Sanmina Corporation · NASDAQ:SANM
Sanmina — Q2 FY2021 Earnings Presentation
23 slides from Sanmina's earnings presentation, May 3, 2021
Slide 1: Q2 FY'21 Results
‘“e) Q2 FY'21 = =£ Lid >= Results SANMINA May 3, 2021 ——________
Slide 2: Today's Presenters
Today’s Presenters Jure Sola Kurt Adzema Chairman & CEO EVP & CFO
Slide 3: Safe Harbor Statement
Safe Harbor Statement Certain statements made during this presentation, including the Company's outlook for the third quarter fiscal 2021 financial results, constitute forward-looking statements within the meaning of the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934. A
Slide 4: Financial Review
Financial Review Kurt Adzema
Slide 5: Q2'21 Non-GAAP Financial Highlights
Q2’21 Non-GAAP Financial Highlights Q2’21 Outlook WAS Commentary Revenue $1.7B $1.65B - $1.75B Midpoint of outlook 4th consecutive quarter of gross margin Gross Margin 8.6% 7.6% - 8.2% over 8% 3rd consecutive quarter of operating Operating Margin 5.0% 4.1% - 4.7% margin of 5% or greater Dilute
Slide 6: P&L Performance
P&L Performance* ($ in Millions, except per share data) Revenue Non-GAAP Gross Profit / Margin $1,875 $156 $1,755 $1,700 $146 $146 $1,591 $1,655 $135 $110 8.1% 8.3% 8.3% 8.6% 6.9% Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Non-GAAP Operating Income / Margin Non-GAAP Earnings Per Sha
Slide 7: Segment Reporting – Revenue and Non-GAAP Gross Margin
Segment Reporting – Revenue and Non-GAAP Gross Margin* ($ in Millions) Integrated Manufacturing Solutions Components, Products and Services $359 $361 $1,547 $1,462 $331 $1,354 $1,370 $322 $319 14.2% $1,306 7.2% 7.3% 7.0% 6.9% 12.4% 12.4% 12.1% 5.8% 10.8% Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q2'20 Q3'20 Q4'
Slide 8: Strong Balance Sheet
Strong Balance Sheet Cash and cash equivalents: $575M, increase of $59M sequentially Debt to cash ratio: 0.6x Liquidity: $1.3B Cash flow from operations: Q2 $81M, YTD $143M Free cash flow: Q2 $67M, YTD $117M Financial Flexibility to Support Long-Term Objectives 8
Slide 9: Balance Sheet Metrics
Balance Sheet Metrics ($ in Millions) Cash and Cash Equivalents Inventory $ / Turns $1,115 $1,117 $884 $884 $861 $819 $785 7.3x 7.7x 7.7x $575 6.9x 6.9x $481 $516 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q2’20 and Q3’20 include $650 million of borrowings on our cash flow revolver,
Slide 10: Q3'21 Outlook
Q3’21 Outlook* The following outlook for the third fiscal quarter ended July 3, 2021. These statements are forward-looking and actual results Stronger demand may differ materially. Supply constraint uncertainty Revenue: $1.675B - $1.775B Ongoing effects of COVID-19 Expect positive free cash
Slide 11: CEO Remarks
w CEO — Lad > Remarks SANMINA Jure Sola ——________
Slide 12: Q2'21 Key Drivers
Q2’21 Key Drivers Stable Operational Supply Chain Cash Favorable Mix Demand Execution Excellence Management Broad-based Growth in CPS Driving efficiencies Executed well Strong cash flow despite supply challenges Executing Well in Dynamic Environment 12
Slide 13: Q2'21 Revenue By End-Market
Q2’21 Revenue By End-Market Communications Networks & Cloud Infrastructure Medical ($ in Millions) Q2’20 Q3’20 Q4’20* Q1’21 Q2’21 42% Communications Networks Communications Networks & $624 $717 $759 $723 $719 Cloud Cloud Infrastructure Solutions Industrial/Medical/ Q2’21 Defense/Automotive $967 $938
Slide 14: Q3'21 End-Market Outlook
Q3’21 End-Market Outlook Mission Critical, Heavily Regulated Markets 14
Slide 15: Management Priorities
Management Priorities Delivering Competitive Advantage to Our Customers 15
Slide 16: Summary
Summary Q2’21 – Revenue: $1.7B, at midpoint of outlook – Non-GAAP operating margin: 5.0% – Non-GAAP diluted EPS: $1.01, exceeded outlook – Free cash flow: $67M – Executed well in dynamic environment Q3’21 – Stronger demand – Continue to manage the supply chain and COVID-19 – Remain focused on fi
Slide 17: Consolidated Financial Statements Reconciliation of GAAP vs. Non-GAAP
Consolidated Financial Statements Reconciliation of GAAP vs. Non-GAAP Quarter Ended April 3, 2021
Slide 18: Condensed Consolidated Balance Sheets
Sanmina Corporation Condensed Consolidated Balance Sheets (in thousands) (GAAP) April 3, October 3, 2021 2020 (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 575,176 $ 480,526 Accounts receivable, net 1,122,962 1,043,334 Contract assets 334,957 396,583 Inventories 785,406 861,281 Prep
Slide 19: Condensed Consolidated Statements of Income
Sanmina Corporation Condensed Consolidated Statements of Income (in thousands, except per share amounts) (GAAP) (Unaudited) Three Months Ended Six Months Ended April 3, March 28, April 3, March 28, 2021 2020 2021 2020 Net sales $ 1,699,677 $ 1,590,550 $ 3,454,926 $ 3,430,721 Cost of sales 1,556,579
Slide 20: Reconciliation of GAAP to Non-GAAP Measures
Sanmina Corporation Reconciliation of GAAP to Non-GAAP Measures (in thousands, except per share amounts) (Unaudited) Three Month Periods Q2'21 Q1'21 Q4'20 Q3'20 Q2'20 GAAP Gross Profit $ 143,098 $ 141,235 $ 151,931 $ 131,473 $ 107,421 GAAP gross margin 8.4% 8.0% 8.1% 7.9% 6.8% Adjustments Stock comp
Slide 21: Pre-Tax Return on Invested Capital (ROIC)
Sanmina Corporation Pre-Tax Return on Invested Capital (ROIC) (in thousands) (Unaudited) Q2 FY21 Pre-tax Return on Invested Capital (ROIC) GAAP operating income $ 64,723 x 4.0 Annualized GAAP operating income 258,892 Average invested capital (1) ÷ 1,237,417 GAAP pre-tax ROIC 20.9% Non-GAAP operating
Slide 22: Condensed Consolidated Cash Flow Statement
Sanmina Corporation Condensed Consolidated Cash Flow Statement (in thousands) (Unaudited) Three Month Periods Q2'21 Q1'21 Q2'20 GAAP Net Income $ 47,037 $ 48,021 $ 4,882 Depreciation and amortization 27,196 27,635 28,042 Other, net 19,498 11,556 16,029 Net change in net working capital (12,642) (25,
Slide 23: Sanmina
_ SANMINA ——________