Good day. My name is Sequoia and I will be your conference operator. At this time, I would like to welcome everyone to the Sanmina Corporation Second Quarter 2016 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. Thank you. I would now like to turn the call over to Paige Bombino, Vice President, Investor Relations. Ma'am, you may begin.

Thank you, Sequoia. Good afternoon, ladies and gentlemen, and welcome to Sanmina's Second Quarter Fiscal 2016 Earnings Call. A copy of today's release is available on our website in the Investor Relations section. You can follow along with our prepared remarks in the slides posted on our website. Please turn to slide 2, the Safe Harbor statement. 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 of operation may differ significantly as a result of various factors including the state of the global economy, economic conditions in the electronics industry, changes in customer requirements and sales volume, competition and technological change. We refer you to our quarterly and annual reports filed with the Securities and Exchange Commission. These documents contain risk factors that could cause actual results to differ materially from our projections or forward-looking statements. You will note in our press release and slides issued today that we've provided you with statements of operations for the three and six months ended April 2, 2016 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, noncash stock-based compensation expense, amortization expense, and other infrequent or unusual items to the extent material. Any comments we make on this call as it relates 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 our gross profit, gross margin, operating income, operating margin, taxes, net income,…

Your first question comes from the line of Jim Suva with Citi. Jure Sola - Chairman & Chief Executive Officer: Hello Jim.

Thank you very much and congratulations to your team at Sanmina. Jure Sola - Chairman & Chief Executive Officer: Thank you, Jim.

One detailed thing probably for Jure and then a follow-up for Bob, and I'll ask them at the same time. So, Jure, I believe when you kind of gave your outlook this time about three months ago, you expected, I think, Communications to be flattish and it ended up being down 3.5%, if I read the slides correctly, or maybe my numbers are wrong. And if so, was that due to maybe the timing of Motorola coming in later than expected, or why was it down? And then the follow-up question is, was MSI in for the full quarter or part of the quarter? And can you help us out with organic growth rate and what Motorola added in the first part of the quarter? I assume there's a additional add-on that helps out for the June outlook. Thank you. Jure Sola - Chairman & Chief Executive Officer: Yeah. First of all Motorola is not in that segment. Motorola business is all government safety, and that's in our industrial part of our business under Industrial, Medical, and Defense. So, back to Communication, Jim, as I said earlier, really we did expect maybe little bit stronger communication in our second quarter beginning of the quarter, but really nothing major happened. There were some movements back and forth, but nothing major. We expect that segment for us continue to move in the right direction and we expect some kind of growth for the rest of the year. So, as I mentioned, we're well positioned in that segment. We're fortunate that most of the revenue that we have is in newer technology, especially in the networking and optical products of our business, so that looks promising. Back to MSI or Motorola Solutions, we have basically some revenue that we had in February and March. So, back to the growth, the company – a lot of our growth and a lot of the positive stuff that we have today, Jim, has been really driven by new projects, new opportunities, new wins. Motorola's project for us is really extension of the relationship that we had with this company for the last 20 years. They decided to outsource most of their manufacturing couple of years ago. Now, we are a major partner, actually majority partner for MSI. So we're looking to building – this, to me, it's no different than just winning a new win, and that's basically what happened. It's a start-up stage, so from margins point of view, we need to do lot of work to get some margins up here but it's a very exciting project. Most important, it's a long-term project, and it's in a great industry that we really want to grow. Bob, any comments? Go ahead, Jim.

Go ahead, Bob. Robert K. Eulau - Chief Financial Officer & Executive Vice President: Obviously, I don't have a lot to add. I think our view is we're extending the relationship.

Okay, so it sounds like you are not quantifying the amount of revenues that transaction's driving, is that right? Robert K. Eulau - Chief Financial Officer & Executive Vice President: Yeah, I mean, it's – we really don't go into specific customer situations.

Okay. And then Bob, you'd mentioned Communications. There was bit of softness, but nothing to worry about. But if I remember right that segment has three parts to it. Maybe my memory is old but I thought it was like networking, optical and wireless infrastructure. If so, which of those three came in softer? Because the segment was down about 4% for the quarter. I thought you'd mentioned that it was probably going to be flattish. So which of those did better, which did worse? Jure Sola - Chairman & Chief Executive Officer: So, Jim, let me. I would look at 3.5%; to me, I don't look at that as a big deal in the quarter itself. I think we had a lot of new programs that are coming aboard. So, some of these – as you know, seasonality – the March quarter is our slowest quarter in that segment if you look at historically. So I believe that 3.5% coming down, more of it was a seasonal. Beginning at the quarter, because we had so many programs, I personally thought that we will be able to ship more of that. So, some of those, the new programs didn't get shipped out. But I would say that all our segments there, because these are all new technology, did well. But lot of our revenue in that today has changed lot, Jim. Like – what you're talking about is years ago when you're talking – most of our stuff right now comes there is really an optical side of that networking part of the business, and lot of the new programs on that side of the business. And if you look at the mobile, also pretty stable and strong going forward.

Thank you and congratulations to your team at Sanmina. Jure Sola - Chairman & Chief Executive Officer: Okay, thanks, Jim. Robert K. Eulau - Chief Financial Officer & Executive Vice President: Thank you.

Your next question comes from the line of Mitch Steves with RBC Capital Markets.

Hey, I've got a quick question. So it looks like your top 10 customers increased about 6% sequentially as a percent of revenue. So, one, did you guys have a 10% customer in the quarter? And then secondly, what drove that material increase there? Jure Sola - Chairman & Chief Executive Officer: Okay, let me take – this is Jure, Mitch. First of all, we had two customers that become one. Alcatel and Nokia merged, so instead of having two customers, now we have one. So, really if you take that out there is really no change there. Bob, any comments? Robert K. Eulau - Chief Financial Officer & Executive Vice President: Yeah, no, there are really two causes. I mean that was one, and the other was the increase on the Motorola business. But the combination of the two caused that increase.

Got it. And then secondly, if I look at the gross margins for the CPS business, looks like you're at the 10% range. Is there a way to think about how that's being sustainable over the next, call it, three or four quarters? Jure Sola - Chairman & Chief Executive Officer: Well, Mitch, we're not happy with those margins. We believe we need to do a lot better in our Component, Product and Services. So we're not happy with those margins. We believe there is a fair amount of upside in those margins as some of our new businesses come online, and we drive the revenue up in that segment. So yeah, I would say hopefully, our margin, that will improve.

Perfect. Thank you very much. Jure Sola - Chairman & Chief Executive Officer: Thanks, Mitch.

Your next question comes from the line of Steven Fox with Cross Research. Robert K. Eulau - Chief Financial Officer & Executive Vice President: Hi, Steve.

Good afternoon, hi. Jure Sola - Chairman & Chief Executive Officer: Hi, Steven.

Hi. So just couple questions on the gross margin also. I guess you noted mix was an issue in the gross margin on the IMS side, so I was hoping to get some specifics on that. And then secondly, on the CPS side, you said that Components was driving some improvement in the margins, but the volumes didn't change that much. In fact the volumes slightly went down quarter-over-quarter. So can you sort of dig into how you're able to achieve those gross margins quarter-over-quarter? Robert K. Eulau - Chief Financial Officer & Executive Vice President: Yeah. This is Bob. So I'll take the question. So on the IMS side, my belief is 7.4% is still a very good outcome. And there are always mix changes quarter-to-quarter. They're never completely predictable. But I think that's a good outcome, and we've been about 7% now for the last four quarters. So we feel pretty good about that. Q1, as we've said at the time, was a very good mix and – I'm sure that that would be a sustainable mix. And having said all that, there's still room for operational improvement in the IMS businesses. On the Components side, as Jure said to the last question, we think there's still a lot of upside potential here. The number one issue in Components, Products and Services is revenue growth, and that's definitely true on the Components side. As I've said before, it's characterized by high fixed cost but also very high contribution margins. So as we can get some revenue growth there, we should see quite a bit of margin expansion on the Components, Products and Services. And specifically on the Components side we saw some nice operational improvements this quarter although as you saw overall, we actually didn't see revenue increase. So, a lot of the improvement was operationally oriented.

Great, that was very helpful. Jure Sola - Chairman & Chief Executive Officer: And Steve, if I can just add to that, it's important to understand that Sanmina is a different company now than years ago, and I just want to kind of remind analysts that we changed this company especially in the last couple of years. So, we are focused more about quality also of the earnings. So getting the revenue for revenue's sake, that's the easiest thing for us to do. But we went away from that formula. We're really focusing more on what we call sustainable type of businesses that are repeatable for many, many years that will build a long-term partnership. And I think we are accomplishing that. I think our customer base today is lot more solid than I've seen it ever. And I think we have a strong pipeline of new opportunities and some new businesses that we are being expanding into that will help us drive the margins. So I think the message today, I think we have a solid quarter but we are basically saying that we can do better and there is room for growth both on the top and the bottom line.

Thanks for that, Jure. I appreciate that. And then just really quickly on the software business that you acquired, can talk about its impact over the next couple of quarters on CPS? Are we going to see revenues at fairly high margins flow through? Any help there would be appreciated. That's it. Jure Sola - Chairman & Chief Executive Officer: So let me start with that from a marketing sales point of view a little bit, Steve, and then I'll turn it over for Bob for additional comments. First of all, we are building a product through our name called Newisys that's basically focusing in a cloud computing type of environment. I think we progressed a lot. We added a fair amount of customers there. And we started looking about a year and half ago, how do we create more value and we had a lot of interest from some of our key customers adding more software to solution that we already have. And we went out and acquired a small company with very unique capabilities – was that last quarter, Bob? Yeah, I think so. Robert K. Eulau - Chief Financial Officer & Executive Vice President: Yes. Jure Sola - Chairman & Chief Executive Officer: So, the last quarter. So we think this has a lot of upside. We don't want to talk too much about it today because of competitive reasons. But I personally believe that has upside. Maybe, Bob, you can add more on profitability. Robert K. Eulau - Chief Financial Officer & Executive Vice President: Yeah. Now, we're really pleased with how this acquisition is going. It really helps our offering on the storage side and allows us to have an offer in terms of software defined storage, which is pretty compelling right now. And the good news is we have early customer engagement there. While we were able to book $20 million in deferred revenue – that's revenue that will not be recognized immediately, it will be recognized over the next few quarters, so I wouldn't assume dramatic changes right away. But we think there's a lot of potential and we obviously really like the software business because we can be differentiated there and over time deliver very good margins.

Great, thank so much. Jure Sola - Chairman & Chief Executive Officer: Thanks, Steve.

Your next question comes from the line of Herve Francois with B. Riley. Jure Sola - Chairman & Chief Executive Officer: Hi, Herve. Herve Daniel Francois - B. Riley & Co. LLC: Hi. Good evening, everybody. Hey, how's it – good to hear from you, Jure. I was just asking in regards, when you look out for the remainder of this year in regards to the drivers of operating margin improvement, where do you – do you see it being the majority continuing to come from your mix of business? Do you see any of that coming from efficiencies that you can get from some of your existing, either processes or manufacturing facilities? Jure Sola - Chairman & Chief Executive Officer: Well, both of those. I mean definitely mix is a big impact on our business and of course efficiency. Efficiency is what we drive every day, I believe we still can make improvements there. But I think also it's going to be growth we have – we've been working on a lot of good projects. We've got to get those things in production as we start loading some of these plants that we have around the world, definitely will help us improve the margin and we talked about earlier on Components, Products and Services. Again, we're driving more revenue there. And also, as we just talked about, some of these storage product that we're doing, hardware plus the software, I believe that will help us drive the margin. Bob, anything else? Did I miss... Robert K. Eulau - Chief Financial Officer & Executive Vice President: No, I think you hit all the key items. I guess the one other area as we grow that we think we'll get leverage out of is our operating expenses because we think we…

Sure thing. Your last question comes from Christian Schwab with Craig-Hallum Capital Group.

Congratulations. Robert K. Eulau - Chief Financial Officer & Executive Vice President: Hi, Christian. Jure Sola - Chairman & Chief Executive Officer: We obviously leave the best for the last, you know.

You're always so nice to me. Congratulations on a good quarter, guys. So Bob, can you remind us how much is left in the stock buyback? Robert K. Eulau - Chief Financial Officer & Executive Vice President: Yeah, we've about $100 million remaining in the share repurchase program.

Okay. Given the significant leverage not many companies do and $6.5 million in revenue with only 77 million shares outstanding, do you plan on being opportunistic in that? Or I know you spent a number of years reducing debt cost and re-profiling. Can you give us an idea of what your plan is long-term on the stock buyback program? Robert K. Eulau - Chief Financial Officer & Executive Vice President: Yeah, I'm happy to do that and I'd say our strategy there really haven't changed. I mean in terms of use of cash, it's always where do we need to grow the business first in terms of either working capital or CapEx investment. And then, at this point, it's really a matter of either small strategic acquisitions or share repurchase. And the good news is that the share repurchase program sets a pretty high bar for any of the acquisitions. So, we're very pleased with the repurchases we made last quarter and we'll continue to be opportunistic with the program.

Right, no other questions. Thanks, guys. Jure Sola - Chairman & Chief Executive Officer: Thanks Christian. Robert K. Eulau - Chief Financial Officer & Executive Vice President: Thanks Christian. Jure Sola - Chairman & Chief Executive Officer: Well, ladies and gentlemen, I'm going to again thank you, and also remind you again, as Bob mentioned earlier, we're hoping to see in New York on Thursday, May 26. I think our meetings are between 9 and 1 PM. As Bob mentioned, I think it's a great opportunity to see at least both of us; that's plus right there. And we're going to also bring other members of our management team who do most of the work. And we're looking forward to a very open discussion and for you to get to know new Sanmina and most important where is this Sanmina is going. We're very excited, it's entrepreneur type of a company, we got lot of exciting things that we love to share with you. So, looking forward to seeing you in New York. Thank you, again. Robert K. Eulau - Chief Financial Officer & Executive Vice President: Yeah, thanks, everybody. Bye, bye.

This concludes today's conference call. You may now disconnect. Thank you for joining.