SANMINA CORP
For the period ended Dec 28, 2024. Filed Jan 28, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Dec 28, 2024 · Filed Jan 28, 2025
SANM$134.68+3.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-29; filed 2024-07-31.
0000897723-24-000046
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-12-28; filed 2025-01-28.
0000897723-25-000007
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 78 previous paragraphs and 66 current paragraphs.
38 unchanged; 24 reworded; 4 added; 15 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 6 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (4)
Current report
Sales to our ten largest customers represent 50% of net sales. Net sales from these customers are derived from multiple segments. No customers represented 10% or more of our net sales for the three months ended December 28, 2024 and one customer represented 10% or more of our net sales for the three months ended December 30, 2023.
Current report
We believe our end-to-end manufacturing solutions combined with our global supply chain management expertise differentiate us from our competitors and enable us to better serve the needs of OEMs. However, our business faces many challenges. For example, we compete with a number of companies in each of our key end markets. This includes companies that are much larger than we are and smaller companies that focus on a particular niche product, service or end market. Although we believe we are well-positioned in each of our key end markets and offer many advantages compared to our competitors, competition remains intense and profitably growing our revenues has been challenging. Additionally, we are impacted by macroeconomic challenges, such as inflation, supply chain constraints, foreign currency fluctuations, high interest rates, market volatility, recession concerns, tariffs and other factors, that have been and could be in the future exacerbated by geopolitical conflicts such as the war in Ukraine and conflict in the Middle East, changes in trade policies. For example, the current U.S. presidential administration has indicated that a broad increase in tariffs on all imported components is possible. Although supply chain constraints have been easing, we expect headwinds to our revenue growth due to these factors to persist in 2025 due to customers continuing to absorb their finished goods inventory in some of our end markets.
Current report
Net sales increased 7.0% in the three months ended December 28, 2024 compared to the three months ended December 30, 2023, primarily due to new program wins in our telecommunications and automotive end markets.
Current report
Our provision for income taxes for the three months ended December 28, 2024 and December 30, 2023 was $15 million (18% of income before taxes) and $21 million (26% of income before taxes), respectively. The tax rate was lower for the three months ended December 28, 2024, primarily due to favorable discrete tax events, including a $3 million benefit from a change in tax law, and an approximately $2 million benefit from other discrete tax items.
Removed paragraphs (15)
Previous report
The overall impact of the challenges on our financial condition and operating results will depend on the severity of the macroeconomic factors and the duration of geopolitical conflicts. There can be no assurance that the measures we take will counteract the negative impact of these challenges.
Previous report
Recent Tax Developments
Previous report
The Organization for Economic Co-operation and Development (“OECD”), an international association of 38 countries including the United States, has proposed changes to numerous long-standing tax principles, namely, its Pillar Two framework, which imposes a global minimum corporate tax rate of 15%. Various countries have enacted or have announced plans to enact new tax laws to implement the global minimum tax and where enacted, the rules begin to be effective for us in fiscal 2025. The Pillar Two rules are considered an alternative minimum tax and therefore deferred taxes would not be recognized or adjusted for the estimated effects of the future minimum tax. The adoption and effective dates of these rules may vary by country and could increase tax complexity and uncertainty and may adversely affect our provision for income taxes. We do not expect any impact from these tax law changes in fiscal 2024 and will continue to evaluate its impact for fiscal 2025.
Previous report
Revenue Recognition
Previous report
We recognize revenue for the majority of our contracts on an over time basis. This is primarily due to the fact that we do not have an alternative use for the end products we manufacture for our customers and have an enforceable right to payment, including a reasonable profit, for work-in-progress upon a customer’s cancellation of a contract for convenience. In certain circumstances, we recognize over time because our customer simultaneously receives and consumes the benefits provided by our services or, our customer controls the end product as we perform manufacturing services (continuous transfer of control).
Previous report
For these contracts, revenue is recognized on an over time basis using the cost-to-cost method (ratio of costs incurred to date to total estimated costs at completion) which we believe best depicts the transfer of control to the customer.
Previous report
In our Defense and Aerospace division, we apply the cost-to-cost method for government contracts which requires the use of significant judgments with respect to estimated materials, labor and subcontractor costs included in the total estimated costs at completion. Additionally, we evaluate whether contract modifications for claims have been approved and, if so, estimate the amount, if any, of variable consideration that can be included in the transaction price of the contract.
Previous report
Estimates of materials, labor and subcontractor costs expected to be incurred to satisfy a performance obligation are updated on a quarterly basis. These estimates consider costs incurred to date and estimated costs to be incurred over the remaining expected period of performance to satisfy a performance obligation. There is inherent uncertainty in estimating the amount of costs that will be required to complete a contract. Factors that contribute to the inherent uncertainty in estimates include, among others, (1) the long-term duration of contracts, (2) the highly-complex nature of the products we manufacture, (3) the readiness of our customer’s design for manufacturing, (4) the cost and availability of purchased materials, (5) labor cost, availability and productivity, (6) subcontractor performance and (7) the risk of delayed performance/completion. Therefore, such estimates are reviewed each quarter by a group of employees that includes representatives from numerous functions such as engineering, materials, contracts, manufacturing, program management, finance and senior management. If a change in estimate is deemed necessary, the impact of the change is recognized in the period of change. Additionally, contract modifications for claims are assessed each quarter to determine whether the claims have been approved. If it is determined that a claim has been approved, the amount of the claim, if any, that can be included in transaction price is estimated considering a number of factors such as the length of time expected to lapse until uncertainty about the claim has been resolved and the extent to which our experience with claims for similar contracts has predictive value.
Previous report
Changes in our estimates of transaction price and/or costs to complete result in a favorable or unfavorable impact to revenue and operating income. The impact of changes in estimates on revenue and operating income resulting from application of the cost-to-cost method for recognizing revenue was as follows:
Previous report
Net sales decreased 16.6% in the three months ended June 29, 2024 compared to the three months ended July 1, 2023 and 19.4% in the nine months ended June 29, 2024 compared to the nine months ended July 1, 2023 primarily due to reduced demand driven by customers continuing to absorb their finished goods inventory in some end markets, particularly telecommunications. The impact of this was partially offset by new program wins.
Previous report
Gross margin was 8.5% and 8.3% for the nine months ended June 29, 2024 and July 1, 2023, respectively. IMS gross margin was 7.6% for both the nine months ended June 29, 2024 and July 1, 2023. CPS gross margin increased to 12.4% for the nine months ended June 29, 2024 from 11.8% for the nine months ended July 1, 2023, primarily due to significant losses recognized on certain fixed-price customer contracts in the third quarter of 2023 compared to 2024, which was partially offset by unfavorable product mix.
Previous report
Other Expense
Previous report
Other expense for both the three months ended June 29, 2024 and July 1, 2023 was $3 million. Other expense for the nine months ended June 29, 2024 and July 1, 2023 was $1 million and $12 million, respectively. The decrease in other expense for the nine months ended June 29, 2024 was primarily due to a $9 million decrease in discounts on sold receivables and a $2 million increase in the market value of participant investment accounts in our deferred compensation plan compared to the same period in 2023.
Previous report
Our provision for income taxes for the three months ended June 29, 2024 and July 1, 2023 was $20 million (27% of income before taxes) and $17 million (17% of income before taxes), respectively. Our provision for income taxes for the nine months ended June 29, 2024 and July 1, 2023 was $60 million (26% of income before taxes) and $64 million (20% of income before taxes), respectively. The tax rate was lower for the three and nine months ended July 1, 2023 due to the higher discrete items, including recognized tax benefits from the release of certain foreign tax reserves due to lapse of time and expiration of statutes of limitations.
Previous report
As a result of an audit by the Internal Revenue Service (“IRS”) for fiscal 2008 through 2010, we received a Revenue Agent’s Report (“RAR”) on November 17, 2023 asserting an underpayment of tax of approximately $8 million for fiscal 2009. The asserted underpayment results from the IRS’s proposed disallowance of a$503 million worthless stock deduction in fiscal 2009. Such disallowance, if upheld, would reduce our available net operating loss carryforwards and result in additional tax and interest attributable to fiscal 2021 and later years, which could be material. We disagree with the IRS’s position as asserted in the RAR and intend to vigorously contest this matter through the applicable IRS administrative and judicial procedures, as appropriate. We do not expect resolution of this matter within twelve months and cannot predict with any certainty the timing of such resolution. Although the final resolution of this matter remains uncertain, we continue to believe that it is more likely than not our tax position will be sustained. However, an unfavorable resolution of this matter could have a material adverse impact on our condensed consolidated financial statements.
Reworded paragraphs (24)
Previous wording
This quarterly report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements relate to our expectations for future events and time periods. All statements other than statements of historical fact are statements that could be deemed to be forward-looking statements, including any statements regarding trends in future revenue or results of operations, gross margin, operating margin, expenses, earnings or losses from operations, or cash flow; any statements of the plans, strategies and objectives of management for future operations and the anticipated benefits of such plans, strategies and objectives; any statements regarding future economic conditions or performance; any statements regarding litigation or pending investigations, claims or disputes; any statements regarding the timing of closing of, future cash outlays for, and benefits of acquisitions and other strategic transactions, including our Indian joint venture; any statements regarding expected restructuring costs and benefits; any statements concerning the adequacy of our current liquidity and the availability of additional sources of liquidity; any statements regarding the potential impact of the COVID-19 pandemic on our business, results of operations and financial condition; any statements regarding the potential impact of supply chain shortages and inflation on our business; any statements regarding the future impact of tariffs and export controls on our business; any statements relating to future tax rates and our expectations concerning developments in the audit by the IRS of certain tax returns filed by us, including the potential impact of the IRS revenue agent’s report received by us in November 2023; any statements relating to the expected impact of accounting pronouncements not yet adopted; any statements regarding future repurchases of our common stock; any statements of expectation or belief; and any statements of assumptions underlying any of the foregoing. Generally, the words “anticipate,” “believe,” “plan,” “expect,” “future,” “intend,” “may,” “will,” “should,” “estimate,” “predict,” “potential,” “continue” and similar expressions identify forward-looking statements. Our forward-looking statements are based on current expectations, forecasts and assumptions and are subject to risks and uncertainties, including those contained in Part II, Item 1A of this report. As a result, actual results could vary materially from those suggested by the forward-looking statements. We undertake no obligation to publicly disclose any revisions to these forward-looking statements to reflect events or circumstances occurring subsequent to filing this report with the Securities and Exchange Commission (the “SEC”). Investors and others should note that Sanmina announces material financial information to our investors using our investor relations website (http://ir.…
Excerpt shortened here; the source contains the full paragraph.
Current wording
This quarterly report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements relate to our expectations for future events and time periods. All statements other than statements of historical fact are statements that could be deemed to be forward-looking statements, including any statements regarding trends in future revenue or results of operations, gross margin, operating margin, expenses, earnings or losses from operations, or cash flow; any statements of the plans, strategies and objectives of management for future operations and the anticipated benefits of such plans, strategies and objectives; any statements regarding future economic conditions or performance; any statements regarding litigation or pending investigations, claims or disputes; any statements regarding the timing of closing of, future cash outlays for, and benefits of acquisitions and other strategic transactions, including our Indian joint venture; any statements regarding expected restructuring costs and benefits; any statements concerning the adequacy of our current liquidity and the availability of additional sources of liquidity; any statements regarding the potential impact of the COVID-19 pandemic and future outbreaks on our business, results of operations and financial condition; any statements regarding the potential impact of supply chain shortages and inflation on our business; any statements regarding the future impact of tariffs and export controls on our business; any statements relating to future tax rates and our expectations concerning developments in the audit by the IRS of certain tax returns filed by us, including the potential impact of the IRS revenue agent’s report received by us in November 2023; any statements relating to the expected impact of accounting pronouncements not yet adopted; any statements regarding future repurchases of our common stock; any statements of expectation or belief; and any statements of assumptions underlying any of the foregoing. Generally, the words “anticipate,” “believe,” “plan,” “expect,” “future,” “intend,” “may,” “will,” “should,” “estimate,” “predict,” “potential,” “continue” and similar expressions identify forward-looking statements. Our forward-looking statements are based on current expectations, forecasts and assumptions and are subject to risks and uncertainties, including those contained in Part II, Item 1A of this report. As a result, actual results could vary materially from those suggested by the forward-looking statements. We undertake no obligation to publicly disclose any revisions to these forward-looking statements to reflect events or circumstances occurring subsequent to filing this report with the Securities and Exchange Commission (the “SEC”). Investors and others should note that Sanmina announces material financial information to our investors using our investor relation…
Excerpt shortened here; the source contains the full paragraph.
Previous wording
Integrated Manufacturing Solutions (“IMS”). Our IMS segment consists of printed circuit board assembly and test, high-level assembly and test and direct-order-fulfillment.
Current wording
Integrated Manufacturing Solutions (“IMS”). IMS is a single operating segment consisting of printed circuit board assembly and test, high-level assembly and test and direct-order-fulfillment.
Previous wording
Components, Products and Services (“CPS”). Components include printed circuit boards, backplanes and backplane assemblies, cable assemblies, fabricated metal parts, precision machined parts, and plastic injected molded parts. Products include optical, radio frequency (“RF”) and microelectronic design and manufacturing services from our Advanced Microsystems Technologies division; multi-chip package memory solutions from our Viking Technology division; high-performance storage platforms for hyperscale and enterprise solutions from our Viking Enterprise Solutions division; defense and aerospace product, design, manufacturing, repair and refurbishment services from our SCI Technology Inc. (“SCI”) subsidiary; and cloud-based smart manufacturing execution software from our 42Q division. Services include design, engineering, and logistics and repair.
Current wording
Components, Products and Services (“CPS”). Components include advanced printed circuit boards, backplanes and backplane assemblies, cable assemblies, fabricated metal parts, precision machined parts, and plastic injected molded parts. Products include optical, radio frequency (“RF”) and microelectronic design and manufacturing services from our Advanced Microsystems Technologies division; multi-chip package memory solutions from our Viking Technology division; high-performance storage platforms for hyperscale and enterprise solutions from our Viking Enterprise Solutions division; defense and aerospace product, design, manufacturing, repair and refurbishment services from our SCI Technology Inc. (“SCI”) subsidiary; and cloud-based smart manufacturing execution software from our 42Q division. Services include design, engineering, and logistics and repair.
Previous wording
Our only reportable segment for financial reporting purposes is IMS, which represented approximately 80% of our total revenue for the nine months ended June 29, 2024. Our CPS business consists of multiple operating segments which do not individually meet the quantitative thresholds for being presented as reportable segments. Therefore, financial information for these operating segments is combined and presented in a single category entitled “CPS”.
Current wording
Our only reportable segment for financial reporting purposes is IMS, which represented approximately 80% of our total revenue for the three months ended December 28, 2024. Our CPS business consists of multiple operating segments which do not individually meet the quantitative thresholds for being presented as reportable segments. Therefore, financial information for these operating segments is combined and presented in a single category entitled “CPS”.
Previous wording
Our business continues to be exposed to macroeconomic challenges such as inflation, supply chain constraints, foreign currency fluctuations, high interest rates, market volatility, recession concerns and other factors that have been exacerbated by geopolitical conflicts such as the war in Ukraine and conflict in the Middle East. Although the supply chain constraints have been easing, we are experiencing and expect to see headwinds to our revenue growth in the near term due to customers absorbing their finished goods inventory in some of our end markets. Despite these many challenges, we remain focused on improving our operations, building flexibility and efficiencies in our processes and adjusting our business models to changing circumstances. We intend to continue diversifying into mission critical markets, creating a portfolio with longer product life cycles and higher technology and more complex products. As our end markets evolve and grow, our ability to optimize our product and portfolio mix towards higher value opportunities will continue to be an important driver for our business going forward. Additionally, given that maintaining low costs is a cornerstone to our success and growth, we proactively handle cost impacts through a combination of well-calibrated pricing actions and targeted cost-saving measures to enhance overall stockholder value.
Current wording
Despite these challenges, we remain focused on improving our operations, building flexibility and efficiencies in our processes and adjusting our business models to changing circumstances. We intend to continue diversifying into mission critical markets and creating a portfolio of more complex, higher technology products with longer product life cycles. As our end markets evolve and grow, our ability to optimize our product and portfolio mix towards higher value opportunities will continue to be an important driver for our business going forward.
Previous wording
The following should be read in conjunction with our critical accounting policies and estimates contained in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023 filed with the SEC on November 16, 2023.
Current wording
A complete description of our critical accounting policies and estimates is contained in our Annual Report on Form 10-K for the fiscal year ended September 28, 2024 filed with the SEC on November 27, 2024.
Previous wording
Gross margin was 8.3% for both the three months ended June 29, 2024 and July 1, 2023. IMS gross margin decreased to 7.6% for the three months ended June 29, 2024 from 8.3% for the three months ended July 1, 2023. CPS gross margin increased to 11.5% for the three months ended June 29, 2024 from 8.8% for the three months ended July 1, 2023, primarily due to significant losses on certain fixed-price customer contracts recognized in the third quarter of 2023 compared to the third quarter of 2024.
Current wording
Gross margin decreased to 8.4% for the three months ended December 28, 2024 from 8.6% for the three months ended December 30, 2023. IMS gross margin increased to 7.9% for the three months ended December 28, 2024 from 7.6% for the three months ended December 30, 2023, primarily due to improved operating efficiencies as well as favorable customer mix. CPS gross margin decreased to 12.5% for the three months ended December 28, 2024 from 13.0% for the three months ended December 30, 2023, primarily due to an unfavorable mix.
Previous wording
Selling, general and administrative expenses for the three months ended June 29, 2024 and July 1, 2023 were $62 million and $69 million, respectively. As a percentage of net sales, selling, general and administrative expenses were 3.4% and 3.1% for the three months ended June 29, 2024 and July 1, 2023, respectively. The decrease in absolute dollars was primarily due to lower variable compensation and professional fees, partially offset by higher stock compensation expense from new equity grants.
Current wording
Selling, general and administrative expenses for the three months ended December 28, 2024 and December 30, 2023 were $71 million and $65 million, respectively. As a percentage of net sales, selling, general and administrative expenses were 3.5% for each of the three months ended December 28, 2024 and December 30, 2023. The increase in absolute dollars was primarily due to higher professional fees and higher stock compensation expense from new equity grants.
Previous wording
(1) Days sales outstanding (a measure of how quickly we collect our accounts receivable), or “DSO”, is calculated as the ratio of average accounts receivable, net, to average daily net sales for the quarter.
Current wording
(1) Days sales outstanding (a measure of how quickly we collect our accounts receivable), or “DSO”, is calculated as the ratio of the average of accounts receivable, net, at the end of the current and prior quarter, to the average daily net sales for the quarter.
Previous wording
(2) Contract asset days (a measure of how quickly we transfer contract assets to accounts receivable) are calculated as the ratio of average contract assets to average daily net sales for the quarter.
Current wording
(2) Contract asset days (a measure of how quickly we transfer contract assets to accounts receivable) is calculated as the ratio of the average of contract assets at the end of the current and prior quarter, to the average daily net sales for the quarter.
Previous wording
(3) Inventory turns (annualized) (a measure of how quickly we sell inventory) are calculated as the ratio of four times our cost of sales for the quarter to average inventory.
Current wording
(3) Inventory turns (annualized) (a measure of how quickly we sell inventory) is calculated as the ratio of four times our cost of sales for the quarter to the average inventory at the end of the current and prior quarter.
Previous wording
(4) Days inventory on hand (a measure of how quickly we turn inventory into sales) is calculated as the ratio of average inventory for the quarter to average daily cost of sales for the quarter.
Current wording
(4) Days inventory on hand (a measure of how quickly we turn inventory into sales) is calculated as the ratio of the average inventory at the end of the current and prior quarter to the average daily cost of sales for the quarter.
Previous wording
(5) Accounts payable days (a measure of how quickly we pay our suppliers), or “DPO”, is calculated as the ratio of 365 days divided by accounts payable turns, in which accounts payable turns is calculated as the ratio of four times our cost of sales for the quarter to average accounts payable.
Current wording
(5) Accounts payable days (a measure of how quickly we pay our suppliers), or “DPO”, is calculated as the ratio of 365 days divided by accounts payable turns, in which accounts payable turns is calculated as the ratio of four times our cost of sales for the quarter to average accounts payable as at the end of the current and prior quarter.
Previous wording
Cash and cash equivalents were $658 million at June 29, 2024 and $668 million at September 30, 2023. Our cash levels vary during any given quarter depending on the timing of collections from customers and payments to suppliers, borrowings under our credit facilities, sales of accounts receivable under numerous programs we utilize, repurchases of common stock and other factors. Our working capital was $1.9 billion and $1.8 billion of June 29, 2024 and September 30, 2023, respectively.
Current wording
Cash and cash equivalents were $642 million at December 28, 2024 and $626 million at September 28, 2024. Our cash levels vary during any given quarter depending on the timing of collections from customers and payments to suppliers, borrowings under our credit facilities, sales of accounts receivable under numerous programs we utilize, repurchases of common stock and other factors. Our working capital was $2.0 billion and $1.9 billion as of December 28, 2024 and September 28, 2024, respectively.
Previous wording
Net cash provided by operating activities was $288 million and $158 million for the nine months ended June 29, 2024 and July 1, 2023, respectively. Our working capital metrics tend to fluctuate from quarter-to-quarter based on factors such as the linearity of our shipments to customers and purchases from suppliers, customer and supplier mix, the extent to which we factor customer receivables and the negotiation of payment terms with customers and suppliers. These fluctuations can significantly affect our cash flows from operating activities.
Current wording
Net cash provided by operating activities was $64 million and $126 million for the three months ended December 28, 2024 and December 30, 2023, respectively. Our working capital metrics tend to fluctuate from quarter to quarter based on factors such as the linearity of our shipments to customers and purchases from suppliers, customer and supplier mix, the extent to which we factor customer receivables and the negotiation of payment terms with customers and suppliers. These fluctuations can significantly affect our cash flows from operating activities.
Previous wording
During the nine months ended July 1, 2023, we generated $409 million of cash primarily from earnings, excluding non-cash items, and used $251 million of cash primarily due to an increase in accounts receivable and a decrease in accounts payable, partially offset by a decrease in inventory. The increase in accounts receivable was primarily attributable to an increase in business volume. The decrease in inventory was primarily due to our efforts to reduce inventory to more appropriate levels by working with customers to ensure their demand forecasts are reasonable and incorporate the appropriate lead times to secure materials. The decrease in accounts payable was primarily attributable to lower inventory receipts.
Current wording
During the three months ended December 28, 2024, we generated $124 million of cash primarily from earnings, excluding non-cash items, and used $60 million of cash due primarily to decreases in accounts payable and accrued liabilities and other, partially offset by an increase in deferred revenue and customer advances. The decrease in accounts payable was primarily attributable to lower inventory receipts. The increase in deferred revenue and customer advances was due primarily to increased customer advances against raw materials inventory.
Previous wording
During the nine months ended June 29, 2024, we generated $317 million of cash primarily from earnings, excluding non-cash items, and used $29 million of cash due primarily to decreases in accounts payable and accrued liabilities, which were partially offset by decreases in accounts receivable and inventories. The decreases in accounts receivable, inventory, accounts payable and accrued liabilities were primarily attributable to a decrease in business volume.
Current wording
During the three months ended December 30, 2023, we generated $109 million of cash primarily from earnings, excluding non-cash items, and generated $17 million of cash primarily due to decreases in accounts receivable and inventory, which were partially offset by a decrease in accounts payable. The decreases in accounts receivable, inventory and accounts payable were primarily attributable to a decrease in business volume.
Previous wording
Net cash used in investing activities was $88 million and $154 million for the nine months ended June 29, 2024 and July 1, 2023, respectively, primarily related to cash for capital expenditures.
Current wording
Net cash used in investing activities was $17 million and $35 million for the three months ended December 28, 2024 and December 30, 2023, respectively, primarily related to cash for capital expenditures.
Previous wording
Net cash provided by (used in) financing activities was $(209) million and $121 million for the nine months ended June 29, 2024 and July 1, 2023, respectively. During the nine months ended June 29, 2024, we used $189 million of cash to repurchase common stock (including $26 million paid to applicable tax authorities in connection with these repurchases) and repayment of $22 million of borrowings. During the nine months ended July 1, 2023, we received $216 million from the sale of shares to Reliance Strategic Business Ventures Limited, used $74 million of cash to repurchase common stock (including $26 million related to employee tax withholding on vested restricted stock units), repaid $13 million of long-term debt and paid a final payment of $9 million in connection with a previous business combination.
Current wording
Net cash used in financing activities was $29 million and $128 million for the three months ended December 28, 2024 and December 30, 2023, respectively. During the three months ended December 28, 2024, we used $24 million of cash to repurchase common stock (including $8 million payment to tax authorities for stock-based compensation activity) and repayment of $4 million of borrowings. During the three months ended December 30, 2023, we used $116 million of cash to repurchase common stock (including $10 million paid to applicable tax authorities in connection with these repurchases) and repayment of $13 million of borrowings.
Previous wording
During the nine months ended June 29, 2024 and July 1, 2023, we repurchased 3 million and 1 million shares of our common stock for $162 million and $51 million, respectively, under stock repurchase programs authorized by the Board of Directors. These programs have no expiration dates and the timing of repurchases will depend upon capital needs to support the growth of our business, market conditions and other factors. Although stock repurchases are intended to increase stockholder value, they also reduce our liquidity. As of June 29, 2024, an aggregate of $118 million remained available under these programs.
Current wording
During the three months ended December 28, 2024 and December 30, 2023, we repurchased 0.2 million and 2 million shares of our common stock for $16 million and $106 million, respectively, under stock repurchase programs authorized by the Board of Directors. Subsequent to the end of the first quarter of 2025, our Board of Directors authorized the repurchase of up to $300 million of our common stock in the open market or in negotiated private transactions. These programs have no expiration dates and the timing of repurchases will depend upon capital needs to support the growth of our business, market conditions and other factors. Although stock repurchases are intended to increase stockholder value, they also reduce our liquidity. As of December 28, 2024, an aggregate of $37 million remained available under these programs.
Previous wording
Under each of the programs noted above, we sell our entire interest in a trade receivable for 100% of face value, less a discount. During the nine months ended June 29, 2024 and July 1, 2023, we sold approximately $1 billion and $2 billion, respectively, of accounts receivable under these programs. As of June 29, 2024 and September 30, 2023, $127 million and $162 million, respectively, of accounts receivable sold under the RPA and subject to servicing by us remained outstanding and had not yet been collected. Our sole risk with respect to receivables we service is with respect to commercial disputes regarding such receivables. Commercial disputes include billing errors, returns and similar matters. To date, we have not been required to repurchase any receivable we have sold due to a commercial dispute. Additionally, we are required to remit amounts collected as servicer on a weekly basis to the financial institutions that purchased the receivables. As of June 29, 2024 and September 30, 2023, $7 million and $33 million, respectively, had been collected but not yet remitted. This amount is classified in accrued liabilities on the condensed consolidated balance sheets.
Current wording
Under each of the programs noted above, we sell our entire interest in a trade receivable for 100% of face value, less a discount. During the three months ended December 28, 2024 and December 30, 2023, we sold approximately $34 million and $407 million, respectively, of accounts receivable under these programs. As of December 28, 2024, no accounts receivable sold under the RPA and subject to servicing by us remained outstanding. As of September 28, 2024, $34 million of accounts receivable sold under the RPA and subject to servicing by us remained outstanding and had not yet been collected. Our sole risk with respect to receivables we service is with respect to commercial disputes regarding such receivables. Commercial disputes include billing errors, returns and similar matters. To date, we have not been required to repurchase any receivable we have sold due to a commercial dispute. Additionally, we are required to remit amounts collected as servicer on a weekly basis to the financial institutions that purchased the receivables. There were no outstanding remittances for amounts collected as of December 28, 2024 and $3 million had been collected but not yet remitted as of September 28, 2024. This amount is classified in accrued liabilities on the condensed consolidated balance sheets.
Previous wording
As of June 29, 2024, we had a liability of $51 million for uncertain tax positions. Our estimate of liabilities for uncertain tax positions is based on a number of subjective assessments, including the likelihood of a tax obligation being assessed, the amount of taxes (including interest and penalties) that would ultimately be payable, and our ability to settle any such obligations on favorable terms. Therefore, the amount of future cash flows associated with uncertain tax positions may be significantly higher or lower than our recorded liability and we are unable to reliably estimate when cash settlement may occur.
Current wording
As of December 28, 2024, we had a liability of $55 million for uncertain tax positions. Our estimate of liabilities for uncertain tax positions is based on a number of subjective assessments, including the likelihood of a tax obligation being assessed, the amount of taxes (including interest and penalties) that would ultimately be payable, and our ability to settle any such obligations on favorable terms. Therefore, the amount of future cash flows associated with uncertain tax positions may be significantly higher or lower than our recorded liability and we are unable to reliably estimate when cash settlement may occur.
Previous wording
Our liquidity is largely dependent on changes in our working capital, including sales of accounts receivable under our receivables sales programs and the extension of trade credit by our suppliers, investments in manufacturing inventory, facilities and equipment, repayments of obligations under outstanding indebtedness and repurchases of common stock. We generated $288 million of cash from operations for the nine months ended June 29, 2024. Our primary sources of liquidity as of June 29, 2024 consisted of (1) cash and cash equivalents of $658 million (an aggregate of $188 million of our cash is held by Sanmina SCI India Private Limited (“SIPL”), our existing Indian manufacturing entity, that may not be used for general corporate purposes and must be retained in SIPL to fund its operations); (2) our Credit Agreement, under which $786 million, net of outstanding borrowings and letters of credit, was available; (3) our foreign short-term borrowing facilities of $71 million, all of which was available; (4) proceeds from the sale of accounts receivable under our receivables sales programs and (5) cash generated from operations. Subject to satisfaction of certain conditions, including obtaining additional commitments from existing and/or new lenders, we may increase the revolving commitments under the Credit Agreement up to an additional $200 million.
Current wording
Our liquidity is largely dependent on changes in our working capital, including sales of accounts receivable under our receivables sales programs and the extension of trade credit by our suppliers, investments in manufacturing inventory, facilities and equipment, repayments of obligations under outstanding indebtedness and repurchases of common stock. We generated $64 million of cash from operations for the three months ended December 28, 2024. Our primary sources of liquidity as of December 28, 2024 consisted of (1) cash and cash equivalents of $642 million (an aggregate of $230 million of our cash is held by Sanmina SCI India Private Limited (“SIPL”), our existing Indian manufacturing entity, that may not be used for general corporate purposes and must be retained in SIPL to fund its operations); (2) our Credit Agreement, under which $791 million, net of outstanding borrowings and letters of credit, was available; (3) our foreign short-term borrowing facilities of $71 million, all of which was available; (4) proceeds from the sale of accounts receivable under our receivables sales programs and (5) cash generated from operations. Subject to satisfaction of certain conditions, including obtaining additional commitments from existing and/or new lenders, we may increase the revolving commitments under the Credit Agreement up to an additional $200 million.
Previous wording
As of June 29, 2024, 35% of our cash balance was held in the United States. Should we choose or need to remit cash to the United States from our foreign locations, we may incur tax obligations, which would reduce the amount of cash ultimately available to the United States. We believe that cash held in the United States, together with liquidity available under our Credit Agreement and cash from foreign subsidiaries that could be remitted to the United States without tax consequences, will be sufficient to meet our United States liquidity needs for at least the next twelve months.
Current wording
As of December 28, 2024, 32% of our cash balance was held in the United States. Should we choose or need to remit cash to the United States from our foreign locations, we may incur tax obligations, which would reduce the amount of cash ultimately available to the United States. We believe that cash held in the United States, together with liquidity available under our Credit Agreement and cash from foreign subsidiaries that could be remitted to the United States without tax consequences, will be sufficient to meet our United States liquidity needs for at least the next twelve months.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Selling, general and administrative expenses for the nine months ended June 29, 2024 and July 1, 2023 were $196 million and $193 million, respectively. As a percentage of net sales, selling, general and administrative expenses were 3.5% and 2.8% for the nine months ended June 29, 2024 and July 1, 2023, respectively. The increase in absolute dollars was primarily due to higher stock compensation expense from new equity grants which was partially offset by lower variable compensation and professional fees.