Sanmina (SANM) risk factors, FY2025 10-K

Other

1. 01Adverse changes in the key end markets we target could harm our business by reducing our sales23% rewritten
2. 02Our operating results are subject to significant uncertainties, which can cause our future sales, net income and cash generated from operations to be variable
3. 03We are subject to risks arising from our international operations
4. 04We rely on a relatively small number of customers for a substantial portion of our sales and declines in sales to these customers could significantly reduce our net sales and net income
5. 05Customer order cancellations, push-outs and reduced forecasts could reduce our sales, net income and liquidity
6. 06Our strategy to pursue higher margin business depends in part on the success of our CPS businesses, which, if not successful, could cause our future gross margins and operating results to be lower74% rewritten
7. 07Current U.S. trade policy could increase the cost of using both our onshore and offshore manufacturing services for our customers, leading them to reduce their orders to us; unrecovered tariffs would reduce our gross marginsNew
8. 08Transfers of business or operations may increase our costs and cause disruptions in our ability to service our customers

Regulatory, Compliance and Litigation Risks

1. 09We are subject to a number of U.S. export control and regulatory requirements relating to our defense business, with which the failure to comply could result in fines and reduction of future revenue
2. 10If we are unable to protect our intellectual property or if we infringe, or are alleged to infringe, upon the intellectual property of others, we could be required to pay significant amounts in costs or damages
3. 11Allegations of failures to comply with domestic or international employment and related laws could result in the payment of significant damages, which would reduce our net income
4. 12Cyberattacks and other disruptions of our information technology network and systems could interrupt our operations, lead to loss of our customer and employee data and subject us to damages
5. 13Any failure to comply with applicable environmental laws could adversely affect our business by causing us to pay significant amounts for cleanup of hazardous materials or for damages or fines
6. 14Changes in financial accounting standards or policies have affected, and in the future may affect, our reported financial condition or results of operations; there are inherent limitations to our system of internal controls; changes in corporate governance requirements, policies and practices may impact our business42% rewritten
7. 15Global, national and corporate initiatives addressing climate change could increase our costs
8. 16Our customers could experience credit problems, which could reduce our future revenue and net income
9. 17Any failure to maintain adequate liquidity would prevent us from maintaining operations at current or desired levels, which in turn would reduce both our revenue and profitability83% rewritten
10. 18Our credit facilities contain covenants that may adversely impact our business; the failure to comply with such covenants or the occurrence of an event of default could cause us to be unable to borrow additional funds and cause our outstanding debt to become immediately payable24% rewritten

Strategic Transaction Risks

1. 19manufacturing business of ZT Systems from Advanced Micro Devices, Inc., and in October 2022, we entered into a joint venture with a wholly owned subsidiary of Reliance Strategic Business Ventures Limited (“RSBVL”)New
2. 20Separately, we may also choose to divest plants, businesses or products lines in the future. Divestitures reduce revenue and, potentially, margins and can involve the risk of retained liabilities from the operations divested, including environmental liabilitiesNew
3. 21We are subject to intense competition in the electronics manufacturing services (“EMS”) industry, which could cause us to lose sales and, therefore, harm our financial performance
4. 22Consolidation in the electronics industry may adversely affect our business by increasing customer buying power and increasing prices we pay for components
5. 23Changes in our income tax rates or exposure to additional tax liabilities or expiration of our net operating loss carryforwards could increase our taxes and decrease our net income; developments in pending audits could result in an increase in our tax expenses which would decrease our net income
6. 24We can experience losses due to foreign exchange rate fluctuations and currency controls, which could reduce our net income and impact our ability to repatriate funds
7. 25We may not have sufficient insurance coverage for potential claims and losses, which could leave us responsible for certain costs and damages
8. 26Recruiting and retaining our key personnel is critical to the continued growth of our business
9. 27We are subject to risks associated with natural disasters and global events27% rewritten
10. 28The market price of our common stock is volatile and is impacted by factors other than our financial performance49% rewritten