SAN JOSE, Calif., Jan. 25, 2016 /PRNewswire/ -- Sanmina
Corporation ("Sanmina" or the "Company") (NASDAQ: SANM), a leading
integrated manufacturing solutions company, today reported
financial results for the first fiscal quarter ended January 2, 2016.
First Quarter Fiscal 2016 Summary
- Revenue of $1.53
billion
- GAAP operating margin of 3.5 percent
- GAAP diluted earnings per share of $0.33
- Non-GAAP(1) operating margin of 4.0
percent
- Non-GAAP(1) diluted earnings per share of
$0.58
Revenue for the first quarter was $1.53
billion, compared to $1.64
billion in the prior quarter and $1.67 billion for the same period of fiscal 2015.
GAAP operating income in the first quarter was $54.1 million or 3.5 percent of revenue, compared
to $53.5 million or 3.2 percent of
revenue for the first quarter fiscal 2015. GAAP net income in
the first quarter was $27.1 million,
compared to $22.7 million for the
same period a year ago. GAAP diluted earnings per share were
$0.33, compared to $0.26 in the first quarter of fiscal
2015.
Non-GAAP operating income in the first quarter was $61.0 million or 4.0 percent of revenue, compared
to $68.3 million or 4.1 percent of
revenue in the first quarter fiscal 2015. Non-GAAP net income
in the first quarter was $46.8
million, compared to $53.1
million in the same period a year ago. Non-GAAP diluted
earnings per share for the quarter were $0.58, compared to $0.61 for the same period a year ago.
"We delivered solid margin improvement, EPS expansion and cash
generation on a sequential basis, despite softer than expected
revenue," stated Jure Sola, Chairman
and Chief Executive Officer of Sanmina Corporation. "As we
look to the second quarter, demand is stable with growth driven by
new programs. We remain optimistic that fiscal 2016 will be a
growth year," concluded Sola.
Balance Sheet Summary
- Ending cash and cash equivalents were $398.4 million
- Cash flow from operations was 62.7 million
- Repurchased 1.4 million common shares for $28.7 million
- Inventory turns were 6.2x
- Cash cycle days were 47.2 days
Second Quarter Fiscal 2016 Outlook
The following
forecast is for the second fiscal quarter ending April 2, 2016. These statements are
forward-looking and actual results may differ materially.
- Revenue between $1.55 billion to $1.65
billion
- Non-GAAP diluted earnings per share between $0.55 to $0.59
Company Conference Call Information
Sanmina will hold
a conference call regarding financial results for the first quarter
fiscal 2016 on Monday, January 25,
2016 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 30708957.
(1)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 second
quarter fiscal 2016 outlook for earnings per share 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 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 regarding the
company is available at http://www.sanmina.com.
Sanmina Safe Harbor Statement
Certain statements
contained in this press release, including the Company's outlook
for the second quarter fiscal 2016 and expectations about fiscal
2016 being a growth year, 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.
Sanmina
Corporation
|
Condensed
Consolidated Balance Sheets
|
(in
thousands)
|
(GAAP)
|
|
|
|
|
|
|
|
|
|
January 2,
|
|
October 3,
|
|
|
|
2016
|
|
2015
|
|
|
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$ 398,447
|
|
$ 412,253
|
|
Accounts receivable,
net
|
930,460
|
|
936,952
|
|
Inventories
|
896,123
|
|
918,728
|
|
Prepaid expenses and
other current assets
|
55,409
|
|
55,047
|
|
|
Total current
assets
|
2,280,439
|
|
2,322,980
|
Property, plant and
equipment, net
|
585,771
|
|
590,844
|
Deferred tax
assets
|
484,987
|
|
497,605
|
Other
|
|
80,029
|
|
81,835
|
|
|
Total
assets
|
$ 3,431,226
|
|
$ 3,493,264
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
$ 1,014,031
|
|
$ 1,035,323
|
|
Accrued
liabilities
|
105,118
|
|
111,416
|
|
Accrued payroll and
related benefits
|
103,306
|
|
120,402
|
|
Short-term
debt
|
89,416
|
|
113,416
|
|
|
Total current
liabilities
|
1,311,871
|
|
1,380,557
|
|
|
|
|
|
|
Long-term
liabilities:
|
|
|
|
|
Long-term
debt
|
424,100
|
|
423,949
|
|
Other
|
168,001
|
|
168,287
|
|
|
Total long-term
liabilities
|
592,101
|
|
592,236
|
|
|
|
|
|
|
Stockholders'
equity
|
1,527,254
|
|
1,520,471
|
|
|
Total liabilities and
stockholders' equity
|
$ 3,431,226
|
|
$ 3,493,264
|
Sanmina
Corporation
|
Condensed
Consolidated Statements of Income
|
(in thousands,
except per share amounts)
|
(GAAP)
|
(Unaudited)
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Jan. 2,
|
|
Dec. 27,
|
|
|
2016
|
|
2014
|
Net sales
|
$ 1,534,714
|
|
$ 1,671,162
|
Cost of
sales
|
1,411,076
|
|
1,544,816
|
|
Gross
profit
|
123,638
|
|
126,346
|
Operating
expenses:
|
|
|
|
|
Selling, general and
administrative
|
57,693
|
|
59,418
|
|
Research and
development
|
9,647
|
|
8,069
|
|
Amortization of
intangible assets
|
692
|
|
425
|
|
Restructuring
costs
|
553
|
|
3,000
|
|
Asset
impairments
|
1,000
|
|
1,954
|
|
Total operating
expenses
|
69,585
|
|
72,866
|
Operating
income
|
54,053
|
|
53,480
|
|
Interest
income
|
148
|
|
289
|
|
Interest
expense
|
(5,878)
|
|
(6,437)
|
|
Other income
(expense), net
|
(218)
|
|
(1,528)
|
Interest and other,
net
|
(5,948)
|
|
(7,676)
|
Income before income
taxes
|
48,105
|
|
45,804
|
Provision for income
taxes
|
20,967
|
|
23,148
|
Net income
|
$ 27,138
|
|
$ 22,656
|
|
|
|
|
|
|
Basic income per
share
|
$
0.35
|
|
$
0.27
|
|
Diluted income per
share
|
$
0.33
|
|
$
0.26
|
|
|
|
|
|
|
Weighted-average
shares used in computing
|
|
|
|
|
per share
amounts:
|
|
|
|
|
Basic
|
77,921
|
|
82,548
|
|
Diluted
|
81,205
|
|
86,682
|
Sanmina
Corporation
|
Reconciliation of
GAAP to Non-GAAP Measures
|
(in thousands,
except per share amounts)
|
(Unaudited)
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Jan. 2,
|
|
Dec. 27,
|
|
|
2016
|
|
2014
|
|
|
|
|
|
GAAP Operating
Income
|
$ 54,053
|
|
$ 53,480
|
|
GAAP operating
margin
|
3.5%
|
|
3.2%
|
Adjustments
|
|
|
|
|
Stock compensation
expense (1)
|
4,052
|
|
5,717
|
|
Amortization of
intangible assets
|
1,360
|
|
1,035
|
|
Distressed customer
charges (2)
|
-
|
|
3,102
|
|
Restructuring
costs
|
553
|
|
3,000
|
|
Asset
impairments
|
1,000
|
|
1,954
|
Non-GAAP Operating
Income
|
$ 61,018
|
|
$ 68,288
|
|
Non-GAAP
operating margin
|
4.0%
|
|
4.1%
|
|
|
|
|
|
GAAP Net
Income
|
$ 27,138
|
|
$ 22,656
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
Operating income
adjustments (see above)
|
6,965
|
|
14,808
|
|
Loss on
extinguishment of debt (3)
|
-
|
|
2,913
|
|
Litigation
settlements (4)
|
-
|
|
(273)
|
|
Deferred and
non-recurring tax adjustments
|
12,707
|
|
13,028
|
Non-GAAP Net
Income
|
$ 46,810
|
|
$ 53,132
|
|
|
|
|
|
GAAP Net Income
Per Share:
|
|
|
|
|
Basic
|
$
0.35
|
|
$
0.27
|
|
Diluted
|
$
0.33
|
|
$
0.26
|
|
|
|
|
|
Non-GAAP Net
Income Per Share:
|
|
|
|
|
Basic
|
$
0.60
|
|
$
0.64
|
|
Diluted
|
$
0.58
|
|
$
0.61
|
|
|
|
|
|
Weighted-average
shares used in computing per share amounts:
|
|
|
|
|
Basic
|
77,921
|
|
82,548
|
|
Diluted
|
81,205
|
|
86,682
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Stock compensation
expense was as follows:
|
|
|
|
|
|
Three Months
Ended
|
|
|
Jan. 2,
|
|
Dec. 27,
|
|
|
2016
|
|
2014
|
|
|
|
|
Cost of
sales
|
$ 1,405
|
|
$ 1,576
|
|
Selling, general and
administrative
|
2,566
|
|
4,103
|
|
Research and
development
|
81
|
|
38
|
|
Total
|
$ 4,052
|
|
$ 5,717
|
|
|
|
|
|
(2)
|
Relates to inventory
and bad debt reserves associated with distressed
customers.
|
|
|
|
|
|
(3)
|
Represents a loss,
including write-off of unamortized debt issuance costs, on debt
redeemed, repurchased or otherwise extinguished prior to
maturity.
|
|
|
|
|
|
(4)
|
Represents cash
received in connection with certain litigation
settlements.
|
|
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