SAN JOSE, Calif., Jan. 28, 2019 /PRNewswire/ -- Sanmina
Corporation ("Sanmina" or the "Company") (NASDAQ: SANM), a leading integrated manufacturing solutions company, today reported
financial results for the first quarter fiscal 2019 ended December 29, 2018.
"We delivered revenue of $2.19 billion, up 16.6 percent sequentially, operating margin expanded
80 basis points from last quarter to 3.9 percent and earnings per share were up 40 percent to $0.83
compared to the prior quarter. Our first quarter financial performance reflects solid momentum across all of our
end-markets," stated Michael Clarke, Chief Executive Officer.
|
(In thousands, except per share data)
|
Q1:2019
|
|
Q4:2018
|
|
Q1:2018
|
|
|
Revenue
|
$2,188,018
|
|
$1,876,335
|
|
$1,744,800
|
|
|
GAAP:
|
|
|
|
|
|
|
|
Operating income
|
$77,543
|
|
$9,819
|
|
$13,788
|
|
|
Operating margin
|
3.5
|
%
|
0.5
|
%
|
0.8
|
%
|
|
Net income (loss)
|
$37,952
|
|
$782
|
|
$(154,910)
|
|
|
Earnings (loss) per share
|
$0.54
|
|
$0.01
|
|
$(2.16) (1)
|
|
|
Non-GAAP:(2)
|
|
|
|
|
|
|
|
Operating income
|
$85,790
|
|
$58,749
|
|
$47,459
|
|
|
Operating margin
|
3.9
|
%
|
3.1
|
%
|
2.7
|
%
|
|
Net income
|
$59,168
|
|
$42,546
|
|
$36,468
|
|
|
Diluted earnings per share
|
$0.83
|
|
$0.60
|
|
$0.48
|
|
|
|
|
(1)
|
The first quarter of 2018 GAAP loss per share includes a
non-cash tax charge of $2.27 per share as a result of the U.S. Tax Cuts & Jobs Act.
|
|
(2)
|
Non-GAAP financial measures, exclude charges or gains relating to:
stock-based compensation expenses, restructuring costs (including employee severance and benefits costs and charges
related to excess facilities and assets), 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 charges associated with distressed customers, litigation settlements, gains and losses
on sales of assets and redemptions of debt, deferred tax and discrete tax items to the extent material in the applicable
period. 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 results contained in
this release to their most directly comparable GAAP measures is included in the financial statements contained in this
release.
|
Balance Sheet and Cash Flow
- Ending cash and cash equivalents: $409.3 million
- Cash flow from operations: $(78.4) million
"Looking ahead, our customer base and pipeline remain solid. Based on our solid first quarter results and with our
outlook for the second quarter, we are confident we will profitably grow revenue and strengthen our financial results in fiscal
2019," stated Clarke.
Second Quarter Fiscal 2019 Outlook
The following outlook is for the second fiscal quarter ending March 30, 2019. 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 $0.59 to $0.69,
including stock-based compensation expense of $0.11
- Non-GAAP diluted earnings per share between $0.70 to $0.80
Company Conference Call Information
Sanmina will hold a conference call to review its financial results for the first quarter on Monday,
January 28, 2019 at 5:00 p.m. ET (2:00 p.m. PT). The
access numbers are: domestic 877-273-6760 and international 706-634-6605. The conference will also be webcast live over the
Internet. You can log on to the live webcast at www.sanmina.com. 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 855-859-2056 and international 404-537-3406, access code is 5289284.
About Sanmina
Sanmina Corporation 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 communications
networks, storage, industrial, defense, medical, energy and industries that include embedded computing technologies such as point
of sale devices, casino gaming and automotive. Sanmina has facilities strategically located in key regions throughout the world.
More information about the Company is available at www.sanmina.com.
Sanmina Safe Harbor Statement
Certain statements contained in this press release, including the Company's outlook for the second quarter fiscal 2019 results,
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; and the other factors set forth in the Company's annual and quarterly reports filed with the Securities
Exchange Commission ("SEC").
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.
|
Sanmina Corporation
|
|
Condensed Consolidated Balance Sheets
|
|
(in thousands)
|
|
(GAAP)
|
|
|
|
|
December 29,
|
|
September 29,
|
|
|
|
|
2018
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
Cash and cash equivalents
|
|
$ 409,290
|
|
$ 419,528
|
|
Accounts receivable, net
|
|
1,344,536
|
|
1,177,219
|
|
Contract assets
|
|
419,484
|
|
-
|
|
Inventories
|
|
1,054,166
|
|
1,374,004
|
|
Prepaid expenses and other current assets
|
|
46,296
|
|
43,676
|
|
|
Total current assets
|
|
3,273,772
|
|
3,014,427
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net
|
|
643,518
|
|
642,913
|
|
Deferred tax assets
|
|
323,931
|
|
344,124
|
|
Other
|
|
|
75,632
|
|
83,669
|
|
|
Total assets
|
|
$ 4,316,853
|
|
$ 4,085,133
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Accounts payable
|
|
$ 1,531,927
|
|
$ 1,547,399
|
|
Accrued liabilities
|
|
215,215
|
|
136,427
|
|
Accrued payroll and related benefits
|
|
117,631
|
|
124,748
|
|
Short-term debt, including current portion of long-term debt
|
|
708,362
|
|
593,321
|
|
|
Total current liabilities
|
|
2,573,135
|
|
2,401,895
|
|
|
|
|
|
|
|
|
Long-term liabilities:
|
|
|
|
|
|
Long-term debt
|
|
14,361
|
|
14,346
|
|
Other
|
|
196,740
|
|
196,048
|
|
|
Total long-term liabilities
|
|
211,101
|
|
210,394
|
|
|
|
|
|
|
|
|
Stockholders' equity
|
|
1,532,617
|
|
1,472,844
|
|
|
Total liabilities and stockholders' equity
|
|
$ 4,316,853
|
|
$ 4,085,133
|
|
Sanmina Corporation
|
|
Condensed Consolidated Statements of Income
|
|
(in thousands, except per share amounts)
|
|
(GAAP)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
Dec. 29,
|
|
Dec. 30,
|
|
|
2018
|
|
2017
|
|
|
|
|
|
|
Net sales
|
$ 2,188,018
|
|
$ 1,744,800
|
|
Cost of sales
|
2,038,681
|
|
1,635,334
|
|
Gross profit
|
149,337
|
|
109,466
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
Selling, general and administrative
|
63,028
|
|
63,603
|
|
Research and development
|
6,437
|
|
7,615
|
|
Restructuring and other costs
|
2,329
|
|
24,460
|
|
Total operating expenses
|
71,794
|
|
95,678
|
|
|
|
|
|
|
Operating income
|
77,543
|
|
13,788
|
|
|
|
|
|
|
Interest income
|
194
|
|
285
|
|
Interest expense
|
(8,271)
|
|
(6,214)
|
|
Other income (expense), net
|
(5,994)
|
|
3,230
|
|
Interest and other, net
|
(14,071)
|
|
(2,699)
|
|
|
|
|
|
|
Income before income taxes
|
63,472
|
|
11,089
|
|
|
|
|
|
|
Provision for income taxes
|
25,520
|
|
165,999
|
|
|
|
|
|
|
Net income (loss)
|
$ 37,952
|
|
$ (154,910)
|
|
|
|
|
|
|
|
|
|
|
|
Basic income (loss) per share
|
$ 0.56
|
|
$ (2.16)
|
|
Diluted income (loss) per share
|
$ 0.54
|
|
$ (2.16)
|
|
|
|
|
|
|
Weighted-average shares used in computing
|
|
|
|
|
per share amounts:
|
|
|
|
|
Basic
|
68,303
|
|
71,605
|
|
Diluted
|
70,901
|
|
71,605
|
|
Sanmina Corporation
|
|
Reconciliation of GAAP to Non-GAAP Measures
|
|
(in thousands, except per share amounts)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Dec. 29,
|
|
Sep. 29,
|
|
Dec. 30,
|
|
|
|
2018
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
GAAP Operating Income
|
|
$ 77,543
|
|
$ 9,819
|
|
$ 13,788
|
|
GAAP operating margin
|
|
3.5%
|
|
0.5%
|
|
0.8%
|
|
Adjustments:
|
|
|
|
|
|
|
|
Stock compensation expense (1)
|
|
5,816
|
|
4,127
|
|
8,642
|
|
Amortization of intangible assets
|
|
636
|
|
1,092
|
|
1,820
|
|
Distressed customer charges (2)
|
|
(344)
|
|
(73)
|
|
(333)
|
|
Restructuring costs
|
|
2,139
|
|
13,174
|
|
23,542
|
|
Goodwill and other asset impairments
|
|
-
|
|
30,610
|
|
-
|
|
Non-GAAP Operating Income
|
|
$ 85,790
|
|
$ 58,749
|
|
$ 47,459
|
|
Non-GAAP operating margin
|
|
3.9%
|
|
3.1%
|
|
2.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Net Income (Loss)
|
|
$ 37,952
|
|
$ 782
|
|
$ (154,910)
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
Operating income adjustments (see above)
|
|
8,247
|
|
48,930
|
|
33,671
|
|
Litigation settlements (3)
|
|
-
|
|
(475)
|
|
(287)
|
|
Adjustments for taxes (4)
|
|
12,969
|
|
(6,691)
|
|
157,994
|
|
Non-GAAP Net Income
|
|
$ 59,168
|
|
$ 42,546
|
|
$ 36,468
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Net Income (Loss) Per Share:
|
|
|
|
|
|
|
|
Basic
|
|
$ 0.56
|
|
$ 0.01
|
|
$ (2.16)
|
|
Diluted
|
|
$ 0.54
|
|
$ 0.01
|
|
$ (2.16)
|
|
|
|
|
|
|
|
|
|
Non-GAAP Net Income Per Share:
|
|
|
|
|
|
|
|
Basic
|
|
$ 0.87
|
|
$ 0.62
|
|
$ 0.51
|
|
Diluted
|
|
$ 0.83
|
|
$ 0.60
|
|
$ 0.48
|
|
|
|
|
|
|
|
|
|
Weighted-average shares used in computing GAAP per share
amounts:
|
|
|
|
|
|
|
|
Basic
|
|
68,303
|
|
68,236
|
|
71,605
|
|
Diluted
|
|
70,901
|
|
71,500
|
|
71,605
|
|
|
|
|
|
|
|
|
|
Weighted-average shares used in computing non-GAAP per share
amounts:
|
|
|
|
|
|
|
|
Basic
|
|
68,303
|
|
68,236
|
|
71,605
|
|
Diluted
|
|
70,901
|
|
71,500
|
|
75,485
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Stock compensation expense was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
$ 1,735
|
|
$ 1,833
|
|
$ 2,448
|
|
Selling, general and administrative
|
|
3,990
|
|
3,164
|
|
6,164
|
|
Research and development
|
|
91
|
|
(870)
|
|
30
|
|
Total
|
|
$ 5,816
|
|
$ 4,127
|
|
$ 8,642
|
|
|
|
|
|
|
|
|
|
(2)
|
Relates to recovery of previously written-off inventory and bad debt
associated with distressed customers.
|
|
|
|
|
|
|
|
|
|
(3)
|
Represents cash received in connection with certain litigation
settlements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4)
|
GAAP provision for income taxes
|
|
$ 25,520
|
|
$ 2,648
|
|
$ 165,999
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
Tax impact of operating income adjustments
|
|
168
|
|
990
|
|
656
|
|
Discrete tax items
|
|
2,127
|
|
177
|
|
700
|
|
Other deferred tax adjustments
|
|
(15,264)
|
|
4,220
|
|
3,050
|
|
Impact of US Tax Reform
|
|
-
|
|
1,304
|
|
(162,400)
|
|
|
|
|
|
|
|
|
|
Subtotal - adjustments for taxes
|
|
(12,969)
|
|
6,691
|
|
(157,994)
|
|
|
|
|
|
|
|
|
|
Non-GAAP provision for income taxes
|
|
$ 12,551
|
|
$ 9,339
|
|
$ 8,005
|
Schedule I
The commentary and financial information above includes 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 infrequent items, as adjusted for taxes, to the extent
material or which we consider to be of a non-operational nature in the applicable period, and as more fully described below.
Management excludes these items principally because such charges 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 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 the
ongoing, core business. The material limitations to management's approach include the fact that the charges and expenses excluded
are nonetheless charges 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 back to GAAP 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 stock options and
unvested restricted stock units granted to employees, 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 stock options in each quarter. In addition,
given the fact that competitors grant different amounts and types of equity award and may use different option 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, exit 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 which
are difficult to predict, (2) are not directly related to ongoing business results and (3) 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 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 Infrequent Items, which consist of other infrequent or unusual items (including charges associated with
distressed customers, litigation settlements and gains and losses on sales of assets and redemptions of debt), to the extent
material or non-operational in nature, are excluded because such items are typically non-recurring, difficult to predict or not
directly related to the Company's ongoing core operations. However, items excluded by the Company may be different from those
excluded by the Company's competitors. In addition, these expenses 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 include in 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 where 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