SanminaSCI Corp. Reports Operating Results (10-Q)

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Jul 31, 2012
SanminaSCI Corp. (SANM, Financial) filed Quarterly Report for the period ended 2012-06-30.

Sanmina-sci Corporation has a market cap of $713.1 million; its shares were traded at around $8.59 with a P/E ratio of 8.5 and P/S ratio of 0.1. Sanmina-sci Corporation had an annual average earning growth of 4.6% over the past 5 years.

Highlight of Business Operations:

A relatively small number of customers have historically generated a significant portion of our net sales. Sales to our ten largest customers represented 50.8% and 49.1% of our net sales for the three and nine months ended June 30, 2012, respectively. Sales to our ten largest customers represented 50.2% and 49.2% for the three and nine months ended July 2, 2011, respectively. Two customers each represented 10% or more of our net sales for the three months ended June 30, 2012. One customer represented 10% or more of our net sales for each of the other periods presented herein.

Gross margin decreased to 6.8% for the third quarter of 2012 from 7.9% for the third quarter of 2011. Gross margin decreased to 7.1% for the nine months ended June 30, 2012 from 7.7% for the nine months ended July 2, 2011. The decrease for both the three and nine month periods was primarily attributable to decreased sales, especially for components manufacturing services which typically have higher contribution margins than our standard electronics manufacturing services.

Selling, general and administrative expenses decreased $6.0 million from $67.0 million, or 4.0% of net sales, in the third quarter of 2011 to $61.0 million, or 3.9% of net sales, in the third quarter of 2012. Selling, general and administrative expenses decreased $4.7 million from $187.7 million, or 3.8% of net sales, for the nine months ended July 2, 2011 to $183.0 million, or 4.1% of net sales, for the nine months ended June 30, 2012. The decrease for both the three and nine month periods was primarily attributable to reduced incentive compensation and lower personnel-related costs.

Research and development expenses decreased slightly from $5.8 million, or 0.3% of net sales, in the third quarter of 2011 to $5.6 million, or 0.4% of net sales, in the third quarter of 2012. Research and development expenses increased from $14.9 million, or 0.3% of net sales, for the nine months ended July 2, 2011 to $15.6 million, or 0.3% of net sales, for the nine

Our provision for income taxes was $3.8 million for the three months ended June 30, 2012, compared to $4.2 million for the three months ended July 2, 2011, and $18.7 million for the nine months ended June 30, 2012, compared to $19.9 million for the nine months ended July 2, 2011. The tax provision as a percentage of income before tax increased significantly in the current year when compared to the prior year due primarily to lower than expected profits globally and unfavorable changes in the geographic mix of our expected profits. Additionally, during the first quarter of 2012, we recorded a $1.9 million write-down of certain deferred tax assets associated with our Mexico operations to reflect changes in tax law that occurred during that quarter.

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