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What changed in SANMINA CORP's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of SANMINA CORP's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+286 added−292 removedSource: 10-K (2025-11-13) vs 10-K (2024-11-27)

Top changes in SANMINA CORP's 2025 10-K

286 paragraphs added · 292 removed · 229 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

75 edited+7 added−12 removed83 unchanged
Biggest changeIn order to service to the specialized needs of customers in particular market segments, we have dedicated personnel, and in some cases facilities, with industry-specific capabilities and expertise. Expertise in Industry Standards and Regulatory Requirements. We maintain compliance with industry standards and regulatory requirements applicable to certain markets, including, among others, medical, automotive and defense and aerospace.
Biggest changeExpertise in Serving Diverse End Markets. We have experience in serving customers in the industrial, medical, defense and aerospace, automotive, communications networks and cloud infrastructure end markets. In order to service to the specialized needs of customers in particular market segments, we have dedicated personnel, and in some cases facilities, with industry-specific capabilities and expertise.
Next generation semiconductor emulation and fabrication equipment supporting current and next generation artificial intelligence (“AI”) solutions. b. Medical. Disposable, wearable and consumable products supporting glucose sensing, insulin and drug delivery, cancer treatment, diagnostic cartridges and general health monitoring. Lab diagnostic, life sciences, 4 Table of Contents lab processing equipment, high volume automated labs, point of care and personal use devices.
Next generation semiconductor emulation and fabrication equipment supporting current and next generation artificial intelligence (“AI”) solutions. b. Medical. Disposable, wearable and consumable products supporting glucose sensing, insulin and drug delivery, cancer treatment and general health monitoring. Lab diagnostic, life sciences, lab processing 4 Table of Contents equipment, high volume automated labs, point of care and personal use devices.
Sanmina Global Services complements our end-to-end manufacturing strategy by integrating a full range of post-manufacturing and after-market services, engineering, supply chain, manufacturing, logistics, repair and environmentally friendly disposition into a seamless solution for customers, for both Sanmina-manufactured, and non-Sanmina-manufactured products around the world.
Sanmina Global Services complements our end-to-end manufacturing strategy by integrating a full range of post-manufacturing and after-market services, engineering, supply chain, assembly, logistics, repair and environmentally friendly disposition into a seamless solution for customers, for both Sanmina-manufactured, and non-Sanmina-manufactured products around the world.
For the medical end market, we develop components and subassemblies that support Sanmina’s medical manufacturing operations for products such as blood analyzers, food contamination analyzers, and specialized optical spectrometers and fluorometers utilizing the latest optical technologies. In the automotive and industrial end markets, we are working with customers on next generation photonics based LIDAR product offerings. Viking Technology.
For the medical end market, we develop components and subassemblies that support our medical manufacturing operations for products such as blood analyzers, food contamination analyzers, and specialized optical spectrometers and fluorometers utilizing the latest optical technologies. In the automotive and industrial end markets, we are working with customers on next generation photonics based LIDAR product offerings. Viking Technology.
We continue to invest in factory automation, process improvements, robotics and AI to further enhance our efficiency output. We maintain extensive operations in lower-cost locations and we plan to expand our presence as appropriate to meet the needs of our customers. We believe we are well positioned to take advantage of future opportunities on a global/regional basis.
We continue to invest in factory automation, process improvements, robotics and AI to further enhance our manufacturing efficiency. We maintain extensive operations in lower-cost locations and we plan to expand our presence as appropriate to meet the needs of our customers. We believe we are well positioned to take advantage of future opportunities on a global/regional basis.
Jonathan Faust has served as our Executive Vice President and Chief Financial Officer since December 2023. Mr. Faust previously served as Global Controller and Head of Corporate Finance & Services of Hewlett Packard Enterprise (“HP”), which he joined in August 2021. From February 2020 until July 2021, Mr. Faust was Chief Financial Officer of Aruba, a HP company. Mr.
Jonathan Faust has served as our Executive Vice President and Chief Financial Officer since December 2023. Mr. Faust previously served as Global Controller and Head of Corporate Finance & Services of HP Inc., which he joined in August 2021. From February 2020 until July 2021, Mr. Faust was Chief Financial Officer of Aruba, a Hewlett Packard Enterprise company. Mr.
We embrace diverse perspectives and empower our employees to improve our organization, help us innovate, and continuously strengthen our workplace. As a founding member of the RBA, its principles are fundamental to our corporate culture and core values and are reflected in our commitments to our customers, stakeholders, employees and communities in which we do business around the world.
We embrace various perspectives and empower our employees to improve our organization, help us innovate, and continuously strengthen our workplace. As a founding member of the RBA, its principles are fundamental to our corporate culture and core values and are reflected in our commitments to our customers, stakeholders, employees and communities in which we do business around the world.
As a result of customer feedback and our customers' desire to manage research and development expenses, we offer product design services to develop systems and components jointly with our customers. Our NPI services include quick-turn prototyping, supply chain readiness, functional test development, and release-to-volume production.
As a result of customer demand and our customers’ desire to manage research and development expenses, we offer product design services to develop systems and components jointly with our customers. Our NPI services include quick-turn prototyping, supply chain readiness, functional test development, and release-to-volume production.
The compact and rugged design of these MCPs makes them ideal for Size, Weight, and Power (SWaP) optimized applications. Viking Technology product offerings cater to the networking, industrial, transportation, medical, AI, data centers, and defense and aerospace markets. Viking Enterprise Solutions.
The compact and rugged design of these MCPs makes them ideal for Size, Weight, and Power (“SWaP”) optimized applications. Viking Technology product offerings cater to the networking, industrial, transportation, medical, AI, data centers, and defense and aerospace markets. Viking Enterprise Solutions.
Approximately 49% of our employees worldwide are female and, in the U.S., non-Caucasian employees account for approximately 60% of the employee base. Our diversity, equity and inclusion principles are reflected in our employee training, in particular with respect to our policies against harassment and bullying and the elimination of bias in the workplace.
Approximately 49% of our employees worldwide are female and, in the U.S., non-Caucasian employees account for approximately 60% of the employee base. Our inclusion principles are reflected in our employee training, in particular with respect to our policies against harassment and bullying and the elimination of bias in the workplace.
The end customer typically places this order by choosing from a variety of possible system configurations and options. Using advanced manufacturing processes and a real-time warehouse management and data control system on the manufacturing floor, we can usually meet a 48-to-72 hour turn-around-time for BTO and CTO requests.
The end customer typically places this order by choosing from a variety of possible system configurations and options. Using advanced manufacturing processes and a real-time warehouse management 8 Table of Contents and data control system on the manufacturing floor, we can usually meet a 48-to-72 hour turn-around-time for BTO and CTO requests.
Our Viking Technology division provides advanced high-technology hardware products, such as Solid-State Drives (SSDs), DRAM memory modules, Non-Volatile DIMMs and the latest Compute Express Link (“CXL”) attached memory which increases efficiency by allowing composability, scalability, and flexibility for heterogeneous and distributed computer architectures. Furthermore, Viking Technology specializes in delivering state-of-the-art ruggedized Microelectronics Multi-Chip Package (MCP) memory solutions.
Our Viking Technology division provides advanced high-technology hardware products, such as Solid-State Drives (“SSDs”), DRAM memory modules, Non-Volatile DIMMs and the latest Compute Express Link (“CXL”) attached memory which increases efficiency by allowing composability, scalability, and flexibility for heterogeneous and distributed computer architectures. Furthermore, Viking Technology specializes in delivering state-of-the-art ruggedized Microelectronics Multi-Chip Package (“MCP”) memory solutions.
We have aligned our work programs, processes and procedures to the RBA Code of Conduct to help ensure a safe and 13 Table of Contents positive work environment for our employees that emphasizes learning and professional development, respect for individuals and ethical conduct, and that is facilitated by a direct management-employee engagement model.
We have aligned our work programs, processes and procedures to the RBA Code of Conduct to help ensure a safe and positive work environment for our employees that emphasizes learning and professional development, respect for individuals and ethical conduct, and that is facilitated by a direct management-employee engagement model.
We use state of the art production management systems to manage our procurement and manufacturing processes in an efficient and cost-effective manner. We collaborate with our customers to enable us to respond to their changing component requirements and to reflect any changes in these requirements in our ERP system.
We use state of the art production management systems to manage our procurement and manufacturing processes in an efficient and cost-effective manner. We collaborate with our customers to enable us to respond to their changing 7 Table of Contents component requirements and to reflect any changes in these requirements in our ERP system.
In the U.S., we are subject to the requirements of the United States Department of Labor’s OSHA and we are guided by the Environmental Health and Safety principles as described in the RBA’s Code of Conduct worldwide. We conduct regular self-assessments and audits to ensure compliance with our health and safety guidelines and regulatory requirements.
In the U.S., we are subject to the requirements of the United States Department of Labor’s OSHA and we are guided by the Environmental Health and Safety principles as 13 Table of Contents described in the RBA’s Code of Conduct worldwide. We conduct regular self-assessments and audits to ensure compliance with our health and safety guidelines and regulatory requirements.
These groups complement our vertically integrated manufacturing capabilities by providing component level design services for printed circuit boards, backplanes and a variety of electro-mechanical systems. Our offerings in design engineering include product architecture, detailed development, simulation, test and validation, integration and regulatory and qualification services, and our NPI services include quick-turn prototypes, functional test development and release-to-volume production.
These groups complement our vertically integrated manufacturing capabilities by providing component level design services for PCBs, backplanes and a variety of electro-mechanical systems. Our offerings in design engineering include product architecture, detailed development, simulation, test and validation, integration and regulatory and qualification services, and our NPI services include quick-turn prototypes, functional test development and release-to-volume production.
We support our direct-order-fulfillment services with logistics that include delivery of parts and assemblies to the final assembly site, distribution and shipment of finished systems and processing of customer returns. 8 Table of Contents Components, Products and Services includes: Product Design and Engineering.
We support our direct order fulfillment services with logistics that include delivery of parts and assemblies to the final assembly site, distribution and shipment of finished systems and processing of customer returns. Components, Products and Services includes: Product Design and Engineering.
In some international locations, our employees are represented by labor unions on either a national or plant level or are subject to collective bargaining agreements. 14 Table of Contents INFORMATION ABOUT OUR EXECUTIVE OFFICERS The following table sets forth the name, position and age of our current executive officers and their ages as of September 28, 2024.
In some international locations, our employees are represented by labor unions on either a national or plant level or are subject to collective bargaining agreements. 14 Table of Contents INFORMATION ABOUT OUR EXECUTIVE OFFICERS The following table sets forth the name, position and age of our current executive officers and their ages as of September 27, 2025.
Our experienced tooling, process, quality and resin engineers work concurrently using a scientific molding approach to develop cost-effective, highly reliable manufacturing solutions for medical, industrial, defense, multimedia, computing and data storage customers. Advanced Microsystems Technologies . Our Advanced Microsystems Technologies division focuses on optical, RF and microelectronics design and manufacturing services.
Our experienced tooling, process, quality and resin engineers work concurrently using a scientific molding approach to develop cost-effective, highly reliable manufacturing solutions for medical, industrial, defense, multimedia, computing and data storage customers. 9 Table of Contents Advanced Microsystems Technologies . Our Advanced Microsystems Technologies division focuses on optical, RF and microelectronics design and manufacturing services.
Finally, there are some sites, including our acquired facility in Gunzenhausen, Germany, 12 Table of Contents which are known to have groundwater contamination caused by a third-party, and that third-party has provided indemnification to us for the related liability. However, in certain situations, third-party indemnities may not be effective to reduce our liability for environmental contamination.
Finally, there are some sites, including our acquired facility in Gunzenhausen, Germany, which are known to have groundwater contamination caused by a third-party, and that third-party has provided indemnification to us for the related liability. However, in certain situations, third-party indemnities may not be effective to reduce our liability for environmental contamination.
We consider their recommendations together with other information when determining the appropriate amount to accrue for environmental liabilities. Other Regulations We are also subject to a number of domestic and foreign regulations relating to our operations worldwide.
We consider their recommendations together with other information when determining the appropriate amount to accrue for environmental liabilities. 12 Table of Contents Other Regulations We are also subject to a number of domestic and foreign regulations relating to our operations worldwide.
The average tenure of our employees is approximately eight years and approximately 34% of our employees have been employed by us for more than ten years.
The average tenure of our employees is approximately eight years and approximately 30% of our employees have been employed by us for more than ten years.
We are also subject to occupational safety and health laws, product labeling and product content requirements, either directly or as required by our customers. Proper waste disposal is a major consideration for printed circuit board manufacturers due to the metals and chemicals used in the manufacturing process.
We are also subject to occupational safety and health laws, product labeling and product content requirements, either directly or as required by our customers. Proper waste disposal is a major consideration for PCB manufacturers due to the metals and chemicals used in the manufacturing process.
In addition to our manufacturing, distribution and repair locations, we support our customers’ logistics and repair requirements through a network of certified partners around the world. Comprehensive IT Systems and Global Supply Chain Management.
In addition to our extensive network of manufacturing, distribution and repair locations, we support our customers’ logistics and repair requirements through selected certified partners around the world. Comprehensive IT Systems and Global Supply Chain Management.
Our facilities also support full system level assembly and test and logistic support for a variety of complex electronic systems, including radio base stations and transmission equipment for wireless networks, optical central offices and wireline switching and routing hardware, server and storage systems for data centers, carriers central offices and video streaming service providers, high-volume disposable sensors and drug delivery devices, lab diagnostics, surgical controllers, ultrasound systems, patient monitoring systems, automotive sensor assemblies, and electric vehicle power control systems and modules.
Our facilities also support full system level assembly and test and logistic support for a variety of complex electronic and electro-mechanical, as well as liquid-cooled heat dissipation devices and systems, including radio base stations and transmission equipment for wireless networks, optical central offices and wireline switching and routing hardware, server and storage systems for data centers, carriers central offices and video streaming service providers, high-volume disposable sensors and drug delivery devices, lab diagnostics, surgical controllers, ultrasound systems, patient monitoring systems, automotive sensor assemblies, and electric vehicle power control systems and modules.
Faust spent more than 19 years at HP working in various finance roles, most recently as Senior Vice President and Chief Financial Officer – Hybrid IT from August 2018 until January 2020. Alan Reid has served as our Executive Vice President of Global Human Resources since October 2012. Mr.
Faust spent more than 19 years at Hewlett Packard Enterprise (and formerly Hewlett Packard Co.) working in various finance roles, most recently as Senior Vice President and Chief Financial Officer – Hybrid IT from August 2018 until January 2020. Alan Reid has served as our Executive Vice President of Global Human Resources since October 2012. Mr.
We provide advanced component technologies, which we believe allow us to differentiate ourselves from our competitors. These advanced technologies include the fabrication of complex printed circuit boards, printed circuit board assemblies, backplanes and backplane assemblies, cable assemblies fabricated metal parts, precision machined parts, plastic injected molded parts, memory modules, and optical, RF and microelectronics modules.
We provide advanced component technologies, which we believe allow us to differentiate ourselves from our competitors. These advanced technologies include the fabrication of complex PCBs, PCB assemblies, backplanes and backplane assemblies, cable assemblies, fabricated metal parts, precision machined parts, plastic injected molded parts, memory modules, and optical, RF and microelectronics modules.
Diversity, Equity and Inclusion We are focused on creating a culture of belonging where employees can be their authentic selves and cultivate a workplace where everyone has an opportunity to succeed. Recognizing and respecting our global presence, we strive to maintain a diverse, equitable and inclusive workforce everywhere we operate.
Inclusiveness We are focused on creating a culture of belonging where employees can be their authentic selves and cultivate a workplace where everyone has an opportunity to succeed. Recognizing and respecting our global presence, we strive to maintain an inclusive workforce everywhere we operate.
Our customer-focused organization with 37,000 employees, including 5,000 temporary employees, supports our customers from 21 countries on four continents. We locate our facilities near our customers and their end markets in major centers for the electronics industry or in lower-cost locations.
Our customer-focused organization with 39,000 employees, including 4,000 temporary employees, supports our customers from 20 countries on four continents. We locate our facilities near our customers and their end markets in major centers for the electronics industry or in lower-cost locations.
Next generation imagining, monitoring and therapeutic delivery systems. c. Defense and Aerospace. Federal, regional, municipal and commercial surveillance systems, secure network communication systems and personal protection devices. Federal and commercial manned and unmanned aerospace products. d. Automotive and Transportation. Power conversion and battery management for battery electric vehicles and hybrid electric vehicles. Heavy equipment, agricultural, commercial and passenger vehicles.
Next generation imaging, monitoring and therapeutic delivery systems. c. Defense and Aerospace. Federal, regional, municipal and commercial surveillance systems, secure network communication systems and personal protection devices. Federal and commercial manned and unmanned aerospace products. d. Automotive and Transportation. Power conversion and battery management for battery electric vehicles and hybrid electric vehicles.
Region Approximate Breakdown of Employees Americas 58 % APAC 32 % EMEA 10 % Total 100 % Core Principles At Sanmina, we believe our employees are the key to our success. We cultivate an agile, innovative workplace culture fueled by collaboration, diversity, equity and inclusion. Having highly engaged employees is essential to our culture and achieving our mission.
Region Approximate Breakdown of Employees Americas 55 % APAC 36 % EMEA 9 % Total 100 % Core Principles At Sanmina, we believe our employees are the key to our success. We cultivate an agile, innovative workplace culture fueled by collaboration and inclusion. Having highly engaged employees is essential to our culture and achieving our mission.
Autonomous, driver assistance and remote control vehicle applications. 2) Communications Networks and Cloud Infrastructure: Next generation fixed wireless networks. Optical (400G, 800G, 1.6T) shelves, modules and transceivers. Switches, servers, storage, racks and cooling for traditional data centers, edge compute and AI centric data center applications.
Electronic systems for heavy equipment, agricultural, commercial and passenger vehicles. Autonomous, driver assistance and remote control vehicle applications. 2) Communications Networks and Cloud Infrastructure: Next generation fixed wireless networks. Optical (400G, 800G, 1.6T) shelves, modules and transceivers. Switches, servers, storage, racks and cooling for traditional data centers, edge compute and AI centric data center applications.
In addition, many of the newer, advanced technology backplanes require surface-mounted attachment of components, including active high-pin count packages that come in a variety of sophisticated package types. These advanced assembly processes require specialized equipment and a strong focus on quality and process control. We often perform in-circuit and functional tests on backplane assemblies.
In addition, many of the newer, advanced technology backplanes require surface-mounted attachment of components, including active high-pin count packages that come in a variety of sophisticated package types. These advanced assembly processes require specialized equipment and a strong focus on quality and process control.
Key system components we manufacture include high-technology printed circuit boards, printed circuit board assemblies, backplanes and backplane assemblies, cable assemblies, fabricated metal parts, precision machined parts, plastic injected molded parts, memory modules, and optical, RF microelectronics modules.
Key system components we manufacture include high-technology PCBs, PCB assemblies, backplanes and backplane assemblies, cable assemblies, fabricated metal parts, precision machined parts, plastic injected molded parts, memory modules, and optical, RF microelectronics modules.
Although ACM is being managed and controls have been put in place pursuant to ACM operations and maintenance plans, the presence of ACM could give rise to remediation obligations and other liabilities. Our facilities generally operate under environmental permits issued by governmental authorities.
Asbestos containing materials (“ACM”) are present at several of our manufacturing facilities. Although ACM is being managed and controls have been put in place pursuant to ACM operations and maintenance plans, the presence of ACM could give rise to remediation obligations and other liabilities. Our facilities generally operate under environmental permits issued by governmental authorities.
Name Age Position Jure Sola 73 Chairman and Chief Executive Officer Jonathan Faust 47 Executive Vice President, Chief Financial Officer Alan Reid 61 Executive Vice President, Global Human Resources Charles C. Mason 59 Executive Vice President, Worldwide Sales Jure Sola has served as our Chairman and Chief Executive Officer since August 2020.
Name Age Position Jure Sola 74 Chairman and Chief Executive Officer Jonathan Faust 48 Executive Vice President, Chief Financial Officer Alan Reid 62 Executive Vice President, Global Human Resources Charles C. Mason 60 Executive Vice President, Worldwide Sales Jure Sola has served as our Chairman and Chief Executive Officer since August 2020.
We manage our operations as two businesses: 1) Integrated Manufacturing Solutions (“IMS”). Our IMS business consists of printed circuit board assembly and test, high-level assembly and test and direct-order-fulfillment. This segment generated approximately 80% of our total revenue in 2024. 2) Components, Products and Services (“CPS”).
We manage our operations as two businesses: 1) Integrated Manufacturing Solutions (“IMS”). IMS is a single operating segment consisting of printed circuit board (“PCB”) assembly and test, high-level assembly and test and direct order fulfillment. This segment generated approximately 80% of our total revenue in 2025. 2) Components, Products and Services (“CPS”).
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. We operate on-site wastewater treatment systems at our printed circuit board manufacturing plants in order to treat wastewater generated in the fabrication process.
Water used in the PCB manufacturing process must be treated to remove metal particles and other contaminants before it can be discharged into municipal sanitary sewer systems. We operate on-site wastewater treatment systems at our PCB manufacturing plants in order to treat wastewater generated in the fabrication process. Additionally, the electronics assembly process can generate lead dust.
Plastic injection molded parts are used to create a vast array of everyday items, from very small intricate plastic parts to enclosures designed to protect sensitive electronic equipment. Our diverse capability within the plastic injection molding space spans all major markets and industries. We are equipped with nearly 80 plastic injection molding machines with a wide variety of clamping pressures.
Plastic injection molded parts are used to create a vast array of everyday items, from very small intricate plastic parts to enclosures designed to protect sensitive electronic equipment. Our diverse capability within the plastic injection molding space spans all major markets and industries.
Any of such results would increase our expenses, reduce our revenue and damage our reputation as both a commercial and government supplier. Human Capital Resources General Information About Our Human Capital Resources As of September 28, 2024, we had approximately 37,000 employees, including 5,000 temporary employees in 21 countries.
Any of such results would increase our expenses, reduce our revenue and damage our reputation as both a commercial and government supplier. Human Capital Resources General Information About Our Human Capital Resources As of September 27, 2025, we had approximately 39,000 employees, including 4,000 temporary employees in 20 countries.
Backlog We generally do not obtain firm, long-term commitments from our customers and our customers usually do not make firm orders for product delivery more than thirty to ninety days in advance. Additionally, customers may cancel or postpone scheduled deliveries, in some cases without significant penalty.
However, we cannot predict whether this trend will continue. 10 Table of Contents Backlog We generally do not obtain firm, long-term commitments from our customers and our customers usually do not make firm orders for product delivery more than thirty to ninety days in advance. Additionally, customers may cancel or postpone scheduled deliveries, in some cases without significant penalty.
Compliance with Government Regulations Environmental Regulations We are subject to a variety of local, state, federal and foreign environmental laws and regulations relating to the storage and use of hazardous materials used in our manufacturing processes, as well as the storage, treatment, discharge, emission and disposal of hazardous waste that are by-products of these processes.
Sanmina, Viking, Viking Enterprise Solutions, Viking Technology and 42Q are registered trademarks of Sanmina Corporation. 11 Table of Contents Compliance with Government Regulations Environmental Regulations We are subject to a variety of local, state, federal and foreign environmental laws and regulations relating to the storage and use of hazardous materials used in our manufacturing processes, as well as the storage, treatment, discharge, emission and disposal of hazardous waste that are by-products of these processes.
Components include advanced printed circuit boards (“PCBs”), backplanes and backplane assemblies, cable assemblies, fabricated metal parts, precision machined parts, and plastic injected molded parts.
Components include advanced PCBs, backplanes and backplane assemblies, cable assemblies, fabricated metal parts, precision machined parts, and plastic injected molded parts.
However, the customer is typically liable for the cost of the materials and components we have ordered to meet their production forecast but which are not used, provided that the material was ordered in accordance with an agreed-upon procurement plan. In some cases, the procurement plan contains provisions regarding the types of materials for which our customers will assume responsibility.
However, the customer is typically liable for the cost of the materials, tariffs and components we have ordered to meet their production forecast but which are not used, provided that the material was ordered in accordance with an agreed-upon procurement plan.
Nokia represented 10% or more of our net sales in 2023 and 2022. We typically enter into supply agreements with our major OEM customers with terms ranging from three to five years. Our supply agreements generally do not obligate the customer to purchase minimum quantities of products.
We typically enter into supply agreements with our major OEM customers with terms ranging from three to five years. Our supply agreements generally do not obligate the customer to purchase minimum quantities of products.
We compete with different companies depending on the type of solution or geographic area. We believe the primary competitive factors in our industry include manufacturing technology, quality, global/regional footprint, delivery, responsiveness, provision of value-added solutions and price.
In addition, our potential customers may also compare the benefits of outsourcing their manufacturing to us with the merits of manufacturing products themselves. We compete with different companies depending on the type of solution or geographic area. We believe the primary competitive factors in our industry include manufacturing technology, quality, global/regional footprint, delivery, responsiveness, provision of value-added solutions and price.
Functional tests are performed to confirm the board or assembly operates in accordance with its final design and manufacturing specifications. We design and procure test fixtures and develop our own test software or use our customers' test fixtures and test software.
In-circuit testing verifies that all components are properly inserted and attached and that electrical circuits are complete. Functional tests are performed to confirm the board or assembly operates in accordance with its final design and manufacturing specifications. We design and procure test fixtures and develop our own test software or use our customers’ test fixtures and test software.
With our extensive market knowledge and global/regional footprint, we can align these solutions to our facilities in each region around the world. Sales to our ten largest customers represented 47% of our net sales in 2024. Motorola represented 10% or more of our net sales in 2024 and 2022.
With our extensive market knowledge and global/regional footprint, we can align these solutions to our facilities in each region around the world. Sales to our ten largest customers represented 52% of our net sales in 2025. One customer represented 10.1% of our net sales in both 2025 and 2024 and one customer represented 13.2% of our net sales in 2023.
We offer a suite of world-class precision machining services in multiple locations. We use advanced numerically controlled machines enabling the machining to very tight tolerances and we often perform further assembly services with these components in clean-room environments.
We offer a suite of world-class precision machining services in multiple locations. We use sophisticated equipment that allows us to machine complex parts to very tight tolerances and we often perform further assembly services with these components in clean-room environments.
We believe we are extremely competitive with regard to all of these factors. 11 Table of Contents Intellectual Property We hold U.S. and foreign patents and patent applications relating to, among other things, printed circuit board manufacturing technology, enclosures, cables, memory modules, optical technology, medical devices and computing and storage.
We believe we are extremely competitive with regard to all of these factors. Intellectual Property We hold U.S. and foreign patents and patent applications relating to, among other things, PCB manufacturing technology, enclosures, cables, memory modules, optical technology, medical devices, computing and storage, and defense and aerospace. For other proprietary processes, we rely primarily on trade secret protection.
As such, they require global solutions that include regional manufacturing for selected end markets, especially when time to market, local manufacturing or content and best cost solutions are critical objectives. Our global network of manufacturing facilities provides our customers a combination of sites to maximize both the benefits of regional and best cost manufacturing solutions and repair services.
As such, they require global solutions that include regional manufacturing for selected end markets, especially when time to market, local manufacturing or content and best cost solutions are critical objectives.
Additionally, the electronics assembly process can generate lead dust. Upon vacating a facility, we are responsible for remediating lead dust from the interior of the manufacturing facility. Although there are no applicable standards for lead dust remediation in manufacturing facilities, we endeavor to remove the residues.
Upon vacating a facility, we are responsible for remediating lead dust from the interior of the manufacturing facility. Although there are no applicable standards for lead dust remediation in manufacturing facilities, we endeavor to remove the residues. To date, lead dust remediation costs have not been material to our results of operations.
Parts that are fabricated from metal are often used in sub-assemblies and full enclosures, racks or cabinets used to house and protect complex, critical and fragile electronic components, modules and sub-systems so that the system's functional performance is not compromised due to mechanical, environmental or any other use conditions.
Parts that are fabricated from metal are often used in sub-assemblies and full enclosures, racks or cabinets used to house and protect complex, critical and fragile electronic components, modules and sub-systems.
For other proprietary processes, we rely primarily on trade secret protection. A number of our patents have expired or will expire in the near term. The expiration and abandonment of patents reduces our ability to assert claims against competitors or others who use similar technologies and to license such patents to third parties.
A number of our patents have expired or will expire in the near term. The expiration and abandonment of patents reduces our ability to assert claims against competitors or others who use similar technologies and to license such patents to third parties. We have registered a number of trademarks and have pending trademark applications in both the U.S. and internationally.
VES provides solutions ideal for a wide range of applications including rack scale data storage and AI and machine learning workloads. With advances in interconnect speeds and architectural shifts towards disaggregating storage from compute for scalability and efficiency in large data centers, VES is well positioned to take advantage of these trends. SCI.
VES provides solutions ideal for a wide range of applications including rack scale data storage and AI and machine learning workloads. With the increasing demand for AI, hybrid cloud and edge solutions for compute workloads in hyperscaler and enterprise data centers, VES is well positioned to take advantage of these trends. SCI.
We have implemented procedures intended to ensure our manufacturing processes are compliant with RoHS and the European Union's Registration, Evaluation and Authorization of Chemicals (“REACH”) legislation, when required. WEEE compliance is primarily the responsibility of OEMs. Asbestos containing materials (“ACM”) are present at several of our manufacturing facilities.
WEEE requires producers to assume responsibility for the collection, recycling and management of waste electronic products and components. We have implemented procedures intended to ensure our manufacturing processes are compliant with RoHS and the European Union’s Registration, Evaluation and Authorization of Chemicals (“REACH”) legislation, when required. WEEE compliance is primarily the responsibility of OEMs.
To date, lead dust remediation costs have not been material to our results of operations. We also monitor for airborne concentrations of lead in our buildings and are unaware of any significant lead concentrations that exceed the applicable Occupational Safety & Health Administration (“ OSHA”) or other local standards.
We also monitor for airborne concentrations of lead in our buildings and are unaware of any significant lead concentrations that exceed the applicable Occupational Safety & Health Administration (“ OSHA”) or other local standards. We have a range of corporate programs that aim to reduce the use of hazardous materials in manufacturing.
We provide a wide range of services, including new product introduction, high-level assembly, distribution services and warranty management, life-extension services and end-of-life management as well as programs that focus on reuse, repair, refurbishment, recycle, recover and redesign. Our reverse logistics services include detailed failure analysis and feedback to enhance product design and product quality.
We provide a wide range of services, including new product introduction, high-level assembly, configuration and direct order fulfillment services, warranty management, life-extension services and end-of-life management as well as programs that focus on reuse, repair, refurbishment, recycle, recover and redesign collectively designed to minimize landfill waste.
Parallel initiatives have been adopted in other jurisdictions throughout the world, including several states in the U.S. and the Peoples' Republic of China. RoHS limits the use of lead, mercury and other specified substances in electronics products. WEEE requires producers to assume responsibility for the collection, recycling and management of waste electronic products and components.
In addition, the electronics industry must adhere to the European Union’s Restrictions of Hazardous Substances (“RoHS”) and Waste Electrical and Electronic Equipment (“WEEE”). Parallel initiatives have been adopted in other jurisdictions throughout the world, including several states in the U.S. and the Peoples’ Republic of China. RoHS limits the use of lead, mercury and other specified substances in electronics products.
This system enables us to forecast 7 Table of Contents future supply and demand imbalances and develop strategies to help our customers manage their component requirements, especially during supply shortages that have affected our industry in the recent past.
This system enables us to forecast future supply and demand imbalances and develop strategies to help our customers manage their component requirements, especially during supply shortages that have affected our industry in the recent past. Our enterprise-wide ERP systems provide us with company-wide information regarding component inventories and orders to help optimize inventories, planning and purchasing at the facility level.
In addition, we have been found liable in a lawsuit alleging operations at our current and former facilities in Orange County, California contributed to groundwater contamination, and also have ongoing investigation activities at and adjacent to a former facility to determine the extent of any soil, soil vapor, and groundwater contamination.
In addition, we are currently responding to a regulatory inquiry relating to environmental conditions at a former facility in Orange County, California and also have ongoing investigation activities at and adjacent to two other former facilities in Orange County to determine the extent of any soil, soil vapor, and groundwater contamination.
Such engineering services can help in improving a customer’s time-to-market and cost-to-market objectives. Printed Circuit Boards. We produce a wide range of multilayer printed circuit boards on a global basis with high layer counts and fine line circuitry.
Such engineering services can help in improving a customer’s time-to-market and cost-to-market objectives. Printed Circuit Boards. We produce a wide range of PCBs with multiple layers in our PCB fabrication plants around the world.
These technologies, which support the needs of our customers to provide greater functionality in smaller products, include chip-scale packaging, ball grid array, direct chip attach and high-density interconnect. We perform in-circuit and functional testing of printed circuit board assemblies. In-circuit testing verifies that all components are properly inserted and attached and that electrical circuits are complete.
We use SMT, PTH, press-fit and other attachment technologies focused on miniaturization and increasing the density of component placement on PCBs. These technologies, which support the needs of our customers to provide greater functionality in smaller products, include chip-scale packaging, ball grid array, direct chip attach and high-density interconnect. We perform in-circuit and functional testing of PCBAs.
We provide a broad range of cable assembly products and services, from cable assemblies and harnesses for automobiles to very complex harnesses for industrial products and semiconductor manufacturing equipment. We also provide mechanical assembly and integration services where we often assemble, integrate and test cables with electromechanical systems or sub-systems.
We provide a wide range of cable assembly products of varying degrees of complexity and we provide mechanical assembly and integration services where we often assemble, integrate and test cables with electromechanical systems or sub-systems. Fabricated Metal Parts.
(“SCI”) subsidiary; and cloud-based smart manufacturing execution software from our 42Q division. Services include design, engineering, and logistics and repair. CPS generated approximately 20% of our total revenue in 2024. We target markets that we believe offer significant growth opportunities and in which OEMs sell complex mission critical products that are subject to strict regulatory requirements and/or rapid technological change.
We target markets that we believe offer significant growth opportunities and in which OEMs sell complex mission critical products that are subject to strict regulatory requirements and/or rapid technological change.
Our mechanical systems manufacturing services are capable of fabricating mechanical components that range from single parts to complex enclosures, racks or cabinets and we often integrate these with various electronic components and sub-systems including backplane assemblies and cables with power and thermal management, and other sensor and control systems. Precision Machined Parts.
We fabricate metal parts that range from single parts to complex enclosures, racks or cabinets and we often integrate these with various electronic components and sub-systems including backplane assemblies and cables. We may also install air or liquid based cooling systems especially for data center applications. Precision Machined Parts.
Our supply agreements generally contain provisions permitting cancellation and rescheduling of orders upon notice and are subject to cancellation charges and, in some cases, rescheduling charges. In some circumstances, our supply agreements with customers include provisions for cost reduction objectives during the term of the agreement, which can have the effect of reducing revenue and profitability from these arrangements.
In some circumstances, our supply agreements with customers include provisions for cost reduction objectives during the term of the agreement, which can have the effect of reducing revenue and profitability from these arrangements. Competition Our business is highly competitive. We compete against numerous domestic and foreign electronic manufacturing service providers, diversified manufacturing service providers and design providers.
Our Products and Solutions Integrated Manufacturing Solutions includes: Printed Circuit Board Assembly (“PCBA”) and Test. To meet the ever-changing needs across our diverse customer base, we continue to evolve in support of their current and future requirements.
To meet the ever-changing needs across our diverse customer base, we continue to evolve in support of their current and future requirements. PCBAs are at the core of all electronic systems, and we continue to work to ensure that our PCBA manufacturing capabilities are aligned with the requirements for such complex systems.
Our capabilities include complex medium and large format mill and lathe machining of aluminum, stainless steel, plastics, ferrous and nonferrous alloys and exotic alloys. We also 9 Table of Contents have helium and hydrostatic leak-test capabilities. By leveraging our established supply chain, we oversee lapping, anodizing, electrical discharge machining, heat-treating, cleaning, laser inspection, painting and packaging.
Our capabilities include complex medium and large format mill and lathe machining of aluminum, stainless steel, plastics, ferrous and nonferrous alloys and exotic alloys as well as helium and hydrostatic leak-test capabilities. Plastic Injection Molded Parts.
We have a range of corporate programs that aim to reduce the use of hazardous materials in manufacturing. We developed corporate-wide standardized environmental management systems, auditing programs and policies to enable better management of environmental compliance activities.
We developed corporate-wide standardized environmental management systems, auditing programs and policies to enable better management of environmental compliance activities. For example, almost all of our manufacturing facilities are certified under ISO 14001, a set of standards and procedures relating to environmental compliance management.
The most common technologies used to attach components to printed circuit boards employ surface mount technology (“SMT”) and pin-through-hole assembly (“PTH”) and press-fit technology for connectors. We use SMT, PTH, press-fit and other attachment technologies focused on miniaturization and increasing the density of component placement on printed circuit boards.
PCBA involves attaching electronic components, such as integrated circuits, capacitors, microprocessors, resistors, memory modules, and connectors to PCBs. The most common technologies used to attach components to PCBs employ surface mount technology (“SMT”) and pin-through-hole assembly (“PTH”) and press-fit technology for connectors.
Our IT systems provide full traceability of 10 Table of Contents the product’s lifecycle, from manufacturing and distribution to product returns, the repair process, component swaps and product test results. 42Q. Our 42Q division provides an innovative, world-class cloud-based smart manufacturing execution solution that is scalable, flexible, secure and easy to implement.
Our 42Q division provides an innovative, world-class cloud-based smart manufacturing execution solution that is scalable, flexible, secure and easy to implement. Our solution provides customers advantages in efficiencies and costs relative to legacy systems and offers traceability and genealogy, multi-plant visibility, compliance management and on-demand work instructions.
Backplane fabrication is significantly more complex than printed circuit board fabrication due to the large size and thickness of the backplanes. We assemble backplanes by press-fitting high-density connectors into plated through-holes in the fabricated backplane.
Backplanes are typically very large PCBs that serve as the backbones of sophisticated electronics products, such as internet routers and switches, and in a wide variety of other applications. We assemble backplanes by press-fitting high-density connectors into plated through-holes in the fabricated backplane.
Specialized production equipment along with an in-depth understanding of high-performance laminate materials allow us to fabricate some of the largest form factor and highest speed circuit boards in the industry. Our ability to support NPI and quick-turn fabrication followed by manufacturing in both North America and Asia allows our customers to accelerate their time-to-market as well as their time-to-volume.
Skilled professionals using specialized production equipment along with an in-depth understanding of sophisticated manufacturing processes and high-performance laminate materials allow us to fabricate some of the largest PCB’s with very complex geometries and features.
Our solution provides customers advantages in efficiencies and costs relative to legacy systems and offers traceability and genealogy, multi-plant visibility, compliance management and on-demand work instructions. Seasonality Because of the diversity of our customer base, we generally have not experienced significant seasonality in our business in recent years. However, we cannot predict whether this trend will continue.
Seasonality Because of the diversity of our customer base, we generally have not experienced significant seasonality in our business in recent years.
Removed
Our enterprise-wide ERP systems provide us with company-wide information regarding component inventories and orders to help optimize inventories, planning and purchasing at the facility level. Expertise in Serving Diverse End Markets. We have experience in serving customers in the industrial, medical, defense and aerospace, automotive, communications networks and cloud infrastructure end markets.
Added
(“SCI”) subsidiary; and cloud-based smart manufacturing execution software from our 42Q division. Services include design, engineering, logistics and repair and direct order fulfillment. CPS generated approximately 20% of our total revenue in 2025.
Removed
PCBAs are at the core of all electronic systems, and we continue to work to ensure that our PCBA manufacturing capabilities are aligned with the requirements for such systems. Printed circuit board assembly involves attaching electronic components, such as integrated circuits, capacitors, microprocessors, resistors, memory modules, and connectors to printed circuit boards.
Added
Our global network of manufacturing facilities provides our customers with flexibility through a combination of sites to maximize both the benefits of regional and best cost manufacturing solutions and repair services, especially in the constantly evolving tariff and geopolitical environments.
Removed
Standardized processes and procedures make transitioning of products easier for our customers. Our field applications engineering personnel support designers with material selection and design for manufacturability advice. Backplanes and Backplane Assemblies. Backplanes are typically very large printed circuit boards that serve as the backbones of sophisticated electronics products, such as internet routers and switches.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeStrategic transactions involve a number of risks, uncertainties and costs, including integrating acquired operations and workforce, businesses and products, resolving quality issues involving acquired products, incurring severance and other restructuring costs, diverting management attention from their normal operational duties, maintaining customer, supplier or other favorable business relationships of acquired operations, terminating unfavorable commercial arrangements, losing key employees, integrating the systems of acquired operations into our management information systems and satisfying the liabilities of acquired businesses, including liability for past violations of law and material environmental liabilities.
Biggest changeStrategic transactions, including the acquisition of ZT Systems, involve a number of risks, uncertainties and costs, including: difficulty in integrating acquired operations and workforce, businesses and products; resolving quality issues involving acquired products; incurring severance and other restructuring costs; diverting management attention from their normal operational duties; maintaining customer, supplier or other favorable business relationships of acquired operations; terminating unfavorable commercial arrangements; losing key employees; integrating the systems of acquired operations into our management information systems; satisfying the liabilities of acquired businesses, including liability for historical contract and intellectual property infringement liabilities, past violations of law and material environmental liabilities; significant transaction and integration costs, or unknown or inestimable liabilities associated with the transaction, such as increased interest expense and compliance with debt covenants or other obligations; and the possibility that we may not realize the expected benefits, cost savings, accretion, synergies, or growth from the transaction, or that such benefits may be delayed.
GAAP is subject to interpretation by the Financial Accounting Standards Board (“FASB”), the SEC and various bodies formed to interpret and create accounting policies. A change in those policies can have a significant effect on our reported results and may affect our reporting of transactions which are completed before a change is announced.
GAAP is subject to interpretation by the Financial Accounting Standards Board (the “FASB”), the SEC and various bodies formed to interpret and create accounting policies. A change in those policies can have a significant effect on our reported results and may affect our reporting of transactions which are completed before a change is announced.
For example, the SEC has recently adopted rules requiring that issuers provide significantly increased disclosures concerning cybersecurity risk management, strategy, governance and incident reporting and adopt more stringent executive compensation clawback policies and several agencies and governments, including the SEC, the EU and California have enacted legislation or adopted rules that will require large companies to provide significant disclosures concerning their greenhouse gas emissions and financial risks relating to climate change.
For example, the SEC has adopted rules requiring that issuers provide significantly increased disclosures concerning cybersecurity risk management, strategy, governance and incident reporting and adopt more stringent executive compensation clawback policies and several agencies and governments, including the SEC, the EU and California have enacted legislation or adopted rules that will require large companies to provide significant disclosures concerning their greenhouse gas emissions and financial risks relating to climate change.
However, an adverse result in this matter or additional developments in these or future audits would adversely affect our tax provisions, including through the disallowance or reduction of deferred tax assets or the assessment of back taxes, interest and penalties, any of which could result in a material increase to our income tax expense and therefore a material decrease in our net income and could have a material adverse impact on our condensed consolidated financial statements.
However, an adverse result in this matter or additional developments in these or future audits would adversely affect our tax provisions, including through the disallowance or reduction of deferred tax assets or the assessment of back taxes, interest and penalties, any of which could result in a material increase to our income tax expense and therefore a material decrease in our net income and could have a material adverse impact on our consolidated financial statements.
If we are not able to comply with these covenants or if an event of default were to occur and not be cured or waived by our lenders, all of our outstanding debt would become immediately due and payable and the incurrence of additional debt under our Credit Agreement would not be allowed, either of which would have a material adverse effect on our liquidity and ability to continue to conduct our business.
If we are not able to comply with these covenants or if an event of default were to occur and not be cured or waived by our lenders, all of our outstanding debt would become immediately due and payable and the incurrence of additional debt under our credit facilities would not be allowed, either of which would have a material adverse effect on our liquidity and ability to continue to conduct our business.
Our operating results can vary due to a number of significant uncertainties, including: • our ability to replace declining sales from end-of-life programs and customer disengagements with new business wins; • conditions in the global economy as a whole and in the industries we serve, which have been significantly impacted by supply chain disruptions, inflationary pressures and higher interest rates; • fluctuations in component prices, component shortages and extended component lead times caused by high demand and supply chain constraints and disruptions caused by geopolitical events, such as the war in Ukraine and conflict in the Middle East, natural disasters or otherwise; • timing and success of new product developments and ramps by our customers, which create demand for our services, but which can also require us to incur start-up costs relating to new tooling and processes; • levels of demand in the end markets served by our customers and the amount of inventory held by them; • timing of orders from customers, the accuracy of their forecasts which drive the amount of components we order and the extent to which customers reschedule or cancel their orders; • the extent to which our customers may choose to in-source the manufacturing of their products; • our inventory levels, which in the past have been driven higher as a result of supply chain disruptions, with higher levels of inventory reducing our operating cash flow; • our customers’ inventory levels, which, if high, decrease demand for new orders for products; • customer payment terms and the extent to which we factor customer receivables during the quarter; • increasing labor costs in the regions in which we operate; • mix of products ordered by and shipped to major customers, as high volume and low complexity manufacturing services typically have lower gross margins than more complex and lower volume services; • our ability to pass tariffs and price increases of components through to our customers; 16 Table of Contents • quality or other claims made by our customers; • the degree to which we are able to fully utilize our available manufacturing capacity or expand, when necessary to satisfy customer demand; • customer insolvencies resulting in bad debt or inventory exposures that are in excess of our reserves; • our ability to efficiently move manufacturing operations to lower cost regions when requested by our customers; • changes in our tax provision due to changes in our estimates of pre-tax income in the jurisdictions in which we operate, uncertain tax positions and our continued ability to utilize our deferred tax assets; • political and economic developments in countries in which we or our customers or our suppliers have operations, which could restrict our operations or those of our suppliers and/or customers or increase our costs; and • accuracy of management’s estimates of materials, labor and subcontractor costs relating to long-term contracts, particularly for new products, as any impact due to changes in estimates must be recognized in the period of change.
Our operating results can vary due to a number of significant uncertainties, including: • our ability to replace declining sales from end-of-life programs and customer disengagements with new business wins; • conditions in the global economy as a whole and in the industries we serve, which have been significantly impacted by supply chain disruptions, inflationary pressures, higher interest rates and, more recently, significant changes in U.S. and international trade policies; • fluctuations in component prices, component shortages and extended component lead times caused by high demand and supply chain constraints and disruptions caused by natural disasters, geopolitical conditions and events, such as the war in Ukraine, conflict in the Middle East and tensions between the U.S. and China, or otherwise; • timing and success of new product developments and ramps by our customers, which create demand for our services, but which can also require us to incur start-up costs relating to new tooling and processes; • levels of demand in the end markets served by our customers and the amount of inventory held by them; • timing of orders from customers, the accuracy of their forecasts which drive the amount of components we order and the extent to which customers reschedule or cancel their orders; • the extent to which our customers may choose to in-source the manufacturing of their products; • our inventory levels, which in the past have been driven higher as a result of supply chain disruptions, with higher levels of inventory reducing our operating cash flow; • our customers’ inventory levels, which, if high, decrease demand for new orders for products; • customer payment terms and the extent to which we factor customer receivables during the quarter; • increasing labor costs in the regions in which we operate; • mix of products ordered by and shipped to major customers, as high volume and low complexity manufacturing services typically have lower gross margins than more complex and lower volume services; • our ability to pass tariffs and price increases of components through to our customers; • quality or other claims made by our customers; 16 Table of Contents • the degree to which we are able to fully utilize our available manufacturing capacity or expand, when necessary to satisfy customer demand; • customer insolvencies resulting in bad debt or inventory exposures that are in excess of our reserves; • our ability to efficiently move manufacturing operations to lower cost regions when requested by our customers; • changes in our tax provision due to changes in our estimates of pre-tax income in the jurisdictions in which we operate, uncertain tax positions and our continued ability to utilize our deferred tax assets; • political and economic developments in countries in which we or our customers or our suppliers have operations, which could restrict our operations or those of our suppliers and/or customers or increase our costs; and • accuracy of management’s estimates of materials, labor and subcontractor costs relating to long-term contracts, particularly for new products, as any impact due to changes in estimates must be recognized in the period of change.
Even when our customers or suppliers are contractually responsible for defects in the design of a product and defects in components used in the manufacture of such products, there is no guarantee that any indemnities provided by such parties will be adequate to cover all damages to which we may become subject or that these parties will have the financial resources to indemnify us for such liabilities, in which case we could be required to expend significant resources to defend ourselves if named in a product liability suit over such defects.
Even when our customers or suppliers are contractually responsible for defects in the design of a product and defects in components used in the manufacture of such products, there is no guarantee that any indemnities provided by such parties will be adequate to cover all damages to which we may become subject or that these parties will have the financial resources to 19 Table of Contents indemnify us for such liabilities, in which case we could be required to expend significant resources to defend ourselves if named in a product liability suit over such defects.
Although we believe our existing cash resources and sources of liquidity, together with cash generated from operations, will be sufficient to meet our working capital requirements for at least the next 12 months, should demand for our services increase significantly over the next 12 months or should we experience significant increases in delinquent or uncollectible accounts receivable for any reason, including recessionary economic conditions, our cash provided by operations 23 Table of Contents could decrease significantly and we could be required to seek additional sources of liquidity to continue our operations at their current level.
Although we believe our existing cash resources and sources of liquidity, together with cash generated from operations, will be sufficient to meet our working capital requirements for at least the next 12 months, should demand for our services increase significantly over the next 12 months or should we experience significant increases in delinquent or uncollectible accounts receivable for any reason, including recessionary economic conditions, our cash provided by operations could decrease significantly and we could be required to seek additional sources of liquidity to continue our operations at their current level.
For example, in April 2023, a court issued a ruling finding us and other defendants liable for certain investigation and remediation costs relating to a site owned by a predecessor company in Southern California at which a disposal was alleged to have occurred, which claim has since been settled subject to court approval.
For example, in April 2023, a court issued a ruling finding us and other defendants liable for certain investigation and remediation costs relating to a site owned by a predecessor company in Southern California at which a disposal was alleged to have occurred, which claim has since been settled.
A sustained increase in energy prices for any reason could increase our raw material, components, operations and transportation costs, which we may 21 Table of Contents not be able to pass on to our customers and which would therefore reduce our profitability, as would any increase in operating costs and investments due to our adoption, whether voluntary or mandatory, of measures to reduce our carbon footprint.
A sustained increase in energy prices for any reason could increase our raw material, components, operations and transportation costs, which we may not be able to pass on to our customers and which would therefore reduce our profitability, as would any increase in operating costs and investments due to our adoption, whether voluntary or mandatory, of measures to reduce our carbon footprint.
When our NOLs expire, our state income tax rates will increase, which will reduce our net income. We can experience losses due to foreign exchange rate fluctuations and currency controls, which could reduce our net income and impact our ability to repatriate funds.
As our NOLs expire, our state income tax rates will increase, which will reduce our net income. We can experience losses due to foreign exchange rate fluctuations and currency controls, which could reduce our net income and impact our ability to repatriate funds.
Commerce Department has released rules that in some cases significantly restrict the export of U.S. technology to or from China. These laws could negatively impact our operations in China by making it more difficult to import components containing U.S. technology into China and to export finished products 19 Table of Contents containing such components out of China.
Commerce Department has released rules that in some cases significantly restrict the export of U.S. technology to or from China. These laws could negatively impact our operations in China by making it more difficult to import components containing U.S. technology into China and to export finished products containing such components out of China.
If successful, such claims could force our customers and us to stop importing or producing products or components of products that use the challenged intellectual property, to pay up to treble damages and to obtain a license to the 20 Table of Contents relevant technology or to redesign those products or services so as not to use the infringed technology.
If successful, such claims could force our customers and us to stop importing or producing products or components of products that use the challenged intellectual property, to pay up to treble damages and to obtain a license to the relevant technology or to redesign those products or services so as not to use the infringed technology.
From time to time, we receive formal and informal inquiries from government agencies and regulators regarding our compliance. For example, we responded to several Civil Investigative Demands from the U.S.
From time to time, we receive formal and informal inquiries from government agencies and regulators regarding our compliance. For example, in 2023 we responded to several Civil Investigative Demands from the U.S.
Hacking, malware and other cybersecurity attacks, if not prevented, could lead to the collection and disclosure of sensitive personal or confidential information relating to our business, customers, employees or others, exposing us to legal liability and causing us to suffer reputational damage.
Hacking, malware and other cybersecurity attacks, if not prevented, could lead 20 Table of Contents to the collection and disclosure of sensitive personal or confidential information relating to our business, customers, employees or others, exposing us to legal liability and causing us to suffer reputational damage.
The sale of receivables under our factoring programs is subject to the approval of the banks or customers involved and there can be no assurance that we will be able to sell the maximum amount of receivables permitted by these programs when desired.
The sale of receivables under our factoring programs is subject to the approval of the banks or customers involved and there can be no assurance that we will be able to sell the maximum amount of receivables permitted by these 22 Table of Contents programs when desired.
A key part of our strategy of providing end-to-end manufacturing solutions is to grow our CPS businesses, which supplies printed circuit boards, backplane and backplane assemblies, cable assemblies, fabricated metal parts, precision machined parts, and plastic injected molded parts, memory, RF, optical and microelectronic solutions, and data storage solutions and design, engineering, logistics and repair services and our SCI defense and aerospace products.
A key part of our strategy of providing end-to-end manufacturing solutions is to grow our CPS businesses, which supplies PCBs, backplane and backplane assemblies, cable assemblies, fabricated metal parts, precision machined parts, and plastic injected molded parts, memory, RF, optical and microelectronic solutions, and data storage solutions and design, engineering, logistics and repair services and our SCI defense and aerospace products.
We may be required to relocate or close additional manufacturing operations in the future and, accordingly, we may incur additional costs that decrease our net income. In addition, certain of our foreign manufacturing facilities are leased from third parties.
We may be required to relocate or close additional manufacturing operations in the future and, accordingly, we may incur additional costs that decrease our net income. 18 Table of Contents In addition, certain of our foreign manufacturing facilities are leased from third parties.
Our Credit Agreement contains a maximum leverage and minimum interest coverage ratio and a number of restrictive covenants, including restrictions on incurring additional debt, making investments and other restricted payments, selling assets and paying dividends, subject to certain exceptions, with which we must comply.
Our credit facilities contain a maximum leverage and minimum interest coverage ratio and a number of restrictive covenants, including restrictions on incurring additional debt, making investments and other restricted payments, selling assets and paying dividends, subject to certain exceptions, with which we must comply.
Consolidation in the electronics industry among our customers, our suppliers and/or our competitors may increase, which could result in a small number of very large electronics companies offering products in multiple sectors of the electronics 24 Table of Contents industry.
Consolidation in the electronics industry among our customers, our suppliers and/or our competitors may increase, which could result in a small number of very large electronics companies offering products in multiple sectors of the electronics industry.
Department of Justice relating to certain contracts, projects, proposals, and business activities of our SCI subsidiary and a qui tam lawsuit filed by a former SCI employee was recently unsealed relating to these matters.
Department of Justice relating to certain contracts, projects, proposals, and business activities of our SCI subsidiary, and in 2024 a qui tam lawsuit filed by a former SCI employee was unsealed relating to these matters.
Our Credit Agreement contains covenants that may adversely impact our business; the failure to comply with such covenants or the occurrence of an event of default could cause us to be unable to borrow additional funds and cause our outstanding debt to become immediately payable.
Our credit facilities contain covenants that may adversely impact our business; the failure to comply with such covenants or the occurrence of an event of default could cause us to be unable to borrow additional funds and cause our outstanding debt to become immediately payable.
Collectively, these covenants could constrain our ability to grow our business through acquisition or engage in other strategic transactions. Such facility also contains customary events of default. Finally, such facility includes covenants requiring, among other things, that we timely file quarterly and annual financial statements with the SEC, comply with all laws, pay all taxes and maintain casualty insurance.
Collectively, these covenants could constrain our ability to grow our business through acquisition or engage in other strategic transactions. Such facilities also contain customary events of default. Finally, such facilities include covenants requiring, among other things, that we timely file quarterly and annual financial statements with the SEC, comply with all laws, pay all taxes and maintain casualty insurance.
As a result, competition may cause our gross and operating margins to fall. Consolidation in the electronics industry may adversely affect our business by increasing customer buying power and increasing prices we pay for components.
As a result, competition may cause our gross and operating margins to fall. 24 Table of Contents Consolidation in the electronics industry may adversely affect our business by increasing customer buying power and increasing prices we pay for components.
Although our customers are generally liable for tariffs we pay on their behalf on importation of components used in the manufacture of their products, our gross margins would be reduced in the event we are for any reason unable to recover tariffs or duties from our customers.
Although our customers are generally liable for tariffs we pay on their behalf on importation of components used in the manufacture of their products and the importation of the products themselves, our gross margins would be reduced, potentially significantly, in the event we are for any reason unable to fully recover tariffs or duties from our customers.
In particular, our insurance coverage with respect to damages to or closure of our facilities, or damages to our customers’ products caused by cyberattacks, outages and certain natural disasters, such as earthquakes, epidemics and pandemics (such as the COVID-19 pandemic), is limited and is subject to policy deductibles, coverage limits, and exclusions, and as a result, may not be sufficient to cover all of our losses.
In particular, our insurance coverage with respect to damages to or closure of our facilities, or damages to our customers’ products caused by cyberattacks, outages and certain 25 Table of Contents natural disasters, such as earthquakes, epidemics and pandemics, is limited and is subject to policy deductibles, coverage limits, and exclusions, and as a result, may not be sufficient to cover all of our losses.
Global, national and corporate initiatives addressing climate change could increase our costs. Concern over climate change may lead to state, federal and international legislative and regulatory initiatives aimed at reducing carbon dioxide and other greenhouse gas emissions through incentives, taxes or mandates and there is increased interest generally in voluntary corporate commitments to reduce the generation of greenhouse gases.
Concern over climate change may lead to state, federal and international legislative and regulatory initiatives aimed at reducing carbon dioxide and other greenhouse gas emissions through incentives, taxes or mandates and there is increased interest generally in voluntary corporate commitments to reduce the generation of greenhouse gases.
Finally, if one or more counterparties to our interest rate or foreign currency hedging instruments were to fail, we could suffer losses and our hedging of risk could become less effective. As of September 28, 2024, approximately 65% of our cash was held in foreign jurisdictions.
Finally, if one or more counterparties to our interest rate or foreign currency hedging instruments were to fail, we could suffer losses and our hedging of risk could become less effective. As of September 27, 2025, approximately 60% of our cash was held in foreign jurisdictions.
Our liquidity is dependent on a number of factors, including profitability, business volume, inventory levels, the extension of trade credit by our suppliers, the degree of alignment of payment terms from our suppliers with payment terms granted to our customers, the amount we invest in our facilities and equipment, the timing of acquisitions and divestitures, the schedule for repayment of our outstanding indebtedness, the timing of stock repurchases, the amount available to borrow under the Fifth Amended and Restated Credit Agreement, dated as of September 27, 2022, as amended (the “Credit Agreement”), and the amount of accounts receivable eligible and accepted for sale under our factoring programs.
Our liquidity is dependent on a number of factors, including profitability, business volume, inventory levels, the extension of trade credit by our suppliers, the degree of alignment of payment terms from our suppliers with payment terms granted to our customers, the amount we invest in our facilities and equipment, the timing of acquisitions and divestitures, the schedule for repayment of our outstanding indebtedness, the timing of stock repurchases, the amount available to borrow under our credit facilities, and the amount of accounts receivable eligible and accepted for sale under our factoring programs.
Increasing regulatory burdens and corporate governance requirements impose both internal and external costs on us, require significant management attention and oversight and could make it more difficult for us to attract and retain qualified members of our Board of Directors and qualified executive officers.
Increasing regulatory burdens and corporate governance requirements impose both internal and external costs on us, require significant management attention and oversight and could make it more difficult for us to attract and retain qualified members of our Board of Directors and qualified executive officers. Global, national and corporate initiatives addressing climate change could increase our costs.
Further, as of September 28, 2024, we have cumulative net operating loss carryforwards (“NOLs”) for state and foreign tax purposes of $255 million and $446 million, respectively, and none for federal. The state NOLs begin expiring in fiscal 2025, and expire at various dates through September 26, 2043. Certain foreign NOLs begin expiring in fiscal 2025.
Further, as of September 27, 2025, we have cumulative net operating loss carryforwards (“NOLs”) for state and foreign tax purposes of $200 million and $481 million, respectively, and none for federal. The state NOLs began expiring in fiscal 2025, and expire at various dates through September 26, 2043. Certain foreign NOLs began expiring in fiscal 2025.
Further, although we are required to pay tariffs upon importation of the components, we may not be able to recover these amounts from our customers until sometime later, if at all, which would adversely impact our operating cash flow in a given period.
Further, although we are required to pay tariffs upon importation of the components, we may not be able to recover these amounts from our customers until sometime later, if at all, which could materially adversely impact our operating cash flow in a given period, especially if the recently announced higher tariffs actually take effect.
Our competitors include major global EMS providers, including Benchmark Electronics, Inc., Celestica, Inc., Flex Ltd., Hon Hai Precision Industry Co., Ltd. (Foxconn), Jabil Inc. and Plexus Corp., as well as other companies that have a regional, product, service or industry-specific focus.
The EMS industry is highly competitive and the industry has experienced a surplus of manufacturing capacity. Our competitors include major global EMS providers, including Benchmark Electronics, Inc., Celestica, Inc., Flex Ltd., Hon Hai Precision Industry Co., Ltd. (Foxconn), Jabil Inc. and Plexus Corp., as well as other companies that have a regional, product, service or industry-specific focus.
Should we sustain a significant uncovered loss, our net income will be reduced. Additionally, if one or more counterparties to our insurance coverage were to fail, we would bear the entire amount of an otherwise insured loss. Recruiting and retaining our key personnel is critical to the continued growth of our business.
Additionally, if one or more counterparties to our insurance coverage were to fail, we would bear the entire amount of an otherwise insured loss. Recruiting and retaining our key personnel is critical to the continued growth of our business.
We may not be successful in implementing and integrating strategic transactions or in divesting assets or businesses, which could harm our operating results; we could become required to book a charge to earnings should we determine that goodwill and other acquired assets are impaired.
Strategic Transaction Risks We may not be successful in implementing and integrating strategic transactions, including acquisition of ZT Group Int’l, Inc. (“ZT Systems”), or in divesting assets or businesses, which could harm our operating results; we could become required to book a charge to earnings should we determine that goodwill and other acquired assets are impaired.
The success of this joint venture is subject to a number of risks and uncertainties, including the joint venture obtaining “Trusted Source” designation under the India government’s “Make in India” initiative, adverse changes in the key markets the joint venture targets and the risks described above under the caption “We are subject to risks arising from our international operations”.
The success of our India joint venture is also subject to a number of risks and uncertainties, including adverse changes in the key markets the joint venture targets and the risks described above under the caption “We are subject to risks arising from our international operations”.
We realize a substantial portion of our revenue from communications equipment customers. This market is highly competitive, particularly in the area of price.
We realize a substantial portion of our revenue from communications equipment customers, including cloud service providers and data center operators. This market is highly competitive, particularly in the area of price.
Our policies generally 25 Table of Contents have deductibles and/or limits or may be limited to certain lines or business or customer engagements that reduce the amount of our potential recoveries from insurance. As a result, not all of our potential business losses are covered under our insurance policies.
Our policies generally have deductibles and/or limits or may be limited to certain lines or business or customer engagements that reduce the amount of our potential recoveries from insurance. As a result, not all of our potential business losses are covered under our insurance policies. Should we sustain a significant uncovered loss, our net income will be reduced.
Factors that can cause such fluctuations include announcements by our customers, suppliers, competitors or other events affecting companies in the electronics industry, such as component shortages, currency fluctuations, the impact of natural disasters and global events, such as the COVID-19 pandemic, geopolitical tensions, such as the war in Ukraine and conflict in the Middle East, general market fluctuations and macroeconomic conditions, including concerns about inflation and recession, any of which may cause the market price of our common stock to fluctuate widely. 27 Table of Contents Item 1B.
Factors that can cause such fluctuations include announcements by our customers, suppliers, competitors or other events affecting companies in the electronics industry, such as component shortages, changes in trade and tax policies, currency fluctuations, the impact of natural disasters and global events, geopolitical conditions and events, and general market fluctuations and macroeconomic conditions, including inflation, recession and slowing global economic growth, any of which may cause the market price of our common stock to fluctuate widely. 26 Table of Contents Item 1B.
Should we be unable to recruit new employees to fill key positions with us, our operations and growth prospects could be negatively impacted.
Should we be unable to recruit new employees to fill key positions with us, our operations and growth prospects could be negatively impacted. We are subject to risks associated with natural disasters and global events.
Liquidity and Credit Risks Our customers could experience credit problems, which could reduce our future revenue and net income. Certain of our customers have experienced significant financial difficulties in the past, with a few filing for bankruptcy.
We could also suffer reputational damage if our sustainability practices are perceived to be inadequate. Liquidity and Credit Risks Our customers could experience credit problems, which could reduce our future revenue and net income. Certain of our customers have experienced significant financial difficulties in the past, with a few filing for bankruptcy.
We could also suffer reputational damage if our sustainability practices are perceived to be inadequate. Any failure to comply with applicable environmental laws could adversely affect our business by causing us to pay significant amounts for cleanup of hazardous materials or for damages or fines.
Any failure to comply with applicable environmental laws could adversely affect our business by causing us to pay significant amounts for cleanup of hazardous materials or for damages or fines.
Our system of internal and disclosure controls and procedures was designed to provide reasonable assurance of achieving its objectives. However, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been or will be detected.
However, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been or will be detected.
The stock market in recent years has experienced significant price and volume fluctuations that have affected our stock price. These fluctuations have often been unrelated to our operating performance.
Risks of Investing in Our Stock The market price of our common stock is volatile and is impacted by factors other than our financial performance. The stock market in recent years has experienced significant price and volume fluctuations that have affected our stock price. These fluctuations have often been unrelated to our operating performance.
Current U.S. trade policy could increase the cost of using both our onshore and offshore manufacturing services for our U.S. customers, leading them to reduce their orders to us. Although we maintain significant manufacturing capacity in the U.S., the majority of our manufacturing operations are located outside the U.S.
Current U.S. trade policy could increase the cost of using both our onshore and offshore manufacturing services for our customers, leading them to reduce their orders to us; unrecovered tariffs would reduce our gross margins.
Any decision by a large number of our customers to cease using our manufacturing services due to the application of tariffs would materially reduce our revenue and net income. Depending on the outcome of the U.S. presidential election, a broad increase in tariffs on all imported components is possible.
Any decision by a large number of our customers to cease using our non-U.S. manufacturing locations due to the application of increased tariffs would materially reduce our revenue and net income.
Climate change may cause certain of these events to become more severe and therefore more damaging. In the event of a major natural disaster affecting one or more of our facilities, our operations and management information systems, which control our worldwide procurement, inventory management, shipping and billing activities, could be significantly disrupted.
In the event of a major natural disaster affecting one or more of our facilities, our operations and management information systems, which control our worldwide procurement, inventory management, shipping and billing activities, could be significantly disrupted. Such events could delay or prevent product manufacturing for an extended period of time.
We are subject to risks associated with natural disasters and global events. Our activities, including manufacturing, administration and information technology management, can be adversely affected by natural disasters such as major earthquakes, hurricanes, floods, tsunamis, tornadoes, fires and epidemics or pandemics, such as the COVID-19 pandemic.
Our activities, including manufacturing, administration and information technology management, can be adversely affected by natural disasters such as major earthquakes, hurricanes, floods, tsunamis, tornadoes, fires and epidemics or pandemics. Climate change may cause certain of these events to become more severe and therefore more damaging.
A significant change in our accounting judgments could have a significant impact on our reported revenue, gross profit, assets and liabilities. In general, changes to accounting rules or challenges to our interpretation or application of the rules by regulators may have a material adverse effect on our reported financial results or on the way we conduct business.
In general, changes to accounting rules or challenges to our interpretation or application of the rules by regulators may have a material adverse effect on our reported financial results or on the way we conduct business. 21 Table of Contents Our system of internal and disclosure controls and procedures was designed to provide reasonable assurance of achieving its objectives.
Any of these risks could cause our strategic transactions not to be ultimately profitable. We may also choose to divest plants, businesses or products lines in the future. Divestitures reduce revenue and, potentially, margins and can involve the risk of retained liabilities from the operations divested, including environmental liabilities.
Any of these risks could cause our strategic transactions, including the ZT Systems acquisition and our India joint venture, not to be as profitable or accretive as expected or planned. Separately, we may also choose to divest plants, businesses or products lines in the future.
In addition, because the interest rate we pay for borrowings under the Credit Agreement and the interest rate used to calculate the purchase price for receivables under our factoring programs are variable, the currently high interest rates resulting from actions taken by the Federal Reserve to reduce inflation both increases the amount of interest expense we pay, which reduces net income, and also reduces the amount of proceeds we receive from purchasers under our receivables factoring program, which reduces operating cash flow.
When interest rates are high, this both increases the amount of interest expense we pay, which reduces net income, and reduces the amount of proceeds we receive from purchasers under our receivables factoring program, which reduces operating cash flow.
General Risk Factors We are subject to intense competition in the electronics manufacturing services (“EMS”) industry, which could cause us to lose sales and, therefore, harm our financial performance. The EMS industry is highly competitive and the industry has experienced a surplus of manufacturing capacity.
Should we determine in the future that our goodwill or other intangible assets have become impaired, an impairment charge to earnings would become necessary, which could be significant. General Risk Factors We are subject to intense competition in the electronics manufacturing services (“EMS”) industry, which could cause us to lose sales and, therefore, harm our financial performance.
Further, geopolitical events like the war in Ukraine and conflict in the Middle East may also impact our operations by affecting our supply chain or impacting our plants located in the region of instability. 26 Table of Contents Risks of Investing in Our Stock The market price of our common stock is volatile and is impacted by factors other than our financial performance.
Any extended inability to continue our operations at affected facilities following such an event could reduce our revenue. Further, geopolitical conditions and events like the war in Ukraine, conflict in the Middle East and tensions between the U.S. and China may also impact our operations by affecting our supply chain or impacting our plants located in the region of instability.
For example, in the first quarter of fiscal 2023, we entered into a joint venture with a wholly owned subsidiary of Reliance Strategic Business Ventures Limited (“RSBVL”) that is intended to create a world-class electronic manufacturing hub in India.
For example, in October 2025, we acquired the data center infrastructure 23 Table of Contents manufacturing business of ZT Systems from Advanced Micro Devices, Inc., and in October 2022, we entered into a joint venture with a wholly owned subsidiary of Reliance Strategic Business Ventures Limited (“RSBVL”).
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In addition, recent customer finished goods inventory adjustments reduced demand for our services from this end market, negatively impacting our revenue during fiscal 2024. There can be no assurance when this adjustment will be complete or that we will not experience declines in demand in this or in other end markets in the future.
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The U.S. has recently announced or enacted broad increases in tariffs on all imported components, as well as on aluminum, steel, copper and derivatives thereof, subject to limited exceptions.
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Worldwide supply chain shortages caused by the COVID-19 pandemic, the resumption of strong worldwide demand for electronic products and components and geopolitical events have collectively limited our ability to manufacture and ship all of the products for which we have demand; our profitability will be reduced if we are unable to continue to pass on increasing component costs.
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As a result, we are exposed to increased tariffs with respect to components, products and certain raw materials we import into the U.S. from China, Mexico and other countries, with some exceptions.
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Over the past four years, our supply chain has been significantly impacted by interruptions in supplier and port operations resulting from the COVID-19 pandemic, the resumption of strong worldwide demand for electronic products and components following the easing of COVID-19 restrictions and geopolitical events, such as the war in Ukraine and the conflict in the Middle East.
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A significant change in our accounting judgments could have a significant impact on our reported revenue, gross profit, assets and liabilities.
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As a result, we have experienced and continue to experience delays in delivery and shortages of certain components, particularly certain types of capacitors, resistors and discrete semiconductors needed for many of the products we manufacture.
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In addition, because the interest rate we pay for borrowings under our credit facilities and the interest rate used to calculate the purchase price for receivables under our factoring programs are variable.
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These conditions have limited and may continue to limit our ability to manufacture and ship all of the products for which we have demand and that require these components and have resulted and may continue to result in an increase in our inventories of other components that cannot be assembled into finished products without these components.
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Our ability to realize any of the anticipated benefits from the acquisition of ZT Systems depends on us successfully integrating ZT Systems into our business and executing on our business plan to support large scale data center rack deployments.
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These factors are exacerbated by the fact that we are dependent on a limited number of sole source suppliers to provide key components that we incorporate into our products. In the case of semiconductors, most third-party manufacturing is concentrated among a small number of suppliers located in the same geographic area.
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If we cannot successfully integrate or are delayed in integrating newly acquired businesses or fail to execute our business plan, it would negatively impact our ability to manufacture new products for and to grow our business, which would materially adversely affect our financial condition, results of operations or cash flows.
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Although conditions have generally improved, we expect some level of delays and shortages to continue to persist in some form in the short to medium term.
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Even if ZT Systems is successfully integrated, the benefits of such acquisition may not be realized within the anticipated time frame or at all.
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Any such delays or shortages, including due to natural disasters or geopolitical issues or conflicts, could result in delays in shipments to our customers, which would reduce our revenue, margins and operating cash flow for the periods affected.
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Divestitures reduce revenue and, potentially, margins and can involve the risk of retained liabilities from the operations divested, including environmental liabilities. Finally, we have in the past recorded, and, as a result of the closing of the ZT Systems acquisition, will be required to record substantial goodwill and other intangible assets on our balance sheet.
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In addition, inflationary pressures resulting from supply chain constraints and strong economic conditions generally have led to sustained increases in the prices we pay for components and materials used in production and in our labor and transportation costs.
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While we seek to pass on to our customers the increased prices for components and shipping, plus a margin, our gross margins and profitability could decrease, perhaps significantly, over a sustained period of time if we are unable to do so. 18 Table of Contents The COVID-19 pandemic had, and any future outbreak could have, a significant impact on our results of operations and financial condition by reducing demand from our customers, interrupting the flow of components needed for our customers’ products, limiting the operations and productivity of our manufacturing facilities and creating health risks to our employees.
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Our business, operations and results of operations were significantly and negatively impacted by the COVID-19 pandemic. The COVID-19 pandemic 1) caused our customers to reduce their demand from us, 2) interrupted the availability of components we need for our customers’ products, 3) limited the operations and productivity of our manufacturing resources and 4) created health risks to our employees.
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Our operations could again be similarly and negatively impacted in the event of any future outbreaks, including outbreaks caused by new variants of COVID-19, and actions that government authorities may take in response to such future outbreaks.
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The U.S., China, the E.U. and several other countries have imposed tariffs on certain imported products. In particular, the U.S. has imposed tariffs impacting certain components and products imported from China by us into the U.S.
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These tariffs apply to both components imported into the U.S. from China for use in the manufacture of products at our U.S. plants and to certain of our customers’ products that we manufacture for them in China and that are then imported into the U.S.
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Our gross margins would be reduced in the event we are for any reason unable to pass on any tariffs that we incur to our customers.
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For example, as disclosed in Item 9A of this annual report on Form 10-K, we have identified 22 Table of Contents several material weaknesses relating to the control environment at one of our divisions and a material weakness in our internal controls over accounting for certain payments received for inventory.
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In addition, we have in the past recorded, and may be required to record in the future, goodwill and other intangible assets in connection with our acquisitions.
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Should we determine in the future that our goodwill or other intangible assets have become impaired, an impairment charge to earnings would become necessary, which could be significant. For example, during our fiscal 2018 annual goodwill impairment analysis, we fully impaired goodwill of $31 million associated with the acquisition of a storage software business we purchased in 2016.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeIn performing his role, the Vice President, IT Security monitors the prevention, detection, mitigation, and remediation of cybersecurity risks and incidents and is a key stakeholder and participant in the Company’s cybersecurity and privacy incident reporting framework described above. Our Vice President, IT Security reports to our CIO who, in turn, reports directly to our Chief Executive Officer.
Biggest changeIn performing his role, the Vice President, IT Security monitors the prevention, detection, mitigation, and remediation of cybersecurity risks and incidents and is a key stakeholder and participant in the Company’s cybersecurity and privacy incident reporting framework described above. Our Vice President, IT Security reports to our CIO who, in turn, reports to our Chief Financial Officer.
We also provide additional specialized training for our security team and for employees with access to certain sensitive information. Our SCI Technology subsidiary has been certified under the U.S. Cybersecurity Maturity Model Certification (CMMC) program. We also engage third-party experts to improve our cybersecurity posture, including through penetration testing.
We also provide additional specialized training for our security team and for employees with access to certain sensitive information. Our SCI subsidiary has been certified under the U.S. Cybersecurity Maturity Model Certification (CMMC) program. We also engage third-party experts to improve our cybersecurity posture, including through penetration testing.
Our Vice President, IT Security is an experienced cybersecurity professional with more than 20 years of experience building and leading cybersecurity, risk management, and information technology teams, and holds industry-recognized cybersecurity certifications, including Certified Information Systems Security Professional (CISSP) certification. 28 Table of Contents
Our Vice President, IT Security is an experienced cybersecurity professional with more than 10 years of experience building and leading cybersecurity, risk management, and information technology teams, and holds industry-recognized cybersecurity certifications, including Certified Information Systems Security Professional (CISSP) certification. 27 Table of Contents

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThese facilities are ISO 13485:2016 certified and, where appropriate, FDA registered and MDSAP certified. All such facilities are fully compliant with the FDA's quality systems regulations. Our SCI Technology defense and aerospace operations are headquartered in Huntsville, Alabama in a facility dedicated to meeting the specialized needs of our defense and aerospace customers.
Biggest changeFor our medical systems businesses, we have identified certain manufacturing facilities to be centers of excellence for medical products manufacturing. These facilities are ISO 13485:2016 certified and, where appropriate, FDA registered and MDSAP certified. All such facilities are fully compliant with the FDA’s quality systems regulations.
The majority of our facilities are also compliant with the standards set by Underwriters Laboratories. These standards define requirements for quality, manufacturing process control and manufacturing documentation and are required by many OEMs in the communications sector of the electronics industry. Our medical systems division has identified certain manufacturing facilities to be centers of excellence for medical products manufacturing.
The majority of our facilities are also compliant with the standards set by Underwriters Laboratories. These standards define requirements for quality, manufacturing process control and manufacturing documentation and are required by many OEMs in the communications sector of the electronics industry.
As of September 28, 2024, the approximate square footage of our active manufacturing facilities by region was as follows: Approximate Square Footage Americas 5,706,824 APAC 4,479,735 EMEA 1,372,443 Total 11,559,002 As of September 28, 2024, our active manufacturing facilities consist of nine million square feet in facilities that we own and two million square feet in leased facilities with lease terms expiring between 2024 and 2042.
As of September 27, 2025, the approximate square footage of our active manufacturing facilities by region was as follows: Approximate Square Footage Americas 5,615,766 APAC 4,277,270 EMEA 1,548,274 Total 11,441,310 As of September 27, 2025, our active manufacturing facilities consist of nine million square feet in facilities that we own and two million square feet in leased facilities with lease terms expiring between 2026 and 2042.
Substantially all of our automotive facilities are certified to IATF16949:2016, the automotive industry standard. Our oil and gas related manufacturing operations are, as applicable, certified to American Petroleum Institute requirements. Other certifications and registrations are obtained and maintained at our sites in accordance with specific customer requirements.
Other selected operations around the world are also AS9100 Rev. D certified. Our automotive facilities are strategically located worldwide. Substantially all of our automotive facilities are certified to IATF16949:2016, the automotive industry standard. Our oil and gas related manufacturing operations are, as applicable, certified to American Petroleum Institute requirements.
These operations are AS9100 Rev D certified and maintain other certifications in accordance with various U.S. military specifications, ANSI and other standards as appropriate for defense and aerospace suppliers. Other selected operations around the world are also AS9100 Rev. D certified. Our automotive facilities are strategically located worldwide.
Our SCI subsidiary’s defense and aerospace operations are headquartered in Huntsville, Alabama in a facility dedicated to meeting the specialized needs of our defense and aerospace customers. These operations are AS9100 Rev D certified and maintain other certifications in accordance with various U.S. military specifications, ANSI and other standards as appropriate for defense and aerospace suppliers.
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Other certifications and registrations are obtained and maintained at our sites in accordance with specific customer requirements.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest change(3) During the third quarter of fiscal 2022 and third quarter of fiscal 2023, our Board of Directors authorized us to repurchase up to $200 million and $200 million of our common stock, respectively, in the open market or in negotiated private transactions. These programs have no expiration date.
Biggest changeManagement’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources.” Stock Repurchases During the second quarter of fiscal 2025, our Board of Directors authorized us to rep urchase up to $300 million of our common stock in the open market or in negotiated private transactions. The program has no expiration date.
Index performance is calculated on a month-end basis. Copyright @ 2024 Standard & Poor's, a division of S&P Global.
Index performance is calculated on a month-end basis. Copyright @ 2025 Standard & Poor’s, a division of S&P Global.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock is traded on the Nasdaq Global Select Market under the symbol SANM. As of November 14, 2024, we had approximately 712 holders of record of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock is traded on the Nasdaq Global Select Market under the symbol SANM. As of October 31, 2025, we had approximately 659 holders of record of our common stock.
An investment of $100 (with reinvestment of all dividends, if any) is assumed to have been made in our common stock on September 28, 2019 and in each of such indices at month end starting on September 28, 2019 and its relative performance is tracked through September 28, 2024. * $100 invested on 9/28/2019 in stock or index, including reinvestment of dividends.
An investment of $100 (with reinvestment of all dividends, if any) is assumed to have been made in our common stock on October 3, 2020 and in each of such indices at month end starting on October 3, 2020 and its relative performance is tracked through September 27, 2025. * $100 invested on 10/3/2020 in stock or index, including reinvestment of dividends.
All rights reserved. 9/28/2019 10/3/2020 10/2/2021 10/1/2022 9/30/2023 9/28/2024 Sanmina Corporation 100.00 82.66 121.98 143.46 168.99 214.41 S&P 500 100.00 115.15 149.70 126.54 153.89 209.84 Peer Group 100.00 101.54 161.23 152.26 278.13 337.71 Sanmina's stock price performance included in this graph is not necessarily indicative of future stock price performance. 31 Table of Contents Dividends We have never declared or paid cash dividends on our common stock.
All rights reserved. 10/3/2020 10/2/2021 10/1/2022 9/30/2023 9/28/2024 9/27/2025 Sanmina Corporation 100.00 147.57 173.56 204.44 259.40 429.79 S&P 500 100.00 130.01 109.89 133.65 182.23 214.30 Peer Group 100.00 158.27 150.05 277.71 371.63 781.82 Sanmina’s stock price performance included in this graph is not necessarily indicative of future stock price performance. 30 Table of Contents Dividends We have never declared or paid cash dividends on our common stock.
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Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources.” Stock Repurchases The table below presents information regarding repurchases of our common stock during the fourth quarter of 2024.
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There was no stock repurchase activity during the fourth quarter of 2025. As of September 27, 2025, an aggregate of $239 million remains available under the stock repurchase program.
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Period (1) Total Number of Shares Purchased Average Price Paid Per Share (2) Total Number of Shares Purchased as Part of Publicly Announced Programs (3) Maximum Dollar Value of Shares That May Yet Be Purchased Under The Programs (2) June 30, 2024 - July 27, 2024 — $ — — $ 117,824,163 July 28, 2024 - August 24, 2024 564,460 $ 69.05 564,460 $ 78,846,811 August 25, 2024 - September 28, 2024 380,451 $ 68.18 380,451 $ 52,906,153 Total 944,911 $ 68.70 944,911 (1) All months shown are our fiscal months.
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(2) Amounts do not include commissions payable on shares repurchased. The total average price paid per share is a weighted average based on the total number of shares repurchased during the period and does not include the effect of the excise tax under the provision of the Inflation Reduction Act.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeAll statements other than statements of historical fact are statements that could be deemed to be forward-looking statements, including any statements regarding trends in future revenue or results of operations, gross margin, operating margin, expenses, earnings or losses from operations, or cash flow; any statements of the plans, strategies and objectives of management for future operations and the anticipated benefits of such plans, strategies and objectives; any statements regarding future economic conditions or performance; any statements regarding litigation or pending investigations, claims or disputes; any statements regarding the timing of closing of, future cash outlays for, and benefits of acquisitions and other strategic transactions, including our Indian joint venture; any statements regarding expected restructuring costs and benefits; any statements concerning the adequacy of our current liquidity and the availability of additional sources of liquidity; any statements regarding the potential impact of any future outbreaks, including outbreaks caused by new variants of COVID-19 on our business, results of operations and financial condition; any statements regarding the potential impact of supply chain shortages and inflation on our business; any statements regarding the future impact of tariffs and export controls on our business; any statements relating to future tax rates and our expectations concerning developments in the audit by the IRS of certain tax returns filed by us, including the potential impact of the IRS revenue agent’s report received by us in November 2023; any statements relating to the expected impact of accounting pronouncements not yet adopted; any statements regarding future repurchases of our common stock; any statements of expectation or belief; and any statements of assumptions underlying any of the foregoing.
Biggest change(“ZT Systems”); any statements regarding expected restructuring costs and benefits; any statements concerning the adequacy of our current liquidity and the availability of additional sources of liquidity; any statements regarding the potential impact of any future pandemics on our business, results of operations and financial condition; any statements regarding the potential impact of supply chain shortages and inflation on our business; any statements regarding the future impact of tariffs, export controls and evolving trade policies on our business; any statements relating to future tax rates and tax policies and our expectations concerning developments in the audit by the IRS of certain tax returns filed by us, including the potential impact of the IRS revenue agent’s report received by us in November 2023; any statements relating to the expected impact of accounting pronouncements not yet adopted; any statements regarding future repurchases of our common stock; any statements of expectation or belief; and any statements of assumptions underlying any of the foregoing.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations This report on annual report Form 10-K 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 statements relate to our expectations for future events and time periods.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations This report on Annual Report on Form 10-K 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 statements relate to our expectations for future events and time periods.
The concentration of foreign operations has resulted primarily from a desire on the part of many of our customers to manufacture in lower-cost locations in regions such as Asia, Latin America and Eastern Europe and we plan to expand our presence as appropriate to meet the needs of our customers.
The concentration of foreign operations has resulted primarily from a desire on the part of many of our customers to manufacture in lower-cost locations in regions such as Latin America, Asia and Eastern Europe and we plan to expand our presence as appropriate to meet the needs of our customers.
Fluctuations in our gross margin may be caused by a number of factors, including: • the impacts of supply chain constraints on our operations, the operations of our suppliers and on our customers’ businesses; • capacity utilization which, if lower, results in lower margins due to fixed costs being absorbed by lower volumes; • changes in the mix of high and low margin products demanded by our customers; 38 Table of Contents • competition in the EMS industry and pricing pressures from OEMs due to greater focus on cost reduction; • the amount of our provisions for excess and obsolete inventory, including those associated with distressed customers; • levels of operational efficiency and production yields; • our performance on long-term contracts, including our ability to recover claims for cost overruns; and • our ability to transition the location of and ramp up manufacturing and assembly operations when requested by a customer in a timely and cost-effective manner.
Fluctuations in our gross margin may be caused by a number of factors, including: • the impacts of supply chain constraints on our operations, the operations of our suppliers and on our customers’ businesses; • capacity utilization which, if lower, results in lower margins due to fixed costs being absorbed by lower volumes; • changes in the mix of high and low margin products demanded by our customers; • competition in the EMS industry and pricing pressures from OEMs due to greater focus on cost reduction; 37 Table of Contents • the amount of our provisions for excess and obsolete inventory, including those associated with distressed customers; • levels of operational efficiency and production yields; • our performance on long-term contracts, including our ability to recover claims for cost overruns; and • our ability to transition the location of and ramp up manufacturing and assembly operations when requested by a customer in a timely and cost-effective manner.
We believe that cash held in the United States, together with liquidity available under our Credit Agreement and cash from foreign subsidiaries that could be remitted to the United States without tax consequences, will be sufficient to meet our United States liquidity needs for at least the next 12 months.
We believe that cash held in the United States, together with liquidity available under our Existing Credit Agreement and cash from foreign subsidiaries that could be remitted to the United States without tax consequences, will be sufficient to meet our United States liquidity needs for at least the next 12 months.
Products include optical, radio frequency (“RF”) and microelectronic design and manufacturing services from our Advanced Microsystems Technologies division; multi-chip package memory solutions from our Viking Technology division; high-performance storage platforms for hyperscale and enterprise solutions from our Viking Enterprise Solutions division; defense and aerospace product, design, manufacturing, repair and refurbishment services from our SCI Technology Inc.
Products include optical, radio frequency (“RF”) and microelectronic design and manufacturing services from our Advanced Microsystems Technologies division; multi-chip package memory solutions from our Viking Technology division; high-performance storage platforms for hyperscale and enterprise solutions from our Viking Enterprise Solutions division; defense and aerospace products, design, manufacturing, repair and refurbishment services from our SCI Technology, Inc.
The Fifth Amended and Restated Credit Agreement, dated as of September 27, 2022, as amended, (the “Credit Agreement”), provides for an $800 million revolving credit facility and a $350 million secured term loan (the “Term Loan Due 2027”), together with an accordion feature by which we can obtain, subject to the satisfaction of specified conditions and commitment of the lenders, additional revolving commitments in an aggregate amount of up to $200 million.
The Fifth Amended and Restated Credit Agreement, dated as of September 27, 2022, as amended, (the “Existing Credit Agreement”), provides for an $800 million revolving credit facility and a $350 million secured term loan (the “Term Loan Due 2027”), together with an accordion feature by which we can obtain, subject to the satisfaction of specified conditions and commitment of the lenders, additional revolving commitments in an aggregate amount of up to $200 million.
The Company’s long-term liabilities arising from unrecognized tax benefits can be found in Note 10 “Income Tax” of the notes to the Consolidated Financial Statements contained in this report. We also have outstanding firm purchase orders with certain suppliers for the purchase of inventory which are generally short-term in nature.
Our long-term liabilities arising from unrecognized tax benefits can be found in Note 10 “Income Tax” of the notes to the Consolidated Financial Statements contained in this report. We also have outstanding firm purchase orders with certain suppliers for the purchase of inventory which are generally short-term in nature.
Our effective tax rate is highly dependent upon the amount and geographic distribution of our worldwide income or losses, the tax regulations, rates and holidays in each geographic region, the utilization of net operating losses, the availability of tax credits and carryforwards, and the effectiveness of our tax planning strategies. 37 Table of Contents Results of Operations Refer to Item 7.
Our effective tax rate is highly dependent upon the amount and geographic distribution of our worldwide income or losses, the tax regulations, rates and holidays in each geographic region, the utilization of net operating losses, the availability of tax credits and carryforwards, and the effectiveness of our tax planning strategies. 36 Table of Contents Results of Operations Refer to Item 7.
Changes in our estimates of transaction price and/or costs to complete result in a favorable or unfavorable impact to revenue and operating income.
Changes in our estimates of transaction price and/or costs to complete may result in a favorable or unfavorable impact to revenue and operating income.
On an ongoing basis, we evaluate the process used to develop estimates related to accounts receivable, inventories, income taxes, environmental matters, litigation and other contingencies, as well as estimates related to costs expected to be incurred to satisfy performance obligations under long-term contracts and variable consideration related to such contracts.
On an ongoing basis, we evaluate the processes used to develop estimates related to accounts receivable, inventories, income taxes, environmental matters, litigation and other contingencies, as well as estimates related to costs expected to be incurred to satisfy performance obligations under long-term contracts and variable consideration related to such contracts.
(“SCI”) subsidiary; and cloud-based smart manufacturing execution software from our 42Q division. Services include design, engineering, and logistics and repair. Our only reportable segment for financial reporting purposes is IMS, which represented approximately 80% of our total revenue in 2024.
(“SCI”) subsidiary; and cloud-based smart manufacturing execution software from our 42Q division. Services include design, engineering, and logistics and repair. Our only reportable segment for financial reporting purposes is IMS, which represented approximately 80% of our total revenue in 2025.
We believe our existing cash resources and other sources of liquidity, together with cash generated from operations, will be sufficient to meet our working capital requirements through at least the next 12 months.
We believe our existing cash resources and other sources of liquidity, together with cash generated from operations, will be sufficient to meet our working capital requirements through at least the next twelve months.
We invest our cash in numerous financial institutions that we believe to be of high quality. However, there can be no assurance that one or more of such institutions will not become insolvent in the future, in which case all or a portion of our uninsured funds on deposit with such institutions could be lost.
We invest our cash among a number of financial institutions that we believe to be of high quality. However, there can be no assurance that one or more of such institutions will not become insolvent in the future, in which case all or a portion of our uninsured funds on deposit with such institutions could be lost.
Off-Balance Sheet Arrangements As of September 28, 2024, we did not have any off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of Regulation S-K promulgated by the SEC, that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues, or expenses, results of operations, liquidity, capital expenditures, or capital resources that is material to investors. 43 Table of Contents
Off-Balance Sheet Arrangements As of September 27, 2025, we did not have any off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of Regulation S-K promulgated by the SEC, that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues, or expenses, results of operations, liquidity, capital expenditures, or capital resources that is material to investors. 43 Table of Contents
To the extent the probable tax outcome of these matters changes, such changes in estimate will impact our income tax provision in the period in which such determination is made. We only recognize or continue to recognize tax positions that meet a “more likely than not” threshold of being upheld.
To the extent the probable tax outcome of these matters changes, such changes in estimate will impact our income tax provision in the period in which such 35 Table of Contents determination is made. We only recognize or continue to recognize tax positions that meet a “more likely than not” threshold of being upheld.
Various countries have enacted or have announced plans to enact new tax laws to implement the global minimum tax and where enacted, the rules begin to be effective for us in fiscal 2025.
Various countries have enacted or have announced plans to enact new tax laws to implement the global minimum tax and where enacted, the rules began to be effective for us in fiscal 2025.
Therefore, financial information for these operating segments is combined and presented in a single category entitled “CPS”. 33 Table of Contents Our strategy is to leverage our comprehensive product and service offerings, advanced technologies and global capabilities to further penetrate diverse end markets that we believe offer significant growth opportunities and have complex products that require higher value-added services.
Therefore, financial information for these operating segments is combined and presented in a single category called “CPS”. 32 Table of Contents Our strategy is to leverage our comprehensive product and service offerings, advanced technologies and global capabilities to further penetrate diverse end markets that we believe offer significant growth opportunities and have complex products that require higher value-added services.
The sale of receivables under all of these programs is subject to the approval of the banks or customers involved and there can be no assurance that we will be able to sell the maximum amount of receivables permitted by these programs when desired.
The sale of 41 Table of Contents receivables under all of these programs is subject to the approval of the banks or customers involved and there can be no assurance that we will be able to sell the maximum amount of receivables permitted by these programs when desired.
Our liquidity is largely dependent on changes in our working capital, including sales of accounts receivable under our receivables sales programs and the extension of trade credit by our suppliers, investments in manufacturing inventory, facilities and equipment, repayments of obligations under outstanding indebtedness and repurchases of common stock. In 2024, we generated $340 million of cash from operations.
Our liquidity is largely dependent on changes in our working capital, including sales of accounts receivable under our receivables sales programs and the extension of trade credit by our suppliers, investments in manufacturing inventory, facilities and equipment, repayments of obligations under outstanding indebtedness and repurchases of common stock. In 2025, we generated $621 million of cash from operations.
However, should demand for our services decrease significantly over the next 12 months, should we be unable to recover on inventory obligations owed to us 42 Table of Contents by our customers or should we experience significant increases in delinquent or uncollectible accounts receivable for any reason, our cash provided by operations could decrease significantly and we could be required to seek additional sources of liquidity to continue our operations at their current level.
However, should demand for our services decrease significantly over the next twelve months, should we be unable to recover on inventory obligations owed to us by our customers or should we experience significant increases in delinquent or uncollectible accounts receivable for any reason, our cash provided by operations could decrease significantly and we could be required to seek additional sources of liquidity to continue our operations at their current level.
In the ordinary course of business, we are or may become party to legal proceedings, claims and other contingencies, including environmental, warranty and employee matters and examinations by government agencies. As of September 28, 2024, we had accrued liabilities of $39 million related to such matters.
In the ordinary course of business, we are or may become party to legal proceedings, claims and other contingencies, including environmental, regulatory, warranty and employee matters and examinations by government agencies. As of September 27, 2025, we had accrued liabilities of $39 million related to such matters.
Cash and cash equivalents were $626 million at September 28, 2024 and $668 million at September 30, 2023. Our cash levels vary during any given period depending on the timing of collections from customers and payments to suppliers, borrowings under credit facilities, sales of accounts receivable under numerous programs we utilize, repurchases of capital stock and other factors.
Cash and cash equivalents were $926 million at September 27, 2025 and $626 million at September 28, 2024. Our cash levels vary during any given period depending on the timing of collections from customers and payments to suppliers, borrowings under credit facilities, sales of accounts receivable under numerous programs we utilize, repurchases of capital stock and other factors.
We cannot accurately predict the outcome of these matters or the amount or timing of cash flows that may be required to defend ourselves or to settle such matters or that these reserves will be sufficient to fully satisfy our contingent liabilities. As of September 28, 2024, we had a liability of $57 million for uncertain tax positions.
We cannot accurately predict the outcome of these matters or the amount or timing of cash flows that may be required to defend ourselves or to settle such matters or that these reserves will be sufficient to fully satisfy our contingent liabilities. As of September 27, 2025, we had a liability of $53 million for uncertain tax positions.
Subject to satisfaction of certain conditions, including obtaining additional commitments from existing and/or new lenders, we may increase the revolver commitments under the Credit Agreement by an additional $200 million.
Subject to satisfaction of certain conditions, including obtaining additional commitments from existing and/or new lenders, we may increase the revolving commitments under the Existing Credit Agreement up to an additional $200 million.
A summary of our long-term debt obligations as of September 28, 2024 can be found in Note 6 “Debt” of the notes to the Consolidated Financial Statements contained in this report. We have defined benefit pension plans with an underfunded amount of $39 million as of September 28, 2024.
A summary of our long-term debt obligations as of September 27, 2025 can be found in Note 6 “Debt” of the notes to the Consolidated Financial Statements contained in this report. We have defined benefit pension plans with an underfunded amount of $46 million as of September 27, 2025.
This includes companies that are much larger than we are and smaller companies that focus on a particular niche product, service or end market. Although we believe we are well-positioned in each of our key end markets and offer many advantages compared to our competitors, competition remains intense and profitably growing our revenues has been challenging.
This includes companies that are much larger than we are and smaller companies that focus on a particular niche product, service or end market. Although we believe we are well-positioned in each of our key end markets and offer many advantages compared to our competitors, profitably growing revenues are often constrained by intense competition.
Trends and Uncertainties We believe our end-to-end manufacturing solutions combined with our global supply chain management expertise differentiates us from our competitors and enables us to better serve the needs of OEMs. However, our business faces many challenges. For example, we compete with a number of companies in each of our key end markets.
Trends and Uncertainties We believe our end-to-end manufacturing solutions combined with our global supply chain management expertise differentiate us from our competitors and enable us to better serve the needs of OEM customers. However, our business faces many challenges. For example, we compete with a number of companies in each of our key end markets.
Inventory write-downs are recorded based on forecasted demand, past experience with specific customers, the ability to redistribute inventory to other programs or return inventories to our suppliers, and whether customers are contractually obligated and have the ability to pay for the related inventory.
Inventory write-downs are recorded based on forecasted demand, past experience with specific customers, the ability to redistribute inventory to other programs or return inventories to our suppliers, and whether customers are contractually obligated and have the ability to pay for the related inventory. We generally procure inventory based on specific customer orders and forecasts.
“Management's Discussion and Analysis of Financial Condition and Results of Operations” contained in our annual report on Form 10-K for the fiscal year ended September 30, 2023 filed with the SEC on November 16, 2023 for discussion of our results of operations for the fiscal year ended September 30, 2023 compared to the fiscal year ended October 1, 2022.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in our Annual Report on Form 10-K for the fiscal year ended September 28, 2024 filed with the SEC on November 27, 2024 for discussion of our results of operations for the fiscal year ended September 28, 2024 compared to the fiscal year ended September 30, 2023.
As of September 28, 2024, approximately 34% of our cash balance was held in the United States. Should we choose or need to remit cash to the United States from our foreign locations, we may incur tax obligations which would reduce the amount of cash ultimately available to the United States.
As of September 27, 2025, 42% of our cash balance was held in the United States. Should we choose or need to remit cash to the United States from our foreign locations, we may incur tax obligations which would reduce the amount of cash ultimately available to the United States.
Additionally, we are impacted by macroeconomic challenges such as inflation, supply chain constraints, foreign currency fluctuations, high interest rates, market volatility, recession concerns, tariffs and other factors that have been and could be in the future exacerbated by geopolitical conflicts such as the war in Ukraine, conflict in the Middle East and results of the U.S. presidential election.
Additionally, we are impacted by macroeconomic challenges such as tariffs, inflation, supply chain constraints, foreign currency fluctuations, high interest rates, market volatility and recession concerns that have been and could be in the future exacerbated by geopolitical environment such as the tensions between the U.S. and other nations, conflict in the Middle East and the war in Ukraine.
Our working capital metrics tend to fluctuate from quarter-to-quarter based on factors such as the linearity of our 40 Table of Contents shipments to customers and purchases from suppliers, customer and supplier mix, and payment terms with customers and suppliers. These fluctuations can significantly affect our cash flows from operating activities.
Our working capital metrics tend to fluctuate from quarter-to-quarter based on factors such as the linearity of our shipments to customers and purchases from suppliers, customer and supplier mix, the extent to which we factor customer receivables and the negotiation of payment terms with customers and suppliers. These fluctuations can significantly affect our cash flows from operating activities.
In addition to the RPA, we participate in accounts receivable sales programs that have been implemented by certain of our customers, as in effect from time to time. We do not service accounts receivable sold under these other programs.
Trade receivables sold pursuant to the RPA are serviced by us. In addition to the RPA, we participate in trade receivables sales programs that have been implemented by certain of our customers, as in effect from time to time. We do not service trade receivables sold under these other programs.
We enter into forward interest rate swap agreements with independent counterparties to partially hedge the variability in cash flows due to changes in Secured Overnight Financing Rate benchmark interest rate associated with anticipated variable rate borrowings. See Note 5 “Financial Instruments and Concentration of Credit Risk” of the notes to the Consolidated Financial Statements contained in this report for details.
See Note 8, “Accounts Receivable Sale Programs” of the notes to the Consolidated Financial Statements contained in this report for details. We enter into forward interest rate swap agreements with independent counterparties to partially hedge the variability in cash flows due to changes in the Secured Overnight Financing Rate benchmark interest rate associated with anticipated variable rate borrowings.
The impact of changes in estimates on revenue and operating income resulting from application of the cost-to-cost method for recognizing revenue was as follows: Year Ended September 28, 2024 September 30, 2023 October 1, 2022 Revenue: (In thousands) Favorable $ 12,220 $ 6,023 $ 5,403 Unfavorable (2,697) (2,556) (162) Total $ 9,523 $ 3,467 $ 5,241 35 Table of Contents Year Ended September 28, 2024 September 30, 2023 October 1, 2022 Operating Income: (In thousands) Favorable $ 21,229 $ 8,657 $ 7,025 Unfavorable (16,102) (44,838) (20,737) Total $ 5,127 $ (36,181) $ (13,712) For contracts for which revenue is required to be recognized at a point-in-time, we recognize revenue when we have transferred control of the related goods, which generally occurs upon shipment or delivery of the goods to the customer.
The impact of changes in estimates on revenue and operating income resulting from application of the cost-to-cost method for recognizing revenue was as follows: Year Ended September 27, 2025 September 28, 2024 September 30, 2023 Revenue: (In thousands) Favorable $ 23,740 $ 12,220 $ 6,023 Unfavorable (3,786) (2,697) (2,556) Total $ 19,954 $ 9,523 $ 3,467 34 Table of Contents Year Ended September 27, 2025 September 28, 2024 September 30, 2023 Operating Income: (In thousands) Favorable $ 25,640 $ 21,229 $ 8,657 Unfavorable (19,510) (16,102) (44,838) Total $ 6,130 $ 5,127 $ (36,181) For contracts for which revenue is required to be recognized at a point-in-time, we recognize revenue when we have transferred control of the related goods, which generally occurs upon shipment or delivery of the goods to the customer.
Our IMS segment consists of printed circuit board assembly and test, high-level assembly and test and direct-order-fulfillment. 2) Components, Products and Services (“CPS”). Components include advanced printed circuit boards, backplanes and backplane assemblies, cable assemblies, fabricated metal parts, precision machined parts, and plastic injected molded parts.
IMS is a single operating segment consisting of printed circuit board (“PCB”) assembly and test, high-level assembly and test and direct-order-fulfillment. 2) Components, Products and Services (“CPS”). Components include advanced PCBs, backplanes and backplane assemblies, cable assemblies, fabricated metal parts, precision machined parts, and plastic injected molded parts.
Sales to our ten largest customers typically represent approximately 50% of our net sales in any given year. We typically enter into supply agreements with our major OEM customers. These agreements generally have terms ranging from three to five years and cover the manufacture of a range of products.
Historically, we have had substantial recurring sales to existing customers. Sales to our ten largest customers represent approximately 50% of net sales. We typically enter into long-term supply agreements with our major OEM customers. These agreements generally have terms ranging from three to five years and cover the manufacture of a range of products.
During 2024, we generated $447 million of cash from earnings, excluding non-cash items, and used $107 million of cash primarily because of a decrease in accounts payable of $112 million, an increase in accrued liabilities of $12 million and an increase in accounts receivable of $104 million, partially offset by a decrease in inventories of $36 million.
During 2024, we generated $447 million of cash from earnings, excluding non-cash items, and used $107 million of cash primarily because of a decrease in accounts payable of $112 million and an increase in accounts receivable of $104 million, partially offset by an increase in deferred revenue and customer advances of $89 million.
Our working capital was approximately $1.9 billion and $1.8 billion as of September 28, 2024 and September 30, 2023, respectively. Net cash provided by operating activities was $340 million, $235 million and $331 million for 2024, 2023 and 2022, respectively.
Our working capital was approximately $2.0 billion and $1.9 billion as of September 27, 2025 and September 28, 2024, respectively. Net cash provided by operating activities was $621 million, $340 million and $235 million for 2025, 2024 and 2023, respectively.
However, an unfavorable resolution of this matter could have a material adverse impact on our consolidated financial statements. The Organization for Economic Co-operation and Development (“OECD”), an international association of 38 countries including the United States, has proposed changes to numerous long-standing tax principles, namely, its Pillar Two framework, which imposes a global minimum corporate tax rate of 15%.
The Organization for Economic Co-operation and Development (“OECD”), an international association of 38 countries including the United States, has proposed changes to numerous long-standing tax principles, namely, its Pillar Two framework, which imposes a global minimum corporate tax rate of 15%.
Net cash used in investing activities was $114 million, $192 million and $132 million for 2024, 2023 and 2022, respectively. In 2024 and 2023, we used $111 million and $191 million, respectively, of cash for capital expenditures. Net cash provided by (used in) financing activities was $(270) million, $95 million and $(314) million for 2024, 2023 and 2022, respectively.
In 2024, we used $111 million of cash for capital expenditures. Net cash provided by (used in) financing activities was $(174) million, $(270) million and $95 million for 2025, 2024 and 2023, respectively.
As of September 28, 2024, no borrowings and $14 million of letters of credit were outstanding under the Credit Agreement, under which $786 million was available to borrow. There were no borrowings outstanding under the Credit Agreement as of September 30, 2023. Short-term Borrowing Facilities.
As of September 27, 2025, no borrowings and $9 million of letters of credit were outstanding under the Existing Credit Agreement, under which $791 million was available to borrow. There were no borrowings outstanding under the Existing Credit Agreement as of September 28, 2024. Short-term Borrowing Facilities. We had no short-term borrowings outstanding as of September 27, 2025.
Our raw materials inventories are generally acquired in anticipation of specific customer orders and pursuant to customer-specific design specifications. When we and our customers agree that the quantity of customer-specific inventory is in excess of anticipated demand, we may transfer control of those inventories to our customers in exchange for a cash payment.
Our raw materials inventories are generally acquired in anticipation of specific customer orders and pursuant to customer-specific design specifications. When we and our customers agree that the quantity of customer-specific inventory is in excess of anticipated demand, we may seek advance payments from our customers against such inventories.
Selling, General and Administrative Selling, general and administrative expenses were $266 million, $255 million and $245 million in 2024, 2023 and 2022, respectively. As a percentage of net sales, selling, general and administrative expenses were 3.5%, 2.9% and 3.1% for 2024, 2023 and 2022, respectively.
Selling, General and Administrative Selling, general and administrative expenses were $290 million and $266 million in 2025 and 2024, respectively. As a percentage of net sales, selling, general and administrative expenses were 3.6% and 3.5% for 2025 and 2024, respectively.
We review the accounting policies used in reporting our financial results on a regular basis. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, net sales and expenses and related disclosure of contingent liabilities.
The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, net sales and expenses and related disclosure of contingent liabilities.
(2) Contract asset days (a measure of how quickly we transfer contract assets to accounts receivable) are calculated as the ratio of average contract assets to average daily net sales for the quarter.
(2) Contract asset days (a measure of how quickly we transfer contract assets to accounts receivable) is calculated as contract assets at the end of the current quarter divided by net sales for the quarter multiplied by 90 days.
Year Ended September 28, 2024 September 30, 2023 October 1, 2022 (In thousands) Net sales $ 7,568,328 $ 8,935,048 $ 7,919,622 Gross profit $ 640,429 $ 743,211 $ 622,206 Gross margin 8.5 % 8.3 % 7.9 % Operating expenses $ 304,935 $ 287,553 $ 272,727 Operating income $ 335,494 $ 455,658 $ 349,479 Operating margin 4.4 % 5.1 % 4.4 % Net income attributable to common shareholders $ 222,536 $ 309,970 $ 240,384 Net Sales Net sales decreased from $8.9 billion for 2023 to $7.6 billion for 2024, a decrease of 15.3%.
Year Ended September 27, 2025 September 28, 2024 September 30, 2023 (In thousands) Net sales $ 8,128,382 $ 7,568,328 $ 8,935,048 Gross profit $ 716,357 $ 640,429 $ 743,211 Gross margin 8.8 % 8.5 % 8.3 % Operating expenses $ 361,789 $ 304,935 $ 287,553 Operating income $ 354,568 $ 335,494 $ 455,658 Operating margin 4.4 % 4.4 % 5.1 % Net income attributable to common shareholders $ 245,893 $ 222,536 $ 309,970 Net Sales Net sales increased from $7.6 billion for 2024 to $8.1 billion for 2025, an increase of 7.4%.
We do not expect resolution of this matter within twelve months and cannot predict with any certainty the timing of such resolution. Although the final resolution of this matter remains uncertain, we continue to believe that it is more likely than not our tax position will be sustained.
We cannot predict with any certainty the timing of the resolution of this matter. Although the final resolution of this matter remains uncertain, we continue to believe that it is more likely than not our tax position will be sustained. However, an unfavorable resolution of this matter could have a material adverse impact on our consolidated financial statements.
Our primary sources of liquidity as of September 28, 2024 consisted of (1) cash and cash equivalents of $626 million; (2) our Credit Agreement, under which $786 million, net of outstanding borrowings and letters of credit, was available; (3) our foreign short-term borrowing facilities of $71 million, all of which was available; (4) proceeds from the sale of accounts receivable under our receivables sales programs; and (5) cash generated from operations.
Our primary sources of liquidity as of September 27, 2025 consisted of (1) cash and cash equivalents of $926 million (an aggregate of $215 million of our cash is held by Sanmina SCI India Private Limited (“SIPL”) and Sanmina SCI Technology India Private Limited, our existing Indian manufacturing entity, which is designated to fund its operations use); (2) our Existing Credit Agreement, under which $791 million, net of outstanding borrowings and letters of credit, was available; (3) our foreign short-term borrowing facilities of $71 million, all of which was available; (4) proceeds from the sale of accounts receivable under our receivables sales programs; and (5) cash generated from operations.
Therefore, as of September 28, 2024, a maximum of $490 million of sold receivables could be outstanding at any point in time under this program, as amended, as required by our Credit Agreement. Accounts receivables sold pursuant to the RPA are serviced by us.
Under the Existing Credit Agreement, the percentage of our total trade receivables that can be sold and outstanding at any time is 50%. Therefore, as of September 27, 2025, a maximum of $490 million of sold receivables could be outstanding at any point in time under this program, as amended, as required by our Credit Agreement.
Under these agreements, a customer typically purchases its requirements for specific products in particular geographic areas from us. However, these agreements generally do not obligate the customer to purchase minimum quantities of products. In addition, some customer contracts contain cost reduction objectives, which can have the effect of reducing revenue from such customers.
Under these agreements, we manufacture products to customers’ unique specification leveraging our global factory footprint in locations chosen by our customers. However, these agreements generally do not obligate the customer to purchase minimum quantities of products. In addition, some customer contracts contain cost reduction objectives, which can have the effect of reducing revenue from such customers.
Income Taxes— We estimate our income tax provision or benefit in each of the jurisdictions in which we operate, including estimating exposures related to examinations by taxing authorities.
We periodically assess this arrangement to determine if there is any change in facts and circumstances that might require us to deconsolidate the entity. Income Taxes— We estimate our income tax provision or benefit in each of the jurisdictions in which we operate, including estimating exposures related to examinations by taxing authorities.
Sales by end market were as follows: Year Ended 2024 vs. 2023 2023 vs. 2022 September 28, 2024 September 30, 2023 October 1, 2022 Increase/(Decrease) Increase/(Decrease) (Dollars in thousands) Industrial, Medical, Defense and Aerospace, and Automotive $ 4,915,880 $ 5,388,877 $ 4,744,088 $ (472,997) (8.8) % $ 644,789 13.6 % Communications Networks and Cloud Infrastructure 2,652,448 3,546,171 3,175,534 (893,723) (25.2) % 370,637 11.7 % Total $ 7,568,328 $ 8,935,048 $ 7,919,622 $ (1,366,720) (15.3) % $ 1,015,426 12.8 % Comparison of 2024 to 2023 by End Market The decrease in sales was primarily due to reduced demand caused by customers in some end markets, particularly communications networks, making adjustments to absorb their finished goods inventory.
Sales by end market were as follows: Year Ended 2025 vs. 2024 2024 vs. 2023 September 27, 2025 September 28, 2024 September 30, 2023 Increase/(Decrease) Increase/(Decrease) (Dollars in thousands) Industrial, Medical, Defense and Aerospace, and Automotive $ 5,022,934 $ 4,915,880 $ 5,388,877 $ 107,054 2.2 % $ (472,997) (8.8) % Communications Networks and Cloud Infrastructure 3,105,448 2,652,448 3,546,171 453,000 17.1 % (893,723) (25.2) % Total $ 8,128,382 $ 7,568,328 $ 8,935,048 $ 560,054 7.4 % $ (1,366,720) (15.3) % Comparison of 2025 to 2024 by End Market The increase in sales was primarily due to new program wins and program ramp-ups in our communications networks and cloud infrastructure, as well as our medical end markets.
In 2024, we repurchased $254 million of common stock (including $26 million in settlement of employee tax withholding obligations), repaid an aggregate of $22 million of long-term debt and received $6 million of proceeds from issuances of common stock pursuant to stock option exercises.
In 2025, we repurchased $114 million of common stock, paid $43 million in settlement of employee tax withholding obligations and repaid an aggregate of $18 million of long-term debt. In 2024, we repurchased $228 million of common stock, paid $26 million in settlement of employee tax withholding obligations and repaid an aggregate of $22 million of long-term debt.
We believe this strategy differentiates us from our competitors and will help drive more sustainable revenue growth and provide opportunities for us to achieve operating margins that exceed industry standards. A core component of our business strategy is to establish and retain long-term customer partnerships with companies. Historically, we have had substantial recurring sales to existing customers.
We believe this strategy differentiates us from our competitors and will help drive more sustainable revenue growth and provide opportunities for us to achieve operating margins that exceed industry standards.
We intend to continue diversifying into mission critical markets and creating a portfolio of more complex, higher technology products with longer product life cycles.
Despite these challenges, we remain focused on improving our operations, building flexibility and efficiencies in our processes and adjusting our business models to changing circumstances. We intend to continue diversifying into mission critical markets and creating a portfolio of more complex, higher technology products with longer product life cycles.
Provision for Income Taxes We recorded income tax expense of $80 million, $85 million and $62 million in 2024, 2023 and 2022, respectively. Our effective tax rate was 25%, 21% and 20% for 2024, 2023 and 2022, respectively.
Provision for Income Taxes We recorded income tax expense of $73 million and $80 million in 2025 and 2024, respectively. Our effective tax rate was 22% and 25% for 2025 and 2024, respectively. The tax rate was lower in 2025 primarily due to the release of tax reserves.
A summary of our operating lease obligations as of September 28, 2024 can be found in Note 7 “Leases” of the notes to the Consolidated Financial Statements contained in this report.
As of September 27, 2025, our estimated future obligations consist of leases, our Term Loan Due 2027, pension plan funding obligations and unrecognized tax benefits. 42 Table of Contents A summary of our operating lease obligations as of September 27, 2025 can be found in Note 7 “Leases” of the notes to the Consolidated Financial Statements contained in this report.
(4) Days inventory on hand (a measure of how quickly we turn inventory into sales) is calculated as the ratio of average inventory for the quarter to average daily cost of sales for the quarter.
(3) Days in inventory (a measure of how quickly we turn inventory into sales) is calculated as inventory at the end of the current quarter divided by cost of sales for the quarter multiplied by 90 days.
These programs have no expiration dates and the timing of repurchases will depend upon capital needs to support the growth of our business, market conditions and other factors. Although stock repurchases are intended to increase stockholder value, purchases of shares reduce our liquidity.
Other Liquidity Matters During 2025, we repurchased 1.4 million shares of our common stock for $114 million (including commissions), under stock repurchase programs authorized by the Board of Directors. These programs have no expiration dates and the timing of repurchases will depend upon capital needs to support the growth of our business, market conditions and other factors.
The increase in absolute dollars in 2024 from 2023 was primarily due to higher expenses for design and engineering support for existing and new projects. Other Expense Other expense was $1 million in 2024, $20 million in 2023 and a $26 million in 2022.
As a percentage of net sales, research and development expenses were 0.4% for each of 2025 and 2024. The increase in absolute dollars in 2025 from 2024 was primarily due to higher expenses for design and engineering support for existing projects.
We had no short-term borrowings outstanding as of September 28, 2024 and $8 million of short-term borrowings outstanding as of September 30, 2023. Additionally, certain of our foreign subsidiaries had a total of $71 million of short-term borrowing facilities available, under which no borrowings were outstanding as of September 28, 2024.
Additionally, certain of our foreign subsidiaries had a total of $71 million of uncommitted short-term borrowing facilities available, under which no borrowings were outstanding as of September 27, 2025. Some of these facilities expire at various dates through the first quarter of 2027 and are expected to be renewed.
Customer modifications of orders affecting inventory previously procured by us and our purchases of inventory beyond customer needs may result in excess and obsolete inventory. Although we may be able to use some excess inventory for other products we manufacture, a portion of this excess inventory may not be returnable to vendors or recoverable from customers.
Although we may be able to use some excess inventory for other products we manufacture, a portion of this excess inventory may not be returnable to vendors or recoverable from customers. In certain instances, in accordance with agreed terms, we receive advances from customers to offset our working capital investment in raw materials.
As of September 28, 2024, an aggregate of $53 million remains available under these programs. 41 Table of Contents We are party to a Receivables Purchase Agreement (the “RPA”) with certain third-party banking institutions for the sale of accounts receivable generated from sales to certain customers.
We are party to a Receivables Purchase Agreement, as amended (the “RPA”), with certain third-party banking institutions for the sale of trade receivables generated from sales to certain customers. The amount available under the RPA is uncommitted and, as such, is available at the discretion of our third-party banking institutions.
Our estimates may change as new events occur and additional information becomes available. Our actual results may differ materially from these estimates. We believe the following critical accounting policies reflect the more significant judgments and estimates used by us in preparing our consolidated financial statements: Revenue Recognition.
We believe the following critical accounting policies reflect the more significant judgments and estimates used by us in preparing our consolidated financial statements: Revenue Recognition — We recognize revenue for the majority of our contracts on an over time basis.
As our end markets evolve and grow, our ability to optimize our product and portfolio mix towards higher value opportunities will continue to be an important driver for our business going forward. 34 Table of Contents Critical Accounting Policies and Estimates Management's discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements which have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”).
Critical Accounting Policies and Estimates Management’s discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements which have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). We review the accounting policies used in reporting our financial results on a regular basis.
(5) Accounts payable days (a measure of how quickly we pay our suppliers), or “DPO”, is calculated as the ratio of 365 days to accounts payable turns, in which accounts payable turns is calculated as the ratio of four times our cost of sales for the quarter to average accounts payable.
(4) Accounts payable days (a measure of how quickly we pay our suppliers), or “DPO”, is calculated as accounts payable at the end of the current quarter divided by cost of sales for the quarter multiplied by 90 days. 39 Table of Contents (5) Customer inventory advances days (a measure of how long customer deposits for inventory are held) is calculated as customer inventory advances at the end of the current quarter divided by cost of sales for the quarter multiplied by 90 days.
The decrease in accounts payable was primarily attributable to an unfavorable mix of supplier payment terms and lower inventory receipts, resulting in DPO decreasing from 80 days in 2023 to 71 days in 2024.
The decrease in accounts payable was primarily attributable to an unfavorable mix of supplier payment terms and lower inventory receipts. The increase in accounts receivable was primarily attributable to unfavorable customer payment terms mix. The change in deferred revenue and customer advances is driven by increased customer deposits against raw material inventory purchases.
As a result, the timing of future repurchases depends upon our future capital needs, market conditions and other factors.
Although stock repurchases are intended to increase stockholder value, purchases of shares reduce our liquidity. As a result, the timing of future repurchases depends upon our future capital needs, market conditions and other factors. As of September 27, 2025, an aggregate of $239 million remains available under the stock repurchase program.
SIPL’s cash and cash equivalents balance of $200 million as of September 28, 2024 is not available for general corporate purposes and must be retained in SIPL to fund its operations. Contractual Obligations As part of our ongoing operations, we enter into contractual arrangements that obligate us to make future cash payments.
Contractual Obligations As part of our ongoing operations, we enter into contractual arrangements that obligate us to make future cash payments. These obligations impact our liquidity and capital resource needs.
During 2023, we generated $527 million of cash from earnings, excluding non-cash items, and used $292 million of cash primarily because of a decrease in accounts payable of $418 million and an increase in accounts receivable of $89 million, partially offset by a decrease in inventories of $210 million.
During 2025, we generated $432 million of cash from earnings, excluding non-cash items, and generated $189 million of cash primarily because of increases in accounts payable of $99 million, accrued liabilities and other of $75 million and deferred revenue and customer advances of $663 million, partially offset by increases in accounts receivable of $64 million, contract assets of $42 million and inventories of $543 million.
The impact of this was partially offset by new program wins and program ramps in our automotive and communications networks end markets. Gross Margin Gross margin was 8.5%, 8.3% and 7.9% in 2024, 2023 and 2022, respectively. IMS gross margin decreased slightly to 7.5% in 2024 from 7.7% in 2023.
Gross Margin Gross margin was 8.8%, 8.5% and 8.3% in 2025, 2024 and 2023, respectively. IMS gross margin increased slightly to 7.7% in 2025 from 7.5% in 2024. CPS gross margin increased to 13.9% in 2025 from 12.8% in 2024, primarily due to improved operating efficiencies partially offset by unfavorable product mix.
We do not expect any material impact from these tax law changes in fiscal 2025. 39 Table of Contents Liquidity and Capital Resources Year Ended September 28, 2024 September 30, 2023 October 1, 2022 (In thousands) Net cash provided by (used in): Operating activities $ 340,216 $ 235,168 $ 330,854 Investing activities (114,396) (192,458) (132,214) Financing activities (269,707) 94,505 (314,299) Effect of exchange rate changes 2,177 498 (4,510) Increase (decrease) in cash and cash equivalents $ (41,710) $ 137,713 $ (120,169) Key Working Capital Management Measures As of September 28, 2024 September 30, 2023 Days sales outstanding (1) 56 55 Contract asset days (2) 18 20 Inventory turns (3) 5.2 5.1 Days inventory on hand (4) 70 72 Accounts payable days (5) 71 80 * Cash cycle days (6) 73 67 * (1) Days sales outstanding (a measure of how quickly we collect our accounts receivable), or “DSO”, is calculated as the ratio of average accounts receivable, net, to average daily net sales for the quarter.
Liquidity and Capital Resources Year Ended September 27, 2025 September 28, 2024 September 30, 2023 (In thousands) Net cash provided by (used in): Operating activities $ 620,657 $ 340,216 $ 235,168 Investing activities (108,207) (114,396) (192,458) Financing activities (173,840) (269,707) 94,505 Effect of exchange rate changes 1,750 2,177 498 Increase (decrease) in cash and cash equivalents $ 340,360 $ (41,710) $ 137,713 Key Working Capital Management Measures Management regularly reviews financial and non-financial performance indicators to assess our operating results.
The increase in absolute dollars in 2024 from 2023 was primarily due to higher stock compensation expense from new equity grants, higher variable compensation and an increase in deferred compensation caused by strong stock market performance that increased the market value of participant investment accounts, partially offset by lower professional fees.
The increase in absolute dollars in 2025 from 2024 was primarily attributable to higher employee compensation, largely due to increased stock compensation expense from new equity grants and variable compensation, as well as higher professional fees and increased expenditures supporting IT systems. Research and Development Research and development expenses were $31 million and $29 million in 2025 and 2024, respectively.
The decrease in other expense in 2024 was primarily caused by a $12 million decrease in discount of sold receivables in 2024 due to significantly lower factoring levels and an incremental gain of $5 million in the market value of participant investment accounts in our deferred compensation plan.
The increase in other expense in 2025 was primarily caused by a lower market-value gain on participant investment accounts in our deferred compensation plan compared to 2024 as a result of the total return swap contract (“TRS”) entered in the second quarter of 2025 that substantially offsets changes in the deferred compensation plan liabilities elections made by plan participants.
Certain payments received from customers for inventories that have not been shipped to customers or otherwise disposed of are netted against inventory. We generally procure inventory based on specific customer orders and forecasts. Customers generally have limited rights of modification (for example, rescheduling or cancellations) with respect to specific orders.
Customers generally have limited rights of modification (for example, rescheduling or cancellations) with respect to specific orders. Customer modifications of orders affecting inventory previously procured by us and our purchases of inventory beyond customer needs may result in excess and obsolete inventory.
Removed
Although supply chain constraints have been easing, we expect headwinds to our revenue growth that will continue in 2025 due to customers absorbing their finished goods inventory in some of our end markets. Despite these challenges, we remain focused on improving our operations, building flexibility and efficiencies in our processes and adjusting our business models to changing circumstances.
Added
All statements other than statements of historical fact are statements that could be deemed to be forward-looking statements, including any statements regarding trends in future revenue or results of operations, gross margin, operating margin, expenses, earnings or losses from operations, or cash flow; any statements of the plans, strategies and objectives of management for future operations and the anticipated benefits of such plans, strategies and objectives; any statements regarding future economic conditions or performance; any statements regarding litigation or pending investigations, claims or disputes; any statements regarding the timing of closing of, future cash outlays for, and benefits of acquisitions and other strategic transactions, including our India joint venture and our acquisition of ZT Group Int’l, Inc.
Removed
We recognize revenue for the majority of our contracts on an over time basis.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAs of September 28, 2024, we had outstanding foreign currency forward contracts to exchange various foreign currencies for U.S. dollars in an aggregate notional amount of $366 million. We also utilize foreign currency forward contracts to hedge certain operational (“cash flow”) exposures resulting from changes in foreign currency exchange rates.
Biggest changeFrom an economic perspective, the objective of our hedging program is for gains or losses on forward contracts to substantially offset gains and losses on the underlying hedged items. As of September 27, 2025, we had outstanding foreign currency forward contracts to exchange various foreign currencies for U.S. dollars in an aggregate notional amount of $491 million.
As of September 28, 2024, we had interest rate swaps with an aggregate notional amount of $300 million that effectively convert our floating rate Term Loan Due 2027 to a fixed rate term loan. An immediate 10 percent change in interest rates would not have a significant impact on our results of operations.
As of September 27, 2025, we had interest rate swaps with an aggregate notional amount of $300 million that effectively convert our floating rate Term Loan Due 2027 to a fixed rate term loan. An immediate 10 percent change in interest rates would not have a significant impact on our results of operations.
We had forward contracts related to cash flow hedges in various foreign currencies in an aggregate notional amount of $117 million as of September 28, 2024. The net impact of an immediate 10 percent change in exchange rates would not be material to our consolidated financial statements, provided we accurately forecast and estimate our foreign currency exposure.
We had forward contracts related to cash flow hedges in various foreign currencies in an aggregate notional amount of $131 million as of September 27, 2025. The net impact of an immediate 10 percent change in exchange rates would not be material to our consolidated financial statements, provided we accurately forecast and estimate our foreign currency exposure.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk Interest Rate Risk Our primary exposure to market risk for changes in interest rates relates to our Term Loan Due 2027, under which $319 million is currently outstanding, and borrowings under our revolving credit facility, for which the interest rate we pay is based on a floating index.
Quantitative and Qualitative Disclosures about Market Risk Interest Rate Risk Our primary exposure to market risk for changes in interest rates as of September 27, 2025 relates to our Term Loan Due 2027, under which $302 million is currently outstanding, and borrowings under our revolving credit facility, for which the interest rate we pay is based on a floating index.
For more information about our debt and derivative instruments, see Note 5 “Financial Instruments and Concentration of Credit Risk” and Note 6 “Debt” of the notes to the Consolidated Financial Statements included in this report. Foreign Currency Exchange Risk We transact business in foreign currencies.
For more information about our debt and derivative instruments, see Note 5 “Financial Instruments and Concentration of Credit Risk” and Note 6 “Debt” of the notes to the Consolidated Financial Statements included in this report.
Furthermore, our foreign currency hedges are based on forecasted transactions and estimated balances, the amount of which may differ from that actually incurred. As a result, we can experience foreign exchange gains and losses in our results of operations.
However, our policy does not require us to hedge all foreign exchange exposures. Furthermore, our foreign currency hedges are based on forecasted transactions and estimated balances, the amount of which may differ from that actually incurred. As a result, we can experience foreign exchange gains and losses in our results of operations.
The effective portion of changes in the fair value of the contracts is recorded in stockholders' equity as a separate component of accumulated other comprehensive income and recognized in earnings when the hedged item affects earnings.
These contracts may be up to twelve months in duration and are designated as cash flow hedges for accounting purposes. The effective portion of changes in the fair value of the contracts is recorded in stockholders’ equity as a separate component of accumulated other comprehensive income and recognized in earnings when the hedged item affects earnings.
Accordingly, all outstanding foreign currency forward contracts are marked-to-market at the end of the period with unrealized gains and losses included in other expense, in the consolidated statements of income. From an economic perspective, the objective of our hedging program is for gains or losses on forward contracts to substantially offset gains and losses on the underlying hedged items.
Accordingly, all outstanding foreign currency forward contracts are marked-to-market at the end of the period with unrealized gains and losses included in other income (expense), net, in the consolidated statements of income.
Such exposures result from (1) forecasted non-functional currency sales and (2) forecasted non-functional currency materials, labor, overhead and other expenses. These contracts may be up to twelve months in duration and are designated as cash flow hedges for accounting purposes.
We also utilize foreign currency forward contracts to hedge certain operational (“cash flow”) exposures resulting from changes in foreign currency exchange rates. Such exposures result from (1) forecasted non-functional currency sales and (2) forecasted non-functional currency materials, labor, overhead and other expenses.
Our foreign exchange policy requires that we take certain steps to limit our foreign exchange exposures resulting from certain assets and liabilities and forecasted cash flows. However, our policy does not require us to hedge all foreign exchange exposures.
See Note 5 “Financial Instruments and Concentration of Credit Risk” to the Consolidated Financial Statements included in this report for further details. Foreign Currency Exchange Risk We transact business in foreign currencies. Our foreign exchange policy requires that we take certain steps to limit our foreign exchange exposures resulting from certain assets and liabilities and forecasted cash flows.
Added
Market Risk We entered into a TRS during the second quarter of 2025 to substantially offset changes in the deferred compensation plan liabilities resulting from changes in the value of investment elections made by participants. Under the terms of the agreement, we make periodic payments at a floating rate, SOFR plus a spread, on the notional value of the swap.

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