Sanmina Corp 8-K/A, filed Jan 12, 2026
Sanmina Corp (SANM)
8-K/A
2026-01-12
For: 2025-10-27
View Original
Added on
April 08, 2026
About this 8-K/A
Sanmina Corp filed this 8-K/A on January 12, 2026, reporting on events of October 27, 2025.
Items reported
- Item 2.01: Completed an acquisition or sale of assets
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
(Amendment No. 1)
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of
the Securities Exchange Act of 1934
(October 27, 2025 )
Date of Report (date of earliest event reported)
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification No.) | |||||||||
(Address of principal executive offices, including zip code) | ||||||||||||||||||||
(Registrant's telephone number, including area code) | ||||||||||||||||||||
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
ITEM 2.01 COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS
As previously reported, on October 27, 2025 (the "Closing Date"), Sanmina Corporation ("Sanmina") completed the acquisition of ZT Group Int’l, Inc., a New Jersey corporation (“ZT”) (such acquisition, "the Acquisition"), pursuant to the Equity Purchase Agreement, dated May 18, 2025 (the “Purchase Agreement”), by and among Sanmina, ZT, AMD Design, LLC, a Delaware limited liability company and wholly owned subsidiary of AMD (the “Seller”), and Advanced Micro Devices, Inc., a Delaware corporation (“AMD”). On the Closing Date, pursuant to the Purchase Agreement, Sanmina purchased all of the shares of common stock of ZT held by the Seller.
The unaudited pro forma condensed combined financial information included in this Amendment No. 1 has been presented for informational purposes only. It does not purport to represent the actual results of operations that Sanmina would have achieved had Sanmina acquired ZT during the periods presented in the pro forma financial information and is not intended to project the future results of operations that Sanmina may achieve following the Acquisition. Except as described above, all other information in the Initial Report remains unchanged and is incorporated by reference herein.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Business Acquired
The audited consolidated financial statements of ZT as of and for the years ended July 31, 2025 and July 31, 2024, including the notes related thereto and the report of KPMG LLP thereon, are filed as Exhibit 99.1 to this Amendment No. 1 and incorporated by reference herein.
(b) Pro Forma Financial Information
Sanmina's unaudited pro forma condensed combined balance sheet as of September 27, 2025 and unaudited pro forma condensed combined statement of income for the year ended September 27, 2025, giving effect to the Acquisition, including the notes related thereto, are filed as Exhibit 99.2 to this Amendment No. 1 and incorporated by reference herein.
(d) Exhibits.
Exhibit No | Description | |||||||
The unaudited pro forma condensed combined financial information of Sanmina Corporation as of and for the year ended September 27, 2025, giving effect to the Acquisition, including the unaudited pro forma condensed combined balance sheet as of September 27, 2025 and the unaudited pro forma condensed combined statement of income for the year ended September 27, 2025 | ||||||||
104 | Cover Page Interactive Data File (embedded within the inline XBRL document) | |||||||
SIGNATURE
Pursuant to the Requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| SANMINA CORPORATION | |||||||||||
| By: | /s/ JONATHAN FAUST | ||||||||||
| Jonathan Faust | |||||||||||
| Executive Vice President and Chief Financial Officer | |||||||||||
| Date: | January 12, 2026 | ||||||||||
EXHIBIT 23.1
Consent of Independent Auditors
We consent to the incorporation by reference in the following registration statements of Sanmina Corporation:
•Registration Statement on Form S-8 (No. 333-286804)
•Registration Statement on Form S-8 (No. 333-279031)
•Registration Statement on Form S-8 (No. 333-273602)
•Registration Statement on Form S-8 (No. 333-264681)
•Registration Statement on Form S-8 (No. 333-258471)
•Registration Statement on Form S-8 (No. 333-237898)
•Registration Statement on Form S-8 (No. 333-231175)
•Registration Statement on Form S-8 (No. 333-228406)
•Registration Statement on Form S-8 (No. 333-221515)
•Registration Statement on Form S-8 (No. 333-214706)
•Registration Statement on Form S-8 (No. 333-203596)
•Registration Statement on Form S-8 (No. 333-195455)
•Registration Statement on Form S-8 (No. 333-188085)
•Registration Statement on Form S-8 (No. 333-182042)
•Registration Statement on Form S-8 (No. 333-172128)
•Registration Statement on Form S-8 (No. 333-165435)
•Registration Statement on Form S-8 (No. 333-157099)
•Registration Statement on Form S-8 (No. 333-112605)
•Registration Statement on Form S-8 (No. 333-108942)
•Registration Statement on Form S-8 (No. 333-104692)
•Registration Statement on Form S-8 (No. 333-100236)
•Registration Statement on Form S-8 (No. 333-87946)
•Registration Statement on Form S-8 (No. 333-84704)
•Registration Statement on Form S-8 (No. 333-83110)
•Registration Statement on Form S-8 (No. 333-75616)
•Registration Statement on Form S-8 (No. 333-64294)
•Registration Statement on Form S-8 (No. 333-39930)
•Registration Statement on Form S-8 (No. 333-79259)
•Registration Statement on Form S-8 (No. 333-23565)
of our report dated October 6, 2025 with respect to the consolidated financial statements of ZT Group Int’l, Inc., which report appears in the Current Report on Form 8-K/A of Sanmina Corporation dated January 12, 2026.
/s/ KPMG
Short Hills, New Jersey
January 12, 2026
Exhibit 99.1
ZT GROUP INT’L, INC.
Consolidated Financial Statements
July 31, 2025 and 2024
(With Independent Auditors’ Report Thereon)
ZT GROUP INT’L, INC.
Table of Contents
Page
Independent Auditors’ Report 1
Consolidated Balance Sheets 3
Consolidated Statements of Income and Comprehensive Income 4
Consolidated Statements of Changes in Stockholders’ Equity 5
Consolidated Statements of Cash Flows 6
Notes to Consolidated Financial Statements 7
Independent Auditors’ Report
The Stockholder
ZT Group Int'l, Inc.:
ZT Group Int'l, Inc.:
Opinion
We have audited the consolidated financial statements of ZT Group Int'l, Inc. and its subsidiaries (the Company), which comprise the consolidated balance sheets as of July 31, 2025 and July 31, 2024, and the related consolidated statements of income and comprehensive income, changes in stockholders’ equity, and cash flows for the years then ended, and the related notes to the consolidated financial statements.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of the Company as of July 31, 2025 and July 31, 2024, and the results of its operations and its cash flows for the years then ended in accordance with U.S. generally accepted accounting principles.
Basis for Opinion
We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Responsibilities of Management for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with U.S. generally accepted accounting principles, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for one year after the date that the consolidated financial statements are issued.
Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the consolidated financial statements.
In performing an audit in accordance with GAAS, we:
●Exercise professional judgment and maintain professional skepticism throughout the audit.
●Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.
●Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. Accordingly, no such opinion is expressed.
●Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the consolidated financial statements.
●Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.
/s/ KPMG LLP
Short Hills, New Jersey
October 6, 2025
October 6, 2025
2
ZT GROUP INT’L, INC.
Consolidated Balance Sheets
July 31, 2025 and 2024
(In thousands, except share data)
| Assets | 2025 | 2024 | ||||||||||||
| Current assets: | ||||||||||||||
Cash and cash equivalents | $ | 166,275 | 99,412 | |||||||||||
Trade accounts receivable, net | 1,315,341 | 2,416,151 | ||||||||||||
AMD loan receivable | 2,108,924 | — | ||||||||||||
Inventories | 1,860,943 | 3,372,638 | ||||||||||||
Prepaid expenses and other current assets | 104,269 | 169,970 | ||||||||||||
Total current assets | 5,555,752 | 6,058,171 | ||||||||||||
| Property and equipment, net | 213,215 | 198,637 | ||||||||||||
| Right-of-use assets | 92,029 | 143,912 | ||||||||||||
| Deferred income taxes | 152,706 | 222,167 | ||||||||||||
| Security deposits and other noncurrent assets | 23,866 | 1,737 | ||||||||||||
Total assets | $ | 6,037,568 | 6,624,624 | |||||||||||
| Liabilities and Stockholders' Equity | ||||||||||||||
| Current liabilities: | ||||||||||||||
Accounts payable | $ | 1,442,060 | 2,803,180 | |||||||||||
Lease liabilities-short term | 21,360 | 28,806 | ||||||||||||
Accrued expenses and other current liabilities | 567,190 | 565,815 | ||||||||||||
Income tax payable | 14,484 | 18,687 | ||||||||||||
Total current liabilities | 2,045,094 | 3,416,488 | ||||||||||||
| Revolving credit facility | — | 106,217 | ||||||||||||
| Lease liabilities-long term | 82,770 | 130,601 | ||||||||||||
| Income tax payable | — | 66 | ||||||||||||
| Other noncurrent liabilities | 17,463 | 446,703 | ||||||||||||
Total liabilities | 2,145,327 | 4,100,075 | ||||||||||||
| Commitments and contingencies | ||||||||||||||
| Stockholders' equity: | ||||||||||||||
Common stock, no par value. Authorized 1,000 shares; 714 and 700 shares issued and outstanding at July 31, 2025 and July 31, 2024, respectively | 1,140 | 1,140 | ||||||||||||
Additional paid-in capital | 499,312 | 24,277 | ||||||||||||
Retained earnings | 3,398,108 | 2,509,006 | ||||||||||||
Accumulated other comprehensive loss | (6,319) | (9,874) | ||||||||||||
Total stockholders' equity | 3,892,241 | 2,524,549 | ||||||||||||
Total liabilities and stockholders' equity | $ | 6,037,568 | 6,624,624 | |||||||||||
See accompanying notes to consolidated financial statements.
3
ZT GROUP INT’L, INC.
Consolidated Statements of Income and Comprehensive Income
Years ended July 31, 2025 and 2024
(In thousands)
2025 | 2024 | |||||||||||||
| Net sales | $ | 10,899,934 | 12,474,554 | |||||||||||
| Cost of sales | 9,238,150 | 10,613,760 | ||||||||||||
Gross profit | 1,661,784 | 1,860,794 | ||||||||||||
| Selling, general and administrative expenses | 554,630 | 584,866 | ||||||||||||
Income from operations | 1,107,154 | 1,275,928 | ||||||||||||
| Other expense (income): | ||||||||||||||
Interest expense | 4,093 | 29,191 | ||||||||||||
Foreign currency transaction (gains) losses | (7,886) | 6,676 | ||||||||||||
Other, net | (47,400) | (17,753) | ||||||||||||
Total other expense | (51,193) | 18,114 | ||||||||||||
Income before income taxes | 1,158,347 | 1,257,814 | ||||||||||||
| Provision for income taxes | 251,245 | 200,414 | ||||||||||||
Net income | 907,102 | 1,057,400 | ||||||||||||
| Other comprehensive income (loss) | ||||||||||||||
Currency translation adjustment | 3,555 | (2,682) | ||||||||||||
Comprehensive income | $ | 910,657 | 1,054,718 | |||||||||||
See accompanying notes to consolidated financial statements.
4
ZT GROUP INT’L, INC.
Consolidated Statements of Changes in Stockholders’ Equity
Years ended July 31, 2025 and 2024
(In thousands)
| Accumulated other comprehensive income (loss) | ||||||||||||||||||||||||||||||||
| Common stock | Additional paid-in capital | Retained earnings | Currency translation adjustment | Total stockholders' equity | ||||||||||||||||||||||||||||
| Balance at July 31, 2023 | $ | 1,140 | 24,277 | 1,531,606 | (7,192) | 1,549,831 | ||||||||||||||||||||||||||
| Dividends paid to shareholders | — | — | (80,000) | — | (80,000) | |||||||||||||||||||||||||||
| Net income | — | — | 1,057,400 | — | 1,057,400 | |||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | (2,682) | (2,682) | |||||||||||||||||||||||||||
| Balance at July 31, 2024 | 1,140 | 24,277 | 2,509,006 | (9,874) | 2,524,549 | |||||||||||||||||||||||||||
| Dividends paid to shareholder | — | — | (18,000) | — | (18,000) | |||||||||||||||||||||||||||
| Share-based expense related to vendor arrangement | 8,778 | — | — | 8,778 | ||||||||||||||||||||||||||||
| Net income | — | — | 907,102 | — | 907,102 | |||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | 3,555 | 3,555 | |||||||||||||||||||||||||||
| Contribution from AMD for settlement of converted restricted stock units | — | 502,705 | — | — | 502,705 | |||||||||||||||||||||||||||
| Distribution to AMD | — | (36,448) | — | — | (36,448) | |||||||||||||||||||||||||||
| Balance at July 31, 2025 | $ | 1,140 | 499,312 | 3,398,108 | (6,319) | 3,892,241 | ||||||||||||||||||||||||||
See accompanying notes to consolidated financial statements.
5
ZT GROUP INT’L, INC.
Consolidated Statements of Cash Flows
Years ended July 31, 2025 and 2024
(In thousands)
2025 | 2024 | |||||||||||||
| Cash flows from operating activities: | ||||||||||||||
Net income | $ | 907,102 | 1,057,400 | |||||||||||
Adjustments to reconcile net income to net cash used in operating activities: | ||||||||||||||
Depreciation and amortization | 28,407 | 30,806 | ||||||||||||
Allowance for doubtful accounts | (5,258) | 926 | ||||||||||||
Share-based expense related to vendor arrangement | 8,778 | — | ||||||||||||
Settlement of restricted stock units | (533,781) | — | ||||||||||||
Losses on disposal of property and equipment | — | 1,921 | ||||||||||||
Deferred income taxes | 69,461 | (108,897) | ||||||||||||
Non-cash lease expense | 1,358 | 970 | ||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||
Trade accounts receivable | 1,104,478 | (296,897) | ||||||||||||
Inventories | 1,511,694 | (294,880) | ||||||||||||
Prepaid income taxes | 2,838 | 2,295 | ||||||||||||
Accounts payable | (1,361,096) | (335,118) | ||||||||||||
Income tax payable | (4,219) | 17,417 | ||||||||||||
Prepaid expenses, other current assets and other assets | 36,859 | (3,758) | ||||||||||||
Accrued expenses and other payables | 112,087 | 408,368 | ||||||||||||
Net cash provided by operating activities | 1,878,708 | 480,553 | ||||||||||||
| Cash flows from investing activities: | ||||||||||||||
Purchase of property and equipment | (65,862) | (147,548) | ||||||||||||
Advances to AMD | (2,108,924) | — | ||||||||||||
Net cash used in investing activities | (2,174,786) | (147,548) | ||||||||||||
| Cash flows from financing activities: | ||||||||||||||
Net repayments on credit facilities | (106,217) | (205,426) | ||||||||||||
Stock repurchases for tax withholding on employee equity plans | — | (9,926) | ||||||||||||
Proceeds from AMD for settlement of converted restricted stock units | 502,705 | — | ||||||||||||
Net distribution to AMD | (18,895) | — | ||||||||||||
Dividends paid to shareholder | (18,000) | (80,000) | ||||||||||||
Net cash provided by (used in) financing activities | 359,593 | (295,352) | ||||||||||||
| Effect of exchange rate changes on cash | 3,355 | (2,682) | ||||||||||||
Net (decrease) increase in cash, cash equivalents, and restricted cash | 66,870 | 34,971 | ||||||||||||
Cash, cash equivalents, and restricted cash – beginning of year | 99,620 | 64,649 | ||||||||||||
Cash, cash equivalents, and restricted cash – end of year | $ | 166,490 | 99,620 | |||||||||||
| Supplemental disclosure of cash flows information: | ||||||||||||||
Cash paid for interest | $ | 3,367 | 30,256 | |||||||||||
Cash paid for income taxes | 180,827 | 289,830 | ||||||||||||
6
ZT GROUP INT’L, INC.
Notes to Consolidated Financial Statements
July 31, 2025 and 2024
(1) Description of Business
ZT Group Int’l, Inc. (the Company) engages in the design, manufacture, marketing and sale of computer systems. The Company’s revenues are derived primarily from sales of advanced servers to data center operators in the United States, Europe, Brazil, and the Asia Pacific region. The Company’s principal operations are located in the state of New Jersey. The Company has operating subsidiaries in Brazil, India, Korea, Taiwan, China, Singapore, Hong Kong, Malaysia, Japan, Australia, Mexico, Israel, and the Netherlands.
On March 31, 2025, Advanced Micro Devices, Inc. (AMD) completed the acquisition (the Acquisition) of the Company. See Note 4 – Acquisition and Transfers to AMD for more information.
(2) Summary of Significant Accounting Policies
(a)Principles of Consolidation
The accompanying consolidated financial statements include the accounts of ZT Group Int’l, Inc. and its majority owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.
(b)Use of Estimates
The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include the allowance for doubtful accounts, warranty, stand-alone selling prices for products and/or services used in allocating the transaction price in certain customer contracts, variable consideration related to customer contracts in the form of volume rebates, inventory, share-based payments, and deferred income taxes, and reserves for income tax uncertainties and other contingencies.
(c)Revenue Recognition
Under FASB Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers, the Company recognizes revenue when goods or services are transferred to customers in an amount that reflects the consideration which it expects to receive in exchange for those goods or services. In determining when and how revenue is recognized from contracts with customers, ZT performs the following five-step analysis: (1) identification of contracts with customers; (2) determination of performance obligations; (3) measurement of the transaction price; (4) allocation of the transaction price to the performance obligations; and (5) recognition of revenue when (or as) we satisfy each performance obligation. The majority of the Company’s contracts include one performance obligation, however, there are certain customer contracts that include multiple performance obligations (product and product support services) and accordingly, the total transaction price is allocated to each performance obligation based on the estimated stand-alone selling prices.
7 (Continued)
ZT GROUP INT’L, INC.
Notes to Consolidated Financial Statements
July 31, 2025 and 2024
For product revenues, the Company transfers control to the customer at the time the product is delivered to the customer and recognizes revenues accordingly at a point in time. For bill-and-hold arrangements, the Company transfers control to the customer at the time the product is made available to the customer and cannot use the product for other customers. Revenue is reduced for volume rebates offered to customers which are considered variable consideration. The Company uses estimates to determine the expected variable consideration for such programs based on an evaluation of the contract terms, including rates and actual quantities delivered. Certain product revenue is recognized at a point in time on a net basis (net of certain component costs) as a result of an arrangement whereby the customer controls certain component parts that are used to assemble the finished good. Service revenues mainly consist of extended warranty services, product support services (provided on-site at customer’s location), and engineering services. For the extended warranty services and product support services, the customer simultaneously receives and consumes the benefits provided by the Company as the Company performs therefore, service revenue is recognized over time. For extended warranty contracts, as the Company’s efforts to fulfill the contract are even throughout the contract, revenue is recognized on a straight-line basis over the duration of the contract. For the product support services, the service commences upon the recognition of the product sales and is recognized using the straight-line method over the contractual period (generally one to three years) during which the support services are made available to the customer. For engineering services, which represent less than 1% of total revenue, revenue is generally recognized at a point in time based on the achievement of contractual milestones and customer acceptance. The Company is not entitled to any consideration until milestones are accepted by the customer, and the customer can generally cancel at any time for convenience.
Disaggregation of revenue is as follows (in thousands):
| 2025 | 2024 | |||||||||||||
| Product | $ | 10,360,344 | 11,986,598 | |||||||||||
| Service | 539,590 | 487,956 | ||||||||||||
Total net sales | $ | 10,899,934 | 12,474,554 | |||||||||||
The Company’s rights to consideration related to its customer contracts are unconditional and are presented as accounts receivable. The Company’s contract liabilities are recorded as either short-term deferred revenue in accrued expenses and other current liabilities or long-term deferred revenue in other noncurrent liabilities. Revenue recognized during the year ended July 31, 2025 that was included
8 (Continued)
ZT GROUP INT’L, INC.
Notes to Consolidated Financial Statements
July 31, 2025 and 2024
in the opening deferred revenue balance was $395.0 million. Activity related to deferred revenue for the years ended July 31, 2025 and 2024 are as follows (in thousands):
| 2025 | 2024 | |||||||||||||
| Deferred revenue in accrued expenses and other current liabilities: | ||||||||||||||
Opening balance | $ | 407,641 | 199,150 | |||||||||||
Additions | 440,427 | 590,626 | ||||||||||||
Revenue Recognized | (515,812) | (382,135) | ||||||||||||
Ending balance | $ | 332,256 | 407,641 | |||||||||||
| Deferred revenue in other noncurrent liabilities: | ||||||||||||||
Opening balance | $ | 64,308 | 60,374 | |||||||||||
Net, additions and reclassification to short-term | (56,985) | 3,934 | ||||||||||||
Ending balance | $ | 7,323 | 64,308 | |||||||||||
Sales taxes and value added taxes (VAT) that are collected from customers and remitted to government authorities are excluded from revenues. The Company recorded VAT assets of $25.7 million and VAT liabilities of $33.4 million as of July 31, 2025 and VAT assets of $134.9 million and VAT liabilities of $21.8 million as of July 31, 2024. The net VAT asset amounts due from and net VAT liabilities due to tax authorities are presented in prepaid expenses and other current assets and accrued expenses and other current liabilities in the consolidated balance sheets, respectively.
Shipping and handling activities are performed before the customer obtains control of the product and are therefore accounted for as a fulfillment cost. These costs, which are included in selling, general and administrative expenses, were $21.4 million and $20.2 million for the years ended July 31, 2025 and 2024, respectively.
(d)Cash and Cash Equivalents
Cash and cash equivalents consist of cash and highly liquid instruments purchased with an original maturity of three months or less.
The Company’s revolving credit facility requires that all collections be deposited, and all cash be maintained, in accounts subject to a lockbox arrangement that provides the credit facility lender a perfected security interest in all cash and the right to assert control of the Company’s cash in the event of a default under the facility.
(e)Restricted Cash
The Company classifies all cash whose use is limited by contractual provisions as restricted cash which is recorded as other noncurrent assets. Restricted cash consists of certificates of deposit to satisfy deposit requirements related to letters of credits for leases and purchases. Amount of outstanding standby letters of credit were $0.2 million as of July 31, 2025 and 2024, respectively.
9 (Continued)
ZT GROUP INT’L, INC.
Notes to Consolidated Financial Statements
July 31, 2025 and 2024
The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total of the same amounts shown in the consolidated statements of cash flows (in thousands):
| 2025 | 2024 | |||||||||||||
| Cash and cash equivalents | $ | 166,275 | 99,412 | |||||||||||
| Restricted cash included in other noncurrent assets | 215 | 208 | ||||||||||||
| Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows | $ | 166,490 | 99,620 | |||||||||||
(f)Accounts Receivable
Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The Company generally does not require collateral and its accounts receivable are not secured.
The Company maintains an allowance for doubtful accounts for estimated losses inherent in its accounts receivable portfolio. In establishing the required allowance, management considers historical losses adjusted to take into account current market conditions and the customers’ financial condition, the amount of receivables in dispute, and the current receivables aging and current payment patterns.
Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The allowance for uncollectible accounts was $5.0 million and $10.3 million as of July 31, 2025 and 2024, respectively.
The Company has an arrangement with a financial institution to sell trade receivables (the Receivable Sale Facility) on a selective and uncommitted basis. The financial institution has the right, but not the obligation to purchase. The receivables are sold without recourse to the Company and are therefore accounted for as true sales under ASC 860, Transfers and Servicing. Proceeds from the sales are reported as a component of the changes in trade accounts receivable within operating activities in the consolidated statement of cash flows. Losses incurred on the sales are recorded in interest expense in the consolidated statement of income and comprehensive income. The Company maintains servicing responsibilities of the receivables, for which the related costs are not significant.
Activity relating to the Receivable Sale Facility includes the following (in thousands):
| 2025 | 2024 | |||||||||||||
| Cash proceeds from the sale of receivables for the year ended July 31 | $ | — | 3,181,111 | |||||||||||
| Sold receivables outstanding at July 31 | — | 14,577 | ||||||||||||
| Loss on sale for the year ended July 31 | — | 20,979 | ||||||||||||
(g)Inventories
Inventories are stated at lower of cost or net realizable value. The company periodically reviews the value of items in inventory and provides write-downs of excess and obsolete inventory based on forecasted usage of sales, anticipated selling price, and anticipated recoverability from vendors through
10 (Continued)
ZT GROUP INT’L, INC.
Notes to Consolidated Financial Statements
July 31, 2025 and 2024
the return process. Write-downs are charged to cost of goods sold. Cost is determined on a weighted average basis. Inventory is comprised of the following as of July 31, 2025 and 2024 (in thousands):
| 2025 | 2024 | |||||||||||||
| Production materials | $ | 845,019 | 1,000,660 | |||||||||||
| Work-in-process | 110,309 | 123,259 | ||||||||||||
| Finished goods | 905,615 | 2,248,719 | ||||||||||||
Total inventory | $ | 1,860,943 | 3,372,638 | |||||||||||
(h)Property and Equipment
Property and equipment are stated at cost less accumulated depreciation. Significant additions, improvements, and replacements are treated as capital expenditures and are depreciated accordingly. Construction in progress represents uncompleted leasehold improvements. Construction in progress is not depreciated until it is placed into service. Depreciation is provided by the straight-line method over the estimated lives of the related assets as follows:
| Buildings and improvements | 39 years | ||||
| Leasehold improvements | shorter of useful life or remaining lease term | ||||
| Vehicles | 5 years | ||||
| Equipment and furniture | 3 to 5 years | ||||
| Software | 3 to 5 years | ||||
Property and equipment is comprised of the following at July 31, 2025 and 2024 (in thousands):
| 2025 | 2024 | |||||||||||||
| Leasehold improvements | $ | 73,780 | 89,327 | |||||||||||
| Land | 10,500 | 10,500 | ||||||||||||
| Building and improvements | 60,447 | 49,872 | ||||||||||||
| Vehicles | 674 | 817 | ||||||||||||
| Equipment and furniture | 44,688 | 69,058 | ||||||||||||
| Software | 11,369 | 11,916 | ||||||||||||
| Construction in progress | 86,970 | 70,214 | ||||||||||||
Property and equipment | 288,428 | 301,704 | ||||||||||||
| Accumulated depreciation | (75,213) | (103,067) | ||||||||||||
Property and equipment, net | $ | 213,215 | 198,637 | |||||||||||
(i)Leases
The Company has arrangements for the right to use certain of its office, warehouse spaces and equipment. The leases have remaining lease terms up through 2031 and many contain renewal options and/or termination provisions, but none of the leases contain residual value guarantees, restrictions or
11 (Continued)
ZT GROUP INT’L, INC.
Notes to Consolidated Financial Statements
July 31, 2025 and 2024
covenants on the lease contracts. All leases are classified as operating leases. For real estate leases with lease terms of more than 12 months, operating lease right-of-use (“ROU”) assets are recorded in right-of-use assets, short-term lease liabilities are recorded in lease liabilities-short term, and long-term lease liabilities are recorded in lease liabilities-long term on the consolidated balance sheet. The Company’s lease term includes options to extend or terminate the lease when it is reasonably certain that it will exercise that option. The Company elected to apply the practical expedient that allows short-term lease recognition exemption for leases with an initial term of 12 months or less and does not recognize ROU asset or lease liabilities and recognizes the monthly lease expense when incurred. The Company’s leases with an initial term of 12 months or less are immaterial.
Operating lease expense for the years ended July 31, 2025 and 2024 was $37.4 million and $39.5 million, respectively.
The ROU assets and lease liabilities as of July 31, 2025 and 2024 are as follows (in thousands):
| 2025 | 2024 | |||||||||||||
| Right-of-use assets | $ | 92,029 | 143,912 | |||||||||||
| Lease liabilities-short term | 21,360 | 28,806 | ||||||||||||
| Lease liabilities-long term | 82,770 | 130,601 | ||||||||||||
The operating lease expense includes lease and non-lease components, such as common area maintenance and real estate taxes. Total operating lease expense is as follows (in thousands):
| 2025 | 2024 | |||||||||||||
| Fixed lease expense | $ | 30,511 | 32,650 | |||||||||||
| Variable lease expense | 6,868 | 6,811 | ||||||||||||
Total | $ | 37,379 | 39,461 | |||||||||||
Supplemental cash flow information related to operating leases is as follows (in thousands):
| 2025 | 2024 | |||||||||||||
| Cash paid for operating lease liabilities, net of lease incentives | $ | 29,419 | 32,063 | |||||||||||
12 (Continued)
ZT GROUP INT’L, INC.
Notes to Consolidated Financial Statements
July 31, 2025 and 2024
As of July 31, 2025, maturities of the Company’s operating lease liabilities are as follows (in thousands):
| Year ended: | ||||||||
2026 | $ | 23,821 | ||||||
2027 | 23,679 | |||||||
2028 | 19,643 | |||||||
2029 | 15,079 | |||||||
2030 | 13,469 | |||||||
Thereafter | 15,856 | |||||||
| Total future lease payments | 111,547 | |||||||
| Less: imputed interest | (7,417) | |||||||
| Present value of operating lease liabilities | $ | 104,130 | ||||||
As of July 31, 2025, the weighted average remaining lease term for operating leases was 5.75 years and the weighted average discount rate was 2.66%.
(j)Impairment of Long-Lived Assets
Long-lived assets, such as property, plant, and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the carrying value of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying value exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values, and third-party independent appraisals, as considered necessary.
(k)Income Taxes
Income taxes are accounted for under the asset and liability method. The income tax provision in the Company’s consolidated financial statements has been calculated using the separate return method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the
13 (Continued)
ZT GROUP INT’L, INC.
Notes to Consolidated Financial Statements
July 31, 2025 and 2024
period in which the change in judgment occurs. The Company records interest related to unrecognized tax benefits in interest expense and penalties in income tax expense.
(l)Commitments and Contingencies
Liabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred.
(m)Research and Development Costs
Research and development costs are expensed as incurred. Research and development costs are included in selling, general and administrative expense, and were $226.4 million and $238.2 million for the years ended July 31, 2025 and 2024, respectively. Research and development costs are primarily comprised of wages, supplies and materials used in research and development projects.
(n)Advertising
Costs associated with advertising are expensed as incurred and reflected within selling, general and administrative expense.
(o)Vendor Rebates
The Company may receive rebates and other consideration from vendors in the normal course of business. These refunds are primarily rebates of purchase price paid. The Company recognizes a reduction of cost of goods sold and inventory if the funds represent a reduction of the price of the vendor’s products.
(p)Foreign Currency
The Company’s reporting currency is the US dollar. The functional currency of the Company’s foreign subsidiaries are their respective local currencies, as it is the monetary unit of account of the principal economic environment in which the Company’s foreign subsidiaries operate. All assets and liabilities of the foreign subsidiaries are translated at the current exchange rate as of the end of the period, and revenue and expenses are translated at average exchange rates in effect during the period. The gain or loss resulting from the process of translating foreign currency financial statements into US dollars is reflected as a foreign currency translation adjustment and reported as a component of accumulated other comprehensive income (loss). Foreign currency transaction gains and losses resulting from transactions denominated in a currency other than the functional currency are recognized in other income or expense in the consolidated statements of income and comprehensive income.
(q)Fair Value
The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements,
14 (Continued)
ZT GROUP INT’L, INC.
Notes to Consolidated Financial Statements
July 31, 2025 and 2024
the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels:
•Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date.
•Level 2 Inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.
•Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date.
The recorded amounts of the Company’s cash and cash equivalents, trade accounts receivable, AMD loan receivable, accounts payable and accrued expenses and other current liabilities approximate their fair values principally because of their short-term nature. The recorded amount of the Company’s revolving credit facility approximates its fair value as it is based upon variable benchmark interest rates.
(r)Product Warranties
The Company provides a three year warranty on the majority of its products. Estimated future warranty costs are accrued and charged to cost of goods sold in the period that the related revenue is recognized. These estimates are derived from historical data, expected recoveries from component vendors and trends of product reliability and costs of repairing and replacing defective products.
(s)Share-Based Compensation
The Company recognizes all share-based compensation as a cost in the consolidated financial statements. Liability-classified awards are initially measured at the grant date fair value of the award and are remeasured to fair value at each reporting date. The Company estimates grant date fair value using a combination of discounted cash flow and income approaches to first determine enterprise value and then calculates a grant date fair value per share which includes a discount for lack of marketability.
(3) Concentrations of Business and Credit Risk
Substantially all of the Company’s revenues and accounts receivable are derived from sales to data center operators. The Company had two customers that represented approximately 90.6% and 96.5% of consolidated revenues for the years ended July 31, 2025 and 2024, respectively. Net Sales and accounts receivable from these customers were as follows (in thousands):
| 2025 | 2024 | |||||||||||||
| Net Sales for the year ended July 31 | $ | 9,869,922 | 12,041,567 | |||||||||||
| Accounts receivable as of July 31 | 1,202,436 | 2,319,745 | ||||||||||||
The Company purchased approximately 89.4% and 90% of its inventory from six suppliers during the years ended July 31, 2025 and 2024, respectively.
15 (Continued)
ZT GROUP INT’L, INC.
Notes to Consolidated Financial Statements
July 31, 2025 and 2024
The Company maintains cash and cash equivalents at various financial institutions which at times may exceed federally insured amounts. Management believes that the credit risk associated with its cash and cash equivalents is limited. Consequently, the Company’s ability to sell and collect the amounts due from customers is affected by economic fluctuations in the industry.
(4) Acquisition and Transfers to AMD
On March 31, 2025 (the Closing Date), AMD completed the acquisition (the Acquisition) of one hundred percent of the common shares of the Company in exchange for cash and equity consideration valued at $4.4 billion as of the Closing Date.
At the time of the announcement of AMD’s acquisition of the Company in August 2024, AMD disclosed its intent to retain only certain intellectual property and employees (the Design Business) and divest the Company’s data center infrastructure manufacturing business (the Manufacturing Business). Accordingly, after the Acquisition, the Company transferred its Design Business equity interests, employees, and assets to AMD Design, LLC, a subsidiary of AMD. The transfer of Design Business equity interests, employees, and assets was considered a common control transaction and was measured at historical cost as a distribution to AMD in stockholders’ equity. The consolidated financial statements as of and for the year ended July 31, 2025, include the financial position and results of operations of the Design Business through March 31, 2025. Following the Acquisition and prior to July 31, 2025, approximately 1,000 employees were transferred from the Company to AMD.
The following table summarizes the carrying amounts of Design Business assets and liabilities transferred to AMD (in thousands):
| Cash | $ | 18,895 | ||||||
| Prepaid expenses and other assets | 41,801 | |||||||
| Property and equipment, net | 22,877 | |||||||
| Accounts payable, accrued expenses and other liabilities | (47,125) | |||||||
Net liabilities transferred to AMD | $ | 36,448 | ||||||
On April 14, 2025, the Company paid $18 million of dividends to AMD in cash.
Pending Sale of Manufacturing Business
On May 18, 2025, AMD entered into an Equity Purchase Agreement with Sanmina Corporation for the sale of the Manufacturing Business. Sanmina Corporation will purchase the Manufacturing Business from AMD for $3.0 billion - inclusive of (a) $2.4 billion in cash, (b) $150 million in Sanmina Corporation stock, and (c) an additional consideration of up to $450 million, contingent upon the achievement of certain performance milestones, and subject to customary adjustments for working capital and other items.
16 (Continued)
ZT GROUP INT’L, INC.
Notes to Consolidated Financial Statements
July 31, 2025 and 2024
(5) Related Party Transactions
AMD Revolving Line of Credit
On March 31, 2025, the Company entered into an Intercompany Revolving Line of Credit Agreement (AMD Revolver) with AMD, whereby the Company agreed to loan up to $3.0 billion to AMD for general corporate purposes. Advances to AMD bear interest at the Secured Overnight Financing Rate (SOFR) plus a margin as agreed to between the Company and AMD. As of July 31, 2025, the receivable from AMD was $2.1 billion, which was recorded as AMD Loan Receivable in the consolidated balance sheet. During the year ended July 31, 2025, the Company earned interest income from the AMD Loan Receivable of $26 million recorded within other, net in the consolidated statements of income and comprehensive income.
Cost Recharge Agreement
On March 31, 2025, the Company entered into a Cost Recharge Agreement with AMD Design, LLC, whereby either party will reimburse the other party for certain third-party costs incurred on its behalf. The costs incurred by either party and outstanding amounts payable were immaterial for the year ended July 31, 2025.
Maintenance and Support Services and Design Services
On June 24, 2025, the Company entered into a Maintenance and Support Services Agreement (Support Services Agreement) and a Design Services Agreement with AMD, whereby the Company will retain the services of Design Business employees who were transferred to AMD to continue to perform maintenance, support and design services for certain customers. During the year ended July 31, 2025, the Company recorded $45 million of maintenance and support service fees within Cost of Sales and $1.5 million of design service fees within Sales, general and administrative expenses under these agreements. The Company has $45 million of unpaid service fees under these agreements recorded within Accounts Payable in the consolidated balance sheet as of July 31, 2025.
(6) Revolving Credit Facility
The Company has a revolving credit facility that provides for general working capital loans including letters of credit, and can be used to finance inventory purchases from certain of the Company’s vendors (financed inventory), the total of which cannot exceed the maximum borrowing amount or borrowing base. The maximum borrowing available under the revolving credit facility which expires on December 31, 2026 is $641.7 million. The borrowing base is limited to the sum of i) 85% of eligible accounts receivable, ii) 100% of financed inventory, and iii) the lesser of eligible accounts receivable or 85% of the liquidation value of the cost of inventory not financed, and then minus the aggregate amount of reserves established by the banks. Borrowings in the form of financed inventory purchases provide the Company with extended payment due dates as compared to inventory purchases settled directly with the vendors. Amounts owed for financed inventory purchases can be paid by the Company on the extended payment due date or settled through loans on the revolving facility. As of July 31, 2025 and 2024, the amount outstanding under the revolving facility was $0 million and $106.2 million, respectively, including no outstanding advance and
17 (Continued)
ZT GROUP INT’L, INC.
Notes to Consolidated Financial Statements
July 31, 2025 and 2024
no outstanding advance related to financed inventory as of July 31, 2025 and July 31, 2024, respectively. Borrowings and repayments under the revolving credit facility were as follows (in thousands):
| Year Ended July 31 | |||||||||||||||||
| 2025 | 2024 | ||||||||||||||||
| Opening balance | $ | 106,217 | 311,643 | ||||||||||||||
Borrowings | 8,760,684 | 15,641,667 | |||||||||||||||
Repayments | (8,866,901) | (15,847,093) | |||||||||||||||
| Ending balance | $ | — | 106,217 | ||||||||||||||
For the period August 1, 2024 through July 31, 2025, borrowings under the revolving credit facility bear interest, payable on a monthly basis, calculated at the one month SOFR rate plus a spread ranging from 1.50% to 2.00%, depending on the average excess availability during the month. The interest rate applicable to the revolving credit facility as of July 31, 2025 and 2024 was 5.93% and 7.19%, respectively.
As of July 31, 2025 and 2024, the Company has outstanding standby letters of credit issued in the amount of approximately $2.7 million and $3.0 million, respectively, under the revolving credit facility. The revolving facility requires the Company to maintain a maximum funded debt to tangible net worth of 3.0 to 1.0, a minimum fixed charge coverage ratio of 1.10 to 1.0, and a tangible net worth equal to at least $500 million. The revolving facility is secured by substantially all of the Company’s assets, pursuant to a collateral agreement entered into with the collateral agent, subject to certain customary exceptions including intellectual property. As a result of the Acquisition in March 2025, the Company no longer has a covenant requirement.
(7) Income Taxes
For the years ended July 31, 2025 and 2024, income before income taxes consists of the following (in thousands):
| 2025 | 2024 | |||||||||||||
| U.S. operations | $ | 1,146,520 | 1,254,747 | |||||||||||
| Foreign operations | 11,827 | 3,067 | ||||||||||||
| $ | 1,158,347 | 1,257,814 | ||||||||||||
18 (Continued)
ZT GROUP INT’L, INC.
Notes to Consolidated Financial Statements
July 31, 2025 and 2024
Income tax expense attributable to income from continuing operations consists of (in thousands):
| Current | Deferred | Total | ||||||||||||||||||
| Year ended July 31, 2025: | ||||||||||||||||||||
U.S. federal | $ | 164,033 | 64,020 | 228,053 | ||||||||||||||||
State and local | 12,736 | 5,415 | 18,151 | |||||||||||||||||
Foreign | 5,015 | 26 | 5,041 | |||||||||||||||||
| $ | 181,784 | 69,461 | 251,245 | |||||||||||||||||
| Current | Deferred | Total | ||||||||||||||||||
| Year ended July 31, 2024: | ||||||||||||||||||||
U.S. federal | $ | 289,333 | (100,396) | 188,937 | ||||||||||||||||
State and local | 17,429 | (8,809) | 8,620 | |||||||||||||||||
Foreign | 2,697 | 160 | 2,857 | |||||||||||||||||
| $ | 309,459 | (109,045) | 200,414 | |||||||||||||||||
Income tax expense differed from amounts computed by applying the statutory U.S. federal income tax rate for the years ended July 31, 2025 and 2024 of 21%, respectively, to pretax income as a result of the following (in thousands):
| 2025 | 2024 | |||||||||||||
| Computed expected income tax expense | $ | 243,253 | 264,225 | |||||||||||
| Increase (reduction) in income taxes resulting from: | ||||||||||||||
State and local income taxes | 15,304 | 15,310 | ||||||||||||
Foreign tax rate differential | 857 | 42 | ||||||||||||
Federal tax true-up and R&D Credit | (5,916) | (15,973) | ||||||||||||
Permanent items and other | (4,819) | (63,190) | ||||||||||||
Dividend withholding tax | 2,566 | — | ||||||||||||
Total income tax expense | $ | 251,245 | 200,414 | |||||||||||
19 (Continued)
ZT GROUP INT’L, INC.
Notes to Consolidated Financial Statements
July 31, 2025 and 2024
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at July 31, 2025 and 2024 are presented below (in thousands):
| 2025 | 2024 | |||||||||||||
| Deferred tax assets: | ||||||||||||||
Accruals and reserves not currently deductible | $ | 91,293 | 68,537 | |||||||||||
Lease liabilities | 22,587 | 32,793 | ||||||||||||
Share based payments and warrant | — | 92,896 | ||||||||||||
Deferred compensation | 4,358 | 284 | ||||||||||||
Unrealized foreign currency losses | 596 | 574 | ||||||||||||
Foreign tax credit | 377 | 35 | ||||||||||||
Unearned revenue | 5,347 | 13,445 | ||||||||||||
Net research and development capitalization | 54,698 | 51,226 | ||||||||||||
Total gross deferred tax assets | 179,256 | 259,790 | ||||||||||||
| Deferred tax liabilities: | ||||||||||||||
Depreciation | (6,650) | (8,207) | ||||||||||||
Right-of-use assets | (19,900) | (29,416) | ||||||||||||
Total gross deferred tax liabilities | (26,550) | (37,623) | ||||||||||||
Net deferred tax assets | $ | 152,706 | 222,167 | |||||||||||
In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that all or some portion of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities (including the effect of available carryback and carryforward periods), projected future taxable income, and tax-planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, management believes it is more likely than not that the Company will realize the benefits of these deductible differences as of July 31, 2025. The amount of the deferred tax asset considered realizable, however, could be reduced in the near term if estimates of future taxable income during the carryforward period are reduced.
The Tax Cuts and Jobs Act (“TCJA”) amended Section 174 relating to the federal tax treatment of research and experimental (R&E) expenditures paid or incurred for the Company’s tax year ended July 31, 2025. The new Section 174 rules require taxpayers to capitalize and amortize specified R&E expenditures over a period of five years for domestic expenditures or 15 years for foreign expenditures, beginning with the midpoint of the taxable year in which the expenses are paid or incurred. For fiscal year ended July 31, 2025, the Company capitalized and amortized R&E expenditures for tax purposes in accordance with the new rules.
20 (Continued)
ZT GROUP INT’L, INC.
Notes to Consolidated Financial Statements
July 31, 2025 and 2024
The Company follows the provisions of accounting standard codification (ASC) 740-10, Accounting for Uncertainty in Income Taxes which prescribes a comprehensive model for how a company should recognize, measure, present and disclose in its financial statements uncertain tax positions that the company has taken or expects to take on an income tax return. The Company has no unrecognized tax benefits as of July 31, 2025. The Company’s policy is to record estimated interest and penalties related to the underpayment of income taxes or unrecognized tax benefits as a component of the income tax provision.
The Company files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. For U.S. federal income tax purposes, open years subject to examination are tax years 2020 and beyond. For state income tax purposes, the open tax years subject to examination are tax years 2019 and beyond. For the Company’s foreign entities, open years subject to tax examination are tax years 2018 and beyond.
(8) Contingencies
The Company is involved in various claims and legal actions arising in the ordinary course of business. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the Company’s consolidated financial position, results of operations, or liquidity.
(9) Employee Retirement Benefit
The Company provides a Profit Sharing Contribution Plan (the Plan) that covers substantially all of its employees who have attained the age of 21. The Plan provides for discretionary contributions by the Company. For the years ended July 31, 2025 and 2024, the Company made contributions of $8.6 million and $8.4 million to the Plan, respectively, recorded in selling, general and administrative expenses in the accompanying consolidated statements of income and comprehensive income. On March 28, 2025, the Plan was terminated as a result of the Acquisition, and all employees were given the option to enroll in the AMD Retirement Savings Plan.
(10) Share-Based Payments and Warrants
The Company grants restricted shares to employees. The awards vest over a required service period (generally, annually over four years) and are restricted from sale or transfer by the award holder until such time as a sale of the Company occurs that involves a change in control. The Company recognizes compensation expense for restricted stock awards on a straight-line basis over the required requisite service period and classifies these awards as liability-classified awards because of historical repurchases made by the Company in cash. Accordingly, the liability for these awards is revalued to estimated fair value at the end of each reporting period. The expense related to restricted shares during the years ended July 31, 2025 and 2024 was $146.0 million and $175.5 million, respectively, $137.7 million and $164.0 million of which is recorded in selling, general and administrative expense as of July 31, 2025 and 2024 and $8.3 million and $11.5 million of which is recorded in cost of sales as of July 31, 2025 and 2024, respectively, in the consolidated statements of income and comprehensive income. The Company paid $26.5 million in cash to repurchase vested restricted shares during the year ended July 31, 2024.
21 (Continued)
ZT GROUP INT’L, INC.
Notes to Consolidated Financial Statements
July 31, 2025 and 2024
After the Acquisition, all of the restricted awards with a change-in-control provision vested in their entirety. On March 31, 2025, $502.7 million of outstanding awards were cancelled and converted into the right to receive a portion of the Acquisition closing consideration and all were settled and funded by the proceeds of the Acquisition. On April 11, 2025, the remaining $31.1 million of outstanding awards were settled in cash by the Company, as funded by AMD through an intercompany loan. As of July 31, 2025, there is no liability for outstanding awards.
The liability for outstanding awards as of July 31, 2024, which is a level 3 measurement, was $390.4 million, of which $13.0 million was recorded in accrued expenses and other current liabilities and $377.4 million was recorded in other noncurrent liabilities as of July 31, 2024, in the consolidated balance sheets.
A summary of the fair value measurements using significant unobservable Level 3 inputs as of July 31, 2025 and 2024, and changes during the years ended, are presented below (in millions):
| 2025 | 2024 | |||||||||||||
| Opening balance | $ | 390.4 | 241.4 | |||||||||||
| Change in the liability for outstanding awards | 146.0 | 175.5 | ||||||||||||
| Converted or settled upon Acquisition | (533.8) | — | ||||||||||||
| Cancelled and converted to Cash Award | (2.6) | — | ||||||||||||
| Repurchase of awards | — | (26.5) | ||||||||||||
| Ending balance | $ | — | 390.4 | |||||||||||
| Total expense related to outstanding awards | $ | 146.0 | 175.5 | |||||||||||
A summary of the Company’s outstanding share-based payment awards as of July 31, 2025 and 2024, and changes during the years ended, are presented below:
| 2025 | 2024 | |||||||||||||
| Outstanding share award activity: | ||||||||||||||
Outstanding awards at beginning of year | 118 | 126 | ||||||||||||
Granted | 16 | 4 | ||||||||||||
Converted or settled upon Acquisition | (119) | — | ||||||||||||
Repurchased | — | (12) | ||||||||||||
Cancelled and converted to Cash Award | (15) | — | ||||||||||||
Outstanding awards at end of year | — | 118 | ||||||||||||
Vested awards outstanding at end of year | — | 101 | ||||||||||||
A warrant to purchase up to 79 shares of the Company’s common stock at a price of $62,857 per share, subject to adjustment for certain dilutive issuances was outstanding as of July 31, 2024 and was due to expire in December 2028. This warrant was equity-classified and the grant-date fair value was previously
22 (Continued)
ZT GROUP INT’L, INC.
Notes to Consolidated Financial Statements
July 31, 2025 and 2024
recorded in periods prior to fiscal year 2021. Upon close of the Acquisition on March 31, 2025, the warrant would have become exercisable due to the change in control which resulted in an in-substance performance condition that fully vested the award. On March 21, 2025, pursuant to a warrant acknowledgement and joinder agreement, the warrant holders agreed to cancel the warrant immediately prior to consummation of the Acquisition, in exchange for a pro rata commensurate portion of the Acquisition consideration.
A warrant to purchase up to 14 shares of the Company’s common stock at a price of $0.01 per was outstanding as of July 31, 2024. In connection with the closing of the Acquisition, the warrant automatically exercised pursuant to its terms, and the warrant holder was issued shares of common stock of the Company, which were subsequently sold, assigned and transferred to AMD in exchange for a pro rata portion of the Acquisition consideration. Due to this event, the associated grant-date fair value of the warrants of $8.7 million was recognized within cost of sales in the consolidated statements of income and comprehensive income for the year ended July 31, 2025.
(11) Subsequent Event
The Company has evaluated all subsequent events through October 6, 2025, the date the financial statements were available to be issued.
22
Exhibit 99.2
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
On May 18, 2025, Sanmina Corporation ("Sanmina" or the “Company”) entered into an Equity Purchase Agreement (the “Purchase Agreement”) with ZT Group Int’l, Inc. (“ZT”), AMD Design, LLC, a Delaware limited liability company and wholly owned subsidiary of AMD (the “Seller”) and owner of 100% of the equity interests of ZT, and Advanced Micro Devices, Inc., a Delaware corporation (“AMD”). On October 27, 2025 (the “Closing Date”), pursuant to the Purchase Agreement, the Company completed its acquisition of all of the equity interests of ZT.
The aggregate consideration paid at the Closing Date consisted of (i) $1.7 billion of cash consideration paid, after purchase agreement adjustments for closing cash, closing indebtedness, closing expenses and net working capital relative to a target amount as provided in the Purchase Agreement and (ii) 1,151,052 shares of Sanmina common stock issued from treasury stock and outstanding, representing an aggregate value of $155.3 million, determined based on per share price of $134.96, the closing price of Sanmina’s common stock on the Closing Date. The Seller is also eligible to receive up to $450 million in contingent cash consideration upon the achievement of certain financial metrics during the three-year period following the closing.
The transaction will be accounted for as a business combination in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) (pursuant to Accounting Standards Codification Topic 805, Business Combinations), with Sanmina treated as the “acquirer” and ZT treated as the “acquired” company for financial reporting purposes. Sanmina will control ZT as it will beneficially own 100% of the outstanding shares of ZT common stock. The unaudited pro forma condensed combined financial information was prepared in accordance with the acquisition method of accounting. Under the acquisition method of accounting, the purchase price is allocated to the identifiable tangible and intangible assets acquired and liabilities assumed based on their respective estimated fair values with any excess purchase price allocated to goodwill. Significant estimates and assumptions were used in determining the preliminary purchase price and the preliminary purchase price allocation reflected in the unaudited pro forma condensed combined financial information. The process of valuing the net assets of ZT immediately prior to the business combination for purposes of presentation within this unaudited pro forma condensed combined financial information is preliminary. As the unaudited pro forma condensed combined financial information have been prepared based on these preliminary estimates, the final amounts recorded may differ materially from the information presented.
On May 18, 2025, Sanmina entered into a commitment letter with Bank of America, N.A. and BofA Securities, Inc., which provided, among other things, a senior secured 364-day bridge loan facility in an aggregate principal amount of up to $2.5 billion (the “Bridge Facility”), which was intended to be available to Sanmina to finance, together with other sources of funds, the consideration and related expenses under the transaction in the event that Sanmina has not obtained other permanent financing prior to the Closing Date.
In connection with the transaction, a Credit Agreement (as amended from time to time, the “Credit Agreement”) was entered into by and among the Company, as the initial borrower, one of its subsidiaries named therein as a guarantor, Bank of America, N.A., as administrative agent and swing line lender, and the banks and other financial institutions party thereto from time to time as lenders (and in certain cases, as letter of credit issuers as well). The Credit Agreement also includes the ability to add wholly owned subsidiaries of the Company as additional borrowers from time to time, subject to certain documentary requirements in the Credit Agreement. The Credit Agreement provides for committed senior secured credit facilities in an aggregate principal amount of $3.5 billion (the “Credit Facilities”), consisting of a $1.5 billion revolving credit facility and a $2.0 billion term loan A facility. In addition, on October 27, 2025, the Company executed an amendment to increase the Credit Facilities to include an $800 million term loan B facility (the “Amendment”). To finance the cash portion of the acquisition and to settle all outstanding amounts under the Fifth Amended and Restated Credit Agreement, dated as of September 27, 2022, as amended (the “Existing Credit Agreement”), the Company simultaneously drew $1.4 billion under the term loan A facility and the full $800 million under the term loan B facility. Concurrently on the Closing Date, the Existing Credit Agreement was fully repaid and the Bridge Facility was terminated in its entirety.
Further, on October 25, 2025, in connection with the execution of the Purchase Agreement, ZT entered into a settlement agreement (the “AMD Receivable Settlement”) with AMD to settle the existing related party receivable balance prior to the Closing Date of the transaction.
The unaudited pro forma condensed combined financial information set forth below give effect to the Purchase Agreement, the Credit Agreement and the Amendment, and the AMD Receivable Settlement. The financial information has been prepared in accordance with Article 11 of Regulation S-X, as amended, and should be read in conjunction with the accompanying notes to the unaudited pro forma condensed combined financial information.
The unaudited pro forma condensed combined financial information was derived from and should be read in conjunction with:
•The separate historical audited consolidated financial statements of Sanmina for the fiscal year ended September 27, 2025, included in Sanmina’s Annual Report on Form 10-K filed with the SEC on November 13, 2025; and
•The separate historical audited consolidated financial statements of ZT for the fiscal years ended July 31, 2025 and 2024 included in Exhibit 99.1 in the Form 8-K/A filed with the SEC on January 12, 2026.
The following unaudited pro forma condensed combined financial information presents the unaudited pro forma condensed combined balance sheet as of September 27, 2025 and the unaudited pro forma condensed combined statement of income for the fiscal year ended September 27, 2025. The unaudited pro forma condensed combined financial information includes the historical results of Sanmina and ZT, after giving pro forma effect to the acquisition of ZT as described in the following paragraphs and accompanying notes.
The unaudited pro forma condensed combined financial information is provided for illustrative purposes only and does not purport to represent what the actual consolidated results of income or consolidated financial condition would have been had the ZT acquisition actually occurred on September 27, 2025 for the balance sheet, or September 29, 2024 for the statement of income, nor does it purport to project the future consolidated results of income or consolidated financial condition for any future period or as of any future date. Under accounting for business combinations, the assets and liabilities of ZT are required to be recorded at their respective fair values as of the date of the acquisition, October 27, 2025 (the “Acquisition Date”). Sanmina has performed the preliminary fair valuation of ZT’s assets and liabilities. The fair values are subject to adjustment for up to one year after the close of the transaction as additional information is obtained. The unaudited pro forma adjustments are based upon available information and certain assumptions that the Company believes are reasonable under the circumstances. Actual results may differ materially from the assumptions within the accompanying unaudited pro forma condensed combined financial information. All pro forma adjustments and their underlying assumptions are described more fully in the notes to the unaudited pro forma condensed combined financial information.
The unaudited pro forma condensed combined financial information does not reflect any expected cost savings, operating synergies or revenue enhancements that the combined company may achieve as a result of the transaction or the costs necessary to achieve any such cost savings, operating synergies or revenue enhancements.
| Unaudited Pro Forma Condensed Combined Balance Sheet | |||||||||||||||||||||||||||||||||||
| As of September 27, 2025 | |||||||||||||||||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||||||||||||||
| Historical | Pro Forma | ||||||||||||||||||||||||||||||||||
| Sanmina as of September 27, 2025 Reclassified | ZT as of July 31, 2025 Reclassified | Transaction Accounting Adjustments | Note 5 | Financing Adjustments | AMD Receivable Settlement | Pro Forma Combined | |||||||||||||||||||||||||||||
| Note 3 | Note 6 | Note 7 | |||||||||||||||||||||||||||||||||
| ASSETS | |||||||||||||||||||||||||||||||||||
Current assets: | |||||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 926,267 | $ | 166,275 | $ | (1,650,970) | (a) | $ | 1,867,962 | $ | — | $ | 1,309,534 | ||||||||||||||||||||||
Accounts receivable, net | 1,400,129 | 1,315,341 | (90,305) | (d) | — | — | 2,625,165 | ||||||||||||||||||||||||||||
Contract assets | 425,944 | — | — | — | — | 425,944 | |||||||||||||||||||||||||||||
| AMD loan receivable | — | 2,108,924 | — | — | (2,108,924) | — | |||||||||||||||||||||||||||||
| Inventories | 1,988,462 | 1,860,943 | (58,088) | (d),(g) | — | — | 3,791,317 | ||||||||||||||||||||||||||||
Prepaid expenses and other current assets | 124,656 | 104,269 | — | (4,574) | — | 224,351 | |||||||||||||||||||||||||||||
Total current assets | 4,865,458 | 5,555,752 | (1,799,363) | 1,863,388 | (2,108,924) | 8,376,311 | |||||||||||||||||||||||||||||
Property, plant and equipment, net | 682,354 | 213,215 | 23,515 | (e) | — | — | 919,084 | ||||||||||||||||||||||||||||
| Goodwill | 30,386 | — | 273,785 | (c) | — | — | 304,171 | ||||||||||||||||||||||||||||
Deferred income tax assets | 171,218 | 152,706 | 14,174 | (i) | — | — | 338,098 | ||||||||||||||||||||||||||||
| Other | 108,757 | 115,895 | 52,000 | (c),(f) | — | — | 276,652 | ||||||||||||||||||||||||||||
Total assets | 5,858,173 | 6,037,568 | (1,435,889) | 1,863,388 | (2,108,924) | 10,214,316 | |||||||||||||||||||||||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||||||||||||||||||||||||||
Current liabilities: | |||||||||||||||||||||||||||||||||||
Accounts payable | 1,578,895 | 1,442,060 | (249,947) | (d) | — | — | 2,771,008 | ||||||||||||||||||||||||||||
Accrued liabilities | 179,605 | 220,187 | 89,713 | (d),(f),(h),(i) | (4,574) | — | 484,931 | ||||||||||||||||||||||||||||
| Deferred revenue and customer advances | 878,474 | 332,256 | 188,503 | (d) | — | — | 1,399,233 | ||||||||||||||||||||||||||||
Accrued payroll and related benefits | 167,541 | 50,591 | — | — | — | 218,132 | |||||||||||||||||||||||||||||
Short-term debt, including current portion of long-term debt | 17,500 | — | — | 68,500 | — | 86,000 | |||||||||||||||||||||||||||||
Total current liabilities | 2,822,015 | 2,045,094 | 28,269 | 63,926 | — | 4,959,304 | |||||||||||||||||||||||||||||
Long-term liabilities: | |||||||||||||||||||||||||||||||||||
Long-term debt | 282,974 | — | — | 1,798,061 | — | 2,081,035 | |||||||||||||||||||||||||||||
| Other | 214,021 | 100,233 | 207,086 | (a),(d),(f) | — | — | 521,340 | ||||||||||||||||||||||||||||
Total long-term liabilities | 496,995 | 100,233 | 207,086 | 1,798,061 | — | 2,602,375 | |||||||||||||||||||||||||||||
Stockholders' equity: | — | ||||||||||||||||||||||||||||||||||
| Preferred stock | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Common stock | 534 | 1,140 | (1,128) | (a),(b) | — | — | 546 | ||||||||||||||||||||||||||||
Treasury stock, at cost | (1,896,367) | — | 90,898 | (a) | — | — | (1,805,469) | ||||||||||||||||||||||||||||
Additional paid-in capital | 6,641,698 | 499,312 | (434,875) | (a),(b) | — | — | 6,706,135 | ||||||||||||||||||||||||||||
| Accumulated other comprehensive income | 69,620 | (6,319) | 6,319 | (b) | — | — | 69,620 | ||||||||||||||||||||||||||||
| Accumulated deficit | (2,461,579) | 3,398,108 | (1,332,458) | (b),(h) | 1,401 | (2,108,924) | (2,503,452) | ||||||||||||||||||||||||||||
Noncontrolling interest | 185,257 | — | — | — | — | 185,257 | |||||||||||||||||||||||||||||
Total stockholders' equity | 2,539,163 | 3,892,241 | (1,671,244) | 1,401 | (2,108,924) | 2,652,637 | |||||||||||||||||||||||||||||
Total liabilities and stockholders' equity | $ | 5,858,173 | $ | 6,037,568 | $ | (1,435,889) | $ | 1,863,388 | $ | (2,108,924) | $ | 10,214,316 | |||||||||||||||||||||||
See accompanying notes to unaudited pro forma condensed combined financial information.
| Unaudited Pro Forma Condensed Combined Statement of Income | |||||||||||||||||||||||||||||||||||
| Year ended September 27, 2025 | |||||||||||||||||||||||||||||||||||
| (In thousands, except per share data) | |||||||||||||||||||||||||||||||||||
| Historical | Pro Forma | ||||||||||||||||||||||||||||||||||
| Sanmina year ended September 27, 2025 | ZT year ended July 31, 2025 Reclassified | Transaction Accounting Adjustments | Note 5 | Financing Adjustments | AMD Receivable Settlement | Pro Forma Combined | |||||||||||||||||||||||||||||
| Note 3 | Note 6 | Note 7 | |||||||||||||||||||||||||||||||||
Net sales | $ | 8,128,382 | $ | 10,899,934 | $ | 89,109 | (j) | $ | — | $ | — | $ | 19,117,425 | ||||||||||||||||||||||
Cost of sales | 7,412,025 | $ | 9,238,150 | 301,065 | (k) | — | — | 16,951,240 | |||||||||||||||||||||||||||
Gross profit | 716,357 | 1,661,784 | (211,956) | — | — | 2,166,185 | |||||||||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||||||||||
| Selling, general and administrative | 290,221 | 554,630 | (365,940) | (l) | — | — | 478,911 | ||||||||||||||||||||||||||||
Research and development | 31,087 | — | — | — | — | 31,087 | |||||||||||||||||||||||||||||
| Acquisition and integration charges | 34,162 | — | 43,274 | (m) | 1,396 | — | 78,832 | ||||||||||||||||||||||||||||
Restructuring | 6,319 | — | — | — | — | 6,319 | |||||||||||||||||||||||||||||
Total operating expenses | 361,789 | 554,630 | (322,666) | 1,396 | — | 595,149 | |||||||||||||||||||||||||||||
Operating income | 354,568 | 1,107,154 | 110,710 | (1,396) | — | 1,571,036 | |||||||||||||||||||||||||||||
| Interest income | 15,855 | 49,992 | — | — | (25,988) | 39,859 | |||||||||||||||||||||||||||||
| Interest expense | (20,151) | (4,177) | — | (111,273) | — | (135,601) | |||||||||||||||||||||||||||||
| Other income (expense), net | (10,844) | 5,378 | (29) | (n) | — | — | (5,495) | ||||||||||||||||||||||||||||
Interest and other, net | (15,140) | 51,193 | (29) | (111,273) | (25,988) | (101,237) | |||||||||||||||||||||||||||||
Income before income taxes | 339,428 | 1,158,347 | 110,681 | (112,669) | (25,988) | 1,469,799 | |||||||||||||||||||||||||||||
Provision for income taxes | 73,168 | 251,245 | 23,243 | (o) | (23,661) | (5,457) | 318,538 | ||||||||||||||||||||||||||||
Net income before noncontrolling interest | 266,260 | 907,102 | 87,438 | (89,008) | (20,531) | 1,151,261 | |||||||||||||||||||||||||||||
| Less: Net income attributable to noncontrolling interest | 20,367 | — | — | — | — | 20,367 | |||||||||||||||||||||||||||||
| Net income attributable to common shareholders | $ | 245,893 | $ | 907,102 | $ | 87,438 | $ | (89,008) | $ | (20,531) | $ | 1,130,894 | |||||||||||||||||||||||
Net income attributable to common shareholders per share: | (p) | ||||||||||||||||||||||||||||||||||
| Basic | $ | 4.56 | 20.53 | ||||||||||||||||||||||||||||||||
| Diluted | $ | 4.46 | 20.08 | ||||||||||||||||||||||||||||||||
Weighted-average shares used in computing per share amounts: | (p) | ||||||||||||||||||||||||||||||||||
| Basic | 53,947 | 55,098 | |||||||||||||||||||||||||||||||||
| Diluted | 55,178 | 56,329 | |||||||||||||||||||||||||||||||||
See accompanying notes to unaudited pro forma condensed combined financial information.
Note 1. Basis of Preparation
The accompanying unaudited pro forma condensed combined financial information was prepared in accordance with Article 11 of SEC Regulation S-X. Sanmina has a 52-to-53-week fiscal year that ends on the Saturday nearest September 30 and ZT has a fiscal calendar year that ends on July 31. To comply with SEC rules and regulations for companies with different fiscal year ends, the unaudited pro forma condensed combined financial information has been prepared utilizing periods that differ by less than one fiscal quarter.
The unaudited pro forma condensed combined balance sheet as of September 27, 2025 was prepared using the historical audited consolidated balance sheets of Sanmina and ZT as of September 27, 2025 and July 31, 2025, respectively, and presents the unaudited pro forma combined financial position of Sanmina and ZT as if the acquisition occurred on September 27, 2025.
The unaudited pro forma condensed combined statement of income for the fiscal year ended September 27, 2025 gives effect to the acquisition as if it had occurred on September 29, 2024, the beginning of Sanmina’s fiscal 2025 year. The unaudited pro forma condensed combined statement of income is presented on the basis of Sanmina’s fiscal year and combines the historical results of the fiscal periods of Sanmina and ZT.
The unaudited pro forma condensed combined financial information has been prepared using the acquisition method of accounting in accordance with the provisions of Accounting Standards Codification (“ASC”) Topic 805, Business Combinations, with Sanmina representing the acquirer under this guidance. In the unaudited pro forma condensed combined balance sheet, Sanmina’s purchase consideration associated with the ZT acquisition has been allocated to the assets acquired and liabilities assumed, based upon their respective preliminary estimates of fair values as of the Acquisition Date. Any excess of the purchase consideration over the fair value of identified tangible and intangible assets acquired and liabilities assumed is recognized as goodwill. Management believes the preliminary estimates of fair values utilized for the assets acquired and liabilities assumed are based on reasonable estimates and assumptions. These preliminary valuations of assets acquired, and liabilities assumed are determined using the market, income, and cost approaches from the perspective of a market participant, which requires estimates and assumptions including, but not limited to, estimating future cash flows in addition to developing the appropriate market discount rates and obtaining available market pricing for comparable assets. Preliminary fair value estimates may change as additional information becomes available and such changes could be material, as certain valuations and other studies have yet to progress to a stage where there is sufficient information for definitive measurement, including inventory, property, plant and equipment, identifiable intangible assets and their related tax impact. The preliminary estimates of fair values are subject to adjustment for up to one year after the close of the transaction as additional information is obtained. As a result, management may identify differences that, when finalized, could have a material impact on the unaudited pro forma condensed combined financial information.
Note 2. Significant Accounting Policies
The accounting policies used in the preparation of this unaudited pro forma condensed combined financial information are those set out in Sanmina’s audited financial statements as of and for the year ended September 27, 2025. Management has included certain reclassification and policy alignment adjustments for consistency in presentation as indicated in the subsequent notes (see Note 4 for further details).
Note 3. Reclassifications
The Sanmina and ZT historical consolidated financial statement line items include the reclassification of certain historical balances to conform to the expected post-combination Sanmina presentation of these unaudited pro forma condensed combined financial information, as described below. These reclassifications have no effect on previously reported total assets, total liabilities, stockholders’ equity or net income available to common shareholders of Sanmina or ZT.
Balance Sheet as of September 27, 2025
The carrying amount of Sanmina’s historical goodwill of $30.4 million, previously classified as a component of Other assets has been reclassified to a newly presented financial statement line item, Goodwill, on Sanmina’s historical reclassified consolidated balance sheet.
The following reclassification adjustments were made to conform the presentation of ZT’s financial information to Sanmina’s presentation as indicated in the tables below:
| As of July 31, 2025 | ||||||||||||||||||||
| Sanmina Presentation | ZT Presentation | ZT Unadjusted Historical | Reclassification Adjustments | ZT Adjusted Historical | ||||||||||||||||
| (In thousands) | ||||||||||||||||||||
| ASSETS | ASSETS | |||||||||||||||||||
| Current assets: | Current assets: | |||||||||||||||||||
| Cash and cash equivalents | Cash and cash equivalents | $ | 166,275 | $ | — | $ | 166,275 | |||||||||||||
| Accounts receivable, net | Trade accounts receivable, net | 1,315,341 | — | 1,315,341 | ||||||||||||||||
| Contract assets | — | — | — | |||||||||||||||||
| AMD Loan Receivable | 2,108,924 | — | 2,108,924 | |||||||||||||||||
| Inventories | Inventories | 1,860,943 | — | 1,860,943 | ||||||||||||||||
| Prepaid expenses and other current assets | Prepaid expenses and other current assets | 104,269 | — | 104,269 | ||||||||||||||||
| Total current assets | Total current assets | 5,555,752 | — | 5,555,752 | ||||||||||||||||
| Property, plant and equipment, net | Property and equipment, net | 213,215 | — | 213,215 | ||||||||||||||||
Right-of-use assets | 92,029 | (92,029) | (a) | — | ||||||||||||||||
| Deferred income tax assets | Deferred income taxes | 152,706 | — | 152,706 | ||||||||||||||||
| Security deposits and other noncurrent assets | 23,866 | (23,866) | (b) | — | ||||||||||||||||
| Other | — | 115,895 | (a),(b) | 115,895 | ||||||||||||||||
| Total assets | Total assets | 6,037,568 | — | 6,037,568 | ||||||||||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||||||||||
| Current liabilities: | Current liabilities: | |||||||||||||||||||
| Accounts payable | Accounts payable | 1,442,060 | — | 1,442,060 | ||||||||||||||||
Lease liabilities-short term | 21,360 | (21,360) | (c) | — | ||||||||||||||||
Accrued expenses and other current liabilities | 567,190 | (567,190) | (d) | — | ||||||||||||||||
| Income tax payable | 14,484 | (14,484) | (c) | — | ||||||||||||||||
| Accrued liabilities | — | 220,187 | (c),(d) | 220,187 | ||||||||||||||||
| Deferred revenue and customer advances | — | 332,256 | (d) | 332,256 | ||||||||||||||||
| Accrued payroll and related benefits | — | 50,591 | (d) | 50,591 | ||||||||||||||||
| Total current liabilities | Total current liabilities | 2,045,094 | — | 2,045,094 | ||||||||||||||||
| Long-term liabilities: | Long-term liabilities: | |||||||||||||||||||
| Lease liabilities-long term | 82,770 | (82,770) | (e) | — | ||||||||||||||||
| Other | Other noncurrent liabilities | 17,463 | 82,770 | (e) | 100,233 | |||||||||||||||
| Total long-term liabilities | Total long-term liabilities | 100,233 | — | 100,233 | ||||||||||||||||
| Stockholders' equity: | Stockholders' equity: | |||||||||||||||||||
| Common stock | Common stock | 1,140 | — | 1,140 | ||||||||||||||||
| Additional paid-in capital | Additional paid-in capital | 499,312 | — | 499,312 | ||||||||||||||||
| Accumulated deficit | Retained earnings | 3,398,108 | — | 3,398,108 | ||||||||||||||||
| Accumulated other comprehensive income | Accumulated other comprehensive loss | (6,319) | — | (6,319) | ||||||||||||||||
| Total stockholders' equity | Total stockholders' equity | 3,892,241 | — | 3,892,241 | ||||||||||||||||
| Total liabilities and stockholders' equity | Total liabilities and stockholders' equity | $ | 6,037,568 | $ | — | $ | 6,037,568 | |||||||||||||
(a) Represents the reclassification of Right-of-use assets to Other assets.
(b) Represents the reclassification of Security deposits and other noncurrent assets to Other assets.
(c) Represents the reclassification of Lease liabilities-short term and Income tax payable to Accrued liabilities.
(d) Represents the reclassification of Accrued expenses and other current liabilities to the following captions:
| Sanmina Presentation | ZT Amount | ||||
| (In thousands) | |||||
| Accrued liabilities | $ | 184,343 | |||
| Deferred revenue and customer advances | 332,256 | ||||
| Accrued payroll and related benefits | 50,591 | ||||
| $ | 567,190 | ||||
(e) Represents the reclassification of Lease liabilities-long term to Other assets.
Statement of Income for the Fiscal Year Ended September 27, 2025
| For the Year ended July 31, 2025 | ||||||||||||||||||||
| Sanmina Presentation | ZT Presentation | ZT Unadjusted Historical | Reclassification Adjustments | ZT Adjusted Historical | ||||||||||||||||
| (In thousands) | ||||||||||||||||||||
| Net sales | Net sales | $ | 10,899,934 | $ | — | $ | 10,899,934 | |||||||||||||
| Cost of sales | Cost of sales | 9,238,150 | — | 9,238,150 | ||||||||||||||||
| Gross profit | Gross profit | 1,661,784 | — | 1,661,784 | ||||||||||||||||
| Selling, general and administrative | Selling, general and administrative expenses | 554,630 | — | 554,630 | ||||||||||||||||
| Income from operations | 1,107,154 | — | 1,107,154 | |||||||||||||||||
| Other expense (income): | ||||||||||||||||||||
| Interest income | — | 49,992 | (f) | 49,992 | ||||||||||||||||
| Interest expense | Interest expense | (4,093) | (84) | (f) | (4,177) | |||||||||||||||
| Foreign currency transaction (gains) losses | 7,886 | (7,886) | (g) | — | ||||||||||||||||
| Other income (expense), net | Other, net | 47,400 | (42,022) | (f) | 5,378 | |||||||||||||||
| Interest and other, net | Total other expense | 51,193 | — | 51,193 | ||||||||||||||||
| Income before income taxes | Income before income taxes | 1,158,347 | — | 1,158,347 | ||||||||||||||||
| Provision for income taxes | Provision for income taxes | 251,245 | — | 251,245 | ||||||||||||||||
| Net income before noncontrolling interest | Net income | $ | 907,102 | $ | — | $ | 907,102 | |||||||||||||
(f) Represents the reclassification of certain amounts of Other, net to the following captions:
| Sanmina Presentation | ZT Amount | ||||
| (In thousands) | |||||
| Interest income | $ | 49,992 | |||
| Interest expense | (84) | ||||
| Other income (expense), net | (2,508) | ||||
| $ | 47,400 | ||||
(g) Represents the reclassification of Foreign currency transaction (gains) losses to Other income (expense), net.
Note 4. Purchase Consideration and Allocation
Purchase Consideration
The fair value of the purchase consideration of approximately $1.9 billion includes (i) the cash paid to the AMD stockholders at the closing, (ii) the fair value of 1,151,052 shares of Sanmina stock issued from treasury stock to the AMD stockholders at closing, and (iii) the estimated fair value of the contingent earnout consideration. The contingent earnout consideration is based upon the achievement of certain gross profit and revenue metrics during the three-year period following the Closing Date. As of the Closing Date, the fair value of the contingent cash consideration was estimated to be $111.0 million based on a probability-weighted income approach valuation model, which uses significant unobservable inputs. The estimated range of undiscounted payment in respect of the contingent consideration from no payout to $450.0 million. The calculation of the purchase consideration is as follows:
| Consideration Transferred | |||||
| (In thousands) | |||||
| Cash paid | $ | 1,650,970 | |||
| Common stock issued at fair value | 155,346 | ||||
| Contingent earnout consideration | 111,000 | ||||
| Total consideration transferred | $ | 1,917,316 | |||
Preliminary Purchase Price Allocation
Under the acquisition method of accounting, the identifiable assets acquired and liabilities assumed of ZT are recorded at their fair values as of the Acquisition Date and added to those of Sanmina. The purchase price allocation shown below is based on preliminary estimates of the fair value and useful lives of the assets acquired and liabilities assumed and has been prepared to illustrate the estimated effect of the acquisition. The preliminary estimates of fair values are subject to adjustment for up to one year after the close of the transaction as additional information is obtained. As a result, management may identify differences that, when finalized, could have a material impact on the unaudited pro forma condensed combined financial information.
The following table sets forth the preliminary allocation of the total purchase consideration to the identifiable tangible and intangible assets acquired and liabilities assumed, as if the transaction occurred on September 27, 2025, with excess recorded as goodwill:
| Allocation of Purchase Price | |||||
| (In thousands) | |||||
| Cash and cash equivalents | $ | 166,275 | |||
| Accounts receivable, net | 1,225,036 | ||||
| Inventories | 1,802,855 | ||||
| Prepaid expenses and other current assets | 104,269 | ||||
| Total current assets acquired | 3,298,435 | ||||
| Property, plant and equipment, net | 236,730 | ||||
| Intangible assets, net | 51,000 | ||||
| Deferred income tax assets | 166,880 | ||||
| Other | 116,895 | ||||
| Total assets acquired (a) | 3,869,940 | ||||
| Accounts payable | 1,192,113 | ||||
| Accrued liabilities | 266,626 | ||||
| Deferred revenue and customer advances | 520,759 | ||||
| Accrued payroll and related benefits | 50,591 | ||||
| Total short-term liabilities assumed | 2,030,090 | ||||
| Other | 196,319 | ||||
| Total long-term liabilities assumed | 196,319 | ||||
| Total liabilities assumed (b) | $ | 2,226,409 | |||
| Net assets acquired (c) = (a) – (b) | 1,643,531 | ||||
| Total consideration transferred (d) | 1,917,316 | ||||
| Goodwill (d) – (c) | $ | 273,785 | |||
Goodwill represents the excess of acquisition consideration over the fair value of the underlying net assets acquired. In accordance with ASC 350, Goodwill and Other Intangible Assets, goodwill is not amortized, but instead is reviewed for impairment at least annually, absent any indicators of impairment. Goodwill is attributable to the assembled workforce of ZT and synergies expected to be achieved from the combined income of Sanmina and ZT. Goodwill recorded in the acquisition is not deductible for tax purposes.
The fair value adjustments are further described below in Note 5.
Intangible Assets
Identifiable intangible assets in the unaudited pro forma condensed combined financial information consist of the following:
| Fair Value | Average Estimated Remaining Useful Life | Pro Forma Amortization Expense per Year | |||||||||
| (In thousands) | (In years) | (In thousands) | |||||||||
| Trademark / Trade Name | $ | 4,000 | 1 | $ | 4,000 | ||||||
| Customer Relationships | 31,000 | 10 | 3,123 | ||||||||
| Internally Developed Software | 16,000 | 5 | 3,200 | ||||||||
| $ | 51,000 | $ | 10,323 | ||||||||
The preliminary estimate of fair value for all identifiable intangible assets is based on assumptions that market participants would use in pricing an asset, based on the most advantageous market for the asset (i.e., its highest and best use).
Intangible assets are included within Other assets in the unaudited pro forma condensed combined balance sheet The amortization related to the identifiable intangible assets is reflected as a pro forma adjustment in the unaudited pro forma condensed combined statement of income based on the estimated useful lives above using straight-line amortization.
Note 5. Transaction Accounting Adjustments
Balance Sheet
The following summarizes the transaction adjustments to give effect as if the transaction had been completed on September 27, 2025 for the purposes of the unaudited pro forma condensed combined balance sheet.
(a) Represents consideration transferred to acquire ZT; refer to Note 4. Other liabilities is adjusted to include the fair value of the contingent consideration of $111.0 million. The common stock consideration of $155.3 million issued from treasury stock is included within Common stock ($12 thousand), Treasury stock, at cost ($90.9 million), and Additional paid-in capital ($64.4 million).
(b) Represents the elimination of the historical ZT equity represented by the following components:
| Amount | |||||
| (In thousands) | |||||
| Common stock | $ | (1,140) | |||
| Additional paid-in capital | (499,312) | ||||
| Accumulated other comprehensive loss | 6,319 | ||||
| Accumulated deficit | (1,289,184) | ||||
| $ | (1,783,317) | ||||
The adjustment to accumulated deficit includes the removal of ZT’s historical retained earnings and an additional removal following the adjustment for the AMD Receivable Settlement; refer to Note 7.
(c) Represents the preliminary recognition of $273.8 million of goodwill and $51.0 million of identifiable intangible assets attributable to the transaction; refer to Note 4.
(d) Represents a policy adjustment affecting multiple balances to align revenue recognition and related balances with ASC 606, Revenue from Contracts with Customers requirements under the acquirer’s accounting policies.
| Amount | ||||||||
| (In thousands) | ||||||||
| Accounts receivable, net | $ | (90,305) | (1) | |||||
| Inventories | (107,088) | (1)(2) | ||||||
| Total assets | (197,393) | |||||||
| Accounts payable | (249,947) | (1) | ||||||
| Accrued liabilities | (14,191) | (2) | ||||||
| Deferred revenue and customer advances | 188,503 | (2) | ||||||
| Other liabilities | 102,086 | (2) | ||||||
| Total liabilities | 26,451 | |||||||
| Total assets and liabilities | $ | (223,845) | ||||||
(1) Represents the removal of balances associated with components bought from a customer where ZT is considered the agent in the transaction.
(2) Represents the establishment of deferred revenue related to services considered a separate performance obligation under Sanmina’s policy. The services were considered assurance warranties in the historical financial statements of
ZT and the associated current and noncurrent warranty accruals included in Accounts payable and Other liabilities were removed.
(e) Represents the fair value step up adjustment of $23.5 million to existing property, plant and equipment consisting of the following:
| Fair Value Step Up | |||||
| (In thousands) | |||||
| Land and buildings | $ | 7,835 | |||
| Furniture and fixtures | 512 | ||||
| Machinery and equipment | 4,760 | ||||
| Leasehold improvements | 10,408 | ||||
| $ | 23,515 | ||||
(f) Represents an increase of $1.0 million to Other assets, increase of $2.0 million to Accrued liabilities, and decrease of $6.0 million to Other liabilities to remeasure acquired ROU assets, lease liabilities short-term, and lease liabilities long-term, respectively.
(g) Represents the fair value step up adjustment of $49.0 million to existing inventories.
(h) Represents the accrual of non-recurring transaction costs of $43.3 million for acquisition consulting services related to the transaction. The non-recurring transaction costs are expected to be incurred within 3 months from the consummation of the transaction.
(i) Represents an adjustment of $14.2 million to Deferred income tax assets associated with incremental differences in book and tax basis created from the preliminary purchase price allocation, primarily related to the preliminary inventory fair value adjustment and the preliminary acquired identifiable intangible assets that are not tax-deductible. The adjustment additionally includes an increase of $58.6 million to Accrued liabilities related to a tax refund owed to AMD.
Statement of Income
The following summarizes the transaction adjustments to give effect as if the transaction had been completed on September 29, 2024 for the purposes of the unaudited pro forma condensed combined statement of income.
(j) Represents an increase of $98.8 million to align revenue recognition and related balances with ASC 606, Revenue from Contracts with Customers requirements under the acquirer’s accounting policies. The increase relates to additional revenue recognized during the period related to services considered a separate performance obligation for the acquired business, previously considered an assurance warranty. The adjustment is offset by the removal of $9.7 million of revenue related to ZT’s non-manufacturing business; refer to Note 5(n).
(k) Represents the following adjustments to Cost of sales:
| Amount | ||||||||
| (In thousands) | ||||||||
| Intangible assets amortization | $ | 3,200 | (1) | |||||
| ASC 606 policy adjustment | (2,098) | (2) | ||||||
| Property, plant, and equipment fair value step-up | 3,413 | (3) | ||||||
| Inventory fair value step-up | 49,000 | (4) | ||||||
| Removal of ZT non-manufacturing business | (35,720) | (5) | ||||||
| Cost of sales policy adjustment | 120,027 | (6) | ||||||
| AMD reimbursement adjustment | 151,644 | (7) | ||||||
| Maintenance and supporting services agreement adjustment | 11,600 | (8) | ||||||
| $ | 301,065 | |||||||
(1) Represents the recognition of $3.2 million for amortization pertaining to purchased intangibles recognized as part of the transaction.
(2) Represents a decrease of $2.1 million to align revenue recognition and related balances with ASC 606, Revenue from Contracts with Customers requirements under the acquirer’s accounting policies; refer to Note 5(j).
(3) Represents an adjustment of $3.4 million for the incremental depreciation expense relating to the estimated step-up in fair value of property, plant and equipment. Depreciation expense is determined using a straight-line methodology over an estimated useful life of 30 years for buildings, 9 years for machinery, equipment, furniture and fixtures, and 4 years for leasehold improvements.
(4) Represents an adjustment to cost of sales of $49.0 million from the run-off of the estimated step-up in fair value of inventory acquired as the existing inventory is expected to be sold within one year of the transaction.
(5) Represents the removal of ZT’s non-manufacturing business; refer to Note 5(n).
(6) Represents a policy adjustment to reclassify $120.0 million of expenses related to platform and field services engineering, manufacturing overhead, and outbound freight expenses recorded to Selling, general and administrative in accordance with ZT’s accounting policy within ZT’s historical statement of income to Cost of sales. The recording of these specific expenses to Cost of sales aligns to Sanmina’s accounting policy.
(7) Following AMD’s sale of ZT to Sanmina, ZT retained certain revenue contracts, but had previously entered into a separate arrangement to reimburse AMD for services provided by non-acquired personnel under those contracts. This adjustment reflects a Cost of sales increase of $151.6 million to reflect the impact of the reimbursement under the revenue sharing agreement with AMD as if the cost had been incurred throughout the pro forma statement of income period.
(8) In connection with AMD’s previous acquisition of ZT, ZT entered into a maintenance and support services agreement and a design services agreement with AMD, whereby ZT will retain the services of the former design business employees who were transferred to AMD to continue to perform maintenance, support and design services for certain customers. Following AMD’s sale of ZT to Sanmina, under the terms of the Transition Services Agreement, AMD agreed to provide sustained research and development support services to ZT. This adjustment reflects an increase of $11.6 million to Cost of sales and decrease of $1.0 million to Selling, general and administrative to reflect the impact as if this cost was incurred throughout the pro forma statement of income period.
(l) Represents the following adjustments to Selling, general and administrative expenses:
| Amount | ||||||||
| (In thousands) | ||||||||
| Intangible assets amortization | $ | 7,123 | (1) | |||||
| Removal of ZT non-manufacturing business | (252,070) | (2) | ||||||
| Cost of sales policy adjustment | (120,027) | (3) | ||||||
| Maintenance and supporting services agreement adjustment | (967) | (4) | ||||||
| $ | (365,940) | |||||||
(1) Represents the recognition of $7.1 million for amortization pertaining to purchased intangibles recognized as part of the transaction.
(2) Represents the removal of ZT’s non-manufacturing business; refer to Note 5(n).
(3) Refer to Note 5(k)(6).
(4) Refer to Note 5(k)(8).
(m) Represents the accrual of non-recurring transaction costs of $43.3 million related to the transaction. These costs are expected to be incurred within 3 months from the consummation of the transaction.
(n) Sanmina acquired all of ZT’s net assets and substantially all of ZT’s operations included in ZT’s historical statement of income. ZT transferred the net assets of its non-manufacturing business to AMD prior to ZT’s July 31, 2025 balance sheet date. No balance sheet adjustments are needed due to this transfer prior to the transaction. The adjustment represents the statement of income carve out of ZT's non-manufacturing business that was not acquired by the Company as part of the transaction. The unaudited carve out financial information is derived from the accounting records of ZT.
| Year ended September 27, 2025 | |||||
| (In thousands) | |||||
| Net sales | $ | (9,664) | |||
| Cost of sales | (35,720) | ||||
| Gross profit | 26,056 | ||||
| Selling, general and administrative | (252,070) | ||||
| Operating income | 278,126 | ||||
| Other income (expense), net | 29 | ||||
| Net income | $ | 278,155 | |||
(o) Represents a $23.2 million adjustment to Provision for income taxes for transaction adjustments, based on the statement of income impact above and statutory rate of approximately 21%. The effective tax rate of the combined company could be significantly different than what is presented in these unaudited pro forma condensed combined financial information depending on post-transaction activities, including legal entity restructuring, repatriation decisions, and the geographical mix of taxable income.
(p) The pro forma basic and diluted weighted average shares outstanding are a combination of historic and weighted average shares of Sanmina common stock and issuance of shares in connection with the transaction. The pro forma basic and diluted earnings per share are as follows:
| Year ended September 27, 2025 | |||||
| (In thousands, except per share data) | |||||
| Net income attributable to the Company | $ | 245,893 | |||
| Net Income attributable to ZT | 907,102 | ||||
| Pro Forma adjustments to net income attributable to the Company | (22,101) | ||||
| Pro Forma net income attributable to the Company | 1,130,894 | ||||
| Weighted-average shares used in computing per share amounts - basic | 53,947 | ||||
| Share issuance for equity consideration | 1,151 | ||||
| Pro Forma weighted-average shares used in computing per share amounts - basic | $ | 55,098 | |||
| Effect of dilutive stock options and restricted stock options | 1,231 | ||||
| Pro Forma Weighted-average shares used in computing per share amounts - diluted | $ | 56,329 | |||
| Pro Forma basic net income per share | $ | 20.53 | |||
| Pro Forma diluted net income per share | $ | 20.08 | |||
Note 6. Financing Adjustments
In connection with the acquisition of ZT, Sanmina entered into a credit agreement with Bank of America, N.A., as administrative agent, and other lenders. The agreement provided Sanmina with $1,400 million under the term loan A facility and $800 million under the term loan B facility. The proceeds from the new term loan were used to repay the term loan under Sanmina's prior credit agreement. Sanmina made adjustments to the unaudited pro forma condensed combined financial information as described below.
Balance Sheet
The following summarizes the financing adjustments to give effect as if the financing had been completed on September 27, 2025 for the purposes of the unaudited pro forma condensed combined balance sheet.
| Financing Adjustments | ||||||||
| (In thousands) | ||||||||
| Cash and cash equivalents | $ | 1,867,962 | (a) | |||||
| Prepaid expenses and other current assets | (4,574) | (c) | ||||||
| Total assets | 1,863,388 | |||||||
| Accrued liabilities | (4,574) | (c) | ||||||
| Short-term debt, including current portion of long-term debt | 68,500 | (b) | ||||||
| Long-term debt | 1,798,061 | (b) | ||||||
Total liabilities | 1,861,987 | |||||||
| Accumulated deficit | 1,401 | (b) | ||||||
Total liabilities and stockholders' equity | 1,863,388 | |||||||
(a) Represents the repayment of the existing term loan and the proceeds from the issuance of the new term loan A facility and term loan B facility obtained by Sanmina for a period of 5 years and 7 years, respectively, net of related debt issuance costs.
| Amount | |||||
| (In thousands) | |||||
| Term loan A facility | $ | 1,400,000 | |||
| Term loan B facility | 800,000 | ||||
| Total principal - term loan A facility and term loan B facility | 2,200,000 | ||||
| Debt issuance costs | (30,163) | ||||
| Total term loan A facility and term loan B facility, net of issuance costs (a) | 2,169,837 | ||||
| Current portion of existing term loan | 17,500 | ||||
| Non-current portion of existing term loan | 284,375 | ||||
| Total principal of existing term loan (b) | 301,875 | ||||
| Total adjustment to debt (a) – (b) | $ | 1,867,962 | |||
(b) Represents the short-term and long-term debt impact from the (i) repayment of the old term loan and the remaining unamortized debt issuance costs, and (ii) the proceeds from the issuance of the new term loan A facility and term loan B facility and the associated debt issuance costs incurred, as outlined in (a) above. The short-term portion represents the payments expected in next 12 months for the term loan A facility and term loan B facility, as outlined in the Credit Agreement and the Amendment.
(c) As of September 27, 2025, debt issuance costs of $4.6 million were capitalized to prepaid expenses for the new term loan A facility and term loan B facility prior to the debt being closed and issued. A $4.6 million reduction of accrued liabilities reverses the impact of this capitalization. All debt issuance costs have been fully capitalized via the addition of new debt adjustment above, and all debt issuance costs are assumed paid, so the accrued liabilities have been reduced accordingly.
Statement of Income
The following summarizes the financing adjustments to give effect as if the financing had been completed on September 29, 2024 for the purposes of the unaudited pro forma condensed combined statement of income.
| Financing Adjustments | ||||||||
| (In thousands) | ||||||||
| Acquisition and integration charges | $ | 1,396 | (a) | |||||
| Interest expense | (111,273) | (b) | ||||||
Provision for income taxes | (23,661) | (c) | ||||||
Adjustment to net income before noncontrolling interest | $ | 89,008 | ||||||
(a) Reflects the pro forma adjustment for debt financing expenses comprised of ticking fees and agency fees for the year ended September 27, 2025.
(b) Reflects the pro forma adjustment for interest and amortization expense for the term loan A facility and B facility of $133.8 million offset by the write-off of the interest and amortization expense of $22.5 million from the prior credit agreement. The interest expense of $128.3 million is comprised of $80.4 million for the term loan A facility and $47.9 million for the term loan B facility based on assumed interest rates of 5.74% and 5.99%, respectively, and the amortized issuance costs are $5.5 million for the year ended September 27, 2025. The interest rate is variable based on the Secured Overnight Finance Rate. A change in interest rate of 0.125% would have a $2.8 million impact on net income.
(c) Represents an adjustment of $23.7 million to Provision for income taxes for financing adjustments, based on the statement of income impact above and statutory rate of approximately 21%. The effective tax rate of the combined company could be significantly different than what is presented in these unaudited pro forma condensed combined financial information depending on post-transaction activities, including legal entity restructuring, repatriation decisions, and the geographical mix of taxable income.
Note 7. AMD Receivable Settlement
In connection with the acquisition of ZT, ZT entered into the AMD Receivable Settlement to settle the existing related party receivable balance prior to the Closing Date of the transaction.
Within the unaudited pro forma condensed combined balance sheet, the $2.1 billion related party receivable related to the AMD Receivable Settlement was eliminated.
Further, an adjustment of $26.0 million was included in the unaudited pro forma condensed combined statement of income to remove the interest income previously recognized in ZT’s historical consolidated financial statements. This decrease to interest income is offset by a $5.5 million decrease to Provision for income taxes for financing adjustments, based on a statutory rate of approximately 21%. The effective tax rate of the combined company could be significantly different than what is presented in these unaudited pro forma condensed combined financial information depending on post-transaction activities, including legal entity restructuring, repatriation decisions, and the geographical mix of taxable income.