SAN
JOSE, Calif., Nov. 6, 2023
/PRNewswire/ -- Sanmina Corporation ("Sanmina" or the "Company")
(NASDAQ: SANM), a leading integrated manufacturing solutions
company, today reported unaudited financial results for the fourth
quarter and fiscal year ended September 30,
2023 and outlook for its fiscal first quarter ending
December 30, 2023.
Fourth Quarter Fiscal 2023 Financial
Highlights
• Revenue: $2.05
billion
• GAAP operating
margin: 4.8%
• GAAP diluted
EPS: $1.04
•
Non-GAAP(1) operating margin: 5.7%
• Non-GAAP
diluted EPS: $1.42
|
Fiscal Year 2023 Financial
Highlights
• Revenue: $8.9
billion
• GAAP operating
margin: 5.1%
• GAAP diluted
EPS: $5.18
• Non-GAAP
operating margin: 5.8%
• Non-GAAP
diluted EPS: $6.26
|
|
Additional Highlights
• Cash flow from
operations: Q4 $77 million and FY'23 $235 million
• Free cash
flow: $39 million in Q4 and $45 million in FY'23
• Share
repurchases: 603,776 shares for $33 million in Q4 and 1.58 million
shares for $84 million in FY'23
• Q4 ending cash
and cash equivalents: $668 million
• Q4 non-GAAP
pre-tax ROIC: 26.4%
|
(1)Non-GAAP
financial measures exclude charges or gains relating to:
stock-based compensation expenses; restructuring costs (including
employee severance costs, environmental investigation, remediation
and related costs and other charges related to closing and
consolidating facilities); acquisition and integration costs
(consisting of costs associated with the acquisition and
integration of acquired businesses into our operations); impairment
charges for goodwill and other assets; amortization expense; and
other unusual or infrequent items (e.g. charges or benefits
associated with distressed customers, expenses, charges and
recoveries relating to certain legal matters, gains and losses on
sales of assets, deferred tax adjustments and discrete tax items).
See Schedule 1 below for more information regarding our use of
non-GAAP financial measures, including the economic substance
behind each exclusion, the manner in which management uses non-GAAP
measures to conduct and evaluate the business, the material
limitations associated with using such measures and the manner in
which management compensates for such limitations. 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 strong fiscal 2023 financial results. Revenue was
up 13 percent, non-GAAP operating margin expanded 80 basis points
to 5.8 percent and non-GAAP earnings per share was up 34 percent
year-over-year," stated Jure Sola, Chairman and Chief
Executive Officer of Sanmina Corporation. "Revenue for the fourth
quarter was down 7 percent sequentially due to ongoing customer
inventory adjustments primarily in the communications end-market.
Despite lower revenue, we delivered consistent non-GAAP operating
margin sequentially and a 40 basis point improvement compared to
the same quarter a year ago."
"The team continues to demonstrate resilience in a dynamic
market environment. Over the last year, we've made significant
investments to support new programs, further diversify within our
end-markets and expand our capabilities, positioning our business
to capture future opportunities."
"Our first quarter outlook is down sequentially, driven by some
customers continuing to adjust inventory levels and ongoing
macroeconomic uncertainty. We expect headwinds for the next couple
of quarters with an improvement in the back half of the year. We
remain confident in our strategy and long-term financial
performance," concluded Sola.
First Quarter Fiscal 2024 Outlook
The following
outlook is for the fiscal first quarter ending December 30, 2023. These statements are
forward-looking and actual results may differ materially.
- Revenue between $1.85 billion to
$1.95 billion
- GAAP diluted earnings per share between $0.98 to $1.08
- Non-GAAP diluted earnings per share between $1.20 to $1.30
Safe Harbor Statement
The statements above concerning
our financial outlook for the first quarter fiscal 2024 and our
expectations for FY24 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 fourth
quarter and fiscal year 2023 and outlook for the first quarter of
fiscal 2024 on Monday, November 6,
2023 at 4:30 p.m. ET
(1:30 p.m. PT). The access numbers
are: domestic 833-816-1390 and international 412-317-0483. The
conference will also be webcast live over the Internet. You can log
on to the live webcast at Q4 and FY'23 Webcast. 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 877-344-7529 and international 412-317-0088, access code
is 5486944.
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)
|
|
|
|
|
|
|
September 30,
|
|
October 1,
|
|
|
|
|
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
$
667,570
|
|
$
529,857
|
|
Accounts receivable,
net
|
|
|
1,230,771
|
|
1,138,894
|
|
Contract
assets
|
|
|
445,757
|
|
475,721
|
|
Inventories
|
|
|
|
1,477,223
|
|
1,684,099
|
|
Prepaid expenses and
other current assets
|
|
58,249
|
|
62,044
|
|
|
Total current
assets
|
|
|
3,879,570
|
|
3,890,615
|
|
|
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
|
632,836
|
|
575,170
|
Deferred tax
assets
|
|
|
177,597
|
|
209,554
|
Other
|
|
|
|
|
183,965
|
|
160,192
|
|
|
Total assets
|
|
|
$ 4,873,968
|
|
$ 4,835,531
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Accounts
payable
|
|
|
$ 1,612,833
|
|
$ 2,041,434
|
|
Accrued
liabilities
|
|
|
267,148
|
|
281,599
|
|
Accrued payroll and
related benefits
|
|
|
127,406
|
|
130,892
|
|
Short-term debt,
including current portion of long-term debt
|
25,945
|
|
17,500
|
|
|
Total current
liabilities
|
|
|
2,033,332
|
|
2,471,425
|
|
|
|
|
|
|
|
|
|
Long-term
liabilities:
|
|
|
|
|
|
|
Long-term
debt
|
|
|
|
312,327
|
|
329,237
|
|
Other
|
|
|
|
209,684
|
|
215,333
|
|
|
Total long-term
liabilities
|
|
|
522,011
|
|
544,570
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
2,318,625
|
|
1,819,536
|
|
|
Total liabilities and
stockholders' equity
|
|
$ 4,873,968
|
|
$ 4,835,531
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sanmina Corporation
|
Condensed Consolidated Statements of
Income
|
(in thousands, except per share
amounts)
|
(GAAP)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Twelve Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
October 1,
|
|
September 30,
|
|
October 1,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
2,052,019
|
|
$
2,224,865
|
|
$
8,935,048
|
|
$ 7,919,622
|
Cost of
sales
|
1,878,591
|
|
2,052,636
|
|
8,191,837
|
|
7,297,416
|
|
Gross profit
|
173,428
|
|
172,229
|
|
743,211
|
|
622,206
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
62,124
|
|
59,771
|
|
255,072
|
|
244,569
|
|
Research and
development
|
7,715
|
|
6,023
|
|
26,427
|
|
21,343
|
|
Restructuring and other
costs
|
4,323
|
|
3,085
|
|
6,054
|
|
6,815
|
|
Total operating
expenses
|
74,162
|
|
68,879
|
|
287,553
|
|
272,727
|
|
|
|
|
|
|
|
|
|
Operating
income
|
99,266
|
|
103,350
|
|
455,658
|
|
349,479
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
3,910
|
|
430
|
|
13,595
|
|
1,628
|
|
Interest
expense
|
(8,257)
|
|
(7,111)
|
|
(36,290)
|
|
(22,473)
|
|
Other expense,
net
|
(8,168)
|
|
(19,204)
|
|
(20,156)
|
|
(26,314)
|
Interest and other,
net
|
(12,515)
|
|
(25,885)
|
|
(42,851)
|
|
(47,159)
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
86,751
|
|
77,465
|
|
412,807
|
|
302,320
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
21,396
|
|
19,101
|
|
85,294
|
|
61,936
|
|
|
|
|
|
|
|
|
|
Net income before
noncontrolling interest in
|
|
|
|
|
|
|
|
subsidiary
earnings
|
65,355
|
|
58,364
|
|
327,513
|
|
240,384
|
|
|
|
|
|
|
|
|
|
Noncontrolling interest
in subsidiary earnings
|
3,514
|
|
-
|
|
17,543
|
|
-
|
|
|
|
|
|
|
|
|
|
Net income attributable
to common shareholders
|
$
61,841
|
|
$
58,364
|
|
$
309,970
|
|
$
240,384
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic income per
share
|
$
1.08
|
|
$
1.01
|
|
$
5.36
|
|
$
3.92
|
|
Diluted income per
share
|
$
1.04
|
|
$
0.98
|
|
$
5.18
|
|
$
3.81
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares
used in
|
|
|
|
|
|
|
|
|
computing per share
amounts:
|
|
|
|
|
|
|
|
|
Basic
|
57,406
|
|
58,023
|
|
57,847
|
|
61,310
|
|
Diluted
|
59,178
|
|
59,844
|
|
59,815
|
|
63,117
|
|
|
|
|
|
|
|
|
|
Sanmina Corporation
|
Reconciliation of GAAP to Non-GAAP
Measures
|
(in thousands, except per share
amounts)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Twelve Months Ended
|
|
|
|
September 30,
|
|
July 1,
|
|
October 1,
|
|
September 30,
|
|
October 1,
|
|
|
|
2023
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Operating
income
|
|
$
99,266
|
|
$ 107,365
|
|
$ 103,350
|
|
$
455,658
|
|
$
349,479
|
|
GAAP Operating margin
|
|
4.8 %
|
|
4.9 %
|
|
4.6 %
|
|
5.1 %
|
|
4.4 %
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Stock compensation
expense (1)
|
|
12,942
|
|
13,317
|
|
10,563
|
|
50,402
|
|
39,608
|
|
Amortization of
intangible assets
|
|
1,342
|
|
669
|
|
234
|
|
2,493
|
|
1,010
|
|
Legal and other
(2)
|
|
-
|
|
4,475
|
|
-
|
|
5,170
|
|
2,033
|
|
Restructuring and
others costs
|
|
4,323
|
|
296
|
|
3,085
|
|
6,054
|
|
6,815
|
Non-GAAP Operating income
|
|
$
117,873
|
|
$
126,122
|
|
$
117,232
|
|
$
519,777
|
|
$
398,945
|
|
Non-GAAP Operating margin
|
|
5.7 %
|
|
5.7 %
|
|
5.3 %
|
|
5.8 %
|
|
5.0 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Net income
attributable to common shareholders
|
|
$
61,841
|
|
$
76,494
|
|
$
58,364
|
|
$
309,970
|
|
$
240,384
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
adjustments (see above)
|
|
18,607
|
|
18,757
|
|
13,882
|
|
64,119
|
|
49,466
|
|
Reversal of gain on
sale of IP
|
|
-
|
|
-
|
|
-
|
|
-
|
|
7,000
|
|
Legal and other
(2)
|
|
-
|
|
-
|
|
10,750
|
|
(3,630)
|
|
3,640
|
|
Adjustments for taxes
(3)
|
|
3,526
|
|
(3,093)
|
|
(737)
|
|
3,771
|
|
(5,231)
|
Non-GAAP Net income attributable to common
shareholders
|
|
$
83,974
|
|
$
92,158
|
|
$
82,259
|
|
$
374,230
|
|
$
295,259
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Net income attributable to common shareholders
per share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
1.08
|
|
$
1.32
|
|
$
1.01
|
|
$
5.36
|
|
$
3.92
|
|
Diluted
|
|
$
1.04
|
|
$
1.28
|
|
$
0.98
|
|
$
5.18
|
|
$
3.81
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Net income attributable to common
shareholders per share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
1.46
|
|
$
1.59
|
|
$
1.42
|
|
$
6.47
|
|
$
4.82
|
|
Diluted
|
|
$
1.42
|
|
$
1.55
|
|
$
1.37
|
|
$
6.26
|
|
$
4.68
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares used in computing per share
amounts:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
57,406
|
|
57,987
|
|
58,023
|
|
57,847
|
|
61,310
|
|
Diluted
|
|
59,178
|
|
59,592
|
|
59,844
|
|
59,815
|
|
63,117
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Stock compensation
expense was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
$
3,978
|
|
$
4,518
|
|
$
3,610
|
|
$
16,763
|
|
$
14,065
|
|
Selling, general and
administrative
|
|
8,747
|
|
8,588
|
|
6,807
|
|
32,781
|
|
25,037
|
|
Research and
development
|
|
217
|
|
211
|
|
146
|
|
858
|
|
506
|
|
Total
|
|
$
12,942
|
|
$
13,317
|
|
$
10,563
|
|
$
50,402
|
|
$
39,608
|
|
|
|
|
|
|
|
|
|
|
|
|
(2)
|
Represents expenses,
charges and recoveries associated with certain legal and other
matters.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3)
|
GAAP Provision for
income taxes
|
|
$
21,396
|
|
$
17,267
|
|
$
19,101
|
|
$
85,294
|
|
$
61,936
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Tax impact of
operating income adjustments
|
|
2,645
|
|
1,817
|
|
879
|
|
7,736
|
|
1,926
|
|
Discrete tax
items
|
|
1,210
|
|
6,957
|
|
2,415
|
|
12,930
|
|
16,899
|
|
Deferred tax
adjustments
|
|
(7,381)
|
|
(5,681)
|
|
(2,557)
|
|
(24,437)
|
|
(13,594)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal - adjustments
for taxes
|
|
(3,526)
|
|
3,093
|
|
737
|
|
(3,771)
|
|
5,231
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Provision for
income taxes
|
|
$
17,870
|
|
$
20,360
|
|
$
19,838
|
|
$
81,523
|
|
$
67,167
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1 FY24 Earnings Per Share
Outlook*:
|
|
Q1 FY24 EPS Range
|
|
|
|
|
|
|
|
|
|
Low
|
|
High
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Diluted earnings
per share
|
|
$
0.98
|
|
$
1.08
|
|
|
|
|
|
|
|
Stock
compensation expense
|
|
$
0.22
|
|
$
0.22
|
|
|
|
|
|
|
|
Non-GAAP Diluted
earnings per share
|
|
$
1.20
|
|
$
1.30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* 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 first quarter of FY24, an
estimate of such items is not included in the outlook for Q1 FY24
GAAP EPS.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sanmina
Corporation
|
|
Condensed
Consolidated Cash Flow
|
|
(in
thousands)
|
|
(GAAP)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Month
Periods
|
|
Twelve Month
Periods
|
|
|
Q4'23
|
|
Q3'23
|
|
Q2'23
|
|
Q1'23
|
|
Q4'22
|
|
FY23
|
|
FY22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Net income before
noncontrolling interest
|
$
65,355
|
|
$
81,737
|
|
$
85,307
|
|
$
95,114
|
|
$
58,364
|
|
$ 327,513
|
|
$ 240,384
|
|
Depreciation and
amortization
|
30,521
|
|
29,898
|
|
29,282
|
|
28,536
|
|
26,686
|
|
118,237
|
|
108,783
|
|
Other, net
|
21,947
|
|
21,174
|
|
17,075
|
|
20,727
|
|
33,886
|
|
80,923
|
|
77,626
|
|
Net change in net
working capital
|
(40,966)
|
|
(76,300)
|
|
(67,086)
|
|
(107,153)
|
|
(37,038)
|
|
(291,505)
|
|
(95,939)
|
|
Cash provided by
operating activities
|
76,857
|
|
56,509
|
|
64,578
|
|
37,224
|
|
81,898
|
|
235,168
|
|
330,854
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of long-term
investments
|
(500)
|
|
(500)
|
|
(700)
|
|
(800)
|
|
(300)
|
|
(2,500)
|
|
(2,000)
|
|
Net purchases of
property & equipment
|
(37,803)
|
|
(52,167)
|
|
(63,458)
|
|
(36,530)
|
|
(48,155)
|
|
(189,958)
|
|
(130,214)
|
|
Cash used
in investing activities
|
(38,303)
|
|
(52,667)
|
|
(64,158)
|
|
(37,330)
|
|
(48,455)
|
|
(192,458)
|
|
(132,214)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contingent
consideration paid in connection with previous business
combination
|
-
|
|
(8,558)
|
|
-
|
|
-
|
|
-
|
|
(8,558)
|
|
-
|
|
Net share
repurchases
|
(30,397)
|
|
(52,072)
|
|
(13,376)
|
|
(7,836)
|
|
(23,438)
|
|
(103,681)
|
|
(328,722)
|
|
Net borrowing
activities
|
4,070
|
|
(4,375)
|
|
(4,375)
|
|
(4,375)
|
|
27,987
|
|
(9,055)
|
|
13,923
|
|
Proceeds from
collection of notes receivable
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
500
|
|
Proceeds from sale of
noncontrolling interest
|
-
|
|
-
|
|
-
|
|
215,799
|
|
-
|
|
215,799
|
|
-
|
|
Cash
provided by (used for) financing activities
|
(26,327)
|
|
(65,005)
|
|
(17,751)
|
|
203,588
|
|
4,549
|
|
94,505
|
|
(314,299)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate
changes
|
(1,245)
|
|
(452)
|
|
220
|
|
1,975
|
|
(1,440)
|
|
498
|
|
(4,510)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in cash
& cash equivalents
|
$
10,982
|
|
$ (61,615)
|
|
$ (17,111)
|
|
$ 205,457
|
|
$
36,552
|
|
$ 137,713
|
|
$
(120,169)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free cash
flow:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
provided by operating activities
|
$
76,857
|
|
$
56,509
|
|
$
64,578
|
|
$
37,224
|
|
$
81,898
|
|
$ 235,168
|
|
$ 330,854
|
|
Net
purchases of property & equipment
|
(37,803)
|
|
(52,167)
|
|
(63,458)
|
|
(36,530)
|
|
(48,155)
|
|
(189,958)
|
|
(130,214)
|
|
Proceeds
from sale of intellectual property
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
500
|
|
|
$
39,054
|
|
$
4,342
|
|
$
1,120
|
|
$
694
|
|
$
33,743
|
|
$
45,210
|
|
$ 201,140
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sanmina
Corporation
|
|
Pre-Tax Return on
Invested Capital (ROIC)
|
|
($ in
thousands)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Month
Periods
|
|
|
|
Q4
FY23
|
|
Q3
FY23
|
|
Q2
FY23
|
|
Q1
FY23
|
|
Q4
FY22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Operating
income
|
|
$
99,266
|
|
$
107,365
|
|
$
120,601
|
|
$ 128,426
|
|
$ 103,350
|
|
|
x
|
4.0
|
|
4.0
|
|
4.0
|
|
4.0
|
|
4.0
|
|
Annualized GAAP
Operating income
|
|
397,064
|
|
429,460
|
|
482,404
|
|
513,704
|
|
413,400
|
|
Average invested
capital (1)
|
÷
|
1,783,744
|
|
1,698,819
|
|
1,592,563
|
|
1,485,054
|
|
1,398,566
|
|
GAAP Pre-tax
ROIC
|
|
22.3 %
|
|
25.3 %
|
|
30.3 %
|
|
34.6 %
|
|
29.6 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Operating
income
|
|
$ 117,873
|
|
$
126,122
|
|
$
134,883
|
|
$ 140,899
|
|
$ 117,232
|
|
|
x
|
4.0
|
|
4.0
|
|
4.0
|
|
4.0
|
|
4.0
|
|
Annualized non-GAAP
Operating income
|
|
471,492
|
|
504,488
|
|
539,532
|
|
563,596
|
|
468,928
|
|
Average invested
capital (1)
|
÷
|
1,783,744
|
|
1,698,819
|
|
1,592,563
|
|
1,485,054
|
|
1,398,566
|
|
Non-GAAP Pre-tax
ROIC
|
|
26.4 %
|
|
29.7 %
|
|
33.9 %
|
|
38.0 %
|
|
33.5 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Invested capital is
defined as total assets (not including cash and cash equivalents
and deferred tax assets) less total liabilities (excluding
short-term and long-term debt).
|
|
|
Schedule 1
The statements above and financial information provided in this
earnings release include non-GAAP measures of operating income,
operating margin, net income, diluted earnings per share and
pre-tax return on invested capital (ROIC). 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 severance, lease termination costs, exit costs,
environmental investigation, remediation and related 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, 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, gains and losses
on sales of assets, deferred tax adjustments and discrete tax
items, 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