Sanmina Corp (SANM) 2021 Q4 法說會逐字稿

Good day, and thank you for standing by, and welcome to the Sanmina Corporation's Fourth Quarter and Fiscal Year-End 2021 Earnings Conference Call. (Operator Instructions) Please be advised that today's conference is being recorded. (Operator Instructions)

各位朋友，大家好，感謝您的耐心等待，歡迎參加Sanmina公司2021財年第四季及全年業績電話會議。 （操作說明）請注意，本次會議正在錄音。 （操作說明）

I would now like to hand the conference over to your speaker today, Speaker Paige Melching, Senior Vice President of Investor Communications. Thank you. Please go ahead, Madam.

現在我謹將會議交給今天的演講嘉賓，投資者關係高級副總裁佩奇·梅爾欽女士。謝謝。請開始吧，女士。

Thank you, Nora. Good afternoon, ladies and gentlemen, and welcome to Sanmina's Fourth Quarter and Full Year Fiscal 2021 Earnings Call. A copy of our press release and slides for today's discussion are available on our website at sanmina.com in the Investor Relations section. Joining me on today's call is Jure Sola, Chairman and Chief Executive Officer.

謝謝諾拉。女士、先生們，下午好，歡迎參加Sanmina公司2021財年第四季及全年業績電話會議。您可以在公司網站sanmina.com的「投資者關係」欄位中找到我們今天的新聞稿和會議幻燈片。今天與我一同出席電話會議的是董事長兼執行長Jure Sola先生。

Good afternoon.

午安.

And Kurt Adzema, Executive Vice President and Chief Financial Officer.

以及執行副總裁兼財務長庫爾特·阿澤馬。

Good afternoon.

午安.

Before we begin our prepared remarks, let me remind everyone that today's call is being webcasted and recorded and will be available on our website. You can follow along with our prepared remarks in the slides provided on our website.

在我們開始發言之前，請允許我提醒各位，今天的電話會議將進行網路直播和錄音，並將在我們的網站上提供回放。您可以透過我們網站上提供的幻燈片來觀看我們的發言。

Please turn to Slide 3 of our presentation or the press release safe harbor statement. During this conference call, we may make projections or other forward-looking statements regarding future events or the future financial performance of the company. We caution you that such statements are just projections. The company's actual results could differ materially from those projections in these statements as a result of the number factors set forth in the company's annual and quarterly reports filed with the Securities and Exchange Commission. The company is under no obligation to and expressly disclaims any such obligation to update or alter any of the forward-looking statements made in this earnings release, their earnings presentation, the conference call or the Investor Relations section of our website, whether as a result of new information, future events or otherwise, unless otherwise required by law.

請參閱我們簡報的第3頁或新聞稿中的安全港聲明。在本次電話會議中，我們可能會就未來事件或公司未來的財務表現做出預測或其他前瞻性陳述。我們提醒您，此類陳述僅為預測。由於公司向美國證券交易委員會提交的年度和季度報告中列出的許多因素，公司的實際業績可能與這些陳述中的預測有重大差異。除非法律另有規定，否則公司沒有義務，並且明確聲明不承擔任何更新或修改本次盈利報告、盈利演示文稿、電話會議或公司網站投資者關係部分中任何前瞻性陳述的義務，無論是因為新資訊、未來事件或其他原因。

Included in our press release and slides issued today, we have provided you with statements of operations for the quarter and fiscal year ending October 2, 2021, on a GAAP basis as well as certain non-GAAP financial information. A reconciliation between the GAAP and non-GAAP financial information is also provided in the press release and slides posted on our website.

在今天發布的新聞稿和幻燈片中，我們提供了截至2021年10月2日的季度和年度營運報表（按美國通用會計準則編制）以及部分非美國通用會計準則財務資訊。新聞稿和幻燈片中還提供了美國通用會計準則和非美國通用會計準則財務資訊的調節表，這些資料已發佈在我們的網站上。

In general, our non-GAAP information excludes restructuring costs, acquisition and integration costs, noncash stock-based compensation expense, amortization expense and other unusual or infrequent items. Any comments we make on this call as it relates to the income statement measures will be directed at our non-GAAP financial results. Accordingly, unless otherwise stated in this conference call, when we refer to the gross profit, gross margin, operating income, operating margin, taxes, net income and earnings per share, we are referring to our non-GAAP information.

通常情況下，我們的非GAAP財務資訊不包括重組成本、收購及整合成本、非現金股權激勵費用、攤提費用等異常或偶發項目。在本次電話會議中，任何與損益表指標相關的評論均針對我們的非GAAP財務表現。因此，除非本次電話會議另有說明，否則當我們提及毛利、毛利率、營業收入、營業利益率、稅項、淨利和每股盈餘時，均指我們的非GAAP財務資訊。

I would now like to turn the call over to Jure Sola.

現在我想把電話交給 Jure Sola。

Thanks, Paige. Good afternoon, ladies and gentlemen, and welcome. Thank you all for being here with us today. For agenda, we have Kurt, our CFO, to review the details of our financial results for you. I will follow up with additional comments about Sanmina results and future goals. And Kurt and I will open for question and answers. And now I'd like to turn this call over to Kurt. Kurt?

謝謝佩奇。女士們、先生們，下午好，歡迎各位。感謝各位今天蒞臨。接下來，我們的財務長庫爾特將為大家詳細介紹我們的財務表現。之後，我將補充說明關於Sanmina的業績和未來目標。庫爾特和我隨後將開放問答環節。現在，我把電話交給庫爾特。庫爾特？

Thanks, Jure. Please turn to Slide 5. In the fourth quarter, our team did an excellent job of managing through the impact of supply chain constraints and delivering solid margins and profitability as well as cash generation. Q4 revenue of $1.64 billion was slightly below our outlook of $1.65 billion to $1.75 billion.

謝謝，Jure。請翻到第五張投影片。第四季度，我們的團隊出色地應對了供應鏈限制帶來的影響，實現了穩健的利潤率、獲利能力和現金流。第四季營收為16.4億美元，略低於我們先前預期的16.5億美元至17.5億美元。

Demand was strong. However, the impact of supply chain constraints continued. We expected an impact of about $150 million in Q4, consistent with Q3. However, we believe revenue was ultimately impacted by more than $200 million in Q4. Non-GAAP gross margin was 8.2%. The decline in gross margin relative to Q3 was primarily due to slightly lower revenues and incremental costs due to supply chain constraints. Non-GAAP operating margin was 4.8%, in line with our outlook, but slightly lower than the prior quarter, primarily due to lower revenue and lower gross margins, partially offset by lower operating expenses. Non-GAAP fully diluted earnings per share of $0.95 was in the range of our outlook of $0.93 to $1.03. Finally, Q4 GAAP EPS was $0.84.

需求強勁。然而，供應鏈限制的影響持續存在。我們預計第四季受影響約為1.5億美元，與第三季持平。但我們認為，第四季營收最終受到的影響超過2億美元。非GAAP毛利率為8.2%。毛利率較第三季下降的主要原因是營收略有下降以及供應鏈限制導致的額外成本。非GAAP營業利潤率為4.8%，符合我們的預期，但略低於上一季度，主要原因是營收和毛利率下降，部分被較低的營運費用所抵銷。非GAAP完全稀釋後每股收益為0.95美元，在我們預期的0.93美元至1.03美元範圍內。最後，第四季GAAP每股收益為0.84美元。

Now please turn to Slide 6. This slide shows the quarterly trends of our financial results. You can see our team has done an excellent job of managing through this dynamic period. Non-GAAP gross margins have exceeded 8% for the last 6 consecutive quarters. Non-GAAP operating margins have been 5% or greater for 4 of the last 5 quarters. We expect to return to non-GAAP operating margin at 5% or higher in the future as revenue grows and the supply chain constraints ease. We've learned a lot over the last 12 months, and the hard work and the focus of the team is demonstrated in our results. Furthermore, we believe revenue will increase and our margins will continue to improve as material supply chain constraints resolved.

現在請翻到第6頁投影片。這張投影片展示了我們財務表現的季度趨勢。您可以看到，我們的團隊在應對這段充滿挑戰的時期方面做得非常出色。過去六個季度，非GAAP毛利率均超過8%。在過去五個季度中，有四個季度的非GAAP營業利潤率達到或超過5%。隨著收入成長和供應鏈限制的緩解，我們預計未來非GAAP營業利潤率將恢復到5%或更高水準。過去12個月，我們累積了豐富的經驗，團隊的辛勤付出和專注精神體現在我們的業績中。此外，我們相信，隨著主要供應鏈限制的解決，營收將會成長，利潤率也將持續提升。

Now please turn to Slide 7. Q4 IMS revenue was $1.32 billion. The slight decline in revenue from Q3 was primarily due to the increased impact of supply chain constraints. Non-GAAP gross margin for IMS declined to 6.8% from 7.6%. This was primarily due to slightly lower revenues and incremental costs due to supply chain constraints. As a reminder, Q3 gross margin reflected a onetime release of a $2.2 million customer-specific inventory reserve, which favorably impacted Q3 gross margins and did not -- which did not occur again in Q4.

請翻到幻燈片7。 IMS第四季營收為13.2億美元。營收較第三季略有下降，主要是由於供應鏈限制的影響加劇。 IMS的非GAAP毛利率從7.6%下降至6.8%。這主要是由於營收略有下降以及供應鏈限制導致成本增加。需要注意的是，第三季毛利率反映了一次性釋放的220萬美元客戶特定庫存準備金，這筆資金對第三季毛利率產生了積極影響，而第四季則沒有再次發生這種情況。

Components, Products and Services revenue increased to $357 million. Non-GAAP gross margin for CPS increased relative to Q3 to 12.8%. As a reminder, Q3 gross margin was unfavorably impacted by costs associated with the ramping of several new defense-related programs, which had less of an impact in Q4. Again, overall non-GAAP gross margin was 8.2%. In summary, we believe revenue will increase and our margins will improve in both our IMS and CPS segments as supply chain constraints resolve.

零件、產品和服務收入成長至 3.57 億美元。 CPS 的非 GAAP 毛利率較第三季成長至 12.8%。需要指出的是，第三季毛利率受到多個新國防相關專案啟動成本的不利影響，而這些成本在第四季受到的影響較小。此外，整體非 GAAP 毛利率為 8.2%。總之，我們相信隨著供應鏈限制的緩解，IMS 和 CPS 兩大業務部門的營收和毛利率都會成長。

Now please turn to Slide 8 so we can talk about fiscal 2021 financial performance. We had a strong fiscal 2021 despite the challenges associated with the supply chain constraints. Fiscal 2021 revenue of $6.8 billion was relatively flat compared to fiscal 2020 after adjusting for the fact that fiscal 2020 had 53 weeks compared to 52 weeks in fiscal 2021.

現在請翻到第8張投影片，我們來討論一下2021財年的財務表現。儘管面臨供應鏈限制帶來的挑戰，我們2021財年的業績依然強勁。 2021財年的營收為68億美元，與2020財年相比基本持平，這是考慮到2020財年有53週，而2021財年只有52週。

Non-GAAP gross margins improved 70 basis points to 8.4% primarily due to operational efficiencies and a favorable product mix. Non-GAAP operating margin improved from 4.2% to 4.9% primarily due to improved gross margins and lower operating expenses. Non-GAAP earnings per share were up 30% year-over-year from $3.05 to $3.97 primarily due to better margins. I'm proud of the exceptional performance that the team delivered during this year in what was a challenging environment and despite revenue being relatively flat due to COVID and supply chain constraints.

非GAAP毛利率提升70個基點至8.4%，主要得益於營運效率的提升及有利的產品組合。非GAAP營業利益率從4.2%提升至4.9%，主要得益於毛利率的提升及營運費用的降低。非GAAP每股收益年增30%，從3.05美元增至3.97美元，主要得益於利潤率的提高。我為團隊在充滿挑戰的環境下取得的卓越業績感到自豪，尤其是在受新冠疫情和供應鏈限制導致收入相對持平的情況下。

Now please turn to Slide 9. Let's talk about the balance sheet. Cash and cash equivalents increased to $650 million. Between cash and availability under our revolver and other debt facilities, we have $1.4 billion of liquidity. At the end of Q4, there were no borrowings outstanding under the revolver. We believe we have a strong cash position to manage through these current market dynamics. Inventory increased due to an increase in the level of unconstrained parts resulting from a bigger-than-expected impact of supply chain constraints during the quarter.

現在請翻到第9頁幻燈片。我們來看一下資產負債表。現金及現金等價物增至6.5億美元。加上現金以及循環信貸和其他債務融資項下的可用資金，我們擁有14億美元的流動資金。截至第四季末，循環信貸項下沒有未償還的借款。我們相信，我們擁有充足的現金儲備來應對當前的市場動態。由於本季供應鏈受限的影響超出預期，導致非受限零件數量增加，造成庫存增加。

The inventory increase was driven based on conversations with our customers. We expect this inventory to be consumed in the balance of this inventory to normalize as supply chain constraints are resolved. Despite the increase in inventory, we were able to manage working capital such that cash cycle days remained steady at approximately 58 days. Non-GAAP pretax ROIC was 23.8%.

庫存增加是基於與客戶的溝通。我們預計，隨著供應鏈瓶頸的解決，這部分庫存將逐步消耗，並最終恢復正常水準。儘管庫存增加，我們透過有效的營運資金管理，將現金週轉天數維持在約58天的穩定水準。非GAAP稅前投資報酬率為23.8%。

Now please turn to Slide 10. Our cash flow generation remains consistently strong. We generated $92 million of cash from operations and $65 million of free cash flow in Q4 and $338 million of cash from operations and $274 million of free cash flow during fiscal 2021. We continue to remain very focused on cash generation and expect to continue to generate cash going forward.

請翻到第10頁。我們的現金流持續強勁。第四季度，我們透過經營活動產生了9,200萬美元的現金流和6,500萬美元的自由現金流；2021財年，我們透過經營活動產生了3.38億美元的現金流和2.74億美元的自由現金流。我們將繼續高度重視現金流的創造，並預期未來將繼續保持良好的現金流。

Now please turn to Slide 11. We could say take a very disciplined approach to cash utilization. Our primary use of cash relates to the internal investments to drive organic revenue growth and improve the efficiency of our operations. Net capital expenditures for Q4 were $29.5 million and depreciation was approximately $27 million. Fiscal 2021 net capital expenditures were $72 million as we continue to leverage our existing manufacturing capacity. FY '21 depreciation was approximately $109 million.

現在請翻到第11頁。可以說，我們對現金使用採取了非常嚴格的策略。現金主要用於內部投資，以推動內生性收入成長並提高營運效率。第四季淨資本支出為2,950萬美元，折舊約2,700萬美元。 2021財年淨資本支出為7,200萬美元，我們將持續充分利用現有產能。 2021財年折舊約1.09億美元。

Please turn to Slide 12 now. During Q4, we repurchased 827,000 shares for a total cost of approximately $32 million. For the full fiscal 2021, we repurchased approximately 1.5 million shares for a total of $54 million. At the end of the quarter, we had remaining repurchase authorization of approximately $81 million. We announced today that the Board of Directors approved an increase of the current authorization by an additional $200 million. This additional authorization will allow management the flexibility to continue to opportunistically repurchase shares. As I previously mentioned, our primary use of cash relates to internal investment to drive organic revenue growth and improve the efficiency of our operations.

請翻到第12頁投影片。第四季度，我們回購了82.7萬股股票，總成本約3,200萬美元。 2021財年全年，我們回購了約150萬股股票，總成本約5,400萬美元。季度末，我們剩餘的股票回購授權額度約8,100萬美元。我們今天宣布，董事會已批准將現有授權額度增加2億美元。這項新增授權將使管理階層能夠更靈活地繼續擇機回購股票。正如我之前提到的，我們現金的主要用途是進行內部投資，以推動內生性收入成長並提高營運效率。

Please turn to Slide 13. Let's talk about the outlook for Q1. Overall, customer demand is very strong, but there continue to be supply chain challenges. We expect Q1 revenue to be slightly up and be in the range of $1.6 billion to $1.7 billion. Non-GAAP gross margin to be in the range of 8% to 8.6%. non-GAAP operating expenses in the range of $56 million to $58 million and non-GAAP operating margin in the range of 4.6% to 5.2%. Non-GAAP other expenses are expected to be approximately $4.4 million to $5 million. Non-GAAP tax rate is expected to be approximately 17%. And non-GAAP fully diluted share count is expected to be approximately 66.5 million.

請翻到第13頁投影片。我們來談談第一季的展望。整體而言，客戶需求非常強勁，但供應鏈仍面臨挑戰。我們預計第一季營收將略有成長，介於16億美元至17億美元之間。非GAAP毛利率預計在8%至8.6%之間。非GAAP營運費用預計在5,600萬美元至5,800萬美元之間，非GAAP營運利潤率預計在4.6%至5.2%之間。非GAAP其他費用預計約440萬美元至500萬美元。非GAAP稅率預計約為17%。非GAAP完全稀釋後股份數量預計約6650萬股。

When you consider all this guidance, our outlook for non-GAAP diluted earnings per share is in the range of $0.90 to $1. We expect capital expenditures to be around $30 million, driven by growth of new programs and the depreciation to be about $28 million. In summary, demand remains strong across our customer base. We are confident that our lean manufacturing business model positions us well, and we expect the company to deliver a strong operating leverage and cash flow generation over time as the supply chain constraints are resolved. Now I'll turn the call back over to Jure.

綜合以上所有因素，我們對非GAAP攤薄後每股收益的預期在0.90美元至1美元之間。我們預期資本支出約3000萬美元，主要來自新項目的成長；折舊約2800萬美元。總而言之，我們客戶群的需求依然強勁。我們相信，精實生產的商業模式使我們處於有利地位，並預期隨著供應鏈瓶頸的解決，公司將逐步實現強勁的營運槓桿和現金流。現在，我將把電話會議交還給Jure。

Thanks, Kurt. Ladies and gentlemen, let me add a few more comments about our financial highlights for fiscal year 2021 and the fourth quarter. I'll also review with you the market outlook for our first quarter and fiscal year 2022.

謝謝，庫爾特。女士們、先生們，請容許我再補充幾點關於我們2021財年和第四季財務亮點的內容。我也會和大家一起回顧我們2022財年第一季和全年的市場展望。

Please turn to Slide 15. First, I would like to take this opportunity and say thank you to our employees for managing daily challenges around the material shortages and navigating around the COVID. Our management team has done an outstanding job in this very difficult supply chain environment. And with all these constraints, we delivered strong financial results for fiscal year 2021 by focusing on what we control. The key for us was driving margins, delivered the growth in earnings per share and delivered a strong cash flow.

請翻到第15頁。首先，我想藉此機會感謝我們的員工，感謝他們應對日常挑戰，克服原材料短缺和新冠疫情帶來的困難。我們的管理團隊在如此艱難的供應鏈環境中表現出色。在所有這些限制下，我們透過專注於可控因素，在2021財年取得了強勁的財務表現。對我們而言，關鍵在於提高利潤率，實現每股盈餘成長，並維持強勁的現金流。

So as you look at our margins, especially operating margin, they went from 4.2% to 4.9%, up 70 basis points. Earnings per share increased 30% and deliver the EPS of $3.97, strong cash flow of $274 million. So overall, a good year. Unfortunately, material shortages affected our revenue growth. But I can tell you today that Sanmina is well positioned for the future.

因此，從我們的利潤率，特別是營業利潤率來看，從4.2%上升到4.9%，提高了70個基點。每股盈餘成長了30%，達到3.97美元，現金流強勁，達到2.74億美元。所以總的來說，這是不錯的一年。遺憾的是，原物料短缺影響了我們的收入成長。但我可以告訴大家，Sanmina已經為未來做好了充分準備。

Please turn to Slide 16. Let's look at the revenue for the fourth quarter by end markets. We had strong demand for our fourth quarter. As I mentioned, material shortages impacted the fourth quarter revenue by approximately $200 million plus. Communication Networks and Cloud Infrastructure was 44% of our revenue that was slightly up quarter-over-quarter. And industrial, medical, defense and automotive was slightly down quarter-over-quarter. Our top 10 customers for the fourth quarter were 48.4% of our revenue. Bookings for the fourth quarter continued to be strong. Book-to-bill for the fourth quarter was 1.14:1.

請翻到第16頁投影片。我們來看看第四季按終端市場劃分的收入情況。第四季市場需求強勁。正如我之前提到的，原物料短缺導致第四季收入減少了約2億美元。通訊網路和雲端基礎設施業務占我們總收入的44%，較上季略有成長。而工業、醫療、國防和汽車業務則較上季略有下降。第四季前十大客戶貢獻了我們48.4%的營收。第四季訂單量持續強勁。第四季訂單出貨比為1.14:1。

Please turn to Slide 17. Let me review for you the first quarter of fiscal year '22 end market outlook. We are continuing to see strong demand across all market segments. So for Communication Networks and Cloud Infrastructure for the revenue for the first quarter, we are forecasting the revenue will be slightly up, driven by strong demand from optical, networking and 5G products. For industrial, medical, defense and automotive, for industrial, we see a strong demand driven by security and safety products, semiconductor products and alternative and renewable energy products.

請翻到第17頁。讓我為大家回顧一下2022財年第一季的終端市場展望。我們持續看到所有細分市場需求強勁。因此，在通訊網路和雲端基礎設施領域，我們預測第一季營收將略有成長，主要得益於光纖、網路和5G產品的強勁需求。在工業、醫療、國防和汽車領域，我們看到安防產品、半導體產品以及替代能源和再生能源產品的需求強勁。

For medical, overall, we see stable demand across all product lines. For defense business, we have strong demand across all product lines. For automotive, we also see strong demand driven by electrical vehicles business for us. So overall, revenue growth for our first quarter will be impacted by material shortages.

整體而言，醫療業務所有產品線的需求保持穩定。國防業務所有產品線的需求也十分強勁。汽車業務的需求同樣強勁，這主要得益於電動車業務的帶動。因此，總體而言，第一季的收入成長將受到原材料短缺的影響。

As you please turn to Slide 18. As you heard from Kurt, the outlook for first quarter is $1.6 billion to $1.7 billion. We have upside potential here. But today, it's limited by component constraints. But if we look at the fiscal year 2022, we expect to see nice growth. Nice growth, but it's all about the supply chain. We are forecasting that approximately 60% of revenue will be from industrial, medical, defense and automotive markets and 40% from communication networks and cloud infrastructure markets.

請翻到第18頁幻燈片。正如庫爾特剛才所說，我們預計第一季營收為16億至17億美元。我們還有成長潛力。但目前，由於零件供應的限制，成長受到一定程度的限制。不過，展望2022財年，我們預期會有可觀的成長。可觀的成長取決於供應鏈。我們預測，約60%的營收將來自工業、醫療、國防和汽車市場，40%將來自通訊網路和雲端基礎設施市場。

At this time, we are seeing strong business demand across all of our customer sectors. And we have a strong pipeline of new opportunities. I'm personally optimistic that all of these opportunities will translate into margin expansion and EPS growth. For cash, we'll continue to generate healthy cash, cash flow from operations.

目前，我們看到所有客戶領域的業務需求都很強勁。同時，我們也擁有大量新的業務機會。我個人非常樂觀地認為，所有這些機會都將轉化為利潤率的提升和每股盈餘的成長。在現金方面，我們將繼續產生健康的現金流，即來自經營活動的現金流。

Please turn to Slide 19. Let me talk to you about management priorities for fiscal year 2022 and beyond. Number one for us is to continue to provide industry-leading end-to-end technology solutions for our customers, build on our strong customer partnerships and continue to expand with industry leaders in mission-critical, high-complexity, heavy-regulated markets. We are working closely with our customers and suppliers to resolve supply chain shortages and logistics challenges. We expect supply chain constraints to continue through fiscal year 2022. We will continue to work around these constraints to deliver consistent and profitable growth. Our end goal is to maximize shareholders' value. We are focused on investing in talent and technology as we continue to deliver competitive advantage to our customers.

請翻到第19頁。接下來，我將介紹2022財年及以後的管理重點。首要任務是繼續為客戶提供業界領先的端到端技術解決方案，鞏固我們與客戶的緊密合作關係，並繼續與關鍵任務型、高複雜性、監管嚴格的市場領域的行業領導者攜手拓展業務。我們正與客戶和供應商緊密合作，以解決供應鏈短缺和物流挑戰。我們預計供應鏈限制將持續到2022財年。我們將繼續努力克服這些限制，實現持續獲利成長。我們的最終目標是最大化股東價值。我們將專注於人才和技術投資，持續為客戶創造競爭優勢。

Please turn to Slide 20. In summary, fiscal year 2021 was a good year. We delivered nice financial results, non-GAAP margin expansion, non-GAAP EPS growth of 30% plus and strong cash flow from operations. Our future is exciting. Sanmina is well positioned to deliver profitable growth in fiscal year 2022. We have industry-leading diverse portfolio of leading technology and solutions. We are operating with lot of agility and successfully navigating in these market dynamics. And we have a strong balance sheet that provides us financial flexibility to drive future profitable growth for fiscal year 2022 and beyond.

請翻至第20頁。總而言之，2021財年業績斐然。我們取得了令人滿意的財務業績，非GAAP利潤率有所提升，非GAAP每股收益成長超過30%，且經營活動產生的現金流強勁。我們的未來充滿希望。 Sanmina已做好充分準備，在2022財年實現獲利成長。我們擁有業界領先的多元化技術和解決方案組合。我們營運靈活，能夠成功應對不斷變化的市場環境。此外，我們穩健的資產負債表為我們提供了財務彈性，從而推動2022財年及以後的獲利成長。

So ladies and gentlemen, now I would like to say thank you to you, for your time and support. Operator, we're now ready to open the lines for question and answers. Thank you, again.

女士們、先生們，現在我要感謝各位抽出時間並給予支持。接線員，我們現在可以開始問答環節了。再次感謝大家。

(Operator Instructions) Your first question comes from the line of Ruplu Bhattacharya with Bank of America.

（操作員說明）您的第一個問題來自美國銀行的 Ruplu Bhattacharya 的線路。

Jure, , I want to ask you about the fiscal '22 outlook. I think when you were talking about revenue growth, I thought you said like strong revenue growth. I mean consensus right now is modeling 6% to 7% year-on-year growth based on the fiscal '21 reported revenue. I mean given that most people think that component shortages will last well into 2022, do you think that, that's a reasonable estimate? Or how would you phrase -- if you can qualify what you mean by revenue growth in '22?

Jure，我想問關於2022財年的展望。我記得您剛才提到營收成長時，好像說的是強勁的營收成長。目前普遍的預期是基於2021財年公佈的營收數據，預測2022財年營收年增6%到7%。考慮到大多數人認為零件短缺的情況會持續到2022年，您覺得這個預測合理嗎？或者，您能否具體說明一下您對2022財年營收成長的定義？

Yes, excellent question, up. Let me, first of all, go back to what I just said in my prepared statement. I said that we expect to see nice growth based on our strong backlog today and opportunities that we have in front of us. I did qualify it. I say it's all dependent on what goes on in materials. As you know, we've been in this material shortages now for us anyway, third quarter in a row. We don't have a, how do I say it, crystal ball to tell you exactly when it's going to end. But based on all the forecasts, talking to our suppliers and customers, we think it's going to last, definitely, maybe even for the rest calendar year '22. I said to our fiscal year '22. I think we're in a better shape today than we were 3 months ago -- I'm sorry, 3 quarters ago, understanding what we are working with. So we are learning to work with it. We are expecting to see some improvements during the year. If we get improvements, we have a plenty of backlog. Our customers today will take a lot more than what we can ship. So kind of that's what we're operating with. I expect still to see some growth next year. It's very hard for me to say in the short term. And short term to me, next 12 months, how much. But internally, we're driving how do we get to that $2 billion a quarter. And it's all about materials for us, Ruplu.

是的，問得好。首先，讓我回到我剛才在準備好的聲明中所說的話。我說過，基於我們目前強勁的訂單儲備和擺在我們面前的機遇，我們預計會看到良好的成長。但我也補充了一點。我認為這完全取決於原材料供應情況。正如你們所知，我們已經連續三個季度面臨原材料短缺的問題。我們沒有水晶球，無法準確預測這種情況何時結束。但根據所有預測，以及與供應商和客戶的溝通，我們認為這種情況肯定會持續下去，甚至可能持續到2022年剩餘時間。我說的是2022財年。我認為我們現在的狀況比三個月前——抱歉，是三個季度前——要好得多，因為我們更了解我們面臨的情況。所以我們正在學習如何應對。我們預計今年情況會有所改善。如果情況有所改善，我們擁有充足的訂單儲備。如今客戶的需求量遠遠超過我們的出貨量。所以，我們目前就是在這種供需平衡下運作的。我預計明年仍會有一些成長。短期內，尤其是未來12個月，我很難預測具體成長幅度。但公司內部，我們正在努力實現每季20億美元的目標。而對我們Ruplu來說，一切都與原料有關。

Okay. Okay. That's helpful. If I can ask -- inventory looks like it went up 16% sequentially, and I guess you are facing material shortages. But the guide for the first quarter is flat sequentially. So I mean I guess the question is how quickly do you think that, that inventory gets worked off. And related to that, how should we think about working capital and free cash flow over the next 12 months?

好的，好的，這很有幫助。如果可以的話——庫存環比增長了16%，我猜你們可能面臨原材料短缺的問題。但第一季的業績指引與上一季持平。所以我想問的是，你們預計庫存需要多久才能消化掉？另外，關於這一點，我們該如何看待未來12個月的營運資本和自由現金流？

Sure, Ruplu. This is Kurt. So first of all, as I mentioned in my prepared remarks, I mean part of the reason the inventory went up last quarter is because we brought in a lot of unconstrained parts assuming we were going to get a certain level of delivery of constrained parts and ended up being more challenging than we expected. I think that being said, I expect inventory levels to remain high over the next couple of quarters. And over time, as the supply chain constraints ease that obviously will become more efficient and get back to a more normalized level. But I think in the near term, I think the amount of inventory and inventory turns are going to be higher than normal, and that's just part of the business.

當然，Ruplu。我是Kurt。首先，正如我在準備好的發言稿中提到的，上季度庫存上升的部分原因是，我們大量採購了非受限零部件，並假設能夠獲得一定數量的受限零部件，但最終實際情況比我們預期的要困難得多。因此，我認為未來幾季庫存水準仍將居高不下。隨著時間的推移，隨著供應鏈限制的緩解，庫存水準顯然會提高，並恢復到更正常的水平。但我認為，短期內庫存量和庫存週轉率都會高於正常水平，這也是商業運作的一部分。

That being said, in terms of your question about cash generation, I still feel very confident that we'll be able to generate cash during this coming quarter and the fiscal 2022. So we're doing a lot of things to make sure we operate the working capital efficiency -- efficiently working with our customers. So we'll continue to generate cash, just like we have the last couple of years. I think that's one of the things that separates us is our consistent cash generation, whether it's COVID or supply chain constraints or other factors.

話雖如此，關於您提出的現金流問題，我仍然非常有信心我們能夠在即將到來的季度和2022財年實現現金流。因此，我們正在採取多項措施來確保營運資金的高效運作—有效率地與客戶合作。所以我們將繼續創造現金流，就像過去幾年一樣。我認為，無論受到新冠疫情、供應鏈限製或其他因素的影響，我們持續穩定的現金流是我們的優勢之一。

Okay. Okay. That's helpful. Kurt, if I can also ask you about the margin dynamics in IMS and CPS. I mean for CPS, it didn't look like in the third quarter that revenue was up that much sequentially, but you had 170 bps of margin improvement. And IMS, on the other hand, also it didn't seem to have that much of revenue decline, but it declined 80 bps. So if you can just kind of go into a little bit more detail on each segment and what impacted the margins there?

好的，好的，這很有幫助。庫爾特，我還能問一下IMS和CPS的利潤率動態嗎？我的意思是，CPS第三季營收季增似乎並不顯著，但利潤率卻提升了170個基點。而IMS方面，營收下滑幅度似乎不大，但利潤率卻下降了80個基點。所以，您能否更詳細地分析這兩個業務板塊，以及哪些因素影響了它們的利潤率？

Sure. So let's start with IMS first. As I mentioned in my prepared comments, you have to, first of all, remember that Q3 gross margin for IMS was favorably impacted by a $2.2 million reversal of a reserve. And so that's why Q3 was higher than the prior quarters. So I think that's a big part of it. I think the second part of it is, as we've seen materials come in, materials are not coming in linearly throughout the quarter. And so what you're seeing is a lot of variability in the arrival, which means at various points in time, we're just not operating as efficiently as we would like to. We have to incur you. We get a bunch of parts. We have to incur over time. And then we've got people not fully occupied when the parts aren't there. So there's a bit of inefficiency associated with that on the IMS side. And so I'd say those are the 2 biggest factors on IMS. As we look at CPS, again, last quarter, Q3, we talked about the fact that the reason the CPS margin was lower is that we incurred a bunch of costs in some of our new defense programs that we were ramping. And so that is why Q3 margin went down to 11 and change percent last quarter. And as I mentioned in my prepared comments, in Q4, we had less of those costs plus CPS revenue went up a little bit. And so the combination of those 2 factors got us back kind of in that 12 to 13 range, which is more in line with what we had been performing in Q4 of last year and Q1 of last year. So hopefully, that's helpful.

當然。那我們先從IMS說起。正如我在準備好的評論中提到的，首先，您需要記住，IMS第三季的毛利率受益於220萬美元的準備金回撥。所以第三季的毛利率高於前幾季。我認為這是主要原因之一。其次，正如我們所看到的，物料的到貨並非整個季度都呈現線性成長。因此，您會看到到貨量存在很大的波動，這意味著在某些時候，我們的營運效率不如預期。我們需要承擔成本。我們收到很多零件，這些成本需要隨著時間的推移而累積。而且，當零件缺貨時，我們的人員也無法充分利用。因此，IMS方面存在一些效率低的問題。所以我認為這是影響IMS的兩個最主要因素。我們再來看CPS，上個季度（第三季）我們提到，CPS利潤率下降的原因是我們在一些新國防項目的啟動階段產生了大量成本。因此，第三季的利潤率降至11%左右。正如我在準備的發言稿中提到的，第四季度，這些成本有所減少，同時CPS收入也略有成長。這兩個因素共同作用，使我們的利潤率回升至12%到13%之間，這與我們去年第四季和第一季的業績更為接近。希望這些資訊對您有所幫助。

Let me add one more thing to that. In this environment, as Kurt said, when you have a lot of material shortages, our operational efficiencies are not very good. If we can -- once we improve that, we definitely know we can deliver the better bottom line. So a combination of growth and steady output on a daily basis will drive our margin substantially. So we did a lot of work this year, and that's very important to understand on what I call internal processes to improve the cost long term. And I think that's going to start showing up as we get a better, how do I say, handle on material shortages and we start growing a little bit.

我再補充一點。正如庫爾特所說，在當前這種原料短缺的情況下，我們的營運效率並不高。如果我們能夠改善這一點，我們肯定能夠提高利潤。因此，每日穩定的產量和持續成長將大幅提升我們的利潤率。今年我們做了很多工作，這對於理解我所說的內部流程至關重要，有助於從長遠角度降低成本。我認為，隨著我們更好地應對原材料短缺問題，並開始逐步實現成長，這些成果將會逐漸顯現。

Great. Can I just -- if I can just squeeze one more in for Jure. You guys are strong in 5G and on the communications side. Can you just let us -- give us some more details on what you saw on the networking, optical and wireless side? And how do you see that progressing into the next quarter?

太好了。我可以再問Jure一個問題嗎？你們在5G和通訊方面實力很強。能否請您詳細介紹一下您在網路、光纖和無線方面看到的情況？以及您如何看待這些領域在下一季的發展？

Yes. That business, as I mentioned, Ruplu, in my prepared statement, we have very strong demand there. Our customers today in that segment will take everything I can ship. So the optical networks are really -- the demand is very strong. 5G continue to do well and expanding for us. That's doing well. And then networking products, IP routing, et cetera, also very strong. Again, demand is there. I think it's just getting this material shortages resolved.

是的。正如我在事先準備好的聲明中提到的，Ruplu，我們那邊的需求非常強勁。目前，該領域的客戶會盡可能訂購我能夠交付的產品。所以，光網路的需求確實非常旺盛。 5G業務也持續成長，發展動能良好。此外，網路產品、IP路由等業務也非常強勁。總之，需求一直都很旺盛。我認為現在的問題只是材料短缺需要解決。

Your next question comes from the line of Jim Suva with Citigroup.

你的下一個問題來自花旗集團的吉姆·蘇瓦。

And the supply constraints are pretty well-known, and it's unfortunate, and everybody is dealing with it. My question is, does it make sense longer term to like adjust with your clients where you're manufacturing and the relationship of how much inventory whether it be components or work-in-process or finished goods to hold structurally. I'm just wondering if those are discussions already in place or happening because it seems like whether it be trade wars whether it be power outages or water shortages or now COVID or shipping containers and such? It seems like it's one thing after the other. I'm just wondering if there's some structural things that maybe you were talking with your customers about for risk mitigation going forward longer term?

供應限制問題眾所周知，這很不幸，每個人都在處理。我的問題是，從長遠來看，是否應該與客戶協商調整生產地點以及庫存結構，無論是零件、在製品還是成品，應該持有多少庫存？我只是想知道這方面是否已經有討論或正在進行，因為似乎貿易戰、停電、缺水、新冠疫情、貨櫃運輸等等問題接踵而至。我想知道您是否與客戶討論過一些結構性問題，以降低長期風險？

Yes, Jim, that's excellent question. And not because you asked the question, that's something that we have really been working with our customers is really talking about the whole global supply chain. As you know, you've been around long as I did. 40 years ago, everything went east, east, east, now customers are definitely concerned about the safety to buy -- by logistic costs, et cetera. So we're really putting a lot of programs for one of our key customers today to improve that and minimize the impact. Unfortunately, this material shortages, I've never seen anything like this, Jim. This is a very unique time. I wish this was excuse. It will be at least easier to find a solution for it. But we are dealing with a real world and which is a lot of shortages from raw material to finished product. And also, as you know, we have a lot of geopolitical issues around the world. So all those things today are our customer base is very concerned, which longer term is really -- it's going to benefit our industry to be able to play a bigger role and have a better solution and closer relationship with our key customers. So we are excited what's in front of us. It's just frustrating in the short term because we are taking a lot of costs out. And I think if we had a better supply chain on a daily basis, I think we delivered a lot better financial results. So still a lot of work, but that's an exciting part of our job.

是的，吉姆，你問得好。這不僅是因為你問了這個問題，而是因為我們一直在與客戶探討整個全球供應鏈。你也知道，你跟我一樣在這個行業摸爬滾打了這麼多年。 40年前，所有東西都運往東方，現在客戶無疑更重視採購的安全性──物流成本等等。所以，我們今天正在為一位重要客戶實施一系列項目，以改善這種情況並盡可能減少影響。不幸的是，這種原材料短缺的情況，我以前從未見過，吉姆。這是一個非常特殊的時期。我希望這只是一個藉口，那樣至少更容易找到解決方案。但我們面對的是現實，那就是從原料到成品都存在著大量短缺。而且，你也知道，世界各地都存在著許多地緣政治問題。所以，目前我們的客戶群非常關注這些問題，但從長遠來看，這確實有利於我們整個產業——讓我們能夠發揮更大的作用，提供更好的解決方案，並與關鍵客戶建立更緊密的聯繫。因此，我們對未來的發展充滿期待。只是短期內會遇到一些挫折，因為我們正在大幅削減成本。我認為，如果我們能夠每天擁有更有效率的供應鏈，就能達到更好的財務表現。所以，我們還有很多工作要做，但這正是我們工作中令人興奮的部分。

Yes. I think I'd add to that, Jim. I think we -- if you look at our manufacturing footprint, we have a very diversified manufacturing footprint. We're not focused in any one particular area. And I think that's something that's quite appealing to our customers and our partners as you undergo these challenges. I think in terms of long term, are people going to hold more inventory of key components? That certainly seems to be the case. But given the fact that we're not going to -- everybody predicts that it's going to take another year plus to kind of get through this, that's something that won't happen until 2023. But certainly, I think, people are expecting to hold more at least critical components in the future.

是的，吉姆，我想補充一點。我認為，如果你看一下我們的生產佈局，你會發現我們的生產佈局非常多元化。我們並沒有專注於任何一個特定領域。我認為，在你們面臨這些挑戰之際，這對我們的客戶和合作夥伴來說非常有吸引力。從長遠來看，人們是否會增加關鍵零件的庫存？看起來確實如此。但考慮到我們目前的情況——大家都預測，要度過這場危機還需要一年以上的時間——這種情況至少要到2023年才會出現。但可以肯定的是，我認為人們預計未來至少會持有更多關鍵零件的庫存。

And then as my follow-up question, can you give us a little bit of details in your Communications Network and Cloud Infrastructure a little bit about the trends you're seeing in, say, networking versus routing versus optical. It seems like everyone is shifting to go from 40 gig to 100 gig and eventually 400 gig. Is that going well? Or is there a pause there for supplies and kind of what's going on, on how we should think about those subpart of that segment?

那麼，我的後續問題是，您能否詳細介紹貴公司在通訊網路和雲端基礎設施方面的情況，例如網路、路由和光纖等方面的發展趨勢？似乎大家都在從 40G 向 100G 過渡，最終達到 400G。這種轉變進展順利嗎？還是說由於供應問題，發展受到了阻礙？我們應該如何看待這個細分領域的這些子領域？

Jim, from our point of view, we're well positioned in this industry, especially right now as a lot of our customers is going to more to that 400 gig and so on, with every one of our key suppliers -- I mean, sorry, key customers been involved in the last year or so, bringing the new product to the market. So for us, I think you're going to see better demand in the higher-end systems in next -- well, we delivered them today, but I think you're going to see more of that in the next 12 months. Definitely, shortage for materials is there to -- we are chasing it ever there -- we're dealing -- I think with Sanmina because we're dealing with a lot of custom products and a lot of unique products and a lot of our components, in some cases, a single source is affecting us a little bit more. But we are working on it together with our customers, and I expect to see light at the end of the tunnel. And hopefully, a little bit easier a couple of quarters from now.

吉姆，從我們的角度來看，我們在這個行業中佔據著有利地位，尤其是在目前很多客戶都在轉向400G及以上級別的系統時，我們所有的主要供應商——抱歉，應該是主要客戶——在過去一年左右的時間裡都參與了新產品的上市。所以我認為，未來幾個月高階系統的需求將會更大——雖然我們今天交付了一些，但我認為未來12個月內需求會更加旺盛。當然，材料短缺的問題也確實存在——我們一直在努力解決——我們正在與Sanmina公司合作，因為我們有很多客製化產品和獨特產品，而且我們的許多組件在某些情況下都依賴單一供應商，這確實對我們造成了一定的影響。但我們正在與客戶共同努力解決這個問題，我相信曙光就在前方。希望幾個季度後情況會有所改善。

Your next question comes from the line of Christian Schwab with Craig-Hallum.

你的下一個問題來自 Christian Schwab 與 Craig-Hallum 的合作系列。

So just -- all my questions have kind of been answered. Just a quick clarity. What constrained components surprised you this quarter or materials that surprised you this quarter when you're kind of thinking it was going to be a typical $150 million and end up being greater than $200 million? What became less available or what became tighter? Can you give us any clarity on that?

所以，我的問題基本上都得到了解答。再補充一點：本季有哪些受限組件或材料讓您感到驚訝？您原本預計本季預算會達到1.5億美元，結果卻超過了2億美元。哪些組件或材料的供應變得更加緊張？能詳細說明一下嗎？

Well, definitely, semiconductor continue to be a problem. I think the biggest issue is de-commit when you think you're going to get the products today and then they come 2 weeks later, 3 weeks later. So semiconductor continues to be a problem. And also -- and it depends on our customer. We have a lot of different customers, different requirements even for a defense where we can put a lot of pressure on suppliers to make sure they put priority on this top military programs that we can -- we have a tough time getting certain components there also. So semiconductors for me, it's #1, but all the way down to raw materials, both in aluminum to fiber optics material, et cetera. It's just across all the sectors right now.

沒錯，半導體仍然是個問題。我認為最大的問題是供應商食言，你以為今天就能拿到產品，結果兩週、三週後才到。所以半導體問題依然存在。而且—這也取決於我們的客戶。我們有許多不同的客戶，需求也各不相同，即使是國防領域，我們也可以向供應商施加很大壓力，確保他們優先滿足這些重要的軍事項目——但我們仍然很難拿到某些零件。所以對我來說，半導體是頭號問題，但從原料到鋁材、光纖材料等等，所有領域都面臨著同樣的問題。

Yes. Jim -- Christian, I'm sorry, Christian, I would also add, I think in prior quarters, there was some inventory out in the distribution channel and that we're able to access that and help mitigate some of the problems. I think once that stuff got eaten through, then we kind of had to wait to the normalized channel and we saw a lot of stuff get delivered in the back part of the quarter. So I think it was a combination of those 2 things. But to Jure's point, semiconductor is clearly the leader in terms of impacting us.

是的。吉姆——克里斯蒂安，抱歉，克里斯蒂安，我還想補充一點，我認為在前幾個季度，分銷渠道裡有一些庫存，我們可以調動這些庫存來緩解一些問題。我認為一旦這些庫存被消化掉，我們就不得不等待渠道恢復正常，我們看到很多貨物在季度末才交付。所以我認為這是這兩個因素共同作用的結果。但正如尤爾所說，半導體顯然是對我們影響最大的產業。

And then as I look to Q1, you guys kind of gave guidance in the next fiscal year, but a lot of the trip constraints by one of the largest bottleneck producers of chips started about in February of last year, a little bit earlier in January for bigger customers pushing things to 52 weeks. So a lot of those customers should see increased supply going into Q1, I guess, if they predicted their business, Jure, a year ago. Are you not seeing any reflection of that?

展望第一季度，你們之前對下一財年做了一些預測，但一家大型晶片瓶頸生產商的運力限制從去年二月就開始了，一些大客戶甚至在一月份就出現了更早的情況，導致交貨週期延長至52週。所以，如果他們一年前就預測了自己的業務，Jure，我想很多客戶應該會在第一季看到供應增加。你們沒有看到任何這方面的跡象嗎？

Well, definitely is -- our customers are giving us a lot more visibility, I would say, in the last 9 months than ever before. So we've been planning that they're out, in some cases, longer than a year. I have a customer is looking stuff out for 2 years. So definitely, the customers that have a better planning, especially on this custom products that take a long time to manufacture are getting some relief.

確實如此——可以說，在過去的九個月裡，我們的客戶給予我們的訊息比以往任何時候都更加清晰。因此，我們一直在計劃他們的產品可能會停產，在某些情況下，停產時間甚至超過一年。我有一個客戶甚至計劃停產兩年。所以，那些計劃更周全的客戶，特別是那些生產週期較長的客製化產品客戶，確實能從中受益。

So then my last question is we don't currently believe there's any lost demand. So I mean we have over the last few quarters, hundreds and hundreds of millions of dollars of incremental loss revenue. So if we get any help in the supply chain or loosening up at the end of '22, we're going into '23, that would suggest that there should be a material increase in top line growth at some point if some of these component shortages, in particular, semiconductors become more available. Is that fair?

那麼我的最後一個問題是，我們目前認為需求並沒有下降。我的意思是，過去幾個季度，我們新增了數億美元的收入損失。因此，如果供應鏈在2022年底到2023年初有所改善，或者供應有所放鬆，那麼如果某些零件短缺問題，特別是半導體供應更加充足，那麼營收成長應該會在某個時候出現顯著提升。這樣理解對嗎？

Yes. That's fair. Right now, Christian, in short term, we don't see any orders going away. Yes, we definitely believe that as we resolve the shortages, our revenue will go up.

是的，這很合理。克里斯蒂安，就目前而言，短期內我們預計不會有任何訂單減少。是的，我們堅信，隨著短缺問題的解決，我們的收入一定會成長。

Thanks, Christian. Ladies and gentlemen, that's all we have for you today. Hopefully, we answered most of your questions. If not, give us a call. With all that, thank you very much. Bye-bye.

謝謝，克里斯蒂安。女士們先生們，今天的內容就到這裡。希望我們已經解答了你們大部分的問題。如果還有疑問，請隨時致電我們。非常感謝。再見。

This concludes today's conference call. Thank you for participating. You may now disconnect.

今天的電話會議到此結束。感謝您的參與。您可以斷開連線了。