Sanmina-SCI's Management Presents At Bank Of America Merrill Lynch 2012 Technology Conference (Transcript)

Sanmina-SCI Corp. (SANM)

Bank of America Merrill Lynch 2012 Technology Conference Transcript

May 08, 2012 6:30 PM ET

Executives

Bob Eulau – Chief Financial Officer

Paige Bombino – Investor Relations

Analysts

Wamsi Mohan – Bank of America Merrill Lynch

Presentation

Wamsi Mohan – Bank of America Merrill Lynch

Joining us here, it is the end of a long day for many of us. So appreciate you all being here today. For those of you who have not met, I’m Wamsi Mohan. I’m the Technology Supply Chain Analyst here at Bank of America Merrill Lynch and welcome again to our Technology Conference this year.

We are delighted to have Sanmina-SCI with us today. As you all know they have been around for a long time in the EMS business and have had seen many, many cycles both ups and downs over the years, and we have from Sanmina Bob Eulau, CFO, representing Sanmina here today. Also we have Paige Bombino from IR sitting here if you want to reach out at the end of the day.

Bob is going start off with some introductory slides and then we will jump into Q&A. Okay. Bob?

Bob Eulau

Okay. Thanks, Wamsi. It is a pleasure to be here today and thanks everybody for attending, we appreciate it. What I’ll do is quickly go through an overview of the company and we’ll save plenty of time for questions-and-answers.

Of course, I have to start with the obligatory Safe Harbor. I would encourage you to read all of our SEC filings about the risks, et cetera in them and with that, we’ll move right along.

So, as Wamsi mentioned, Sanmina-SCI has been around for 32 years. We’ve been, in fact some of our predecessors companies even been around longer than that. So we operate in 18 countries around the world and at this point, we have about 42,000 employees in those 18 countries.

Our focus is really on providing leading edge technology, engineering and manufacturing solutions to our customers. And I’ll go through that in more detail. Oops! Wrong direction.

So our strategy is to make sure that we are providing differentiated capability. We want to make sure we invest in technologies, and products and services, where we can add value for our customers.

We made a bold decision about five years ago to exit that personal computer manufacturing and we don’t do any high velocity manufacturing. We really focused primarily on infrastructure related product area, where again, we can bring more engineering content, we can add more value and hopefully, make a bigger difference for our customers.

Our goal is to maximize value in each and everyone of the businesses that we operate in and we’ll come back to that in few minute.

We do invest in leading edge design, engineering and technology. We are unique in that respect. As a EMS company, we have a higher percentage of our revenue that is vertically integrated then anybody else in the industry and we also make specific product investments that are unique within the industry.

And we spend a lot of time over the last few years really diversifying our customer base to continue to drive growth in the infrastructure product areas, which is where we think our capabilities are uniquely well-positioned.

The other thing that we’ve had as a strategy for quite awhile, it’s very much in evidence over the last 90 days, whereas our goal to deleverage the balance sheet and we’ve made a lot of progress on that, and I will share that with you as we move forward here as well.

So the key is, executing on this strategy to have long-term sustainable growth and profitability to create shareholder value.

When we look it as a company, it’s still dominated by the manufacturing and services area, which was showing in the center of this slide. But we are focused on unique businesses that help compliment the traditional manufacturing services.

One of the areas is interconnect systems, which we been in and involved in for many years, in fact Sanmina started out as the printed circuit board company and when we say interconnect systems we are really referring to printed circuit board, fabrication, backplane and cable, that’s a good business for us and one other areas in which we vertical integrate.

The second one is mechanical systems and here we invest in areas like precision machining, plastic injection molding, sheet meta, bending, stamping, et cetera. So we again have a unique business, we run each of these a separate business, we have separate leadership and President for those organization and their goal is to independently generate profitability for the company.

Third area for us is optical components and RF and microelectronic capability, and this is an area in which we have very large footprint that very tightly integrated with our manufacturing services. I would say our footprint is probably second only to Fabrinet in terms of optical, optical capability and the largest footprint among the Tier 1 manufacturing services company.

Another unique area for our company is on the defense side, we’ve been investing in defense and aerospace for a number of years, in fact, our name Sanmina-SCI, the SCI stands for Space Craft Incorporated and we began -- that part of the company began as really a defense contractor working for NASA.

So there is, and I believe that was in the ’60, we go over 50 years of selling into defense market. This is a still a very profitable business for us, somewhat smaller than it was a year ago, but still very good profitability.

Read the rest of this transcript for free on seekingalpha.com