Sanmina Corporation · NASDAQ:SANM
Sanmina — Q3 FY2020 Earnings Presentation
22 slides from Sanmina's earnings presentation, Jul 29, 2020
Slide 1: Sanmina Q3 FY20 Results
Sanmina Q3 FY20 Results July 29, 2020 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 fourth quarter fiscal 2020 financial results, constitutes forward-looking statements within the meaning of the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934.
Slide 3: Q3 FY20 Non-GAAP P&L Summary
Q3 FY20 Non-GAAP P&L Summary Revenue: $1.65 billion, up 4% sequentially and exceeded outlook of $1.5 - $1.6 billion Gross margin: 8.1%, up 120 bps sequentially Operating expense: reduced $4 million sequentially Operating margin: 4.6%, up 160 basis points sequentially Diluted EPS: $0.86 3
Slide 4: Q3 FY20 Financial Information
Q3 FY20 Financial Information (Unaudited) Three Month Period ($ in millions, except per share data) Q3 FY20 Q2 FY20 Q3 FY19 GAAP: Revenue $1,655 $1,591 $2,027 Gross profit $131 $107 $148 Gross margin 7.9% 6.8% 7.3% Operating expense $67 $83 $80 Operating income $64 $24 $67 Operating margin 3.9% 1.5%
Slide 5: Non-GAAP P&L Performance
Non-GAAP P&L Performance ($ in Millions, except per share data) Revenue Gross Profit / Margin $2,027 $1,892 $1,840 $150 $144 $1,655 $138 $135 $1,591 $110 7.6% 7.5% 8.1% 7.4% 6.9% Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Operating Income / Margin Earnings Per Share $0.82 $0.84 $0.8
Slide 6: Segment Reporting - Revenue and Non-GAAP Gross Margin
Segment Reporting - Revenue and Non-GAAP Gross Margin* ($ in Millions) Integrated Manufacturing Solutions Components, Products and Services $1,720 $362 $1,601 $1,544 $342 $336 $337 $327 $1,300 $1,348 7.0% 12.0% 6.8% 6.6% 11.2% 10.9% 6.4% 10.2% 10.6% 5.8% Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q3'19 Q4'19 Q1'
Slide 7: Revenue By End-Market
Revenue By End-Market Sequential $ in Millions Q3 FY20 % of Sales Change Industrial/Medical/Defense/Automotive (Industrial equipment, energy, oil and gas, LIDAR, infotainment, control systems, MRI, CT scan, blood glucose meters, infusion, ultrasound and $938 (3.0%) 57% defense & aerospace) Communica
Slide 8: Strong Balance Sheet
Strong Balance Sheet Cash flow from operations: $64 million Free cash flow: $54 million Cash and cash equivalents: $1.1 billion Debt to cash ratio: 0.9x Repurchased 667,000 shares for approximately $17.5 million 8
Slide 9: Summary Balance Sheet
Summary Balance Sheet ($ in Millions) 6/27/20 3/28/20 9/28/19 Cash and cash equivalents $1,117 $1,115 $455 Accounts receivable, net 1,042 919 1,128 Contract Assets 381 407 396 Inventories 884 884 901 Property, plant and equipment, net 575 592 631 Deferred tax assets 277 285 280 Other assets 198 159
Slide 10: Balance Sheet Metrics
Balance Sheet Metrics ($ in Millions) Cash and Cash Equivalents Inventory $ / Turns $1,115 $1,117 $915 $901 $844 $884 $884 7.8x 7.7x 7.8x 6.9x 6.9x $414 $455 $431 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q2’20 and Q3’20 include $650 million of borrowings on our cash flow revolver.
Slide 11: Q4 FY20 Outlook
Q4 FY20 Outlook* The following outlook for the fourth fiscal quarter ended October 3, 2020 takes into account any additional revenue and expenses associated with a 14 week quarter. These statements are forward- Our operations on all 6 continents are running and the vast looking and actual results
Slide 12: CEO Remarks
Sanmina CEO Remarks WHAT WE MAKE, MAKES A DIFFERENCE Concept to Delivery / Advanced Technology / Manufacturing & Global Supply Chain Solutions / Systems & Intelligence 12
Slide 13: Q4 FY20 End-Market Outlook
Q4 FY20 End-Market Outlook Focused on High-Complexity, Heavily Regulated Markets Communications Networks Industrial/Medical/Defense/Automotive Cloud Solutions Relatively Stable Demand Across All Segments 13
Slide 14: Key Initiatives
Key Initiatives Focus on customers Critical for new in high-complexity, Profitable Market Leading program wins and mission-critical end Revenue Onboarding time to revenue markets Growth Processes Supports attractive Flexibility to invest in margins regardless Lean and Flexible Cash Flow busi
Slide 15: Summary
Summary Q3 FY20 Revenue, margins and EPS exceeded expectations Generated free cash flow of $54 million Healthy balance sheet Q4 FY20 Revenue outlook of $1.73 billion - $1.83 billion Non-GAAP diluted EPS outlook of $0.73 - $0.83 Expect to generate free cash flow Focused on customer requ
Slide 16: Reconciliation of GAAP and Non-GAAP Measures
Sanmina Consolidated Financial Statements Reconciliation of GAAP and Non-GAAP Measures Quarter Ended June 27, 2020 WHAT WE MAKE, MAKES A DIFFERENCE Concept to Delivery / Advanced Technology / Manufacturing & Global Supply Chain Solutions / Systems & Intelligence
Slide 17: GAAP Condensed Consolidated Balance Sheet
GAAP Condensed Consolidated Balance Sheet June 27, September 28, ($ in thousands) 2020 2019 (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 1,117,217 $ 454,741 Short-term investments 30,000 - Accounts receivable, net 1,042,011 1,128,379 Contract assets 381,249 396,300 Inventories 883,
Slide 18: GAAP Condensed Consolidated Statement of Operations
GAAP Condensed Consolidated Statement of Operations (Unaudited) Three Months Ended Nine Months Ended June 27, June 29, June 27, June 29, ($ in thousands, except per share data) 2020 2019 2020 2019 Net sales $ 1,654,691 $ 2,026,995 $ 5,085,412 $ 6,341,652 Cost of sales 1,523,218 1,879,200 4,711,636 5
Slide 19: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures (Unaudited) Three Month Periods ($ in thousands, except per share data) Q3'20 Q2'20 Q1'20 Q4'19 Q3'19 GAAP Gross Profit $ 131,473 $ 107,421 $ 134,882 $ 141,704 $ 147,795 GAAP gross margin 7.9% 6.8% 7.3% 7.5% 7.3% Adjustments Stock compensation expense (1) 2,772 2,
Slide 20: Pre-tax Return on Invested Capital (ROIC)
Pre-tax Return on Invested Capital (ROIC) (Unaudited) ($ in thousands) Q3 FY20 Pre-tax Return on Invested Capital (ROIC) GAAP operating income $ 64,103 x 4 Annualized GAAP operating income 256,412 Average invested capital (1) ÷ 1,247,777 GAAP pre-tax ROIC 20.5% Non-GAAP operating income $ 75,831 x 4
Slide 21: Condensed Consolidated Cash Flow
Condensed Consolidated Cash Flow (Unaudited) Three Month Periods ($ in thousands) Q3'20 Q2'20 Q3'19 GAAP Net Income $ 44,880 $ 4,882 $ 42,921 Depreciation and amortization 28,886 28,042 29,561 Other, net* 15,532 16,029 9,960 Net change in net working capital (25,531) 86,775 83,024 Cash provided by o
Slide 22: What we make, makes a difference
What we make, makes a difference” pa wat SANMINA