Document and Entity Information
Document and Entity Information Document - $ / shares | 6 Months Ended | |
Mar. 28, 2020 | Apr. 22, 2020 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 28, 2020 | |
Document Transition Report | false | |
Entity File Number | 0-21272 | |
Entity Registrant Name | Sanmina Corporation | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 77-0228183 | |
Entity Address, Address Line One | 2700 N. First St., | |
Entity Address, City or Town | San Jose, | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 95134 | |
City Area Code | (408) | |
Local Phone Number | 964-3500 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Shell Company | false | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | SANM | |
Security Exchange Name | NASDAQ | |
Entity Common Stock, Shares Outstanding | 68,207,673 | |
Entity Listing, Par Value Per Share | $ 0.01 | |
Entity Central Index Key | 0000897723 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Current Fiscal Year End Date | --10-03 | |
Entity Emerging Growth Company | false | |
Entity Small Business | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 28, 2020 | Sep. 28, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 1,114,585 | $ 454,741 |
Accounts receivable, net of allowances of $10,089 and $12,481 as of March 28, 2020 and September 28, 2019, respectively | 918,582 | 1,128,379 |
Contract assets | 407,284 | 396,300 |
Inventories | 883,727 | 900,557 |
Prepaid expenses and other current assets | 39,121 | 40,952 |
Total current assets | 3,363,299 | 2,920,929 |
Property, plant and equipment, net | 591,738 | 630,647 |
Deferred tax assets | 285,244 | 279,803 |
Other | 119,904 | 74,134 |
Total assets | 4,360,185 | 3,905,513 |
Current liabilities: | ||
Accounts payable | 1,126,997 | 1,336,914 |
Accrued liabilities | 225,330 | 180,107 |
Accrued payroll and related benefits | 105,312 | 127,647 |
Short-term debt, including current portion of long-term debt | 673,437 | 38,354 |
Total current liabilities | 2,131,076 | 1,683,022 |
Long-term liabilities: | ||
Long-term debt | 338,105 | 346,971 |
Other | 273,255 | 232,947 |
Total long-term liabilities | 611,360 | 579,918 |
Contingencies (Note 8) | ||
Stockholders' equity | 1,617,749 | 1,642,573 |
Total liabilities and stockholders' equity | $ 4,360,185 | $ 3,905,513 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands | Mar. 28, 2020 | Sep. 28, 2019 |
Allowance for Doubtful Accounts | $ 10,089 | $ 12,481 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 28, 2020 | Mar. 30, 2019 | Mar. 28, 2020 | Mar. 30, 2019 | |
Net sales | $ 1,590,550 | $ 2,126,639 | $ 3,430,721 | $ 4,314,657 |
Cost of sales | 1,483,129 | 1,973,537 | 3,188,418 | 4,012,218 |
Gross profit | 107,421 | 153,102 | 242,303 | 302,439 |
Operating expenses: | ||||
Selling, general and administrative | 62,257 | 64,186 | 125,408 | 127,214 |
Research and development | 5,767 | 7,599 | 10,967 | 14,036 |
Restructuring and other | 15,028 | 3,202 | 24,378 | 5,531 |
Total operating expenses | 83,052 | 74,987 | 160,753 | 146,781 |
Operating income | 24,369 | 78,115 | 81,550 | 155,658 |
Interest income | 418 | 364 | 728 | 558 |
Interest expense | (6,040) | (8,472) | (11,917) | (16,743) |
Other expense, net | (7,660) | (891) | (6,342) | (6,885) |
Interest and other, net | (13,282) | (8,999) | (17,531) | (23,070) |
Income before income taxes | 11,087 | 69,116 | 64,019 | 132,588 |
Provision for income taxes | 6,205 | 28,231 | 20,792 | 53,751 |
Net income | $ 4,882 | $ 40,885 | $ 43,227 | $ 78,837 |
Net income per share: | ||||
Basic | $ 0.07 | $ 0.59 | $ 0.61 | $ 1.15 |
Diluted | $ 0.07 | $ 0.57 | $ 0.60 | $ 1.11 |
Weighted average shares used in computing per share amounts: | ||||
Basic | 70,584 | 68,821 | 70,377 | 68,556 |
Diluted | 72,245 | 71,446 | 72,429 | 71,162 |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 28, 2020 | Mar. 30, 2019 | Mar. 28, 2020 | Mar. 30, 2019 | |
Net income | $ 4,882 | $ 40,885 | $ 43,227 | $ 78,837 |
Other comprehensive income (loss), net of tax: | ||||
Change in foreign currency translation adjustments | (2,887) | (235) | (2,170) | (487) |
Derivative financial instruments: | ||||
Change in net unrealized amount | (8,306) | (2,478) | (4,926) | (8,975) |
Amount reclassified into net income | 538 | (2,645) | 343 | (235) |
Defined benefit plans: | ||||
Changes in unrecognized net actuarial losses and unrecognized transition costs | 415 | 109 | 228 | 399 |
Amortization of actuarial losses and transition costs | 102 | 237 | 646 | 435 |
Total other comprehensive loss | (10,138) | (5,012) | (5,879) | (8,863) |
Comprehensive income (loss) | $ (5,256) | $ 35,873 | $ 37,348 | $ 69,974 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholder's Equity Statement - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock and Additional Paid in Capital | Treasury Stock | Accumulated Other Comprehensive Income | Accumulated Deficit | Number of Common Shares | |
Balance at Sep. 29, 2018 | $ 6,222,988 | $ (791,366) | $ 73,944 | $ (4,032,722) | |||
Common Stock, Shares, Issued at Sep. 29, 2018 | 103,128 | ||||||
Treasury Stock, Shares at Sep. 29, 2018 | (35,351) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuances under stock plans, shares | 1,668 | ||||||
Issuances under stock plans, Value | 9,339 | ||||||
Stock-based compensation expense | 12,442 | ||||||
Other issuances | 138 | ||||||
Repurchases of treasury stock | (455) | ||||||
Repurchases of Treasury Stock, Value | $ 12,148 | ||||||
Other comprehensive income (loss) | $ (8,863) | (8,863) | |||||
Cumulative effect of new accounting pronouncement (1) | [1] | 28,130 | |||||
Net income | 78,837 | 78,837 | |||||
Common Stock, Shares, Issued at Mar. 30, 2019 | 104,796 | ||||||
Treasury Stock, Shares at Mar. 30, 2019 | (35,806) | ||||||
Balance at Mar. 30, 2019 | 1,580,719 | 6,244,907 | $ (803,514) | 65,081 | (3,925,755) | ||
Balance at Dec. 29, 2018 | 6,232,372 | $ (803,208) | 70,093 | (3,966,640) | |||
Common Stock, Shares, Issued at Dec. 29, 2018 | 104,156 | ||||||
Treasury Stock, Shares at Dec. 29, 2018 | (35,800) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuances under stock plans, shares | 640 | ||||||
Issuances under stock plans, Value | 5,771 | ||||||
Stock-based compensation expense | 6,626 | ||||||
Other issuances | 138 | ||||||
Repurchases of treasury stock | (6) | ||||||
Repurchases of Treasury Stock, Value | $ 306 | ||||||
Other comprehensive income (loss) | (5,012) | (5,012) | |||||
Cumulative effect of new accounting pronouncement (1) | 0 | ||||||
Net income | 40,885 | 40,885 | |||||
Common Stock, Shares, Issued at Mar. 30, 2019 | 104,796 | ||||||
Treasury Stock, Shares at Mar. 30, 2019 | (35,806) | ||||||
Balance at Mar. 30, 2019 | 1,580,719 | 6,244,907 | $ (803,514) | 65,081 | (3,925,755) | ||
Balance at Sep. 28, 2019 | 1,642,573 | 6,267,509 | $ (804,118) | 42,259 | (3,863,077) | ||
Common Stock, Shares, Issued at Sep. 28, 2019 | 105,551 | ||||||
Treasury Stock, Shares at Sep. 28, 2019 | (35,831) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuances under stock plans, shares | 1,575 | ||||||
Issuances under stock plans, Value | 5,172 | ||||||
Stock-based compensation expense | 14,689 | ||||||
Other issuances | 0 | ||||||
Repurchases of treasury stock | (3,093) | ||||||
Repurchases of Treasury Stock, Value | $ 82,033 | ||||||
Other comprehensive income (loss) | (5,879) | (5,879) | |||||
Cumulative effect of new accounting pronouncement (1) | 0 | ||||||
Net income | 43,227 | 43,227 | |||||
Common Stock, Shares, Issued at Mar. 28, 2020 | 107,126 | ||||||
Treasury Stock, Shares at Mar. 28, 2020 | (38,924) | ||||||
Balance at Mar. 28, 2020 | 1,617,749 | 6,287,370 | $ (886,151) | 36,380 | (3,819,850) | ||
Balance at Dec. 28, 2019 | 6,279,267 | $ (821,668) | 46,518 | (3,824,732) | |||
Common Stock, Shares, Issued at Dec. 28, 2019 | 106,841 | ||||||
Treasury Stock, Shares at Dec. 28, 2019 | (36,384) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuances under stock plans, shares | 285 | ||||||
Issuances under stock plans, Value | 320 | ||||||
Stock-based compensation expense | 7,783 | ||||||
Other issuances | 0 | ||||||
Repurchases of treasury stock | (2,540) | ||||||
Repurchases of Treasury Stock, Value | $ 64,483 | ||||||
Other comprehensive income (loss) | (10,138) | (10,138) | |||||
Cumulative effect of new accounting pronouncement (1) | 0 | ||||||
Net income | 4,882 | 4,882 | |||||
Common Stock, Shares, Issued at Mar. 28, 2020 | 107,126 | ||||||
Treasury Stock, Shares at Mar. 28, 2020 | (38,924) | ||||||
Balance at Mar. 28, 2020 | $ 1,617,749 | $ 6,287,370 | $ (886,151) | $ 36,380 | $ (3,819,850) | ||
[1] | Due to the adoption of ASU 2014-09 "Revenue from Contracts with Customers (Topic 606)" using the modified retrospective approach. |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Mar. 28, 2020 | Mar. 30, 2019 | |
CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES: | ||
Net income | $ 43,227 | $ 78,837 |
Adjustments to reconcile net income to cash provided by (used in) operating activities: | ||
Depreciation and amortization | 56,777 | 58,880 |
Stock-based compensation expense | 14,689 | 12,442 |
Deferred income taxes | 1,952 | 23,410 |
Goodwill impairment | 8,409 | 0 |
Other, net | 568 | 587 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 207,994 | (129,741) |
Contract assets | (10,984) | (26,219) |
Inventories | 15,333 | 16,559 |
Prepaid expenses and other assets | 11,687 | 436 |
Accounts payable | (185,175) | (85,037) |
Accrued liabilities | (7,578) | 77,148 |
Cash provided by operating activities | 156,899 | 27,302 |
CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES: | ||
Purchases of property, plant and equipment | (45,088) | (72,962) |
Proceeds from sales of property, plant and equipment | 632 | 1,139 |
Cash used in investing activities | (44,456) | (71,823) |
CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES: | ||
Repayments of long-term debt | 24,986 | 0 |
Proceeds from revolving credit facility borrowings | 1,909,000 | 2,242,225 |
Repayments of revolving credit facility borrowings | (1,259,000) | (2,207,225) |
Debt issuance costs | 0 | (2,003) |
Net proceeds from stock issuances | 5,172 | 9,339 |
Repurchases of common stock | (82,033) | (12,010) |
Cash provided by financing activities | 548,153 | 30,326 |
Effect of exchange rate changes | (752) | 161 |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Period Increase (Decrease), Including Exchange Rate Effect | 659,844 | (14,034) |
Cash and cash equivalents at beginning of period | 454,741 | 419,528 |
Cash and cash equivalents at end of period | 1,114,585 | 405,494 |
Cash paid during the period for: | ||
Interest, net of capitalized interest | 8,407 | 13,589 |
Income taxes, net of refunds | 13,371 | 13,237 |
Unpaid purchases of property, plant and equipment at the end of period | $ 9,377 | $ 31,780 |
Note 1 Basis of Presentation
Note 1 Basis of Presentation | 6 Months Ended |
Mar. 28, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | Basis of Presentation The accompanying unaudited condensed consolidated financial statements of Sanmina Corporation (the “Company”) have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and note disclosures normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been omitted pursuant to those rules or regulations. The interim condensed consolidated financial statements are unaudited, but reflect all adjustments, consisting primarily of normal recurring adjustments, that are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended September 28, 2019 , included in the Company's 2019 Annual Report on Form 10-K. The preparation of financial statements requires management to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and accompanying notes. Due to the COVID-19 global pandemic, the global economy and financial markets have been disrupted and there is a significant amount of uncertainty about the length and severity of the consequences caused by the pandemic. The Company has considered information available to it as of the date of issuance of these financial statements and, other than the impairments described in Note 4, is not aware of any specific events or circumstances that would require an update to its estimates or judgments, or a revision to the carrying value of its assets or liabilities. These estimates may change as new events occur and additional information becomes available. Actual results could differ materially from these estimates. Results of operations for the second quarter of 2020 are not necessarily indicative of the results that may be expected for other interim periods or for the full fiscal year. The Company operates on a 52 or 53 week year ending on the Saturday nearest September 30. Fiscal 2019 was a 52-week year and fiscal 2020 will be a 53-week year, with the extra week occurring during the fourth quarter. All references to years relate to fiscal years unless otherwise noted. Recent Accounting Pronouncements Adopted In December 2019, the FASB issued ASU 2019-12, "Simplifying the Accounting for Income Taxes (Topic 740)" which is intended to simplify various aspects related to accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and which also clarifies and amends existing guidance to improve consistent application. The Company adopted this ASU in the second quarter of 2020. The impact of adoption was not material. In February 2018, the FASB issued ASU 2018-02, "Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income", which allows companies to reclassify stranded tax effects resulting from the U.S. Tax Cuts and Jobs Act (H.R. 1) from accumulated other comprehensive income to retained earnings. The Company adopted this ASU at the beginning of fiscal 2020. The impact of adoption was not material. In August 2017, the FASB issued ASU 2017-12, "Derivatives and Hedging (Topic 815): Targeted Improvements for Accounting For Hedging Activities", simplifying hedge accounting guidance and improving the financial reporting of hedging relationships by allowing an entity to better align its risk management activities and financial reporting for hedging relationships through changes to both designation and measurement for qualifying hedging relationships and the presentation of hedge results. This standard eliminates the requirement to separately measure and report hedge ineffectiveness, resulting in full recognition of the change in fair value that impacts earnings in the same income statement line item that is used to present the earnings effect of the hedged item. In addition, the guidance allows more flexibility in the requirements to qualify for and maintain hedge accounting. The Company adopted this ASU at the beginning of fiscal 2020. The impact of adoption was not material. In February 2016, the FASB issued ASU 2016-02, "Leases: Amendments to the FASB Accounting Standards Codification (Topic 842)". This ASU requires the Company to recognize on the balance sheet the assets and liabilities for the rights and obligations created by leases with terms of more than twelve months. This ASU also requires disclosures enabling the users of financial statements to understand the amount, timing and uncertainty of cash flows arising from leases. In addition, the FASB provided a practical expedient transition method that allows entities to initially apply the requirements by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption, as opposed to applying the requirements retrospectively and providing comparative prior period financial statements. The Company adopted the new standard on September 29, 2019, the first day of fiscal 2020, and applied the above practical expedient transition method. The Company elected certain other transition options which, among other things, allowed the Company to carry forward its prior conclusions about lease identification and classification. Upon adoption of the new standard, the Company recognized approximately $65 million of right-of-use ("ROU") assets and lease liabilities. Adoption of the new standard did not have a material impact on the Company's consolidated statements of income or consolidated statements of cash flows. Refer to Note 6 for additional information and disclosures related to the adoption of ASC 842. Recent Accounting Pronouncements Not Yet Adopted In March 2020, the FASB issued ASU 2020-04, "Reference Rate Reform (Topic 848)" which provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by reference rate reform. The amendments are effective for all entities as of March 12, 2020 through December 31, 2022. The Company is currently evaluating the impact of the provisions of ASU 2020-04. In August 2018, the FASB issued ASU 2018-15, "Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract." The new guidance aligns the requirements for capitalizing implementation costs incurred in a cloud-based hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). This ASU is effective for the Company at the beginning of fiscal 2021, including interim periods within that reporting period, although early adoption is permitted. The Company does not expect the impact of adoption to be significant. In June 2016, the FASB issued ASU 2016-13 "Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments", which replaces the existing incurred loss impairment methodology with an expected credit loss methodology and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. This new standard is effective for the Company at the beginning of fiscal 2021, including interim periods within that reporting period. The Company does not expect the impact of adoption to be significant. |
Note 2 Inventories
Note 2 Inventories | 6 Months Ended |
Mar. 28, 2020 | |
Inventory, Net [Abstract] | |
Inventory Disclosure [Text Block] | Inventories Components of inventories were as follows: As of March 28, September 28, (In thousands) Raw materials $ 881,465 $ 898,077 Work-in-process 898 869 Finished goods 1,364 1,611 Total $ 883,727 $ 900,557 |
Note 3 Revenue Recognition
Note 3 Revenue Recognition | 6 Months Ended |
Mar. 28, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contract with Customer [Text Block] | Revenue Recognition The Company is a leading global provider of integrated manufacturing solutions, components, products and repair, logistics and after-market services. For purposes of determining when to recognize revenue, and in what amount, the Company applies a 5-step model: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when (or as) the Company satisfies a performance obligation. Each of these steps involves the use of significant judgments, as discussed below. Step 1 - Identify the contract with a customer A contract is defined as an agreement between two parties that creates enforceable rights and obligations. 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. 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. Step 2 - Identify the performance obligations in the contract A performance obligation is a promised good or service that is material in the context of the contract and is both capable of being distinct (customer can benefit from the good or service on its own or together with other readily available resources) and distinct within the context of the contract (separately identifiable from other promises). The Company reviews its contracts to identify promised goods or services and then evaluates such items to determine which of those items are performance obligations. The majority of the Company’s contracts have a single performance obligation since the promise to transfer an individual good or service is not separately identifiable from other promises in the contract. The Company’s performance obligations generally have an expected duration of one year or less. Step 3 - Determine the transaction price The Company’s contracts with its customers may include certain forms of variable consideration such as early payment discounts, volume discounts and shared cost savings. The Company includes an estimate of variable consideration when determining the transaction price and the appropriate amount of revenue to be recognized. This estimate is limited to an amount which will not result in a significant reversal of revenue in a future period. Factors considered in the Company’s estimate of variable consideration are the potential amount subject to these contract provisions, historical experience and other relevant facts and circumstances. Step 4 - Allocate the transaction price to the performance obligations in the contract A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. In the event that more than one performance obligation is identified in a contract, the Company is required to allocate a portion of the transaction price to each performance obligation. This allocation would generally be based on the relative standalone price of each performance obligation, which most often would represent the price at which the Company would sell similar goods or services separately. Step 5 - Recognize revenue when (or as) a performance obligation is satisfied 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 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. This determination is based on the fact that 1) 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 cancelation of a contract for convenience or 2) the Company’s customer simultaneously receives and consumes the benefits provided by the Company’s services. 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. 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. 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. Contract Assets A contract asset is recognized when the Company has recognized revenue, but has not issued an invoice to its customer for payment. Contract assets are classified separately on the condensed consolidated balance sheets and transferred to accounts receivable when rights to payment become unconditional. Because of the Company’s short manufacturing cycle times, the transfer from contract assets to accounts receivable generally occurs within the next fiscal quarter. Other Other than the impact upon adoption of ASC 606 at the beginning of the first quarter of 2019, which was limited to beginning retained earnings, the application of ASC 606 has not materially impacted any financial statement line item for any period presented herein. Taxes assessed by governmental authorities that are both imposed on and concurrent with a specific revenue-producing transaction, and are collected by the Company from a customer, are excluded from revenue. Shipping and handling costs associated with outbound freight after control of a product has transferred to a customer are accounted for as fulfillment costs and are included in cost of sales. The Company applies the following practical expedients or policy elections under ASC 606: • The promised amount of consideration under a contract is not adjusted for the effects of a significant financing component because, at inception of a contract, the Company expects the period between when a good or service is transferred to a customer and when the customer pays for that good or service will generally be one year or less. • The Company has elected to not disclose information about remaining performance obligations that have original expected durations of one year or less, which is substantially all of the Company’s remaining performance obligations. • Incremental costs of obtaining a contract are not capitalized if the period over which such costs would be amortized to expense is less than one year. Disaggregation of revenue In the following table, revenue is disaggregated by segment, market sector and geography. Three Months Ended Six Months Ended March 28, March 30, March 28, March 30, (In thousands) Segments: IMS $ 1,289,087 $ 1,778,076 $ 2,824,720 $ 3,558,960 CPS 301,463 348,563 606,001 755,697 Total $ 1,590,550 $ 2,126,639 $ 3,430,721 $ 4,314,657 End Markets: Industrial, Medical, Automotive and Defense $ 966,642 $ 1,162,563 $ 2,074,189 $ 2,345,047 Communications Networks 500,446 760,918 $ 1,081,189 $ 1,540,639 Cloud Solutions 123,462 203,158 275,343 428,971 Total $ 1,590,550 $ 2,126,639 $ 3,430,721 $ 4,314,657 Geography: Americas (1) $ 817,061 $ 1,101,698 $ 1,723,629 $ 2,265,576 EMEA 256,724 269,202 517,755 504,255 APAC 516,765 755,739 1,189,337 1,544,826 Total $ 1,590,550 $ 2,126,639 $ 3,430,721 $ 4,314,657 (1) Mexico represents approximately 60% of the Americas revenue and the U.S. represents approximately 35% . |
Note 4 Financial Instruments
Note 4 Financial Instruments | 6 Months Ended |
Mar. 28, 2020 | |
Financial Instruments [Abstract] | |
Derivatives and Fair Value [Text Block] | Financial Instruments Fair Value Measurements Fair Value of Financial Instruments The fair values of cash equivalents (generally 10% or less of cash and cash equivalents), accounts receivable, accounts payable and short-term debt approximate carrying value due to the short-term duration of these instruments. Additionally, the fair value of variable rate long-term debt approximates carrying value as of March 28, 2020 . Assets and Liabilities Measured at Fair Value on a Recurring Basis The Company's primary financial assets and financial liabilities measured at fair value on a recurring basis are deferred compensation plan assets and defined benefit plan assets, which are both measured using Level 1 inputs. Defined benefit plan assets are measured at fair value only in the fourth quarter of each year. Other financial assets and financial liabilities measured at fair value on a recurring basis include foreign exchange contracts and interest rate swaps, which are both measured using Level 2 inputs. Foreign exchange contracts were not material as of March 28, 2020 or September 28, 2019 . Interest rate swaps had a negative value of $31 million and $20 million as of March 28, 2020 and September 28, 2019 , respectively. Offsetting Derivative Assets and Liabilities The Company has entered into master netting arrangements with each of its derivative counterparties that allows net settlement of derivative assets and liabilities under certain conditions, such as multiple transactions with the same currency maturing on the same date. The Company presents its derivative assets and derivative liabilities on a gross basis on the unaudited condensed consolidated balance sheets. The amount that the Company had the right to offset under these netting arrangements was not material as of March 28, 2020 or September 28, 2019 . Non-Financial Assets 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. During the second quarter of 2020, commodity prices in the oil and gas market experienced a sharp decline due to a combination of an oversaturated supply and a decrease in demand caused by the COVID-19 global pandemic. This commodity price decline resulted in a negative impact to the projected cash flows of the Company’s oil and gas reporting unit that is part of the Company's Components, Products and Services ("CPS") operating segment and therefore the Company performed a goodwill impairment test for this particular reporting unit. The Company concluded that the fair value of the reporting unit was below its carrying value, resulting in a goodwill impairment charge of $7 million . The fair value of the reporting unit was estimated based on the present value of future discounted cash flows. The Company also recorded an impairment charge of $2 million in the second quarter of 2020 for certain long-lived assets. These impairment charges are included in "Restructuring and Other" on the condensed consolidated statements of income. Derivative Instruments Foreign Exchange Rate Risk The Company is exposed to certain risks related to its ongoing business operations. The primary risk managed by using derivative instruments is foreign currency exchange risk. 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 certain Asian and European countries, Brazil, Israel and Mexico. The Company had the following outstanding foreign currency forward contracts that were entered into to hedge foreign currency exposures: As of March 28, September 28, Derivatives Designated as Accounting Hedges: Notional amount (in thousands) $ 100,326 $ 106,564 Number of contracts 45 46 Derivatives Not Designated as Accounting Hedges: Notional amount (in thousands) $ 245,144 $ 299,127 Number of contracts 42 43 The Company utilizes foreign currency forward contracts to hedge certain operational (“cash flow”) exposures resulting from changes in foreign currency exchange rates. Such exposures generally result from (1) forecasted non-functional currency sales (2) forecasted non-functional currency materials, labor, overhead and other expenses and (3) anticipated capital expenditures denominated in a currency other than the functional currency of the entity making the expenditures. 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 effective portion of the gain or loss on the derivative is recorded in Accumulated Other Comprehensive Income ("AOCI"), a component of equity, and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. The amount of gain (loss) recognized in Other Comprehensive Income on derivative instruments and the amount of gain (loss) reclassified from AOCI into income were not material for any period presented herein. Additionally, the amount of ineffectiveness was not material for any period presented herein. Pursuant to a new accounting standard, as of the beginning of 2020, the Company is no longer required to separately measure and report hedge ineffectiveness. The Company enters into short-term foreign currency forward contracts to hedge 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 unaudited condensed consolidated statements of income. The amount of gains (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. 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. Interest Rate Risk The Company enters into forward interest rate swap agreements with independent counterparties to partially hedge the variability in cash flows due to changes in the benchmark interest rate (LIBOR) associated with anticipated variable rate borrowings. These interest rate swaps have a maturity date of December 1, 2023 and effectively convert 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. As of March 28, 2020 and September 28, 2019 , interest rate swaps with an aggregate notional amount of $350 million , respectively, were outstanding. The aggregate effective interest rate of these swaps as of March 28, 2020 was approximately 4.3% . As of March 28, 2020 , due to a decline in interest rates since the time the swaps were put in place, these interest rate swaps had a negative value of $31 million , of which $8 million is included in accrued liabilities and the remaining amount is included in other long-term liabilities on the condensed consolidated balance sheets. |
Note 5 Debt
Note 5 Debt | 6 Months Ended |
Mar. 28, 2020 | |
Debt Disclosure [Abstract] | |
Debt Disclosure [Text Block] | Debt Long-term debt consisted of the following: As of March 28, September 28, (In thousands) Term loan due 2023 ("Term Loan"), net of issuance costs $ 361,542 $ 370,409 Non-interest bearing promissory notes — 14,916 Total long-term debt 361,542 385,325 Less: Current portion of non-interest bearing promissory notes — 14,916 Current portion of long-term debt 23,437 23,438 Long-term debt $ 338,105 $ 346,971 Maturities of the Term Loan as of March 28, 2020 by fiscal year are as follows: (In Thousands) Remainder of 2020 $ 14,063 2021 18,750 2022 18,750 2023 14,062 2024 300,000 $ 365,625 As of March 28, 2020 , there was $650 million in borrowings and $8 million of letters of credit outstanding under the Fourth Amended and Restated Credit Agreement (the "Amended Cash Flow Revolver"). The Amended Cash Flow Revolver provides a committed $375 million Term Loan, of which $366 million , net of amounts initially drawn and subsequently repaid, was outstanding as of March 28, 2020 . As of March 28, 2020 , certain foreign subsidiaries of the Company had a total of $72 million of short-term borrowing facilities available, under which no borrowings were outstanding. Debt covenants The Company's Amended Cash Flow Revolver requires the Company to comply with certain financial covenants, namely a maximum leverage ratio and a minimum interest coverage ratio, in both cases measured on the basis of a trailing 12 month look-back period. In addition, the Company's debt agreements contain a number of restrictive covenants, including restrictions on incurring additional debt, making investments and other restricted payments, selling assets and paying dividends, subject to certain exceptions. The Company was in compliance with these covenants as of March 28, 2020 . |
Note 6 Leases
Note 6 Leases | 6 Months Ended |
Mar. 28, 2020 | |
Leases [Abstract] | |
Leases of Lessee Disclosure [Text Block] | Leases The Company's leases consist primarily of operating leases for buildings and land. These leases have initial lease terms of up to 44 years and, upon adoption of ASC 842, are recorded on the Company's balance sheet as lease liabilities and corresponding right-of-use ("ROU") assets. 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. Renewal options are considered in the measurement of the Company's initial lease liability and corresponding ROU asset only if it is reasonably certain that the Company will exercise such options. Leases with lease terms of twelve months or less are not recorded on the Company's balance sheet. ROU assets and lease liabilities recorded in the condensed consolidated balance sheet as of March 28, 2020 are as follows: As of March 28, (In thousands) Other assets (1) $ 56,827 Accrued liabilities 17,138 Other long-term liabilities 38,783 Total lease liabilities $ 55,921 Weighted average remaining lease term (in years) 6.98 Weighted average discount rate 3.13 % (1) Net of accumulated amortization of $8 million . The Company’s lease liability and ROU assets represent the present value of future lease payments which, pursuant to the Company's accounting election, are a combination of lease components and non-lease components such as maintenance and utilities. 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. 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. Upon adoption of ASC 842, the Company used the incremental borrowing rate as of that date for all leases that commenced prior to that date. Operating lease expense, which is recognized on a straight-line basis over the term of a lease, was $4 million and $8 million for the three and six months ended March 28, 2020 , respectively. Cash payments for operating leases were $9 million for the six months ended March 28, 2020 . Certain of the Company’s lease payments are variable because such payments adjust periodically based on changes in consumer price and other indexes. Future lease payments under non-cancelable operating leases as of March 28, 2020 , by fiscal year, are as follows: Operating Leases (In thousands) Remainder of 2020 $ 10,328 2021 15,684 2022 10,977 2023 5,057 2024 3,936 Thereafter 16,519 Total lease payments 62,501 Less: imputed interest 6,580 Total $ 55,921 |
Note 7 Accounts Receivable Sal
Note 7 Accounts Receivable Sale Program | 6 Months Ended |
Mar. 28, 2020 | |
Transfers and Servicing [Abstract] | |
Transfers and Servicing of Financial Assets [Text Block] | Accounts Receivable Sale Program The Company has entered into 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. 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. During the six months ended March 28, 2020 and March 30, 2019 , the Company sold $1.1 billion and $1.4 billion , respectively, of accounts receivable under these programs. Upon sale, these receivables are removed from the condensed consolidated balance sheets and cash received is presented as cash provided by operating activities in the condensed consolidated statements of cash flows. Discounts on sold receivables were not material for any period presented. As of March 28, 2020 and September 28, 2019 , $149 million and $241 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. Commercial disputes include billing errors, returns and similar matters. To date, the Company has not been required to repurchase any receivable it has sold due to a commercial dispute. Additionally, the Company is required to remit amounts collected as servicer under the RPA on a weekly basis to the financial institutions that purchased the receivables. As of March 28, 2020 and September 28, 2019 , $83 million and $76 million , respectively, had been collected but not yet remitted. This amount is classified in accrued liabilities on the condensed consolidated balance sheets. |
Note 8 Commitments and Continge
Note 8 Commitments and Contingencies | 6 Months Ended |
Mar. 28, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | Contingencies From time to time, the Company is a party to litigation, claims and other contingencies, including environmental and employee matters and examinations and investigations by governmental agencies, which arise in the ordinary course of business. 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 March 28, 2020 and September 28, 2019 , the Company had reserves of $34 million and $36 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. Such reserves are included in accrued liabilities and other long-term liabilities on the unaudited condensed consolidated balance sheets. Legal Proceedings Environmental Matters 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 March 28, 2020 , 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 remediate groundwater contamination at four 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 other alleged defendants to better understand its potential exposure in this action and has reserved its estimated exposure for this matter as of March 28, 2020 . However, there can be no assurance that the Company's reserve will ultimately be sufficient. In June 2008, the Company was named by the Orange County Water District in a suit alleging that its actions contributed to polluted groundwater managed by the plaintiff. The complaint seeks recovery of compensatory and other damages, as well as declaratory relief, for the payment of costs necessary to investigate, monitor, remediate, abate and contain contamination of groundwater within the plaintiff’s control. In April 2013, all claims against the Company were dismissed. The plaintiff appealed this dismissal and the appellate court reversed the judgment in August 2017. In November 2017, the California Supreme Court denied the Company’s petition to review this decision and, in December 2017, the Court of Appeal remanded the case back to the Superior Court for further proceedings. The first part of a multi-phase trial, originally scheduled to commence on September 14, 2020, has been postponed due to COVID-19-related judicial disruption, and is now expected to commence in approximately March 2021. The Company intends to contest the plaintiff’s claims vigorously. Other Matters Two of the Company’s subsidiaries in Brazil are parties to a number of administrative and judicial proceedings for claims alleging that these subsidiaries failed to comply with certain bookkeeping and tax rules for certain periods between 2001 and 2011. These claims seek payment of social fund contributions and income and excise taxes allegedly owed by the subsidiaries, as well as fines. The subsidiaries believe they have meritorious positions in these matters and intend to continue to contest the claims. In October 2018, a contractor who had been retained by the Company through a third party temporary staffing agency from November 2015 to March 2016 filed a lawsuit against the Company in the Santa Clara County Superior Court on behalf of himself and all other similarly situated Company contractors and employees in California, alleging violations of California Labor Code provisions governing overtime, meal and rest periods, wages, wage statements and reimbursement of business expenses. The operative amended complaint seeks certification of a class of all non-exempt employees, whether employed directly or through a temporary staffing agency, employed from four years before the filing of the initial complaint to the time of trial. Additionally, on November 1, 2019, another contractor retained through a temporary staffing agency filed a lawsuit against the Company in the Santa Clara County Superior Court. The complaint, which includes a single cause of action under California’s Private Attorneys General Act of 2004, alleges Labor Code violations substantially similar to those alleged in the October 2018 class action lawsuit and seeks penalties on behalf of the State of California and other “aggrieved employees” (defined to be current and former hourly, non-exempt employees employed by the Company between August 22, 2018 and the present). The Company intends to vigorously defend these 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 gross negligence/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 an unspecified amount of compensatory and punitive damages. The Company intends to vigorously prosecute its claim against Dialight. Further, the Company strongly disagrees with Dialight’s allegations and intends to defend against them vigorously. For each of the matters noted above, a loss is not currently considered probable and estimable and the Company is unable to reasonably estimate a range of possible loss at this time. Other Contingencies |
Note 9 Restructuring
Note 9 Restructuring | 6 Months Ended |
Mar. 28, 2020 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Activities Disclosure [Text Block] | Restructuring The following table provides a summary of restructuring costs: Restructuring Expense Three Months Ended Six Months Ended March 28, 2020 March 30, 2019 March 28, 2020 March 30, 2019 Severance costs (approximately 300 and 1,750 employees for the three and six months ended March 28, 2020, respectively) $ 4,725 $ — $ 11,453 $ — Other exit costs (recognized as incurred) 44 — 52 — Total - Q1 FY20 Plan 4,769 — 11,505 — Costs incurred for other plans 3,587 3,012 6,011 5,151 Total - all plans $ 8,356 $ 3,012 $ 17,516 $ 5,151 Q1 FY20 Plan On October 28, 2019, the Company adopted a Company-wide restructuring plan ("Q1 FY20 Plan"). Under this plan, the Company expects to incur restructuring charges of approximately $10 million to $20 million , consisting primarily of cash severance costs, primarily in 2020. Further actions are expected to be implemented under the Q1 FY20 Plan in the second half of fiscal 2020 and cash payments of severance are expected to occur through the end of fiscal 2020. In addition, the Company is still in the process of completing restructuring actions under other plans. Other Plans Other plans include a number of plans for which costs are not expected to be material individually or in the aggregate. All Plans The Company’s Integrated Manufacturing Solutions ("IMS") segment incurred costs of $9 million for the six months ended March 28, 2020 . This compares to a benefit incurred of $4 million for the six months ended March 30, 2019 , primarily as a result of a recovery from a third party of certain environmental remediation costs. The Company’s CPS segment incurred costs of $6 million and $9 million for the six months ended March 28, 2020 and March 30, 2019 , respectively. In addition, $3 million of costs incurred for SG&A headcount reductions were not allocated to IMS or CPS. The Company had accrued liabilities of $7 million and $5 million as of March 28, 2020 and September 28, 2019 , respectively, for restructuring costs (exclusive of long-term environmental remediation liabilities). In addition to costs expected to be incurred under the Q1 FY20 Plan, the Company expects to incur restructuring costs in future periods primarily for vacant facilities and former sites for which the Company is or may be responsible for environmental remediation. |
Note 10 Income Tax
Note 10 Income Tax | 6 Months Ended |
Mar. 28, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | Income Tax The Company estimates its annual effective income tax rate at the end of each quarterly period. The estimate takes into account the geographic mix of expected pre-tax income (loss), expected total annual pre-tax income (loss), enacted changes in tax laws, implementation of tax planning strategies and possible outcomes of audits and other uncertain tax positions. To the extent there are fluctuations in any of these variables during a period, the provision for income taxes may vary. The Company's provision for income taxes for the three months ended March 28, 2020 and March 30, 2019 was $6 million ( 56% of income before taxes) and $28 million ( 41% of income before taxes), respectively, and $21 million ( 32% of income before taxes) and $54 million ( 41% of income before taxes) for the six months ended March 28, 2020 and March 30, 2019 , respectively. Income tax expense for the three and six months ended March 28, 2020 decreased primarily as a result of lower income before tax, a change in the geographic mix of income before tax and the impact of a tax-related restructuring transaction that became effective in the fourth quarter of 2019. |
Note 11 Stockholders' Equity
Note 11 Stockholders' Equity | 6 Months Ended |
Mar. 28, 2020 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity Note Disclosure [Text Block] | Stockholder's Equity Accumulated Other Comprehensive Income Accumulated other comprehensive income, net of tax as applicable, consisted of the following: As of March 28, September 28, (In thousands) Foreign currency translation adjustments $ 84,098 $ 86,268 Unrealized holding losses on derivative financial instruments (24,471 ) (19,888 ) Unrecognized net actuarial losses and transition costs for benefit plans (23,247 ) (24,121 ) Total $ 36,380 $ 42,259 Unrealized holding losses on derivative financial instruments includes 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 (LIBOR) associated with anticipated variable rate borrowings. These swaps are accounted for as cash flow hedges under ASC Topic 815, Derivatives and Hedging. As of March 28, 2020 and September 28, 2019 , interest rate swaps with an aggregate notional amount of $350 million for both periods, were outstanding. The aggregate effective interest rate of these swaps as of March 28, 2020 was approximately 4.3% . As of March 28, 2020 , due to a decline in interest rates since the time the swaps were put in place, these interest rate swaps had a negative value of $31 million , of which $8 million is included in accrued liabilities and the remaining amount is included in other long-term liabilities on the condensed consolidated balance sheets. Stock Repurchase Program During the first quarter of 2020, the Board of Directors authorized the Company to purchase an additional $200 million of its common stock on the same terms as previously approved repurchase programs with no expiration. During the six months ended March 28, 2020 and March 30, 2019 , the Company repurchased 2.7 million and 0.3 million shares of its common stock for $70 million and $7 million , respectively. As of March 28, 2020 , an aggregate of $231 million remains available under repurchase programs authorized by the Board of Directors. In addition to the repurchases discussed above, the Company repurchased 0.4 million and 0.2 million shares of its common stock during the six months ended March 28, 2020 and March 30, 2019 , respectively, in settlement of employee tax withholding obligations due upon the vesting of restricted stock units. The Company paid $12 million and $5 million , respectively, to applicable tax authorities in connection with these repurchases. |
Note 12 Business Segment, Geogr
Note 12 Business Segment, Geographic and Customer Information | 6 Months Ended |
Mar. 28, 2020 | |
Segment Reporting [Abstract] | |
Segment Reporting Disclosure [Text Block] | Business Segment, Geographic and Customer Information ASC Topic 280, Segment Reporting , establishes standards for reporting information about operating segments, products and services, geographic areas of operations and major customers. Operating segments are defined as components of an enterprise for which separate financial information is available and evaluated regularly by the chief operating decision maker or decision making group in deciding how to allocate resources and in assessing performance. The Company's operations are managed as two businesses: IMS and CPS. The Company's CPS business consists of multiple operating segments which do not meet the quantitative threshold for being presented as reportable segments. Therefore, financial information for these operating segments is presented in a single category entitled "CPS" and the Company has only one reportable segment - IMS. The following table presents revenue and a measure of segment gross profit used by management to allocate resources and assess performance of operating segments: Three Months Ended Six Months Ended March 28, March 30, March 28, March 30, (In thousands) Gross sales: IMS $ 1,300,324 $ 1,793,119 $ 2,844,259 $ 3,586,301 CPS 327,323 394,985 663,754 850,788 Intersegment revenue (37,097 ) (61,465 ) (77,292 ) (122,432 ) Net sales $ 1,590,550 $ 2,126,639 $ 3,430,721 $ 4,314,657 Gross profit: IMS $ 75,435 $ 114,837 $ 176,617 $ 225,493 CPS 34,568 40,292 71,180 80,811 Total 110,003 155,129 247,797 306,304 Unallocated items (1) (2,582 ) (2,027 ) (5,494 ) (3,865 ) Total $ 107,421 $ 153,102 $ 242,303 $ 302,439 (1) For purposes of evaluating segment performance, management excludes certain items from its measure of gross profit. These items consist of stock-based compensation expense, amortization of intangible assets and charges or credits resulting from distressed customers. Net sales by geographic segment, determined based on the country in which a product is manufactured, were as follows: Three Months Ended Nine Months Ended March 28, March 30, March 28, March 30, (In thousands) Net sales: Americas (1) $ 817,061 $ 1,101,698 $ 1,723,629 $ 2,265,576 EMEA 256,724 269,202 517,755 504,255 APAC 516,765 755,739 1,189,337 1,544,826 Total $ 1,590,550 $ 2,126,639 $ 3,430,721 $ 4,314,657 (1) Mexico represents approximately 60% of the Americas revenue and the U.S. represents approximately 35% . Percentage of net sales represented by ten largest customers 55 % 55 % 55 % 54 % Number of customers representing 10% or more of net sales 1 1 1 1 |
Note 13 Earnings Per Share
Note 13 Earnings Per Share | 6 Months Ended |
Mar. 28, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share [Text Block] | Earnings Per Share Basic and diluted per share amounts are calculated by dividing net income by the weighted average number of shares of common stock outstanding during the period, as follows: Three Months Ended Six Months Ended March 28, March 30, March 28, March 30, (In thousands, except per share data) Numerator: Net income $ 4,882 $ 40,885 $ 43,227 $ 78,837 Denominator: Weighted average common shares outstanding 70,584 68,821 70,377 68,556 Effect of dilutive stock options and restricted stock units 1,661 2,625 2,052 2,606 Denominator for diluted earnings per share 72,245 71,446 72,429 71,162 Net income per share: Basic $ 0.07 $ 0.59 $ 0.61 $ 1.15 Diluted $ 0.07 $ 0.57 $ 0.60 $ 1.11 |
Note 14 Stock-Based Compensatio
Note 14 Stock-Based Compensation | 6 Months Ended |
Mar. 28, 2020 | |
Share-based Payment Arrangement, Noncash Expense [Abstract] | |
Share-based Payment Arrangement [Text Block] | Stock-Based Compensation Stock-based compensation expense was attributable to: Three Months Ended Six Months Ended March 28, March 30, March 28, March 30, (In thousands) Stock options $ — $ 6 $ (1,145 ) $ 99 Restricted stock units, including performance based awards 7,783 6,620 15,834 12,343 Total $ 7,783 $ 6,626 $ 14,689 $ 12,442 Stock-based compensation expense was recognized as follows: Three Months Ended Six Months Ended March 28, March 30, March 28, March 30, (In thousands) Cost of sales $ 2,582 $ 2,582 $ 5,494 $ 4,317 Selling, general and administrative 5,127 3,939 9,052 7,929 Research and development 74 105 143 196 Total $ 7,783 $ 6,626 $ 14,689 $ 12,442 During the second quarter of 2020, the Company's stockholders approved the reservation of an additional 1.6 million shares of common stock for future issuance under the Company's 2019 Incentive Plan. As of March 28, 2020 , an aggregate of 8.5 million shares were authorized for future issuance under the Company's stock plans, of which 4.3 million of such shares were issuable upon exercise of outstanding options and delivery of shares upon vesting of restricted stock units and 4.2 million shares of common stock were available for future grant. Restricted and Performance Stock Units The Company grants restricted stock units and restricted stock units with performance conditions ("PSUs") to executive officers, directors and certain other employees. These units vest over periods ranging from 1 year to 4 years and/or upon achievement of specified performance criteria and are automatically exchanged for shares of common stock at the vesting date. If performance metrics are not met within specified time limits, the award will be canceled. Compensation expense associated with restricted stock units and PSUs is recognized ratably over the vesting period, subject to probability of achievement for PSUs. During the first two quarters of 2020, the Company granted PSUs for 304,500 shares for which vesting are contingent on cumulative non-GAAP earnings per share measured over three fiscal years. If a minimum threshold is not achieved, no shares will vest. If the minimum threshold is achieved or exceeded, the number of shares of common stock that will be issued will range from 80% to 120% 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. These PSUs will expire on December 31, 2022 if such performance conditions have not been met. Activity with respect to the Company's restricted stock awards was as follows: Number of Shares Weighted- Average Grant Date Fair Value ($) Weighted- Average Remaining Contractual Term (Years) Aggregate Intrinsic Value ($) (In thousands) (In thousands) Outstanding as of September 28, 2019 3,153 27.82 1.30 102,720 Granted 1,223 33.61 Vested/Forfeited/Cancelled (1,316 ) 26.77 Outstanding as of March 28, 2020 3,060 30.59 1.68 64,817 Expected to vest as of March 28, 2020 2,581 30.87 1.66 54,671 As of March 28, 2020 , unrecognized compensation expense of $56 million is expected to be recognized over a weighted average period of 1.7 years . Additionally, as of March 28, 2020 , unrecognized compensation expense related to performance-based restricted stock units for which achievement of the performance criteria was not currently considered probable is $5 million |
Accounting Policies (Policies)
Accounting Policies (Policies) | 6 Months Ended |
Mar. 28, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Accounting [Text Block] | The accompanying unaudited condensed consolidated financial statements of Sanmina Corporation (the “Company”) have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and note disclosures normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been omitted pursuant to those rules or regulations. The interim condensed consolidated financial statements are unaudited, but reflect all adjustments, consisting primarily of normal recurring adjustments, that are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended September 28, 2019 , included in the Company's 2019 Annual Report on Form 10-K. |
Use of Estimates, Policy [Policy Text Block] | The preparation of financial statements requires management to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and accompanying notes. Due to the COVID-19 global pandemic, the global economy and financial markets have been disrupted and there is a significant amount of uncertainty about the length and severity of the consequences caused by the pandemic. The Company has considered information available to it as of the date of issuance of these financial statements and, other than the impairments described in Note 4, is not aware of any specific events or circumstances that would require an update to its estimates or judgments, or a revision to the carrying value of its assets or liabilities. These estimates may change as new events occur and additional information becomes available. Actual results could differ materially from these estimates. Results of operations for the second quarter of 2020 are not necessarily indicative of the results that may be expected for other interim periods or for the full fiscal year. |
Fiscal Period, Policy [Policy Text Block] | The Company operates on a 52 or 53 week year ending on the Saturday nearest September 30. Fiscal 2019 was a 52-week year and fiscal 2020 will be a 53-week year, with the extra week occurring during the fourth quarter. All references to years relate to fiscal years unless otherwise noted. |
New Accounting Pronouncements, Policy [Text Block] | Recent Accounting Pronouncements Adopted In December 2019, the FASB issued ASU 2019-12, "Simplifying the Accounting for Income Taxes (Topic 740)" which is intended to simplify various aspects related to accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and which also clarifies and amends existing guidance to improve consistent application. The Company adopted this ASU in the second quarter of 2020. The impact of adoption was not material. In February 2018, the FASB issued ASU 2018-02, "Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income", which allows companies to reclassify stranded tax effects resulting from the U.S. Tax Cuts and Jobs Act (H.R. 1) from accumulated other comprehensive income to retained earnings. The Company adopted this ASU at the beginning of fiscal 2020. The impact of adoption was not material. In August 2017, the FASB issued ASU 2017-12, "Derivatives and Hedging (Topic 815): Targeted Improvements for Accounting For Hedging Activities", simplifying hedge accounting guidance and improving the financial reporting of hedging relationships by allowing an entity to better align its risk management activities and financial reporting for hedging relationships through changes to both designation and measurement for qualifying hedging relationships and the presentation of hedge results. This standard eliminates the requirement to separately measure and report hedge ineffectiveness, resulting in full recognition of the change in fair value that impacts earnings in the same income statement line item that is used to present the earnings effect of the hedged item. In addition, the guidance allows more flexibility in the requirements to qualify for and maintain hedge accounting. The Company adopted this ASU at the beginning of fiscal 2020. The impact of adoption was not material. In February 2016, the FASB issued ASU 2016-02, "Leases: Amendments to the FASB Accounting Standards Codification (Topic 842)". This ASU requires the Company to recognize on the balance sheet the assets and liabilities for the rights and obligations created by leases with terms of more than twelve months. This ASU also requires disclosures enabling the users of financial statements to understand the amount, timing and uncertainty of cash flows arising from leases. In addition, the FASB provided a practical expedient transition method that allows entities to initially apply the requirements by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption, as opposed to applying the requirements retrospectively and providing comparative prior period financial statements. The Company adopted the new standard on September 29, 2019, the first day of fiscal 2020, and applied the above practical expedient transition method. The Company elected certain other transition options which, among other things, allowed the Company to carry forward its prior conclusions about lease identification and classification. Upon adoption of the new standard, the Company recognized approximately $65 million of right-of-use ("ROU") assets and lease liabilities. Adoption of the new standard did not have a material impact on the Company's consolidated statements of income or consolidated statements of cash flows. Refer to Note 6 for additional information and disclosures related to the adoption of ASC 842. Recent Accounting Pronouncements Not Yet Adopted In March 2020, the FASB issued ASU 2020-04, "Reference Rate Reform (Topic 848)" which provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by reference rate reform. The amendments are effective for all entities as of March 12, 2020 through December 31, 2022. The Company is currently evaluating the impact of the provisions of ASU 2020-04. In August 2018, the FASB issued ASU 2018-15, "Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract." The new guidance aligns the requirements for capitalizing implementation costs incurred in a cloud-based hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). This ASU is effective for the Company at the beginning of fiscal 2021, including interim periods within that reporting period, although early adoption is permitted. The Company does not expect the impact of adoption to be significant. In June 2016, the FASB issued ASU 2016-13 "Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments", which replaces the existing incurred loss impairment methodology with an expected credit loss methodology and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. This new standard is effective for the Company at the beginning of fiscal 2021, including interim periods within that reporting period. The Company does not expect the impact of adoption to be significant. |
Note 2 Inventories (Tables)
Note 2 Inventories (Tables) | 6 Months Ended |
Mar. 28, 2020 | |
Inventory, Net [Abstract] | |
Schedule of Inventory, Current [Table Text Block] | As of March 28, September 28, (In thousands) Raw materials $ 881,465 $ 898,077 Work-in-process 898 869 Finished goods 1,364 1,611 Total $ 883,727 $ 900,557 |
Note 3 Revenue Recognition (Tab
Note 3 Revenue Recognition (Tables) | 6 Months Ended |
Mar. 28, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue [Table Text Block] | Three Months Ended Six Months Ended March 28, March 30, March 28, March 30, (In thousands) Segments: IMS $ 1,289,087 $ 1,778,076 $ 2,824,720 $ 3,558,960 CPS 301,463 348,563 606,001 755,697 Total $ 1,590,550 $ 2,126,639 $ 3,430,721 $ 4,314,657 End Markets: Industrial, Medical, Automotive and Defense $ 966,642 $ 1,162,563 $ 2,074,189 $ 2,345,047 Communications Networks 500,446 760,918 $ 1,081,189 $ 1,540,639 Cloud Solutions 123,462 203,158 275,343 428,971 Total $ 1,590,550 $ 2,126,639 $ 3,430,721 $ 4,314,657 Geography: Americas (1) $ 817,061 $ 1,101,698 $ 1,723,629 $ 2,265,576 EMEA 256,724 269,202 517,755 504,255 APAC 516,765 755,739 1,189,337 1,544,826 Total $ 1,590,550 $ 2,126,639 $ 3,430,721 $ 4,314,657 (1) Mexico represents approximately 60% of the Americas revenue and the U.S. represents approximately 35% . |
Note 4 Derivative Financial Ins
Note 4 Derivative Financial Instruments (Tables) | 6 Months Ended |
Mar. 28, 2020 | |
Financial Instruments [Abstract] | |
Schedule of Notional Amounts of Outstanding Derivative Positions [Table Text Block] | As of March 28, September 28, Derivatives Designated as Accounting Hedges: Notional amount (in thousands) $ 100,326 $ 106,564 Number of contracts 45 46 Derivatives Not Designated as Accounting Hedges: Notional amount (in thousands) $ 245,144 $ 299,127 Number of contracts 42 43 |
Note 5 Debt (Tables)
Note 5 Debt (Tables) | 6 Months Ended |
Mar. 28, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments [Table Text Block] | As of March 28, September 28, (In thousands) Term loan due 2023 ("Term Loan"), net of issuance costs $ 361,542 $ 370,409 Non-interest bearing promissory notes — 14,916 Total long-term debt 361,542 385,325 Less: Current portion of non-interest bearing promissory notes — 14,916 Current portion of long-term debt 23,437 23,438 Long-term debt $ 338,105 $ 346,971 |
Schedule of Maturities of Long-Term Debt [Table Text Block] | (In Thousands) Remainder of 2020 $ 14,063 2021 18,750 2022 18,750 2023 14,062 2024 300,000 $ 365,625 |
Note 6 Leases (Tables)
Note 6 Leases (Tables) | 6 Months Ended |
Mar. 28, 2020 | |
Leases [Abstract] | |
Asset and Liabilities, Lessee [Table Text Block] | As of March 28, (In thousands) Other assets (1) $ 56,827 Accrued liabilities 17,138 Other long-term liabilities 38,783 Total lease liabilities $ 55,921 Weighted average remaining lease term (in years) 6.98 Weighted average discount rate 3.13 % (1) Net of accumulated amortization of $8 million . |
Lessee, Operating Lease, Liability, Maturity [Table Text Block] | Operating Leases (In thousands) Remainder of 2020 $ 10,328 2021 15,684 2022 10,977 2023 5,057 2024 3,936 Thereafter 16,519 Total lease payments 62,501 Less: imputed interest 6,580 Total $ 55,921 |
Note 9 Restructuring and Relate
Note 9 Restructuring and Related Activities (Tables) | 6 Months Ended |
Mar. 28, 2020 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs [Table Text Block] | Restructuring Expense Three Months Ended Six Months Ended March 28, 2020 March 30, 2019 March 28, 2020 March 30, 2019 Severance costs (approximately 300 and 1,750 employees for the three and six months ended March 28, 2020, respectively) $ 4,725 $ — $ 11,453 $ — Other exit costs (recognized as incurred) 44 — 52 — Total - Q1 FY20 Plan 4,769 — 11,505 — Costs incurred for other plans 3,587 3,012 6,011 5,151 Total - all plans $ 8,356 $ 3,012 $ 17,516 $ 5,151 |
Note 11 Stockholders' Equity (T
Note 11 Stockholders' Equity (Tables) | 6 Months Ended |
Mar. 28, 2020 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block] | As of March 28, September 28, (In thousands) Foreign currency translation adjustments $ 84,098 $ 86,268 Unrealized holding losses on derivative financial instruments (24,471 ) (19,888 ) Unrecognized net actuarial losses and transition costs for benefit plans (23,247 ) (24,121 ) Total $ 36,380 $ 42,259 |
Note 12 Business Segment, Geo_2
Note 12 Business Segment, Geographic and Customer Information (Tables) | 6 Months Ended |
Mar. 28, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment [Table Text Block] | Three Months Ended Six Months Ended March 28, March 30, March 28, March 30, (In thousands) Gross sales: IMS $ 1,300,324 $ 1,793,119 $ 2,844,259 $ 3,586,301 CPS 327,323 394,985 663,754 850,788 Intersegment revenue (37,097 ) (61,465 ) (77,292 ) (122,432 ) Net sales $ 1,590,550 $ 2,126,639 $ 3,430,721 $ 4,314,657 Gross profit: IMS $ 75,435 $ 114,837 $ 176,617 $ 225,493 CPS 34,568 40,292 71,180 80,811 Total 110,003 155,129 247,797 306,304 Unallocated items (1) (2,582 ) (2,027 ) (5,494 ) (3,865 ) Total $ 107,421 $ 153,102 $ 242,303 $ 302,439 (1) For purposes of evaluating segment performance, management excludes certain items from its measure of gross profit. These items consist of stock-based compensation expense, amortization of intangible assets and charges or credits resulting from distressed customers. |
Schedule of Revenue from External Customers by Geographic Area [Table Text Block] | Three Months Ended Nine Months Ended March 28, March 30, March 28, March 30, (In thousands) Net sales: Americas (1) $ 817,061 $ 1,101,698 $ 1,723,629 $ 2,265,576 EMEA 256,724 269,202 517,755 504,255 APAC 516,765 755,739 1,189,337 1,544,826 Total $ 1,590,550 $ 2,126,639 $ 3,430,721 $ 4,314,657 (1) Mexico represents approximately 60% of the Americas revenue and the U.S. represents approximately 35% . Percentage of net sales represented by ten largest customers 55 % 55 % 55 % 54 % Number of customers representing 10% or more of net sales 1 1 1 1 |
Note 13 Earnings Per Share (Tab
Note 13 Earnings Per Share (Tables) | 6 Months Ended |
Mar. 28, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | Three Months Ended Six Months Ended March 28, March 30, March 28, March 30, (In thousands, except per share data) Numerator: Net income $ 4,882 $ 40,885 $ 43,227 $ 78,837 Denominator: Weighted average common shares outstanding 70,584 68,821 70,377 68,556 Effect of dilutive stock options and restricted stock units 1,661 2,625 2,052 2,606 Denominator for diluted earnings per share 72,245 71,446 72,429 71,162 Net income per share: Basic $ 0.07 $ 0.59 $ 0.61 $ 1.15 Diluted $ 0.07 $ 0.57 $ 0.60 $ 1.11 |
Note 14 Stock-Based Compensat_2
Note 14 Stock-Based Compensation (Tables) | 6 Months Ended |
Mar. 28, 2020 | |
Share-based Payment Arrangement, Noncash Expense [Abstract] | |
Disclosure of Share-based Compensation Arrangements by Share-based Payment Award [Table Text Block] | Three Months Ended Six Months Ended March 28, March 30, March 28, March 30, (In thousands) Stock options $ — $ 6 $ (1,145 ) $ 99 Restricted stock units, including performance based awards 7,783 6,620 15,834 12,343 Total $ 7,783 $ 6,626 $ 14,689 $ 12,442 |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Table Text Block] | Three Months Ended Six Months Ended March 28, March 30, March 28, March 30, (In thousands) Cost of sales $ 2,582 $ 2,582 $ 5,494 $ 4,317 Selling, general and administrative 5,127 3,939 9,052 7,929 Research and development 74 105 143 196 Total $ 7,783 $ 6,626 $ 14,689 $ 12,442 |
Schedule of Restricted Stock Units Award Activity [Table Text Block] | Number of Shares Weighted- Average Grant Date Fair Value ($) Weighted- Average Remaining Contractual Term (Years) Aggregate Intrinsic Value ($) (In thousands) (In thousands) Outstanding as of September 28, 2019 3,153 27.82 1.30 102,720 Granted 1,223 33.61 Vested/Forfeited/Cancelled (1,316 ) 26.77 Outstanding as of March 28, 2020 3,060 30.59 1.68 64,817 Expected to vest as of March 28, 2020 2,581 30.87 1.66 54,671 |
Note 1 Basis of Presentation (D
Note 1 Basis of Presentation (Details) - USD ($) $ in Thousands | Mar. 28, 2020 | Sep. 29, 2019 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating Lease, Liability | $ 55,921 | |
Accounting Standards Update 2016-02 [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating Lease, Right-of-Use Asset | $ 65,000 | |
Operating Lease, Liability | $ 65,000 |
Note 2 Inventories (Details)
Note 2 Inventories (Details) - USD ($) $ in Thousands | Mar. 28, 2020 | Sep. 28, 2019 |
Inventory, Net [Abstract] | ||
Raw materials | $ 881,465 | $ 898,077 |
Work-in-process | 898 | 869 |
Finished goods | 1,364 | 1,611 |
Total | $ 883,727 | $ 900,557 |
Note 3 Disagregation of Revenue
Note 3 Disagregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Mar. 28, 2020 | Mar. 30, 2019 | Mar. 28, 2020 | Mar. 30, 2019 | ||
Disaggregation of Revenue [Line Items] | |||||
Net sales | $ 1,590,550 | $ 2,126,639 | $ 3,430,721 | $ 4,314,657 | |
Percent of Net Sales Transferred Over Time | 95.00% | ||||
Americas | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | [1] | 817,061 | 1,101,698 | $ 1,723,629 | 2,265,576 |
EMEA | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | 256,724 | 269,202 | 517,755 | 504,255 | |
Asia Pacific | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | $ 516,765 | 755,739 | $ 1,189,337 | 1,544,826 | |
Mexico | |||||
Disaggregation of Revenue [Line Items] | |||||
Percentage of Net Sales to Americas Net Sales | 60.00% | 60.00% | |||
United States | |||||
Disaggregation of Revenue [Line Items] | |||||
Percentage of Net Sales to Americas Net Sales | 35.00% | 35.00% | |||
Industrial, Medical, Automotive and Defense | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | $ 966,642 | 1,162,563 | $ 2,074,189 | 2,345,047 | |
Communications Networks | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | 500,446 | 760,918 | 1,081,189 | 1,540,639 | |
Cloud Solutions | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | 123,462 | 203,158 | 275,343 | 428,971 | |
IMS Third Party Revenue | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | 1,289,087 | 1,778,076 | 2,824,720 | 3,558,960 | |
CPS Third Party Revenue | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | $ 301,463 | $ 348,563 | $ 606,001 | $ 755,697 | |
[1] | (1) Mexico represents approximately 60% of the Americas revenue and the U.S. represents approximately 35% . |
Note 4 Fair Value (Details)
Note 4 Fair Value (Details) | 6 Months Ended |
Mar. 28, 2020 | |
Additional Fair Value Elements [Abstract] | |
Cash Equivalents | 10.00% |
Note 4 Goodwill Impairment (Det
Note 4 Goodwill Impairment (Details) $ in Millions | 3 Months Ended |
Mar. 28, 2020USD ($) | |
Goodwill, Impaired [Abstract] | |
Goodwill impairment | $ 7 |
Tangible Asset Impairment Charges | $ 2 |
Note 4 Derivatives (Details)
Note 4 Derivatives (Details) $ in Thousands | 6 Months Ended | |
Mar. 28, 2020USD ($) | Sep. 28, 2019USD ($) | |
Derivatives Designated as Accounting Hedges: | Foreign Exchange Forward [Member] | ||
Derivative [Line Items] | ||
Number of contracts | 45 | 46 |
Maximum Length of Time Hedged | 12 months | |
Derivative, Notional Amount | $ 100,326 | $ 106,564 |
Derivatives Designated as Accounting Hedges: | Interest Rate Swap [Member] | ||
Derivative [Line Items] | ||
Maturity Date | Dec. 1, 2023 | |
Derivative, Notional Amount | $ 350,000 | $ 350,000 |
Effective Interest Rate | 4.30% | |
Derivatives Not Designated as Accounting Hedges: | Foreign Exchange Forward [Member] | ||
Derivative [Line Items] | ||
Number of contracts | 42 | 43 |
Maximum Remaining Maturity | 2 months | |
Derivative, Notional Amount | $ 245,144 | $ 299,127 |
Fair Value, Inputs, Level 2 [Member] | Derivatives Designated as Accounting Hedges: | Interest Rate Swap [Member] | ||
Derivative [Line Items] | ||
Interest Rate Cash Flow Hedge Liability at Fair Value | 31,000 | $ 20,000 |
Fair Value, Inputs, Level 2 [Member] | Other Current Liabilities | Derivatives Designated as Accounting Hedges: | Interest Rate Swap [Member] | ||
Derivative [Line Items] | ||
Interest Rate Cash Flow Hedge Liability at Fair Value | $ 8,000 |
Note 5 Debt Schedule (Details)
Note 5 Debt Schedule (Details) - USD ($) $ in Thousands | Mar. 28, 2020 | Sep. 28, 2019 |
Debt Instrument [Line Items] | ||
Total long-term debt | $ 361,542 | $ 385,325 |
Long-term debt | 338,105 | 346,971 |
Non-interest bearing promissory note [Member] | ||
Debt Instrument [Line Items] | ||
Non-interest bearing promissory notes | 0 | 14,916 |
Less: Current portion of non-interest bearing promissory notes | 0 | 14,916 |
Delayed Draw Term Loan [Member] | ||
Debt Instrument [Line Items] | ||
Current portion of Term Loan due 2023 | 23,437 | 23,438 |
Term Loan due 2023 | $ 361,542 | $ 370,409 |
Note 5 Line of Credit Facility
Note 5 Line of Credit Facility (Details) $ in Thousands | Mar. 28, 2020USD ($) |
Line of Credit Facility [Line Items] | |
Long-term Line of Credit | $ 650,000 |
Letters of Credit Outstanding, Amount | 8,000 |
Foreign Line of Credit | |
Line of Credit Facility [Line Items] | |
Maximum Borrowing Capacity | 72,000 |
Long-term Line of Credit | 0 |
Delayed Draw Term Loan [Member] | |
Line of Credit Facility [Line Items] | |
Debt Instrument, Face Amount | 375,000 |
Long-term Debt, Fiscal Year Maturity [Abstract] | |
Remainder of Fiscal Year | 14,063 |
Repayments of Principal in Year Two | 18,750 |
Repayments of Principal in Year Three | 18,750 |
Repayments of Principal in Year Four | 14,062 |
Repayments of Principal in Year Five | 300,000 |
Long-term Debt, Gross | $ 365,625 |
Note 6 Lessee Lease Description
Note 6 Lessee Lease Description (Details) | Mar. 28, 2020 |
Maximum [Member] | |
Lessee, Lease, Description [Line Items] | |
Term of Contract | 44 years |
Note 6 Lease Cost (Details)
Note 6 Lease Cost (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Mar. 28, 2020 | Mar. 28, 2020 | |
Leases [Abstract] | ||
Operating Lease, Expense | $ 4 | $ 8 |
Note 6 Leases Supplemental Cash
Note 6 Leases Supplemental Cash Flow Information (Details) $ in Millions | 6 Months Ended |
Mar. 28, 2020USD ($) | |
Cash Flow, Operating Activities, Lessee [Abstract] | |
Operating Lease, Payments | $ 9 |
Note 6 Leases (Detail)
Note 6 Leases (Detail) $ in Thousands | 3 Months Ended | |
Mar. 28, 2020USD ($) | ||
Asset and Liabilities, Lessee [Line Items] | ||
Operating Lease, Right Of Use Asset, Accumulated Amortization | $ 8,000 | |
Operating Lease, Liability | $ 55,921 | |
Operating Lease, Weighted Average Remaining Lease Term | 6 years 11 months 23 days | |
Operating Lease, Weighted Average Discount Rate, Percent | 3.13% | |
Other Assets [Member] | ||
Asset and Liabilities, Lessee [Line Items] | ||
Operating Lease, Right-of-Use Asset | $ 56,827 | [1] |
Accrued Liabilities [Member] | ||
Asset and Liabilities, Lessee [Line Items] | ||
Operating Lease, Liability, Current | 17,138 | |
Other Noncurrent Liabilities [Member] | ||
Asset and Liabilities, Lessee [Line Items] | ||
Operating Lease, Liability, Noncurrent | 38,783 | |
Liabilities, Total [Member] | ||
Asset and Liabilities, Lessee [Line Items] | ||
Operating Lease, Liability | $ 55,921 | |
[1] | Net of accumulated amortization of $8 million . |
Note 6 Future Lease Liability (
Note 6 Future Lease Liability (Details) $ in Thousands | Mar. 28, 2020USD ($) |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | |
Lessee, Operating Lease, Liability, Payments, Remainder of Fiscal Year | $ 10,328 |
Lessee, Operating Lease, Liability, Payments, Due Year Two | 15,684 |
Lessee, Operating Lease, Liability, Payments, Due Year Three | 10,977 |
Lessee, Operating Lease, Liability, Payments, Due Year Four | 5,057 |
Lessee, Operating Lease, Liability, Payments, Due Year Five | 3,936 |
Lessee, Operating Lease, Liability, Payments, Due after Year Five | 16,519 |
Lessee, Operating Lease, Liability, Payments, Due | 62,501 |
Lessee, Operating Lease, Liability, Undiscounted Excess Amount | 6,580 |
Operating Lease, Liability | $ 55,921 |
Note 7 Accounts Receivable Sale
Note 7 Accounts Receivable Sale Program (Details) - USD ($) $ in Millions | 6 Months Ended | ||
Mar. 28, 2020 | Mar. 30, 2019 | Sep. 28, 2019 | |
Transfer of Financial Assets Accounted for as Sales [Line Items] | |||
Face Value of Receivable Sold, Percentage | 100.00% | ||
Accounts Receivable Sold During The Period | $ 1,100 | $ 1,400 | |
RPA [Member] | |||
Transfer of Financial Assets Accounted for as Sales [Line Items] | |||
Accounts Receivable Sold and Outstanding | 149 | $ 241 | |
Amount Collected But Not Remitted to Financial Institutions | $ 83 | $ 76 |
Note 8 Contingencies (Details)
Note 8 Contingencies (Details) - USD ($) $ in Millions | Mar. 28, 2020 | Sep. 28, 2019 |
Loss Contingencies [Line Items] | ||
Loss Contingency Accrual | $ 34 | $ 36 |
Collectibility of Receivable and Excess and Obsolete Inventory [Member] | ||
Loss Contingencies [Line Items] | ||
Loss Contingency Accrual | $ 10 |
Note 9 Restructuring (Details)
Note 9 Restructuring (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Mar. 28, 2020USD ($) | Mar. 30, 2019USD ($) | Mar. 28, 2020USD ($) | Mar. 30, 2019USD ($) | Sep. 28, 2019USD ($) | |
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring Charges | $ 8,356 | $ 3,012 | $ 17,516 | $ 5,151 | |
Restructuring Reserve | $ 7,000 | 7,000 | $ 5,000 | ||
IMS | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring Expense (Recovery), net | (4,000) | ||||
Restructuring Charges | 9,000 | ||||
CPS | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring Charges | 6,000 | 9,000 | |||
Corporate, Non-Segment [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring Charges | $ 3,000 | ||||
Q1 FY20 Plan [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Completion Date | Oct. 3, 2020 | ||||
Expected Number of Positions Eliminated | 300 | 1,750 | |||
Restructuring Charges | $ 4,769 | 0 | $ 11,505 | 0 | |
Q1 FY20 Plan [Member] | Employee Severance [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring Charges | 4,725 | 0 | 11,453 | 0 | |
Q1 FY20 Plan [Member] | Other Restructuring [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring Charges | 44 | 0 | 52 | 0 | |
Other plans [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring Charges | 3,587 | $ 3,012 | 6,011 | $ 5,151 | |
Minimum [Member] | Q1 FY20 Plan [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and Related Cost, Expected Cost | 10,000 | 10,000 | |||
Maximum [Member] | Q1 FY20 Plan [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and Related Cost, Expected Cost | $ 20,000 | $ 20,000 |
Note 10 Income Tax (Details)
Note 10 Income Tax (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 28, 2020 | Mar. 30, 2019 | Mar. 28, 2020 | Mar. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Provision for income taxes | $ 6,205 | $ 28,231 | $ 20,792 | $ 53,751 |
Effective Income Tax Rate | 56.00% | 41.00% | 32.00% | 41.00% |
Note 11 Stockholders' Equity (D
Note 11 Stockholders' Equity (Details) - USD ($) $ in Thousands | Mar. 28, 2020 | Sep. 28, 2019 |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||
Foreign currency translation adjustments | $ 84,098 | $ 86,268 |
Unrealized holding losses on derivative financial instruments | (24,471) | (19,888) |
Unrecognized net actuarial losses and transition costs for benefit plans | (23,247) | (24,121) |
Total | $ 36,380 | $ 42,259 |
Note 11 Derivatives (Details)
Note 11 Derivatives (Details) - Derivatives Designated as Accounting Hedges: - Interest Rate Swap [Member] - USD ($) $ in Millions | Mar. 28, 2020 | Sep. 28, 2019 |
Derivative [Line Items] | ||
Derivative, Notional Amount | $ 350 | $ 350 |
Effective Interest Rate | 4.30% |
Note 11 Stock Repurchase (Detai
Note 11 Stock Repurchase (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | |
Mar. 28, 2020 | Mar. 28, 2020 | Mar. 30, 2019 | |
Stockholders' Equity Note [Abstract] | |||
Stock Repurchase Program Additional Authorized Amount | $ 200 | ||
Shares Repurchased | 2.7 | 0.3 | |
Cash Paid for Share Repurchases | $ 70 | $ 7 | |
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ 231 | $ 231 | |
Share-based Payment Arrangement, Shares Withheld for Tax Withholding Obligation | 0.4 | 0.2 | |
Amount of Tax Withholding for Share-based Compensation | $ 12 | $ 5 |
Note 12 Revenue and Gross Profi
Note 12 Revenue and Gross Profit by Segment (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Mar. 28, 2020USD ($) | Mar. 30, 2019USD ($) | Mar. 28, 2020USD ($) | Mar. 30, 2019USD ($) | ||
Segment Reporting Information [Line Items] | |||||
Net sales | $ 1,590,550 | $ 2,126,639 | $ 3,430,721 | $ 4,314,657 | |
Gross profit | 107,421 | 153,102 | $ 242,303 | 302,439 | |
Number of Reportable Segments | 1 | ||||
Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Gross profit | 110,003 | 155,129 | $ 247,797 | 306,304 | |
Operating Segments | IMS | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 1,300,324 | 1,793,119 | 2,844,259 | 3,586,301 | |
Gross profit | 75,435 | 114,837 | 176,617 | 225,493 | |
Operating Segments | CPS | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 327,323 | 394,985 | 663,754 | 850,788 | |
Gross profit | 34,568 | 40,292 | 71,180 | 80,811 | |
Intersegment revenue | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | (37,097) | (61,465) | (77,292) | (122,432) | |
Unallocated items | |||||
Segment Reporting Information [Line Items] | |||||
Gross profit | [1] | $ (2,582) | $ (2,027) | $ (5,494) | $ (3,865) |
[1] | For purposes of evaluating segment performance, management excludes certain items from its measure of gross profit. These items consist of stock-based compensation expense, amortization of intangible assets and charges or credits resulting from distressed customers. |
Note 12 Segment Reporting by Ge
Note 12 Segment Reporting by Geographic Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Mar. 28, 2020 | Mar. 30, 2019 | Mar. 28, 2020 | Mar. 30, 2019 | ||
Revenue from External Customer [Line Items] | |||||
Net sales | $ 1,590,550 | $ 2,126,639 | $ 3,430,721 | $ 4,314,657 | |
Percentage of net sales represented by ten largest customers | 55.00% | 55.00% | 55.00% | 54.00% | |
Number of customers representing 10% or more of net sales | 1 | 1 | 1 | 1 | |
Americas | |||||
Revenue from External Customer [Line Items] | |||||
Net sales | [1] | $ 817,061 | $ 1,101,698 | $ 1,723,629 | $ 2,265,576 |
United States | |||||
Revenue from External Customer [Line Items] | |||||
Percentage of Net Sales to Americas Net Sales | 35.00% | 35.00% | |||
Mexico | |||||
Revenue from External Customer [Line Items] | |||||
Percentage of Net Sales to Americas Net Sales | 60.00% | 60.00% | |||
EMEA | |||||
Revenue from External Customer [Line Items] | |||||
Net sales | $ 256,724 | 269,202 | $ 517,755 | 504,255 | |
Asia Pacific | |||||
Revenue from External Customer [Line Items] | |||||
Net sales | $ 516,765 | $ 755,739 | $ 1,189,337 | $ 1,544,826 | |
[1] | (1) Mexico represents approximately 60% of the Americas revenue and the U.S. represents approximately 35% . |
Note 13 Earnings Per Share (Det
Note 13 Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 28, 2020 | Mar. 30, 2019 | Mar. 28, 2020 | Mar. 30, 2019 | |
Weighted average shares used in computing per share amount: | ||||
Net income | $ 4,882 | $ 40,885 | $ 43,227 | $ 78,837 |
Weighted average common shares outstanding | 70,584 | 68,821 | 70,377 | 68,556 |
Effect of dilutive stock options and restricted stock units | 1,661 | 2,625 | 2,052 | 2,606 |
Denominator for diluted earnings per share | 72,245 | 71,446 | 72,429 | 71,162 |
Net income per share: | ||||
Basic | $ 0.07 | $ 0.59 | $ 0.61 | $ 1.15 |
Diluted | $ 0.07 | $ 0.57 | $ 0.60 | $ 1.11 |
Note 14 Share-Based Compensatio
Note 14 Share-Based Compensation Arrangements (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 28, 2020 | Mar. 30, 2019 | Mar. 28, 2020 | Mar. 30, 2019 | |
Allocation of Recognized Period Costs [Line Items] | ||||
Share-based Payment Arrangement, Noncash Expense | $ 7,783 | $ 6,626 | $ 14,689 | $ 12,442 |
Share-based Payment Arrangement, Option [Member] | ||||
Allocation of Recognized Period Costs [Line Items] | ||||
Share-based Payment Arrangement, Noncash Expense | 0 | 6 | (1,145) | 99 |
Restricted stock units, including performance based awards | ||||
Allocation of Recognized Period Costs [Line Items] | ||||
Share-based Payment Arrangement, Noncash Expense | 7,783 | 6,620 | 15,834 | 12,343 |
Cost of sales | ||||
Allocation of Recognized Period Costs [Line Items] | ||||
Share-based Payment Arrangement, Expense | 2,582 | 2,582 | 5,494 | 4,317 |
Selling, general and administrative | ||||
Allocation of Recognized Period Costs [Line Items] | ||||
Share-based Payment Arrangement, Expense | 5,127 | 3,939 | 9,052 | 7,929 |
Research and development | ||||
Allocation of Recognized Period Costs [Line Items] | ||||
Share-based Payment Arrangement, Expense | $ 74 | $ 105 | $ 143 | $ 196 |
Note 14 Shares Authorized for F
Note 14 Shares Authorized for Future Issuance and Available for Grant (Details) shares in Millions | 3 Months Ended |
Mar. 28, 2020shares | |
Share-based Payment Arrangement, Additional Disclosure [Abstract] | |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized | 1.6 |
Common Stock, Capital Shares Reserved for Future Issuance | 8.5 |
Stock options and unvested restricted stock units outstanding | 4.3 |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 4.2 |
Note 14 Restricted Stock Rollfo
Note 14 Restricted Stock Rollforward (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 6 Months Ended | 12 Months Ended |
Mar. 28, 2020USD ($)$ / sharesshares | Sep. 28, 2019USD ($)$ / sharesshares | |
Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Outstanding, beginning | shares | 3,153 | |
Granted | shares | 1,223 | |
Vested/Forfeited/Cancelled | shares | (1,316) | |
Outstanding, ending | shares | 3,060 | 3,153 |
Expected to vest | shares | 2,581 | |
Weighted Average Grant Date Fair Value Restricted Stock [Abstract] | ||
Outstanding, beginning | $ / shares | $ 27.82 | |
Granted | $ / shares | 33.61 | |
Vested/Forfeited/Cancelled | $ / shares | 26.77 | |
Outstanding, ending | $ / shares | 30.59 | $ 27.82 |
Expected to vest | $ / shares | $ 30.87 | |
Weighted Average Remaining Contractual Term [Abstract] | ||
Outstanding | 1 year 8 months 4 days | 1 year 3 months 18 days |
Expected to vest | 1 year 7 months 28 days | |
Restricted Stock Non vested Aggregate Intrinsic Value [Abstract] | ||
Outstanding | $ | $ 64,817 | $ 102,720 |
Expected to vest | $ | $ 54,671 |
Note 14 Unrecognized Stock Base
Note 14 Unrecognized Stock Based Compensation Expense (Details) $ in Millions | 6 Months Ended |
Mar. 28, 2020USD ($) | |
Restricted stock units | |
Unrecognized Compensation Cost and Weighted Average Period [Line Items] | |
Unrecognized compensation expense | $ 56 |
Weighted average period of recognition (years) | 1 year 8 months 12 days |
Performance Shares | |
Unrecognized Compensation Cost and Weighted Average Period [Line Items] | |
Unrecognized compensation expense | $ 5 |
Note 14 Additional Information
Note 14 Additional Information (Details) - shares | 3 Months Ended | 6 Months Ended |
Mar. 28, 2020 | Mar. 28, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted | 1,223,000 | |
Performance Shares | Q1 FY20 Grants [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted | 304,500 | |
Potential adjustment to PSUs | 15.00% | |
Expiration Date | Dec. 31, 2022 | |
Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting Period | 1 year | |
Minimum [Member] | Performance Shares | Q1 FY20 Grants [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Potential Payout Percentage | 80.00% | |
Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting Period | 4 years | |
Maximum [Member] | Performance Shares | Q1 FY20 Grants [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Potential Payout Percentage | 120.00% |