What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-11-27 compared with 2023-11-16 · 247 added, 257 removed, 738 unchanged (41% of the section changed)

4 unchanged sentences

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Sanmina Corporation and its subsidiaries (the “Company”) as of September 30, 2023 and October 1, 2022, and the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the three years in the period ended September 30, 2023, including the related notes and financial statement schedule listed in the index appearing under Item 15(a)(2) (collectively referred to as the “consolidated financial statements”).

We have audited the accompanying consolidated balance sheets of Sanmina Corporation and its subsidiaries (the “Company”) as of September 28, 2024 and September 30, 2023, and the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the three years in the period ended September 28, 2024, including the related notes and financial statement schedule listed in the index appearing under Item 15(a)(2) (collectively referred to as the “consolidated financial statements”).

We also have audited the Company's internal control over financial reporting as of September 28, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of September 30, 2023 and October 1, 2022, and the results of its operations and its cash flows for each of the three years in the period ended September 30, 2023 in conformity with accounting principles generally accepted in the United States of America.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of September 28, 2024 and September 30, 2023, and the results of its operations and its cash flows for each of the three years in the period ended September 28, 2024 in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company did not maintain, in all material respects, effective internal control over financial reporting as of September 28, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO because material weaknesses in internal control over financial reporting existed as of that date related to (i) inappropriate tone at the top in the control environment at one of the Company’s divisions, specifically division management did not sufficiently promote, monitor or enforce appropriate accounting policies and procedures, thereby resulting in inappropriate and unsupported adjustments to the quarterly contract cost estimate process;

(ii) the Company not maintaining a sufficient complement of finance personnel at the division with an appropriate level of expertise, knowledge and training in internal control over financial reporting commensurate with the Company’s financial reporting requirements;

and (iii) the division not designing and maintaining effective controls over the quarterly contract estimate review process, which led to the failure to timely and appropriately record adjustments to quarterly estimates.

(iii) the division not designing and maintaining effective controls over the quarterly contract estimate review process, which led to the failure to timely and appropriately record adjustments to quarterly estimates;

and (iv) the Company not designing and maintaining effective controls to properly support and account for the transfer of control to its customers of certain raw materials inventory.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.

11 unchanged sentences

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based

on the assessed risk.

Our audits also included performing such other procedures as we considered necessary in the circumstances.

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Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Revenue Recognition using the Cost-to-cost Method for Government Contracts in the Defense and Aerospace Division

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and (iii) obtaining evidence to support estimated costs.

Consolidation of Sanmina SCI India Private Limited (“SIPL”)

As described in Note 18 to the consolidated financial statements, the Company completed a joint venture transaction with Reliance Strategic Business Ventures Limited (“RSBVL”) to establish SIPL as a joint venture.

As a result of the transaction, RSBVL holds 50.1% of the outstanding shares of SIPL and the Company holds the remaining 49.9% of the outstanding shares of SIPL.

In connection with RSBVL’s investment, the Company and RSBVL entered into a management services contract

pursuant to which the Company has the unilateral ability to make the significant financial and operating decisions made in the ordinary course of SIPL’s business.

Management determined the voting interest model was applicable and concluded that, despite not having a majority ownership interest, the Company has a controlling financial interest in SIPL through the management services contract.

Because of this controlling financial interest, the Company consolidated SIPL.

In connection with the transaction close on October 3, 2022, the Company recognized a noncontrolling interest of $132 million and an increase in additional paid-in-capital of $84 million.

The principal considerations for our determination that performing procedures relating to the consolidation of SIPL is a critical audit matter are (i) the significant judgment by management in the assessment of whether the Company has a controlling financial interest in SIPL under the voting interest model, despite not having a majority ownership interest;

(ii) a high degree of auditor judgment and subjectivity in performing procedures and evaluating audit evidence related to management’s assessment of whether the Company has a controlling financial interest in SIPL based on the Company’s contractual rights under the joint venture and shareholders’ agreement and the management services contract;

and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to management's assessment of whether the Company has a controlling financial interest in SIPL under the voting interest model.

These procedures also included, among others, (i) reading the joint venture and shareholders’ agreement and the management services contract;

(ii) evaluating whether the contractual terms of the joint venture and shareholders’ agreement and the management service contract are consistent with management’s assessment of whether the Company has a controlling financial interest in SIPL;

and (iii) evaluating management’s determination that the Company has the unilateral ability to make the significant financial and operating decisions made in the ordinary course of SIPL’s business.

Professionals with specialized skill and knowledge were used to assist in evaluating the appropriateness of management's conclusion that the Company has a controlling financial interest in SIPL.

/s/ PricewaterhouseCoopers LLP

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September 28,

2023 October 1,

2024 September 30,

(In thousands, except par value)

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Cash and cash equivalents $ 625,860 $ 667,570

Accounts receivable, net of allowances of approximately $ 8 million as of September 30, 2023 and October 1, 2022, respectively

Accounts receivable, net of allowances of approximately $ 7 million and $ 8 million as of September 28, 2024 and September 30, 2023, respectively

1,337,562 1,230,771

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Common stock, $ 0.01 par value, authorized 166,667 shares;

111,550 and 110,160 shares issued and 56,833 and 57,394 shares outstanding as of September 30, 2023 and October 1, 2022, respectively

Treasury stock, 54,718 and 52,766 shares as of September 30, 2023 and October 1, 2022, respectively, at cost

113,117 and 111,550 shares issued and 53,921 and 56,833 shares outstanding as of September 28, 2024 and September 30, 2023, respectively

Treasury stock, 59,196 and 54,718 shares as of September 28, 2024 and September 30, 2023, respectively, at cost

( 1,739,550 ) ( 1,485,252 )

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September 28,

2023 October 1,

2024 September 30,

2023 October 1,

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Interest expense ( 29,183 ) ( 36,290 ) ( 22,473 )

Other income (expense), net ( 20,156 ) ( 26,314 ) 44,331

Other expense ( 1,216 ) ( 20,156 ) ( 26,314 )

Interest and other, net ( 17,959 ) ( 42,851 ) ( 47,159 )

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September 28,

2023 October 1,

2024 September 30,

2023 October 1,

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Other comprehensive income — — — — 14,554 — — 14,554

Sale of noncontrolling interest — 78,169 — — — — 132,132 210,301

Net income — — — — — 309,970 17,543 327,513

BALANCE AT OCTOBER 1, 2022

BALANCE AT SEPTEMBER 30, 2023

111,550 $ 6,513,331 ( 54,718 ) $ ( 1,485,252 ) $ 70,879 $ ( 2,930,008 ) $ 149,675 $ 2,318,625

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Repurchases of treasury stock — — ( 4,478 ) ( 254,298 ) — — — ( 254,298 )

Other comprehensive income — — — — 14,554 — — 14,554

Sale of noncontrolling interest — 78,169 — — — — 132,132 210,301

Other comprehensive loss — — — — ( 4,138 ) — — ( 4,138 )

Net income — — — — — 222,536 15,215 237,751

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September 28,

2023 October 1,

2024 September 30,

2023 October 1,

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Net income before noncontrolling interest $ 237,751 $ 327,513 $ 240,384

Adjustments to reconcile net income before noncontrolling interest to cash provided by operating activities:

Adjustments to reconcile net income before noncontrolling interest to cash provided by (used in) operating activities:

Depreciation and amortization 122,418 118,237 108,783

1 unchanged sentence

Deferred income taxes 30,346 28,753 27,910

Loss (Gain) on sale of intellectual property

— 7,000 ( 15,000 )

Gain on liquidation of foreign entity

— — ( 8,263 )

Other, net ( 1,116 ) 1,768 10,108

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Purchases of investments ( 5,200 ) ( 2,500 ) ( 2,000 )

Cash paid for business acquisition, net of cash acquired

— — ( 21,408 )

Proceeds from sale of intellectual property — — 5,000

Cash used in investing activities ( 114,396 ) ( 192,458 ) ( 132,214 )

2 unchanged sentences

Repayments of revolving credit facility borrowings ( 2,108,800 ) ( 2,980,800 ) ( 1,874,000 )

Repayments of long-term debt ( 17,500 ) ( 332,814 ) ( 18,752 )

Proceeds from issuance of long-term debt — 350,000 —

Debt issuance costs — ( 3,263 ) —

Repayments of borrowings ( 21,570 ) ( 17,500 ) ( 332,814 )

Proceeds from issuance of long-term debt, net of issuance cost — — 346,737

Holdback paid in connection with previous business combination — ( 8,558 ) —

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Proceeds from sale of noncontrolling interest — 215,799 —

Proceeds from collection of notes receivable — 500 2,500

Other — — 500

Cash provided by (used in) financing activities ( 269,707 ) 94,505 ( 314,299 )

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CPS consists of multiple operating segments which do not individually meet the quantitative thresholds for being presented as reportable segments.

Therefore, financial information for these operating segments is combined and presented in a single category entitled “Components, Products and Services”.

Therefore, financial information for these operating segments is combined and presented in a single category entitled “CPS”.

The accounting policies for each segment are the same as those disclosed by the Company for its consolidated financial statements.

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Noncontrolling interest represents a noncontrolling investor’s interest in the results of operations of subsidiaries that the Company controls and consolidates.

Reclassification.

Certain prior period balances have been reclassified to conform to the current period presentation in the consolidated financial statements and the accompanying notes.

Summary of Significant Accounting Policies

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Actual results could differ materially from these estimates.

Financial Instruments and Concentration of Credit Risk.

Financial instruments consist primarily of cash and cash equivalents, accounts receivable, foreign currency forward contracts, interest rate swap agreements, accounts payable and debt

The fair value of these financial instruments approximates their carrying amount as of September 30, 2023 and October 1, 2022 due to the nature or short maturity of these instruments, or because, in some cases, the instruments are recorded at fair value on the consolidated balance sheets.

Financial Instruments.

Financial instruments consist primarily of cash and cash equivalents, accounts receivable, foreign currency forward contracts, interest rate swap agreements, accounts payable and debt obligations.

The fair value of these financial instruments approximates their carrying amount as of September 28, 2024 and September 30, 2023 due to the nature or short maturity of these instruments, or because, in some cases, the instruments are recorded at fair value on the consolidated balance sheets.

Cash and Cash Equivalents.

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Accounts Receivable and Other Related Allowances.

The Company had allowances of approximately $ 8 million as of September 30, 2023 and October 1, 2022, respectively, for uncollectible accounts, product returns and other net sales adjustments.

The Company had allowances of approximately $ 7 million and $ 8 million as of September 28, 2024 and September 30, 2023, respectively, for uncollectible accounts, product returns and other net sales adjustments.

To establish the allowance for doubtful accounts, the Company estimates credit risk associated with accounts receivable by considering the creditworthiness of its customers, past experience, specific facts and circumstances, and the overall economic climate in industries that it serves.

1 unchanged sentence

Accounts Receivable Sales.

The Company is a party to a Receivables Purchase Agreement (the “RPA”) with certain third-party banking institutions for the sale of trade receivables generated from sales to certain customers, subject to acceptance by, and a funding commitment from, the banks that are party to the RPA.

Trade receivables sold pursuant to the RPA are serviced by the Company.

In addition to the RPA, the Company has the option to participate in trade receivables sales programs that have been implemented by certain of the Company’s customers, as in effect from time to time.

The Company does not service trade receivables sold under these other programs.

Under each of the programs noted above, the Company sells its entire interest in a trade receivable for 100% of face value, less a discount.

The Company is a party to a Receivables Purchase Agreement (the “RPA”) with certain third-party banking institutions for the sale of accounts receivable generated from sales to certain customers, subject to acceptance by, and a funding commitment from, the banks that are party to the RPA.

Accounts receivable sold pursuant to the RPA are serviced by the Company.

In addition to the RPA, the Company has the option to participate in accounts receivable sales programs that have been implemented by certain of the Company’s customers, as in effect from time to time.

The Company does not service accounts receivable sold under these other programs.

Under each of the programs noted above, the Company sells its entire interest in accounts receivable for 100% of face value, less a discount.

Accounts receivable balances sold are removed from the consolidated balance sheets and the related proceeds are reported as cash provided by operating activities in the consolidated statements of cash flows.

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Inventory provisions are established based on forecasted demand, past experience with specific customers, the age and nature of the inventory, the ability to redistribute inventory to other programs or back to suppliers and whether customers are contractually obligated and have the ability to pay for the related inventory.

Certain payments received from customers for inventory held by the Company are recorded as a reduction of inventory.

The Company’s raw materials inventories are generally acquired in anticipation of specific customer orders and pursuant to customer-specific design specifications.

When the Company and its customers agree that the quantity of customer-specific inventory is in excess of anticipated demand, the Company will transfer control of those inventories to its customers in exchange for a cash payment.

These transactions are reported as transfers of non-financial assets – i.e., reported on a net basis in the income statement.

Long-lived Assets.

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For foreign subsidiaries using the local currency as their functional currency, assets and liabilities are translated to U.S.

dollars at exchange rates in effect at the balance sheet date and income and expenses are translated at average exchange rates.

dollars at exchange rates in effect at the balance sheet date and income and expenses are

translated at average exchange rates.

The effects of these translation adjustments are reported in stockholder’ equity as a component of accumulated other comprehensive income (“AOCI”).

For all entities, remeasurement adjustments for non-functional currency monetary assets and liabilities are included in other income (expense), net in the accompanying consolidated statements of income.

For all entities, remeasurement adjustments for non-functional currency monetary assets and liabilities are included in other expense in the accompanying consolidated statements of income.

Remeasurement gains and losses arising from long-term intercompany loans denominated in a currency other than an entity’s functional currency are recorded in AOCI if repayment of the loan is not anticipated in the foreseeable future.

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The Company accounts for derivative instruments and hedging activities in accordance with ASC Topic 815, Derivatives and Hedging , which requires each derivative instrument to be recorded on the consolidated balance sheets at its fair value as either an asset or a liability.

If a derivative is designated as a cash flow hedge, the Company excludes time value from its assessment of hedge effectiveness and recognizes the amount of time value in earnings over the life of the derivative.

If a derivative is designated as a cash flow hedge, the Company excludes the change in the fair value of the contract related to the changes in the difference between the spot price and the forward price from its assessment of hedge effectiveness and recognizes these amounts, which are primarily related to time value, in earnings over the life of the derivative instrument.

Gains or losses on the derivative not caused by changes in time value are recorded in AOCI, and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings.

If a derivative is designated as a fair value hedge, changes in the fair value of the derivative and of the item being hedged are recognized in earnings in the current period.

Derivative instruments are entered into for periods of time consistent with the related underlying exposures and are not entered into for speculative purposes.

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The Company minimizes such risk by seeking high quality counterparties.

The Company's leases consist primarily of operating leases for buildings and land and have initial lease terms of up to 44 years.

The Company's leases consist of operating leases for buildings and land and have initial lease terms of up to 44 years.

Certain of these leases contain an option to extend the lease term for additional periods or to terminate the lease after an initial non-cancelable term.

1 unchanged sentence

Leases with a term of twelve months or less are not recorded on the Company’s balance sheet.

The Company’s lease liability and ROU assets represent the present value of future lease payments which are a combination of lease components and non-lease components such as maintenance and utilities.

The Company’s lease liability and ROU assets represent the present value of future fixed lease payments which are a combination of lease components and non-lease components such as maintenance and utilities.

Operating lease expense is recognized on a straight-line basis over the term of the lease.

1 unchanged sentence

Variable payments are expensed as incurred and not included in the measurement of lease liabilities and ROU assets.

Since the Company’s leases generally do not provide an implicit rate, the Company uses an incremental borrowing rate based on information available at the lease commencement date for purposes of determining the present value of lease payments.

Since the Company’s leases generally do not provide an implicit rate, the Company uses its incremental borrowing rate based on information available at the lease commencement date for purposes of determining the present value of lease payments.

The Company’s incremental borrowing rate is based on the term of the lease, the economic environment of the lease and the effect of collateralization, if any.

5 unchanged sentences

and sales of raw materials to customers whose requirements change after the Company has procured inventory to fulfill the customer’s forecasted demand.

The Company determines the appropriate revenue to recognize by applying a 5-step model:

The Company determines the appropriate revenue to recognize as described in ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”) by applying a 5-step model:

(1) identify the contract with a customer;

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Step 1 - Identify the contract with a customer

The Company generally enters into a master supply agreement (“MSA”) with its customers that provides the framework under which business will be conducted, and pursuant to which a customer will issue purchase orders or other binding documents to specify the quantity, price and delivery requirements for products or services the customer wishes to purchase.

binding documents to specify the quantity, price and delivery requirements for products or services the customer wishes to purchase.

The Company generally considers its contract with a customer to be a firm commitment, consisting of the combination of an MSA and a purchase order or any other similar binding document.

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The Company is required to assess whether control of a product or services promised under a contract is transferred to the customer at a point-in-time or over time as the product is being manufactured or the services are being provided.

If the criteria in ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”), for recognizing revenue on an over time basis are not met, revenue must be recognized at the point-in-time determined by the Company at which its customer obtains control of a product or service.

The Company has determined that revenue for the majority of its contracts is required to be recognized on an over time basis.

If the criteria in ASC 606, for recognizing revenue on an over time basis are not met, revenue must be recognized at the point-in-time determined by the Company at which its customer obtains control of a product or service.

The Company recognizes revenue for the majority of its contracts on an over time basis.

This is primarily due to the fact that the Company does not have an alternative use for the end products it manufactures for its customers and has an enforceable right to payment, including a reasonable profit, for work in progress upon a customer’s cancellation of a contract for convenience.

1 unchanged sentence

For these contracts, revenue is recognized on an over time basis using the cost-to-cost method (ratio of costs incurred to date to total estimated costs at completion) which the Company believes best depicts the transfer of control to the customer.

Revenue streams for which revenue is recognized on an over time basis include sales of vertically integrated manufacturing solutions (integrated manufacturing solutions and components);

logistics and repair services;

design, development and engineering services;

and defense and aerospace programs.

At least 95 % of the Company’s revenue is recognized on an over time basis, which is as products are manufactured or services are performed.

1 unchanged sentence

For contracts for which revenue is required to be recognized at a point in time, the Company recognizes revenue when it has transferred control of the related goods, which generally occurs upon shipment or delivery of the goods to the customer.

Revenue streams for which revenue is recognized at a point-in-time include Company-proprietary products and sales of raw materials.

Application of the cost-to-cost method for government contracts in the Company’s Defense and Aerospace division requires the use of significant judgments with respect to estimated materials, labor and subcontractor costs included in the total estimated costs at completion.

In our Defense and Aerospace division, we apply the cost-to-cost method for government contracts which requires the use of significant judgments with respect to estimated materials, labor and subcontractor costs included in the total estimated costs at completion.

Additionally, the Company evaluates whether contract modifications for claims have been approved and, if so, estimates the amount, if any, of variable consideration that can be included in the transaction price of the contract.

This division is an operating segment whose results are combined with thirteen other operating segments and reported under CPS for segment reporting purposes.

Estimates of materials, labor and subcontractor costs expected to be incurred to satisfy a performance obligation are updated on a quarterly basis.

These estimates consider costs incurred to date and estimated costs to be incurred over the remaining expected period of performance to satisfy a performance obligation.

Such estimates are reviewed each quarter by a group of employees that includes representatives from numerous functions such as engineering, materials, contracts, manufacturing, program management, finance and senior management.

These estimates consider costs incurred to date and estimated costs to be incurred over the

remaining expected period of performance to satisfy a performance obligation.

There is inherent uncertainty in estimating the amount of costs that will be required to complete a contract.

Factors that contribute to the inherent uncertainty in estimates include, among others, (1) the long-term duration of contracts, (2) the highly-complex nature of the products we manufacture, (3) the readiness of our customer’s design for manufacturing, (4) the cost and availability of purchased materials, (5) labor cost, availability and productivity, (6) subcontractor performance and (7) the risk of delayed performance/completion.

Therefore, such estimates are reviewed each quarter by a group of employees that includes representatives from numerous functions such as engineering, materials, contracts, manufacturing, program management, finance and senior management.

If a change in estimate is deemed necessary, the impact of the change is recognized in the period of change.

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Stock-based Compensation .

The Company recognizes stock-based compensation expense, net of estimated forfeitures, on as straight-line basis over the requisite service period of the award, which generally ranges from one year to four years and/or upon achievement of specified performance criteria.

The stock-based compensation expense for time-based and performance-based restricted stock awards are valued at the closing market price of the Company’s common stock on the date of grant.

During the requisite service period, performance-based restricted stock awards are monitored by management for probability of achievement of performance goals and if become probable, that more or less than the previous estimate of the awarded shares will vest, an adjustment to stock-based compensation expense will be recognized as a change in accounting estimate.

The Company recognizes stock-based compensation expense, net of estimated forfeitures, on a straight-line basis over the requisite service period of the award, which generally ranges from one year to four years and/or upon achievement of specified performance criteria.

Stock-based compensation expense for time-based and performance-based restricted stock awards is valued at the closing market price of the Company’s common stock on the date of grant.

During the requisite service period, performance-based restricted stock awards are monitored by management for probability of achievement of performance goals and if it becomes probable that the number of awarded shares that will vest is greater than or less than the previous estimate of the number of awarded shares that will vest, an adjustment to stock-based compensation expense will be recognized as a change in accounting estimate.

The Company recognizes stock-based compensation expense for market-based restricted stock units measured at fair value on the grant date using a Monte Carlo valuation model.

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Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

The carrying value of the Company’s net deferred tax assets is based on the Company’s belief that it is more likely than not that the Company will generate sufficient future taxable income in certain jurisdictions to realize these deferred tax assets.

A valuation allowance has been established for deferred tax assets which do not meet the “more likely than not” criteria discussed above .

The carrying value of the Company’s net deferred tax assets is based on the Company’s belief that it is more likely than not that the Company will generate sufficient future

taxable income in certain jurisdictions to realize these deferred tax assets.

A valuation allowance has been established for deferred tax assets that do not meet the “more likely than not” criteria discussed above .

The Company’s tax rate is dependent upon the geographic distribution of its worldwide income or losses, the tax regulations and tax holidays in each geographic region, the availability of tax credits and carryforwards, including net operating losses, and the effectiveness of its tax planning strategies.

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Interest and penalties related to unrecognized tax benefits are recognized as a component of income tax expense.

Balance Sheet and Income Statement Details

Recently Issued Accounting Pronouncements Not Yet Adopted

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, which will require the Company to disclose information about its reportable segment’s significant expenses and other segment items on an interim and annual basis.

The disclosure requirements are effective for the Company in fiscal 2025, and for interim periods within the Company's fiscal 2026, with early adoption permitted.

The Company is currently evaluating the impact ASU 2023-07 will have on its financial statement disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, which will require the Company, on an annual basis, to provide disclosure of specific categories in its effective income tax rate reconciliation, as well as disclosure of income taxes paid disaggregated by jurisdiction.

ASU 2023-09 is effective for the Company in fiscal 2026, with early adoption permitted.

The Company is currently evaluating the impact ASU 2023-09 will have on its financial statement disclosures.

Balance Sheet Details

Property, Plant and Equipment, net

1 unchanged sentence

September 28,

2023 October 1,

2024 September 30,

(In thousands)

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Depreciation expense was $ 122 million, $ 116 million and $ 108 million for 2024, 2023 and 2022, respectively.

Other Income (Expense), net

In 2021, the Company sold intellectual property for $ 15 million in 2021, of which $ 8 million has been received in cash.

The sale of intellectual property was included in other income (expense), net on the consolidated statements of income.

During 2022, the Company expected to incur credit losses with the counterparty for the remaining $ 7 million due under the arrangement and consequently, recorded a charge of $ 7 million in other income (expense), net, on the consolidated statements of income to establish an allowance.

A foreign entity of the Company was substantially liquidated in 2021 and the Company reclassified $ 8 million of cumulative translation adjustments associated with this entity from accumulated other comprehensive income to other income (expense), net on the consolidated statements of income in 2021.

The Company received $ 16 million of cash in 2021 in connection with settlements of certain anti-trust class action matters and recognized a gain in other income (expense), net on the consolidated statements of income.

Customer Payments for Raw Materials Inventory

As of September 28, 2024 and September 30, 2023, customer payments related to raw materials inventory of $ 151 million and $ 54 million, respectively, are recorded in accrued liabilities in the consolidated balance sheets.

Net sales by geographic segment is determined based on the country in which a product is manufactured.

The following table presents revenue disaggregated by segment, market sector and geography.

September 28,

2023 October 1,

2024 September 30,

2023 October 1,

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Total $ 7,568,328 $ 8,935,048 $ 7,919,622

Percentage of net sales represented by ten largest customers 48 % 49 % 53 %

Number of customers representing 10% or more of net sales 1 2 1

(1) Mexico represents approximately 65 % of the Americas revenue and the U.S.

represents approximately 30 % as of September 30, 2023.

Financial Instruments

(1) Mexico represents 63 %, 65 % and 60 % of Americas revenue for the years ended September 28, 2024, September 30, 2023 and October 1, 2022, respectively.

represents 35 %, 32 % and 37 % of Americas revenue for the years ended September 28, 2024, September 30, 2023 and October 1, 2022, respectively.

(2) Malaysia represents 30 %, 26 % and 31 % of APAC revenue for the years ended September 28, 2024, September 30, 2023 and October 1, 2022, respectively .

As an electronics manufacturing services company, the Company primarily provides manufacturing and related services for products built to its customers’ unique specifications.

Therefore, it is impracticable for the Company to provide revenue from external customers for each product and service it provides.

Changes in the Company’s estimates of transaction price and/or costs to complete result in a favorable or unfavorable impact to revenue and operating income.

The impact of changes in estimates on revenue and operating income resulting from the application of the cost-to-cost method for recognizing revenue was as follows:

September 28,

2024 September 30,

2023 October 1,

(In thousands)

Favorable $ 12,220 $ 6,023 $ 5,403

Unfavorable ( 2,697 ) ( 2,556 ) ( 162 )

Total $ 9,523 $ 3,467 $ 5,241

September 28,

2024 September 30,

2023 October 1,

Operating Income:

(In thousands)

Favorable $ 21,229 $ 8,657 $ 7,025

Unfavorable ( 16,102 ) ( 44,838 ) ( 20,737 )

Total $ 5,127 $ ( 36,181 ) $ ( 13,712 )

Financial Instruments and Concentration of Credit Risk

Fair Value Measurements

2 unchanged sentences

Additionally, the fair value of variable rate long-term debt approximates carrying value as of September 28, 2024.

The Company’s cash equivalents are classified as Level 1 in the fair value hierarchy.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

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For currency contracts, Level 2 inputs include foreign currency spot and forward rates and interest rates at commonly quoted intervals.

Foreign exchange contracts were not material as of September 30, 2023 or October 1, 2022 .

Foreign exchange contracts were not material as of September 28, 2024 or September 30, 2023 .

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Other non-financial assets, such as goodwill and other long-lived assets, are measured at fair value as of the date such assets are acquired or in the period an impairment is recorded.

Offsetting Derivative Assets and Liabilities

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The Company presents its derivative assets and derivative liabilities on a gross basis on the consolidated balance sheets.

The amount that the Company had the right to offset under these netting arrangements was not material as of September 30, 2023 or October 1, 2022 .

Non-Financial Assets Measured at Fair Value on a Nonrecurring Basis

Other non-financial assets, such as intangible assets, goodwill and other long-lived assets, are measured at fair value as of the date such assets are acquired or in the period an impairment is recorded.

The Company recorded an impairment charge of $ 2 million in 2022 for certain long-lived assets.

The following table presents the location and fair values of derivative financial instruments included in our consolidated balance sheets.

September 28,

2024 September 30,

(In thousands)

Derivatives Designated as Accounting Hedges:

Prepaid expenses and other current assets $ 2,277 $ 6,179

Other assets $ 21 $ 6,351

Accrued liabilities $ 53 $ 213

Other $ 1,771 $ —

Derivatives Not Designated as Accounting Hedges:

Prepaid expenses and other current assets $ 3,229 $ 1,164

Accrued liabilities $ 2,265 $ 4,685

Derivative Instruments

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Forward contracts on various foreign currencies are used to manage foreign currency risk associated with forecasted foreign currency transactions and certain monetary assets and liabilities denominated in non-functional currencies.

The Company’s primary foreign currency cash flows are in Mexico, China and India.

The Company’s primary foreign currency cash flows are in India, Mexico and China.

The Company had the following outstanding foreign currency forward contracts to hedge foreign currency exposures:

September 28,

2023 October 1,

2024 September 30,

Derivatives Designated as Accounting Hedges:

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These contracts are designated as cash flow hedges for accounting purposes and are generally one to two months in duration but, by policy, may be up to twelve months in duration.

For derivative instruments that are designated and qualify as cash flow hedges, the Company excludes time value from its assessment of hedge effectiveness and recognizes the amount of time value in earnings over the life of the derivative instrument.

The amount of gain or loss recognized in Other Comprehensive Income on derivative instruments and the amount of gain or loss reclassified from AOCI into income were not material for any period presented herein.

The amount of gain or loss recognized in other comprehensive income on derivative instruments and the amount of gain or loss reclassified from AOCI into income were not material for any period presented herein and is included as a component of cost of sales in the consolidated statements of income.

The Company enters into short-term foreign currency forward contracts to hedge foreign currency exposures associated with certain monetary assets and liabilities denominated in non-functional currencies.

These contracts have maturities of up to two months and are not designated as accounting hedges.

Accordingly, these contracts are marked-to-market at the end of each period with unrealized gains and losses recorded in other income (expense), net, in the consolidated statements of income.

Accordingly, these contracts are marked-to-market at the end of each period with unrealized gains and losses recorded in other expense, in the consolidated statements of income.

The amount of gains or losses associated with these forward contracts was not material for any period presented herein.

From an economic perspective, the objective of the Company’s hedging program is for gains and losses on forward contracts to substantially offset gains and losses on the underlying hedged items.

In addition to the contracts disclosed in the table above, the Company has numerous contracts that have been closed from an economic and financial accounting

perspective and will settle early in the first month of the following quarter.

In addition to the contracts disclosed in the table above, the Company has numerous contracts that have been closed from an economic and financial accounting perspective and will settle early in the first month of the following quarter.

Since these offsetting contracts do not expose the Company to risk of fluctuations in exchange rates, these contracts have been excluded from the above table.

1 unchanged sentence

The Company enters into forward interest rate swap agreements with independent counterparties to partially hedge the variability in cash flows due to changes in Secured Overnight Financing Rate benchmark interest rate (“SOFR”) associated with anticipated variable rate borrowings.

These interest rate swaps have maturity dates of December 1, 2023 and September 27, 2027 and effectively convert a portion of the Company’s variable interest rate obligations to fixed interest rate obligations.

These interest rate swaps have a maturity date of September 27, 2027 and effectively convert a portion of the Company’s variable interest rate obligations to fixed interest rate obligations.

These swaps are accounted for as cash flow hedges under ASC Topic 815, Derivatives and Hedging .

Interest rate swaps with an aggregate notional amount of $ 650 million and $ 350 million were outstanding as of September 30, 2023 and October 1, 2022, respectively.

Interest rate swaps with an aggregate notional amount of $ 300 million and $ 650 million were outstanding as of September 28, 2024 and September 30, 2023, respectively.

The aggregate effective interest rate of these swaps as of September 28, 2024 was approximately 4.7 %.

Interest rate swaps had a value of $ 12 million and $ 6 million as of September 30, 2023 and October 1, 2022, respectively.

As of September 30, 2023, $ 6 million was included in prepaid expenses and other current assets and $ 6 million was included in other assets on the consolidated balance sheets.

Financial Instruments and Concentration of Credit Risk

Concentration of Credit Risk

Financial instruments that potentially subject the Company to credit risk consist primarily of cash, cash equivalents, trade accounts receivable, foreign currency forward contracts and interest rate swap agreements.

The carrying value of assets such as cash, cash equivalents and accounts receivable is expected to approximate fair value due to the short duration of the assets.

The Company maintains its cash and cash equivalents with recognized financial institutions that management believes to be of high credit quality.

The Company maintains its cash and cash equivalents with recognized financial institutions, both domestic and foreign.

Cash and cash equivalents may exceed the amount of insurance provided on such deposits, but may generally be redeemed upon demand.

Periodic evaluations of the relative credit standing of the financial institutions are performed and the Company attempts to limit its exposure with any one institution.

One of the Company’s most significant credit risks is the ultimate realization of accounts receivable.

3 unchanged sentences

Foreign currency forward contracts and interest rate swaps are maintained with high quality counterparties to reduce the Company’s credit risk and are recorded on the Company’s balance sheets at fair value.

Nokia represented 10 % or more of the Company's net sales in 2023 and 2021.

Nokia and Motorola each represented 10 % or more of the Company’s net sales in 2022.

No customer represented 10% or more of the Company’s gross accounts receivable as of September 30, 2023 and Motorola represented 10 % or more of the Company’s gross accounts receivable as of October 1, 2022.

Long-term debt consisted of the following:

Sales to the Company’s ten largest customers represented 47 % of net sales in 2024.

Net sales from these customers are derived from multiple segments.

The following table presents the percentage of total net sales to each significant customer that represented 10% or more of the Company’s net sales.

September 28,

2024 September 30,

2023 October 1,

IMS * 12.6 % 13.6 %

CPS * 0.6 % 1.0 %

Total * 13.2 % 14.6 %

IMS 9.9 % * 10.1 %

CPS 0.2 % * 0.2 %

Total 10.1 % * 10.3 %

* Less than 10% of the Company’s net sales.

Nokia represented 10 % or more of the Company’s gross accounts receivable as of September 28, 2024.

No customer represented 10% or more of the Company’s gross accounts receivable as of September 30, 2023.

Long-term debt consisted of the following:

September 28,

2024 September 30,

(In thousands)

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The Company is required to repay a portion of the principal amount of the Term Loan Due 2027 equal to 1.25 % of the principal in quarterly installments.

On May 17, 2023, as a result of the Company’s failure to timely file its quarterly report on Form 10-Q for the quarter ended April 1, 2023, the Company was in technical default with respect to certain covenants within its Credit Agreement.

The Company filed its quarterly report on Form 10-Q for the quarter ended April 1, 2023 on May 22, 2023, which was within the stated cure period of 15 calendar days and ceased to be in default as of that time.

Certain of the Company’s domestic subsidiaries are guarantors in respect of the Credit Agreement.

1 unchanged sentence

As of September 28, 2024, no borrowings and $ 14 million of letters of credit were outstanding under the Credit Agreement, under which $ 786 million was available to borrow.

There were no borrowings outstanding under the Credit Agreement as of October 1, 2022.

There were no borrowings outstanding under the Credit Agreement as of September 30, 2023.

Short-term Borrowing Facilities

The Company had $ 8 million of short-term borrowings outstanding as of September 30, 2023.

Additionally, certain foreign subsidiaries of the Company had a total of $ 72 million of short-term borrowing facilities available, under which no borrowings were outstanding as of September 30, 2023.

These facilities expire at various dates through the first quarter of 2025 .

Certain foreign subsidiaries of the Company had a total of $ 71 million of short-term borrowing facilities available, under which no borrowings were outstanding as of September 28, 2024.

Some of these facilities expire at various dates through the second quarter of 2025 and are expected to be renewed.

The Company had $ 8 million of short-term borrowings outstanding as of September 30, 2023 and no short-term borrowings outstanding as of September 28, 2024.

Debt Covenants

5 unchanged sentences

September 28,

2023 October 1,

2024 September 30,

(In thousands)

8 unchanged sentences

September 28,

2023 October 1,

2024 September 30,

2023 October 1,

2 unchanged sentences

Cash paid for operating lease liabilities $ 26,180 $ 24,388 $ 19,249

Right-of-use assets obtained in exchange for lease liabilities $ 1,215 $ 21,180 $ 9,115

(1) Includes immaterial amounts of short term leases, variable lease costs and sublease income.

Future lease payments under non-cancelable operating leases as of September 30, 2023, by fiscal year, are as follows:

Future fixed lease payments under non-cancelable operating leases as of September 28, 2024, by fiscal year, are as follows:

Operating Leases

5 unchanged sentences

Accounts Receivable Sale Program

The Company is a party to a Receivable Purchase Agreement (the “RPA”) with certain third-party banking institutions for the sale of trade receivables generated from sales to certain customers, subject to acceptance by, and a funding commitment from, the banks that are party to the RPA.

Trade receivables sold pursuant to the RPA are serviced by the Company.

The Company does not service trade receivables sold under these other programs.

Under each of the programs noted above, the Company sells its entire interest in a trade receivable for 100 % of face

value, less a discount.

For the years ended September 30, 2023 and October 1, 2022, the Company sold approximately $ 2.6 billion and approximately $ 1.9 billion, respectively, of accounts receivable under these programs.

Under the sale of accounts receivable programs, the Company sells its entire interest in an accounts receivable for 100 % of face value, less a discount.

For the years ended September 28, 2024 and September 30, 2023, the Company sold approximately $ 1.1 billion and approximately $ 2.6 billion, respectively, of accounts receivable under these programs.

Upon sale, these receivables are removed from the consolidated balance sheets and cash received is presented as cash provided by operating activities in the consolidated statements of cash flows.

Discounts on sold receivables were $ 19 million and $ 6 million for the years ended September 30, 2023 and October 1, 2022, respectively and were recorded in other income (expense), net, in the consolidated statements of income.

As of September 30, 2023 and October 1, 2022, $ 162 million and $ 194 million, respectively, of accounts receivable sold under the RPA and subject to servicing by the Company remained outstanding and had not yet been collected.

Discounts on sold receivables were $ 8 million and $ 19 million for the years ended September 28, 2024 and September 30, 2023, respectively, and were recorded in other expense, in the consolidated statements of income.

As of September 28, 2024 and September 30, 2023, $ 34 million and $ 162 million, respectively, of accounts receivable sold under the RPA and subject to servicing by the Company remained outstanding and had not yet been collected.

The Company’s sole risk with respect to receivables it services is with respect to commercial disputes regarding such receivables.

2 unchanged sentences

Additionally, the Company is required to remit amounts collected as a servicer under the RPA on a weekly basis to the financial institutions that purchased the receivables.

As of September 30, 2023 and October 1, 2022, $ 33 million and $ 49 million, respectively, had been collected but not yet remitted.

As of September 28, 2024 and September 30, 2023, $ 3 million and $ 33 million, respectively, had been collected but not yet remitted.

This amount is classified in accrued liabilities on the consolidated balance sheets.

2 unchanged sentences

The Company records a contingent liability when it is probable that a loss has been incurred and the amount of loss is reasonably estimable in accordance with ASC Topic 450, Contingencies, or other applicable accounting standards.

As of September 30, 2023 and October 1, 2022, the Company had reserves of $ 34 million and $ 38 million, respectively, for environmental matters, warranty, litigation and other contingencies (excluding reserves for uncertain tax positions), which the Company believes are adequate.

As of September 28, 2024 and September 30, 2023, the Company had reserves of $ 39 million and $ 34 million, respectively, for environmental matters, warranty, litigation and other contingencies (excluding reserves for uncertain tax positions), which the Company believes are adequate.

However, there can be no assurance that the Company’s reserves will be sufficient to settle these contingencies.

3 unchanged sentences

The Company is subject to various federal, state, local and foreign laws and regulations and administrative orders concerning environmental protection, including those addressing the discharge of pollutants into the environment, the management and disposal of hazardous substances, the cleanup of contaminated sites, the materials used in products, and the recycling, treatment and disposal of hazardous waste.

As of September 30, 2023, the Company had been named in a lawsuit and several administrative orders alleging certain of its current and former sites contributed to groundwater contamination.

One such order demands that the Company and other alleged defendants fund continued post-closure care and remediation at four properly-permitted former hazardous waste landfills located in Northern California to which the Company may have sent wastewater in the past.

The Company is participating in a working group of a number of other alleged defendants in a settlement of this matter and has reserved its estimated exposure for this matter as of September 30, 2023, which amount is immaterial.

In June 2008, the Company was named by the Orange County Water District in a suit alleging that a predecessor company’s actions at a plant the Company sold in 1998 contributed to polluted groundwater managed by the plaintiff.

3 unchanged sentences

The trial against the Company and several other defendants commenced in April 2021 and the submission of evidence concluded in May 2022.

On April 3, 2023, the Superior Court published a statement of decision finding the Company and other remaining defendants liable for certain past investigation costs incurred by the plaintiff.

The Company believes a loss in this matter is probable and has recorded its estimated loss as of September 30, 2023.

There will be subsequent proceedings to assess the Company’s and other defendants’ liability for the plaintiff’s future remediation and other costs, including attorneys’ fees.

It is probable that the Company will record additional losses in connection with this matter, and it is reasonably possible that the amount of such additional losses will be material.

However, the Company is unable to estimate the amount of such additional losses or a range of losses.

The Company intends to continue defending the case vigorously and to seek appellate review at the appropriate time.

On April 3, 2023, the court published a statement of decision finding the Company and other remaining defendants liable for certain past investigation costs incurred by the plaintiff.

Subsequent proceedings to assess the Company’s and other defendants’ liability for the plaintiff’s future remediation and other costs, including attorneys’ fees, were expected.

However, without admitting any liability, in August 2024, the Company and plaintiff agreed to settle this matter and all pending litigation in exchange for the Company’s payment to the plaintiff of $ 3 million.

Other Matters

In December 2019, the Company sued a former customer, Dialight plc (“Dialight”), in the United States District Court for the Southern District of New York to collect approximately $ 10 million in unpaid accounts receivable and net obsolete inventory obligations.

Later the same day, Dialight commenced its own action in the same court.

Dialight’s complaint, which asserts claims for fraudulent inducement, breach of contract and willful misconduct, alleges that the Company fraudulently misrepresented its capabilities to induce Dialight to enter into a Manufacturing Services Agreement (the “Dialight MSA”), and then breached its obligations contained in the Dialight MSA relating to quality, on-time delivery and supply chain management.

Dialight seeks compensatory and punitive damages that it contends exceed $ 200 million, but the Company believes Dialight’s claimed damages are vastly overstated and are subject to a contractual limitation of liability that limits any Dialight recovery to less than $ 2 million.

In an Opinion and Order dated March 14, 2023, the District Court granted in part the Company’s motion for partial summary judgment and dismissed Dialight’s willful misconduct claim.

The Company continues to vigorously prosecute its claims against Dialight.

Further, the Company strongly disagrees with Dialight’s allegations and is defending against Dialight’s remaining claims vigorously.

No trial date has been set in this matter.

In May 2023, the Company and its SCI subsidiary received Civil Investigative Demands (“CIDs”) from the United States Department of Justice (“DOJ") pursuant to the civil False Claims Act (“FCA”).

In December 2019, the Company sued a former customer, Dialight plc (“Dialight”), in the United States District Court for the Southern District of New York to collect unpaid accounts receivable and net obsolete inventory obligations now totaling $ 9 million (exclusive of interest and attorneys’ fees).

On the same day the Company filed its suit, Dialight commenced its own action in the same court.

Dialight alleged that the Company fraudulently misrepresented its capabilities to induce Dialight to enter into a Manufacturing Services Agreement (“MSA”) and then allegedly committed multiple, willful breaches of contract when performing under the MSA.

A trial took place in September 2024 and the jury awarded the Company $ 9 million on its claims and rejected Dialight’s claims for fraudulent inducement and willful breach of contract and awarded Dialight $ 1 million for breach of contract.

The parties filed post-trial motions in October 2024, including a motion by the Company for prejudgment interest and its costs and expenses of the suit, and a motion by Dialight for pre-judgment and post-judgment interest, its costs and expenses of the suit and for a new trial.

A decision resolving these motions is expected in the first calendar quarter of 2025.

The Company will continue to prosecute vigorously its claims against Dialight and, ultimately, to defend on appeal and enforce any resulting judgment.

In May 2023, Sanmina Corporation and its SCI Technology, Inc.

subsidiary (“SCI”) received Civil Investigative Demands (“CIDs”) from the United States Department of Justice (“DOJ”) pursuant to the civil False Claims Act (“FCA”).

The stated purpose of the CIDs—a form of subpoena requiring responses to written interrogatories and the production of documents relating to certain contracts, projects, proposals and business activities of SCI going back to 2010—is to determine whether there is or has been a violation of the FCA with respect to the provision of products and services to the government.

These CIDs supplement several CIDs relating to the same subject matter served upon SCI and certain current and former SCI and Sanmina employees beginning in August 2020, pursuant to which SCI has been producing documents and information and the current and former employees have provided or will provide oral testimony.

To date, neither the Company nor SCI has been served with a complaint in this matter.

The Company has been, and is, cooperating with the DOJ and continues to produce documents and other information responsive to the CIDs.

The Company is unable to predict the ultimate outcome in this matter, although a loss currently is not considered to be probable or estimable.

On November 14, 2023, Gerardo Ramirez, an employee at the Company’s Newark, California plant, filed two lawsuits against the Company in the Alameda County Superior Court.

The first, a putative class action, alleges violations of various California Labor Code and Wage Order requirements, including provisions governing overtime, meal and rest periods, minimum wage requirements, payment of wages during employment and final wages, wage statements, payroll records, and reimbursement of business expenses.

The class action complaint seeks certification of a class of all current and former non-exempt employees who worked for the Company within the State of California at any time between November 14, 2019 and final judgment, as well as unspecified damages, penalties, restitution, attorneys’ fees, pre-judgment interest, and costs of suit.

The second action, a complaint under California’s Private Attorneys General Act of 2004 (“PAGA”) (Labor Code §§ 2698 et seq.), alleges substantially similar violations and seeks penalties individually and on behalf of the State of California and other “aggrieved employees,” along with attorneys’ fees and costs.

The Company intends to defend these cases vigorously.

These CIDs supplement several CIDs relating to the same subject matter served upon SCI and certain current and former SCI and Sanmina Corporation employees beginning in August 2020, pursuant to which SCI produced documents and information and certain of the current and former employees provided oral testimony.

Sanmina and SCI cooperated with the DOJ investigation.

On May 13, 2024, the Company learned that United States of America ex rel.

SCI Technology, Inc.

(the “Eckert Qui Tam Suit”) had been filed under seal in June 2020, and is now unsealed.

On May 13, 2024, the Company also learned that the DOJ had filed a notice in the Eckert Qui Tam Suit stating that, while its investigation would continue, it was declining to intervene at the current time.

The Eckert Qui Tam Suit, filed by a former SCI employee, alleges on behalf of the United States, 16 FCA counts that relate substantially to the same contracts and issues that the DOJ has investigated over the past four years, including making false certifications under the Truth in Negotiations Act and Cost Accounting Standards, submitting false cost and pricing data, fraudulently inducing the government to award contracts and violations of the Service Contract Act.

The complaint alleges such claimed violations defrauded the government in an amount approximating $ 100 million.

The complaint seeks, on behalf of the government, treble damages, civil penalties and interest payable thereon.

On October 7, 2024, Sanmina and SCI filed a motion to dismiss the Eckert Qui Tam Suit.

A decision on the motion is expected in the first half of calendar 2025.

Sanmina Corporation and SCI intend to defend vigorously against the claims made in the Eckert Qui Tam Suit.

The Company is unable to predict the ultimate outcome of the Eckert Qui Tam Suit, although a loss is currently not considered to be probable or estimable.

On November 14, 2023, employee Gerardo Ramirez, filed two lawsuits against the Company in the Alameda County Superior Court (together, the “Ramirez Cases”).

The first, a putative class action, alleges violations of various California Labor Code and Wage Order requirements, including provisions governing overtime, meal and rest periods, minimum wage requirements, payment of wages during employment, wage statements, payroll records, and reimbursement of business expenses.

The class action complaint seeks certification of a class of all current and former non-exempt employees who worked for the Company within the State of California at any time between March 1, 2021 and final judgment, as well as unspecified damages, penalties, restitution, attorneys’ fees, pre-judgment interest, and costs of suit.

The second action, a complaint under California’s Private Attorneys General Act of 2004 (“PAGA”), alleges substantially similar violations and a violation of the provision governing payment of final wages and seeks penalties individually and on behalf of the State of California and other “aggrieved employees,” along with attorneys’ fees and costs.

On May 16, 2024 and June 14, 2024, former employee Carlos Lobatos filed class and PAGA actions in the Santa Clara County Superior Court (the “Lobatos Cases”) alleging violations substantially similar to the violations in the Ramirez Cases, and, in the case of the Lobatos PAGA action, additional violations related to sick leave, suitable rest facilities, seating, failure to retain and provide employment and payroll records, reporting time pay, day of rest rules, payroll deductions, paid time off, and various unlawful employment practices.

The Lobatos class action complaint seeks certification of a class of all current and former non-exempt employees who worked for the Company (directly or via a staffing agency) within the State of California at any time between May 16, 2020 and final judgment, as well as unspecified damages, penalties, restitution, attorneys’ fees, pre-judgment interest, and costs of suit.

On August 12, 2024, former employee Mando Gomez filed a class and PAGA action in the Alameda County Superior Court (the “Gomez Case”) alleging violations substantially similar to the violations in the Ramirez Cases.

The Gomez Case seeks certification of a class of all current and former non-exempt employees who worked for the Company (directly or via a staffing agency) within the State of California at any time between August 12, 2020 and final judgment, as well as unspecified damages, penalties, restitution,

attorneys’ fees, pre-judgment interest, and costs of suit.

On September 20, 2024, former employee Frank J.

Leon Guerrero filed a class action in the Alameda County Superior Court (the “Guerrero Case”) alleging violations substantially similar to the violations in the Ramirez Cases.

The Guerrero Case seeks certification of several classes comprised of all current and former non-exempt employees who worked for the Company (directly or via a staffing agency) within the State of California at any time between September 20, 2020 and final judgment, as well as unspecified damages, penalties, restitution, attorneys’ fees, pre- and post-judgment interest, and costs of suit.

The Company expects the Lobatos Cases, the Gomez Case, and the Guerrero Case to be related to or consolidated with the Ramirez Cases and intends to defend all such cases vigorously.

For each of the pending matters noted above, the Company is unable to reasonably estimate a range of possible loss at this time.

2 unchanged sentences

The ultimate outcome of any litigation is uncertain and unfavorable outcomes could have a negative impact on the Company’s results of operations and financial condition.

Restructuring and Other

Restructuring

Restructuring costs were $ 6 million, $ 11 million, and $ 15 million in 2023, 2022, and 2021, respectively.

The following table is a summary of restructuring costs:

September 30,

2023 October 1,

2022 October 2,

(In thousands)

Severance costs $ 724 $ 319 $ 9,405

Other exit costs (recognized as incurred) 1,607 1,500 1,834

Total - Q1 FY20 Plan 2,331 1,819 11,239

Costs incurred for Other Plans 3,723 9,606 3,818

Total - All Plans $ 6,054 $ 11,425 $ 15,057

On October 28, 2019, the Company adopted a Company-wide restructuring plan (“Q1 FY20 Plan”).

Substantially all cash payments have occurred and actions under this plan were completed.

Other plans include a number of plans for which costs are not expected to be material individually or in the aggregate.

The Company’s IMS segment incurred costs of $ 4 million, $ 1 million and $ 9 million for 2023, 2022, and 2021, respectively.

The Company’s CPS segment incurred costs of $ 2 million, $ 10 million and $ 5 million for 2023, 2022, and 2021, respectively.

Accrued liabilities for restructuring costs are not material as of September 30, 2023 or October 1, 2022, (excludes environmental remediation liabilities which are disclosed in Note 10 “Contingencies”).

During the first quarter of 2022, the Company recognized a gain of $ 5 million primarily from the sale of a certain real property.

Domestic and foreign components of income before income taxes were as follows:

September 28,

2023 October 1,

2024 September 30,

2023 October 1,

5 unchanged sentences

September 28,

2023 October 1,

2024 September 30,

2023 October 1,

8 unchanged sentences

The Company's provision for income taxes for 2024, 2023 and 2022 was $ 80 million ( 25 % of income before taxes), $ 85 million ( 21 % of income before taxes) and $ 62 million ( 20 % of income before taxes), respectively.

The effective tax rate for 2024 was higher than the expected U.S.

statutory rate of 21% primarily due to foreign earnings taxed at rates higher than the U.S.

statutory rate, state taxes, and unfavorable permanent differences.

The effective tax rates for 2023 and 2022 were lower than the expected U.S.

statutory rate of 21 % primarily due to a $ 12 million, $ 16 million and $ 43 million tax benefit, respectively, resulting from the release of certain foreign tax reserves due to lapse of time and expiration of statutes of limitations.

statutory rate of 21 % primarily due to a $ 12 million and $ 16 million tax benefit, respectively, resulting from the release of certain foreign tax reserves due to lapse of time and expiration of statutes of limitations.

In connection with the sale of shares of Sanmina SCI India Private Limited (“SIPL”) to Reliance Strategic Business Ventures Limited ("RSBVL") on October 3, 2022, the Company recognized tax expense of $ 6 million for the year ended September 30, 2023, which was allocated to additional paid-in-capital.

2 unchanged sentences

September 28,

2023 October 1,

2024 September 30,

(In thousands)

33 unchanged sentences

Determination of the amount of unrecognized deferred tax liabilities on these undistributed earnings is not practicable.

As of September 30, 2023, the Company has cumulative net operating loss carryforwards for federal, state and foreign tax purposes of $ 155 million, $ 337 million and $ 433 million, respectively.

The federal and state net operating loss carryforwards begin expiring in fiscal years 2028 and 2024, respectively, and expire at various dates through September 29, 2035 .

As of September 28, 2024, the Company has cumulative net operating loss carryforwards for state and foreign tax purposes of $ 255 million and $ 446 million, respectively, and none for federal tax.

The state net operating loss carryforwards begin expiring in fiscal year 2025 and expire at various dates through September 26, 2043 .

Certain foreign net operating losses will begin expiring in 2025.

5 unchanged sentences

September 28,

2023 October 1,

2024 September 30,

2023 October 1,

9 unchanged sentences

September 28,

2023 October 1,

2024 September 30,

2023 October 1,

6 unchanged sentences

Balance, end of year $ 48,543 $ 44,707 $ 53,552

The Company had reserves of $ 8 million and $ 11 million as of September 30, 2023 and October 1, 2022, respectively, for the payment of interest and penalties relating to unrecognized tax benefits.

The Company had reserves of $ 8 million as of each of September 28, 2024 and September 30, 2023 for the payment of interest and penalties relating to unrecognized tax benefits.

During 2024, the Company recognized an income tax benefit for interest and penalties of $ 1 million due to lapse of time and expiration of statutes of limitations compared to an income tax benefit of $ 4 million in 2023.

3 unchanged sentences

In the normal course of business, the Company is subject to examination by taxing authorities throughout the world.

The Company is currently being audited by the Internal Revenue Service (“IRS”) for fiscal years 2008 through 2010.

On September 26, 2023, the Company received a final Notice of Proposed Adjustment from the IRS related to a worthless stock deduction and disallowance of the resulting net operating loss carryforward in the 2009 fiscal year.

The Company disagrees with the IRS’s proposed adjustment and intends to vigorously contest this matter through the applicable IRS administrative and judicial procedures, as appropriate.

In the future, the Company expects to receive a Revenue Agent Report including the IRS’s calculation of the tax assessment related to this matter.

Although the final resolution of this proposed adjustment remains uncertain, the Company continues to believe that it is more likely than not the Company’s tax position will be sustained.

An unfavorable resolution of this matter could have a material, adverse impact on the Company’s Consolidated Financial

As a result of an audit by the Internal Revenue Service (“IRS”) for fiscal 2008 through 2010, the Company received a Revenue Agent’s Report (“RAR”) on November 17, 2023 asserting an underpayment of tax of approximately $ 8 million for fiscal 2009.

The asserted underpayment results from the IRS’s proposed disallowance of a $ 503 million worthless stock deduction in fiscal 2009.

Such disallowance, if upheld, would reduce the Company’s available net operating loss carryforwards and result in additional tax and interest attributable to fiscal 2021 and later years, which could be material.

The Company disagrees with the IRS’s position as asserted in the RAR and is vigorously contesting this matter through the applicable IRS administrative and judicial procedures, as appropriate.

The Company does not expect resolution of this matter within twelve months and cannot predict with any certainty the timing of such resolution.

Although the final resolution of this matter remains

uncertain, the Company continues to believe that it is more likely than not the Company’s tax position will be sustained.

However, an unfavorable resolution of this matter could have a material adverse impact on the Company’s consolidated financial statements.

Additionally, the Company is being audited by various state tax agencies and certain foreign countries.

2 unchanged sentences

In general, the Company is no longer subject to United States federal or state income tax examinations for years before 2003, and to foreign examinations for years prior to 2006 in its major foreign jurisdictions.

It is reasonably possible that the balance of gross unrecognized tax benefits could decrease in the next 12 months by approximately $ 5 million related to payments, the resolution of audits and expiration of statutes of limitations.

It is reasonably possible that the balance of gross unrecognized tax benefits could decrease in the next twelve months by approximately $ 8 million related to payments, the resolution of audits and expiration of statutes of limitations.

In addition, there could be a corresponding decrease in accrued interest and penalties of approximately $ 2 million.

The Organization for Economic Co-operation and Development (“OECD”), an international association of 38 countries including the United States, has proposed changes to numerous long-standing tax principles, namely, its Pillar Two framework, which imposes a global minimum corporate tax rate of 15%.

Various countries have enacted or have announced plans to enact new tax laws to implement the global minimum tax and where enacted, the rules begin to be effective for the Company in fiscal 2025.

The Pillar Two rules are considered an alternative minimum tax and therefore deferred taxes would not be recognized or adjusted for the estimated effects of the future minimum tax.

The adoption and effective dates of these rules may vary by country and could increase tax complexity and uncertainty and may adversely affect the Company’s provision for income taxes.

The Company does not expect any material impact from these tax law changes in fiscal 2025.

Earnings Per Share

1 unchanged sentence

September 28,

2023 October 1,

2024 September 30,

2023 October 1,

19 unchanged sentences

These programs have no expiration dates and the timing of repurchases will depend upon capital needs to support the growth of the Company’s business, market conditions and other factors.

Although stock repurchases are intended to increase stockholder value, purchases of shares reduce the Company’s liquidity.

Inflation Reduction Act of 2022 was enacted on August 16, 2022 and imposes a 1% excise tax on corporate share repurchases effective January 1, 2023 and is excluded from the amount available under the stock repurchase programs.

The excise tax is recorded to equity and was not material as of September 30, 2023.

Although stock repurchases are intended to increase stockholder value, they also reduce the Company’s liquidity.

As of September 28, 2024, an aggregate of $ 53 million remains available under these programs.

In addition to the repurchases discussed above, the Company withheld 374,000 , 369,000 and 286,000 shares of its common stock during 2023, 2022, and 2021, respectively, in settlement of employee tax withholding obligations due upon the vesting of restricted stock units.

In addition to the repurchases discussed above, the Company withheld 0.5 million, 0.4 million and 0.4 million shares of its common stock during 2024, 2023, and 2022, respectively, in settlement of employee tax withholding obligations due upon the vesting of restricted stock units.

The Company paid $ 26 million, $ 23 million and $ 14 million, respectively, to applicable tax authorities in connection with these repurchases.

2 unchanged sentences

September 28,

2023 October 1,

2024 September 30,

(In thousands)

Foreign currency translation adjustments $ 73,236 $ 68,305

Unrealized holding gain (loss) on derivative financial instruments 9,427 4,112

Unrealized holding gain on derivative financial instruments 266 9,427

Unrecognized net actuarial loss and unrecognized transition cost for benefit plans ( 6,761 ) ( 6,853 )

1 unchanged sentence

Unrealized holding gain (loss) on derivative financial instruments includes gains or losses from interest rate swap agreements with independent counterparties to partially hedge the variability in cash flows due to changes in the benchmark interest rate (SOFR) associated with anticipated variable rate borrowings.

Interest rate swaps with an aggregate notional amount of $ 650 million and $ 350 million were outstanding as of September 30, 2023 and October 1, 2022, respectively.

Given the recent rise in interest rates and the likelihood of additional rate increases, these interest rate swaps had a positive value of $ 12 million and $ 6 million as of September 30, 2023 and October 1, 2022, respectively.

As of September 30, 2023, $ 6 million was included in prepaid expenses and other current assets and $ 6 million was included in other assets on the consolidated balance sheets.

Business Segment, Geographic and Customer Information

Interest rate swaps with an aggregate notional amount of $ 300 million and $ 650 million were outstanding as of September 28, 2024 and September 30, 2023, respectively.

Business Segment and Geographic Information

The Company's chief operating decision making group is the Chief Executive Officer who allocates resources and assesses performance of operating segments based on a measure of revenue and gross profit that excludes items not directly related to the Company's ongoing business operations.

3 unchanged sentences

September 28,

2023 October 1,

2024 September 30,

2023 October 1,

26 unchanged sentences

Segment assets, consisting of accounts receivable, inventories and fixed assets, are substantially proportional to segment sales.

Property, plant and equipment, net by geographic segment is as follows:

Long-lived assets, net by geographic area is as follows:

September 28,

2023 October 1,

2024 September 30,

(In thousands)

Property, plant and equipment, net:

Americas $ 428,941 $ 367,172

APAC 152,024 151,254

EMEA 51,871 56,744

(country of domicile) $ 175,562 $ 168,808

Mexico (>10% of total) 210,275 235,797

Other 230,230 228,231

Total $ 616,067 $ 632,836

Location of long-lived assets was determined based on entities that owned the long-lived assets.

No other individual foreign country accounted for more than 10% of the long-lived assets as of September 28, 2024 and September 30, 2023.

Stock-Based Compensation

1 unchanged sentence

September 28,

2023 October 1,

2024 September 30,

2023 October 1,

4 unchanged sentences

Total $ 57,407 $ 50,402 $ 39,608

The Company grants restricted stock units (“RSUs”) and restricted stock units with performance conditions (“PSUs”) to executive officers, directors and certain other employees.

The Company grants restricted stock units (“RSUs”) and restricted stock units with performance conditions (“PSUs”) primarily to executive officers, directors and certain employees.

These units vest over periods ranging from one year to four years and/or upon achievement of specified performance criteria, with associated compensation expense recognized ratably over the vesting period.

2 unchanged sentences

If a minimum threshold is achieved or exceeded, the number of shares of common stock that will be issued will range from 70 % to 130 % of the number of PSUs granted, depending on the extent of performance.

Additionally, the number of shares that vest may be adjusted up or down by up to 15 % based on the Company's total shareholder return relative to that of its peer group over this same period.

Additionally, for certain grants, the number of shares that vest may be adjusted up or down by up to 15 % based on the Company's total shareholder return relative to that of its peer group over this same period.

Activity with respect to the Company’s RSUs and PSUs was as follows:

11 unchanged sentences

Vested/Forfeited/Cancelled ( 1,371 ) 36.45

Outstanding as of October 1, 2022

Outstanding as of September 30, 2023

2,881 45.07 1.14 150,547

14 unchanged sentences

Deferrals under this plan were immaterial.

Assets associated with these plans were $ 38 million and $ 37 million as of September 30, 2023 and October 1, 2022, respectively.

Liabilities associated with these plans were $ 38 million and $ 37 million as of September 30, 2023 and October 1, 2022, respectively.

Assets associated with these plans were $ 47 million and $ 38 million as of September 28, 2024 and September 30, 2023, respectively.

Liabilities associated with these plans were $ 47 million and $ 38 million as of September 28, 2024 and September 30, 2023, respectively.

These amounts are recorded in other non-current assets and other long-term liabilities on the consolidated balance sheets.

1 unchanged sentence

During 2022, the Board of Directors approved the termination of the Company's frozen U.S.

defined benefit plan (the “Plan”) effective July 3, 2022.

defined benefit plan, effective July 3, 2022.

In connection with this termination, the Company purchased a group annuity contract for $ 6 million during 2022 that provides for the administration of future payments to eligible plan participants.

In addition, the Company recorded a pension settlement charge of $ 2 million during 2022, which includes the reclassification of unrecognized pension losses from accumulated other comprehensive income to other income (expense), net on the consolidated statements of income.

The Company provides defined benefit pension plans in certain other countries.

4 unchanged sentences

September 28,

2023 October 1,

2024 September 30,

(In thousands)

6 unchanged sentences

The Company’s investment strategy is designed to help ensure that sufficient pension assets are available to pay benefits as they become due.

Plan assets are invested in mutual funds that are valued using the NAV that is quoted in active markets (Level 1 input).

Plan assets are invested in mutual funds that are valued using the net asset value that is quoted in active markets (Level 1 input).

These plans are managed consistent with regulations or market practices of the country in which the assets are invested.

3 unchanged sentences

India Joint Venture

On October 3, 2022 (“Transaction Date”), the Company completed a joint venture transaction pursuant to a Share Subscription and Purchase Agreement (the “SSPA”) and a Joint Venture and Shareholders’ Agreement (the “Shareholders’ Agreement”) previously entered into with RSBVL, a wholly owned subsidiary of Reliance Industries Limited.

Pursuant to the SSPA and the Shareholders’ Agreement, the parties established SIPL, the Company’s existing Indian manufacturing entity, as a joint venture to engage in manufacturing in India of telecommunications equipment, data center and internet equipment, medical equipment, clean technology equipment and other high-tech equipment.

This partnership leverages the Company’s advanced manufacturing experience and RSBVL’s expertise and leadership in the Indian business ecosystem.

In addition to supporting the Company’s current customer base, the joint venture will create a state-of-the-art “Manufacturing Technology Center of Excellence” that will serve as an incubation center to support the product development and hardware start-up ecosystem in India, as well as promote research and innovation of leading-edge technologies.

As a result of the transaction, RSBVL acquired shares of SIPL for approximately $ 216 million of cash such that RSBVL holds 50.1 % of the outstanding shares of SIPL and the Company holds the remaining 49.9 % of the outstanding shares of SIPL.

In connection with RSBVL’s investment, the Company and RSBVL entered into a management services contract pursuant to which the Company has the unilateral ability to make the significant financial and operating decisions made in the ordinary course of SIPL’s business.

In 2023, the Company entered into a joint venture transaction pursuant to which RSBVL acquired 50.1 % of the outstanding shares of SIPL, the Company’s existing Indian manufacturing entity for $ 216 million of cash.

The remaining 49.9 % is held by the Company.

In accordance with ASC Topic 810, Consolidation (“ASC 810”), the Company is required to consolidate entities in which it has a controlling financial interest.

3 unchanged sentences

However, the Company periodically assesses whether any changes in facts and circumstances have occurred that could require the Company to deconsolidate SIPL.

The Company recognized a noncontrolling interest of $ 132 million and an increase in additional paid-in-capital of $ 84 million ($ 78 million, net of tax expense) in the consolidated financial statements in connection with the sale of shares of SIPL to RSBVL as of the Transaction Date.

SIPL’s cash and cash equivalents balance of $ 200 million as of September 28, 2024 is not available for general corporate purposes and must be retained in SIPL to fund its operations.

On April 6, 2021 , the Company purchased all of the outstanding stock of a European subsidiary of a multinational company in the industrial end market.

This acquisition increased the Company's IMS capabilities in Europe.

The Company also entered into a master supply agreement with the seller in connection with this acquisition.

Total consideration paid in this acquisition was $ 38 million of cash, of which $ 29 million was paid upon closing and $ 9 million was paid in 2023.

The acquiree had $ 8 million of cash as of the acquisition date, resulting in a net cash outlay upon closing of $ 21 million.

The pro-forma effect of the acquisition, as if it had occurred at the beginning of the year, was not material to the consolidated financial statements.

The acquisition is reported in the Company's IMS reportable segment.

The Company's allocation of the purchase price was based on management's estimate of the acquisition-date fair values of the tangible and identifiable intangible assets acquired and liabilities assumed.

The following represents the allocation of the purchase price to the acquired assets and liabilities assumed.

(In thousands)

Current assets, including cash acquired of $ 8.1 million

Noncurrent assets, including identifiable intangible assets of $ 4.4 million and goodwill of $ 8.5 million

Current liabilities ( 10,671 )

Noncurrent liabilities ( 152 )

Total net assets acquired $ 38,584

Goodwill reflects the expectation that the acquisition enables the Company to increase its IMS capabilities in Europe.

Goodwill and identifiable intangible assets are recorded in other non-current assets on the consolidated balance sheets.

Identifiable intangible assets were fully amortized as of September 30, 2023.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data