SAN JOSE, Calif., Oct. 27, 2014 /PRNewswire/ -- Sanmina
Corporation ("Sanmina" or the "Company") (NASDAQ: SANM), a leading
integrated manufacturing solutions company, today reported
financial results for the fourth quarter and fiscal year ended
September 27, 2014.
Fourth Quarter Fiscal 2014 Summary
- Revenue of $1.69
billion
- GAAP operating margin of 3.6
percent
- GAAP diluted earnings per share of
$1.52(1)
- Non-GAAP(2)
operating margin of 4.2 percent
- Non-GAAP(2)
diluted earnings per share of $0.61
Fiscal Year 2014 Summary
- Revenue of $6.22
billion
- GAAP diluted earnings per share of
$2.27(1)
- Non-GAAP diluted earnings per share of
$1.99
Revenue for the fourth quarter was $1.69
billion, compared to $1.60
billion in the prior quarter and $1.51 billion for the same period of fiscal 2013.
Revenue for fiscal year ended September 27, 2014 was $6.22 billion, compared to $5.92 billion for the fiscal year ended
September 28, 2013.
GAAP operating income in the fourth quarter was $61.5 million or 3.6 percent of revenue, compared
to $44.7 million or 3.0 percent of
revenue for the same period a year ago. GAAP operating income
for fiscal year 2014 was $199.7
million, compared to $157.6
million in fiscal year 2013. GAAP net income in the
fourth quarter was $132.5 million,
compared to $38.8 million for the
same period a year ago. GAAP diluted earnings per share for
the fourth quarter was $1.52,
compared to $0.44 in the same period
a year ago. GAAP net income for fiscal year 2014 was
$197.2 million, compared to
$79.4 million in fiscal year
2013. GAAP diluted earnings per share in fiscal year 2014 was
$2.27, compared to $0.93 in fiscal year 2013.
Non-GAAP operating income in the fourth quarter was $71.3 million or 4.2 percent of revenue, compared
to $55.7 million or 3.7 percent of
revenue for the same period a year ago. Non-GAAP operating
income for the full fiscal year was $234.0
million, compared to $186.9
million for fiscal year 2013. Non-GAAP net income in
the fourth quarter was $53.4 million,
compared to $39.9 million for the
same period a year ago. Non-GAAP diluted earnings per share
for the fourth quarter was $0.61,
compared to $0.46 in the same period
a year ago. Non-GAAP net income for fiscal year 2014 was
$172.5 million, compared to
$123.4 million in fiscal year
2013. Non-GAAP diluted earnings per share in fiscal year 2014
was $1.99, compared to $1.44 in fiscal year 2013.
Balance Sheet Summary
- Ending cash and cash equivalents were
$466.6 million
- Cash flow from operations was $110.2 million in Q4, and $308.7 million for fiscal year 2014
- Repurchased 1.1 million common shares in
Q4 and 4.2 million shares in fiscal 2014
- Inventory turns were 7.0x
- Cash cycle days were 38.9 days
"Solid execution coupled with stable demand from a majority of
our market segments were the key drivers for overall improvement in
our financial results. Revenue for the fourth quarter was up
5 percent sequentially and 12 percent over the fourth quarter last
year," stated Jure Sola, Chairman
and Chief Executive Officer of Sanmina Corporation.
"In fiscal 2014, we delivered solid growth, margin improvement,
EPS expansion and strong cash generation. Execution of our core
strategy has delivered consistent and predictable results. We
remain focused on the quality of our revenue, expanding our
capabilities and providing value to our customers. With our revenue
base exiting 2014, we are optimistic that 2015 will be another
growth year for Sanmina," concluded Sola.
Company Completes The Redemption Of All Outstanding 7% Senior
Notes Due 2019
On October 8, 2014, the Company completed the redemption
of the remaining $100 million in aggregate principal
amount of its 7% Senior Notes due 2019 using existing cash and
credit facilities.
First Quarter Fiscal 2015 Outlook
The following
outlook is for the first fiscal quarter ending December 27, 2014. These statements are
forward-looking and actual results may differ materially.
- Revenue between $1.65 billion to $1.70
billion
- Non-GAAP diluted earnings per share between $0.55 to $0.60
Company Conference Call Information
Sanmina will hold
a conference call regarding results for the fourth quarter and
fiscal year end 2014 on Monday, October 27,
2014 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 broadcast 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 by logging onto 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
21263272.
(1)Fourth quarter and full year fiscal 2014 GAAP
diluted earnings per share includes a non-recurring tax benefit of
$1.01 and fourth quarter and full
year fiscal 2013 GAAP diluted earnings per share includes a
non-recurring tax benefit of $0.25.
(2)In the commentary set forth above and/or in the
financial statements included in this earnings release, we present
the following non-GAAP financial measures: operating income,
operating margin, net income and diluted earnings per share.
In computing each of these non-GAAP financial measures, we 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 other infrequent or unusual items
(including charges associated with distressed customers, litigation
settlements, gains and losses on sales of assets and redemptions of
debt, discrete tax events and deferred tax changes), to the extent
material or which we consider to be of a non-operational nature 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. Sanmina provides its first quarter fiscal 2015
outlook only on a non-GAAP basis due to the inherent uncertainties
associated with forecasting the timing and amount of acquisitions,
restructuring activities, asset impairments and other unusual and
infrequent items.
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 OEMs primarily in the communications,
defense and aerospace, industrial and semiconductor systems,
medical, multimedia, computing and storage, automotive and clean
technology sectors. Sanmina has facilities strategically located in
key regions throughout the world. More information regarding 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 first quarter and its expectations concerning growth in
fiscal 2015, 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; credit problems experienced by our customers; risks
arising from our international operations; competition that could
cause us to lose sales; consolidation among our customers and
suppliers that could adversely affect our business; 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.
|
Condensed
Consolidated Balance Sheets
|
|
(in
thousands)
|
|
(GAAP)
|
|
|
|
September
27,
|
|
September
28,
|
|
|
|
2014
|
|
2013
|
|
|
|
(Unaudited)
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$ 466,607
|
|
$ 402,875
|
|
Accounts receivable,
net
|
979,475
|
|
944,816
|
|
Inventories
|
893,178
|
|
781,560
|
|
Prepaid expenses and
other current assets
|
111,714
|
|
75,337
|
|
|
Total current
assets
|
2,450,974
|
|
2,204,588
|
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
563,016
|
|
540,151
|
|
Other
|
|
299,099
|
|
251,109
|
|
|
Total
assets
|
$ 3,313,089
|
|
$ 2,995,848
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
$ 1,139,845
|
|
$ 956,488
|
|
Accrued
liabilities
|
110,357
|
|
109,363
|
|
Accrued payroll and
related benefits
|
126,541
|
|
118,572
|
|
Short-term
debt
|
157,394
|
|
22,301
|
|
|
Total current
liabilities
|
1,534,137
|
|
1,206,724
|
|
|
|
|
|
|
|
Long-term
liabilities:
|
|
|
|
|
Long-term
debt
|
386,681
|
|
562,512
|
|
Other
|
145,516
|
|
135,048
|
|
|
Total long-term
liabilities
|
532,197
|
|
697,560
|
|
|
|
|
|
|
|
Stockholders'
equity
|
1,246,755
|
|
1,091,564
|
|
|
Total liabilities and
stockholders' equity
|
$ 3,313,089
|
|
$ 2,995,848
|
|
Condensed
Consolidated Statements of Income
|
|
(in thousands,
except per share amounts)
|
|
(GAAP)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
|
|
|
|
|
|
|
|
|
Sept. 27,
|
|
Sept. 28,
|
|
Sept. 27,
|
|
Sept. 28,
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$ 1,686,169
|
|
$ 1,505,323
|
|
$ 6,215,106
|
|
$ 5,917,124
|
|
Cost of
sales
|
1,554,551
|
|
1,389,989
|
|
5,726,823
|
|
5,490,307
|
|
Gross
profit
|
131,618
|
|
115,334
|
|
488,283
|
|
426,817
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
57,745
|
|
57,130
|
|
242,288
|
|
238,072
|
|
Research and
development
|
7,932
|
|
7,395
|
|
32,495
|
|
25,571
|
|
Amortization of
intangible assets
|
425
|
|
474
|
|
1,798
|
|
1,896
|
|
Restructuring and
integration costs
|
3,979
|
|
4,647
|
|
12,550
|
|
24,910
|
|
Asset
impairments
|
-
|
|
1,000
|
|
-
|
|
2,100
|
|
Gain on sales of
long-lived assets
|
-
|
|
-
|
|
(530)
|
|
(23,361)
|
|
Total operating
expenses
|
70,081
|
|
70,646
|
|
288,601
|
|
269,188
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
61,537
|
|
44,688
|
|
199,682
|
|
157,629
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
343
|
|
179
|
|
1,533
|
|
1,014
|
|
Interest
expense
|
(7,410)
|
|
(8,560)
|
|
(30,804)
|
|
(41,004)
|
|
Other expense,
net
|
(4,075)
|
|
2,204
|
|
(8,672)
|
|
(14,233)
|
|
Interest and other,
net
|
(11,142)
|
|
(6,177)
|
|
(37,943)
|
|
(54,223)
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
50,395
|
|
38,511
|
|
161,739
|
|
103,406
|
|
|
|
|
|
|
|
|
|
|
Provision for
(benefit from) income taxes
|
(82,108)
|
|
(290)
|
|
(35,426)
|
|
24,055
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$ 132,503
|
|
$ 38,801
|
|
$ 197,165
|
|
$ 79,351
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic income per
share
|
$
1.61
|
|
$
0.46
|
|
$
2.38
|
|
$
0.96
|
|
Diluted income per
share
|
$
1.52
|
|
$
0.44
|
|
$
2.27
|
|
$
0.93
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares used in computing
|
|
|
|
|
|
|
|
|
per share
amounts:
|
|
|
|
|
|
|
|
|
Basic
|
82,528
|
|
83,790
|
|
82,872
|
|
82,834
|
|
Diluted
|
86,997
|
|
87,201
|
|
86,731
|
|
85,403
|
|
Reconciliation of
GAAP to Non-GAAP Measures
|
|
(in thousands,
except per share amounts)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
Sept. 27,
|
|
Sept. 28,
|
|
Sept. 27,
|
|
Sept. 28,
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
GAAP Operating
Income
|
$ 61,537
|
|
$ 44,688
|
|
$ 199,682
|
|
$ 157,629
|
|
GAAP operating
margin
|
3.6%
|
|
3.0%
|
|
3.2%
|
|
2.7%
|
|
Adjustments
|
|
|
|
|
|
|
|
|
Stock compensation
expense (1)
|
5,519
|
|
4,148
|
|
18,789
|
|
17,524
|
|
Amortization of
intangible assets
|
1,072
|
|
474
|
|
3,871
|
|
1,896
|
|
Distressed customer
charges (2)
|
1,856
|
|
768
|
|
2,239
|
|
6,180
|
|
Restructuring,
acquisition and integration costs
|
3,979
|
|
4,647
|
|
12,550
|
|
24,910
|
|
Recovery of
contingency item (3)
|
(2,686)
|
|
-
|
|
(2,562)
|
|
-
|
|
Gain on sales of
long-lived assets
|
-
|
|
-
|
|
(530)
|
|
(23,361)
|
|
Asset
impairments
|
-
|
|
1,000
|
|
-
|
|
2,100
|
|
Non-GAAP Operating
Income
|
$ 71,277
|
|
$ 55,725
|
|
$ 234,039
|
|
$ 186,878
|
|
Non-GAAP
operating margin
|
4.2%
|
|
3.7%
|
|
3.8%
|
|
3.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Net
Income
|
$ 132,503
|
|
$ 38,801
|
|
$ 197,165
|
|
$ 79,351
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Operating income
adjustments (see above)
|
9,740
|
|
11,037
|
|
34,357
|
|
29,249
|
|
Loss on repurchases
of debt (4)
|
3,587
|
|
-
|
|
11,779
|
|
1,401
|
|
Loss on dedesignation
of interest rate swap (5)
|
-
|
|
-
|
|
-
|
|
14,903
|
|
Litigation
settlements (6)
|
-
|
|
(2,421)
|
|
(1,571)
|
|
(2,421)
|
|
Nonrecurring tax
items
|
(92,416)
|
|
(7,537)
|
|
(69,260)
|
|
902
|
|
Non-GAAP Net
Income
|
$ 53,414
|
|
$ 39,880
|
|
$ 172,470
|
|
$ 123,385
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Net Income
Per Share:
|
|
|
|
|
|
|
|
|
Basic
|
$
1.61
|
|
$
0.46
|
|
$
2.38
|
|
$
0.96
|
|
Diluted
|
$
1.52
|
|
$
0.44
|
|
$
2.27
|
|
$
0.93
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Net
Income Per Share:
|
|
|
|
|
|
|
|
|
Basic
|
$
0.65
|
|
$
0.48
|
|
$
2.08
|
|
$
1.49
|
|
Diluted
|
$
0.61
|
|
$
0.46
|
|
$
1.99
|
|
$
1.44
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares used in computing per share amounts:
|
|
|
|
|
|
|
|
|
Basic
|
82,528
|
|
83,790
|
|
82,872
|
|
82,834
|
|
Diluted
|
86,997
|
|
87,201
|
|
86,731
|
|
85,403
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Stock compensation
expense was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
Sept. 27,
|
|
Sept. 28,
|
|
Sept. 27,
|
|
Sept. 28,
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
$ 1,986
|
|
$ 1,362
|
|
$ 5,850
|
|
$ 5,464
|
|
Selling, general and
administrative
|
3,491
|
|
2,767
|
|
12,860
|
|
11,942
|
|
Research and
development
|
42
|
|
19
|
|
79
|
|
118
|
|
Total
|
$ 5,519
|
|
$ 4,148
|
|
$ 18,789
|
|
$ 17,524
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2)
|
Relates to inventory
and bad debt reserves / recoveries associated with distressed
customers.
|
|
|
|
(3)
|
Represents a
non-recurring contingency that the Company resolved
favorably.
|
|
|
|
(4)
|
Represents a loss,
including write-off of unamortized debt issuance costs, on debt
redeemed or repurchased prior to maturity.
|
|
|
|
(5)
|
Represents a non-cash
loss resulting from dedesignation of an interest rate
swap.
|
|
|
|
(6)
|
Represents cash
received in connection with a litigation settlement.
|
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, 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. Management compensates for these
limitations primarily by using 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 Items, which consist of other infrequent or unusual
items (including charges associated with distressed customers,
litigation settlements, gains and losses on sales of assets and
redemptions of debt, discrete tax events and deferred tax changes),
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.
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SOURCE Sanmina Corporation