SCI SYSTEMS, INC.

  • Overview

Sanmina means to be a top contract manufacturer of sophisticated electronic components. It designs and makes printed circuit boards and board assemblies, backplanes and backplane assemblies, enclosures, cable assemblies, optical components and modules, and memory modules. In addition, the company provides services such as design and engineering, materials management, order fulfillment, and in-circuit testing. It serves OEMs in the health care, aerospace, telecommunications, and technology industries, among others. Because its customers base production in lower-cost regions, more than 80% of sales come from outside the US.

Geographic Reach

Sanmina has 75 facilities in 25 countries on six continents. The company's largest geographic segment is China, which represents more than a quarter of sales. Mexico accounts for nearly 20% of sales, followed closely by the US.

Operations

In late 2012 Sanmina divided its business into two operations. Integrated Manufacturing Solutions (IMS; 80% of total sales) makes printed circuit board assembly and test, optical, and radio frequency modules. Components, Products, and Services (CPS; 20% of sales) makes its interconnect systems and mechanical systems components in addition to memory and storage products and other services.

Sales and Marketing

Alcatel-Lucent accounted for 10% of the company's sales in 2012; Sanmina's top 10 customers together generate half of sales.

Financial Performance

After reporting two straight years of growth, Sanmina posted an 8% drop in revenues from $6.6 billion in 2011 to $6.1 billion in 2012. However, its net income more than doubled from $69 million in 2011 to $180 million in 2012.

The company suffered from an overall lower demand for wireless communications products in 2012. Sales in the multimedia market were also down due to a decline in the demand for set-top boxes. It also suffered declines for semiconductor capital equipment within the industrial, defense, and medical sectors.

Sanmina's significant gain in net income in 2012 (more than 150%) was primarily the result of an income tax benefit of $130 million, most of which came from the release of nearly $160 million of the company’s deferred tax asset valuation allowance.

Strategy

Operating in a highly cyclical industry, the company is continually restructuring in order to provide more cost-efficient products to its customers. In order to reduce costs and exert greater control over production, the company follows suit with its customers, locating its components plants in lower-cost regions, while its final system assembly plants sit near customers and their end-markets. It continues to eye regions such as Latin America, Eastern Europe, China, Southeast Asia, and India for opportunities to keep its manufacturing costs down. Restructuring initiatives over the past several years include closing or consolidating facilities, moving manufacturing plants to lower-cost regions, and terminating employees.

Ownership

Two investment entities each own 10% of the company: Invesco and Donald Smith & Co.

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SCI SYSTEMS, INC.


13000 Memorial Pkwy Sw
Huntsville, AL 35803-6000
Phone: 1 (256) 882-4800
Fax: 1 (256) 8824466
www.sci.com

STATS


  • Employer Type: Unknown
  • President: Rashad Hasan
  • Chairman: Gina Lackey
  • Chief Technology Officer: Kenneth Mbale

Major Office Locations

  • Huntsville, AL
  • Huntsville, AL