Slide 1: Sanmina Q4 & FY'19 Results
Sanmina Q4 & FY’19 Results October 28, 2019 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 first quarter fiscal 2020 results and the expected cost and anticipated benefits of the Company’s right-sizing plan, constitute forward-looking statements within the meaning of the safe ha
Slide 3: Financial Results Compared to Outlook
Financial Results Compared to Outlook Q4'19(A) Q4'19 Outlook WAS Revenue: $1.9B $1.9B - $2.0B GAAP Diluted EPS: $0.27 $0.61 - $0.71 Non-GAAP Diluted EPS(1): $0.84 $0.73 - $0.83 (1)See slide 22 for non-GAAP reconciliation. 3
Slide 4: Financial Results
Financial Results (Unaudited) Three Month Period Twelve Month Period ($ in millions, except per share data) Q4’19 Q3’19 Q4’18 FY’19 FY’18 GAAP: Revenue $1,892 $2,027 $1,876 $8,234 $7,110 Gross profit $142 $148 $121 $592 $464 Operating expense $79 $80 $111 $306 $344 Operating income $63 $67 $10 $286
Slide 5: Q4'19 Revenue By End-Market
Q4’19 Revenue By End-Market Outlook Communications $ in Millions Q4’19 Sequential Y-Y WAS Networks Medical 33% Communications Communications Networks $630 (14.5%) (8.8%) (Networking, optical & wireless infrastructure) Networks Cloud Industrial/Medical/Defense/Automotive SolutionsCloud 8% Solutions
Slide 6: FY'19 Revenue By End-Market
FY’19 Revenue By End-Market Outlook Communications $ in Millions FY’19 FY’18 Y-Y WAS Networks Medical 35% Communications Communications Networks $2,907 $2,685 8.3% (Networking, optical & wireless infrastructure) Networks Cloud Industrial/Medical/Defense/Automotive Solutions Cloud (Industrial equip
Slide 7: Segment Reporting - Revenue and Non-GAAP Gross Margin
Segment Reporting - Revenue and Non-GAAP Gross Margin* ($ in Millions) Integrated Manufacturing Solutions Components, Products and Services $1,793 $1,793 $1,720 $456 $1,554 $1,601 $395 $382 $362 $342 6.8% 11.2% 10.2% 10.2% 6.3% 6.2% 6.4% 6.4% 8.9% 6.6% Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q4'18 Q1'19 Q2'19
Slide 8: Non-GAAP P&L Performance
Non-GAAP P&L Performance ($ in Millions, except per share data) Revenue Gross Profit / Margin $151 $155 $150 $2,188 $2,127 $144 $2,027 $1,876 $1,892 $124 7.3% 7.4% 7.6% 6.6% 6.9% Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Operating Income / Margin Earnings Per Share $0.91 $87 $0.83
Slide 9: Y-Y Non-GAAP P&L Performance
Y-Y Non-GAAP P&L Performance ($ in Millions, except per share data) Revenue Gross Profit / Margin $8,234 $600 $6,869 $7,110 $519 $532 $6,217 $6,375 $6,481 $496 $502 $470 8.0% 7.9% 8.0% 7.7% 7.3% 6.6% FY'14 FY'15 FY'16 FY'17 FY'18 FY'19 FY'14 FY'15 FY'16 FY'17 FY'18 FY'19 Operating Income / Margin Ea
Slide 10: Summary Balance Sheet
Summary Balance Sheet ($ in Millions) 9/28/19 6/29/19 9/29/18 Cash and cash equivalents $455 $414 $420 Accounts receivable, net 1,128 1,235 1,177 Contract Assets 396 387 - Inventories 901 915 1,374 Property, plant and equipment, net 631 635 643 Deferred tax assets 280 308 344 Other assets 115 125 12
Slide 11: Return of Capital - Expanded Share Repurchase Program
Return of Capital - Expanded Share Repurchase Program Repurchased 26.4M shares for approximately $649 million since FY’14 Reduced shares outstanding from 84.2M shares in FY’13 to 69.7M shares in FY’19 $100.8 million remains available under current program Board authorized today an additional
Slide 12: Balance Sheet Metrics
Balance Sheet Metrics ($ in Millions) Cash and Cash Equivalents Inventory $ / Turns* $455 $1,374 $1,444 $1,388 $1,281 $1,272 $420 $409 $405 $414 $1,054 $1,007 $915 $901 7.7x 6.7x 7.8x 7.7x 5.5x 5.6x 5.5x 5.6x 5.4x Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q4'18 Q1'19 Q1'19 Q2'19 Q2'19 Q3'19 Q3'19 Q4'19 Q4'19 Ol
Slide 13: Capital Structure & Capital Allocation Priorities
Capital Structure & Capital Allocation Priorities $375M bank term loan matures November 30th, 2023 Upsized credit facility to $700M - $692M available at FY’19’s year end Gross leverage ratio is .91 based on total debt at end of Q4’19 Generated $383M of cash flow from ops and $256M of free ca
Slide 14: Q1'20 Outlook
Q1’20 Outlook The following outlook is for the first fiscal quarter ending December 28, 2019. These statements are forward-looking and actual results may differ materially. Revenue: $1.725B - $1.825B GAAP Diluted EPS: $0.52 - $0.62 Non-GAAP Diluted EPS: $0.65 - $0.75 14
Slide 15: End-market Outlook
Sanmina End-market Outlook WHAT WE MAKE, MAKES A DIFFERENCE Concept to Delivery / Advanced Technology / Manufacturing & Global Supply Chain Solutions / Systems & Intelligence
Slide 16: Q1'20 End-Market Outlook
Q1’20 End-Market Outlook Q1’20 Communications Networks (Networking, optical & wireless infrastructure) Industrial/Medical/Defense/Automotive FLAT (Industrial equipment, energy, oil and gas, MRI, CT scan, blood glucose meters, infusion and ultrasound, LIDAR, infotainment, control systems and defens
Slide 17: CEO Remarks
Sanmina CEO Remarks WHAT WE MAKE, MAKES A DIFFERENCE Concept to Delivery / Advanced Technology / Manufacturing & Global Supply Chain Solutions / Systems & Intelligence 17
Slide 18: Summary
Summary Q4’19 – Operating margin of 4.2%, up 20 basis points sequentially – Revenue $1.9 billion, lower than expected – Non-GAAP diluted EPS of $0.84, through efficiency improvement FY’19 – Revenue up 16%, solid growth year – Operating margin 4.1%, in line with our 4%+ margin objective – Non-GAA
Slide 19: Consolidated Financial Statements, Reconciliation of GAAP vs. Non-GAAP
Sanmina Consolidated Financial Statements Reconciliation of GAAP vs. Non-GAAP Quarter Ended September 28, 2019 WHAT WE MAKE, MAKES A DIFFERENCE Concept to Delivery / Advanced Technology / Manufacturing & Global Supply Chain Solutions / Systems & Intelligence
Slide 20: GAAP Condensed Consolidated Balance Sheet
GAAP Condensed Consolidated Balance Sheet September 28, September 29, 2019 2018 ($ in thousands) (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 454,741 $ 419,528 Accounts receivable, net 1,128,379 1,177,219 Contract assets 396,300 - Inventories 900,557 1,374,004 Prepaid expenses and
Slide 21: GAAP Condensed Consolidated Statement of Operations
GAAP Condensed Consolidated Statement of Operations (Unaudited) Three Months Ended Twelve Months Ended Sept. 28, Sept. 29, Sept. 28, Sept. 29, ($ in thousands, except per share data) 2019 2018 2019 2018 Net sales $ 1,892,207 $ 1,876,335 $ 8,233,859 $ 7,110,130 Cost of sales 1,750,503 1,755,252 7,641
Slide 22: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures (Unaudited) Three Month Periods Twelve Month Periods ($ in thousands, except per share data) Q4'19 Q3'19 Q2'19 Q1'19 Q4'18 FY19 FY18 GAAP Gross Profit $ 141,704 $ 147,795 $ 153,102 $ 149,337 $ 121,083 $ 591,938 $ 463,783 GAAP gross margin 7.5% 7.3% 7.2% 6.8% 6.5%
Slide 23: Pre-tax Return on Invested Capital (ROIC)
Pre-tax Return on Invested Capital (ROIC) (Unaudited) ($ in thousands) Q4 FY19 Pre-tax Return on Invested Capital (ROIC) GAAP operating income $ 63,085 x 4 Annualized GAAP operating income 252,340 Average invested capital (1) ÷ 1,352,195 GAAP pre-tax ROIC 18.7% Non-GAAP operating income $ 79,627 x 4
Slide 24: Condensed Consolidated Cash Flow
Condensed Consolidated Cash Flow (Unaudited) Three Month Periods Twelve Month Periods ($ in thousands) Q4'19 Q3'19 Q4'18 FY19 FY18 GAAP Net Income $ 19,757 $ 42,921 $ 782 $141,515 $ (95,533) Depreciation and amortization 28,508 29,561 29,686 116,949 118,820 Other, net* 41,332 9,960 36,926 87,731 238
Slide 25: What we make, makes a difference
What we make, makes a difference” pa wat SANMINA