UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

 

April 26, 2011

Date of Report (date of earliest event reported)

 

SANMINA-SCI CORPORATION

(Exact name of registrant as specified in its charter)

 

Delaware

 

000-21272

 

77-0228183

(State or other jurisdiction of
incorporation)

 

(Commission File Number)

 

(I.R.S. Employer Identification No.)

 

2700 North First Street

San Jose, California 95134

(Address of principal executive offices, including zip code)

 

(408) 964-3500

(Registrant’s telephone number, including area code)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

o            Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o            Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4c))

 

 

 



 

Item 7.01

 

Regulation FD Disclosure.

 

The information set forth in this Item 7.01 is intended to be furnished under Item 7.01 of Form 8-K (Regulation FD Disclosure).  This information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section.  In addition, this information shall not be incorporated by reference into any registration statement filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.

 

To satisfy its obligations under Regulation FD, Sanmina-SCI Corporation (the “Company”) is furnishing updated information regarding its business that is separately being provided to investors.

 

Financial Information for Subsidiaries that will not be Guarantors of Certain of our Debt

 

For the quarter ended April 2, 2011, our consolidated subsidiaries that will not be guarantors of certain of our debt had net sales (excluding intercompany sales) of approximately $507.9 million, and at April 2, 2011 those subsidiaries had assets (excluding intercompany obligations) of approximately $1.8 billion and debt and other liabilities of a type required to be reflected on a balance sheet in accordance with U.S. generally accepted accounting principles of approximately $755.8 million (including trade payables but excluding intercompany obligations).  These figures exclude various accounts related to income tax that are recorded at the corporate level rather than at the subsidiary level.

 

Ratio of Earnings to Fixed Charges

 

 

 

Fiscal Year Ended

 

Six Months Ended

 

 

 

September 30,
2006

 

September 29,
2007

 

September 27,
2008

 

October 3, 2009

 

October 2, 2010

 

April 3, 2010

 

April 2, 2011

 

 

 

 

 

 

 

 

 

 

 

 

 

(unaudited)

 

 

 

(in thousands)

 

Ratio of earnings to fixed charges (1)

 

 

 

 

0.1

 

2.2

 

2.3

 

2.0

 

 


(1)          The ratio of earnings to fixed charges was computed by dividing earnings by fixed charges.  For purposes of calculating the ratios, “earnings” consists of income (loss) before income taxes and loss from equity investments plus fixed charges, and “fixed charges” consists of interest expense, amortization of debt discount and debt issuance costs, and the portion of rental expense estimated to represent interest expense.  We believe that one-third of total rental expense is a reasonable estimate of the interest component of rental expense.  Earnings for fiscal 2006, fiscal 2007 and fiscal 2008 were insufficient to cover fixed charges by approximately $174.9 million for fiscal 2006, $1.1 billion for fiscal 2007 and $490.3 million for fiscal 2008, respectively.  The loss before income taxes for fiscal 2006, fiscal 2007 and fiscal 2008 included goodwill impairment and write down of long-lived assets losses of $19.0 million, $1.0 billion and $483.7 million, respectively.

 

2



 

Selected Non-GAAP Financial Information

 

 

 

Fiscal Year Ended

 

Six Months Ended

 

 

 

September 30,
2006

 

September 29,
2007

 

September 27,
2008

 

October 3, 2009

 

October 2, 2010

 

April 3, 2010

 

April 2, 2011

 

 

 

 

 

 

 

 

 

 

 

 

 

(unaudited)

 

 

 

(in thousands)

 

Other Financial Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA (1)

 

$

54,762

 

$

(890,059

)

$

(288,951

)

$

85,654

 

$

333,009

 

$

166,433

 

$

158,259

 

Adjusted EBITDA (1)

 

288,792

 

206,510

 

291,896

 

176,961

 

322,024

 

144,371

 

169,755

 

 


(1)          For the periods presented, EBITDA represents earnings before interest income, interest expense, depreciation and amortization, provision for (benefit from) income taxes, income from discontinued operations and cumulative effect of accounting changes.  We use a non-GAAP EBITDA financial measure because we believe EBITDA provides useful supplemental information to management and investors regarding the performance of our business and measures the amount of income generated each period that could be used to service debt, pay taxes and fund capital expenditures.  Adjusted EBITDA represents EBITDA, as adjusted for impairment of goodwill and other assets, loss (gain) on sales of assets, customer bankruptcies, contingency items expected to reverse, other (income) expense, loss (gain) on extinguishment of debt, in-process research and development, integration costs, restructuring costs, stock compensation expense and stock option investigation costs.  We have furnished a non-GAAP adjusted EBITDA financial measure because we believe it provides useful supplemental information to management and investors.  Our management also uses these non-GAAP financial measures to (i) make more meaningful period-to-period comparisons of our operations, both internally and externally, (ii) guide management in assessing performance of the business, internally allocating resources and making decisions in furtherance of our strategic plan, (iii) provide investors with a better understanding of how management plans and measures the business and (iv) provide investors with a better understanding of the ongoing, core business.  We believe some investors may find EBITDA and adjusted EBITDA to be useful adjuncts to net income (loss) and other measures under U.S. GAAP.  EBITDA and adjusted EBITDA do not represent, and should not be considered a substitute for, operating income (loss), net income (loss), operating cash flows or other measures of performance prepared in accordance with U.S. GAAP.  Our definitions of EBITDA and adjusted EBITDA may not be comparable to those reported by other companies and do not correspond to definitions of EBITDA used as a defined term in any of our debt documents.  Below is a reconciliation of our net income (loss) from operations to EBITDA and adjusted EBITDA for each of the five fiscal years in the period ended October 2, 2010 and for each of the six month periods ended April 3, 2010 and April 2, 2011.

 

 

 

Fiscal Year Ended

 

Six Months Ended

 

 

 

September 30,
2006

 

September 29,
2007

 

September 27,
2008

 

October 3,
2009

 

October 2,
2010

 

April 3, 2010

 

April 2, 2011

 

 

 

 

 

 

 

 

 

 

 

 

 

(unaudited)

 

 

 

(in thousands)

 

Net income (loss) as reported

 

$

(143,157

)

$

(1,136,257

)

$

(487,949

)

$

(137,822

)

$

122,435

 

$

69,473

 

$

41,424

 

Adjustments for EBITDA:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

(19,434

)

(28,766

)

(19,744

)

(6,499

)

(2,246

)

(978

)

(1,134

)

Interest expense

 

121,813

 

168,291

 

127,231

 

116,988

 

108,144

 

53,357

 

52,930

 

Depreciation and amortization

 

127,316

 

112,443

 

93,893

 

87,735

 

87,869

 

41,762

 

49,392

 

Provision for (benefit from) income taxes

 

(9,038

)

1,066

 

22,605

 

25,252

 

16,807

 

2,819

 

15,647

 

Income from discontinued operations

 

(19,908

)

(6,836

)

(24,987

)

 

 

 

 

Cumulative effect of accounting changes

 

(2,830

)

 

 

 

 

 

 

Total adjustments

 

197,919

 

246,198

 

198,998

 

223,476

 

210,574

 

96,960

 

116,835

 

EBITDA

 

54,762

 

(890,059

)

(288,951

)

85,654

 

333,009

 

116,433

 

158,259

 

Adjustments for adjusted EBITDA:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impairment for goodwill and other assets

 

19,000

 

1,042,541

 

483,699

 

10,178

 

1,100

 

500

 

85

 

Loss (gain) on sales of assets

 

 

 

 

 

(13,824

)

 

(2,025

)

Customer bankruptcies

 

 

 

 

10,000

 

759

 

 

(759

)

Contingency items expected to reverse

 

 

 

 

 

3,039

 

 

 

Other (income) expense(a)

 

16,491

 

(23,810

)

(3,553

)

5,970

 

(41,538

)

(39,775

)

(3,278

)

Loss (gain) on extinguishment of debt

 

84,600

 

3,251

 

2,237

 

(8,545

)

1,197

 

 

 

In-process research and development

 

2,600

 

 

 

 

 

 

 

Integration costs

 

 

200

 

160

 

573

 

3,247

 

424

 

878

 

Restructuring costs

 

85,231

 

42,587

 

81,376

 

56,687

 

19,868

 

6,785

 

8,671

 

Stock compensation expense

 

13,057

 

20,592

 

13,936

 

15,994

 

15,167

 

10,004

 

7,924

 

Stock option investigation costs

 

13,051

 

11,208

 

2,992

 

450

 

 

 

 

Total adjustments

 

234,030

 

1,096,569

 

580,847

 

91,307

 

(10,985

)

(22,062

)

11,496

 

Adjusted EBITDA

 

$

288,792

 

$

206,510

 

$

291,896

 

$

176,961

 

$

322,024

 

$

144,371

 

$

169,755

 

 


(a)          In each of fiscal 2010 and the six months ended April 3, 2010, other (income) expense includes approximately $35.6 million received by us in connection with a litigation settlement.

 

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SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

SANMINA-SCI CORPORATION

 

 

 

 

 

Date: April 26, 2011

By:

/s/ Michael R. Tyler

 

Name:

Michael R. Tyler

 

Title:

Executive Vice President, General Counsel and Corporate Secretary

 

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