Sanmina Corporation (SANM) Q2 2020 Results - Earnings Call
Sanmina Corporation (NASDAQ:SANM) Q2 2020 Earnings Conference Call April 27, 2020 10:00 AM ET
Company Participants
Paige Melching - SVP, Marketing & Investor Communications
Hartmut Liebel - CEO
Kurt Adzema - CFO
Conference Call Participants
Ruplu Bhattacharya - Bank of America
Christian Schwab - Craig-Hallum Capital
Jim Suva - Citigroup
Operator
Ladies and gentlemen, thank you for standing by. And welcome to the Sanmina Corporation's Second Quarter Fiscal Year 2020 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's call is being recorded. [Operator Instructions]
I would now like to hand the conference over to your first speaker for today, the Senior Vice President of Marketing and Investor Communications, Paige Melching. Ma'am, please go ahead.
Paige Melching
Thank you, Ian. Good afternoon, ladies and gentlemen, and welcome to Sanmina's second quarter fiscal 2020 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. 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.
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 projected in the statements as a result of a number of factors.
Most notably, the ongoing impact of the COVID-19 pandemic, which have and are expected to continue to reduce demand from our customers, interrupt the flow of our components needed for our customers' products, restrict the type of products we can build for our customers, and create health risk to our employees.
Other factors that could cause our results to differ from our outlook include adverse changes to the key markets we target, significant uncertainties that can cause our future sales and net income to be variable, reliance on a small number of customers for a substantial portion of our sales, risks arising from our international operations, any other 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 its forward-looking statements made in the earnings release on this conference call and on our Investor Relations section of our website, whether as a result of new information, future events or otherwise, unless otherwise required by law.
You'll note in our press release and slides issued today that we have provided you with a statement of operations for the quarter ended March 28, 2020 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. In general, our non-GAAP information excludes restructuring costs, acquisition and integration costs, non-cash stock-based compensation expense, amortization expense, and other unusual or infrequent items.
Any comments we make on this call as they relate 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 gross profit, gross margin, operating income, operating margin, taxes, net income and earnings per share, we are referring to our non-GAAP information.
I now like to turn the call over to Hartmut Liebel, Chief Executive Officer.
Hartmut Liebel
Thank you, Paige. And also from me a warm welcome to our second quarter earnings call. In addition to Paige here today, with me is also Kurt, our CFO.
The last weeks have been some of the most challenging in my, perhaps in all of our careers. I am in particular pleased with our exceptional management team. They have stepped up to the plate, managed wave after wave of operational adjustments, taking care of our customers who on average have been with us for 15 years, serving mission critical high complex end markets. So let me take this opportunity to thank our leadership team and of course, thank you to all of our customers and key suppliers, who collaborated with us extremely well in the last few weeks.
With that, let me pass on to Kurt, who will take us through the quarter.
Kurt Adzema
Thanks Hartmut. We started off the quarter strong and on track to meet our original outlook. However, as the quarter progressed, we started to be impacted by COVID-19. We first saw this as our employees in China were delayed in returning from Chinese New Year.
Secondly, there were delays in our Chinese supply chain, which have been shutdown as well and we supply to our operations worldwide as well as the operations of our customers. Thirdly, we saw the impact to the timing and cost associated with the logistics of the supply chain, especially freight. Finally, in March, we saw the impact of the shelter-in-place and similar restrictions, on both our operations as well as the operations of our customers.
The fact that many of Sanmina's products are considered essential and as such are subject to certain exemptions from shelter-in-place or similar restrictions helped mitigate the impact, but we were still impacted. As a management team, we focused on what we could control, namely optimization of our cost structure, limitation in new capital expenditures to only the most essential items, and cash generation.
With that, I'd like to walk you through the details of the quarter. If you could please turn to Slide 3. Second quarter revenue of $1.6 billion, was down 13.6% sequentially and 9.1% lower than the midpoint of our original outlook provided in January. Again this was primarily due to the impact of COVID-19 as we previously discussed. As you know we withdrew our original outlook back in March.
Q2 non-GAAP gross margin was 6.9%, down relative to the prior quarter. This was primarily the result of under absorption due to lower revenue levels, manufacturing inefficiencies, and additional costs caused by COVID-19. There were certain limitations based on government mandates in certain geographies, which prevented Sanmina from optimizing our cost base for the lower revenue levels, which we would do in the normal course.
Q2 operating expenses declined relative to the prior quarter to $62.8 million as we focused on reducing spending as the uncertainty around COVID-19 started to become apparent. Q2 non-GAAP other expenses were approximately $13.5 million. This was up approximately $9.3 million relative to the prior quarter. This was primarily due to a loss of approximately $5.1 million related to deferred compensation assets, primarily as the result of the decline in the stock market and other financial assets in the second quarter. This compares to a gain of $2.0 million in the first quarter.
As a reminder gains or losses related to deferred compensation assets have no net impact on non-GAAP earnings per share. Deferred compensation gains or losses are equally offset with corresponding increases or decreases in manufacturing and operating expenses.
Finally Q2 non-GAAP fully diluted earnings per share declined to $0.32 due to the impact of COVID-19 on revenue and gross margins. As the uncertainty related to COVID became evident we limited new capital expenditures to only the most decentralized items.
Net capital expenditures were approximately $16.4 million in the quarter. Depreciation, amortization was approximately $28 million. If you now please turn to slide 4, here you can see additional income statement details related to the quarter and the associated comparisons.
If you now please turn to slide 5 and I will discuss our two segments both of our segments revenues and gross margins were impacted by COVID-19 relative to our original outlook for the quarter. As you can see on the left IMS segment revenue declined to approximately $1.3 billion, non-GAAP gross margins down to 5.8%. On the right hand side you'll see components, products and services revenues declined to $327 million. Non-GAAP gross margins were down to 10.6%.
Now please turn to slide 6, on this page you can see our revenues by end market. While many of Sanmina’s products are considered essential and such are subject to certain exemptions to shelter in and place and other restrictions. Many of these markets were still impacted by the supply chain disruptions caused by COVID-19.
If you would now please turn to slide 7, our balance sheet remains very strong despite the challenging quarter related to COVID-19 we generated approximately $136 million of cash from operations, and approximately $119 million of free cash flow. Cash and cash equivalents were approximately $1.1 billion at the end of the quarter.
Towards the end of the quarter given the uncertainty related to COVID-19 we decided to draw down $650 million of our $700 million revolver. We did not use any of the cash last quarter, and we do not expect to use any of this cash in the third quarter. As I mentioned before, we generated free cash flow in the second quarter and expect to generate free cash flow in the third quarter.
We continue to maintain a low debt to cash ratio 0.9. Our term loan has a balance of $366 million and matures in November 2023. During the quarter we repurchased approximately 2.4 million shares for approximately $61 million. For the year-to-date we've repurchased 2.7 million shares and a total of $70 million. We will continue to be opportunistic and repurchasing shares.
Inventory was up approximately $40 million and inventory terms declined to 6.9. This was due to the manufacturing inefficiencies and disruptions in supply chain caused by COVID-19. Cash cycle days were 61.7. Non-GAAP pre-tax return on invested capital was 14.6.
I would now ask you to turn to slide 8. Here you can see additional balance sheet details related to the quarter and the associated comparisons. Now if you please turn to Slide 9, we’ll discuss the third quarter outlook while our Chinese operations are up and running and the Chinese supply chain is improving daily we still foresee continued impact to our operations in the third quarter and the rest of the world.
Although again mitigated to some extent by the fact that many of the products we manufacture are considered essential. In addition there remains uncertainty as it relates to the impact of shelter and place and other similar restrictions on our supply chain outside of China as well as on our customers. The impact of COVID-19 and the macroeconomic environment will continue to evolve as the quarter progresses.
Again as a management team we will remain focused on what we can control namely optimization of our cost structure, limitation on new capital expenditures only to the most essential items and cash generation. Our outlook for the third quarter is that revenue will be relatively flat in the range of $1.5 billion to $1.6 billion reflective of the continued impact of COVID-19.
Customer demand for the quarter is expected to be relatively stable with the exception of weakness in Automotive. We expect non-GAAP gross margins will be in the range of 6.4% to 6.9% as we continue to be impacted by COVID-19. This relates to under absorption continued manufacturing, inefficiencies and additional costs.
Non-GAAP operating expenses should be approximately $61 million to $63 million. We continue to be focused on reducing operating expenses given macroeconomic uncertainty. We expect non-GAAP operating margin to be in the range of 2.5% to 3%. We expect non-GAAP other expenses to be approximately $10 million. Our non-GAAP tax rate should be of around 22%. We expect non-GAAP fully-diluted share count to be around 70 million shares.
When you consider all this guidance or outlook for non-GAAP earnings per share for the quarter is in the range of $0.30 to $0.40. Adjusting for an estimated stock-based compensation of $0.12 cents per share, GAAP diluted earnings per share is expected to be between $0.18 and $0.28 cents.
Again we planned to limit new capital expenditures to only the most essential items. We expect capital expenditures to be around $17 million, while we expect depreciation and amortization to be around $28 million
Finally despite the continued impact of COVID-19, we expect to continue to generate free cash flow in the quarter. As I sit here today, there are a lot of variables which are changing every day, as we manage through the COVID-19 crisis. Not only do I believe Sanmina has navigated through these well to-date, I believe we are positioning ourselves well with our customers and our key markets to benefit during the ultimate recovery.
And with that, I'll turn it back to Hartmut for additional comments.
Hartmut Liebel
Thanks, Kurt. So let me add my comments to what Kurt outlined for that please refer to slide number 11. To set the stage., I think the firm ex-Sanmina is very much at the center of the COVID-19 crisis. Guess why? To get through these challenges we need three things to work for us to run our business.
Number one, we need logistics channels to bring part into our centers and to ship to end customers. Number two, we need a functioning supply base. We may have 99 parts, but without number 100 which might be a golden screw you cannot fulfill the order. And number three and probably most important, we need employees to be in the factory recognizing that some work can be done from remote offices.
So we have to manage all three, so we can produce and ship to our end customers. Seeing how our company work through these issues under pressure and uncertainty tells me a lot about the Sanmina team and our company. Just like other multinationals for Sanmina COVID-19 also started in China.
There we have a relatively small presence in two key cities. The local teams and our other retail teams rapidly rolled out waves of operational adjustments through our network by the time the challenge has arrived in Europe and the Americas we had learnt a lot and were relatively well prepared.
The primary responsibility is to keep our employees safe while building products that our customers need right now. For example, inside of one week we moved 7,000 associates to set up and work from home. Today we have ample protective equipment suppliers on hand, new protocols how employees enter facilities, social distancing, and we know how to isolate possible infection cases ahead of time in the future.
I hear from our customers they appreciate our transparency and our willingness to share our protocols with our customers to improve their very own procedures. So far we've had very few cases then it has been manageable. Obviously we still experience major disruption adding additional costs and inefficiencies that we're working through.
With regard to our supplier base we greatly enhance the day-to-day monitoring, including financial strength measurements. We enjoy great collaboration with our customers and certain suppliers are unique to some customers. We experienced some delays and constraints in particular in the medical space for PPE, monitoring tests in high demand by EMS personnel.
But I think overall this additional layer of transparency of monitoring is making us a better company and our customers appreciate that. We experienced similar challenges with freight and cargo as we all know due to the drop in passenger traffic cargo capacity is greatly reduced and very unbalanced worldwide.
Freight prices have gone up. Working with clients we are finding optimal routings, we are expediting for critical path especially in COVID-19 really the production of test equipment and ventilators. Some clients have entered into partnerships with local or national carriers to accomplish exactly that.
We manage the logistics for them but the limited -- with limited direct financial impact for Sanmina but delays and timing of delivery of components can impact revenues and the efficiency at the manufacturing plants. So to me the last few weeks demonstrated what mission critical products really mean and be alive for that please refer to page or slide number 12. For example in cities with stay at home orders, we quickly documented to local authorities the essential nature of our work. Within days we could restart manufacturing for many of our customers.
This response speed was a very much appreciated by our customers. This is really mission-critical nature of our work, and as our experience showed this is much more than a marketing slogan. And next -- please refer to slide number 13. Well, I want to share with you my observations about our end markets.
We have limited visibility. However I believe that our focus markets will be relatively stable to support our guidance with the exception of automotive. As we know production in the automotive sector has stopped very much worldwide and it's unclear about the timing and speed when the recovery will occur.
We have some exciting new engagements on the medical side, for example currently with exclusively manufacturer -- manufacturer of a rapid 15 minute COVID test that received emergency FDA approval.
So this is a very exciting development to be part of. For you many local police stations, fire department and EMS personnel we build communication systems that allow frontline managers to respond with speed and confidence, even if the public networks are overloaded or down during emergencies.
Our optical network customers are quite optimistic about their order book as communication bandwidth constraint is now something all of us can relate to almost daily. And finally, the defense industry's core demand is intact. Again this is you know the -- with the relative stability recognizing that our customers and ourselves have to continue to work through supply chain logistics and personnel challenges, but hopefully those will be gradually coming down in the weeks and quarters ahead.
So where do we go from here and what do I see happening in the near future as I kind of look around the corner. For that please refer to slide number 14. As you can see from the actions we have taken we focus on protecting the institutional strength of Sanmina, that is our strategic customers, our people, and our partner network. So we're staying very, very close to our customers. Based on our performance so far, I believe that they have great confidence in our management team and our approach in turn it gives our customers the confidence to partner with Sanmina even stronger with things go -- do recover.
And I think overall kind of the overall secular industry trend which is partner network consolidation, few partners and more closer to end markets, more regionalization, those trends are firmly intact. And I think they also played to our strength. For example as related to regionalization we've always been organized along those lines.
We serve as leading edge technology customers where we provide first flexibility; second, speed to meet end market demands; and third, best total value for our customers, and that has been our success formula in the past, and I believe it also holds true tomorrow.
So if I may recap today's call and for that please refer to slide number 15 which is the last slide in our deck. In Q2 we really focused obviously on taking care of our people. Revenue and margins were significantly influenced by COVID-19. We focus on what we can control, free cash flow, where we generated nearly $120 million and finished with an industry leading balance sheet strength with a cash balance of $1.1 billion.
In terms of the outlook for Q3 we anticipate a revenue range of $1.5 billion to $1.6 billion, non-GAAP EPS of $0.30 to $0.40 and we expect to be free cash flow positive. While we're streamlining operations so that we prepare for any market challenges we also focus on being prepared so that when the recovery kicks in we are ready to go and go to meet increased demand.
Our seasonal management team is on top of things and has demonstrated enormous resilience. This is the same management team that worked through 2008 with a difference that today we have a much stronger balance sheet and we reset our shock to the system is different but can also create opportunities. I think we have some very exciting years ahead of us.
Here I want to express a big Thank You to all of our employees around the world to our supplier partners and thank you to our shareholders and investors for your long term support.
With that, Ian we can open it up for Q&A.
Question-and-Answer Session
Operator
[Operator Instructions] And our first question is from line of Ruplu Bhattacharya from Bank of America. Your line is open.
Ruplu Bhattacharya
Hi, thank you for taking my questions. You know you’re giving guidance for the next quarter and I think that’s great. I’m just a little surprised because -- there is a lot of uncertainty and a lot of your competitors have also not given guidance so maybe if you can just touch on it, at higher level what are some of the things that are giving you confidence to give the guidance and it looks like a fairly tight guidance on revenues of -- the range of about $100 million so what are some of the things that are giving you confidence enough so that you can guide them at the -- the June quarter?
Hartmut Liebel
Sure, thanks, thank Ruplu good, good question. You know I think it's somewhat reflective of the nature of the customer relations we have. We are -- we always are in close contact with our customers and probably even more toward different levels of organization even more these days with our customers.
And so that's very much the -- the feedback we are hearing from them that combined with a pretty robust -- bottoms up forecast. You know we thought that -- based on that we feel, it would be appropriate to give our estimate for of what Q3 would look like at this point based on the available information to us?
Ruplu Bhattacharya
Yeah, I know it certainly -- we appreciate that and it’s at least a good guidance framework for us. Maybe for my second question if I can ask I think you're guiding flat from an end market demand standpoint except for automotive for the next quarter so I was wondering if you can just drill a little bit deeper into the communications network.
What did you see in that market in fiscal 2Q in networking, optical or wireless and are the same trends continuing so when you say flat are all of these end markets more or less trending the same as you saw in the last quarter?
Hartmut Liebel
Yeah. I think in the -- on the communications side, I think there are some puts and takes of what I think what the end market of our customers are kind of thinking through. And on the one side obviously they're dealing with very similar supply chain and employee and readiness challenges that I described to us in our call, and that you’ve heard from them directly.
At the same time you know they see actually market opportunities to grow their space, so you know in terms of increased communication demand, increased bandwidth demand, increased storage demand and so on. And so I think that's why imbalance, I think our end customers in the communications space they are -- they are reasonably optimistic about the outlook for this space, and that's why those puts and takes that kind of balance each other out, that's why would -- that's why we would call this space right now stable and supporting kind of our guidance right now.
Ruplu Bhattacharya
Okay. Thank you for that. And for my last question I'll focus on margins. I think you reported the gross margin of 6.9%. You mentioned additional costs associated with COVID-19. How much was that in the quarter, and how should we think about additional costs associated with COVID-19 in fiscal 3Q? And it looks like from the guidance you're guiding our gross margin down somewhat because it's the guidance if I heard correctly, the 6.4% to 6.9%. So what are some of the puts and takes that are impacting gross margin in fiscal 3Q? Thank you.
Hartmut Liebel
Kurt, you maybe want to take that call. That…
Kurt Adzema
Sure. So, again I mean I think there are a lot of variables that are interrelated as it relates to margins. I mean obviously it starts with volume, and you know volumes last quarter were down relative to the prior quarter and down relative to the expectations. You know I think as it relates to margin. I mean obviously it starts with volume, and you know, volumes last quarter were down relative to the prior quarter and down relative to expectations.
I think Sanmina has a history of adjusting pretty quickly to those things, but I think given a lot of the uncertainty and the speed of how the coronavirus or COVID rolled out, I think that was problematic.
And I also think, you know again -- as I mentioned in my earlier remarks, there are some restrictions in certain geographies, in terms of what we're able to do to reduce costs, but certainly under absorption is the key thing -- inefficiencies, again if you think about it -- you know inefficiencies associated with not having everybody in the factory or inefficiencies associated with having everybody in the factory, but not necessarily having all the parts you need, and then when the parts show up, you've got to work overtime to pick things up, and then add additional costs, I think Hartmut talked a little bit about freight and some other things. So they're all intertwined.
I think the way, I would think about it, is you know we have guided gross margins in kind of the mid-7s range for the outlook, and I think without COVID-19, I think we would have been in that range based on our strong start to the quarter.
So we're probably looking at a 50 bps to 60 EPS impact as a result of all those factors and COVID-19 as far as Q3 goes, we're going to see a lot of those. Some of them are going to be different right because we won't have -- let's say the shutdown that we had at -- after the Chinese New Year in China, but at the same time you know we've got a fuller impact in -- let's say the automotive business with some of the shelter-in-place stuff that thing come into effect towards the end of Q3 -- or excuse me the end of Q2 that may be in effect for longer in Q3. So I think you're going to see a lot of the same factors and I think that's why roughly margins are flat to slightly down on relatively flat revenue.
Ruplu Bhattacharya
Okay. Thank you for -- thank you for all the details. Appreciate it.
Hartmut Liebel
No problem.
Paige Melching
Ian, next question please.
Operator
Apologies. I was on mute. Our next question is from the line of Christian Schwab from Craig-Hallum Capital. Christian, your line is open.
Christian Schwab
Great. Thanks for taking my question. On the supply side dynamic issues can you quantify the difference between or call out any parts that have caused disruption or is it really just kind of travel logistics to get them?
Hartmut Liebel
Yeah. You know Christian question -- good question. It's really so widespread that it's very much you know the profile that we described of how we had to walk through here at Sanmina filters -- filters very much down to all of our supply base and so it's I think everybody across the board that raised levels of success to get ready again.
Again depends by location, depends by the region and we've worked very closely with that supply base to make sure that when we -- when we have the authority to that -- we could receive from our customers to be up and running under local government regulations we made sure that our suppliers had those too. So there was a lot of great collaboration but I don't about limited to a particular commodity was very, very -- very, very widespread.
Christian Schwab
Okay. Thank you for that. And then as we think about the second half of the calendar year you know what are the puts and takes you talked about stability in the customer base except for automotive this quarter, June. What are the puts and takes that we should be monitoring the closest, or you’re monitoring the closest to kind of anticipate what the second half of the calendar year could look like?
Hartmut Liebel
Yeah. You know it's -- it's you know it's those -- those three factors that we're trying to balance here and optimize, and that is as employee readiness that still you know -- you know there are still some adjustments even today on a day to day basis making sure that when the recovery comes back we have the right protocols in place for employees to come back at you know -- at different intervals, really ensuring that we you know that we’re optimizing our logistic partners and accelerate when parts come into facility, and then you know being very close to our supply base partners. So it's that -- not that optimization. That said, we already when and when the recovery kind of sets in.
Christian Schwab
Great. And my last question, you guys expressed some customer optimism in optical got to give the bandwidth issues globally. Is there -- is there any other silos of -- or pockets of strength that you know some have cap equipment and I think you have a small exposure there, but is there any other pockets of strength that you're pleasantly surprised by?
Hartmut Liebel
Yeah. No. It’s -- it's -- I think it's kind of right now it's a bunch of puts and takes that's why would -- that's why we kind of call to you know the outlook for end markets and as it relates to our Q3 kind of call it stable, right. And to be seen in the next several weeks If some of those end markets maybe accelerate early than some others -- the optimism that all of us have in 5G rollout and the time around that I think that’s still intact but we’ve seen like all the short-term issues is impacting the timing around that. Kurt anything else on that note?
Kurt Adzema
No I think that’s good.
Operator
[Operator Instructions] Our next question is the line of Jim Suva from Citigroup. Jim, your line is open.
Jim Suva
Thank you very much. You know I have covered Sanmina for a very long time and your company has done a lot with diversifying across the various end markets compared to what it was a decade or two ago but if I look back the last time when there was a big oil crisis I recall Sanmina had some receivable collection issues in customers so are you reserving a little bit more allowance for uncollectable accounts or have your collections been pretty sufficient in the past few years where you have enough buffer should it need to be some challenges in those various end markets not just oil and gas but -- small businesses, private businesses you may have trouble with fundings?
Hartmut Liebel
Sure. Good question. Certainly -- we have a very robust process every quarter looking at our outstanding accounts receivable in particular focusing on amounts that are in the past two or companies that -- financials are a bit challenged. I would say for the quarter that we were in our collections were in line with what you would -- we would normally expect and so -- so far we haven't seen any impact of that.
Certainly it's something we're monitoring and you know probably looking closer at it than you normally would although again we have a very robust process normally as well. So no evidence of that yet but certainly something we're keeping an eye on.
Jim Suva
Great. And my follow up question is you mentioned strength in optical, is that like accelerated strength beyond than what you maybe thought three months ago or so or is it a strength in optical relative to just the macro economy slowing. The reason why I ask is you know some people are talking about the need for a better optical for enterprise and work from home and those type of solutions, so I’m wondering if it's actually an acceleration or is it just simply -- it has just performed stronger relative to the overall economy which would given coronavirus - it's no one's fault that it's simply just the world that we live in today.
Hartmut Liebel
No, Jim. Good question but let me clarify my earlier comment I -- I said the even in communications the puts and takes kind of cancel each other out. There's obviously long term optimism for 5G but even our communications and marketers working through the same supply chain employee, logistic challenges here and that's exactly the reason why -- why characterized even the communications market as stable supporting our guidance.
So I don't see any like you know extreme optimism but I like to characterize is that a stable and I think in the current environment that's almost a good thing to have.
Jim Suva
I agree and concur. Thank you so much for the details and follow-up. It's greatly appreciated.
Hartmut Liebel
Thank you Tim. So operator and -- Ian, if we have time for one more question, if there is one more question, out there, we’d be happy to take that.
Operator
[Operator Instructions] And at this time, I'm showing that we have no other questions in the queue.
Hartmut Liebel
Thank you, Ian. So let me just take a moment here on behalf of our entire management team. I want to thank all -- all of you for attending today’s call and thank you for the insightful questions, and I hope that you and your family and your team members will stay healthy.
We very much appreciate your long-term support of Sanmina, and look forward to speaking with you next time, which will be our Q3 earnings call. Thanks again and goodbye.
Operator
Ladies and gentlemen, this concludes today's conference call. We thank you greatly for your participation. You may now disconnect.
