(Mark one)
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☒
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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DE
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77-0228183
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|
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(State or other jurisdiction of
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(I.R.S. Employer
|
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||
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incorporation or organization)
|
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Identification Number)
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||
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2700 N. First St.,
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San Jose,
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CA
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95134
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(Address of principal executive offices)
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(Zip Code)
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||
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(408)
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964-3500
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(Registrant's telephone number, including area code)
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Large Accelerated Filer
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[X]
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Accelerated filer [ ]
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Non-accelerated filer [ ]
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Smaller reporting company
|
☐
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|
|
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Emerging growth company
|
☐
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Title of each class
|
Trading symbol(s)
|
Name of each exchange on which registered
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Common Stock
|
SANM
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NASDAQ Global Select Market
|
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Page
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Item 1.
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||
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Item 2.
|
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Item 3.
|
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Item 4.
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Item 1.
|
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Item 1A.
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Item 2.
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Item 6.
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As of
|
||||||
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December 28,
2019 |
|
September 28,
2019 |
||||
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(Unaudited)
|
||||||
|
(In thousands)
|
||||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
430,564
|
|
|
$
|
454,741
|
|
Accounts receivable, net of allowances of $9,327 and $12,481 as of December 28, 2019 and September 28, 2019, respectively
|
1,063,922
|
|
|
1,128,379
|
|
||
Contract assets
|
421,860
|
|
|
396,300
|
|
||
Inventories
|
843,764
|
|
|
900,557
|
|
||
Prepaid expenses and other current assets
|
45,131
|
|
|
40,952
|
|
||
Total current assets
|
2,805,241
|
|
|
2,920,929
|
|
||
Property, plant and equipment, net
|
612,214
|
|
|
630,647
|
|
||
Deferred tax assets
|
276,820
|
|
|
279,803
|
|
||
Other
|
135,460
|
|
|
74,134
|
|
||
Total assets
|
$
|
3,829,735
|
|
|
$
|
3,905,513
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
1,180,179
|
|
|
$
|
1,336,914
|
|
Accrued liabilities
|
204,749
|
|
|
180,107
|
|
||
Accrued payroll and related benefits
|
106,476
|
|
|
127,647
|
|
||
Short-term debt, including current portion of long-term debt
|
38,728
|
|
|
38,354
|
|
||
Total current liabilities
|
1,530,132
|
|
|
1,683,022
|
|
||
Long-term liabilities:
|
|
|
|
||||
Long-term debt
|
342,537
|
|
|
346,971
|
|
||
Other
|
277,681
|
|
|
232,947
|
|
||
Total long-term liabilities
|
620,218
|
|
|
579,918
|
|
||
Contingencies (Note 8)
|
|
|
|
||||
Stockholders' equity
|
1,679,385
|
|
|
1,642,573
|
|
||
Total liabilities and stockholders' equity
|
$
|
3,829,735
|
|
|
$
|
3,905,513
|
|
|
Three Months Ended
|
||||||
|
December 28,
2019 |
|
December 29,
2018 |
||||
|
(Unaudited)
|
||||||
|
(In thousands, except per share data)
|
||||||
Net sales
|
$
|
1,840,171
|
|
|
$
|
2,188,018
|
|
Cost of sales
|
1,705,289
|
|
|
2,038,681
|
|
||
Gross profit
|
134,882
|
|
|
149,337
|
|
||
|
|
|
|
||||
Operating expenses:
|
|
|
|
||||
Selling, general and administrative
|
63,151
|
|
|
63,028
|
|
||
Research and development
|
5,200
|
|
|
6,437
|
|
||
Restructuring and other
|
9,350
|
|
|
2,329
|
|
||
Total operating expenses
|
77,701
|
|
|
71,794
|
|
||
|
|
|
|
||||
Operating income
|
57,181
|
|
|
77,543
|
|
||
|
|
|
|
||||
Interest income
|
310
|
|
|
194
|
|
||
Interest expense
|
(5,877
|
)
|
|
(8,271
|
)
|
||
Other income (expense), net
|
1,318
|
|
|
(5,994
|
)
|
||
Interest and other, net
|
(4,249
|
)
|
|
(14,071
|
)
|
||
|
|
|
|
||||
Income before income taxes
|
52,932
|
|
|
63,472
|
|
||
Provision for income taxes
|
14,587
|
|
|
25,520
|
|
||
Net income
|
$
|
38,345
|
|
|
$
|
37,952
|
|
|
|
|
|
||||
Net income per share:
|
|
|
|
||||
Basic
|
$
|
0.55
|
|
|
$
|
0.56
|
|
Diluted
|
$
|
0.53
|
|
|
$
|
0.54
|
|
|
|
|
|
||||
Weighted average shares used in computing per share amounts:
|
|
|
|
||||
Basic
|
70,178
|
|
|
68,303
|
|
||
Diluted
|
72,598
|
|
|
70,901
|
|
|
Three Months Ended
|
||||||
|
December 28,
2019 |
|
December 29,
2018 |
||||
|
(Unaudited)
|
||||||
|
(In thousands)
|
||||||
Net income
|
$
|
38,345
|
|
|
$
|
37,952
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
||||
Change in foreign currency translation adjustments
|
717
|
|
|
(252
|
)
|
||
Derivative financial instruments:
|
|
|
|
||||
Change in net unrealized amount
|
3,380
|
|
|
(6,497
|
)
|
||
Amount reclassified into net income
|
(195
|
)
|
|
2,410
|
|
||
Defined benefit plans:
|
|
|
|
||||
Changes in unrecognized net actuarial losses and unrecognized transition costs
|
(187
|
)
|
|
290
|
|
||
Amortization of actuarial losses and transition costs
|
544
|
|
|
198
|
|
||
Total other comprehensive income (loss)
|
4,259
|
|
|
(3,851
|
)
|
||
Comprehensive income
|
$
|
42,604
|
|
|
$
|
34,101
|
|
|
Three Months Ended
|
||||||
|
December 28,
2019 |
|
December 29,
2018 |
||||
|
(Unaudited)
|
||||||
|
(In thousands)
|
||||||
Common Stock and Additional Paid-in Capital
|
|
|
|
||||
Balance, beginning of period
|
$
|
6,267,509
|
|
|
$
|
6,222,988
|
|
Issuances under stock plans
|
4,852
|
|
|
3,568
|
|
||
Stock-based compensation expense
|
6,906
|
|
|
5,816
|
|
||
Balance, end of period
|
6,279,267
|
|
|
6,232,372
|
|
||
Treasury Stock
|
|
|
|
||||
Balance, beginning of period
|
(804,118
|
)
|
|
(791,366
|
)
|
||
Repurchases of treasury stock
|
(17,550
|
)
|
|
(11,842
|
)
|
||
Balance, end of period
|
(821,668
|
)
|
|
(803,208
|
)
|
||
Accumulated Other Comprehensive Income
|
|
|
|
||||
Balance, beginning of period
|
42,259
|
|
|
73,944
|
|
||
Other comprehensive income (loss)
|
4,259
|
|
|
(3,851
|
)
|
||
Balance, end of period
|
46,518
|
|
|
70,093
|
|
||
Accumulated Deficit
|
|
|
|
||||
Balance, beginning of period
|
(3,863,077
|
)
|
|
(4,032,722
|
)
|
||
Cumulative effect of new accounting pronouncement (1)
|
—
|
|
|
28,130
|
|
||
Net income
|
38,345
|
|
|
37,952
|
|
||
Balance, end of period
|
(3,824,732
|
)
|
|
(3,966,640
|
)
|
||
Total stockholders' equity
|
$
|
1,679,385
|
|
|
$
|
1,532,617
|
|
|
|
|
|
||||
Common Stock Shares Outstanding
|
|
|
|
||||
Number of shares, beginning of period
|
105,551
|
|
|
103,128
|
|
||
Issuances under stock plans
|
1,290
|
|
|
1,028
|
|
||
Number of shares, end of period
|
106,841
|
|
|
104,156
|
|
||
Treasury Shares
|
|
|
|
||||
Number of shares, beginning of period
|
(35,831
|
)
|
|
(35,351
|
)
|
||
Repurchases of treasury stock
|
(553
|
)
|
|
(449
|
)
|
||
Number of shares, end of period
|
(36,384
|
)
|
|
(35,800
|
)
|
|
Three Months Ended
|
||||||
|
December 28,
2019 |
|
December 29,
2018 |
||||
|
(Unaudited)
|
||||||
|
(In thousands)
|
||||||
CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES:
|
|
|
|
||||
Net income
|
$
|
38,345
|
|
|
$
|
37,952
|
|
Adjustments to reconcile net income to cash provided by (used in) operating activities:
|
|
|
|
||||
Depreciation and amortization
|
28,735
|
|
|
29,792
|
|
||
Stock-based compensation expense
|
6,906
|
|
|
5,816
|
|
||
Deferred income taxes
|
3,005
|
|
|
11,583
|
|
||
Other, net
|
(322
|
)
|
|
353
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
65,449
|
|
|
(160,974
|
)
|
||
Contract assets
|
(25,560
|
)
|
|
(43,998
|
)
|
||
Inventories
|
57,357
|
|
|
(30,708
|
)
|
||
Prepaid expenses and other assets
|
2,372
|
|
|
3,033
|
|
||
Accounts payable
|
(139,304
|
)
|
|
(2,845
|
)
|
||
Accrued liabilities
|
(15,812
|
)
|
|
71,560
|
|
||
Cash provided by (used in) operating activities
|
21,171
|
|
|
(78,436
|
)
|
||
|
|
|
|
||||
CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES:
|
|
|
|
||||
Purchases of property, plant and equipment
|
(28,466
|
)
|
|
(37,166
|
)
|
||
Proceeds from sales of property, plant and equipment
|
420
|
|
|
575
|
|
||
Cash used in investing activities
|
(28,046
|
)
|
|
(36,591
|
)
|
||
|
|
|
|
||||
CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES:
|
|
|
|
||||
Repayments of long-term debt
|
(4,688
|
)
|
|
—
|
|
||
Proceeds from revolving credit facility borrowings
|
717,000
|
|
|
1,043,825
|
|
||
Repayments of revolving credit facility borrowings
|
(717,000
|
)
|
|
(928,825
|
)
|
||
Debt issuance costs
|
—
|
|
|
(2,003
|
)
|
||
Net proceeds from stock issuances
|
4,852
|
|
|
3,568
|
|
||
Repurchases of common stock
|
(17,550
|
)
|
|
(11,842
|
)
|
||
Cash provided by (used in) financing activities
|
(17,386
|
)
|
|
104,723
|
|
||
|
|
|
|
||||
Effect of exchange rate changes
|
84
|
|
|
66
|
|
||
Decrease in cash and cash equivalents
|
(24,177
|
)
|
|
(10,238
|
)
|
||
Cash and cash equivalents at beginning of period
|
454,741
|
|
|
419,528
|
|
||
Cash and cash equivalents at end of period
|
$
|
430,564
|
|
|
$
|
409,290
|
|
|
|
|
|
||||
Cash paid during the period for:
|
|
|
|
||||
Interest, net of capitalized interest
|
$
|
4,725
|
|
|
$
|
10,895
|
|
Income taxes, net of refunds
|
$
|
4,888
|
|
|
$
|
4,923
|
|
Unpaid purchases of property, plant and equipment at the end of period
|
$
|
15,782
|
|
|
$
|
41,910
|
|
|
As of
|
||||||
|
December 28,
2019 |
|
September 28,
2019 |
||||
|
(In thousands)
|
||||||
Raw materials
|
$
|
841,462
|
|
|
$
|
898,077
|
|
Work-in-process
|
1,026
|
|
|
869
|
|
||
Finished goods
|
1,276
|
|
|
1,611
|
|
||
Total
|
$
|
843,764
|
|
|
$
|
900,557
|
|
•
|
The promised amount of consideration under a contract is not adjusted for the effects of a significant financing component because, at inception of a contract, the Company expects the period between when a good or service is transferred to a customer and when the customer pays for that good or service will generally be one year or less.
|
•
|
The Company has elected to not disclose information about remaining performance obligations that have original expected durations of one year or less, which is substantially all of the Company’s remaining performance obligations.
|
•
|
Incremental costs of obtaining a contract are not capitalized if the period over which such costs would be amortized to expense is less than one year.
|
|
Three Months Ended
|
||||||
|
December 28,
2019 |
|
December 29,
2018 |
||||
|
(In thousands)
|
||||||
Segments:
|
|
|
|
||||
IMS
|
$
|
1,535,633
|
|
|
$
|
1,780,884
|
|
CPS
|
304,538
|
|
|
407,134
|
|
||
Total
|
$
|
1,840,171
|
|
|
$
|
2,188,018
|
|
|
|
|
|
||||
End Markets:
|
|
|
|
||||
Industrial, Medical, Automotive and Defense
|
$
|
1,107,547
|
|
|
$
|
1,182,484
|
|
Communications Networks
|
580,743
|
|
|
779,721
|
|
||
Cloud Solutions
|
151,881
|
|
|
225,813
|
|
||
Total
|
$
|
1,840,171
|
|
|
$
|
2,188,018
|
|
|
|
|
|
||||
Geography:
|
|
|
|
||||
Americas (1)
|
$
|
906,568
|
|
|
$
|
1,163,878
|
|
EMEA
|
261,031
|
|
|
235,053
|
|
||
APAC
|
672,572
|
|
|
789,087
|
|
||
Total
|
$
|
1,840,171
|
|
|
$
|
2,188,018
|
|
|
As of
|
||||||
|
December 28,
2019 |
|
September 28,
2019 |
||||
Derivatives Designated as Accounting Hedges:
|
|
|
|
||||
Notional amount (in thousands)
|
$
|
102,759
|
|
|
$
|
106,564
|
|
Number of contracts
|
45
|
|
|
46
|
|
||
Derivatives Not Designated as Accounting Hedges:
|
|
|
|
||||
Notional amount (in thousands)
|
$
|
253,813
|
|
|
$
|
299,127
|
|
Number of contracts
|
41
|
|
|
43
|
|
|
As of
|
||||||
|
December 28,
2019 |
|
September 28,
2019 |
||||
|
(In thousands)
|
||||||
Term loan due 2023 ("Term Loan"), net of issuance costs
|
$
|
365,974
|
|
|
$
|
370,409
|
|
Non-interest bearing promissory notes
|
15,291
|
|
|
14,916
|
|
||
Total long-term debt
|
381,265
|
|
|
385,325
|
|
||
Less: Current portion of non-interest bearing promissory notes
|
15,291
|
|
|
14,916
|
|
||
Current portion of long-term debt
|
23,437
|
|
|
23,438
|
|
||
Long-term debt
|
$
|
342,537
|
|
|
$
|
346,971
|
|
|
(In Thousands)
|
||
Remainder of 2020
|
$
|
18,750
|
|
2021
|
18,750
|
|
|
2022
|
18,750
|
|
|
2023
|
14,062
|
|
|
2024
|
300,000
|
|
|
|
$
|
370,312
|
|
|
As of
|
||
|
December 28,
2019 |
||
|
(In thousands)
|
||
Other assets (1)
|
$
|
60,130
|
|
|
|
||
Accrued liabilities
|
17,284
|
|
|
Other long-term liabilities
|
43,197
|
|
|
Total lease liabilities
|
$
|
60,481
|
|
|
|
||
Weighted average remaining lease term (in years)
|
7.11
|
|
|
Weighted average discount rate
|
3.13
|
%
|
|
Operating Leases
|
||
|
(In thousands)
|
||
Remainder of 2020
|
$
|
14,600
|
|
2021
|
15,711
|
|
|
2022
|
11,115
|
|
|
2023
|
5,125
|
|
|
2024
|
4,018
|
|
|
Thereafter
|
17,323
|
|
|
Total lease payments
|
67,892
|
|
|
Less: imputed interest
|
7,411
|
|
|
Total
|
$
|
60,481
|
|
|
Restructuring Expense
|
||||||
|
Three Months Ended
|
||||||
|
December 28, 2019
|
|
December 29, 2018
|
||||
|
|
||||||
Severance costs (approximately 1,450 employees)
|
$
|
6,728
|
|
|
$
|
—
|
|
Other exit costs (recognized as incurred)
|
8
|
|
|
—
|
|
||
Total - Q1 FY20 plan
|
6,736
|
|
|
—
|
|
||
Costs incurred for other plans
|
2,424
|
|
|
2,139
|
|
||
Total - all plans
|
$
|
9,160
|
|
|
$
|
2,139
|
|
|
As of
|
||||||
|
December 28,
2019 |
|
September 28,
2019 |
||||
|
(In thousands)
|
||||||
Foreign currency translation adjustments
|
$
|
86,985
|
|
|
$
|
86,268
|
|
Unrealized holding losses on derivative financial instruments
|
(16,703
|
)
|
|
(19,888
|
)
|
||
Unrecognized net actuarial losses and transition costs for benefit plans
|
(23,764
|
)
|
|
(24,121
|
)
|
||
Total
|
$
|
46,518
|
|
|
$
|
42,259
|
|
|
Three Months Ended
|
||||||
|
December 28,
2019 |
|
December 29,
2018 |
||||
|
(In thousands)
|
||||||
Gross sales:
|
|
|
|
||||
IMS
|
$
|
1,543,935
|
|
|
$
|
1,793,182
|
|
CPS
|
336,431
|
|
|
455,803
|
|
||
Intersegment revenue
|
(40,195
|
)
|
|
(60,967
|
)
|
||
Net sales
|
$
|
1,840,171
|
|
|
$
|
2,188,018
|
|
|
|
|
|
||||
Gross profit:
|
|
|
|
||||
IMS
|
$
|
101,182
|
|
|
$
|
110,656
|
|
CPS
|
36,612
|
|
|
40,519
|
|
||
Total
|
137,794
|
|
|
151,175
|
|
||
Unallocated items (1)
|
(2,912
|
)
|
|
(1,838
|
)
|
||
Total
|
$
|
134,882
|
|
|
$
|
149,337
|
|
(1)
|
For purposes of evaluating segment performance, management excludes certain items from its measure of gross profit. These items consist of stock-based compensation expense, amortization of intangible assets and charges or credits resulting from distressed customers.
|
|
Three Months Ended
|
||||||
|
December 28,
2019 |
|
December 29,
2018 |
||||
|
(In thousands)
|
||||||
Net sales:
|
|
|
|
||||
Americas (1)
|
$
|
906,568
|
|
|
$
|
1,163,878
|
|
EMEA
|
261,031
|
|
|
235,053
|
|
||
APAC
|
672,572
|
|
|
789,087
|
|
||
Total
|
$
|
1,840,171
|
|
|
$
|
2,188,018
|
|
(1)
|
Mexico represents approximately 60% of the Americas revenue and the U.S. represents approximately 35%.
|
|
|
|
|
||
Percentage of net sales represented by ten largest customers
|
55
|
%
|
|
54
|
%
|
Number of customers representing 10% or more of net sales
|
2
|
|
|
2
|
|
|
Three Months Ended
|
||||||
|
December 28,
2019 |
|
December 29,
2018 |
||||
|
(In thousands, except per share data)
|
||||||
Numerator:
|
|
|
|
||||
Net income
|
$
|
38,345
|
|
|
$
|
37,952
|
|
|
|
|
|
||||
Denominator:
|
|
|
|
||||
Weighted average common shares outstanding
|
70,178
|
|
|
68,303
|
|
||
Effect of dilutive stock options and restricted stock units
|
2,420
|
|
|
2,598
|
|
||
Denominator for diluted earnings per share
|
72,598
|
|
|
70,901
|
|
||
|
|
|
|
||||
Net income per share:
|
|
|
|
||||
Basic
|
$
|
0.55
|
|
|
$
|
0.56
|
|
Diluted
|
$
|
0.53
|
|
|
$
|
0.54
|
|
|
Three Months Ended
|
||||||
|
December 28,
2019 |
|
December 29,
2018 |
||||
|
(In thousands)
|
||||||
Stock options
|
$
|
(1,145
|
)
|
|
$
|
93
|
|
Restricted stock units, including performance based awards
|
8,051
|
|
|
5,723
|
|
||
Total
|
$
|
6,906
|
|
|
$
|
5,816
|
|
|
Three Months Ended
|
||||||
|
December 28,
2019 |
|
December 29,
2018 |
||||
|
(In thousands)
|
||||||
Cost of sales
|
$
|
2,912
|
|
|
$
|
1,735
|
|
Selling, general and administrative
|
3,925
|
|
|
3,990
|
|
||
Research and development
|
69
|
|
|
91
|
|
||
Total
|
$
|
6,906
|
|
|
$
|
5,816
|
|
|
Number of
Shares
|
|
Weighted-
Average Grant Date
Fair Value
($)
|
|
Weighted-
Average
Remaining
Contractual
Term
(Years)
|
|
Aggregate
Intrinsic
Value
($)
|
|||
|
(In thousands)
|
|
|
|
|
|
(In thousands)
|
|||
Outstanding as of September 28, 2019
|
3,153
|
|
|
27.82
|
|
|
1.30
|
|
102,720
|
|
Granted
|
815
|
|
|
33.11
|
|
|
|
|
|
|
Vested/Forfeited/Cancelled
|
(678
|
)
|
|
28.84
|
|
|
|
|
|
|
Outstanding as of December 28, 2019
|
3,290
|
|
|
28.92
|
|
|
1.59
|
|
109,780
|
|
Expected to vest as of December 28, 2019
|
2,774
|
|
|
29.11
|
|
|
1.44
|
|
92,557
|
|
1.
|
Integrated Manufacturing Solutions ("IMS"). Our IMS segment consists of printed circuit board assembly and test, final system assembly and test and direct-order-fulfillment.
|
2.
|
Components, Products and Services ("CPS"). Components include interconnect systems (printed circuit board fabrication, backplane, cable assemblies and plastic injection molding) and mechanical systems (enclosures and precision machining). Products include memory from our Viking Technology division; enterprise solutions from our Viking Enterprise Solutions division; radio frequency ("RF"), optical and microelectronic; defense and aerospace products from SCI Technology; and cloud-based manufacturing execution software from our 42Q division. Services include design, engineering, logistics and repair services.
|
|
Three Months Ended
|
||||||
|
December 28,
2019 |
|
December 29,
2018 |
||||
|
(In thousands)
|
||||||
Net sales
|
$
|
1,840,171
|
|
|
$
|
2,188,018
|
|
Gross profit
|
$
|
134,882
|
|
|
$
|
149,337
|
|
Operating income
|
$
|
57,181
|
|
|
$
|
77,543
|
|
Net income
|
$
|
38,345
|
|
|
$
|
37,952
|
|
|
Three Months Ended
|
||||||||||||
|
December 28,
2019 |
|
December 29,
2018 |
|
Increase/(Decrease)
|
||||||||
Industrial, Medical, Defense and Automotive
|
$
|
1,107,547
|
|
|
$
|
1,182,484
|
|
|
$
|
(74,937
|
)
|
(6.3
|
)%
|
Communications Networks
|
580,743
|
|
|
779,721
|
|
|
(198,978
|
)
|
(25.5
|
)%
|
|||
Cloud Solutions
|
151,881
|
|
|
225,813
|
|
|
(73,932
|
)
|
(32.7
|
)%
|
|||
Total
|
$
|
1,840,171
|
|
|
$
|
2,188,018
|
|
|
$
|
(347,847
|
)
|
(15.9
|
)%
|
•
|
changes in customer demand and sales volumes for our vertically integrated system components and subassemblies;
|
•
|
changes in the overall volume of our business, which affect the level of capacity utilization;
|
•
|
changes in the mix of high and low margin products demanded by our customers;
|
•
|
parts shortages and extended parts lead times caused by high demand or natural disasters, and related operational disruption and inefficiencies;
|
•
|
greater competition in the EMS industry and pricing pressures from OEMs due to greater focus on cost reduction;
|
•
|
provisions for excess and obsolete inventory, including those associated with distressed customers;
|
•
|
levels of operational efficiency and production yields;
|
•
|
wage inflation and rising materials costs;
|
•
|
resolution of claims with our customers;
|
•
|
our ability to pass tariffs we incur upon importation of components for production of our customers’ products through to our customers; and
|
•
|
our ability to transition the location of and ramp manufacturing and assembly operations when desired or requested by a customer in a timely and cost-effective manner.
|
|
Restructuring Expense
|
||||||
|
Three Months Ended
|
||||||
|
December 28, 2019
|
|
December 29, 2018
|
||||
|
|
||||||
Severance costs (approximately 1,450 employees)
|
$
|
6,728
|
|
|
$
|
—
|
|
Other exit costs
|
8
|
|
|
—
|
|
||
Total - Q1 FY20 plan
|
6,736
|
|
|
—
|
|
||
Costs incurred for other plans
|
2,424
|
|
|
2,139
|
|
||
Total - all plans
|
$
|
9,160
|
|
|
$
|
2,139
|
|
|
Three Months Ended
|
||||||
|
December 28,
2019 |
|
December 29,
2018 |
||||
|
(In thousands)
|
||||||
Net cash provided by (used in):
|
|
|
|
||||
Operating activities
|
$
|
21,171
|
|
|
$
|
(78,436
|
)
|
Investing activities
|
(28,046
|
)
|
|
(36,591
|
)
|
||
Financing activities
|
(17,386
|
)
|
|
104,723
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
84
|
|
|
66
|
|
||
Decrease in cash and cash equivalents
|
$
|
(24,177
|
)
|
|
$
|
(10,238
|
)
|
|
As of
|
||
|
December 28,
2019 |
|
September 28,
2019 |
Days sales outstanding (1)
|
54
|
|
56
|
Contract asset days (2)
|
20
|
|
19
|
Inventory turns (3)
|
7.8
|
|
7.7
|
Days inventory on hand (4)
|
47
|
|
47
|
Accounts payable days (5)
|
68
|
|
70
|
Cash cycle days (6)
|
53
|
|
52
|
(1)
|
Days sales outstanding (a measure of how quickly we collect our accounts receivable), or "DSO", is calculated as the ratio of average accounts receivable, net, to average daily net sales for the quarter.
|
(2)
|
Contract asset days are calculated as the ratio of average contract assets to average daily net sales for the quarter.
|
(3)
|
Inventory turns (annualized) are calculated as the ratio of four times our cost of sales for the quarter to average inventory.
|
(4)
|
Days inventory on hand is calculated as the ratio of average inventory for the quarter to average daily cost of sales for the quarter.
|
(5)
|
Accounts payable days (a measure of how quickly we pay our suppliers), or "DPO", 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 average accounts payable.
|
(6)
|
Cash cycle days is calculated as days inventory on hand plus days sales outstanding and contract assets day minus accounts payable days.
|
•
|
intense competition among our customers and their competitors, leading to reductions in prices for their products and increases in pricing pressure placed on us;
|
•
|
failure of our customers' products to gain widespread commercial acceptance which could decrease the volume of orders customers place with us;
|
•
|
changes in regulatory requirements affecting the products we build for our customers, leading to product redesigns or obsolescence and potentially causing us to lose business; and
|
•
|
recessionary periods in our customers' markets, which decrease orders from affected customers, such as the currently depressed conditions in the oil and gas industry, which decrease orders from affected customers.
|
•
|
our ability to replace declining sales from end-of-life programs and customer disengagements with new business wins;
|
•
|
conditions in the economy as a whole and in the industries we serve;
|
•
|
fluctuations in component prices, component shortages and extended component lead times caused by high demand, natural disaster or otherwise;
|
•
|
timing and success of new product developments and ramps by our customers, which create demand for our services, but which can also require us to incur start-up costs relating to new tooling and processes;
|
•
|
levels of demand in the end markets served by our customers;
|
•
|
timing of orders from customers and the accuracy of their forecasts;
|
•
|
inventory levels of customers, which if high relative to their normal sales volume, could cause them to reduce their orders to us;
|
•
|
customer payment terms and the extent to which we factor customer receivables during the quarter;
|
•
|
increasing labor costs in the regions in which we operate;
|
•
|
mix of products ordered by and shipped to major customers, as high volume and low complexity manufacturing services typically have lower gross margins than more complex and lower volume services;
|
•
|
our ability to pass tariffs through to our customers;
|
•
|
resolution of claims with our customers;
|
•
|
degree to which we are able to utilize our available manufacturing capacity;
|
•
|
customer insolvencies resulting in bad debt or inventory exposures that are in excess of our reserves;
|
•
|
our ability to efficiently move manufacturing operations to lower cost regions;
|
•
|
changes in our tax provision due to changes in our estimates of pre-tax income in the jurisdictions in which we operate, uncertain tax positions, and our ability to utilize our deferred tax assets; and
|
•
|
political and economic developments in countries in which we have operations, which could restrict our operations or those of our suppliers and/or customers or increase our costs.
|
•
|
changes in trade and tax laws that may result in us or our customers being subjected to increased taxes, duties and tariffs, which could increase our costs and/or reduce our customers’ willingness to use our services in countries in which we are currently manufacturing their products;
|
•
|
compliance with laws concerning the export of U.S. technology, including the International Traffic in Arms Regulations and the Export Administration Regulations, sanctions administered by the Office of Foreign Asset Controls and the Foreign Corrupt Practices Act;
|
•
|
rising labor costs;
|
•
|
compliance with foreign labor laws, which generally provide for increased notice, severance and consultation requirements compared to U.S. laws;
|
•
|
labor unrest, including strikes;
|
•
|
difficulties in staffing due to immigration or travel restrictions imposed by national governments, including the U.S.;
|
•
|
security concerns;
|
•
|
political instability and/or regional military tension or hostilities;
|
•
|
fluctuations in currency exchange rates, which may either increase or decrease our operating costs and for which we have significant exposure;
|
•
|
the imposition of currency controls;
|
•
|
exposure to heightened corruption risks;
|
•
|
aggressive, selective or lax enforcement of laws and regulations by national governmental authorities;
|
•
|
potentially increased risk of misappropriation of intellectual property; and
|
•
|
an outbreak of a contagious disease, such as coronavirus, which may cause us or our suppliers and/or customers to temporarily suspend our operations in the affected city or country.
|
Period (1)
|
|
TOTAL NUMBER OF SHARES PURCHASED
|
|
AVERAGE PRICE PAID PER SHARE
(2)
|
|
TOTAL NUMBER OF SHARES PURCHASED AS PART OF PUBLICLY ANNOUNCED PROGRAMS
|
|
MAXIMUM DOLLAR VALUE OF SHARES THAT MAY YET BE PURCHASED UNDER THE PROGRAMS
(2)
|
|
||||||
Month #1
|
|
|
|
|
|
|
|
|
|
||||||
September 29, 2019 through October 26, 2019
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
300,823,253
|
|
|
Month #2
|
|
|
|
|
|
|
|
|
|
||||||
October 27, 2019 through November 23, 2019
|
|
293,223
|
|
|
$
|
30.90
|
|
|
293,223
|
|
|
$
|
291,763,474
|
|
|
Month #3
|
|
|
|
|
|
|
|
|
|
||||||
November 24, 2019 through December 28, 2019
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
291,736,474
|
|
|
Total
|
|
293,223
|
|
|
$
|
30.90
|
|
|
293,223
|
|
|
|
|
(1)
|
All months shown are our fiscal months.
|
(2)
|
Amounts do not include commission payable on shares repurchased. The total average price paid per share is a weighted average based on the total number of shares repurchased during the period.
|
Exhibit Number
|
|
Description
|
|
|
|
10.35*
|
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32.1 (1)
|
|
|
|
|
|
32.2 (1)
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
104
|
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
|
(1)
|
This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference in any filings under the Securities Act of 1933 or the Securities Exchange Act of 1934, whether made before or after the date hereof and irrespective of any general incorporation language in any filings.
|
|
|
SANMINA CORPORATION
|
|
|
|
(Registrant)
|
|
|
|
|
|
|
|
By:
|
/s/ HARTMUT LIEBEL
|
|
|
|
Hartmut Liebel
|
|
|
|
Chief Executive Officer (Principal Executive Officer)
|
|
|
|
|
Date:
|
January 30, 2020
|
|
|
|
|
|
|
|
|
By:
|
/s/ KURT ADZEMA
|
|
|
|
Kurt Adzema
|
|
|
|
Executive Vice President and
|
|
|
|
Chief Financial Officer (Principal Financial Officer)
|
|
|
|
|
Date:
|
January 30, 2020
|
|
(a)
|
Employee’s employment with the Company shall terminate voluntarily at the close of business on October 30, 2020 (the “Termination Date”). Prior to the Termination Date, Employee shall provide such advisory and consulting services as are requested by executive management of the Company, which services shall be rendered by Employee by phone or email, as appropriate.
|
(b)
|
Effective January 3, 2020 and continuing through the Termination Date, Employee’s base salary shall be $3,914.84 bi-weekly, payable in accordance with the Company’s regular payroll process and subject to applicable withholding obligations of the Company, including without limitation, obligations to withhold for applicable federal, state and local income and employment taxes.
|
(c)
|
Employee agrees to the cancelation of the equity awards made to him under the 2009 Incentive Plan and listed on Exhibit A hereto, effective as of the Effective Date.
|
(a)
|
Employee acknowledges and agrees that in the course of Employee’s employment with the Company, Employee has acquired: (i) confidential information including without limitation information received by the Company from third-parties, under confidential conditions; (ii) other technical, product, business, strategic, financial, Human Resources, payroll, employee, or development information from the Company, the use or disclosure of which reasonably might be construed to be contrary to the interest of the Company;
|
(b)
|
The terms of this Agreement, including but not limited to the amount of consideration to be paid under this Agreement, are confidential and shall not be disclosed by the parties except to the extent that Employee seeks legal or tax advice for himself concerning this Agreement and the consideration to be paid under this Agreement or as required by the Company to its accountants and attorneys, as necessary to obtain enforcement of this Agreement or to comply with applicable law.
|
(c)
|
Upon the Termination Date, Employee shall return all the Company property and Confidential Information that is in his possession or confirm that it has been destroyed.
|
(a)
|
They have read this Agreement;
|
(b)
|
They have been represented in the preparation, negotiation, and execution of this Agreement by legal counsel of their own choice or that they have voluntarily declined to seek such counsel;
|
(c)
|
They understand the terms and consequences of this Agreement and of the releases it contains; and
|
(d)
|
They are fully aware of the legal and binding effect of this Agreement.
|
Grant Number
|
Grant Date
|
Number of Shares
|
RS172225
|
October 15, 2018
|
40,000
|
RS172227
|
October 15, 2018
|
50,000
|
RS172228
|
October 15, 2018
|
50,000
|
NO172229
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October 15, 2018
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150,000
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1.
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I have reviewed this Quarterly Report on Form 10-Q of Sanmina Corporation;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
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4.
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The Registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and
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5.
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The Registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's Board of Directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting.
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Date:
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January 30, 2020
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/s/ HARTMUT LIEBEL
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Hartmut Liebel
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Chief Executive Officer (Principal Executive Officer)
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1.
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I have reviewed this Quarterly Report on Form 10-Q of Sanmina Corporation;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
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4.
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The Registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
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(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and
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5.
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The Registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's Board of Directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting.
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Date:
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January 30, 2020
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/s/ KURT ADZEMA
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Kurt Adzema
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Chief Financial Officer (Principal Financial Officer)
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1.
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The Company's Quarterly Report on Form 10-Q for the period ended December 28, 2019, to which this Certification is attached as Exhibit 32.1 (the “Periodic Report”), fully complies with the requirements of Section 13(a) or Section 15(d) of the Exchange Act; and
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2.
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The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ HARTMUT LIEBEL
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Hartmut Liebel
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Chief Executive Officer (Principal Executive Officer)
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1.
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The Company's Quarterly Report on Form 10-Q for the period ended December 28, 2019, to which this Certification is attached as Exhibit 32.2 (the “Periodic Report”), fully complies with the requirements of Section 13(a) or Section 15(d) of the Exchange Act; and
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2.
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The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Kurt Adzema
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Kurt Adzema
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Chief Financial Officer (Principal Financial Officer)
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