwise, unless otherwise
required by law.
Company Conference Call Information
Sanmina will hold
a conference call to review its financial results for the third
quarter and outlook for the fourth quarter of fiscal 2024 on
Monday, July 29, 2024 at 5:00 p.m. ET (2:00 p.m.
PT). The access numbers are: domestic 800-836-8184 and
international 646-357-8785. The conference will also be webcast
live over the Internet. You can log on to the live webcast at Q3'24
Earnings. Additional information in the form of a slide
presentation is available on Sanmina's website at
www.sanmina.com. A replay of the conference call will be available
for 48-hours. The access numbers are: domestic 888-660-6345 and
international 646-517-4150, access code is 27876#.
About Sanmina
Sanmina Corporation, a Fortune 500
company, is a leading integrated manufacturing solutions provider
serving the fastest growing segments of the global Electronics
Manufacturing Services (EMS) market. Recognized as a technology
leader, Sanmina provides end-to-end manufacturing solutions,
delivering superior quality and support to Original Equipment
Manufacturers (OEMs) primarily in the industrial, medical, defense
and aerospace, automotive, communications networks and cloud
infrastructure markets. Sanmina has facilities strategically
located in key regions throughout the world. More information about
the Company is available at www.sanmina.com.
Sanmina Contact
Paige
Melching
SVP, Investor Communications
408-964-3610
|
Sanmina
Corporation
|
|
Condensed
Consolidated Balance Sheets
|
|
(in
thousands)
|
|
(GAAP)
|
|
(Unaudited)
|
|
|
|
|
|
June 29,
2024
|
|
September
30,
2023
|
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
657,709
|
|
$
667,570
|
|
Accounts receivable,
net
|
1,154,834
|
|
1,230,771
|
|
Contract
assets
|
414,805
|
|
445,757
|
|
Inventories
|
1,384,332
|
|
1,477,223
|
|
Prepaid expenses and
other current assets
|
81,655
|
|
58,249
|
|
Total current
assets
|
3,693,335
|
|
3,879,570
|
|
Property, plant and
equipment, net
|
630,254
|
|
632,836
|
|
Deferred tax
assets
|
162,782
|
|
177,597
|
|
Other
|
177,160
|
|
183,965
|
|
Total
assets
|
$
4,663,531
|
|
$
4,873,968
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
$
1,433,803
|
|
$
1,612,833
|
|
Accrued
liabilities
|
243,429
|
|
267,148
|
|
Accrued payroll and
related benefits
|
126,824
|
|
127,406
|
|
Short-term debt,
including current portion of long-term debt
|
17,500
|
|
25,945
|
|
Total current
liabilities
|
1,821,556
|
|
2,033,332
|
|
Long-term
liabilities:
|
|
|
|
|
Long-term
debt
|
299,665
|
|
312,327
|
|
Other
|
200,972
|
|
209,684
|
|
Total long-term
liabilities
|
500,637
|
|
522,011
|
|
|
|
|
|
Stockholders'
equity
|
2,341,338
|
|
2,318,625
|
|
Total liabilities and
stockholders' equity
|
$
4,663,531
|
|
$
4,873,968
|
|
Sanmina
Corporation
|
|
Condensed
Consolidated Statements of Income
|
|
(in thousands,
except per share amounts)
|
|
(GAAP)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
June 29,
2024
|
|
July 1,
2023
|
|
June 29,
2024
|
|
July 1,
2023
|
|
|
|
|
|
|
|
|
|
Net sales
|
$ 1,841,430
|
|
$ 2,207,118
|
|
$ 5,550,823
|
|
$ 6,883,029
|
|
Cost of
sales
|
1,687,891
|
|
2,023,910
|
|
5,081,687
|
|
6,313,246
|
|
Gross
profit
|
153,539
|
|
183,208
|
|
469,136
|
|
569,783
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
61,720
|
|
68,828
|
|
195,704
|
|
192,948
|
|
Research and
development
|
7,659
|
|
6,719
|
|
20,271
|
|
18,712
|
|
Restructuring
|
1,793
|
|
296
|
|
7,257
|
|
1,731
|
|
Total operating
expenses
|
71,172
|
|
75,843
|
|
223,232
|
|
213,391
|
|
|
|
|
|
|
|
|
|
Operating
income
|
82,367
|
|
107,365
|
|
245,904
|
|
356,392
|
|
|
|
|
|
|
|
|
|
Interest
income
|
2,572
|
|
4,213
|
|
9,641
|
|
9,685
|
|
Interest
expense
|
(7,506)
|
|
(10,066)
|
|
(24,136)
|
|
(28,033)
|
|
Other
expense
|
(2,795)
|
|
(2,508)
|
|
(652)
|
|
(11,988)
|
|
Interest and other,
net
|
(7,729)
|
|
(8,361)
|
|
(15,147)
|
|
(30,336)
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
74,638
|
|
99,004
|
|
230,757
|
|
326,056
|
|
Provision for income
taxes
|
19,900
|
|
17,267
|
|
60,346
|
|
63,898
|
|
Net income before
noncontrolling interest
|
54,738
|
|
81,737
|
|
170,411
|
|
262,158
|
|
Less: Net income
attributable to noncontrolling interest
|
3,136
|
|
5,243
|
|
9,256
|
|
14,029
|
|
Net income attributable
to common shareholders
|
$
51,602
|
|
$
76,494
|
|
$
161,155
|
|
$
248,129
|
|
|
|
|
|
|
|
|
|
Net income attributable
to common shareholders per share:
|
|
|
|
|
|
|
|
|
Basic
|
$
0.93
|
|
$
1.32
|
|
$
2.88
|
|
$
4.28
|
|
Diluted
|
$
0.91
|
|
$
1.28
|
|
$
2.82
|
|
$
4.14
|
|
|
|
|
|
|
|
|
|
Weighted-average shares
used in computing per share amounts:
|
|
|
|
|
|
|
|
Basic
|
55,466
|
|
57,987
|
|
55,862
|
|
57,995
|
|
Diluted
|
56,711
|
|
59,592
|
|
57,216
|
|
59,996
|
|
Sanmina
Corporation
|
|
Reconciliation of
GAAP to Non-GAAP Measures
|
|
(in thousands,
except per share amounts)
|
|
(Unaudited)
|
|
|
|
Three Months
Ended
|
|
|
|
June 29,
2024
|
|
March 30,
2024
|
|
July 1,
2023
|
|
|
|
|
|
|
|
|
|
GAAP Operating
income
|
|
$
82,367
|
|
$
75,961
|
|
$
107,365
|
|
GAAP Operating
margin
|
|
4.5 %
|
|
4.1 %
|
|
4.9 %
|
|
Adjustments:
|
|
|
|
|
|
|
|
Stock compensation
expense (1)
|
|
14,682
|
|
14,651
|
|
13,317
|
|
Amortization of
intangible assets
|
|
—
|
|
—
|
|
669
|
|
Distressed customer
charges (recoveries) (2)
|
|
(2,500)
|
|
4,299
|
|
—
|
|
Legal and other
(3)
|
|
500
|
|
1,350
|
|
4,475
|
|
Restructuring
|
|
1,793
|
|
3,274
|
|
296
|
|
Non-GAAP Operating
income
|
|
$
96,842
|
|
$
99,535
|
|
$
126,122
|
|
Non-GAAP
Operating margin
|
|
5.3 %
|
|
5.4 %
|
|
5.7 %
|
|
|
|
|
|
|
|
|
|
GAAP Net income
attributable to common shareholders
|
|
$
51,602
|
|
$
52,485
|
|
$
76,494
|
|
Adjustments:
|
|
|
|
|
|
|
|
Operating income
adjustments (see above)
|
|
14,475
|
|
23,574
|
|
18,757
|
|
Legal and other
(3)
|
|
—
|
|
(4,967)
|
|
—
|
|
Adjustments for taxes
(4)
|
|
4,751
|
|
2,849
|
|
(3,093)
|
|
Non-GAAP Net income
attributable to common shareholders
|
$
70,828
|
|
$
73,941
|
|
$
92,158
|
|
|
|
|
|
|
|
|
|
GAAP Net income
attributable to common shareholders per share:
|
|
|
|
|
|
|
|
Basic
|
|
$
0.93
|
|
$
0.94
|
|
$
1.32
|
|
Diluted
|
|
$
0.91
|
|
$
0.93
|
|
$
1.28
|
|
Non-GAAP Net income
attributable to common shareholders per share:
|
|
|
|
|
|
|
|
Basic
|
|
$
1.28
|
|
$
1.33
|
|
$
1.59
|
|
Diluted
|
|
$
1.25
|
|
$
1.30
|
|
$
1.55
|
|
Weighted-average
shares used in computing per share amounts:
|
|
|
|
|
|
|
|
Basic
|
|
55,466
|
|
55,585
|
|
57,987
|
|
Diluted
|
|
56,711
|
|
56,699
|
|
59,592
|
|
|
|
|
|
|
|
|
|
(1)
|
Stock compensation
expense
|
|
|
|
|
|
|
|
Cost of
sales
|
|
$
4,327
|
|
$
4,416
|
|
$
4,518
|
|
Selling, general and
administrative
|
|
10,082
|
|
9,984
|
|
8,588
|
|
Research and
development
|
|
273
|
|
251
|
|
211
|
|
Total
|
|
$
14,682
|
|
$
14,651
|
|
$
13,317
|
|
|
|
|
|
|
|
|
|
(2)
|
Relates to accounts
receivable and inventory write-downs (recoveries) associated with
distressed customers.
|
|
|
|
|
|
|
|
|
|
(3)
|
Represents expenses,
charges and recoveries associated with certain legal and other
matters.
|
|
|
|
|
|
|
|
|
|
(4)
|
GAAP provision for
income taxes
|
|
$
19,900
|
|
$
19,122
|
|
$
17,267
|
|
Adjustments:
|
|
|
|
|
|
|
|
Tax impact of operating
income adjustments
|
|
1,303
|
|
2,611
|
|
1,817
|
|
Discrete tax
items
|
|
1,462
|
|
385
|
|
6,957
|
|
Deferred tax
adjustments
|
|
(7,516)
|
|
(5,845)
|
|
(5,681)
|
|
Subtotal - adjustments
for taxes
|
|
(4,751)
|
|
(2,849)
|
|
3,093
|
|
Non-GAAP provision for
income taxes
|
|
$
15,149
|
|
$
16,273
|
|
$
20,360
|
|
Q4 FY24 Earnings Per
Share Outlook*:
|
|
Q4 FY24 EPS
Range
|
|
|
|
Low
|
|
High
|
|
GAAP diluted earnings
per share
|
|
$
1.02
|
|
$
1.12
|
|
Stock compensation
expense
|
|
$
0.28
|
|
$
0.28
|
|
Non-GAAP diluted
earnings per share
|
|
$
1.30
|
|
$
1.40
|
|
|
|
|
|
|
|
* Due to uncertainty
regarding the timing of recognition of restructuring charges,
impairment charges and other unusual or infrequent items, if any,
that could be incurred during the fourth quarter of FY24, an
estimate of such items is not included in the outlook for Q4 FY24
GAAP EPS.
|
|
Sanmina
Corporation
|
|
Condensed
Consolidated Cash Flow
|
|
(in
thousands)
|
|
(GAAP)
|
|
(Unaudited)
|
|
Three Month
Periods
|
|
Q3'24
|
|
Q2'24
|
|
Q1'24
|
|
Q4'23
|
|
Q3'23
|
|
|
|
|
|
|
|
|
|
|
|
Net income before
noncontrolling interest
|
$ 54,738
|
|
$ 55,309
|
|
$ 60,364
|
|
$ 65,355
|
|
$ 81,737
|
|
Depreciation and
amortization
|
29,764
|
|
30,274
|
|
30,726
|
|
30,521
|
|
29,898
|
|
Other, net
|
19,708
|
|
18,634
|
|
18,185
|
|
21,947
|
|
21,174
|
|
Net change in net
working capital
|
(14,211)
|
|
(31,900)
|
|
16,750
|
|
(40,966)
|
|
(76,300)
|
|
Cash provided by
operating activities
|
89,999
|
|
72,317
|
|
126,025
|
|
76,857
|
|
56,509
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of long-term
investments
|
(600)
|
|
(700)
|
|
(600)
|
|
(500)
|
|
(500)
|
|
Net purchases of
property & equipment
|
(22,772)
|
|
(29,611)
|
|
(34,216)
|
|
(37,803)
|
|
(52,167)
|
|
Cash used in investing
activities
|
(23,372)
|
|
(30,311)
|
|
(34,816)
|
|
(38,303)
|
|
(52,667)
|
|
|
|
|
|
|
|
|
|
|
|
Holdback paid in
connection with previous business combination
|
—
|
|
—
|
|
—
|
|
—
|
|
(8,558)
|
|
Net share
repurchases
|
(54,629)
|
|
(17,477)
|
|
(115,619)
|
|
(30,397)
|
|
(52,072)
|
|
Net borrowing
activities
|
(4,375)
|
|
(4,375)
|
|
(12,820)
|
|
4,070
|
|
(4,375)
|
|
Cash used for
financing activities
|
(59,004)
|
|
(21,852)
|
|
(128,439)
|
|
(26,327)
|
|
(65,005)
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate
changes
|
(772)
|
|
(886)
|
|
1,250
|
|
(1,245)
|
|
(452)
|
|
|
|
|
|
|
|
|
|
|
|
Net change in cash
& cash equivalents
|
$
6,851
|
|
$ 19,268
|
|
$
(35,980)
|
|
$ 10,982
|
|
$
(61,615)
|
|
|
|
|
|
|
|
|
|
|
|
Free cash
flow:
|
|
|
|
|
|
|
|
|
|
|
Cash provided by
operating activities
|
$ 89,999
|
|
$ 72,317
|
|
$
126,025
|
|
$ 76,857
|
|
$ 56,509
|
|
Net purchases of
property & equipment
|
(22,772)
|
|
(29,611)
|
|
(34,216)
|
|
(37,803)
|
|
(52,167)
|
|
$ 67,227
|
|
$ 42,706
|
|
$ 91,809
|
|
$ 39,054
|
|
$
4,342
|
Schedule 1
The statements above and financial information provided in this
earnings release include non-GAAP measures of operating income,
operating margin, net income and earnings per share. Management
excludes from these measures stock-based compensation,
restructuring, acquisition and integration expenses, impairment
charges, amortization charges and other unusual or infrequent
items, as adjusted for taxes, as more fully described below.
Management excludes these items principally because such charges
or benefits are not directly related to the Company's ongoing core
business operations. We use such non-GAAP measures in order to (1)
make more meaningful period-to-period comparisons of the Company's
operations, both internally and externally, (2) guide management in
assessing the performance of the business, internally allocating
resources and making decisions in furtherance of Company's
strategic plan, (3) provide investors with a better understanding
of how management plans and measures the business and (4) provide
investors with a better understanding of our ongoing, core
business. The material limitations to management's approach include
the fact that the charges, benefits and expenses excluded are
nonetheless charges, benefits and expenses required to be
recognized under GAAP and, in some cases, consume cash which
reduces the Company's liquidity. Management compensates for these
limitations primarily by reviewing GAAP results to obtain a
complete picture of the Company's performance and by including a
reconciliation of non-GAAP results to GAAP results in its earnings
releases.
Additional information regarding the economic substance of each
exclusion, management's use of the resultant non-GAAP measures, the
material limitations of management's approach and management's
methods for compensating for such limitations is provided
below.
Stock-based Compensation Expense, which consists of
non-cash charges for the estimated fair value of equity awards
granted to employees and directors, is excluded in order to permit
more meaningful period-to-period comparisons of the Company's
results since the Company grants different amounts and value of
equity awards each quarter. In addition, given the fact that
competitors grant different amounts and types of equity awards and
may use different valuation assumptions, excluding stock-based
compensation permits more accurate comparisons of the Company's
core results with those of its competitors.
Restructuring, Acquisition and Integration Expenses,
which consist of employee severance, lease termination costs, exit
costs, environmental investigation, remediation and related
employee costs and other charges primarily related to closing and
consolidating manufacturing facilities and those associated with
the acquisition and integration of acquired businesses, are
excluded because such charges (1) can be driven by the timing of
acquisitions and exit activities which are difficult to predict,
(2) are not directly related to ongoing business results and (3)
generally do not reflect expected future operating expenses. In
addition, given the fact that the Company's competitors complete
acquisitions and adopt restructuring plans at different times and
in different amounts than the Company, excluding these charges or
benefits permits more accurate comparisons of the Company's core
results with those of its competitors. Items excluded by the
Company may be different from those excluded by the Company's
competitors and restructuring and integration expenses include both
cash and non-cash expenses. Cash expenses reduce the Company's
liquidity. Therefore, management also reviews GAAP results
including these amounts.
Impairment Charges for Goodwill and Other Assets, which
consist of non-cash charges, are excluded because such charges are
non-recurring and do not reduce the Company's liquidity. In
addition, given the fact that the Company's competitors may record
impairment charges at different times, excluding these charges
permits more accurate comparisons of the Company's core results
with those of its competitors.
Amortization Charges, which consist of non-cash charges
impacted by the timing and magnitude of acquisitions of businesses
or assets, are also excluded because such charges do not reduce the
Company's liquidity. In addition, such charges can be driven by the
timing of acquisitions, which is difficult to predict. Excluding
these charges permits more accurate comparisons of the Company's
core results with those of its competitors because the Company's
competitors complete acquisitions at different times and for
different amounts than the Company.
Other Unusual or Infrequent Items, such as charges or
benefits associated with distressed customers, expenses, charges
and recoveries relating to certain legal matters, and gains and
losses on sales of assets, are excluded because such items are
typically non-recurring, difficult to predict or not directly
related to the Company's ongoing or core operations and are
therefore not considered by management in assessing the current
operating performance of the Company and forecasting earnings
trends. However, items excluded by the Company may be different
from those excluded by the Company's competitors. In addition,
these items include both cash and non-cash expenses. Cash expenses
reduce the Company's liquidity. Management compensates for these
limitations by reviewing GAAP results including these amounts.
Adjustments for Taxes, which consist of the tax effects
of the various adjustments that we exclude from our non-GAAP
measures, and adjustments related to deferred tax and discrete tax
items. Including these adjustments permits more accurate
comparisons of the Company's core results with those of its
competitors. We determine the tax adjustments based upon the
various applicable effective tax rates. In those jurisdictions in
which we do not expect to realize a tax cost or benefit (due to a
history of operating losses or other factors), a reduced tax rate
is applied.
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SOURCE Sanmina Corporation
