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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934.
FOR THE FISCAL YEAR ENDED OCTOBER 2, 1999.
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934.
FOR THE TRANSITION PERIOD FROM ____________ TO ____________ .
COMMISSION FILE NUMBER: 0-21272
SANMINA CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 77-0228183
(STATE OR OTHER JURISDICTION OF INCORPORATION OR (I.R.S. EMPLOYER IDENTIFICATION NO.)
ORGANIZATION)
2700 NORTH FIRST STREET, SAN JOSE, CA 95134
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (408) 964-3500
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
COMMON STOCK, $0.01 PAR VALUE
(TITLE OF CLASS)
Indicate by check mark whether the Registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosures of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in part III of this Form 10-K or any amendment to this
Form 10-K. [X]
The aggregate value of voting stock held by non-affiliates of the
Registrant was approximately $4,351,055,645 as of October 2, 1999, based upon
the average of the high and low prices of the Registrant's Common Stock reported
for such date on the Nasdaq National Market. Shares of Common Stock held by each
executive officer and director and by each person who owns 10% or more of the
outstanding Common Stock have been excluded in that such persons may be deemed
to be affiliates. The determination of affiliate status is not necessarily a
conclusive determination for other purposes. As of October 2, 1999, the
Registrant had outstanding 58,891,980 shares of Common Stock.
DOCUMENTS INCORPORATED BY REFERENCE
Certain information is incorporated into Part III of this report by
reference to the Proxy Statement for the Registrant's 2000 annual meeting of
stockholders to be filed with the Securities and Exchange Commission pursuant to
Regulation 14A not later than 120 days after the end of the fiscal year covered
by this Form 10-K. Certain information is incorporated into Parts II and IV of
this report by reference to the Registrant's annual report to stockholders for
the year ended October 2, 1999.
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PART I
ITEM 1. BUSINESS
THE COMPANY
Sanmina is a leading independent provider of customized integrated
electronic manufacturing services ("EMS"), including turnkey electronic assembly
and manufacturing management services, to original equipment manufacturers
("OEMs") in the electronics industry. Sanmina's electronics manufacturing
services consist primarily of the manufacture of complex printed circuit board
assemblies using surface mount ("SMT") and pin-through hole ("PTH")
interconnection technologies, the manufacture of custom designed plane
assemblies, fabrication of complex multi-layered printed circuit boards,
electronic enclosure systems and testing and assembly of completed systems. In
addition to assembly, turnkey manufacturing management also involves procurement
and materials management, as well as consultation on printed circuit board
design and manufacturing. Sanmina, through its Sanmina Cable Systems ("SCS")
subsidiary (formerly known as Golden Eagle Systems), also manufactures custom
cable and wire harness assemblies for electronic industry OEMs.
SMT and PTH printed circuit board assemblies are printed circuit boards on
which various electronic components, such as integrated circuits, capacitors,
microprocessors and resistors, have been mounted. These assemblies are key
functional elements of many types of electronic products. Backplane assemblies
are large printed circuit boards on which connectors are mounted to interconnect
printed circuit boards, integrated circuits and other electronic components.
Interconnect products manufactured by Sanmina generally require greater
manufacturing expertise and have shorter delivery cycles than mass produced
interconnect products, and therefore, typically have higher profit margins.
Sanmina's customers include leading OEMs in the communications, medical and
industrial instrumentation and high-speed computer sectors. Sanmina's assembly
plants are located in Northern California, Richardson, Texas, Manchester, New
Hampshire, Durham, North Carolina, Guntersville, Alabama, Calgary, Alberta,
Canada and Dublin, Ireland. Sanmina's printed circuit board fabrication
facilities are located in Northern California, Southern California, and Nashua,
New Hampshire. SCS's manufacturing facility is located in Carrollton, Texas. As
a result of Sanmina's November 1998 merger with Altron Inc. ("Altron"), Sanmina
has added new fabrication and assembly plants in the Boston, Massachusetts area,
Northern California, and Plano, Texas. In addition, as a result of Sanmina's
mergers with Telo Electronics Incorporated ("Telo") and Manu-Tronics, Inc.
("Manu-Tronics") in December 1998 and March 1999 respectively, Sanmina has added
new assembly plants in San Jose, California and the greater Chicago area. As
part of Sanmina's agreement to acquire certain assembly operations from Nortel
Networks Corporation, Sanmina added another assembly plant in Calgary, Alberta,
Canada and Chateaudun, France on October 1, 1999 and November 3, 1999,
respectively. As part of Sanmina's acquisition of Devtek Electronics Packaging
Systems Division on October 5, 1999, Sanmina added an enclosure facility in
Toronto, Ontario, Canada.
Sanmina has pursued and intends to continue to pursue, business acquisition
opportunities, particularly when these opportunities have the potential to
enable Sanmina to increase its net assets while maintaining operating margins,
to access new geographic markets, to implement Sanmina's vertical integration
strategy and/or to obtain facilities and equipment on terms more favorable than
those generally available in the market. In particular, Sanmina expects that it
will continue to pursue opportunities to acquire assembly operations being
divested by electronics industry OEMs.
Sanmina was formed in 1989 to acquire the printed circuit board and
backplane operations of its predecessor company, which has been in the printed
circuit board and backplane business since 1980. Sanmina's principal offices are
located at 2700 North First Street, San Jose, California 95134. Sanmina's
telephone number is (408) 964-3500.
Sanmina and the Sanmina logo are trademarks of Sanmina. Trademarks of other
corporations are also referred to in this report.
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This Report on Form 10-K contains certain forward looking statements
regarding future events with respect to Sanmina. Actual events and/or future
results of operations may differ materially as a result of the factors described
herein and in the documents incorporated herein by reference, including, in
particular, those factors described under "Factors Affecting Operating Results."
INDUSTRY OVERVIEW
Sanmina is benefiting from increased market acceptance of the use of
manufacturing specialists in the electronics industry. Many electronics OEMs
have adopted, and are becoming increasingly reliant upon, manufacturing
outsourcing strategies, and Sanmina believes the trend towards outsourcing
manufacturing will continue. Electronics industry OEMs use EMS specialists for
many reasons including the following:
- Reduce Time to Market. Due to intense competitive pressures in the
electronics industry, OEMs are faced with increasingly shorter product
life cycles and therefore have a growing need to reduce the time required
to bring a product to market. OEMs can reduce their time to market by
using a manufacturing specialist's established manufacturing expertise
and infrastructure.
- Reduce Capital Investment. As electronic products have become more
technologically advanced, the manufacturing process has become
increasingly automated, requiring a greater level of investment in
capital equipment. Manufacturing specialists enable OEMs to gain access
to advanced manufacturing facilities, thereby reducing the OEMs' overall
capital equipment requirements.
- Focus Resources. Because the electronics industry is experiencing greater
levels of competition and more rapid technological change, many OEMs are
increasingly seeking to focus their resources on activities and
technologies in which they add the greatest value. By offering
comprehensive electronic assembly and turnkey manufacturing services,
manufacturing specialists allow OEMs to focus on core technologies and
activities such as product development, marketing and distribution.
- Access Leading Manufacturing Technology. Electronic products and
electronics manufacturing technology have become increasingly
sophisticated and complex, making it difficult for OEMs to maintain the
necessary technological expertise in process development and control.
OEMs are motivated to work with a manufacturing specialist in order to
gain access to the specialist's process expertise and manufacturing
knowledge.
- Improve Inventory Management and Purchasing Power. Electronics industry
OEMs are faced with increasing difficulties in planning, procuring and
managing their inventories efficiently due to frequent design changes,
short product lifecycles, large investments in electronic components,
component price fluctuations and the need to achieve economies of scale
in materials procurement. By using a manufacturing specialist's volume
procurement capabilities and expertise in inventory management, OEMs can
reduce production and inventory costs.
- Access Worldwide Manufacturing Capabilities. OEMs are increasing their
international activities in an effort to lower costs and access foreign
markets. Manufacturing specialists with worldwide capabilities are able
to offer such OEMs a variety of options on manufacturing locations to
better address their objectives regarding cost, shipment location,
frequency of interaction with manufacturing specialists and local content
requirements of end-market countries.
SANMINA BUSINESS STRATEGY
Sanmina's objective is to provide OEMs with a total EMS solution. Sanmina's
strategy encompasses several key elements:
- Concentrate on high value added products and services for leading
OEMs. Sanmina focuses on leading manufacturers of advanced electronic
products that generally require custom designed, more complex
interconnect products and short lead-time manufacturing services. By
focusing on complex interconnect products and manufacturing services for
leading OEMs, Sanmina is able to realize higher margins than many other
participants in the interconnect and EMS industries.
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- Leverage vertical integration. Building on its integrated manufacturing
capabilities, Sanmina can provide its customers with a broad range of
high value added manufacturing services from fabrication of bare boards,
to final system assembly and test. The cable assembly capabilities of
Sanmina Cable Systems provide Sanmina with further opportunities to
leverage its vertical integration. By manufacturing printed circuit
boards, electronic enclosure systems, and custom cable assemblies used in
its EMS assemblies, Sanmina, through its vertical integration, is able to
provide greater value added and realize additional manufacturing margin.
In addition, Sanmina's vertical integration provides greater control over
quality, delivery and cost, and enables Sanmina to offer its customers a
complete EMS solution.
- Focus on high growth customer sectors. Sanmina has focused its marketing
efforts on key, fast growing industry sectors. Sanmina's customers
include leading OEM companies in communications, industrial and medical
instrumentation and computer sectors. Sales efforts will focus on
increasing penetration of its existing customer base as well as
attracting new customers, thus diversifying its revenue across a wider
base.
- Geographic expansion of manufacturing facilities. Since 1993, Sanmina has
significantly expanded and upgraded its operations through the opening of
and acquisition of new facilities in Richardson, Texas, San Jose,
California, Manchester, New Hampshire and Durham, North Carolina. In
November 1996, Sanmina acquired the former Comptronix Corporation
contract manufacturing facilities located in Guntersville, Alabama. In
June 1997, Sanmina opened an EMS facility in the Dublin, Ireland area to
serve customers in the European market. In November 1997, Sanmina
acquired Elexsys, which has facilities in Northern and Southern
California, and New Hampshire. In November 1998, Sanmina acquired Altron,
which has facilities in the Boston, Massachusetts area. Also in November
1998, Sanmina acquired a facility in Calgary, Alberta, Canada from Harris
Corporation. In addition, as a result of Sanmina's acquisitions of Telo
and Manu-Tronics in December 1998 and March 1999, Sanmina has added new
facilities in San Jose, California and the greater Chicago area. These
facilities provide Sanmina with operations in key geographic markets for
the electronics industry. Sanmina will continue to aggressively and
opportunistically pursue future expansion opportunities in other markets.
- Aggressive pursuit of acquisition opportunities. Sanmina's strategy
involves the pursuit of business acquisition opportunities, particularly
when these opportunities have the potential to enable Sanmina to increase
its net sales while maintaining operating margin, access new geographic
markets, implement Sanmina's vertical integration strategy and/or obtain
facilities and equipment on terms more favorable than those generally
available in the market. These acquisitions have involved both
acquisitions of entire companies, such as the June 1995 acquisition of
Assembly Solutions in Manchester, New Hampshire, the January 1996
acquisition of Golden Eagle Systems, now known as Sanmina Cable Systems,
the November 1997 merger with Elexsys, the November 1998 merger with
Altron, the December 1998 merger with Telo and the March 1999 merger with
Manu-Tronics. In addition, Sanmina has in other instances acquired
selected assets, principally equipment, inventory and customer contracts
and, in certain cases, facilities or facility leases. Acquisitions of
this nature completed by Sanmina include the November 1996 acquisitions
of the Guntersville, Alabama operations of Comptronix Corporation and
certain assets of the custom manufacturing services division of Lucent
Technologies. In November 1998, Sanmina acquired a facility in Calgary,
Alberta, Canada from Harris Corporation. As part of Sanmina's agreement
to acquire certain assembly operations from Nortel Networks Corporation,
Sanmina added another assembly plant in Calgary, Alberta, Canada and
Chateaudun, France on October 1, 1999 and November 3, 1999, respectively.
As part of Sanmina's acquisition of Devtek Electronics Packaging Systems
Division on October 5, 1999, Sanmina added an enclosure facility in
Toronto, Ontario, Canada. Sanmina intends to continue to evaluate and
pursue acquisition opportunities on a ongoing basis.
- Develop long-term customer relationships. Sanmina seeks to establish
"partnerships" with its customers by focusing on state-of-the-art
technology, quick-turnaround manufacturing and comprehensive management
support for materials and inventory. Sanmina also works closely with its
customers to help them manage their manufacturing cycle and reduce their
time to market. While Sanmina will continue to emphasize growth with its
current customers, it has been successful in attracting new
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clients. To further these efforts, Sanmina intends to continue to expand
its direct sales staff. Sanmina believes its direct sales force is one of
its key competitive advantages.
- Extend technology leadership. Today Sanmina can provide services from the
fabrication of circuit boards to complete system assemblies. In providing
these services, Sanmina uses a variety of processes and technologies.
Sanmina strives for continuous improvement of its processes and has
adopted a number of quality improvement and measurement techniques to
monitor its performance. Sanmina has also recently made significant
capital expenditures to upgrade plant and equipment at its facilities.
Sanmina intends to stay on the leading edge of technology development and
will evaluate new interconnect and packaging technologies as they emerge.
CUSTOMERS, MARKETING AND SALES
Sanmina's customers include a diversified base of OEMs in the
communications (telecommunications and networking), medical and industrial
instrumentation and high-speed computer systems segments of the electronics
industry. The following table shows the estimated percentage of Sanmina's fiscal
1999 sales in each of these segments.
Communications.............................................. 70%
Medical and Industrial Instrumentation...................... 16
High-Speed Computer Systems................................. 14
Sanmina develops relationships with its customers and markets its
manufacturing services through a direct sales force augmented by a network of
manufacturers' representative firms and a staff of in-house customer support
specialists. Sanmina's sales resources are directed at multiple management and
staff levels within target accounts. Sanmina's direct sales personnel work
closely with the customers' engineering and technical personnel to better
understand their requirements. Sanmina's manufacturers' representatives are
managed by Sanmina's direct sales personnel, rather than from corporate
headquarters, in order to provide for greater accountability and responsiveness.
Sanmina has also expanded its customer base through acquisitions. In
particular, the acquisition of the Comptronix Guntersville, Alabama operations
and certain assets of the former custom manufacturing services division of
Lucent Technologies provided Sanmina with several new key customer accounts with
significant growth potential. In addition, the November 1997 merger with
Elexsys, the November 1998 merger with Altron, the December 1998 merger with
Telo, and the March 1999 merger with Manu-Tronics also provided Sanmina with
several major new customer accounts. Sanmina's October and November 1999
acquisitions of certain Nortel Networks assembly operations will provide Sanmina
with an expanded customer relationship with Nortel.
Historically, Sanmina has had substantial recurring sales from existing
customers. Sanmina also conducts advertising and public relations activities, as
well as receiving referrals from current customers.
Although Sanmina seeks to diversify its customer base, a small number of
customers are responsible for a significant portion of Sanmina's net sales.
During fiscal 1999 and 1998, sales to Sanmina's ten largest customers accounted
for 54% and 53%, respectively, of Sanmina's net sales. For fiscal 1999, sales to
Cisco Systems represented more than 10% of Sanmina's net sales. For fiscal 1998,
sales to Cisco Systems and DSC Communications represented more than 10% of
Sanmina's net sales. Although there can be no assurance that Sanmina's principal
customers will continue to purchase products and services from Sanmina at
current levels, if at all, Sanmina expects to continue to depend upon its
principal customers for a significant portion of its net sales. Sanmina's
customer concentration could increase or decrease, depending on future customer
requirements, which will be dependent in large part on market conditions in the
electronics industry segments in which Sanmina's customers participate. The loss
of one or more major customers, or declines in sales to major customers, could
have a material adverse effect on Sanmina's business, financial condition and
results of operations.
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MANUFACTURING SERVICES
Sanmina specializes in manufacturing complex printed circuit board
assemblies, backplane assemblies and printed circuit boards that are used in the
manufacture of sophisticated electronic equipment. Sanmina has been
manufacturing backplane assemblies since 1981 and began providing electronic
assembly and turnkey manufacturing management services, including the assembly
and testing of sophisticated electronic systems, in October 1993.
Sanmina seeks to establish "partnerships" with its customers by providing a
responsive, flexible total manufacturing services solution. These services
include computer integrated manufacturing ("CIM") and engineering services,
quick-turnaround manufacturing and prototype and reproduction interconnect
products and materials procurement and management. CIM services provided by
Sanmina consist of developing manufacturing processes, tooling and test
sequences for new products from product designs received from customers. Sanmina
also evaluates customer designs for manufacturability and test, and, when
appropriate, recommends design changes to reduce manufacturing cost or lead
times or to increase manufacturing yields and the quality of the finished
product. Once engineering is completed, Sanmina manufactures prototype or
preproduction versions of that product on a quick-turnaround basis. Sanmina
expects that the demand for engineering and quick-turnaround prototype and
preproduction manufacturing services will increase as OEMs' products become more
complex and as product life cycles shorten. Materials procurement and handling
services provided by Sanmina include planning, purchasing, warehousing and
financing of electronic components and enclosures used in the assemblies and
systems.
Prices of Sanmina's SMT or PTH assemblies, backplane assemblies, printed
circuit board assemblies, cable assemblies or systems vary depending upon their
size and complexity, the specified manufacturing turnaround time, the extent of
design and engineering services provided by Sanmina, the market for the various
electronic components used and the quantity ordered. These prices of SMT and PTH
assemblies, backplane assemblies, and systems typically range from several
hundred dollars to over ten thousand dollars per unit. Prices of printed circuit
boards manufactured by Sanmina typically range from several dollars to $10,000
per unit. Prices of custom cable assemblies manufactured by Sanmina typically
range from several dollars to $10,000 per unit.
MANUFACTURING AND ENGINEERING
Facilities. Sanmina manufactures its products in 31 decentralized plants,
consisting of 24 assembly facilities and 7 printed circuit board fabrication
facilities. Generally, each of Sanmina's decentralized plants has its own
production, purchasing, and materials management and quality capabilities
located on site. The production expertise of some plants overlaps, which enables
Sanmina to allocate production based on product type and available capacity at
one or more plants. With assembly facilities located in major electronics
industry centers throughout the country, including Silicon Valley, Southern
California, the Dallas-Forth Worth area, the Research Triangle Park area, New
England, the greater Chicago area and Northern Alabama, Sanmina is also able to
allocate production based on geographic proximity to the customer, process
capabilities and available capacity. Sanmina believes that this flexible
approach differs from that of its competition. Decentralized plants can focus on
particular product types and respond quickly to customers' specific
requirements. Sanmina believes that decentralized facilities also allow it to
achieve improved accountability, quality control and cost control. Each plant is
managed as a separate profit center, and each plant manager's compensation
depends, in part, upon that plant meeting quality, shipment and gross profit
targets.
In November 1998, Sanmina entered into a lease with an option to purchase a
330,000 square foot campus facility located in San Jose, California. The
facility consists of four buildings on a single site. Sanmina intends to
consolidate its corporate headquarters and some of its San Jose area assembly
operations at this facility. As of October 2, 1999, approximately 75% of the
buildings were occupied. The remaining buildings will be occupied in fiscal year
2000. Sanmina's San Jose area printed circuit board fabrication facilities will
not be consolidated at the campus facility and will remain at their current
locations.
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Manufacturing Processes. Sanmina produces complex, technologically advanced
SMT and PTH assemblies, backplane assemblies and multilayer printed circuit
boards, custom cable assemblies and full systems that meet increasingly tight
tolerances and specifications demanded by OEMs. Multilayering, which involves
placing multiple layers of electrical circuitry on a single printed circuit
board or backplane, expands the number of circuits and components that can be
contained on the interconnect product and increases the operating speed of the
system by reducing the distance that electrical signals must travel. Increasing
the density of the circuitry in each layer is accomplished by reducing the width
of the circuit tracks and placing them closer together on the printed circuit
board or backplane. Interconnect products having narrow, closely spaced circuit
tracks are known as "fine line" products. Today, Sanmina is capable of
efficiently producing commercial quantities of printed circuit boards with up to
52 layers and circuit track widths as narrow as three mils. The manufacture of
complex multilayer interconnect products often requires the use of sophisticated
circuit interconnections between certain layers (called "blind or buried vias")
and adherence to strict electrical characteristics to maintain consistent
circuit transmission speeds (referred to as "controlled impedance"). These
technologies require very tight lamination and etching tolerances and are
especially critical for printed circuit boards with ten or more layers.
The manufacture of printed circuit boards involves several steps: etching
the circuit image on copper-clad epoxy laminate, pressing the laminates together
to form a panel, drilling holes and depositing copper or other conductive
material to form the inter-layer electrical connections and, lastly, cutting the
panels to shape. Certain advanced interconnect products require additional
critical steps, including dry film imaging, photoimageable soldermask
processing, computer controlled drilling and routing, automated plating and
process controls and achievement of controlled impedance. Manufacture of printed
circuit boards used in backplane assemblies requires specialized expertise and
equipment because of the larger size of the backplane relative to other printed
circuit boards and the increased number of holes for component mounting.
The manufacture of SMT and PTH assemblies involves the attachment of
various electronic components, such as integrated circuits, capacitors,
microprocessors and resistors to printed circuit boards. The manufacture of
backplane assemblies involves attachment of electronic components, including
printed circuit boards, integrated circuits and other components, to the
backplane, which is a large printed circuit board manufactured by Sanmina.
Sanmina uses SMT, PTH and press-fit technologies in backplane assembly.
All of Sanmina's manufacturing facilities are certified under ISO 9002, a
set of standards published by the International Organization of Standardization
and used to document, implement and demonstrate quality management and assurance
systems in design and manufacturing. As part of the ISO 9002 certification
process, Sanmina has developed a quality systems manual and an internal system
of quality controls and audits. Although ISO 9002 certification is of particular
importance to the companies doing business in the European Community, Sanmina
believes that United States electronics manufacturers are increasing their use
of ISO 9002 registration as a criteria for suppliers.
In addition to ISO 9002 certification, Sanmina is BellCore, British
Approval Board for Telecommunications ("BABT") and Underwriters Laboratories
("UL") compliant. These qualifications establish standards for quality,
manufacturing process control and manufacturing documentation and are required
by many OEMs in the electronics industry, including suppliers to AT&T and the
Regional Bell Operating Companies.
Sanmina orders materials and components based on purchase orders received
and accepted and seeks to minimize its inventory of materials or components that
are not identified for use in filling specific orders. Materials used in
manufacturing printed circuit boards are readily available in the open market
and Sanmina has not to date experienced any significant shortages of such
materials. Electronic components used by Sanmina in producing SMT and PTH
assemblies and its backplane assemblies are purchased by Sanmina and, in certain
circumstances, it may be required to bear the risk of component price
fluctuations. In addition, shortages of certain types of electronic components
have occurred in the past and may occur in the future. Component shortages or
price fluctuations could have an adverse effect on Sanmina's SMT and PTH
assemblies and its backplane assembly business, thereby adversely affecting
Sanmina's results of operations. Due to the continued expansion of Sanmina's
contract manufacturing and backplane assembly businesses as a
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percentage of Sanmina's net sales, component shortages and price fluctuations
would adversely affect Sanmina's results of operations to a greater extent than
in prior fiscal years.
TECHNOLOGY DEVELOPMENT
Sanmina's close involvement with its customers at the early stages of their
product development positions it at the leading edge of technical innovation in
the manufacturing of SMT and PTH assemblies, backplane assemblies, and printed
circuit boards. Sanmina selectively seeks orders that require the use of
state-of-the-art materials or manufacturing techniques in order to further
develop its manufacturing expertise. Current areas of manufacturing process
development include reducing circuit widths and hole sizes, establishing new
standards for particle contamination and developing new manufacturing processes
for the use with new materials and new surface mount connector and component
designs.
Recent developments in the electronics industry have necessitated
improvements in the types of laminate used in the manufacture of interconnect
products. New laminate materials may contain new chemical formulations to
achieve better control of flow, resin systems with high glass transition
temperatures, reduced surface imperfections and greatly improved dimensional
stability. Future generations of interconnect products will require ultra fine
lines, multilayers of much greater complexity and thickness, and extremely small
holes in the 4 to 10 mil range. The materials designed to meet these
requirements, such as BT epoxy, cyanate esters, polyamide quartz, and Kevlar
epoxy, are beginning to appear in the marketplace. Widespread commercial use of
these materials will depend upon statistical process control and improved
manufacturing procedures to achieve the required yields and quality.
Sanmina has developed expertise and techniques which it uses in the
manufacture of circuit boards, backpanels and subsystems. Generally, Sanmina
relies on common law trade secret protection and on confidentiality agreements
with its employees to protect its expertise and techniques. Sanmina owns five
patents and believes that patents have not historically constituted a
significant form of intellectual property right in its industry.
ENVIRONMENTAL CONTROLS
Proper waste disposal is a major consideration for printed circuit board
manufacturers because metals and chemicals are used in the manufacturing
process. Water used in the printed circuit board manufacturing process must be
treated to remove metal particles and other contaminants before it can be
discharged into the municipal sanitary sewer system. In addition, although the
electronics assembly process generates significantly less waste water than
printed circuit board fabrication, maintenance of environmental controls is also
important in the electronics assembly process. Each of Sanmina's printed circuit
board and electronics assembly plants has personnel responsible for monitoring
environmental compliance. These individuals report to Sanmina's director of
environmental compliance, who has overall responsibility for environmental
matters.
Each plant operates under effluent discharge permits issued by the
appropriate governmental authority. These permits must be renewed periodically
and are subject to revocation in the event of violations of environmental laws.
There can be no assurance that violations will not occur in the future as a
result of human error, equipment failure or other causes. In the event of a
future violation of environmental laws, Sanmina could be held liable for damages
and for the costs of remedial actions and could be also subject to revocation of
effluent discharge permits. Any such revocation could require Sanmina to cease
or limit production at one or more of its facilities, thereby having an adverse
impact on Sanmina's results of operations. Sanmina is also subject to
environmental laws relating to the storage, use and disposal of chemicals, solid
waste and other hazardous materials as well as air quality regulations.
Furthermore, environmental laws could become more stringent over time, and the
costs of compliance with and penalties associated with violation of more
stringent laws could be substantial.
In November 1997, Sanmina merged with Elexsys, which, by virtue of such
merger, became a wholly owned subsidiary of Sanmina. Several facilities owned or
occupied by Elexsys at the time of the merger, or formerly owned or occupied by
Elexsys or companies acquired by Elexsys, had either soil contamination or
contamination of groundwater underneath or near the facility. Contamination was
discovered at Elexsys'
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Irvine, California facility in 1989 and Elexsys voluntarily installed a
groundwater remediation system at the facility in 1994. Additional investigation
is being undertaken by other parties in the area at the request of the
California Regional Water Quality Control Board. It is unknown whether any
additional remediation activities will be required as a result of such
investigations or whether any third party claims will be brought against Sanmina
alleging that they have been damaged in any way by the existence of the
contamination at the Irvine facility. Sanmina has been required by the
California Department of Toxic Substances Control to undertake investigation of
soil and/or groundwater at certain facilities formerly owned or occupied by a
predecessor company to Elexsys in Mountain View, California. Depending upon the
results of this soil sampling and groundwater testing, Sanmina could be ordered
to undertake soil and/or groundwater cleanup. To date, Sanmina has not been
ordered to undertake any soil or groundwater cleanup activities at the Mountain
View facilities, and does not believe any such activities should be required.
Test results received to date are not sufficient to enable Sanmina to determine
whether or not such cleanup activities are likely to be mandated. Contamination
has also been discovered at other current and former Elexsys facilities and has
been reported to the relevant regulatory agencies. No remediation or further
investigation of such contamination has been required by regulatory agencies. To
date, the cost of the various investigations and the cost of operating the
remediation system at the Irvine facility have not been material to Sanmina's
financial condition. However, in the event Sanmina is required to undertake
additional groundwater or soil cleanup, the costs of such cleanup are likely to
be substantial. Sanmina is currently unable to estimate the amount of such soil
and groundwater cleanup costs because no soil or groundwater cleanup has been
ordered and Sanmina cannot determine from available test results what
remediation activities, if any, are likely to be required. Sanmina believes,
based on the limited information currently available, that the cost of any
groundwater or soil clean-up that may be required would not have a material
adverse effect on Sanmina's business, financial condition and results of
operations. Nevertheless, the process of remediating contaminated soil and
groundwater is costly, and if Sanmina is required to undertake substantial
remediation activities at one or more of the former Elexsys facilities, there
can be no assurance that the costs of such activities would not have a material
adverse effect on Sanmina's business, financial condition and results of
operations.
Altron was advised in 1993 by Olin Corporation that contamination resulting
from activities of prior owners of property owned by Olin Corporation and
located close to the Altron manufacturing plant in Wilmington, Massachusetts,
had migrated under the Altron plant. Olin has assumed full responsibility for
any remediation activities that may be required and has agreed to indemnify and
hold Altron harmless from any and all costs, liabilities, fines, penalties,
charges and expenses arising from and relating to any action or requirement,
whether imposed by statute, ordinance, rule, regulation, order, decree or by
general principles of law to remediate, clean up or abate contamination
emanating from the Olin site. Although Sanmina believes that Olin's assumption
of responsibility will result in no remediation cost to Altron from the
contamination, there can be no assurance that Altron will not be subject to some
costs regarding this matter. Sanmina does not anticipate that such costs, if
any, will be material to its financial condition or results of operations.
Sanmina has been named as a potentially responsible party at several
contaminated disposal sites as a result of the past disposal of hazardous waste
by companies acquired by Sanmina or their corporate predecessors. While
liabilities for such historic disposal activities has not been material to
Sanmina's financial condition to date, there can be no guarantee that past
disposal activities will not result in material liability to Sanmina in the
future.
BACKLOG
Sanmina's backlog was approximately $539 million at October 2, 1999, and
approximately $295 million at September 30, 1998. Backlog consists of purchase
orders received by Sanmina, including, in certain instances, forecast
requirements released for production under customer contracts. Cancellation and
postponement charges generally vary depending upon the time of cancellation or
postponement, and a certain portion of Sanmina's backlog may be subject to
cancellation or postponement without significant penalty. Typically, a
substantial portion of Sanmina's backlog is scheduled for delivery within 210
days.
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COMPETITION
Significant competitive factors in the market for advanced backplane
assemblies and printed circuit boards include product quality, responsiveness to
customers, manufacturing and engineering skills, and price. Sanmina believes
that competition in the market segments served by Sanmina is based more on
product quality and responsive customer service and support than on price, in
part because the cost of interconnect products manufactured by Sanmina is
usually low relative to the total cost of the equipment for which they are
components, and in part because of the greater importance of product reliability
and prompt delivery to Sanmina's customers. Sanmina believes that its primary
competitive strengths are its ability to provide responsive, flexible, short
lead-time manufacturing services, its engineering and manufacturing expertise
and its customer service support.
Sanmina faces intense competition from a number of established competitors
in its various product markets. Certain of Sanmina's competitors have greater
financial and manufacturing resources than Sanmina, including significantly
greater SMT assembly capacity. During periods of recession in the electronic
industry, Sanmina's competitive advantages in the areas of quick-turnaround
manufacturing and responsive customer service may be of reduced importance to
electronics OEMs, who may become more price sensitive. In addition, captive
interconnect product manufacturers may seek orders in the open market to fill
excess capacity, thereby increasing price competition. Although Sanmina
generally does not pursue high-volume, highly price sensitive interconnect
product business, it may be at a competitive disadvantage with respect to price
when compared to manufacturers with lower cost structures, particularly those
manufacturers with offshore facilities where labor and other costs are lower.
EMPLOYEES
As of October 2, 1999, Sanmina had approximately 7,220 full-time employees,
including approximately 6,800 in manufacturing and engineering, approximately
220 in marketing and sales, and approximately 200 in general administration and
finance. None of Sanmina's employees is represented by a labor union and Sanmina
has never experienced a work stoppage or strike. Sanmina believes its
relationship with its employees is good.
Sanmina's success depends to a large extent upon the continued services of
key managerial and technical employees. The loss of such personnel could have a
material adverse effect on Sanmina. To date, Sanmina has not experienced
significant difficulties in attracting or retaining such personnel. Although
Sanmina is not aware that any of its key personnel currently intend to terminate
their employment, their future services cannot be assured.
ITEM 2. PROPERTIES
Sanmina's principal facilities comprise an aggregate of approximately 2.5
million square feet. Except for Sanmina's 72,000 square foot Manchester, New
Hampshire facility, the 160,000 square foot facility occupied by Sanmina Cable
Systems in Carrollton, Texas, a 70,000 square foot facility located in Nashua,
New Hampshire, a 200,000 square foot facility located in Wilmington,
Massachusetts, a 104,000 square foot facility located in Woburn, Massachusetts,
a 44,200 square foot facility located in Irvine, California, a 197,600 square
foot facility located in Kenosha, Wisconsin, a 105,000 square foot facility
located in Guntersville, Alabama, and Sanmina's 52,000 square foot facility
located in Dublin, Ireland, all of the facilities are leased, and the leases for
these facilities expire between 1999 and 2006. The leases generally may be
extended at Sanmina's option. Sanmina has fourteen principal facilities located
in the greater San Jose, California area, with other facilities located in
Southern California, Plano, Texas, Richardson, Texas, Manchester, New Hampshire,
Guntersville, Alabama, Durham, North Carolina, Wilmington and Woburn,
Massachusetts, the greater Chicago area, Calgary, Canada, and Dublin, Ireland.
In November 1998, Sanmina entered into a lease with an option to purchase a
330,000 square foot campus facility located in San Jose, California. The
facility consists of four buildings on a single site. Sanmina intends to
consolidate its corporate headquarters and some of its San Jose area assembly
operations at this facility. As of October 2, 1999, approximately 75% of the
buildings were occupied. The remaining buildings
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will be occupied in fiscal year 2000. Sanmina's San Jose area printed circuit
board fabrication facilities will not be consolidated at the campus facility and
will remain at their current locations. Sanmina believes that its facilities are
adequate to meet its reasonably foreseeable requirements for at least the next
two years. Sanmina continually evaluates its expected future facilities
requirements.
ITEM 3. LEGAL PROCEEDINGS
Sanmina is not currently a party to any material pending legal proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
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PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS
The information required by this item is incorporated by reference to page
23 of the Registrant's 1999 annual report to stockholders under the caption
"quarterly results."
ITEM 6. SELECTED FINANCIAL DATA
The information required by this item is incorporated by reference to page
18 of the Registrant's 1999 annual report to stockholders under the caption
"Selected Financial Data."
ITEM 7.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The information required by this item is incorporated by reference to pages
19 through 26 of the Registrant's 1999 annual report to stockholders under the
caption "Management's Discussion and Analysis of Financial Condition and Results
of Operations."
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this item is incorporated by reference to pages
28 through 40 of the Registrant's 1999 annual report to stockholders.
ITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
Not applicable.
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PART III
Certain information required by Part III is omitted from this Report on
Form 10-K in that the Registrant will file a definitive proxy statement within
120 days after the end of its fiscal year pursuant to Regulation 14A with
respect to the 2000 Annual Meeting of Stockholders (the "Proxy Statement") to be
held on January 28, 2000 and certain information included therein is
incorporated herein by reference.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by this item relating to directors is incorporated
by reference to the information under the caption "Proposal No. 1 -- Election of
Directors" in the Proxy Statement.
DIRECTORS AND EXECUTIVE OFFICERS
The directors and executive officers of Sanmina, and certain information
about them as of December 1999, are as follows:
NAME AGE POSITION
---- --- --------
Jure Sola................................. 47 Chairman, Chief Executive Officer and
Director(1)
John Bolger............................... 53 Director(2)
Neil Bonke................................ 58 Director(1)(2)
Randy W. Furr............................. 45 President, Chief Operating Officer and
Director
Elizabeth D. Jordan....................... 36 Executive Vice President and Chief
Financial Officer
Michael J. Landy.......................... 45 Executive Vice President of Sales and
Marketing
Mario Rosati.............................. 53 Director
Joseph Schell............................. 53 Director
Bernard Vonderschmitt..................... 76 Director(1)
- ---------------
(1) Member of the Compensation Committee
(2) Member of the Audit Committee
Mr. Sola co-founded Sanmina in 1980 and initially held the position of Vice
President of Sales and Marketing and was responsible for the development and
growth of Sanmina's sales organization. He became Vice President and General
Manager in October 1987 with responsibility for all manufacturing operations as
well as sales and marketing. Mr. Sola was elected President in October 1989 and
has served as Chairman of the Board and Chief Executive Officer since April
1991. Mr. Sola relinquished the title of President when Mr. Furr was appointed
to such position in March 1996.
Mr. Bolger has been a director of Sanmina since 1994. From June 1989
through April 1992, he served as Vice President of Finance and Administration of
Cisco Systems, Inc., a manufacturer of computer networking systems. Mr. Bolger
is currently an independent business consultant and serves as a director of
Integrated Device Technology, Inc., Integrated Systems, Inc., TCSI, Inc. and
Mission West Properties, Inc.
Mr. Bonke has been a director of Sanmina since 1995. He also serves on the
Board of Directors of Electroglas, Inc., FSI International and SpeedFam
International, all semiconductor equipment companies. Mr. Bonke previously
served as the Chairman of the Board of Electroglas, Inc. From April 1993 to
April 1996, he served as Chief Executive Officer of Electroglas. From September
1990 to April 1993, Mr. Bonke was a Group V.P. and President of Semiconductor
Operations of General Signal Corp.
Mr. Furr joined Sanmina as Vice President and Chief Financial Officer in
August 1992. In March 1996, Mr. Furr was appointed President and Chief Operating
Officer. In December 1999, Mr. Furr was appointed to Sanmina's board of
directors. From April to August 1992, Mr. Furr was Vice President and Chief
Financial Officer of Aquarius Systems Inc. North America ("ASINA"), a
manufacturer of personal computers. Prior to working at ASINA, he held numerous
positions in both financial and general management for General
13
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Signal Corporation during a 13 year period, serving most recently as Vice
President and General Manager of General Signal Thinfilm Company. Mr. Furr is a
Certified Public Accountant.
Ms. Jordan became Chief Financial Officer and Executive Vice President at
Sanmina in June 1999. Ms. Jordan joined Sanmina in October 1997 as Corporate
Controller and was named Vice President of Finance in October 1998. From August
1992 to October 1997, Ms. Jordan worked for Network General Corporation, a
network fault and performance management solutions company, serving most
recently as Director of Corporate Accounting. Prior to Network General, she
served in a variety positions in the banking industry and in public accounting.
Mr. Landy became Executive Vice President of Sales and Marketing at Sanmina
in October 1997. He was named an Executive Vice President of Sanmina in October
1998. He joined Sanmina in August 1993 as General Manager of Sanmina's
Richardson, Texas operations and in 1995 was promoted to Vice President Assembly
Operations for the Central Region of the United States. Prior to his employment
with Sanmina, Mr. Landy held a senior management position with a
telecommunications corporation.
Mr. Rosati has been a director of Sanmina since 1997. He has been a member
of the law firm Wilson Sonsini Goodrich & Rosati, Professional Corporation since
1971. Mr. Rosati is a director of Aehr Test Systems, a manufacturer of computer
hardware testing systems, Genus, Inc., a semiconductor equipment manufacturer,
Ross Systems, Inc., a software company, C-ATS Software, Inc., a financial
database software company, MyPoints.com, Inc., a web and email-based direct
marketing company, Symyx Technologies, Inc., a combinatorial materials science
company and The Management Network Group, Inc., a management consulting firm
focused on the telecommunications industry, all publicly-held companies. He is
also a director of several privately-held companies.
Mr. Schell was appointed to the board of directors in December 1999. From
1985 to 1999, he served as Senior Managing Director at Montgomery Securities
(recently named Banc of America Securities). Mr. Schell also serves on the board
of directors of Dycom Industries, Inc. and the Good Guys, Inc., both publicly
traded companies.
Mr. Vonderschmitt has been a director of Sanmina since October 1990. He
co-founded Xilinx, Inc., a manufacturer of field programmable gate array
semiconductor products and related system software, served as its Chief
Executive Officer and as a director from its inception in February 1984 through
February 1996, and has served as the Chairman of its Board of Directors since
February, 1996. He is also a director of International Microelectronic Products,
Inc., and Credence Systems Corporation.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this item is incorporated by reference to the
information under the caption "Executive Compensation" in the Proxy Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this item is incorporated by reference to the
information under the caption "Record Date and Stock Ownership" in the Proxy
Statement.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this item is incorporated by reference to the
information under the caption "Certain Transactions" in the Proxy Statement.
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PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) 1. FINANCIAL STATEMENTS
The following Financial Statements of Sanmina Corporation and Report of
Independent Public Accountants are incorporated by reference to pages 28 through
40 of the Registrant's 1999 annual report to stockholders:
Report of Independent Public Accountants
Consolidated Balance Sheets, As of October 2, 1999 and September 30, 1998
Consolidated Statements of Operations, Years Ended October 2, 1999,
September 30, 1998 and 1997
Consolidated Statements of Comprehensive Income, Years Ended October 2,
1999, September 30, 1998 and 1997
Consolidated Statements of Stockholders' Equity, Years Ended October 2,
1999, September 30, 1998 and 1997
Consolidated Statements of Cash Flows, Years Ended October 2, 1999,
September 30, 1998 and 1997
Notes to Consolidated Financial Statements
2. FINANCIAL STATEMENT SCHEDULE
The following financial statement schedule of Sanmina Corporation is filed
as part of this report on Form 10-K and should be read in conjunction with the
Financial Statements of Sanmina Corporation incorporated by reference herein:
Schedule II -- Valuation and Qualifying Accounts
Report of Independent Public Accountants on Schedule
All other schedules are omitted because they are not applicable or the
required information is shown in the Financial Statements or the notes thereto.
3. EXHIBITS
Refer to (c) below.
(b) REPORTS ON FORM 8-K
On December 14, 1998, the Company filed a report on Form 8-K relating to
the merger with Altron.
On February 10, 1999, the Company filed a report on Form 8-K/A relating to
the merger with Altron.
On April 29, 1999, the Company filed a report on Form 8-K relating to the
merger with Manu-Tronics.
On April 30, 1999, the Company filed a report on Form 8-K relating to the
offering of convertible subordinated notes.
(c) EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
------- -----------
3.2(8) Restated Certificate of Incorporation of Registrant.
3.3(1) Bylaws of Registrant, as amended.
4.2(1) Specimen Stock Certificate.
4.3 Convertible subordinated notes issued in April 1999.
10.2(4) Amended 1990 Incentive Stock Plan.
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EXHIBIT
NUMBER DESCRIPTION
------- -----------
10.3(1) 1993 Employee Stock Purchase Plan.
.109(k)(2) Amended and Restated Credit Agreement dated as of August 18,
1993 among Sanmina Corporation, Chemical Bank and other
lenders.
.109(k)(5) Amendment dated July 27, 1995 to Amended and Restated Credit
Agreement dated August 18, 1993.
.109(1)(2) Revolving Credit Note, $12,000,000.00, Chemical Bank.
10.10(1) Lease for premises at 2109 O'Toole Avenue, Suites A-E, San
Jose, California (Portion of Plant I).
10.11(1) Lease for premises at 2101 O'Toole Avenue, San Jose,
California (Portion of Plant I).
10.12(1) Lease for premises at 2539 Scott Boulevard, Santa Clara,
California (Plant III).
10.14(1) Lease for premises at 2060-2068 Bering Drive, San Jose,
California (Plant II).
10.15(1) Lease for premises at 4220 Business Center Drive, Fremont,
California (Plant V).
10.16(1) Lease for premises at McCarthy Boulevard, Milpitas,
California (Plant VI).
10.17(1) Lease for premises at 2121 O'Toole Avenue, San Jose,
California (Corporate Headquarters).
10.19(2) Lease for premises at 1250 American Parkway, Richards, Texas
(Plant VII).
10.20(2) Lease for premises at 6453 Kaiser Drive, Fremont, California
(Plant VIII).
10.21(3) Asset Purchase Agreement dated September 28, 1994 between
Registrant and Comptronix Corporation.
10.22(4) Lease for premises at 355 East Trimble Road, San Jose,
California.
10.23(5) Stock Purchase Agreement dated May 31, 1995 between Sanmina
Corporation, Assembly Solutions, Inc. and the principal
stockholders of Assembly Solutions, Inc.
10.24(6) Indenture dated August 15, 1995 between Registrant and
Norwest Bank Minnesota, N.A. as Trustee.
10.25(7) Asset Purchase Agreement dated September 20, 1996 between
Registrant and Comptronix Corporation.
10.26(9) Agreement and Plan of Merger dated July 22, 1997 among
Registrant, SANM Acquisition Subsidiary, Inc. and Elexsys
International, Inc.
10.26(10) Agreement and Plan of Merger dated September 2, 1998 among
Registrant, SANM Acquisition Subsidiary, Inc. and Altron,
Inc.
10.27(11) Synthetic lease agreement.
10.28(12) Agreement and Plan of Merger dated March 30, 1999 among
Registrant, SANM Acquisition Subsidiary, Inc. and
Manu-Tronics, Inc.
13 Annual Report
21 Subsidiaries of the Registrant.
23 Consent of Arthur Andersen LLP.
27 Financial Data Schedule
- ---------------
(1) Incorporated by reference to the like-numbered exhibits previously filed
with Registrant's Registration Statement on Form S-1, No. 33-70700 filed
with the Securities and Exchange Commission ("SEC") on February 19, 1993.
(2) Incorporated by reference to the like-numbered exhibits previously filed
with Registrant's Registration Statement on Form S-1 No. 33-70700 filed
with the SEC on October 22, 1993.
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(3) Incorporated by reference to exhibit no. 2 previously filed with
Registrant's Report on Form 8-K filed with the SEC on October 28, 1994.
(4) Incorporated by reference to the like-numbered exhibits previously filed
with Registrant's Report on Form 10-K filed with the SEC on December 29,
1994.
(5) Incorporated by reference to the like-numbered exhibit previously filed
with Registrant's Report on Form 10-Q filed with the SEC on July 31, 1995.
(6) Incorporated by reference to the like-numbered exhibit previously filed
with Registrant's Report on Form 10-K for the fiscal year ended September
30, 1995.
(7) Incorporated by reference to exhibit 2 previously filed with the
Registrant's Report on Form 8-K filed with the SEC on November 15, 1996.
(8) Incorporated by reference to the like numbered exhibit previously filed
with Registrant's Report on Form 10-K for the fiscal year ended September
30, 1997.
(9) Incorporated by reference to exhibit 2.1 previously filed with Registrant's
Report on Form 8-K filed with the SEC on November 21, 1997.
(10) Incorporated by reference to exhibit 2.1 previously filed with Registrant's
Report on Form 8-K filed with the SEC on September 4, 1998.
(11) Incorporated by reference to the like-numbered exhibit previously filed
with Registrant's Report on Form 10-K for the fiscal year ended September
30, 1998.
(12) Incorporated by reference to exhibit 2.1 previously filed with Registrant's
Report on Form 8-K filed with the SEC on April 29, 1999.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
SANMINA CORPORATION
By: /s/ JURE SOLA
------------------------------------
Jure Sola
Chairman and Chief Executive Officer
Date: December 14, 1999
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the date indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ JURE SOLA Chairman, Chief Executive December 14, 1999
- ----------------------------------------------------- Officer and Director
Jure Sola (Principal Executive
Officer)
/s/ RANDY W. FURR President, Chief Operating December 14, 1999
- ----------------------------------------------------- Officer and Director
Randy W. Furr
/s/ ELIZABETH D. JORDAN Executive Vice President and December 14, 1999
- ----------------------------------------------------- Chief Financial Officer
Elizabeth D. Jordan (Principal Financial and
Accounting Officer)
/s/ NEIL BONKE Director December 14, 1999
- -----------------------------------------------------
Neil Bonke
/s/ JOHN BOLGER Director December 14, 1999
- -----------------------------------------------------
John Bolger
/s/ MARIO M. ROSATI Director December 14, 1999
- -----------------------------------------------------
Mario M. Rosati
/s/ JOSEPH M. SCHELL Director December 14, 1999
- -----------------------------------------------------
Joseph M. Schell
/s/ BERNARD VONDERSCHMITT Director December 14, 1999
- -----------------------------------------------------
Bernard Vonderschmitt
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SCHEDULE II
SANMINA CORPORATION
VALUATION AND QUALIFYING ACCOUNTS
(IN THOUSANDS)
BALANCE AT CHARGED TO BALANCE AT
BEGINNING COSTS AND END OF
OF PERIOD EXPENSES DEDUCTIONS PERIOD
---------- ---------- ---------- ----------
Allowance for Doubtful Accounts and Returns
Fiscal year ended September 30, 1997.................. $2,730 $2,288 $273 $4,745
Fiscal year ended September 30, 1998.................. $4,745 $1,994 $945 $5,794
Fiscal year ended October 2, 1999..................... $5,794 $4,117 $463 $9,448
S-1
20
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON SCHEDULE
To the Board of Directors and Stockholders
of Sanmina Corporation:
We have audited, in accordance with generally accepted auditing standards,
the financial statements included in Sanmina Corporation's annual report to
shareholders incorporated by reference in this Form 10-K, and have issued our
report thereon dated October 22, 1999. Our audit was made for the purpose of
forming an opinion on those statements taken as a whole. The schedule at Item
14(a)2 is the responsibility of Sanmina's management and is presented for
purposes of complying with the Securities and Exchange Commission's rules and is
not part of the basic financial statements. This schedule has been subjected to
the auditing procedures applied in the audit of the basic financial statements
and, in our opinion, fairly states in all material respects the financial data
required to be set forth therein in relation to the basic financial statements
taken as a whole.
ARTHUR ANDERSEN LLP
San Jose, California
October 22, 1999
S-2
21
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
------- -----------
13 Annual Report
21 Subsidiaries of the Registrant
23 Consent of Arthur Andersen LLP
27 Financial Data Schedule