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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K
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(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934.
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2000.
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934.
FOR THE TRANSITION PERIOD FROM ____________ TO ____________ .
COMMISSION FILE NUMBER: 0-21272
SANMINA CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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<S> <C>
DELAWARE 77-0228183
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
2700 NORTH FIRST STREET, SAN JOSE, CA 95134
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
</TABLE>
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (408) 964-3500
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
COMMON STOCK, $0.01 PAR VALUE
(TITLE OF CLASS)
Indicate by check mark whether the Registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosures of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
The aggregate value of voting stock held by non-affiliates of the
Registrant was approximately $14,458,431,810 as of September 30, 2000, based
upon the average of the high and low prices of the Registrant's Common Stock
reported for such date on the Nasdaq National Market. Shares of Common Stock
held by each executive officer and director and by each person who owns 10% or
more of the outstanding Common Stock have been excluded in that such persons may
be deemed to be affiliates. The determination of affiliate status is not
necessarily a conclusive determination for other purposes. As of September 30,
2000, the Registrant had outstanding 152,259,383 shares of Common Stock.
DOCUMENTS INCORPORATED BY REFERENCE
Certain information is incorporated into Part III of this report by
reference to the Proxy Statement for the Registrant's 2001 annual meeting of
stockholders to be filed with the Securities and Exchange Commission pursuant to
Regulation 14A not later than 120 days after the end of the fiscal year covered
by this Form 10-K. Certain information is incorporated into Parts II and IV of
this report by reference to the Registrant's annual report to stockholders for
the year ended September 30, 2000.
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PART I
ITEM 1. BUSINESS
Sanmina is a leading independent provider of customized integrated
electronic manufacturing services, known as EMS, including turnkey electronic
assembly and manufacturing management services, to original equipment
manufacturers, or OEMs, in the electronics industry. Our electronics
manufacturing services consist primarily of the design and manufacture of
complex printed circuit board assemblies using surface mount and
pin-through-hole interconnection technologies, the manufacture of custom
designed backplane assemblies, fabrication of complex multi-layered printed
circuit boards, the manufacture of custom cables and wire harness assemblies,
the manufacture of electronic enclosure systems that house large electronic
systems and subsystems, testing and assembly of completed systems, and global
order fulfillment. In addition to the services above, turnkey manufacturing
management also involves procurement and materials management, as well as
consultation on printed circuit board design and manufacturing. As a result of
these services, Sanmina can offer an end to end total EMS solution to its
customers.
Surface mount and pin-through-hole printed circuit board assemblies are
printed circuit boards on which various electronic components, such as
integrated circuits, capacitors, microprocessors and resistors, are mounted.
These assemblies are key functional elements of many types of electronic
products. Backplane assemblies are large printed circuit boards on which
connectors are mounted to interconnect printed circuit boards, integrated
circuits and other electronic components. Interconnect products manufactured by
us generally require greater manufacturing expertise and have shorter delivery
cycles than mass produced interconnect products, and therefore, typically have
higher profit margins.
Our customers include leading OEMs in the communications, medical and
industrial instrumentation and high-speed computer sectors. Our principal
customers include Alcatel, Cisco Systems, Lucent Technologies, Motorola, Nokia,
Nortel Networks and Tellabs.
We locate our manufacturing facilities near our customers and,
increasingly, our customers' end users. Our assembly plants are located in
Northern California; Richardson, San Antonio and Plano, Texas; the greater
Boston, Massachusetts area; Manchester, New Hampshire; Durham, North Carolina;
Guntersville, Alabama; Salt Lake City, Utah; Kenosha, Wisconsin; Calgary,
Alberta, Canada; Dublin, Ireland and Chateaudun, France. Our printed circuit
board fabrication facilities are located in Northern California, Southern
California, the greater Boston, Massachusetts area and Nashua, New Hampshire.
Sanmina's cable and harness principal manufacturing facility is located in
Carrollton, Texas. Our principal enclosure manufacturing facilities are located
in Clinton, North Carolina and Toronto, Canada.
Through our June 2000 acquisition of Hadco Corporation ("Hadco"), we added
printed circuit board fabrication facilities in the greater Boston,
Massachusetts area; Northern California; Phoenix, Arizona; Owego, New York;
Austin, Texas; Derry and Hudson, New Hampshire and Kuching, Malaysia. We also
obtained backplane and assembly facilities in Salem, New Hampshire and Santa
Clara, California as well as an engineering facility in Limerick, Ireland. In
June 2000, we also acquired Essex AB ("Essex"), an EMS company with operations
in Sweden and Finland. In July 2000, we acquired an EMS operation in the
Shenzhen region of the Peoples' Republic of China. In August 2000, Sanmina
acquired a design and engineering group from Nortel Networks. Also in September
2000, Sanmina acquired the San Jose, California system integration and
fulfillment operation of Lucent Technologies.
Sanmina recently announced an OEM arrangement with Siemens. Under this
arrangement, we will acquire a 49.9% ownership interest in INBOARD, a wholly
owned subsidiary of Siemens AG. INBOARD is a manufacturer of complex printed
circuit boards.
We have pursued and intend to continue to pursue business acquisition
opportunities, particularly when these opportunities have the potential to
enable us to increase our net sales while maintaining operating margins, to
access new customers, technologies or geographic markets, to implement our end
to end total manufacturing solution strategy and to increase capacity and obtain
facilities and equipment. In particular, we
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expect that we will continue to pursue opportunities to acquire assembly
operations being divested by electronics industry OEMs, particularly those in
the communications sector.
This Report on Form 10-K contains certain forward-looking statements
regarding future events with respect to Sanmina. Actual events and/or future
results of operations may differ materially as a result of the factors described
herein and in the documents incorporated herein by reference, including, in
particular, those factors described under "Factors Affecting Operating Results."
INDUSTRY OVERVIEW
We are benefiting from increased market acceptance of the use of
manufacturing specialists in the electronics industry. Many electronics OEMs
have adopted, and are becoming increasingly reliant upon, manufacturing
outsourcing strategies, and we believe the trend towards outsourcing
manufacturing will continue. Electronics industry OEMs use EMS specialists for
many reasons including the following:
- Reduce Time to Market. Due to intense competitive pressures in the
electronics industry, OEMs are faced with increasingly shorter product
life cycles and, therefore, have a growing need to reduce the time
required to bring a product to market. OEMs can reduce their time to
market by using a manufacturing specialist's established manufacturing
expertise, global presence and infrastructure.
- Reduce Capital Investment. As electronic products have become more
technologically advanced, the manufacturing process has become
increasingly automated, requiring a greater level of investment in
capital equipment. Manufacturing specialists enable OEMs to gain access
to advanced manufacturing facilities, thereby reducing the OEMs' overall
capital equipment requirements.
- Focus Resources. Because the electronics industry is experiencing greater
levels of competition and more rapid technological change, many OEMs are
increasingly seeking to focus their resources on activities and
technologies in which they add the greatest value. By offering
comprehensive electronic assembly and turnkey manufacturing services,
manufacturing specialists allow OEMs to focus on core technologies and
activities such as product development, marketing and distribution.
- Access Leading Manufacturing Technology. Electronic products and
electronics manufacturing technology have become increasingly
sophisticated and complex, making it difficult for OEMs to maintain the
necessary technological expertise in process development and control.
OEMs are motivated to work with a manufacturing specialist in order to
gain access to the specialist's process expertise and manufacturing
knowledge.
- Improve Inventory Management and Purchasing Power. Electronics industry
OEMs are faced with increasing difficulties in planning, procuring and
managing their inventories efficiently due to frequent design changes,
short product lifecycles, large investments in electronic components,
component price fluctuations and the need to achieve economies of scale
in materials procurement. By using a manufacturing specialist's volume
procurement capabilities and expertise in inventory management, OEMs can
reduce production and inventory costs.
- Access Worldwide Manufacturing Capabilities. OEMs are increasing their
international activities in an effort to lower costs and access foreign
markets. Manufacturing specialists with worldwide capabilities are able
to offer such OEMs a variety of options on manufacturing locations to
better address their objectives regarding cost, shipment location,
frequency of interaction with manufacturing specialists and local content
requirements of end-market countries.
SANMINA BUSINESS STRATEGY
Our objective is to provide OEMs with a total EMS solution. Our strategy
encompasses several key elements:
- Concentrate on high value added products and services for leading
OEMs. We focus on leading manufacturers of advanced electronic products
that generally require custom designed, more complex interconnect
products and short lead-time manufacturing services. By focusing on
complex intercon-
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nect products and manufacturing services for leading OEMs, we are able to
realize higher margins than many other participants in the interconnect
and EMS industries.
- Leverage vertical integration. Building on our integrated manufacturing
capabilities, we can provide our customers with a broad range of high
value added manufacturing services from design to fabrication of bare
boards, to final system assembly and test. The cable assembly
capabilities of Sanmina provide us with further opportunities to leverage
our vertical integration. By manufacturing printed circuit boards,
electronic enclosure systems, and custom cable assemblies used in our EMS
assemblies, we, through our vertical integration, are able to add greater
value and realize additional manufacturing margin. In addition, our
vertical integration provides greater control over quality, delivery and
cost, and enables us to offer our customers a complete EMS solution.
- Focus on high growth customer sectors. We have focused our marketing
efforts on key, fast growing industry sectors. Our customers include
leading OEM companies in communications, industrial and medical
instrumentation and computer sectors. Sales efforts will focus on
increasing penetration of our existing customer base as well as
attracting new customers, thus diversifying our revenue across a wider
base.
- Geographic expansion of manufacturing facilities. Since 1993, we have
significantly expanded and upgraded our operations through the opening of
and acquisition of new facilities and operations in various locations
throughout the United States, including Northern California, Southern
California, the Dallas-Fort Worth area, the greater Boston area, the
greater Chicago area and other locations. These facilities provide us
with operations in key geographic markets for the electronics industry.
We will continue to aggressively and opportunistically pursue future
expansion opportunities in other markets. In particular, through two
recent acquisitions, we have established operations in Sweden, Finland
and the Peoples' Republic of China.
- Aggressive pursuit of acquisition opportunities. Our strategy involves
the pursuit of business acquisition opportunities, particularly when
these opportunities have the potential to enable us to increase our net
sales while maintaining operating margin, access new customers,
technologies and geographic markets, implement our vertical integration
strategy and obtain facilities and equipment on terms more favorable than
those generally available in the market. These acquisitions have involved
both acquisitions of entire companies as well as acquisitions of selected
assets, principally equipment, inventory and customer contracts and, in
certain cases, facilities or facility leases. We intend to continue to
evaluate and pursue acquisition opportunities on an ongoing basis.
- Develop long-term customer relationships. We seek to establish
"partnerships" with our customers by focusing on early stage involvement
in product design, state-of-the-art technology, quick-turnaround
manufacturing and comprehensive management support for materials and
inventory. We also work closely with our customers to help them manage
their manufacturing cycle and reduce their time to market. While we will
continue to emphasize growth with our current customers, we have been
successful in attracting new customers. To further these efforts, we
intend to continue to expand our direct sales and support staff. We
believe our direct sales force and support staff are two of our key
competitive advantages.
- Extend technology leadership. Today we can provide a total EMS solution
with services ranging from design services to fabrication of circuit
boards and complete system assemblies. In providing these services, we
use a variety of processes and technologies. We strive for continuous
improvement of our processes and have adopted a number of quality
improvement and measurement techniques to monitor our performance. We
have also recently made significant capital expenditures to upgrade plant
and equipment at our facilities. We intend to stay on the leading edge of
technology development and will evaluate new interconnect and packaging
technologies as they emerge.
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CUSTOMERS, MARKETING AND SALES
Our customers include a diversified base of OEMs in the communications,
medical and industrial instrumentation and high-speed computer systems segments
of the electronics industry. Our principal customers include Alcatel, Cisco
Systems, Lucent Technologies, Motorola, Nokia, Nortel Networks and Tellabs. The
following table shows the approximate percentage of our fiscal 2000 sales in
each of these industry sectors.
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Communications.............................................. 71.6%
Medical and Industrial Instrumentation...................... 12.3%
High-Speed Computer Systems................................. 16.1%
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We develop relationships with our customers and market our manufacturing
services through a direct sales force augmented by a network of manufacturers'
representative firms and a staff of in-house customer support specialists. Our
sales resources are directed at multiple management and staff levels within
target accounts. Our direct sales personnel work closely with the customers'
engineering and technical personnel to better understand their requirements. Our
manufacturers' representatives are managed by our direct sales personnel, rather
than from corporate headquarters, in order to provide for greater accountability
and responsiveness. We also conduct advertising and public relations activities,
as well as receiving referrals from current customers.
Historically, we have had substantial recurring sales from existing
customers. We have also expanded our customer base through acquisitions. In
particular, the acquisition of the Guntersville, Alabama operations of
Comptronix Corporation and certain assets of the former custom manufacturing
services division of Lucent Technologies provided us with several new key
customer accounts with significant growth potential. In addition, the November
1997 acquisition of Elexsys International Inc. ("Elexsys"), the November 1998
acquisition of Altron Incorporated ("Altron"), the December 1998 acquisition of
Telo Electronics, Inc. ("Telo"), and the March 1999 acquisition of Manu-Tronics,
Inc. ("Manu-Tronics") provided us with several major new customer accounts. Our
October and November 1999 acquisitions of certain Nortel Networks assembly
operations have expanded our customer relationship with Nortel Networks. This
relationship was enhanced by our acquisition of a Nortel Networks design
engineering group in August 2000. Our recent transactions with Alcatel, Avaya,
Harris and Lucent will provide us with the opportunity to significantly expand
our relationship with these customers. Finally, our acquisitions of Hadco and
Essex and our acquisition of EMS operations in China will enable us to broaden
our customer base as well our geographic base.
Although we seek to diversify our customer base, a small number of
customers are responsible for a significant portion of our net sales. During
fiscal 2000, fiscal year 1999 and fiscal year 1998, sales to our ten largest
customers accounted for 55.8%, 48.9% and 43.7%, respectively, of our net sales.
For fiscal 2000, only sales to one customer, Nortel Networks, represented more
than 10.0% of our net sales. For fiscal year 1999 and 1998, no single customer
exceeded 10.0% of net sales. This customer information gives effect to the
restatement of Sanmina's results of operations to reflect the acquisitions of
Hadco and Essex, which occurred in fiscal 2000.
Although we cannot assure you that our principal customers will continue to
purchase products and services from us at current levels, if at all, we expect
to continue to depend upon our principal customers for a significant portion of
our net sales. Our customer concentration could increase or decrease, depending
on future customer requirements, which will be dependent in large part on market
conditions in the electronics industry segments in which our customers
participate. The loss of one or more major customers, or declines in sales to
major customers, could harm our business and operating results.
MANUFACTURING SERVICES
We specialize in manufacturing complex printed circuit board assemblies,
backplane assemblies and printed circuit boards that are used in the manufacture
of sophisticated electronic equipment. We began manufacturing backplane
assemblies in 1981 and began providing electronic assembly and turnkey manufac-
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turing management services, including the assembly and testing of sophisticated
electronic systems, in October 1993.
We seek to establish "partnerships" with our customers by providing a
responsive, flexible total manufacturing services solution. These services
include computer integrated manufacturing, known as CIM, and design and
engineering services, quick-turnaround manufacturing of prototype and
preproduction assemblies, and materials procurement and management. CIM services
provided by us consist of developing manufacturing processes, tooling and test
sequences for new products from customer designs. We also evaluate customer
designs for manufacturability and test, and, when appropriate, recommend design
changes to reduce manufacturing cost or lead times or to increase manufacturing
yields and the quality of the finished product. Once engineering is completed,
we manufacture prototype or preproduction versions of that product on a
quick-turnaround basis. We expect that the demand for engineering and
quick-turnaround prototype and preproduction manufacturing services will
increase as OEMs' products become more complex and as product life cycles
shorten. Materials procurement and handling services provided by us include
planning, purchasing, warehousing and financing of electronic components and
enclosures used in the assemblies and systems.
MANUFACTURING AND ENGINEERING
Manufacturing Processes. We produce complex, technologically advanced
surface mount and pin-through-hole assemblies, backplane assemblies and
multilayer printed circuit boards, custom cable assemblies, enclosures and full
systems that meet increasingly tight tolerances and specifications demanded by
OEMs. Multilayering, which involves placing multiple layers of electrical
circuitry on a single printed circuit board or backplane, expands the number of
circuits and components that can be contained on the interconnect product and
increases the operating speed of the system by reducing the distance that
electrical signals must travel. Increasing the density of the circuitry in each
layer is accomplished by reducing the width of the circuit tracks and placing
them closer together on the printed circuit board or backplane. Today, we are
capable of efficiently producing commercial quantities of printed circuit boards
with up to 60 layers and circuit track widths as narrow as three mils. The
manufacture of complex multilayer interconnect products often requires the use
of sophisticated circuit interconnections between certain layers (called "blind
or buried vias") and adherence to strict electrical characteristics to maintain
consistent circuit transmission speeds (referred to as "controlled impedance").
These technologies require very tight lamination and etching tolerances and are
especially critical for printed circuit boards with ten or more layers.
The manufacture of printed circuit boards involves several steps: etching
the circuit image on copper-clad epoxy laminate, pressing the laminates together
to form a panel, drilling holes and depositing copper or other conductive
material to form the inter-layer electrical connections and, lastly, cutting the
panels to shape. Certain advanced interconnect products require additional
critical steps, including dry film imaging, photoimageable soldermask
processing, computer controlled drilling and routing, automated plating and
process controls and achievement of controlled impedance. Manufacture of printed
circuit boards used in backplane assemblies requires specialized expertise and
equipment because of the larger size of the backplane relative to other printed
circuit boards and the increased number of holes for component mounting.
In addition to volume fabrication of printed circuit boards, Sanmina has
facilities which specialize in prototype and pre-production manufacturing.
Prototypes typically require lead times of three to seven days, and often as
short as 24 hours. Prototype development at these facilities has included
multilayer printed circuit boards of up to 60 layers, embedded discrete
components, heavy copper substrates, sequential lamination, cavity substrates,
thermal management products, single chip carriers, planar magnetics, advanced
surface finishes and various high performance substrates for the high frequency
microwave market. These facilities also support advanced attachment technologies
such as Direct Chip Attach (DCA) and High Density Interconnect (HDI). In
combining the design of a printed circuit with the manufacture of the prototype,
Sanmina can reduce the length of the design/manufacture cycle. By working
closely with customers at the design and prototype stage, Sanmina believes it
strengthens long-term relationships with its customers and gains an advantage in
securing a preferred vendor status when customers begin volume production.
Pre-production is the manufacture of limited quantities of electronic
interconnects during the transition period from prototype to volume production.
Pre-production generally requires quick-turn delivery to accommodate
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time-to-volume pressures or as a temporary solution for unforeseen customer
demands. Pre-production is done both in the quick-turn prototype and volume
production facilities.
The manufacture of surface mount and pin-through-hole assemblies involves
the attachment of various electronic components, such as integrated circuits,
capacitors, microprocessors and resistors to printed circuit boards. The
manufacture of backplane assemblies involves attachment of electronic
components, including printed circuit boards, integrated circuits and other
components, to the backplane, which is a large printed circuit board that we
also manufacture. We use surface mount, pin-through-hole and press-fit
technologies in backplane assembly.
The integration of all these processes allows us to offer an end to end
total EMS solution.
Substantially all of our manufacturing facilities are certified under ISO
9002, a set of standards published by the International Organization of
Standardization and used to document, implement and demonstrate quality
management and assurance systems in design and manufacturing. As part of the ISO
9002 certification process, we have developed a quality systems manual and an
internal system of quality controls and audits. Although ISO 9002 certification
is of particular importance to the companies doing business in the European
Community, we believe that United States electronics manufacturers are
increasing their use of ISO 9002 registration as a criteria for suppliers.
In addition to ISO 9002 certification, the majority of our facilities are
BellCore, British Approval Board for Telecommunications, or BABT, and
Underwriters Laboratories, or UL, compliant. These qualifications establish
standards for quality, manufacturing process control and manufacturing
documentation and are required by many OEMs in the electronics industry,
including suppliers to AT&T and the Regional Bell Operating Companies.
Facilities. We manufacture our products in 56 decentralized plants,
consisting of 29 electronics assembly facilities, 18 printed circuit board
fabrication facilities, 3 cable assembly facilities, 3 enclosure assembly
facilities and 3 other manufacturing facilities. Generally, each of our
decentralized plants has its own production, purchasing, and materials
management and quality capabilities located on site. The production expertise of
some plants overlaps, which enables us to allocate production based on product
type and available capacity at one or more plants. With assembly facilities
located in major electronics industry centers throughout the country, including
Silicon Valley, Southern California, the Dallas-Forth Worth area, the Research
Triangle Park area, New England, the greater Chicago area and Northern Alabama,
as well as international locations including Ireland, China, France, Canada,
Malaysia, Finland and Sweden, we are also able to allocate production based on
geographic proximity to the customer, process capabilities and available
capacity. Decentralized plants can focus on particular product types and respond
quickly to customers' specific requirements. We believe that decentralized
facilities also allow us to achieve improved accountability, quality control and
cost control.
In November 1998, we entered into a lease with an option to purchase a
330,000 square foot campus facility located in San Jose, California. The
facility consists of four buildings on a single site. We consolidated our
corporate headquarters and some of our San Jose area assembly operations at this
facility. As of July 2, 2000, this campus site was fully occupied. We believe
that our existing facilities, together with facilities expansion and upgrades
that are in process or that we are currently evaluating, are adequate to meet
our reasonably foreseeable requirements for at least the next two years. We
continually evaluate our expected future facilities requirements.
TECHNOLOGY DEVELOPMENT
Our close involvement with our customers at the early stages of their
product development positions us at the leading edge of technical innovation in
the manufacturing of SMT and PTH assemblies, backplane assemblies, and printed
circuit boards. We selectively seek orders that require the use of
state-of-the-art materials or manufacturing techniques in order to further
develop our manufacturing expertise. Current areas of manufacturing process
development include reducing circuit widths and hole sizes, establishing new
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standards for particle contamination and developing new manufacturing processes
for the use with new materials and new surface mount connector and component
designs.
Recent developments in the electronics industry have necessitated
improvements in the types of laminate used in the manufacture of interconnect
products. New laminate materials may contain new chemical formulations to
achieve better control of flow, resin systems with high glass transition
temperatures, reduced surface imperfections and greatly improved dimensional
stability. Future generations of interconnect products will require ultra fine
lines, multilayers of much greater complexity and thickness, and extremely small
holes in the 3 to 10 mil range. The materials designed to meet these
requirements, such as BT epoxy, cyanate esters, polyamide quartz, and Kevlar
epoxy, are beginning to appear in the marketplace. Widespread commercial use of
these materials will depend upon statistical process control and improved
manufacturing procedures to achieve the required yields and quality. In
addition, Hadco has developed a material known as Buried Capacitance as well as
various other microvia processes which are designed to provide improved
electrical performance and greater interconnect densities on printed circuit
boards.
We have developed expertise and techniques, which we use in the manufacture
of circuit boards, backpanels and subsystems. Generally, we rely on common law
trade secret protection and on confidentiality agreements with our employees to
protect our expertise and techniques. Although we hold several patents, we
believe that patents and other intellectual property rights are not of
fundamental importance to our business.
SUPPLIER RELATIONSHIPS
We order materials and components based on purchase orders received and
accepted and seek to minimize our inventory of materials or components that are
not identified for use in filling specific orders.
Historically, the majority of raw materials used in Sanmina's manufacture
of printed circuit boards and components used in backplane and system assemblies
have been readily available. However, recent shortages of electronic components
have become increasingly prevalent and have affected the ability of Sanmina and
other manufacturers to complete and ship assemblies on a timely basis. Component
shortages can force Sanmina to delay shipments to customers, which could harm
Sanmina's results of operations for a particular fiscal period and could also
expose Sanmina to contractual penalties for failure to complete deliveries as
scheduled. Accordingly, component shortages could harm Sanmina's business,
financial condition and results of operations.
INTELLECTUAL PROPERTY
Sanmina holds various United States and foreign patents directed to printed
circuit boards and methods of manufacturing printed circuit boards. Although
Sanmina seeks to protect certain proprietary technology and other intangible
assets through patents and trademark filings, it has relatively few patents and
relies primarily on trade secret protection. There can be no assurance that
Sanmina will be able to protect its trade secrets or that others will not
independently develop substantially equivalent proprietary information and
techniques or otherwise gain access to Sanmina's trade secrets. The future
success of Sanmina will depend on the continued development of processes and
capabilities. Sanmina believes that its accumulated experience with respect to
materials and process technology is also important to its operations.
ENVIRONMENTAL CONTROLS
Proper waste disposal is a major consideration for printed circuit board
manufacturers because metals and chemicals are used in the manufacturing
process. Water used in the printed circuit board manufacturing process must be
treated to remove metal particles and other contaminants before it can be
discharged into municipal sanitary sewer systems. In addition, although the
electronics assembly process generates significantly less wastewater than
printed circuit board fabrication, maintenance of environmental controls is also
important in the electronics assembly process. Each of our printed circuit board
and electronics assembly plants has personnel responsible for monitoring
environmental compliance.
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Each plant operates under effluent discharge permits issued by the
appropriate governmental authority. These permits must be renewed periodically
and are subject to revocation in the event of violations of environmental laws.
There can be no assurance that violations will not occur in the future as a
result of human error, equipment failure or other causes. In the event of a
future violation of environmental laws, we could be held liable for damages and
for the costs of remedial actions and could be also subject to revocation of
effluent discharge permits. Any such revocation could require us to cease or
limit production at one or more of our facilities, thereby having an adverse
impact on our results of operations. We are also subject to environmental laws
relating to the storage, use and disposal of chemicals, solid waste and other
hazardous materials as well as air quality regulations. Furthermore,
environmental laws could become more stringent over time, and the costs of
compliance with and penalties associated with violation of more stringent laws
could be substantial.
In November 1997, we acquired Elexsys, which, by virtue of such
acquisition, became our wholly owned subsidiary. Several facilities owned or
occupied by Elexsys at the time of the acquisition, or formerly owned or
occupied by Elexsys or companies acquired by Elexsys, had either soil
contamination or contamination of groundwater underneath or near the facility.
Contamination was discovered at Elexsys' Irvine, California facility in 1989 and
Elexsys voluntarily installed a groundwater remediation system at the facility
in 1994. Additional investigation is being undertaken by other parties in the
area at the request of the California Regional Water Quality Control Board. It
is unknown whether any additional remediation activities will be required as a
result of such investigations or whether any third party will bring claims
against us alleging that they have been damaged in any way by the existence of
the contamination at the Irvine facility.
We have been required by the California Department of Toxic Substances
Control to undertake investigation of soil and/or groundwater at certain
facilities formerly owned or occupied by a predecessor company to Elexsys in
Mountain View, California. Depending upon the results of this soil sampling and
groundwater testing, we could be ordered to undertake soil and/or groundwater
cleanup. To date, we have not been ordered to undertake any soil or groundwater
cleanup activities at the Mountain View facilities, and do not believe any such
activities should be required. Test results received to date are not sufficient
to enable us to determine whether or not such cleanup activities are likely to
be mandated. Contamination has also been discovered at other current and former
Elexsys facilities and has been reported to the relevant regulatory agencies. No
remediation or further investigation of such contamination has been required by
regulatory agencies.
To date, the cost of the various investigations and the cost of operating
the remediation system at the Irvine facility have not been material to our
financial condition. However, in the event we are required to undertake
additional groundwater or soil cleanup, the costs of such cleanup are likely to
be substantial. We are currently unable to estimate the amount of such soil and
groundwater cleanup costs because no soil or groundwater cleanup has been
ordered and we cannot determine from available test results what remediation
activities, if any, are likely to be required. We believe, based on the limited
information currently available, that the cost of any groundwater or soil
clean-up that may be required would not harm our business, financial condition
and results of operations. Nevertheless, the process of remediating contaminated
soil and groundwater is costly, and if we are required to undertake substantial
remediation activities at one or more of the former Elexsys facilities, there
can be no assurance that the costs of such activities would not harm our
business, financial condition and results of operations.
Altron was advised in 1993 by Olin Corporation ("Olin") that contamination
resulting from activities of prior owners of property owned by Olin and located
close to the Altron manufacturing plant in Wilmington, Massachusetts, had
migrated under the Altron plant. Olin has assumed full responsibility for any
remediation activities that may be required and has agreed to indemnify and hold
Altron harmless from any and all costs, liabilities, fines, penalties, charges
and expenses arising from and relating to any action or requirement, whether
imposed by statute, ordinance, rule, regulation, order, decree or by general
principles of law to remediate, clean up or abate contamination emanating from
the Olin site. Although we believe that Olin's assumption of responsibility will
result in no remediation cost to Altron from the contamination, there can be no
assurance that Altron will not be subject to some costs regarding this matter.
We do not anticipate that such costs, if any, will be material to our financial
condition or results of operations.
9
<PAGE> 10
We have been named as a potentially responsible party at several
contaminated disposal sites as a result of the past disposal of hazardous waste
by companies we acquired or their corporate predecessors. While liabilities for
such historic disposal activities has not been material to our financial
condition to date, there can be no guarantee that past disposal activities will
not result in material liability to us in the future.
Hadco, which we acquired in June 2000, has several facilities that have
soil and/or groundwater contamination. These matters are described in greater
detail under "Factors Affecting Operating Results." We believe, based on the
limited information currently available, that the cost of any groundwater or
soil clean-up that may be required at these facilities would not materially harm
our business, financial condition and results of operations. Nevertheless, the
process of remediating contaminated soil and groundwater is costly, and there
can be no assurance that the costs of such activities would not harm our
business, financial condition and results of operations.
From 1974 to 1980, Hadco operated a printed circuit manufacturing facility
in Florida as a lessee. This property is the subject of a pending lawsuit in the
circuit court for Broward County, Florida (the "Florida Lawsuit") and an
investigation by the Florida Department of Environmental Protection ("FDEP"). In
connection with the investigation, Hadco and others have participated in
alternative dispute resolution regarding the site with an independent mediator.
Mediation sessions began in 1992 and continued through May 1998. In June 1995,
Hadco and Gould, Inc. ("Gould"), another prior lessee of the site, were joined
as third-party defendants in the pending Florida Lawsuit by a party who had
previously been named as a defendant when the Florida Lawsuit was commenced in
1993 by the FDEP. As a result of the mediation, a Settlement Agreement was
entered into among Hadco, Gould and the FDEP in March 1999. The third-party
complaints against Hadco and Gould in the pending Florida Lawsuit were
dismissed. The Settlement Agreement provides that Hadco and Gould will undertake
remedial action based on a Supplemental Contamination Assessment Report and a
later Feasibility Study, which has been prepared by a consultant to Hadco and
Gould and approved by the FDEP. The estimated cost of the recommended source
removal described in the Feasibility Study is approximately $165,000, and for
ongoing monitoring and remediation is approximately $2.1 million. Actual
remedial activities have not yet commenced.
In June 1997, the United States District Court in Los Angeles, California
approved and entered a Consent Decree among the EPA and 49 entities (including
Hadco) acting through the Casmalia Steering Committee ("CSC"). The Consent
Decree sets forth the terms and conditions under which the CSC will carry out
work aimed at final closure of the site. Certain closure activities will be
performed by the CSC. Later work will be performed by the CSC, if funded by
other parties. Under the Consent Decree, the settling parties will work with the
EPA to pursue the non-settling parties to ensure they participate in
contributing to the closure and long-term operation and maintenance of the
facility.
Sanmina has been notified by the City of Santa Clara, California ("City")
of a number of alleged wastewater discharge and other violations of
environmental laws by one of Sanmina's plants. The City is seeking recovery for
past costs incurred by the City in monitoring the plant's operations in the
amount of approximately $200,000. The notice from the City sets forth that the
penalties for the alleged violations could exceed $1,600,000. Sanmina has been
cooperating with the City to review the plant's operations to determine if
violations have occurred and to address concerns of the City with respect to
Plant operations. The City has notified Sanmina that it could file a civil
action to address the violations, but no civil suit has been filed to date.
BACKLOG
Our backlog was approximately $2.6 billion at September 30, 2000 and
approximately $688 million at October 2, 1999. Backlog consists of purchase
orders we received, including, in certain instances, forecast requirements
released for production under customer contracts. Cancellation and postponement
charges generally vary depending upon the time of cancellation or postponement,
and a certain portion of our backlog may be subject to cancellation or
postponement without significant penalty. Typically, a substantial portion of
our backlog is scheduled for delivery within the next six months.
10
<PAGE> 11
COMPETITION
Significant competitive factors in the market for advanced backplane
assemblies and printed circuit boards include product quality, responsiveness to
customers, manufacturing and engineering skills, and price. We believe that
competition in the market sectors we serve is based more on product quality and
responsive customer service and support than on price, in part because the cost
of interconnect products we manufacture is usually low relative to the total
cost of the equipment for which they are components, and in part because of the
greater importance of product reliability and prompt delivery to our customers.
We believe that our primary competitive strengths are our ability to provide an
end to end total EMS solution which includes responsive, flexible, short
lead-time manufacturing services, our engineering and manufacturing expertise
and our customer service support.
We face intense competition from a number of established competitors in our
various product markets. Certain of our competitors have greater financial and
manufacturing resources than we do, including significantly greater surface
mount assembly capacity. During periods of recession in the electronic industry,
our competitive advantages in the areas of quick-turnaround manufacturing and
responsive customer service may be of reduced importance to electronics OEMs,
who may become more price sensitive. In addition, captive interconnect product
manufacturers may seek orders in the open market to fill excess capacity,
thereby increasing price competition. Although we generally do not pursue
high-volume, highly price sensitive interconnect product business, we may be at
a competitive disadvantage with respect to price when compared to manufacturers
with lower cost structures, particularly those manufacturers with more extensive
offshore facilities where labor and other costs are lower.
EMPLOYEES
As of September 2000, we had approximately 24,000 full-time employees,
including approximately 23,500 in manufacturing and engineering, approximately
250 in marketing and sales and approximately 250 in general administration and
finance. None of our U.S. employees are represented by a labor union and we have
never experienced a work stoppage or strike. We believe our relationship with
our employees is good.
ITEM 2. PROPERTIES
Our principal facilities comprise an aggregate of approximately 5.6 million
square feet. Except for our 72,000 square foot Manchester, New Hampshire
facility, the 160,000 square foot facility occupied by Sanmina Cable Systems in
Carrollton, Texas, a 70,000 square foot facility located in Nashua, New
Hampshire, a 200,000 square foot facility located in Wilmington, Massachusetts,
a 104,000 square foot facility located in Woburn, Massachusetts, a 44,200 square
foot facility located in Irvine, California, a 197,600 square foot facility
located in Kenosha, Wisconsin, a 105,000 square foot facility located in
Guntersville, Alabama, a 52,000 square foot facility located in Dublin, Ireland,
a 282,000 square foot facility in Owego, New York, a 139,000 square foot
facility in Phoenix, Arizona, a 210,000 square foot facility in Derry, New
Hampshire, a 32,000 square foot facility in Hudson, New Hampshire, a 50,000
square foot facility in Mountain View, California, a 180,000 square foot
facility in Kuching, Malaysia, a 411,000 square foot facility in Shenzhen,
Peoples' Republic of China and a 87,000 square foot facility in Clinton, North
Carolina, all of the facilities are leased, and the leases for these facilities
expire between 2000 and 2009. The leases generally may be extended at our
option. We have 17 principal facilities located in the greater San Jose,
California area, with other facilities located in Southern California, Plano,
Texas, Richardson, Texas, San Antonio, Texas, Manchester, New Hampshire, Derry,
New Hampshire, Hudson, New Hampshire, the greater Boston, Massachusetts area,
Guntersville, Alabama, Durham, North Carolina, Clinton, North Carolina, Salt
Lake City, Utah, Kenosha, Wisconsin, Wilmington and Woburn, Massachusetts, the
greater Chicago area, Calgary, Canada, Toronto, Canada, Dublin, Ireland,
Kuching, Malaysia, Shenzhen, Peoples' Republic of China, Neuva Rosita, Cachuila,
Mexico, Chateaudun, France, Ornskoldsvik, Sweden, Sundsvall, Sweden,
Tikkaklaski, Finland and Aanekiski, Finland.
In November 1998, we entered into a lease with an option to purchase a
330,000 square foot campus facility located in San Jose, California. The
facility consists of four buildings on a single site. We consolidated
11
<PAGE> 12
our corporate headquarters and some of our San Jose area assembly operations at
this facility. As of July 2, 2000, these buildings were fully occupied. We
believe that our existing facilities, together with facilities expansions and
upgrades that are in process or that we are currently evaluating, are adequate
to meet our reasonably foreseeable requirements for at least the next two years.
We continually evaluate our expected future facilities requirements.
ITEM 3. LEGAL PROCEEDINGS
Sanmina and certain of its subsidiaries, namely Hadco, Elexsys and Altron,
are involved in various administrative proceedings related to environmental
matters. These matters are described in greater detail under "Factors Affecting
Operating Results." Although Sanmina could incur significant costs relating to
these matters, Sanmina believes, on the limited information currently available,
that the cost of any remediation that may be required at these facilities would
not materially harm our business, financial condition or results of operations.
From time to time, Sanmina is a party to litigation which arises in the
ordinary course of business. Sanmina believes that the resolution of this
litigation will not materially harm Sanmina's business, financial condition or
results of operations.
Sanmina is not currently a party to any material pending legal proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
12
<PAGE> 13
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS
The information required by this item is incorporated by reference to pages
26 and 27 of the Registrant's 2000 annual report to stockholders under the
caption "quarterly results."
ITEM 6. SELECTED FINANCIAL DATA
The information required by this item is incorporated by reference to page
20 of the Registrant's 2000 annual report to stockholders under the caption
"Selected Financial Data."
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The information required by this item is incorporated by reference to pages
21 through 32 of the Registrant's 2000 annual report to stockholders under the
caption "Management's Discussion and Analysis of Financial Condition and Results
of Operations."
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this item is incorporated by reference to pages
34 through 51 of the Registrant's 2000 annual report to stockholders.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
13
<PAGE> 14
PART III
Certain information required by Part III is omitted from this Report on
Form 10-K in that the Registrant will file a definitive proxy statement within
120 days after the end of its fiscal year pursuant to Regulation 14A with
respect to the 2001 Annual Meeting of Stockholders (the "Proxy Statement") to be
held on January 29, 2001 and certain information included therein is
incorporated herein by reference.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by this item relating to directors is incorporated
by reference to the information under the caption "Proposal No. 1 -- Election of
Directors" in the Proxy Statement.
DIRECTORS AND EXECUTIVE OFFICERS
The directors and executive officers of Sanmina, and certain information
about them as of December 2000, are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Jure Sola............................. 49 Chairman, Chief Executive Officer and Director(1)
Randy W. Furr......................... 46 President, Chief Operating Officer and Director
Rick R. Ackel......................... 47 Executive Vice President and Chief Financial Officer
Michael J. Landy...................... 46 President of European Operations
John Bolger........................... 54 Director(2)
Neil Bonke............................ 59 Director(1)(2)(3)
Mario Rosati.......................... 54 Director
Joseph Schell......................... 54 Director(2)
Bernard Vonderschmitt................. 77 Director(1)(3)
</TABLE>
---------------
(1) Member of the Compensation Committee
(2) Member of the Audit Committee
(3) Member of the Officer Stock Committee
Mr. Sola co-founded Sanmina in 1980 and initially held the position of Vice
President of Sales and Marketing and was responsible for the development and
growth of Sanmina's sales organization. He became Vice President and General
Manager in October 1987 with responsibility for all manufacturing operations as
well as sales and marketing. Mr. Sola was elected President in October 1989 and
has served as Chairman of the Board and Chief Executive Officer since April
1991. Mr. Sola relinquished the title of President when Mr. Furr was appointed
to such position in March 1996.
Mr. Furr joined Sanmina as Vice President and Chief Financial Officer in
August 1992. In March 1996, Mr. Furr was appointed President and Chief Operating
Officer. In December 1999, Mr. Furr was appointed to Sanmina's board of
directors. From April to August 1992, Mr. Furr was Vice President and Chief
Financial Officer of Aquarius Systems Inc. North America ("ASINA"), a
manufacturer of personal computers. Prior to working at ASINA, he held numerous
positions in both financial and general management for General Signal
Corporation during a 13 year period, serving most recently as Vice President and
General Manager of General Signal Thinfilm Company. Mr. Furr is a Certified
Public Accountant.
Mr. Ackel became Chief Financial Officer and Executive Vice President at
Sanmina on June 29, 2000. Mr. Ackel joined Sanmina after 25 years of experience
with Arthur Andersen LLP. As a partner for Arthur Andersen LLP, Mr. Ackel worked
with a number of high technology and manufacturing clients. He has a Bachelor of
Science Degree from California State University at Hayward, is a Certified
Public Accountant and a member of the California State Society of CPA's and the
AICPA.
Mr. Landy was promoted to President of European Operations in March 2000.
He was formerly Executive Vice President of Sales and Marketing at Sanmina in
October 1997 until his European assignment. He was named an Executive Officer of
Sanmina in October 1998. He joined Sanmina in August 1993 as
14
<PAGE> 15
General Manager of Sanmina's Richardson, Texas operations and in 1995 was
promoted to Vice President Assembly Operations for the Central Region of the
United States. Prior to his employment with Sanmina, Mr. Landy held a number of
senior management positions in the operations and quality departments with a
North American telecommunications corporation.
Mr. Bolger has been a director of Sanmina since 1994. He is a retired Vice
President of Finance and Administration of Cisco Systems, Inc., a manufacturer
of computer networking systems. Mr. Bolger is currently an independent business
consultant and serves as a director of Wind River Systems, Inc., TCSI, Inc., JNI
Corporation, Integrated Device Technology, Inc. and Mission West Properties,
Inc.
Mr. Bonke has been a director of Sanmina since 1995. He also serves on the
Board of Directors of Electroglas, Inc., Boxer Cross Inc. and SpeedFam
International, all semiconductor equipment companies. He is also on the board
for San Jose State University Foundation. Mr. Bonke previously served as the
Chairman of the Board and Chief Executive Officer of Electroglas, Inc. from
April 1993 to April 1996.
Mr. Rosati has been a director of Sanmina since 1997. He has been a member
of the law firm Wilson Sonsini Goodrich & Rosati, Professional Corporation since
1971. Mr. Rosati is a director of Aehr Test Systems, a manufacturer of computer
hardware testing systems, Genus, Inc., a semiconductor equipment manufacturer,
Ross Systems, Inc., a software company, Vivus, Inc., a pharmaceutical company,
MyPoints.com, Inc., a web and email-based direct marketing company, Symyx
Technologies, Inc., a combinatorial materials science company and The Management
Network Group, Inc., a management consulting firm focused on the
telecommunications industry, all publicly-held companies. He is also a director
of several privately-held companies.
Mr. Schell was appointed to the board of directors in December 1999. He is
currently Chairman of Global Technology Investment Banking of Merrill Lynch &
Co. in Palo Alto, California. From 1985 to 1999, he served as Senior Managing
Director at Montgomery Securities. Mr. Schell also serves on the board of
directors of Dycom Industries, Inc. and the Good Guys, Inc., both publicly
traded companies.
Mr. Vonderschmitt has been a director of Sanmina since October 1990. He
co-founded Xilinx, Inc., a manufacturer of field programmable gate array
semiconductor products and related system software, served as its Chief
Executive Officer and as a director from its inception in February 1984 through
February 1996, and has served as the Chairman of its Board of Directors since
February, 1996. He is also a director of Credence Systems Corporation, a
publicly held company.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this item is incorporated by reference to the
information under the caption "Executive Compensation" in the Proxy Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this item is incorporated by reference to the
information under the caption "Record Date and Stock Ownership" in the Proxy
Statement.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this item is incorporated by reference to the
information under the caption "Certain Transactions" in the Proxy Statement.
15
<PAGE> 16
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a)1. FINANCIAL STATEMENTS
The following Financial Statements of Sanmina Corporation and Report of
Independent Public Accountants are incorporated by reference to pages 34 through
52 of the Registrant's 2000 annual report to stockholders:
Report of Independent Public Accountants
Consolidated Balance Sheets, As of September 30, 2000 and October 2, 1999
Consolidated Statements of Operations, Years Ended September 30, 2000,
October 2, 1999 and September 30, 1998
Consolidated Statements of Comprehensive Income, Years Ended September 30,
2000, October 2, 1999 and September 30, 1998
Consolidated Statements of Stockholders' Equity, Years Ended September 30,
2000, October 2, 1999 and September 30, 1998
Consolidated Statements of Cash Flows, Years Ended September 30, 2000,
October 2, 1999 and September 30, 1998
Notes to Consolidated Financial Statements
2. FINANCIAL STATEMENT SCHEDULE
The following financial statement schedule of Sanmina Corporation is filed
as part of this report on Form 10-K and should be read in conjunction with the
Financial Statements of Sanmina Corporation incorporated by reference herein:
Schedule II -- Valuation and Qualifying Accounts
Report of Independent Public Accountants on Schedule
All other schedules are omitted because they are not applicable or the
required information is shown in the Financial Statements or the notes thereto.
3. EXHIBITS
(a) Refer to (c) below.
(b) Reports on Form 8-K
On July 7, 2000, Sanmina Corporation filed a report on Form 8-K relating to
the merger with Hadco.
On September 5, 2000, Sanmina Corporation filed a report on Form 8-K
relating to the restatement for the mergers with Hadco and Essex.
On September 15, 2000, Sanmina Corporation filed a report on Form 8-K
relating to the offering of zero coupon convertible subordinated notes.
16
<PAGE> 17
(c) Exhibits
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
3.1 Amended and Restated Certificate of Incorporation(14).
3.2 Bylaws(15).
10.2(4) Amended 1990 Incentive Stock Plan.
10.3(1) 1993 Employee Stock Purchase Plan.
10.9(k)(2) Amended and Restated Credit Agreement dated as of August 18,
1993 among Sanmina Corporation, Chemical Bank and other
lenders.
10.9(k)(5) Amendment dated July 27, 1995 to Amended and Restated Credit
Agreement dated August 18, 1993.
10.9(1)(2) Revolving Credit Note, $12,000,000.00, Chemical Bank.
10.10(1) Lease for premises at 2109 O'Toole Avenue, Suites A - E, San
Jose, California (Portion of Plant I).
10.11(1) Lease for premises at 2101 O'Toole Avenue, San Jose,
California (Portion of Plant I).
10.12(1) Lease for premises at 2539 Scott Boulevard, Santa Clara,
California (Plant III).
10.14(1) Lease for premises at 2060-2068 Bering Drive, San Jose,
California (Plant II).
10.15(1) Lease for premises at 4220 Business Center Drive, Fremont,
California (Plant V).
10.16(1) Lease for premises at McCarthy Boulevard, Milpitas,
California (Plant VI).
10.17(1) Lease for premises at 2121 O'Toole Avenue, San Jose,
California (Corporate Headquarters).
10.19(2) Lease for premises at 1250 American Parkway, Richards, Texas
(Plant VII).
10.20(2) Lease for premises at 6453 Kaiser Drive, Fremont, California
(Plant VIII).
10.21(3) Asset Purchase Agreement dated September 28, 1994 between
Registrant and Comptronix Corporation.
10.22(4) Lease for premises at 355 East Trimble Road, San Jose,
California.
10.23(5) Stock Purchase Agreement dated May 31, 1995 between Sanmina
Corporation, Assembly Solutions, Inc. and the principal
stockholders of Assembly Solutions, Inc.
10.24(6) Indenture dated August 15, 1995 between Registrant and
Norwest Bank Minnesota, N.A. as Trustee.
10.25(7) Asset Purchase Agreement dated September 20, 1996 between
Registrant and Comptronix Corporation.
10.26(9) Agreement and Plan of Merger dated July 22, 1997 among
Registrant, SANM Acquisition Subsidiary, Inc. and Elexsys
International, Inc.
10.26(10) Agreement and Plan of Merger dated September 2, 1998 among
Registrant, SANM Acquisition Subsidiary, Inc. and Altron,
Inc.
10.27(11) Synthetic lease agreement.
10.28(12) Agreement and Plan of Merger dated March 30, 1999 among
Registrant, SANM Acquisition Subsidiary, Inc. and
Manu-Tronics, Inc.
10.29(13) 1999 Stock Plan and form of agreement thereunder.
10.30(16) Agreement and Plan of Merger dated as of April 17, 2000
Among the Registrant, Hadco Corporation and SANM Acquisition
Subsidiary, Inc., as amended.
</TABLE>
17
<PAGE> 18
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
10.31(17) Indenture dated September 13, 2000 between Registrant and
Wells Fargo Bank, National Association as Trustee.
13 Annual Report.
21 Subsidiaries of the Registrant.
23 Consent of Arthur Andersen LLP, independent public
accountants.
27 Financial Data Schedule.
</TABLE>
---------------
(1) Incorporated by reference to the like-numbered exhibits previously filed
with Registrant's Registration Statement on Form S-1, No. 33-70700 filed
with the Securities and Exchange Commission ("SEC") on February 19, 1993.
(2) Incorporated by reference to the like-numbered exhibits previously filed
with Registrant's Registration Statement on Form S-1 No. 33-70700 filed
with the SEC on October 22, 1993.
(3) Incorporated by reference to Exhibit No. 2 previously filed with
Registrant's Report on Form 8-K filed with the SEC on October 28, 1994.
(4) Incorporated by reference to the like-numbered exhibits previously filed
with Registrant's Report on Form 10-K filed with the SEC on December 29,
1994.
(5) Incorporated by reference to the like-numbered exhibit previously filed
with Registrant's Report on Form 10-Q filed with the SEC on July 31, 1995.
(6) Incorporated by reference to the like-numbered exhibit previously filed
with Registrant's Report on Form 10-K for the fiscal year ended September
30, 1995.
(7) Incorporated by reference to Exhibit 2 previously filed with the
Registrant's Report on Form 8-K filed with the SEC on November 15, 1996.
(8) Incorporated by reference to the like numbered exhibit previously filed
with Registrant's Report on Form 10-K for the fiscal year ended September
30, 1997.
(9) Incorporated by reference to Exhibit 2.1 previously filed with Registrant's
Report on Form 8-K filed with the SEC on November 21, 1997.
(10) Incorporated by reference to Exhibit 2.1 previously filed with Registrant's
Report on Form 8-K filed with the SEC on September 4, 1998.
(11) Incorporated by reference to the like-numbered exhibit previously filed
with Registrant's Report on Form 10-K for the fiscal year ended September
30, 1998.
(12) Incorporated by reference to Exhibit 2.1 previously filed with Registrant's
Report on Form 8-K filed with the SEC on April 29, 1999.
(13) Incorporated by reference to the like-numbered exhibit previously filed
with Registrant's Report on Form S-8 filed with the SEC on May 25, 1999.
(14) Incorporated by reference to Exhibit 3.2 previously filed with the
Registrant's Report on Form 10-K for the fiscal year ended September 30,
1998.
(15) Incorporated by reference to Exhibit 3.3 previously filed with the
Registrant's Registration Statement on Form S-1, No. 33-70700 filed with
the Securities and Exchange Commission on February 19, 1993.
(16) Incorporated by reference to Exhibit 2.1 previously filed with Registrant's
Registration Statement on Form S-4, No. 333-37526 filed with the SEC on May
22, 2000.
(17) Incorporated by reference to Exhibit 4.1 previously filed with Registrant's
Registration Statement on Form S-3, No. 333-50282 filed with the SEC on
November 20, 2000.
18
<PAGE> 19
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: December 14, 2000 SANMINA CORPORATION
(Registrant)
By /s/ RANDY W. FURR
------------------------------------
Randy W. Furr
President and Chief Operating
Officer
By /s/ RICK R. ACKEL
------------------------------------
Rick R. Ackel
Executive Vice President and
Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <C> <S>
/s/ JURE SOLA Chairman, Chief Executive December 14, 2000
----------------------------------------------------- Officer and Director
Jure Sola (Principal Executive
Officer)
/s/ RANDY W. FURR President, Chief Operating December 14, 2000
----------------------------------------------------- Officer and Director
Randy W. Furr
/s/ RICK R. ACKEL Executive Vice President and December 14, 2000
----------------------------------------------------- Chief Financial Officer
Rick R. Ackel (Principal Financial and
Accounting Officer)
/s/ NEIL BONKE Director December 14, 2000
-----------------------------------------------------
Neil Bonke
/s/ JOHN BOLGER Director December 14, 2000
-----------------------------------------------------
John Bolger
/s/ MARIO M. ROSATI Director December 14, 2000
-----------------------------------------------------
Mario M. Rosati
/s/ JOSEPH M. SCHELL Director December 14, 2000
-----------------------------------------------------
Joseph M. Schell
/s/ BERNARD VONDERSCHMITT Director December 14, 2000
-----------------------------------------------------
Bernard Vonderschmitt
</TABLE>
19
<PAGE> 20
FINANCIAL STATEMENT SCHEDULE
The financial statement Schedule II -- VALUATION AND QUALIFYING ACCOUNTS is
filed as part of this Form 10-K.
SANMINA CORPORATION
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
(IN THOUSANDS)
<TABLE>
<CAPTION>
BALANCE AT CHARGED TO BALANCE AT
BEGINNING OF COSTS AND END OF
PERIOD EXPENSES DEDUCTIONS PERIOD
------------ ---------- ---------- ----------
<S> <C> <C> <C> <C>
Allowance for Doubtful Accounts
Fiscal year ended September 30, 1998...... $ 6,445 $ 2,822 $ 1,344 $ 7,923
Fiscal year ended October 2, 1999......... 7,923 5,388 2,371 10,940
Fiscal year ended September 30, 2000...... 10,940 20,595 3,703 27,832
Plant closing, Relocation, Merger and
Restructuring Reserve
Fiscal year ended September 30, 1998...... $ -- $ 8,481 $ 7,025 $ 1,456
Fiscal year ended October 2, 1999......... 1,456 22,354 18,322 5,488
Fiscal year ended September 30, 2000...... 5,488 47,201 35,767 16,922
</TABLE>
S-1
<PAGE> 21
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON SCHEDULE
To the Board of Directors and Stockholders
of Sanmina Corporation:
We have audited, in accordance with generally accepted auditing standards,
the financial statements included in Sanmina Corporation's annual report to
shareholders incorporated by reference in this Form 10-K, and have issued our
report thereon dated October 20, 2000. Our audit was made for the purpose of
forming an opinion on those financial statements taken as a whole. The schedule
at Item 14(a)2 is the responsibility of Sanmina's management and is presented
for purposes of complying with the Securities and Exchange Commission's rules
and is not part of the basic financial statements. This schedule has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, fairly states in all material respects the
financial data required to be set forth therein in relation to the basic
financial statements taken as a whole.
/s/ ARTHUR ANDERSEN LLP
San Jose, California
October 20, 2000
S-2
<PAGE> 22
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
13 Annual Report
21 Subsidiaries of the Registrant
23 Consent of Arthur Andersen LLP, Independent Public
Accountants
27 Financial Data Schedule
</TABLE>
