UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

 

April 26, 2011

Date of Report (date of earliest event reported)

 

SANMINA-SCI CORPORATION

(Exact name of registrant as specified in its charter)

 

 

2700 North First Street

San Jose, California 95134

(Address of principal executive offices, including zip code)

 

(408) 964-3500

(Registrant’s telephone number, including area code)

 

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

 

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

 

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

 

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

 

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

 

 

 

Item 7.01

Regulation FD Disclosure.

 

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

 

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

 

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

 

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

 

Ratio of Earnings to Fixed Charges

 

Fiscal Year Ended

Six Months Ended

September 30, 2006

September 29, 2007

September 27, 2008

October 3, 2009

October 2, 2010

April 3, 2010

April 2, 2011

(unaudited)

(in thousands)

Ratio of earnings to fixed charges (1)

—

—

—

0.1

2.2

2.3

2.0

 

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

 

2

 

Selected Non-GAAP Financial Information

 

		Fiscal Year Ended															Six Months Ended
		September 30, 2006			September 29, 2007			September 27, 2008			October 3, 2009			October 2, 2010			April 3, 2010			April 2, 2011
																	(unaudited)
		(in thousands)
Other Financial Data:
EBITDA (1)		$	54,762		$	(890,059	)	$	(288,951	)	$	85,654		$	333,009		$	166,433		$	158,259
Adjusted EBITDA (1)		288,792			206,510			291,896			176,961			322,024			144,371			169,755

 

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

 

		Fiscal Year Ended															Six Months Ended
		September 30, 2006			September 29, 2007			September 27, 2008			October 3, 2009			October 2, 2010			April 3, 2010			April 2, 2011
																	(unaudited)
		(in thousands)
Net income (loss) as reported		$	(143,157	)	$	(1,136,257	)	$	(487,949	)	$	(137,822	)	$	122,435		$	69,473		$	41,424
Adjustments for EBITDA:
Interest income		(19,434		)	(28,766		)	(19,744		)	(6,499		)	(2,246		)	(978		)	(1,134		)
Interest expense		121,813			168,291			127,231			116,988			108,144			53,357			52,930
Depreciation and amortization		127,316			112,443			93,893			87,735			87,869			41,762			49,392
Provision for (benefit from) income taxes		(9,038		)	1,066			22,605			25,252			16,807			2,819			15,647
Income from discontinued operations		(19,908		)	(6,836		)	(24,987		)	—			—			—			—
Cumulative effect of accounting changes		(2,830		)	—			—			—			—			—			—
Total adjustments		197,919			246,198			198,998			223,476			210,574			96,960			116,835
EBITDA		54,762			(890,059		)	(288,951		)	85,654			333,009			116,433			158,259
Adjustments for adjusted EBITDA:
Impairment for goodwill and other assets		19,000			1,042,541			483,699			10,178			1,100			500			85
Loss (gain) on sales of assets		—			—			—			—			(13,824		)	—			(2,025		)
Customer bankruptcies		—			—			—			10,000			759			—			(759		)
Contingency items expected to reverse		—			—			—			—			3,039			—			—
Other (income) expense(a)		16,491			(23,810		)	(3,553		)	5,970			(41,538		)	(39,775		)	(3,278		)
Loss (gain) on extinguishment of debt		84,600			3,251			2,237			(8,545		)	1,197			—			—
In-process research and development		2,600			—			—			—			—			—			—
Integration costs		—			200			160			573			3,247			424			878
Restructuring costs		85,231			42,587			81,376			56,687			19,868			6,785			8,671
Stock compensation expense		13,057			20,592			13,936			15,994			15,167			10,004			7,924
Stock option investigation costs		13,051			11,208			2,992			450			—			—			—
Total adjustments		234,030			1,096,569			580,847			91,307			(10,985		)	(22,062		)	11,496
Adjusted EBITDA		$	288,792		$	206,510		$	291,896		$	176,961		$	322,024		$	144,371		$	169,755

 

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

 

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SIGNATURE

 

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

 

 

	SANMINA-SCI CORPORATION
Date: April 26, 2011	By:	/s/ Michael R. Tyler
	Name:	Michael R. Tyler
	Title:	Executive Vice President, General Counsel and Corporate Secretary

 

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