Sanmina Corporation · NASDAQ:SANM
Sanmina — Q1 FY2018 Earnings Presentation
22 slides from Sanmina's earnings presentation, Jan 29, 2018
Slide 1: Sanmina Q1 FY'18 Results
Sanmina Q1 FY’18 Results January 29, 2018 WHAT WE MAKE, MAKES A DIFFERENCE Concept to Delivery / Advanced Technology / Manufacturing & Global Supply Chain Solutions / Systems & Intelligence
Slide 2: Safe Harbor Statement
Safe Harbor Statement Certain statements made during this presentation, including the Company's outlook for the second quarter fiscal year 2018, and expectations for the second half of fiscal 2018, constitute forward-looking statements within the meaning of the safe harbor provisions of Section 21E
Slide 3: Financial Results
Financial Results (Unaudited) Three Month Period ($ in millions, except per share data) Q1’18 Q4’17 Q1’17 Revenue GAAP: Revenue $1,745 $1,755 $1,720 Late in quarter cancellations/push-outs Gross profit $109 $124 $132 primarily in communications segment Operating expense $96 $81 $74 Profitability O
Slide 4: Segment Reporting - Revenue and Gross Margin
Segment Reporting - Revenue and Gross Margin* ($ in Millions) Integrated Manufacturing Solutions Components, Products and Services $1,414 $1,408 $1,440 $1,429 $1,382 $357 $365 $357 $351 $350 7.6% 7.3% 7.3% 6.5% 10.2% 5.8% 9.5% 8.8% 8.4% 7.3% Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q1'17 Q2'17 Q3'17 Q4'17 Q1'1
Slide 5: Non-GAAP P&L Performance
Non-GAAP P&L Performance ($ in Millions, except per share data) Revenue Gross Profit / Margin $1,755 $136 $136 $1,745 $133 $126 $1,720 $1,711 $112 $1,682 7.9% 8.1% 7.8% 7.2% 6.4% Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Operating Income / Margin Earnings Per Share $72 $71 $71 $61
Slide 6: Summary Balance Sheet
Summary Balance Sheet ($ in Millions) 12/30/17 9/30/17 Cash and cash equivalents $405 $407 Accounts receivable, net 1,122 1,110 Inventories 1,080 1,052 Property, plant and equipment, net 635 640 Deferred tax assets 357 477 Other assets 161 162 Total assets $3,759 $3,847 Accounts payable $1,260 $1,28
Slide 7: Balance Sheet Metrics
Balance Sheet Metrics ($ in Millions) Cash and Cash Equivalents Inventory $ / Turns $436 $1,047 $1,052 $1,080 $433 $407 $1,019 $405 $405 $964 6.6x 6.2x 6.1x 6.2x 6.1x Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Inventory turns (annualized) are calculated as the ratio of four times co
Slide 8: Share Repurchase Program
Share Repurchase Program Q1’18 repurchased 1 million common shares for $34.3 million at an average share price of $33.62 $531.0 million share repurchases since FY’14 $219.0 million authorized for future purchases at the end of Q1’18 Opportunistic plan Shares Repurchased (M) 6.8 5.8 4.2 4.3 1
Slide 9: U.S. Tax Cuts and Jobs Act (Tax Act) – Impact to Sanmina
U.S. Tax Cuts and Jobs Act (Tax Act) – Impact to Sanmina Supportive of tax reform Believe it will immediately improve competitiveness of the U.S. Q1’18 non-cash charge of $162.4 million, primarily result of estimated reduction in carrying value of deferred tax asset No immediate plans for in
Slide 10: Consolidated Restructuring Plan
Consolidated Restructuring Plan Decision to optimize and re-align cost structure across the Company to support our long term profitable growth strategy 3 Facilities – Owego, New York – Two facilities in China Cash restructuring charges of approximately $35 million, paid through calendar 2019
Slide 11: Q2'18 Outlook
Q2’18 Outlook The following outlook is for the second fiscal quarter ending March 31, 2018. These statements are forward- looking and actual results may differ materially. Revenue: $1.60B - $1.70B GAAP Diluted EPS(1) : $0.20 - $0.30 Non-GAAP Diluted EPS: $0.40 - $0.50 (1) Includes stock-based compen
Slide 12: Sanmina CEO Remarks
Sanmina CEO Remarks January 29, 2018 WHAT WE MAKE, MAKES A DIFFERENCE Concept to Delivery / Advanced Technology / Manufacturing & Global Supply Chain Solutions / Systems & Intelligence
Slide 13: Q1'18 Revenue Breakdown By End-Market
Q1’18 Revenue Breakdown By End-Market Industrial/Medical/ Defense 46% Communications Networks 39% Embedded Computing & Storage 15% Industrial/Medical/Defense Communications Networks Embedded Computing & Storage (Industrial equipment, energy, oil and gas, medical (Networking, optical & wireless infra
Slide 14: Q2'18 End-market Outlook
Q2’18 End-market Outlook Industrial/Medical/Defense (Industrial equipment, energy, oil and gas and medical equipment, aerospace & defense) Communications Networks (Networking, optical & wireless infrastructure) Embedded Computing & Storage FLAT (Casino gaming equipment, set-top boxes, cinematogr
Slide 15: Summary
Summary Q1’18 – Disappointing profitability – Poor mix of business in IMS – Late in quarter (December) cancellations/push-outs – New programs not ramping as quickly as expected – Continued supply constraints Q2’18 – Seasonally soft quarter, particularly in industrial and communications – Supply
Slide 16: Consolidated Financial Statements – Reconciliation of GAAP vs. Non-GAAP
Sanmina Consolidated Financial Statements Reconciliation of GAAP vs. Non-GAAP Quarter Ended December 30, 2017 WHAT WE MAKE, MAKES A DIFFERENCE Concept to Delivery / Advanced Technology / Manufacturing & Global Supply Chain Solutions / Systems & Intelligence
Slide 17: GAAP Condensed Consolidated Balance Sheet
GAAP Condensed Consolidated Balance Sheet December 30, September 30, ($ in thousands) 2017 2017 (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 404,914 $ 406,661 Accounts receivable, net 1,121,800 1,110,334 Inventories 1,079,638 1,051,669 Prepaid expenses and other current assets 46,3
Slide 18: GAAP Condensed Consolidated Statement of Operations
GAAP Condensed Consolidated Statement of Operations (Unaudited) Three Months Ended Dec. 30, Dec. 31, ($ in thousands, except per share amounts) 2017 2016 Net sales $ 1,744,800 $ 1,719,977 Cost of sales 1,635,334 1,587,815 Gross profit 109,466 132,162 Operating expenses: Selling, general and administ
Slide 19: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures (Unaudited) Three Month Periods ($ in thousands, except per share data) Q1'18 Q4'17 Q3'17 Q2'17 Q1'17 GAAP Gross Profit $ 109,466 $ 123,851 $ 130,688 $ 133,210 $ 132,162 GAAP gross margin 6.3% 7.1% 7.6% 7.9% 7.7% Adjustments Stock compensation expense (1) 2,448 2,
Slide 20: Pre-tax Return on Invested Capital (ROIC)
Pre-tax Return on Invested Capital (ROIC) (Unaudited) Q1 FY18 GAAP operating income $ 13,788 x 4 Annualized GAAP operating income 55,152 Average invested capital (1) ÷ 1,272,979 GAAP pre-tax ROIC 4.3% Non-GAAP operating income $ 47,459 x 4 Annualized non-GAAP operating income 189,836 Average investe
Slide 21: Condensed Consolidated Cash Flow
Condensed Consolidated Cash Flow (Unaudited) Three Month Periods ($ in thousands) Q1'18 Q1'17 GAAP Net Income $ (154,910) $ 44,864 Depreciation and amortization 29,623 28,972 Other, net* 171,685 14,098 Net change in net working capital (37,958) (34,007) Cash provided by operating activities 8,440 53
Slide 22: What we make, makes a difference
What we make, makes a difference” <_ wat SANMINA