Sanmina Corp 8-K, filed Nov 9, 2026
Sanmina Corp (SANM)
8-K
2026-11-09
For: 2026-10-27
View Original
Added on
November 09, 2026
About this 8-K
Sanmina Corp filed this 8-K on November 9, 2026, reporting on events of October 27, 2026.
Sanmina reported fiscal 2026 revenue of $14.53 billion and non-GAAP diluted EPS of $13.28. It added $70 million of term loans and extended major facilities to October 28, 2031. AI summary
Items reported
- Item 2.02: Financial results
- Item 8.01: Other events
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of
the Securities Exchange Act of 1934
( October 27, 2026 )
Date of Report (date of earliest event reported)
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation) | (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 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On November 9, 2026, Sanmina Corporation (the “Company”) issued the press release attached as Exhibit 99.1 announcing unaudited financial results for its fiscal quarter ended October 3, 2026.
The information set forth in this Item 2.02, including the exhibit hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section. In addition, the information in this Item 2.02 shall not be incorporated by reference into any registration statement filed under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.
ITEM 8.01 OTHER EVENTS
As previously disclosed, on July 29, 2025, the Company entered into a senior secured credit agreement with Bank of America, N.A., as administrative agent, and the lenders and other parties thereto (as amended from time to time, including by Amendment No. 1, dated as of October 20, 2025, Amendment No. 2, dated as of October 27, 2025, Amendment No. 3, dated as of May 27, 2026 and Amendment No. 4, dated as of October 19, 2026, the “Credit Agreement”).
On October 27, 2026, the Company, Bank of America, N.A., as administrative agent, and the lenders and other parties thereto entered into Amendment No. 5 to the Credit Agreement (“Amendment No. 5” and the Credit Agreement as amended by Amendment No. 5, the “Amended Credit Agreement”). Amendment No. 5 amended the Credit Agreement to, among other things, (i) provide for $70 million of incremental term A loans (the “Incremental Term A-1 Loans”), which were funded in full on the effective date of Amendment No. 5 and which, together with the $1.33 billion of term A loans outstanding immediately prior thereto, constitute a single class of term A loans, returning the outstanding principal amount of the Company’s term loan A facility (the “Term Loan A Facility”) to its original funded amount of $1.4 billion, (ii) extend the maturity date of the $1.5 billion revolving credit facility, the Term Loan A Facility and the $600 million delayed draw term loan A facility (the “Delayed Draw Facility”) to October 28, 2031, and (iii) extend the period during which the Company may draw on the Delayed Draw Facility, in up to two drawings, to April 27, 2027, (iv) replace the leverage-based pricing grid applicable to the revolving credit facility, the Term Loan A Facility and the Delayed Draw Facility with a pricing grid based on the Company’s debt ratings and (v) reset the amortization schedule for the Term Loan A Facility. The proceeds of the Incremental Term A-1 Loans may be used for general corporate purposes of the Company and its subsidiaries and to pay fees, costs and expenses related to Amendment No. 5.
Following the effectiveness of Amendment No. 5, borrowings under the revolving credit facility and the Term Loan A Facility (including the Incremental Term A-1 Loans and any term loans drawn under the Delayed Draw Facility) bear interest, at the Company’s option, at either (a) a term SOFR-based rate plus an applicable margin or (b) a base rate plus an applicable margin, in each case with the applicable margin determined pursuant to a pricing grid based on the Company’s debt ratings from S&P and Moody’s, with applicable margins ranging from 1.000% to 1.750% for term SOFR borrowings and from 0.000% to 0.750% for base rate borrowings. The commitment fee on unused revolving commitments ranges from 0.125% to 0.300% per annum. The applicable margin is initially determined at the fourth of five pricing levels, or 1.500% for term SOFR borrowings and 0.500% for base rate borrowings. Borrowings under the Company’s existing term loan B facility (the “2026 Term B-1 Loans”) continue to bear interest, at the Company’s option, at either term SOFR plus 1.75% or the base rate plus 0.75%.
The Term Loan A Facility (including the Incremental Term A-1 Loans) amortizes in quarterly installments commencing in March 2027 at an annual rate of 2.50% of the original principal amount through the second anniversary of the effective date of Amendment No. 5, 5.00% through the fourth anniversary of such date and 10.00% thereafter, with the remaining balance due at maturity.
Amendment No. 5 included customary conditions to effectiveness, representations and warranties, and acknowledgments by the Company and the other loan parties confirming, among other things, that (i) their
guarantees of the obligations under the Credit Agreement extend to the Incremental Term A-1 Loans and the extended facilities and (ii) the liens securing the obligations under the Credit Agreement continue in full force and effect, unimpaired and with the same priority, after giving effect to Amendment No. 5.
The foregoing description of Amendment No. 5 does not purport to be complete and is qualified in its entirety by reference to the full text of Amendment No. 5, which the Company intends to file as an exhibit to its Quarterly Report on Form 10-Q for the fiscal quarter ending January 2, 2027.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits.
Exhibit No | Description | |||||||
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: | November 9, 2026 | ||||||||||
Exhibit 99.1
| FINANCIAL NEWS | ||||||||||||||
Sanmina Reports Fourth Quarter and Fiscal 2026 Financial Results
San Jose, CA – November 9, 2026. Sanmina Corporation (“Sanmina” or the “Company”) (NASDAQ: SANM), a leading integrated manufacturing solutions company, today reported financial results for the fourth quarter ended October 3, 2026 and outlook for its first fiscal quarter ending January 2, 2027.
Fourth Quarter Fiscal 2026 Financial Highlights •Revenue: $3.86 billion •GAAP operating margin: 6.0% •GAAP diluted EPS: $2.14 •Non-GAAP(1) operating margin: 9.0% •Non-GAAP(1) diluted EPS: $4.43 | Fiscal Year 2026 Financial Highlights •Revenue: $14.53 billion •GAAP operating margin: 4.7% •GAAP diluted EPS: $6.85 •Non-GAAP(1) operating margin: 7.4% •Non-GAAP(1) diluted EPS: $13.28 | ||||
Additional Highlights •Cash flow from operations: Q4 $242 million and FY’26 $944 million •Free cash flow(2): Q4 $83 million and $541 million in FY’26 •Share repurchases: Q4 $154 million, or 0.8 million shares and FY’26 $393 million, or approximately 2.4 million shares •Q4 ending cash and cash equivalents: $1.68 billion | |||||
(1)See Schedule 1 below for information regarding the items excluded from and our use of non-GAAP financial measures. A reconciliation of the non-GAAP financial information contained in this release to their most directly comparable GAAP measures is included in the financial statements furnished with this release.
(2)Free cash flow is defined as net cash provided by operating activities less net purchases of property and equipment. See Condensed Consolidated Cash Flow Statement included in the financial statements furnished with this release.
“This was a transformative year for Sanmina as we delivered strong broad-based growth across all of our end markets, integrated the ZT Systems business, strengthening our position in the Cloud and AI Infrastructure end market, and grew our core Sanmina business by double digits year-over-year, maintaining a well-diversified portfolio,” stated Jure Sola, Chairman and CEO of Sanmina Corporation.
“Our fiscal 2026 results were exceptional. Revenue grew 79%, non-GAAP operating profit increased 130%, and non-GAAP diluted earnings per share more than doubled compared to a year ago. These results reflect our disciplined execution, robust financial management, and targeted diversification across and within our customers and end markets. Additionally, we generated strong cash flow from operations of $944 million, which provided the flexibility to fund strategic investments in new capabilities and capacity, further strengthening our position in the market while maintaining a very healthy balance sheet.”
“As we look to fiscal 2027, we expect demand to remain strong. At the midpoint of our full-year outlook, revenue is projected to grow about 27% and our non-GAAP diluted earnings per share about 24%. We remain excited for the opportunities ahead, and the team is well-positioned to capitalize on the momentum while maintaining disciplined execution to drive sustainable, long-term shareholder value.”
| First Quarter Fiscal 2027 Outlook | |||||
| Revenue: | $3.8 billion - $4.1 billion | ||||
Non-GAAP operating margin(3): | 7.0% - 7.5% | ||||
Non-GAAP diluted EPS(3): | $3.50 - $3.85 | ||||
| Fiscal 2027 Outlook | |||||
| Revenue: | $17.5 billion - $19.5 billion | ||||
Non-GAAP operating margin(3): | 7.0% - 7.5% | ||||
Non-GAAP diluted EPS(3): | $15.50 - $17.50 | ||||
(3)This is a forward-looking non-GAAP financial measure that cannot be reconciled to its equivalent GAAP financial measure without unreasonable effort.
Safe Harbor Statement
The statements above relating to our expectations and the outlook above, constitute forward-looking statements within the meaning of the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934. Actual results could differ materially from those projected in these statements as a result of a number of factors, including the risk that the expected benefits from the ZT Systems acquisition may not be realized or may take longer to realize than anticipated; adverse changes in the key markets we target, in particular the cloud and AI infrastructure sectors; the impact of recent or future changes in tariffs and trade policy, which may adversely affect our costs, supply chain, and customer demand; our reliance on a limited number of customers for a substantial portion of our sales; risks arising from our international operations and expansion into new geographic markets; geopolitical uncertainty, including relating to the conflict in the Middle East, and the other risk factors set forth in the Company's annual and quarterly reports filed with the Securities Exchange Commission.
The Company is under no obligation to (and expressly disclaims any such obligation to) update or alter any of the forward-looking statements made in this earnings release, the conference call or the Investor Relations section of our website whether as a result of new information, future events or otherwise, unless otherwise required by law.
Company Conference Call Information
Sanmina will hold a conference call to review its financial results for the fourth quarter of fiscal 2026 and outlook for the first quarter fiscal 2027 and full year fiscal 2027 on Monday, November 9, 2026 at 5:00 p.m. ET (2:00 p.m. PT). The access numbers are: domestic 800-836-8184 and international 646-357-8785. The conference call will also be webcast live over the Internet. You can log on to the live webcast at Q4'26 Earnings. Additional information in the form of a slide presentation is available on Sanmina’s website at www.sanmina.com. A replay of the conference call will be available for 48-hours. The access numbers are: domestic 888-660-6345 and international 646-517-4150, access code is 77611#.
About Sanmina
Sanmina Corporation, a Fortune 500 company, is a leading integrated manufacturing solutions provider serving the fastest growing segments of the global Electronics Manufacturing Services (EMS) market. Recognized as a technology leader, Sanmina provides end-to-end manufacturing solutions, delivering superior quality and support to Original Equipment Manufacturers (OEMs) primarily in the cloud and AI infrastructure, communications networks, industrial and energy, medical, defense and aerospace, and automotive and transportation markets. Sanmina has facilities strategically located in key regions throughout the world. More information about the Company is available at www.sanmina.com.
Sanmina Contact
Paige Melching
SVP, Investor Communications
408-964-3610
| Sanmina Corporation | |||||||||||
| Condensed Consolidated Balance Sheets | |||||||||||
| (in thousands) | |||||||||||
| (GAAP) | |||||||||||
| (Unaudited) | |||||||||||
| October 3, 2026 | September 27, 2025 | ||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 1,675,641 | $ | 926,267 | |||||||
| Accounts receivable, net | 2,340,508 | 1,400,129 | |||||||||
| Contract assets | 620,650 | 425,944 | |||||||||
| Inventories | 3,609,268 | 1,988,462 | |||||||||
| Prepaid expenses and other current assets | 360,814 | 124,656 | |||||||||
| Total current assets | 8,606,881 | 4,865,458 | |||||||||
| Property, plant and equipment, net | 1,185,607 | 682,354 | |||||||||
| Deferred income tax assets | 264,961 | 171,218 | |||||||||
| Goodwill | 228,934 | 30,386 | |||||||||
| Other assets | 453,347 | 108,757 | |||||||||
| Total assets | $ | 10,739,730 | $ | 5,858,173 | |||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | 3,021,669 | $ | 1,578,895 | |||||||
| Accrued liabilities | 362,722 | 179,605 | |||||||||
| Deferred revenue and customer advances | 1,535,768 | 878,474 | |||||||||
| Accrued payroll and related benefits | 230,698 | 167,541 | |||||||||
| Short-term debt, including current portion of long-term debt | 172,000 | 17,500 | |||||||||
| Total current liabilities | 5,322,857 | 2,822,015 | |||||||||
| Long-term liabilities: | |||||||||||
| Long-term debt | 1,915,528 | 282,974 | |||||||||
| Other liabilities | 708,420 | 214,021 | |||||||||
| Total long-term liabilities | 2,623,948 | 496,995 | |||||||||
| Stockholders' equity | 2,792,925 | 2,539,163 | |||||||||
| Total liabilities and stockholders' equity | $ | 10,739,730 | $ | 5,858,173 | |||||||
| Sanmina Corporation | |||||||||||||||||||||||
| Condensed Consolidated Statements of Income | |||||||||||||||||||||||
| (in thousands, except per share amounts) | |||||||||||||||||||||||
| (GAAP) | |||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||
| October 3, 2026 | September 27, 2025 | October 3, 2026 | September 27, 2025 | ||||||||||||||||||||
| Net sales | $ | 3,858,022 | $ | 2,096,392 | $ | 14,525,002 | $ | 8,128,382 | |||||||||||||||
| Cost of sales | 3,422,712 | 1,905,235 | 13,130,234 | 7,412,025 | |||||||||||||||||||
| Gross profit | 435,310 | 191,157 | 1,394,768 | 716,357 | |||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Selling, general and administrative | 108,696 | 73,521 | 446,462 | 290,221 | |||||||||||||||||||
| Research and development | 8,075 | 8,669 | 32,991 | 31,087 | |||||||||||||||||||
| Acquisition, integration and others | 84,154 | 27,082 | 221,176 | 34,162 | |||||||||||||||||||
| Amortization of intangibles | 1,831 | — | 6,714 | — | |||||||||||||||||||
| Restructuring | 2,868 | 3,420 | 5,908 | 6,319 | |||||||||||||||||||
| Total operating expenses | 205,624 | 112,692 | 713,251 | 361,789 | |||||||||||||||||||
| Operating income | 229,686 | 78,465 | 681,517 | 354,568 | |||||||||||||||||||
| Interest income | 13,650 | 4,536 | 39,941 | 15,855 | |||||||||||||||||||
| Interest expense | (32,853) | (5,190) | (122,177) | (20,151) | |||||||||||||||||||
| Other income (expense), net | (4,676) | (4,474) | (9,002) | (10,844) | |||||||||||||||||||
| Interest and other, net | (23,879) | (5,128) | (91,238) | (15,140) | |||||||||||||||||||
| Income before income taxes | 205,807 | 73,337 | 590,279 | 339,428 | |||||||||||||||||||
| Provision for income taxes | 79,257 | 21,364 | 188,851 | 73,168 | |||||||||||||||||||
| Net income before noncontrolling interest | 126,550 | 51,973 | 401,428 | 266,260 | |||||||||||||||||||
| Less: Net income attributable to noncontrolling interest | 8,590 | 3,907 | 23,407 | 20,367 | |||||||||||||||||||
| Net income attributable to common shareholders | $ | 117,960 | $ | 48,066 | $ | 378,021 | $ | 245,893 | |||||||||||||||
| Net income attributable to common shareholders per share: | |||||||||||||||||||||||
| Basic | $ | 2.20 | $ | 0.90 | $ | 7.00 | $ | 4.56 | |||||||||||||||
| Diluted | $ | 2.14 | $ | 0.88 | $ | 6.85 | $ | 4.46 | |||||||||||||||
| Weighted-average shares used in computing per share amounts: | |||||||||||||||||||||||
| Basic | 53,568 | 53,567 | 53,971 | 53,947 | |||||||||||||||||||
| Diluted | 55,083 | 54,860 | 55,202 | 55,178 | |||||||||||||||||||
| Sanmina Corporation | |||||||||||||||||||||||||||||||||||
| Reconciliation of GAAP to Non-GAAP Measures | |||||||||||||||||||||||||||||||||||
| (in thousands, except per share amounts) | |||||||||||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||||||||||||||
| October 3, 2026 | September 27, 2025 | October 3, 2026 | September 27, 2025 | ||||||||||||||||||||||||||||||||
| GAAP Operating income | $ | 229,686 | $ | 78,465 | $ | 681,517 | $ | 354,568 | |||||||||||||||||||||||||||
| GAAP Operating margin | 6.0 | % | 3.7 | % | 4.7 | % | 4.4 | % | |||||||||||||||||||||||||||
| Adjustments: | |||||||||||||||||||||||||||||||||||
| Stock compensation expense (1) | 28,968 | 16,233 | 101,471 | 63,396 | |||||||||||||||||||||||||||||||
| Amortization of inventory fair value adjustment (2) | — | — | 49,000 | — | |||||||||||||||||||||||||||||||
| Amortization of intangible assets (3) | 2,431 | — | 8,914 | — | |||||||||||||||||||||||||||||||
| Acquisition, integration and others (4) | 84,154 | 27,082 | 221,176 | 34,162 | |||||||||||||||||||||||||||||||
| Distressed customer charges (5) | — | — | — | 7,031 | |||||||||||||||||||||||||||||||
| Legal and other (6) | — | 1,250 | 4,650 | 1,700 | |||||||||||||||||||||||||||||||
| Restructuring and other | 2,868 | 3,420 | 5,908 | 4,602 | |||||||||||||||||||||||||||||||
| Non-GAAP Operating income | $ | 348,107 | $ | 126,450 | $ | 1,072,636 | $ | 465,459 | |||||||||||||||||||||||||||
| Non-GAAP Operating margin | 9.0 | % | 6.0 | % | 7.4 | % | 5.7 | % | |||||||||||||||||||||||||||
| GAAP Net income attributable to common shareholders | $ | 117,960 | $ | 48,066 | $ | 378,021 | $ | 245,893 | |||||||||||||||||||||||||||
| Adjustments: | |||||||||||||||||||||||||||||||||||
| Operating income adjustments (see above) | 118,421 | 47,985 | 391,119 | 110,891 | |||||||||||||||||||||||||||||||
| Legal and other (6) | 3,000 | — | 600 | — | |||||||||||||||||||||||||||||||
| Gain on sale of investment (7) | — | — | (4,710) | — | |||||||||||||||||||||||||||||||
| Adjustments for taxes (8) | 4,646 | (4,604) | (32,025) | (23,534) | |||||||||||||||||||||||||||||||
| Non-GAAP Net income attributable to common shareholders | $ | 244,027 | $ | 91,447 | $ | 733,005 | $ | 333,250 | |||||||||||||||||||||||||||
| GAAP Net income attributable to common shareholders per share: | |||||||||||||||||||||||||||||||||||
| Basic | $ | 2.20 | $ | 0.90 | $ | 7.00 | $ | 4.56 | |||||||||||||||||||||||||||
| Diluted | $ | 2.14 | $ | 0.88 | $ | 6.85 | $ | 4.46 | |||||||||||||||||||||||||||
| Non-GAAP Net income attributable to common shareholders per share: | |||||||||||||||||||||||||||||||||||
| Basic | $ | 4.56 | $ | 1.71 | $ | 13.58 | $ | 6.18 | |||||||||||||||||||||||||||
| Diluted | $ | 4.43 | $ | 1.67 | $ | 13.28 | $ | 6.04 | |||||||||||||||||||||||||||
| Weighted-average shares used in computing per share amounts: | |||||||||||||||||||||||||||||||||||
| Basic | 53,568 | 53,567 | 53,971 | 53,947 | |||||||||||||||||||||||||||||||
| Diluted | 55,083 | 54,860 | 55,202 | 55,178 | |||||||||||||||||||||||||||||||
| (1) | Stock compensation expense | ||||||||||||||||||||||||||||||||||
| Cost of sales | $ | 8,451 | $ | 5,225 | $ | 26,523 | $ | 20,136 | |||||||||||||||||||||||||||
| Selling, general and administrative | 20,064 | 10,621 | 73,387 | 41,974 | |||||||||||||||||||||||||||||||
| Research and development | 453 | 387 | 1,561 | 1,286 | |||||||||||||||||||||||||||||||
| Total | $ | 28,968 | $ | 16,233 | $ | 101,471 | $ | 63,396 | |||||||||||||||||||||||||||
| (2) | Relates to the amortization of the fair value step up on inventory from the ZT acquisition. | ||||||||||||||||||||||||||||||||||
| (3) | Relates to amortization of intangible assets acquired from the ZT acquisition. | ||||||||||||||||||||||||||||||||||
| (4) | Q4'26 and FY26 results include a $78M and $150M fair value adjustment to contingent consideration, respectively, alongside certain employee compensation and professional services related to the ZT acquisition. | ||||||||||||||||||||||||||||||||||
| (5) | Relates to accounts receivable and inventory write-downs or recoveries associated with distressed customers. | ||||||||||||||||||||||||||||||||||
| (6) | Represents expense recorded in connection with the settlement of a legal matter, investment write-off and loss on debt extinguishment as applicable, for various periods presented. | ||||||||||||||||||||||||||||||||||
| (7) | Relates to gain on sale of equity interest. | ||||||||||||||||||||||||||||||||||
| (8) | Adjustments for taxes include the tax effects of the various adjustments we exclude from our non-GAAP measures, and adjustments related to deferred tax and discrete tax items. | ||||||||||||||||||||||||||||||||||
| Sanmina Corporation | ||||||||||||||||||||||||||||||||||||||||||||
| Condensed Consolidated Cash Flow | ||||||||||||||||||||||||||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||||||||||||||||||||||||||
| (GAAP) | ||||||||||||||||||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||||||||||||||||||||||||||
| October 3, 2026 | September 27, 2025 | October 3, 2026 | September 27, 2025 | |||||||||||||||||||||||||||||||||||||||||
Net income before noncontrolling interest | $ | 126,550 | $ | 51,973 | $ | 401,428 | $ | 266,260 | ||||||||||||||||||||||||||||||||||||
Depreciation and intangibles amortization | 46,574 | 29,653 | 181,391 | 119,466 | ||||||||||||||||||||||||||||||||||||||||
| Amortization of inventory fair value adjustment | — | — | 49,000 | — | ||||||||||||||||||||||||||||||||||||||||
| Deferred income taxes | 76,143 | (18,802) | 131,119 | (11,812) | ||||||||||||||||||||||||||||||||||||||||
| Change in fair value of contingent consideration | 78,000 | — | 150,000 | — | ||||||||||||||||||||||||||||||||||||||||
Other, net | 30,996 | 15,811 | 103,634 | 57,732 | ||||||||||||||||||||||||||||||||||||||||
Net change in net working capital | (116,146) | 120,444 | (72,478) | 189,011 | ||||||||||||||||||||||||||||||||||||||||
Cash provided by operating activities | 242,117 | 199,079 | 944,094 | 620,657 | ||||||||||||||||||||||||||||||||||||||||
Purchases of investments | — | (340) | — | (15,040) | ||||||||||||||||||||||||||||||||||||||||
| Proceeds from sales of investments | — | — | 8,710 | 49,309 | ||||||||||||||||||||||||||||||||||||||||
Net purchases of property, plant and equipment | (159,071) | (62,304) | (403,267) | (142,476) | ||||||||||||||||||||||||||||||||||||||||
| Cash paid for business acquisition, net of cash acquired and working capital settlement received | — | — | (1,114,152) | — | ||||||||||||||||||||||||||||||||||||||||
Cash used in investing activities | (159,071) | (62,644) | (1,508,709) | (108,207) | ||||||||||||||||||||||||||||||||||||||||
Proceeds from long-term debt | — | — | 2,200,000 | — | ||||||||||||||||||||||||||||||||||||||||
Net borrowing activities | (86,000) | (4,375) | (387,875) | (17,500) | ||||||||||||||||||||||||||||||||||||||||
| Repurchases of common stock | (155,380) | 624 | (394,624) | (113,320) | ||||||||||||||||||||||||||||||||||||||||
| Payments for tax withholding on stock-based compensation | (469) | (4,473) | (60,071) | (43,020) | ||||||||||||||||||||||||||||||||||||||||
| Debt issuance costs | — | — | (29,341) | — | ||||||||||||||||||||||||||||||||||||||||
Cash provided by (used in) financing activities | (241,849) | (8,224) | 1,328,089 | (173,840) | ||||||||||||||||||||||||||||||||||||||||
Effect of exchange rate changes | (69) | 289 | (1,347) | 1,750 | ||||||||||||||||||||||||||||||||||||||||
Net change in cash, cash equivalents and restricted cash equivalents | $ | (158,872) | $ | 128,500 | $ | 762,127 | $ | 340,360 | ||||||||||||||||||||||||||||||||||||
Free cash flow: | ||||||||||||||||||||||||||||||||||||||||||||
Cash provided by operating activities | $ | 242,117 | $ | 199,079 | $ | 944,094 | $ | 620,657 | ||||||||||||||||||||||||||||||||||||
Net purchases of property, plant and equipment | (159,071) | (62,304) | (403,267) | (142,476) | ||||||||||||||||||||||||||||||||||||||||
| $ | 83,046 | $ | 136,775 | $ | 540,827 | $ | 478,181 | |||||||||||||||||||||||||||||||||||||
Schedule 1
The statements above and financial information provided in this earnings release include non-GAAP measures of operating income, operating margin, net income and earnings per share. Management excludes from these measures stock-based compensation, restructuring, acquisition, integration and other expenses, impairment charges, amortization charges and other unusual or infrequent items, as adjusted for taxes, as more fully described below.
Management excludes these items principally because such charges or benefits are not directly related to the Company’s ongoing core business operations. We use such non-GAAP measures in order to (1) make more meaningful period-to-period comparisons of the Company’s operations, both internally and externally, (2) guide management in assessing the performance of the business, internally allocating resources and making decisions in furtherance of Company’s strategic plan, (3) provide investors with a better understanding of how management plans and measures the business and (4) provide investors with a better understanding of our ongoing, core business. The material limitations to management’s approach include the fact that the charges, benefits and expenses excluded are nonetheless charges, benefits and expenses required to be recognized under GAAP and, in some cases, consume cash which reduces the Company’s liquidity. Management compensates for these limitations primarily by reviewing GAAP results to obtain a complete picture of the Company’s performance and by including a reconciliation of non-GAAP results to GAAP results in its earnings releases.
Additional information regarding the economic substance of each exclusion, management’s use of the resultant non-GAAP measures, the material limitations of management’s approach and management’s methods for compensating for such limitations is provided below.
Stock-based Compensation Expense, which consists of non-cash charges for the estimated fair value of equity awards granted to employees and directors, is excluded in order to permit more meaningful period-to-period comparisons of the Company’s results since the Company grants different amounts and value of equity awards each quarter. In addition, given the fact that competitors grant different amounts and types of equity awards and may use different valuation assumptions, excluding stock-based compensation permits more accurate comparisons of the Company’s core results with those of its competitors.
Restructuring, Acquisition, Integration and Other Expenses, which consist of employee severance, lease termination costs, exit costs, environmental investigation, remediation and related employee costs and other charges primarily related to closing and consolidating manufacturing facilities, and those associated with the acquisition, integration and other expenses of acquired businesses including fair value adjustments related to contingent consideration liability, are excluded because such charges (1) can be driven by the timing of acquisitions and exit activities which are difficult to predict, (2) are not directly related to ongoing business results and (3) generally do not reflect expected future operating expenses. In addition, given the fact that the Company’s competitors complete acquisitions and adopt restructuring plans at different times and in different amounts than the Company, excluding these charges or benefits permits more accurate comparisons of the Company’s core results with those of its competitors. Items excluded by the Company may be different from those excluded by the Company’s competitors and restructuring and integration expenses include both cash and non-cash expenses. Cash expenses reduce the Company’s liquidity. Therefore, management also reviews GAAP results including these amounts.
Impairment Charges for Goodwill and Other Assets, which consist of non-cash charges, are excluded because such charges are non-recurring and do not reduce the Company’s liquidity. In addition, given the fact that the Company’s competitors may record impairment charges at different times, excluding these charges permits more accurate comparisons of the Company’s core results with those of its competitors.
Amortization Charges, which consist of non-cash charges impacted by the timing and magnitude of acquisitions of businesses or assets, are also excluded because such charges do not reduce the Company’s liquidity. In addition, such charges can be driven by the timing of acquisitions, which is difficult to predict. Excluding these charges permits more accurate comparisons of the Company’s core results with those of its competitors because the Company’s competitors complete acquisitions at different times and for different amounts than the Company.
Other Unusual or Infrequent Items, such as charges or benefits associated with distressed customers, expenses, charges and recoveries relating to certain legal matters, and gains and losses on sales of
assets, are excluded because such items are typically non-recurring, difficult to predict or not directly related to the Company’s ongoing or core operations and are therefore not considered by management in assessing the current operating performance of the Company and forecasting earnings trends. However, items excluded by the Company may be different from those excluded by the Company’s competitors. In addition, these items include both cash and non-cash expenses. Cash expenses reduce the Company’s liquidity. Management compensates for these limitations by reviewing GAAP results including these amounts.
Adjustments for Taxes, which consist of the tax effects of the various adjustments that we exclude from our non-GAAP measures and adjustments related to deferred tax and discrete tax items. Including these adjustments permits more accurate comparisons of the Company's core results with those of its competitors. We determine the tax adjustments based upon the various applicable effective tax rates. In those jurisdictions in which we do not expect to realize a tax cost or benefit (due to a history of operating losses or other factors), a reduced tax rate is applied.