SANMINA CORP

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 any future pandemics 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, export controls and evolving trade policies on our business; any statements relating to future tax rates and tax policies 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 o…

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 and the pending acquisition of ZT Group Int’l, Inc. (“ZT Systems”); 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 any future pandemics 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, export controls and evolving trade policies on our business; any statements relating to future tax rates and tax policies 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 Sanmin…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

Our only reportable segment for financial reporting purposes is IMS, which represented approximately 80% of our total revenue for the six months ended March 29, 2025. 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 nine months ended June 28, 2025. 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

Sales to our ten largest customers represent approximately 50% of net sales. Net sales from these customers are derived from multiple segments. One customer represented 10% or more of our net sales for each of the three months ended March 29, 2025 and March 30, 2024. No customer represented 10% or more of our net sales for the six months ended March 29, 2025 and one customer represented 10% or more of our net sales for the six months ended March 30, 2024.

Current wording

Sales to our ten largest customers represent approximately 50% of net sales. Net sales from these customers are derived from multiple segments. No customer represented 10% or more of our net sales for the three and nine months ended June 28, 2025. One customer represented 10% or more of our net sales for the three and nine months ended June 29, 2024.

Previous wording

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 tax policies, that have been and could be in the future exacerbated by geopolitical environment such as changes in trade policies, the war in Ukraine, conflict in the Middle East and tensions between the U.S. and China.

Current wording

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, that have been and could be in the future exacerbated by geopolitical environment such as tensions between the U.S. and China, conflict in the Middle East and war in Ukraine.

Previous wording

Net sales increased 8.1% in the three months ended March 29, 2025 compared to the three months ended March 30, 2024 and 7.6% in the six months ended March 29, 2025 compared to the six months ended March 30, 2024, primarily due to ramp up of programs in our telecommunications end market.

Current wording

Net sales increased 10.9% in the three months ended June 28, 2025 compared to the three months ended June 29, 2024 and 8.7% in the nine months ended June 28, 2025 compared to the nine months ended June 29, 2024, primarily driven by new program wins and program ramp-ups in our communications networks and cloud infrastructure, as well as our medical end market.

Previous wording

Gross margin increased to 8.9% for the three months ended March 29, 2025 from 8.4% for the three months ended March 30, 2024. IMS gross margin was 7.7% for each of the three months ended March 29, 2025 and March 30, 2024. CPS gross margin increased to 13.9% for the three months ended March 29, 2025 from 12.9% for the three months ended March 30, 2024, primarily due to favorable customer mix and improved operating efficiencies.

Current wording

Gross margin increased to 8.9% for the three months ended June 28, 2025 from 8.3% for the three months ended June 29, 2024. IMS gross margin remained relatively stable, at 7.5% for the three months ended June 28, 2025 compared to 7.6% for the three months ended June 29, 2024. CPS gross margin increased to 14.7% for the three months ended June 28, 2025 from 11.5% for the three months ended June 29, 2024, primarily due to improved operating efficiencies.

Previous wording

Gross margin increased to 8.6% for the six months ended March 29, 2025 from 8.5% for the six months ended March 30, 2024. IMS gross margin increased to 7.8% for the six months ended March 29, 2025 from 7.6% for the six months ended March 30, 2024, primarily due to a favorable customer mix and improved operating efficiencies. CPS gross margin increased to 13.2% for the six months ended March 29, 2025 from 12.9% for the six months ended March 30, 2024.

Current wording

Gross margin increased to 8.7% for the nine months ended June 28, 2025 from 8.5% for the nine months ended June 29, 2024. IMS gross margin remained relatively stable at 7.7% for the nine months ended June 28, 2025 compared to 7.6% for the nine months ended June 29, 2024. CPS gross margin increased to 13.7% for the nine months ended June 28, 2025 from 12.4% for the nine months ended June 29, 2024, primarily due to improved operating efficiencies.

Previous wording

Selling, general and administrative expenses for the three months ended March 29, 2025 and March 30, 2024 were $76 million and $69 million, respectively. As a percentage of net sales, selling, general and administrative expenses were 3.8% for each of the three months ended March 29, 2025 and March 30, 2024. The increase in absolute dollars was primarily due to higher professional fees and variable compensation.

Current wording

Selling, general and administrative expenses for the three months ended June 28, 2025 and June 29, 2024 were $70 million and $62 million, respectively. As a percentage of net sales, selling, general and administrative expenses were 3.4% for each of the three months ended June 28, 2025 and June 29, 2024. The increase in absolute dollars was primarily due to higher variable compensation.

Previous wording

Selling, general and administrative expenses for the six months ended March 29, 2025 and March 30, 2024 were $147 million and $134 million, respectively. As a percentage of net sales, selling, general and administrative expenses were 3.7% and 3.6% for the six months ended March 29, 2025 and March 30, 2024, respectively. The increase in absolute dollars was primarily due to higher professional fees, variable compensation and stock compensation expense from new equity grants.

Current wording

Selling, general and administrative expenses for the nine months ended June 28, 2025 and June 29, 2024 were $217 million and $196 million, respectively. As a percentage of net sales, selling, general and administrative expenses were 3.6% and 3.5% for the nine months ended June 28, 2025 and June 29, 2024, respectively. The increase in absolute dollars was primarily due to higher variable compensation, professional fees and stock-based compensation expense from new equity grants.

Previous wording

Provision for income taxes for the three months ended March 29, 2025 and March 30, 2024 was $18 million (20% of income before taxes) and $19 million (26% of income before taxes), respectively. The effective tax rate was lower for the three months ended March 29, 2025 primarily due to change in the jurisdictional mix of earnings, and favorable discrete tax events, including a $3 million benefit from stock compensation.

Current wording

Provision for income taxes for the three months ended June 28, 2025 and June 29, 2024 was $19 million (20% of income before taxes) and $20 million (27% of income before taxes), respectively. The effective tax rate was lower for the three months ended June 28, 2025 primarily due to change in the jurisdictional mix of earnings and favorable discrete tax events, including a $2 million benefit from the release of certain foreign tax reserves due to expiration of statute of limitations.

Previous wording

Provision for income taxes for the six months ended March 29, 2025 and March 30, 2024 was $33 million (19% of income before taxes) and $40 million (26% of income before taxes), respectively. The effective tax rate was lower for the six months ended March 29, 2025 primarily due to a change in the jurisdictional mix of earnings, and favorable discrete tax events, including a $3 million benefit from a change in tax law, and a $4 million benefit from stock compensation.

Current wording

Provision for income taxes for the nine months ended June 28, 2025 and June 29, 2024 was $52 million (19% of income before taxes) and $60 million (26% of income before taxes), respectively. The effective tax rate was lower for the nine months ended June 28, 2025 primarily due to a change in the jurisdictional mix of earnings and favorable discrete tax events, including a $3 million benefit from a change in tax law, a $3 million benefit from the release of certain foreign tax reserves due to expiration of statute of limitations and a $4 million benefit from stock-based compensation.

Previous wording

Cash and cash equivalents were $647 million as of March 29, 2025 and $626 million as of September 28, 2024. Restricted cash equivalents as of March 29, 2025 were $40 million. 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 March 29, 2025 and September 28, 2024, respectively.

Current wording

Cash and cash equivalents were $798 million as of June 28, 2025 and $626 million as of September 28, 2024. Restricted cash equivalents as of June 28, 2025 were $40 million. 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 $2.1 billion and $1.9 billion as of June 28, 2025 and September 28, 2024, respectively.

Previous wording

Net cash provided by operating activities was $221 million for the six months ended March 29, 2025. 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 $422 million for the nine months ended June 28, 2025. 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 six months ended March 29, 2025, we generated $237 million of cash from earnings, excluding non-cash items, and used $16 million of cash due primarily to increase in deferred revenue and customer advances partially offset by increase in inventories and decrease in accounts payable. The increase in inventories resulted from additional purchases to meet customer orders. The increase in deferred revenue and customer advances was primarily due to increased customer advances. The decrease in accounts payable is primarily due to timing of payments.

Current wording

During the nine months ended June 28, 2025, we generated $353 million of cash from earnings, excluding non-cash items, and $69 million of cash due primarily to increase in deferred revenue and customer advances, partially offset by increases in inventories, contract assets, accounts receivables and decrease in accounts payable. The increases in inventories, contract assets and accounts receivables were consistent with the growth in business volume. The change in deferred revenue and customer advances is driven by increased customer deposits against raw material inventory purchases. The decrease in accounts payable is primarily due to timing of payments.

Previous wording

Net cash used in investing activities was $13 million for the six months ended March 29, 2025. During the six months ended March 29, 2025, we received $49 million from liquidation of investments held in a former rabbi trust for our deferred compensation plan assets, purchased $15 million of long-term investments and used $48 million of cash for capital expenditures.

Current wording

Net cash used in investing activities was $46 million for the nine months ended June 28, 2025. During the nine months ended June 28, 2025, we received $49 million from liquidation of investments held in a former rabbi trust for our deferred compensation plan assets, received $5 million proceeds primarily from the sale of certain property, purchased $15 million of long-term investments and used $85 million of cash for capital expenditures.

Previous wording

Net cash used in financing activities was $147 million for the six months ended March 29, 2025. During the six months ended March 29, 2025, we used $100 million of cash to repurchase common stock, withheld $38 million payments to tax authorities for stock-based compensation activity and repaid $9 million of borrowings.

Current wording

Net cash used in financing activities was $166 million for the nine months ended June 28, 2025. During the nine months ended June 28, 2025, we used $114 million of cash to repurchase common stock, withheld $39 million payments to tax authorities for stock-based compensation activity and repaid $13 million of borrowings.

Previous wording

During the six months ended March 29, 2025 and March 30, 2024, we repurchased 1 million and 2 million shares of our common stock for $100 million and $107 million, respectively, under stock repurchase programs authorized by our Board of Directors. During the second 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 March 29, 2025, an aggregate of $253 million remained available under these programs.

Current wording

We repurchased 1.4 million shares of our common stock for $114 million under stock repurchase programs authorized by our Board of Directors for the nine months ended June 28, 2025. During the second 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 June 28, 2025, an aggregate of $239 million remained available under these programs.

Previous wording

We are party to a Receivables Purchase Agreement, as amended (the “RPA”), with certain third-party banking institutions for the sale of trade receivables generated from sales to certain customers. The amount available under the RPA is uncommitted and, as such, is available at the discretion of our third-party banking institutions. Under the Fifth Amended and Restated Credit Agreement (the “Credit Agreement”), the percentage of our total trade receivables that can be sold and outstanding at any time is 50%. Therefore, as of March 29, 2025, a maximum of $457 million of sold receivables could be outstanding at any point in time under this program, as amended, as required by our Credit Agreement. Trade receivables sold pursuant to the RPA are serviced by us.

Current wording

We are party to a Receivables Purchase Agreement, as amended (the “RPA”), with certain third-party banking institutions for the sale of trade receivables generated from sales to certain customers. The amount available under the RPA is uncommitted and, as such, is available at the discretion of our third-party banking institutions. Under the Fifth Amended and Restated Credit Agreement (the “Credit Agreement”), the percentage of our total trade receivables that can be sold and outstanding at any time is 50%. Therefore, as of June 28, 2025, a maximum of $490 million of sold receivables could be outstanding at any point in time under this program, as amended, as required by our Credit Agreement. Trade receivables sold pursuant to the RPA are serviced by us.

Previous wording

The sale of receivables under all of these programs is subject to the approval of the banks or customers involved and there can be no assurance that we will be able to sell the maximum amount of receivables permitted by these programs when desired.

Current wording

In addition to the RPA, we participate in trade receivables sales programs that have been implemented by certain of our customers, as in effect from time to time. We do not service trade receivables sold under these other programs. The sale of receivables under all of these programs is subject to the approval of the banks or customers involved and there can be no assurance that we will be able to sell the maximum amount of receivables permitted by these programs when desired. See Note 6, “Accounts Receivable Sale Program” of the notes to the Condensed Consolidated Financial Statements contained in this report for details.

Previous wording

We enter into forward interest rate swap agreements with independent counterparties to partially hedge the variability in cash flows due to changes in the Secured Overnight Financing Rate benchmark interest rate associated with anticipated variable rate borrowings. In addition, during the three months ended March 29, 2025, we entered into a total return swap contract to manage the equity market risks associated with our deferred compensation plan liabilities. See Note 3, “Financial Instruments” of the notes to the Condensed Consolidated Financial Statements contained in this report for details.

Current wording

We enter into forward interest rate swap agreements with independent counterparties to partially hedge the variability in cash flows due to changes in the Secured Overnight Financing Rate benchmark interest rate associated with anticipated variable rate borrowings. In addition, beginning the second quarter of 2025, we entered into a total return swap contract to manage the equity market risks associated with our deferred compensation plan liabilities. See Note 3, “Financial Instruments” of the notes to the Condensed Consolidated Financial Statements contained in this report for details.

Previous wording

In the ordinary course of business, we are or may become party to legal proceedings, claims and other contingencies, including environmental, regulatory, warranty and employee matters and examinations by government agencies. As of March 29, 2025, we had accrued liabilities of $32 million related to such matters. We cannot accurately predict the outcome of these matters or the amount or timing of cash flows that may be required to defend ourselves or to settle such matters or that these reserves will be sufficient to fully satisfy our contingent liabilities.

Current wording

In the ordinary course of business, we are or may become party to legal proceedings, claims and other contingencies, including environmental, regulatory, warranty and employee matters and examinations by government agencies. As of June 28, 2025, we had accrued liabilities of $36 million related to such matters. We cannot accurately predict the outcome of these matters or the amount or timing of cash flows that may be required to defend ourselves or to settle such matters or that these reserves will be sufficient to fully satisfy our contingent liabilities.

Previous wording

As of March 29, 2025, 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.

Current wording

As of June 28, 2025, 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.

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 $221 million of cash from operations for the six months ended March 29, 2025. Our primary sources of liquidity as of March 29, 2025 consisted of (1) cash and cash equivalents of $647 million (an aggregate of $235 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.

Current wording

We generated $422 million of cash from operations for the nine months ended June 28, 2025. Our primary sources of liquidity as of June 28, 2025 consisted of (1) cash and cash equivalents of $798 million (an aggregate of $212 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 March 29, 2025, 27% 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 June 28, 2025, 40% 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.