About SCI SYSTEMS, INC.

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, defense, medical, aerospace, telecommunications, and technology industries, among others. Because its customers' base production is in lower-cost regions, more than 80% of sales come from outside the US.

Operations

Sanmina's Integrated Manufacturing Solutions unit (IMS; 79% of 2014 sales) makes printed circuit board assembly and test, optical, and radio frequency modules. The Components, Products, and Services unit (CPS; 21% of sales) makes its interconnect systems and mechanical systems components in addition to memory and storage products and other services.

Geographic Reach

Sanmina has 75 facilities in 25 countries on six continents. Mexico surpassed China as the company's largest geographic segment. Customers in Mexico accounted for 27% of revenue while customers in China were responsible for 25%. US customers made up 18%.

Sales and Marketing

The company supplies OEMs primarily in the communications networks, defense and aerospace, industrial and semiconductor systems, medical, multimedia, computing and storage, automotive and clean technology sectors.

Sanmina's top 10 customers together generate half of sales.

Financial Performance

After a year of lower revenue in 2013, Sanmina rebounded in 2014 posting 5% higher revenue on sales of $6.2 billion. Sales to customers in the company's industrial, medical, and defense customer segment increased significantly on an effort to acquire new customers and orders from existing customers. Sales in the communications customer segment fell for the year.

Sanmina's net income staged an even bigger comeback in 2014, rising 148% from 2013 to $197 million. Higher revenue helped boost profit as did income tax benefits.

Strategy

Operating in a highly cyclical industry, the company is continually restructuring in order to provide more cost-efficient products to its customers.

Its strategy includes extending its technology capabilities; building customer partnerships; moving into diverse end markets; pursuing strategic transactions; and cutting costs. The company is emphasizing growth in its CPS segment and it made improvements in its backplane technologies, a key element of CPS.

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. In May 2014, the company bought a manufacturing facility in Mexico from Motorola Solutions.

Company Background

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) 882-4466
www.sanmina-sci.com

Stats

  • Employer Type: Public
  • Chairman: Alberto Paniagua
  • Ex V P: Gary Switzer
  • Chief Technology Officer: Bill Thornton

Major Office Locations

  • Huntsville, AL

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