Sanmina Reports First Quarter Fiscal 2025 Financial Results

, /PRNewswire/ -- Sanmina Corporation ("Sanmina" or the "Company") (NASDAQ: SANM), a leading integrated manufacturing solutions company, today reported financial results for the first quarter ended December 28, 2024 and outlook for its second fiscal quarter ending March 29, 2025. First Quarter Fiscal 2025 Financial Highlights • Revenue: $2.01 billion • GAAP operating margin: 4.4% • GAAP diluted EPS: $1.16 • Non-GAAP(1) operating margin: 5.6% • Non-GAAP(1) diluted EPS: $1.44 Additional Highlights • Cash flow from operations: $64 million • Free cash flow(2): $47 million • Share repurchases: 0.2 million shares for $16 million • Ending cash and cash equivalents: $642 million (1) See Schedule 1 below for information regarding the items excluded from and our use of non-GAAP financial measures. A reconciliation of the non-GAAP financial information contained in this release to their most directly comparable GAAP measures is included in the financial statements furnished with this release. (2) See Condensed Consolidated Cash Flow Statement included in the financial statements furnished with this release. "We delivered solid first quarter financial results, with revenue towards the high end and non-GAAP earnings per share exceeding our outlook. We continue to execute well, as evident in our consistent operating margin and cash generation," stated Jure Sola, Chairman and Chief Executive Officer of Sanmina Corporation. "Our operational discipline and ability to service our customers will further strengthen our operating model and drive shareholder value. We continue to see positive trends and are confident that fiscal 2025 will be a growth year." Expanded Share Repurchase Program Sanmina's Board of Directors has authorized the repurchase of up to an additional $300 million of Sanmina's common stock. The stock repurchase program has no expiration date. As of December 28, 2024, approximately $37 million remained available under the current repurchase program. The expansion of this program is consistent with Sanmina's capital allocation priorities. Second Quarter Fiscal 2025 Outlook The following outlook is for the second fiscal quarter ending March 29, 2025. These statements are forward-looking and actual results may differ materially. Revenue between $1.9 billion to $2.0 billion GAAP diluted earnings per share between $1.03 to $1.13 Non-GAAP diluted earnings per share between $1.30 to $1.40 Safe Harbor Statement The statements above including our financial outlook for the second quarter fiscal 2025 and expectations for growth in fiscal 2025 generally, constitute forward-looking statements within the meaning of the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934. Actual results could differ materially from those projected in these statements as a result of a number of factors, including adverse changes to the key markets we target; significant uncertainties that can cause our future sales and net income to be variable; reliance on a small number of customers for a substantial portion of our sales; risks arising from our international operations; geopolitical uncertainty, including from the war in Ukraine and conflict in the Middle East; and the other risk factors set forth in the Company's annual and quarterly reports filed with the Securities Exchange Commission. The Company is under no obligation to (and expressly disclaims any such obligation to) update or alter any of the forward-looking statements made in this earnings release, the conference call or the Investor Relations section of our website whether as a result of new information, future events or otherwise, unless otherwise required by law. Company Conference Call Information Sanmina will hold a conference call to review its financial results for the first quarter and outlook for the second quarter of fiscal 2025 on Monday, January 27, 2025 at 5:00 p.m. ET (2:00 p.m. PT). The access numbers are: domestic 800-836-8184 and international 646-357-8785. The conference will also be webcast live over the Internet. You can log on to the live webcast at Q1'25 Earnings. Additional information in the form of a slide presentation is available on Sanmina's website at www.sanmina.com. A replay of the conference call will be available for 48-hours. The access numbers are: domestic 888-660-6345 and international 646-517-4150, access code is 98068#. About Sanmina Sanmina Corporation, a Fortune 500 company, is a leading integrated manufacturing solutions provider serving the fastest growing segments of the global Electronics Manufacturing Services (EMS) market. Recognized as a technology leader, Sanmina provides end-to-end manufacturing solutions, delivering superior quality and support to Original Equipment Manufacturers (OEMs) primarily in the industrial, medical, defense and aerospace, automotive, communications networks and cloud infrastructure markets. Sanmina has facilities strategically located in key regions throughout the world. More information about the Company is available at www.sanmina.com. Sanmina ContactPaige MelchingSVP, Investor Communications408-964-3610 Sanmina Corporation Condensed Consolidated Balance Sheets (in thousands) (GAAP) (Unaudited) December 28,2024 September 28,2024 ASSETS Current assets: Cash and cash equivalents $ 642,402 $ 625,860 Accounts receivable, net 1,354,199 1,337,562 Contract assets 386,633 384,077 Inventories 1,425,869 1,443,629 Prepaid expenses and other current assets 67,347 79,301 Total current assets 3,876,450 3,870,429 Property, plant and equipment, net 605,073 616,067 Deferred income tax assets 153,246 160,703 Other assets 177,253 175,646 Total assets $ 4,812,022 $ 4,822,845 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 1,391,649 $ 1,441,984 Accrued liabilities 107,665 132,513 Deferred revenue and customer advances 239,642 215,553 Accrued payroll and related benefits 126,483 133,129 Short-term debt, including current portion of long-term debt 17,500 17,500 Total current liabilities 1,882,939 1,940,679 Long-term liabilities: Long-term debt 295,608 299,823 Other liabilities 212,283 220,835 Total long-term liabilities 507,891 520,658 Stockholders' equity 2,421,192 2,361,508 Total liabilities and stockholders' equity $ 4,812,022 $ 4,822,845 Sanmina Corporation Condensed Consolidated Statements of Income (in thousands, except per share amounts) (GAAP) (Unaudited) Three Months Ended December 28,2024 December 30,2023 Net sales $ 2,006,348 $ 1,874,798 Cost of sales 1,838,433 1,713,958 Gross profit 167,915 160,840 Operating expenses: Selling, general and administrative 70,845 64,785 Research and development 7,024 6,289 Restructuring 1,436 2,190 Total operating expenses 79,305 73,264 Operating income 88,610 87,576 Interest income 3,396 3,657 Interest expense (5,001) (8,412) Other income (expense), net (729) (1,133) Interest and other, net (2,334) (5,888) Income before income taxes 86,276 81,688 Provision for income taxes 15,392 21,324 Net income before noncontrolling interest 70,884 60,364 Less: Net income attributable to noncontrolling interest 5,881 3,296 Net income attributable to common shareholders $ 65,003 $ 57,068 Net income attributable to common shareholders per share: Basic $ 1.20 $ 1.01 Diluted $ 1.16 $ 0.98 Weighted-average shares used in computing per share amounts: Basic 54,206 56,538 Diluted 55,853 58,240 Sanmina Corporation Reconciliation of GAAP to Non-GAAP Measures (in thousands, except per share amounts) (Unaudited) Three Months Ended December 28,2024 September 28,2024 December 30,2023 GAAP Operating income $ 88,610 $ 89,590 $ 87,576 GAAP Operating margin 4.4 % 4.4 % 4.7 % Adjustments: Stock compensation expense (1) 15,292 15,489 12,585 Distressed customer charges (2) 6,872 — — Legal (3) 450 (720) — Restructuring 1,436 2,970 2,190 Non-GAAP Operating income $ 112,660 $ 107,329 $ 102,351 Non-GAAP Operating margin 5.6 % 5.3 % 5.5 % GAAP Net income attributable to common shareholders $ 65,003 $ 61,381 $ 57,068 Adjustments: Operating income adjustments (see above) 24,050 17,739 14,775 Adjustments for taxes (4) (8,880) 1,175 3,961 Non-GAAP Net income attributable to common shareholders $ 80,173 $ 80,295 $ 75,804 GAAP Net income attributable to common shareholders per share: Basic $ 1.20 $ 1.12 $ 1.01 Diluted $ 1.16 $ 1.09 $ 0.98 Non-GAAP Net income attributable to common shareholders per share: Basic $ 1.48 $ 1.47 $ 1.34 Diluted $ 1.44 $ 1.43 $ 1.30 Weighted-average shares used in computing per share amounts: Basic 54,206 54,783 56,538 Diluted 55,853 56,235 58,240 (1) Stock compensation expense Cost of sales $ 5,024 $ 4,700 $ 4,050 Selling, general and administrative 9,962 10,461 8,340 Research and development 306 328 195 Total $ 15,292 $ 15,489 $ 12,585 (2) Relates to accounts receivable and inventory write-downs associated with distressed customers. (3) Represents charges and recoveries associated with certain legal matters. (4) Adjustments for taxes include the tax effects of the various adjustments we exclude from our non-GAAP measures, and adjustments related to deferred tax and discrete tax items. Q2 FY25 Earnings Per Share Outlook*: Q2 FY25 EPS Range Low High GAAP diluted earnings per share $ 1.03 $ 1.13 Stock compensation expense $ 0.27 $ 0.27 Non-GAAP diluted earnings per share $ 1.30 $ 1.40 * Due to uncertainty regarding the timing of recognition of restructuring charges, impairment charges and other unusual or infrequent items, if any, that could be incurred during the second quarter of FY25, an estimate of such items is not included in the outlook for Q2 FY25 GAAP EPS. Sanmina Corporation Condensed Consolidated Cash Flow (in thousands) (GAAP) (Unaudited) Three Month Periods Q1'25 Q4'24 Q3'24 Q2'24 Q1'24 Net income before noncontrolling interest $ 70,884 $ 67,340 $ 54,738 $ 55,309 $ 60,364 Depreciation 31,845 31,654 29,764 30,274 30,726 Other, net 21,154 30,110 19,708 18,634 18,185 Net change in net working capital (59,945) (77,229) (14,211) (31,900) 16,750 Cash provided by operating activities 63,938 51,875 89,999 72,317 126,025 Purchases of long-term investments (300) (3,300) (600) (700) (600) Net purchases of property & equipment (16,921) (22,597) (22,772) (29,611) (34,216) Cash used in investing activities (17,221) (25,897) (23,372) (30,311) (34,816) Net share repurchases (24,456) (60,412) (54,629) (17,477) (115,619) Net borrowing activities (4,375) — (4,375) (4,375) (12,820) Cash used in financing activities (28,831) (60,412) (59,004) (21,852) (128,439) Effect of exchange rate changes (1,344) 2,585 (772) (886) 1,250 Net change in cash & cash equivalents $ 16,542 $ (31,849) $ 6,851 $ 19,268 $ (35,980) Free cash flow: Cash provided by operating activities $ 63,938 $ 51,875 $ 89,999 $ 72,317 $ 126,025 Net purchases of property & equipment (16,921) (22,597) (22,772) (29,611) (34,216) $ 47,017 $ 29,278 $ 67,227 $ 42,706 $ 91,809 Schedule 1 The statements above and financial information provided in this earnings release include non-GAAP measures of operating income, operating margin, net income and earnings per share. Management excludes from these measures stock-based compensation, restructuring, acquisition and integration expenses, impairment charges, amortization charges and other unusual or infrequent items, as adjusted for taxes, as more fully described below. Management excludes these items principally because such charges or benefits are not directly related to the Company's ongoing core business operations. We use such non-GAAP measures in order to (1) make more meaningful period-to-period comparisons of the Company's operations, both internally and externally, (2) guide management in assessing the performance of the business, internally allocating resources and making decisions in furtherance of Company's strategic plan, (3) provide investors with a better understanding of how management plans and measures the business and (4) provide investors with a better understanding of our ongoing, core business. The material limitations to management's approach include the fact that the charges, benefits and expenses excluded are nonetheless charges, benefits and expenses required to be recognized under GAAP and, in some cases, consume cash which reduces the Company's liquidity. Management compensates for these limitations primarily by reviewing GAAP results to obtain a complete picture of the Company's performance and by including a reconciliation of non-GAAP results to GAAP results in its earnings releases. Additional information regarding the economic substance of each exclusion, management's use of the resultant non-GAAP measures, the material limitations of management's approach and management's methods for compensating for such limitations is provided below. Stock-based Compensation Expense, which consists of non-cash charges for the estimated fair value of equity awards granted to employees and directors, is excluded in order to permit more meaningful period-to-period comparisons of the Company's results since the Company grants different amounts and value of equity awards each quarter. In addition, given the fact that competitors grant different amounts and types of equity awards and may use different valuation assumptions, excluding stock-based compensation permits more accurate comparisons of the Company's core results with those of its competitors. Restructuring, Acquisition and Integration Expenses, which consist of employee severance, lease termination costs, exit costs, environmental investigation, remediation and related employee costs and other charges primarily related to closing and consolidating manufacturing facilities and those associated with the acquisition and integration of acquired businesses, are excluded because such charges (1) can be driven by the timing of acquisitions and exit activities which are difficult to predict, (2) are not directly related to ongoing business results and (3) generally do not reflect expected future operating expenses. In addition, given the fact that the Company's competitors complete acquisitions and adopt restructuring plans at different times and in different amounts than the Company, excluding these charges or benefits permits more accurate comparisons of the Company's core results with those of its competitors. Items excluded by the Company may be different from those excluded by the Company's competitors and restructuring and integration expenses include both cash and non-cash expenses. Cash expenses reduce the Company's liquidity. Therefore, management also reviews GAAP results including these amounts. Impairment Charges for Goodwill and Other Assets, which consist of non-cash charges, are excluded because such charges are non-recurring and do not reduce the Company's liquidity. In addition, given the fact that the Company's competitors may record impairment charges at different times, excluding these charges permits more accurate comparisons of the Company's core results with those of its competitors. Amortization Charges, which consist of non-cash charges impacted by the timing and magnitude of acquisitions of businesses or assets, are also excluded because such charges do not reduce the Company's liquidity. In addition, such charges can be driven by the timing of acquisitions, which is difficult to predict. Excluding these charges permits more accurate comparisons of the Company's core results with those of its competitors because the Company's competitors complete acquisitions at different times and for different amounts than the Company. Other Unusual or Infrequent Items, such as charges or benefits associated with distressed customers, expenses, charges and recoveries relating to certain legal matters, and gains and losses on sales of assets, are excluded because such items are typically non-recurring, difficult to predict or not directly related to the Company's ongoing or core operations and are therefore not considered by management in assessing the current operating performance of the Company and forecasting earnings trends. However, items excluded by the Company may be different from those excluded by the Company's competitors. In addition, these items include both cash and non-cash expenses. Cash expenses reduce the Company's liquidity. Management compensates for these limitations by reviewing GAAP results including these amounts. Adjustments for Taxes, which consist of the tax effects of the various adjustments that we exclude from our non-GAAP measures and adjustments related to deferred tax and discrete tax items. Including these adjustments permits more accurate comparisons of the Company's core results with those of its competitors. We determine the tax adjustments based upon the various applicable effective tax rates. In those jurisdictions in which we do not expect to realize a tax cost or benefit (due to a history of operating losses or other factors), a reduced tax rate is applied. 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Sanmina Reports First Quarter Fiscal 2025 Financial Results

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