Sanmina Reports Second 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 second quarter ended March 29, 2025 and outlook for its third fiscal quarter ending June 28, 2025. Second Quarter Fiscal 2025 Financial Highlights Revenue: $1.98 billion GAAP operating margin: 4.6% GAAP diluted EPS: $1.16 Non-GAAP(1) operating margin: 5.6% Non-GAAP(1) diluted EPS: $1.41 Additional Highlights Cash flow from operations: $157 million Free cash flow(2): $126 million Share repurchases: 1.03 million shares for $84 million Ending cash and cash equivalents: $647 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 financial results for the second quarter, with revenue at the high end and non-GAAP earnings per share exceeding our outlook. Our ability to adapt to the evolving environment is reflected in our consistent operating margin and strong cash generation," stated Jure Sola, Chairman and Chief Executive Officer. "Our regional manufacturing footprint has enabled us to be agile and responsive to support our customers during these uncertain times. We remain focused on operational execution and driving shareholder value. Based on our results for the first half of fiscal 2025 and our outlook for the third quarter, we remain confident that fiscal 2025 will be a growth year," Sola concluded. Third Quarter Fiscal 2025 OutlookThe following outlook is for the third fiscal quarter ending June 28, 2025. These statements are forward-looking and actual results may differ materially. Revenue between $1.925 billion to $2.025 billion GAAP diluted earnings per share between $1.05 to $1.15 Non-GAAP diluted earnings per share between $1.35 to $1.45 Safe Harbor StatementThe statements above including our financial outlook for the third 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, including uncertainties related to trade policy; reliance on a small number of customers for a substantial portion of our sales; risks arising from our international operations; geopolitical uncertainty, 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 InformationSanmina will hold a conference call to review its financial results for the second quarter and outlook for the third quarter of fiscal 2025 on Monday, April 28, 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 Q2'25 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 31002#. About SanminaSanmina 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) March 29,2025 September 28,2024 ASSETS Current assets: Cash and cash equivalents $ 647,141 $ 625,860 Accounts receivable, net 1,383,116 1,337,562 Contract assets 384,629 384,077 Inventories 1,548,093 1,443,629 Prepaid expenses and other current assets 104,080 79,301 Total current assets 4,067,059 3,870,429 Property, plant and equipment, net 608,749 616,067 Deferred income tax assets 155,685 160,703 Other assets 135,139 175,646 Total assets $ 4,966,632 $ 4,822,845 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 1,351,087 $ 1,441,984 Accrued liabilities 125,655 132,513 Deferred revenue and customer advances 443,983 215,553 Accrued payroll and related benefits 134,879 133,129 Short-term debt, including current portion of long-term debt 17,500 17,500 Total current liabilities 2,073,104 1,940,679 Long-term liabilities: Long-term debt 291,394 299,823 Other liabilities 206,564 220,835 Total long-term liabilities 497,958 520,658 Stockholders' equity 2,395,570 2,361,508 Total liabilities and stockholders' equity $ 4,966,632 $ 4,822,845 Sanmina Corporation Condensed Consolidated Statements of Income (in thousands, except per share amounts) (GAAP) (Unaudited) Three Months Ended Six Months Ended March 29,2025 March 30,2024 March 29,2025 March 30,2024 Net sales $ 1,984,080 $ 1,834,595 $ 3,990,428 $ 3,709,393 Cost of sales 1,807,845 1,679,838 3,646,278 3,393,796 Gross profit 176,235 154,757 344,150 315,597 Operating expenses: Selling, general and administrative 76,313 69,199 147,158 133,984 Research and development 7,316 6,323 14,340 12,612 Restructuring 990 3,274 2,426 5,464 Total operating expenses 84,619 78,796 163,924 152,060 Operating income 91,616 75,961 180,226 163,537 Interest income 3,723 3,412 7,119 7,069 Interest expense (4,979) (8,218) (9,980) (16,630) Other income (expense), net (1,955) 3,276 (2,684) 2,143 Interest and other, net (3,211) (1,530) (5,545) (7,418) Income before income taxes 88,405 74,431 174,681 156,119 Provision for income taxes 17,890 19,122 33,282 40,446 Net income before noncontrolling interest 70,515 55,309 141,399 115,673 Less: Net income attributable to noncontrolling interest 6,307 2,824 12,188 6,120 Net income attributable to common shareholders $ 64,208 $ 52,485 $ 129,211 $ 109,553 Net income attributable to common shareholders per share: Basic $ 1.18 $ 0.94 $ 2.38 $ 1.95 Diluted $ 1.16 $ 0.93 $ 2.32 $ 1.91 Weighted-average shares used in computing per share amounts: Basic 54,405 55,585 54,304 56,062 Diluted 55,511 56,699 55,681 57,470 Sanmina Corporation Reconciliation of GAAP to Non-GAAP Measures (in thousands, except per share amounts) (Unaudited) Three Months Ended March 29,2025 December 28,2024 March 30,2024 GAAP Operating income $ 91,616 $ 88,610 $ 75,961 GAAP Operating margin 4.6 % 4.4 % 4.1 % Adjustments: Stock compensation expense (1) 15,790 15,292 14,651 Distressed customer charges (2) 159 6,872 4,299 Legal (3) — 450 1,350 Restructuring and other 3,081 1,436 3,274 Non-GAAP Operating income $ 110,646 $ 112,660 $ 99,535 Non-GAAP Operating margin 5.6 % 5.6 % 5.4 % GAAP Net income attributable to common shareholders $ 64,208 $ 65,003 $ 52,485 Adjustments: Operating income adjustments (see above) 19,030 24,050 23,574 Legal (3) — — (4,967) Adjustments for taxes (4) (5,201) (8,880) 2,849 Non-GAAP Net income attributable to common shareholders $ 78,037 $ 80,173 $ 73,941 GAAP Net income attributable to common shareholders per share: Basic $ 1.18 $ 1.20 $ 0.94 Diluted $ 1.16 $ 1.16 $ 0.93 Non-GAAP Net income attributable to common shareholders per share: Basic $ 1.43 $ 1.48 $ 1.33 Diluted $ 1.41 $ 1.44 $ 1.30 Weighted-average shares used in computing per share amounts: Basic 54,405 54,206 55,585 Diluted 55,511 55,853 56,699 (1) Stock compensation expense Cost of sales $ 4,931 $ 5,024 $ 4,416 Selling, general and administrative 10,580 9,962 9,984 Research and development 279 306 251 Total $ 15,790 $ 15,292 $ 14,651 (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. Q3 FY25 Earnings Per Share Outlook*: Q3 FY25 EPS Range Low High GAAP diluted earnings per share $ 1.05 $ 1.15 Stock compensation expense $ 0.30 $ 0.30 Non-GAAP diluted earnings per share $ 1.35 $ 1.45 * Due to uncertainty regarding the timing of recognition of restructuring, acquisition and integration expenses, impairment charges and other unusual or infrequent items, if any, that could be incurred during the third quarter of FY25, an estimate of such items is not included in the outlook for Q3 FY25 GAAP EPS. Sanmina Corporation Condensed Consolidated Cash Flow (in thousands) (GAAP) (Unaudited) Three Months Ended Six Months Ended March 29,2025 March 30,2024 March 29,2025 March 30,2024 Net income before noncontrolling interest $ 70,515 $ 55,309 $ 141,399 $ 115,673 Depreciation 28,208 30,274 60,053 61,000 Other, net 13,921 18,634 35,075 36,819 Net change in net working capital 44,214 (31,900) (15,731) (15,150) Cash provided by operating activities 156,858 72,317 220,796 198,342 Purchases of long-term investments (14,340) (700) (14,640) (1,300) Proceeds from long-term investments 49,309 — 49,309 — Net purchases of property & equipment (30,647) (29,611) (47,568) (63,827) Cash used in investing activities 4,322 (30,311) (12,899) (65,127) Net share repurchases (84,340) (1,255) (100,453) (107,605) Net borrowing activities (4,375) (4,375) (8,750) (17,195) Payments for tax withholding on stock-based compensation (29,312) (16,222) (37,655) (25,491) Cash used in financing activities (118,027) (21,852) (146,858) (150,291) Effect of exchange rate changes 1,165 (886) (179) 364 Net change in cash, cash equivalents & restricted cash equivalents $ 44,318 $ 19,268 $ 60,860 $ (16,712) Free cash flow: Cash provided by operating activities $ 156,858 $ 72,317 $ 220,796 $ 198,342 Net purchases of property & equipment (30,647) (29,611) (47,568) (63,827) $ 126,211 $ 42,706 $ 173,228 $ 134,515 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 Second Quarter Fiscal 2025 Financial Results

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