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Filed Pursuant to Rule 424(b)(3)
File No. 333-84039
117,828 SHARES
SANMINA CORPORATION
COMMON STOCK
THE SHARES OFFERED IN THIS PROSPECTUS INVOLVED A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" BEGINNING ON PAGE 5 OF THIS PROSPECTUS FOR INFORMATION THAT YOU SHOULD
CONSIDER BEFORE PURCHASING THESE SECURITIES.
Our common stock is quoted on the Nasdaq National Market System under the symbol
"SANM". On July 28, 1999, the average for the high and low price of our common
stock on the Nasdaq was $66.91 per share.
The selling stockholder, who acquired these shares in connection with the sale
of real estate to Sanmina, may offer and sell these shares from time to time.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES, OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is August 4, 1999.
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TABLE OF CONTENTS
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SUMMARY..................................................................1
RISK FACTORS.............................................................2
USE OF PROCEEDS..........................................................6
SELLING STOCKHOLDERS.....................................................6
PLAN OF DISTRIBUTION.....................................................7
LEGAL MATTERS............................................................8
EXPERTS..................................................................8
WHERE YOU CAN FIND MORE INFORMATION......................................8
INDEMNIFICATION OF OFFICERS AND DIRECTORS................................9
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SUMMARY
SANMINA IS A TECHNICAL SERVICE PROVIDER
Sanmina primarily assembles complex printed circuit boards that customers
include in their electronic products. We also offer other electronics assembly
services and manufacturing management services. By providing these services,
Sanmina is able to offer its customers complete management of the manufacturing
process from materials procurement through delivery of finished assemblies. By
using Sanmina's services, our customers are able to focus their resources on
product development, sales and marketing and reduce their manufacturing
infrastructure.
Sanmina's customers are suppliers of electronic products and devices, including
telecommunications equipment, data communications equipment, industrial and
medical instrumentation and computer systems. These companies, for whom Sanmina
provides manufacturing services, are known as original equipment manufacturers
or OEMs.
We use surface mount and pin-through hole interconnection technologies in
assembling components on a circuit board. Surface mount refers to soldering
components directly to the surface of a board. With pin-through hole
interconnections, pins on a component go through holes on a circuit board.
Various electronic components, such as integrated circuits, capacitors,
microprocessors and resistors are mounted on surface mount and pin-through hole
printed circuitboard assemblies. These assemblies are key functional elements of
many types of electronic products.
We also manufacture custom designed backplane assemblies and complex
multi-layered printed circuit boards. Backplane assemblies are large printed
circuit boards on which connectors are mounted to interconnect printed circuit
boards, integrated circuits and other electronic components. We test as well as
assemble the completed systems. We also provide procurement, materials
management and consultation to our customers on the design and manufacture of
their equipment.
Through a Sanmina Cable Systems subsidiary, we manufacture custom cable and
wire harness assemblies. Such an assembly consists of a group of cables or wires
assembled as a unit and used to interconnect other components. We provide cable
and wire harness assemblies to electronic industry OEMs who use the assemblies
in their products. As part of the Elexsys International acquisition completed in
November 1997, we also operate a metal stamping and plating business.
SANMINA'S MARKET NICHE AND CUSTOMER BASE
Sanmina was formed in 1989 to acquire the printed circuit board and backplane
operations of its predecessor company, which had been in the printed circuit
board and backplane business since 1980. Our interconnect products generally
require greater manufacturing expertise and have shorter delivery cycles than
mass produced interconnect products. Our customers include leading OEMs in the
telecommunications, networking (data communications), industrial, medical
instrumentation and high-speed computer systems sectors.
THE LOCATION OF SANMINA'S FACILITIES
Our assembly plants are located in six states of the continental United States
and in Dublin, Ireland. We have circuit board fabrication facilities on both the
east and west coasts of the United States. A subsidiary, Sanmina Cable Systems,
manufacturers our custom cable and wire harness assemblies in Carrollton, Texas.
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Sanmina's headquarters are located at 355 East Trimble Road, San Jose,
California 95131. Our telephone at this location is (408) 954-5500.
RISK FACTORS
This prospectus, including the documents incorporated by reference, contains
forward looking statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These
include statements of Sanmina's expectations, beliefs, intentions or future
strategies. We base all forward looking statements on information available to
us on the date of this prospectus.
We will not update any such forward looking statements. Actual results could
differ materially from those in the forward looking statements because of the
risk factors set forth below and in the documents incorporated by reference in
this prospectus. In addition to the information in this report and in the
documents incorporated by reference, you should carefully consider the following
risk factors before buying our securities.
SANMINA DEPENDS ON THE HEALTH OF THE ELECTRONICS INDUSTRY AS A WHOLE
Sanmina's business heavily depends on the health of the electronics industry.
Our customers are manufacturers in the telecommunications, networking (data
communications), industrial and medical instrumentation and high speed computer
systems segments of the electronics industry. These industry segments, and the
electronics industry as a whole, are subject to rapid technological change and
product obsolescence.
Our customers can discontinue or modify products containing our components,
adversely affecting results of operations. The electronics industry also
experiences economic cycles and recessionary periods. A general recession in the
electronics industry could have a material adverse effect on Sanmina's business,
financial condition and results of operations.
SANMINA EXPERIENCES PERIODIC FLUX IN ITS OPERATING RESULTS
Our results of operations have varied and may continue to fluctuate
significantly from period to period, including on a quarterly basis. The factors
effecting our operating results include:
- timing of orders from major customers;
- mix of product ordered by and shipped to major customers;
- volume of orders;
- effective management of our inventory;
- effective management of our fixed assets; and
- timing of expenditures in anticipation of future sales.
Our results are also affected by the mix of products between backplane
assemblies and printed circuit boards.
Results of operations in any period should not be considered indicative of the
results to be expected for any future period. In addition, fluctuations in
operating results may also result in fluctuations in the price of our common
stock.
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SANMINA'S CUSTOMERS MAY ADVERSELY AFFECT REVENUES BY ALTERING ORDERS
We typically do not obtain long-term volume purchase contracts from our
customers and recently experienced reduced lead times in customer orders.
Customer orders may be canceled and volume levels may be changed or delayed. In
particular, some of our customers cancelled and rescheduled shipment dates
during the fourth fiscal quarter of 1998. The timely replacement of canceled,
delayed or reduced contracts with new business cannot be assured.
From time to time, we experience changes in the volume of sales to each of our
principal customers. Operating results may be affected on a period-to-period
basis by these changes. Our customers generally require short delivery cycles. A
substantial portion of our backlog is typically scheduled for delivery within
120 days. Quarterly sales and operating results therefore depend in large part
on the volume and timing of bookings received during the quarter, which are
difficult to forecast. Our backlog also affects our ability to plan production
and inventory levels. This could lead to fluctuations in operating results.
SANMINA MUST RESPOND QUICKLY TO SHORTFALLS IN REVENUES TO REDUCE IMPACT
A significant portion of Sanmina's operating expenses are relatively fixed in
nature and planned expenditures are based in part on anticipated orders. Any
inability to adjust spending quickly enough to compensate for any revenue
shortfall may magnify the adverse impact of such revenue shortfall on our
results of operations.
SOME OF SANMINA'S COMPETITORS HAVE GREATER RESOURCES OR LOWER PRICES
The electronic interconnect product industry is highly fragmented and intensely
competitive. Sanmina competes in the technologically advanced segment of the
interconnect product market. This segment is much less fragmented than the
industry as a whole. Our competitors consist primarily of larger manufacturers
of interconnect products. Some of these competitors have greater manufacturing
and financial resources than Sanmina as well as greater surface mount assembly
capacity. As a participant in the interconnect industry, we must continually
develop improved manufacturing processes to accommodate our customers' needs for
increasingly complex products.
We provide quick turnaround and responsive service to our customers. However,
during periods of recession in the electronics industry, these competitive
advantages may be of reduced importance to electronics OEMs, who may become more
price sensitive. In addition, captive interconnect product manufacturers
increase price competition by seeking orders in the open market to fill excess
capacity. We may be at a competitive disadvantage with respect to price when
compared to manufacturers with lower cost structures, particularly those with
offshore facilities where labor and other costs are lower.
SANMINA'S RECENT ACQUISITIONS REQUIRE EFFORTS TO INTEGRATE
We have, for the past several fiscal years, pursued a strategy of growth through
the acquisition of companies and assets as well as the expansion of our
operations.
The risks of our recent growth include:
- the potential inability to successfully integrate acquired
operations and businesses or to realize anticipated synergies,
economies of scale or other value;
- diversion of management's attention;
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- difficulties in scaling up production at new sites and
coordinating management of operations at new sites;
- delays in implementing consolidation plans; and
- loss of key employees of acquired operations.
Sanmina may experience problems in integrating operations of our recent or
future acquisitions. We cannot assure that any acquisition will result in a
positive contribution to our results of operations. Neither can we assure that
value from any such acquisition will equal or exceed its cost. In particular,
the successful combination of Sanmina and Altron will require substantial effort
from each company to integrate and coordinate sales and marketing efforts. The
efforts expended to integrate the companies could adversely impact our
anticipated benefits of the merger.
We cannot assure that, either generally or specifically, we will realize our
anticipated benefits from expanding our existing operations to new sites. Our
future acquisitions may result in dilutive issuances of equity securities, the
incurrence of additional debt, large one-time write-offs and the creation of
goodwill or other intangible assets that could result in amortization expense.
These factors could adversely effect our business, financial condition and
results of operations with respect to any or all of our recent acquisitions. At
this point the outcome of our acquisitions and expansion activity is still
uncertain.
Sanmina's growth in recent years has included mergers and the acquisition of
entire companies. In other instances we acquired selected assets, principally
equipment, inventory and customer contracts and, in certain cases, facilities or
facility leases. For example, the November 1996 acquisitions of the
Guntersville, Alabama operations of Comptronix Corporation and certain assets of
the custom manufacturing services division of Lucent Technologies. In addition
to these acquisitions, we have also grown our operations through internal
expansion, such as the opening of several new assembly facilities in the United
States and Ireland.
SANMINA RISKS DISRUPTIONS BECAUSE OF DEVELOPING ITS OPERATIONS INTERNATIONALLY
We opened our first overseas facility, located in Dublin, Ireland, in June 1997.
A number of risks are inherent in international operations and transactions.
International sales and operations may be limited or disrupted by:
- the imposition of government controls;
- export license requirements;
- political instability;
- trade restrictions;
- changes in tariffs;
- difficulties in staffing; and
- difficulties in coordinating communications among and managing
international operations.
Our business, financial condition and results of operations may be adversely
affected by:
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- fluctuations in international currency exchange rates;
- increases in duty rates;
- difficulties in obtaining export licenses;
- constraints on our ability to maintain or increase prices; and
- competition.
Difficulties encountered in scaling up production at overseas facilities or in
coordinating our United States and international operations, as well as failure
of the international operations to increase revenue, could adversely effect our
business, financial condition and results of operations.
SANMINA RISKS DISRUPTIONS RELATED TO YEAR 2000 PROBLEMS IN ITS SYSTEMS AND ITS
KEY SUPPLIERS' SYSTEMS
Sanmina is subject to risks related to Year 2000 problems. Many currently
installed computer systems and software products are unable to distinguish years
beginning with "19" from those beginning with "20." As a result, computer
systems and/or software products used by many companies may need to be upgraded
to comply with such Year 2000 requirements. Sanmina is currently expending
resources to review its products and services, as well as its internal use
software in order to identify and modify those products, services and systems
that are not Year 2000 compliant. Additionally, Sanmina is in the process of
evaluating the need for contingency plans with respect to Year 2000
requirements. The necessity of any contingency plan must be evaluated on a
case-by-case basis and will vary considerably in nature depending on the Year
2000 issue it may need to address. There can be no assurance however, that
Sanmina will be able to solve all potential Year 2000 issues. Sanmina's reliance
on its key suppliers, and therefore on the proper functioning of their
information systems and software, is increasing, and there can be no assurance
that another company's failure to address Year 2000 issues could not have an
adverse effect on Sanmina. Sanmina has initiated formal communications with each
of its significant suppliers and customers to determine the extent to which
Sanmina is vulnerable to those third parties' failure to remediate their own
Year 2000 issues. In particular, in the event a product manufactured by Sanmina
contained Year 2000 problems attributable to a design or product development
flaw, it is likely that sales of such product would be adversely affected, which
would adversely affect Sanmina's manufacturing services revenues attributable to
such product. Such a situation could have a material adverse effect on Sanmina's
business, financial condition and results of operations.
Sanmina has requested that third party vendors represent their products
and services to be Year 2000 compliant and that they have a program to test for
Year 2000 compliance. Sanmina has received responses from all third party
vendors. Breakdowns in Sanmina's computer systems and applications, such as its
manufacturing application software, its bar-coding systems, and the computer
chips embedded in its plant equipment, as well as other Year 2000 related
problems such as disruptions in the delivery of materials, power, heat or water
to Sanmina's facilities, could prevent Sanmina from being able to manufacture
and ship its products. Sanmina plans to replace or upgrade or otherwise work
around any of its date driven systems that are not Year 2000 compliant.
Sanmina's Year 2000 Project Team has put in place compliance solutions and work
around and intends to complete compliance testing by September 30, 1999. If
Sanmina fails to correct a material Year 2000 problem, its normal business
activities and operations could be interrupted. Such interruptions could
materially and adversely affect Sanmina's results of operations, liquidity and
financial condition. To date, Year 2000 costs are not considered by Sanmina to
be material to its financial condition. Sanmina currently estimates that, in
order to complete Year 2000 compliance, Sanmina will be required to incur
expenditures of approximately $1.7 million. Through January 2, 1999,
approximately $600,000 of this amount had been expended.
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POSSIBLE VOLATILITY OF SANMINA'S STOCK PRICE MAY AFFECT REVENUES
The trading price of our common stock has and could in the future fluctuate in
response to variations in quarterly operating results, developments in the
electronics industry, general economic conditions, changes in securities
analysts' recommendations regarding our securities and other factors. In recent
years, price and volume fluctuations in the stock market have affected the
market prices of technology companies. Such fluctuations have often been
unrelated to or disproportionately impacted by the operating performance of such
companies. These broad market fluctuations may adversely affect the market price
of Sanmina's common stock.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the shares by the selling
stockholders in the offering. We will pay for costs relative to the registration
of the shares.
SELLING STOCKHOLDERS
The rules and regulations of the Commission determines beneficial ownership.
Such beneficial ownership generally includes voting or investment power with
respect to securities. We base the beneficial ownership stated below on
information as of July 28, 1999. It assumes that there is outstanding an
aggregate of 58,333,144 shares of common stock.
As of April 13, 1999, options to purchase 50,000 shares of Common Stock of the
Company had been issued to Roger Mayer, Trustee of the Roger R. Mayer Revocable
Living Trust dated 10/2/96, and no other options had been issued to the selling
stockholders named in this prospectus. Except as subject to community property
laws where applicable, we believe, based on information furnished by the selling
stockholders that the person named in the table below has sole voting and
investment power with respect to all shares of common stock shown as
beneficially owned by him. This beneficial ownership assumes the sale of all
shares offered by this prospectus and no other purchases or sales of our common
stock. See "Plan of Distribution."
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In this prospectus, we refer to the individual listed below and any family
member, trust or trust instrument to whom he may rightfully transfer his shares
as the "selling stockholder." The following table sets forth certain information
as of July 28, 1999 with respect to the selling stockholder:
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SHARES
OFFERED SHARES BENEFICIALLY
Name of Selling Stockholder HEREBY OWNED AFTER OFFERING
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Number Percent
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Roger R. Mayer, or his successors, 117,828 449,504(1) -(2)
Trustee of the Roger R. Mayer Revocable
Living Trust dated 10/2/96, and as it may be
subsequently be amended
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(1) Reflects shares purchased by Mr. Mayer in the open market and shares
received by Mr. Mayer when Sanmina acquired Manutronics, Inc.
(2) Less than one percent
PLAN OF DISTRIBUTION
The selling stockholder may sell the shares separately or together, from time
to time on the over-the-counter market at prices and on terms prevailing at the
time of any such sale. Any such sale may be made:
- in broker's transactions through broker-dealers acting as agents;
- in transactions directly with market makers; or
- in privately negotiated transactions where no broker or other third
party (other than the purchaser) is involved.
The selling stockholder will pay:
- selling commissions or brokerage fees, if any;
- all applicable transfer taxes; and
- all fees and costs of counsel incurred in connection with the sale.
During such time as the selling stockholder may be attempting to sell shares
registered hereunder, they will:
(i) not engage in any stabilization activity in connection with
any of Sanmina's securities;
(ii) furnish copies of this prospectus, as supplemented or amended
to each person to whom shares may be offered; and
(iii) not bid for or purchase any of Sanmina's securities other than
as permitted under the Exchange Act.
The selling stockholder, and any other persons who participate in the sale of
the shares, may be deemed to be "Underwriters" as defined in the Securities Act.
Any commissions paid or any discounts or concessions
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allowed to any such persons, and any profits received on resale of the shares,
may be deemed to be underwriting discounts and commissions under the Securities
Act.
With regard to the shares, Sanmina has agreed to maintain the effectiveness of
this registration statement until July 30, 2000 or earlier if the distribution
described herein has become effective.
We will bear all costs, expenses and fees in connection with the registration of
the shares. The selling stockholders will bear all commissions and discounts, if
any, attributable to the sale of the shares. We agreed to indemnify the selling
stockholders against certain liabilities, including liabilities under the
Securities Act. The selling stockholders have agreed to indemnify Sanmina
against certain liabilities, including liabilities under the Securities Act.
LEGAL MATTERS
Legal matters with respect to the legality of issuing the common stock offered
hereby will be passed upon for us by Wilson Sonsini Goodrich & Rosati,
Professional Corporation, 650 Page Mill Road, Palo Alto, California 94304.
EXPERTS
The audited financial statements and schedule incorporated by reference in this
registration statement have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their reports with respect thereto, and are
included therein in reliance upon the authority of said firm as experts in
giving said reports.
WHERE YOU CAN FIND MORE INFORMATION
GOVERNMENT FILINGS
We file proxy statements, reports and other information with the Securities and
Exchange Commission in accordance with the Securities Exchange Act of 1934. You
can inspect and copy this information at regional offices of the Commission
located at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511 and 7 World Trade Center, Suite 1300, New York, New York
10048; and at the Public Reference Office of the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549. You can also obtain copies of such material from
the Public Reference Section of the Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. You may obtain information on the
operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The
Commission also maintains a World Wide Web site on the Internet at
http://www.sec.gov that contains reports, proxy and information statements and
other information regarding Sanmina and other companies that file electronically
with the Commission.
INFORMATION INCORPORATED BY REFERENCE
We incorporate by reference the following documents and all future documents
filed by Sanmina pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange
Act until this offering is completed:
Annual Report on Form 10-K/A filed on May 3, 1999 for the fiscal year
ended September 30, 1998.
Current Report on Form 8-K/A filed on February 10, 1999.
Current Reports on Form 8-K filed on April 29, 1999 and April 30, 1999.
Quarterly Report on Form 10-Q/A for the fiscal quarter ended January 2,
1998, filed on May 3, 1999.
Quarterly Reports on Form 10-Q for the fiscal quarters ended January 2,
1999 and April 3, 1999.
Our Current Report on Form 8-K filed December 14, 1998.
Our Proxy Statement for our 1999 meeting of stockholders filed December
30, 1998.
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You may request free copies of these filings by writing or telephoning us.
Requests should be directed to Elizabeth Foreman, Chief Financial Officer,
Sanmina Corporation, 355 East Trimble Road, San Jose, California 95131,
telephone: (408) 954-5500.
You should rely only on the information incorporated by reference or provided in
this prospectus or a prospectus supplement or amendment. We have not authorized
anyone to provide you with different information. We are not making an offer of
these securities in any state where the offer is not permitted. Also, this
prospectus does not offer to sell any securities other than the securities
covered by this prospectus. You should not assume that the information in this
prospectus or a prospectus supplement or amendment is accurate as of any date
other than the date on the front of the document.
Shares of our common stock are traded as "National Market Securities" on the
Nasdaq National Market. Documents we file can be inspected at the offices of the
National Association of Securities Dealers, Inc., Reports Section, 1735 K
Street, N.W., Washington, D.C. 20006.
ADDITIONAL INFORMATION
This prospectus constitutes a part of a registration statement on Form S-3 filed
by Sanmina with the Securities and Exchange Commission under the Securities Act.
This prospectus does not contain all of the information set forth in the
registration statement. The rules and regulations of the Commission permit us to
omit certain parts. For further information, refer to the registration
statement. Statements concerning the provisions of any document are not
necessarily complete. We qualify each such statement, in its entirety, by
reference to the registration statement filed with the Commission.
INDEMNIFICATION OF OFFICERS AND DIRECTORS
Section 145 of the Delaware General Corporation Law authorizes a court to award,
or a corporation's Board of Directors to grant, indemnity to directors and
officer. Such indemnification covers our directors and officers under certain
circumstances for liabilities arising under the Securities Act of 1933, as
amended, including reimbursement for expenses. Article X of Sanmina's Bylaws
provide for indemnification of our directors and officers, employees and other
agents to the maximum extent permitted by law. Insofar as indemnification for
liabilities arising under the Securities Act may be permitted to our directors,
officers and controlling persons, we have been advised that in the opinion of
the Commission, such indemnification is against public policy, as stated by the
Commission, and is, therefore, unenforceable.
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