Sanmina Corp 10-Q for FY2023 Q3

Sanmina Corp (SANM)

10-Q 2023-08-02 For: 2023-07-01

Added on April 08, 2026

About this 10-Q

Sanmina Corp filed this 10-Q on August 2, 2023, covering the quarter ended July 1, 2023 (FY2023 Q3).

Headline figures

Quarter ended July 1, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $2.21B; up 9.1% from $2.02B a year earlier
Net income: $76.49M; down 0.9% from net income of $77.22M a year earlier
Diluted EPS: $1.28; up 2.4% from $1.25 a year earlier

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Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock	SANM	NASDAQ Global Select Market


		Page
	PART I. FINANCIAL INFORMATION
Item 1.	Interim Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Income	4
	Condensed Consolidated Statements of Comprehensive Income	5
	Condensed Consolidated Statements of Stockholders’ Equity	6
	Condensed Consolidated Statements of Cash Flows	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	33
Item 4.	Controls and Procedures	34
	PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	35
Item 1A.	Risk Factors	36
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	47
Item 5.	Other Information	47
Item 6.	Exhibits	48
Signatures		49


	As of
	July 1, 2023		October 1, 2022
			(Restated)
	(Unaudited)
	(In thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	656,588	$	529,857
Accounts receivable, net of allowances of approximately $8 million as of July 1, 2023 and October 1, 2022	1,279,966		1,138,894
Contract assets	459,145		475,721
Inventories	1,489,200		1,684,099
Prepaid expenses and other current assets	68,121		62,044
Total current assets	3,953,020		3,890,615
Property, plant and equipment, net	631,744		575,170
Deferred tax assets	187,434		209,554
Other	185,694		160,192
Total assets	$	4,957,892	$	4,835,531
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	1,724,034	$	2,041,434
Accrued liabilities	277,515		281,599
Accrued payroll and related benefits	138,815		130,892
Short-term debt, including current portion of long-term debt	17,500		17,500
Total current liabilities	2,157,864		2,471,425
Long-term liabilities:
Long-term debt	316,552		329,237
Other	217,748		215,333
Total long-term liabilities	534,300		544,570
Contingencies (Note 8)
Stockholders’ equity	2,265,728		1,819,536
Total liabilities and stockholders’ equity	$	4,957,892	$	4,835,531


	Three Months Ended				Nine Months Ended
	July 1, 2023		July 2, 2022		July 1, 2023		July 2, 2022
			(Restated)				(Restated)
	(Unaudited)
	(In thousands, except per share data)
Net sales	$	2,207,118	$	2,023,361	$	6,883,029	$	5,694,757
Cost of sales	2,023,910		1,861,176		6,313,246		5,244,780
Gross profit	183,208		162,185		569,783		449,977

Operating expenses:
Selling, general and administrative	68,828		61,506		192,948		184,798
Research and development	6,719		5,071		18,712		15,320
Restructuring and other	296		3,994		1,731		3,730
Total operating expenses	75,843		70,571		213,391		203,848

Operating income	107,365		91,614		356,392		246,129

Interest income	4,213		540		9,685		1,198
Interest expense	(10,066)		(5,615)		(28,033)		(15,362)
Other expense	(2,508)		(7,774)		(11,988)		(7,110)
Interest and other, net	(8,361)		(12,849)		(30,336)		(21,274)

Income before income taxes	99,004		78,765		326,056		224,855
Provision for income taxes	17,267		1,543		63,898		42,835
Net income before noncontrolling interest	81,737		77,222		$	262,158	$	182,020
Less: Net income attributable to noncontrolling interest	5,243		—		14,029		—
Net income attributable to common shareholders	$	76,494	$	77,222	$	248,129	$	182,020

Net income attributable to common shareholders per share:
Basic	$	1.32	$	1.29	$	4.28	$	2.92
Diluted	$	1.28	$	1.25	$	4.14	$	2.83

Weighted average shares used in computing per share amounts:
Basic	57,987		59,970		57,995		62,404
Diluted	59,592		61,702		59,996		64,292


	Three Months Ended				Nine Months Ended
	July 1, 2023		July 2, 2022		July 1, 2023		July 2, 2022
			(Restated)				(Restated)
	(Unaudited)
	(In thousands)
Net income before noncontrolling interest	$	81,737	$	77,222	$	262,158	$	182,020
Other comprehensive income (loss), net of tax:
Change in foreign currency translation adjustments	(436)		(3,819)		6,807		(6,935)
Derivative financial instruments:
Change in net unrealized amount	6,856		(2,497)		14,263		7,243
Amount reclassified into net income before noncontrolling interest	(1,832)		5,351		(11,331)		7,751
Defined benefit plans:
Changes in unrecognized net actuarial losses and unrecognized transition costs	(58)		719		(966)		1,380
Amortization of actuarial losses and transition costs	222		228		784		708
Total other comprehensive income (loss), net of tax	4,752		(18)		9,557		10,147
Comprehensive income before noncontrolling interest	$	86,489	$	77,204	$	271,715	$	192,167
Less: Net income attributable to noncontrolling interest	5,243		—		14,029		—
Comprehensive income attributable to common shareholders	$	81,246	$	77,204	$	257,686	$	192,167


(Mark one)
☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	Three Months Ended				Nine Months Ended
	July 2, 2022				July 2, 2022
	(Unaudited)				(Unaudited)
	Previously Reported		Investigation Adjustments		As Restated		Previously Reported		Investigation Adjustments		As Restated
	(In thousands, except per share data)
Net sales	$	2,019,059	$	4,302	$	2,023,361	$	5,687,914	$	6,843	$	5,694,757
Cost of sales	1,853,870		7,306		1,861,176		5,225,789		18,991		5,244,780
Gross profit	165,189		(3,004)		162,185		462,125		(12,148)		449,977

Operating expenses:
Selling, general and administrative	61,506		—		61,506		184,798		—		184,798
Research and development	5,071		—		5,071		15,320		—		15,320
Restructuring and other	3,994		—		3,994		3,730		—		3,730

Total operating expenses	70,571		—		70,571		203,848		—		203,848

Operating income	94,618		(3,004)		91,614		258,277		(12,148)		246,129

Interest income	540		—		540		1,198		—		1,198
Interest expense	(5,615)		—		(5,615)		(15,362)		—		(15,362)
Other income (expense), net	(7,774)		—		(7,774)		(7,110)		—		(7,110)
Interest and other, net	(12,849)		—		(12,849)		(21,274)		—		(21,274)

Income before income taxes	81,769		(3,004)		78,765		237,003		(12,148)		224,855
Provision for income taxes	2,226		(683)		1,543		45,606		(2,771)		42,835
Net Income	$	79,543	$	(2,321)	$	77,222	$	191,397	$	(9,377)	$	182,020

Net income per share:
Basic	$	1.33	$	(0.04)	$	1.29	$	3.07	$	(0.15)	$	2.92
Diluted	$	1.29	$	(0.04)	$	1.25	$	2.98	$	(0.15)	$	2.83

Weighted average shares used in computing per share amounts:
Basic	59,970		—		59,970		62,404		—		62,404
Diluted	61,702		—		61,702		64,292		—		64,292


	As of
	October 1, 2022

		Previously Reported		Investigation Adjustments		Other Adjustments		As Restated
		(In thousands)
ASSETS
Current assets:
Cash and cash equivalents		$	529,857	$	—	$	—	$	529,857
Accounts receivable, net of allowances		1,138,894		—		—		1,138,894
Contract assets		503,674		(27,953)		—		475,721
Inventories		1,691,081		(21,705)		14,723		1,684,099
Prepaid expenses and other current assets		62,044		—		—		62,044
Total current assets		3,925,550		(49,658)		14,723		3,890,615
Property, plant and equipment, net		575,170		—		—		575,170
Deferred tax assets		198,588		10,966		—		209,554
Other		160,192		—		—		160,192
Total assets		$	4,859,500	$	(38,692)	$	14,723	$	4,835,531
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	2,029,534	$	—	$	11,900	$	2,041,434
Accrued liabilities		275,735		1,441		4,423		281,599
Accrued payroll and related benefits		130,892		—		—		130,892
Short-term debt, including current portion of long-term debt		17,500		—		—		17,500
Total current liabilities		2,453,661		1,441		16,323		2,471,425
Long-term liabilities:
Long-term debt		329,237		—		—		329,237
Other		215,333		—		—		215,333
Total long-term liabilities		544,570		—		—		544,570
Contingencies (Note 8)
Stockholders’ equity		1,861,269		(40,133)		(1,600)		1,819,536
Total liabilities and stockholders’ equity		$	4,859,500	$	(38,692)	$	14,723	$	4,835,531


	Operating Leases
	(In thousands)
Remainder of 2023	$	6,187
2024	23,998
2025	21,258
2026	16,876
2027	13,624
Thereafter	13,113
Total lease payments	95,056
Less: imputed interest	9,138
Total	$	85,918


Percentage of net sales represented by ten largest customers	47	%	48	%	49	%	49	%
Number of customers representing 10% or more of net sales	1		1		1		2


	Number of Shares	Weighted- Average Grant Date Fair Value ($)	Weighted- Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value ($)
	(In thousands)			(In thousands)
Outstanding as of October 1, 2022	3,280	37.11	1.35	155,049
Granted	952	59.88
Vested/Forfeited/Cancelled	(1,309)	36.09
Outstanding as of July 1, 2023	2,923	44.98	1.38	172,287
Expected to vest as of July 1, 2023	2,592	44.51	1.33	152,789


Period (1)	TOTAL NUMBER OF SHARES PURCHASED	AVERAGE PRICE PAID PER SHARE (2)		TOTAL NUMBER OF SHARES PURCHASED AS PART OF PUBLICLY ANNOUNCED PROGRAMS (3)	MAXIMUM DOLLAR VALUE OF SHARES THAT MAY YET BE PURCHASED UNDER THE PROGRAMS (2)
Month #1
April 2, 2023 through April 29, 2023	371,833	$	53.49	371,833	$	343,644,942
Month #2
April 30, 2023 through May 27, 2023	568,738	$	52.33	568,738	$	313,880,729
Month #3
May 28, 2023 through July 1, 2023	29,431	$	52.99	29,431	$	312,321,196
Total	970,002	$	52.80	970,002


Exhibit Number						Description

31.1						Certification of the Principal Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).

31.2						Certification of the Principal Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).

32.1 (1)						Certification of the Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).

32.2 (1)						Certification of the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).

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104						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)


		SANMINA CORPORATION
		(Registrant)

		By:	/s/ JURE SOLA
			Jure Sola
			Chief Executive Officer (Principal Executive Officer)

Date:	August 2, 2023

		By:	/s/ KURT ADZEMA
			Kurt Adzema
			Executive Vice President and
			Chief Financial Officer (Principal Financial Officer)

Date:	August 2, 2023


	Three Months Ended				Nine Months Ended
	July 1, 2023		July 2, 2022		July 1, 2023		July 2, 2022
			(Restated)				(Restated)
	(Unaudited)
	(In thousands)
Common Stock and Additional Paid-in Capital
Balance, beginning of period	$	6,483,955	$	6,359,270	$	6,381,348	$	6,339,506
Issuances under stock plans	—		72		295		1,474
Stock-based compensation expense	13,317		10,683		37,460		29,045
Repurchases of treasury stock	—		(144)		—		(144)
Sale of noncontrolling interest	—		—		78,169		—
Balance, end of period	6,497,272		6,369,881		6,497,272		6,369,881
Treasury Stock
Balance, beginning of period	(1,399,666)		(1,229,523)		(1,378,159)		(1,047,202)
Repurchases of treasury stock	(52,072)		(124,293)		(73,579)		(306,614)

Balance, end of period	(1,451,738)		(1,353,816)		(1,451,738)		(1,353,816)
Accumulated Other Comprehensive Income
Balance, beginning of period	61,130		50,855		56,325		40,690
Other comprehensive income (loss), net of tax	4,752		(18)		9,557		10,147
Balance, end of period	65,882		50,837		65,882		50,837
Accumulated Deficit
Balance, beginning of period	(3,068,343)		(3,375,564)		(3,239,978)		(3,480,362)
Net income attributable to common shareholders	76,494		77,222		248,129		182,020
Balance, end of period	(2,991,849)		(3,298,342)		(2,991,849)		(3,298,342)
Noncontrolling Interest
Balance, beginning of period	140,918		—		—		—
Sale of noncontrolling interest	—		—		132,132		—
Net income attributable to noncontrolling interest	5,243		—		14,029		—
Balance, end of period	146,161		—		146,161		—
Total stockholders’ equity	$	2,265,728	$	1,768,560	$	2,265,728	$	1,768,560

Common Stock Shares Outstanding
Number of shares, beginning of period	111,285		109,911		110,160		108,734
Issuances under stock plans	43		99		1,168		1,276
Number of shares, end of period	111,328		110,010		111,328		110,010
Treasury Shares
Number of shares, beginning of period	(53,127)		(49,124)		(52,766)		(44,427)
Repurchases of treasury stock	(982)		(3,096)		(1,343)		(7,793)


	Nine Months Ended
	July 1, 2023		July 2, 2022
			(Restated)
	(Unaudited)
	(In thousands)
CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES:
Net income before noncontrolling interest	$	262,158	$	182,020
Adjustments to reconcile net income before noncontrolling interest to cash provided by (used in) operating activities:
Depreciation and amortization	87,716		82,097
Stock-based compensation expense	37,460		29,045
Deferred income taxes	21,232		15,993




Other, net	284		(1,298)
Changes in operating assets and liabilities, net of amounts acquired:
Accounts receivable	(137,712)		(40,276)
Contract assets	16,576		(112,606)
Inventories	199,406		(552,851)
Prepaid expenses and other assets	(27,492)		(13,269)
Accounts payable	(308,579)		507,909
Accrued liabilities	7,262		152,192
Cash provided by operating activities	158,311		248,956

CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES:
Purchases of property, plant and equipment	(153,239)		(90,398)
Proceeds from sales of property, plant and equipment	1,084		8,339
Purchases of investments	(2,000)		(1,700)

Cash used in investing activities	(154,155)		(83,759)

CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES:
Holdback paid in connection with previous business combination	(8,558)		—
Repayments of long-term debt	(13,125)		(14,064)

Proceeds from revolving credit facility borrowings	2,426,300		926,500
Repayments of revolving credit facility borrowings	(2,426,300)		(926,500)


	Three Months Ended				Nine Months Ended
	July 1, 2023		July 2, 2022		July 1, 2023		July 2, 2022
			(Restated)				(Restated)
	(In thousands)
Segments:
IMS	$	1,811,530	$	1,617,858	$	5,657,800	$	4,584,185
CPS	395,588		405,503		1,225,229		1,110,572
Total	$	2,207,118	$	2,023,361	$	6,883,029	$	5,694,757

End Markets:
Industrial, Defense, Medical and Automotive	$	1,344,068	$	1,221,989	$	4,045,939	$	3,434,221
Communications Networks and Cloud Infrastructure	863,050		801,372		2,837,090		2,260,536
Total	$	2,207,118	$	2,023,361	$	6,883,029	$	5,694,757

Geography:
Americas (1)	$	1,131,925	$	989,172	$	3,380,454	$	2,687,304
APAC	743,372		739,084		2,511,205		2,144,534
EMEA	331,821		295,105		991,370		862,919
Total	$	2,207,118	$	2,023,361	$	6,883,029	$	5,694,757


	As of
	July 1, 2023		October 1, 2022
Derivatives Designated as Accounting Hedges:
Notional amount (in thousands)	$	127,484	$	123,172
Number of contracts	50		50
Derivatives Not Designated as Accounting Hedges:
Notional amount (in thousands)	$	407,290	$	531,558
Number of contracts	43		43