Good afternoon. My name is Mariama, and I will be your conference operator today. At this time, I would like to welcome everyone to the Fourth Quarter and Fiscal Year 2016 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Thank you. I would now like to turn the call over to Vice President, Investor Relations, Paige Bombino. You may begin your conference.

Thank you, Mariama. Good afternoon, ladies and gentlemen, and welcome to Sanmina's Fourth Quarter and 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 and the slides posted on our website. Please turn to page two, the Safe Harbor statement. During this conference call, we may make projections or other forward-looking statements regarding the future events or 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 adverse changes to the key markets we target, credit problems experienced by our customers, competition that could cause us to lose sales, consolidation among our customers and suppliers that could adversely affect our business, and the other factors set forth in the company's annual and quarterly reports filed with the Securities and Exchange Commission. You'll note in our press release and the slides issued today that we have provided you with statements of operations for the three months and 12 months ended October 1, 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 the website. In general, our non-GAAP information excludes restructuring costs, acquisition and integration costs, non-cash stock-based compensation expense, amortization expense, and certain other infrequent or unusual items to the extent material. 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 the gross profit, gross margin, operating income, operating margin, taxes, net income, and earnings per share, we are referring to our non-GAAP information. I would now like to turn the call over to Jure Sola, Chairman and Chief Executive Officer.

Hey. Thanks, Paige. Good afternoon, ladies and gentlemen, and welcome. Thank you all for being here with us. With me on today's conference all is Bob Eulau, our CFO.

Hi, everyone.

For agenda, we have for you that, first, Bob will review our financial results for the fourth quarter and fiscal year 2016. I will follow up with additional comments about Sanmina results and future goals. Then Bob and I will open for Q&A. And now, I'd like to turn this call over to Bob. Bob?

Thanks, Jure. Please turn to slide three. Overall, the fourth quarter was a solid finish to the fiscal year. Revenue of $1.67 billion was almost flat with Q3, but up 1.8% from the fourth quarter last year. Our gross margin came in at 7.9%, which was up 10 basis points from both the third quarter and the fourth quarter last year. Operating margin at 4.2% was up 50 basis points sequentially and up 40 basis points from Q4 last year. Non-GAAP EPS was $0.72, which was above the high-end of our guidance for the quarter. This was based on 77.4 million shares outstanding on a fully diluted basis. During the quarter, we used $28 million to repurchase a total of 1.1 million common shares. Cash flow from operations was $103 million and free cash flow was $68 million. I'll discuss cash in more detail in a few minutes. Please turn to slide four. From a GAAP perspective, we reported net income of approximately $101 million, which resulted in earnings per share of $1.30 for the fourth quarter. This was up relative to last quarter by $0.92. The GAAP results included an incremental release of our valuation allowance against deferred tax assets. The tax benefit recorded in this quarter totaled $96.2 million or $1.24 per share versus the benefit of $287 million or $3.45 per share, which was recognized in the same quarter last year. With this adjustment, we're now expecting to use all of our U.S. federal net operating losses prior to their expiration. For the year, revenue finished at $6.481 billion. This was up by $106 million, while GAAP net income decreased by $189 million to $188 million, primarily due to a lower tax benefit being recognized this year. Accordingly, GAAP earnings per share for the year were $2.38…

Thanks, Bob. Ladies and gentlemen, I'd like to add a few more comments about our business environment for the fourth quarter and fiscal year 2016. And most importantly, we'll talk about the first quarter and the rest of the fiscal year 2017. So let me again recap fourth quarter, just add a few more comments what Bob said or put it my way. I believe we delivered solid financial results for the fourth quarter. Good improvements in operating margin of 4.2% and EPS of $0.72. It is the best EPS earnings in the last 15 years, so we're proud of that. Also, we continue to generate strong cash flow from operations as Bob just talked about. Operationally, we did a solid operational execution in spite of a flat revenue. Revenue was softer than forecasted for the quarter, driven by new project delays and softer demand in the mobile networks and embedded computing and storage. So, overall, good quarter. We also had a fair amount of new projects in this quarter, which was good. For fiscal year 2016, we delivered solid financials and consistent results. We improved margins. EPS grew 15% year-over-year. We delivered strong operating cash flow of $390 million and free cash flow of $274 million. It's part of our key strategy that we focus on that every day. Also during the year, we diversified our customer base and won some very important new programs and new customers. This helped us deliver best financial results in years, and again, very important that we positioned Sanmina for a better future. Now, please turn to slide 15. I'd like to give you some highlights now for the breakup of our revenue by end markets. Our top 10 customers were 51.8% of our revenue. Book-to-bill for the quarter was positive 102 to…

Your first question comes from the line of Steven Fox with Cross Research. Your line is open.

Thanks, good afternoon. I was wondering if...

Hi, Steven.

Hi, Steve.

Hi. I was wondering if first off you could just dig into the gross margins a little bit. Specifically, you said on the IMS side that mix helped the margins go up quarter-over-quarter. And then on the CPS side, you mentioned Products and Services hurt margins while Components helped it. If you could just sort of be more specific on those three topic areas and what (31:52) on there?

Yeah, Steve. This is Bob. So, on the IMS side, I mean we're obviously very pleased with the mix of business, and I think it's what we've seen at times earlier in the year. If you remember in Q2 our gross margin was also 7.7%. So it's really continuing to do well in the businesses that we've invested in for a number of years. Our strength in optical has really been important, and then the diversification into industrial has also been helpful for us. So it's at this point, we're very, very diversified, and so it's hard to point to any one area that drove it, but we think we're executing pretty well across the board on the IMS side.

And then...

And then on...

...CPS?

Go ahead. Yeah. On the CPS side, it's a little bit of a different story this quarter. We were disappointed in terms of Products and Services. We had generally been pretty consistent in both of those areas throughout the year. As Jure said, we had some softness, we had a few execution issues. And so we didn't do as well in those areas, which usually are pretty stable. And then we actually did a little bit better on the Components side. So we think we're beginning to turn the corner there. We've been hurt pretty badly as we've talked about throughout the year in terms of oil and gas and in the wireless base station business. So we think that we're hopefully through the worst of that now, and we'll start to see progress on the Components side.

Is there anything on the Products and Services that you could call out specifically that hurt those margins?

I don't want to get too specific, but I can tell you on the Services side, we believe it's a one-time event. And we think that we'll be able to recover pretty rapidly there. On the Products side, it's really a matter of continuing to drive the adoption of our product offerings.

Okay. And then just as a follow-up, you mentioned the storage push-outs a couple of times. Was that related to customer product or your own internal development of your storage arrays?

Well, it was really related to our new ISOs (34:03) product line.

Yeah. If I can add to that, Steve. As I mentioned in our prepared statement, we have some delayed – few key projects for our storage product. We believe those will be pushed in 2017. But it was really more driven by our customer requirement and some change in the specifications. But we are confident that these projects will be starting to ship soon.

Great. That's very helpful. Thank you.

Thanks, Steve.

Thanks, Steve.

Your next question comes from Herve Francois with B. Riley. Your line is open. Herve Daniel Francois - B. Riley & Co. LLC: Hi. Good afternoon, guys.

Hi, Herve.

Hi, Herve. Herve Daniel Francois - B. Riley & Co. LLC: Just on the – going back to real quick to the Components, Products and Services, and Bob, you've been talking about this for several quarters. Do you see any improvement in that in the December quarter, your fiscal first quarter? Or is that still going to be hampered by it? Because I know that's kind of vertically integrated for you guys, so that's still hampered by the softness that you're seeing in the wireless base stations and oil and gas?

Yeah. Just to kind of recap again, we did better this quarter on the Components side, and we think that we'll make even more progress next quarter, that's certainly our internal plan. Products is really going to be a question of marketed option and how our products do in the marketplace. And we obviously are optimistic that we'll see some positive movement there. And then from a Services standpoint, as I mentioned, it's really a one-time event that we think will turn around pretty rapidly there. Herve Daniel Francois - B. Riley & Co. LLC: Got it. And then when you look at the mix of the business for what you're expecting in your fiscal first quarter, the December quarter, are you expecting kind of like your cash flow and your cash conversion cycle to be within the same neighborhood as you just reported for your September quarter?

Yeah. It turns out the December quarter just because we have some annual payments have to be made, we have some interest payments that have to be made. It tends to be a little more challenging from a cash standpoint, but we still expect to generate solid cash in the first quarter, and we expect to generate solid cash for the year. Herve Daniel Francois - B. Riley & Co. LLC: Got it. Thanks very much, guys.

Thanks, Herve.

Sure. Thank you.

Your next question comes from Mitch Steves with RBC Capital Markets. Your line is open.

Hello, Mitch.

Hi, Mitch.

Hey, guys. Yeah. Just a quick question I guess I'm going to focus more on the Communications segment. So there's basically two pieces that I heard mentioned there, a broadband push-out and then you said an optical push-out. Can you talk about when you guys expect that to kind of come back, both of them separately?

Well, I don't think I said about optical push-outs. Well, two things. First of all, my prepared statement in regards to the markets, we had a push-out in the mobile network, mainly broadband, but our optical actually performed pretty well, and we expect it to perform pretty well in this coming quarter.

Got it. Okay. And secondly, getting back to the gross margins, just to make sure I heard this correctly, it's 7.7% to 7.9% next quarter, is that correct? And that should kind of work its way up to 8% potentially for next year?

Well, I think we guided 7.6% to 8% for Q1.

Got it.

Yeah.

But Mitch, if I can add to that, as we improve our Components, Products and Services business as Bob mentioned, I think our IMS business is pretty solid. We got some really good programs. We expect that – we drive our – to improve our margin, that's the key to us as long as the economy is cooperating, which we think it will, we expect to make nice improvements in 2017.

Yeah. We clearly have a lot of operating leverage in Components, Products and Services. And unfortunately, it's been a pretty challenging year with the mix of business there, but we believe things will get better in 2017.

Perfect. Thank you.

Thanks.

Your next question comes from Jim Suva with Citi. Your line is open.

Hello, Jim.

Hi, Jim.

Thank you very much. This past year, you made an asset transfer or an acquisition, however you want to say it, (38:48) that allowed one of your customers, I believe it was Motorola Solutions to shift production and plants to Sanmina, which I assume took a long time of negotiation and long-term talking. Jure, in your outlook for next year 2017, you mentioned a lot of strengths and positives and such. Do you foresee any additional actions or transactions like that happening as we look ahead for 2017?

Well, the key to our strategy, Jim, we've been talking in the last few years is the quality of the growth, something that is sustainable, quality of the customer that we can be – as long as we're executing, we have a long partnership that we can build on. And if you really look at the deals that we did with a few key customers in the last few years, and you mentioned MSI. It's a customer that yeah, it takes time to do this transaction, especially when you have to do it right and it's a commitment long, long-term. So those are great customers. We will continue to add customers like that, but we are – they have to be very strategic and they have to be a long-term, good customer that will fit in our strategy. But we are excited what's in front of us. We have some great wins last year, and those should help us deliver more revenue and we're hoping better margin, so we're excited. There's a lot of work left, but we are continuing to invest in different technologies that will drive the growth and expand our relationships with some of the great customers out there. So we're really excited. I think 2016 was a good year; I think position us for a better 2017.

Okay. Then my follow-up probably for Bob, it's CFO related (41:00). This quarter, the OpEx came in lower, and I believe you've mentioned lower than expected professional services. I assume that's like internal professional services at a cost that are unrelated to revenues at all, maybe it's consultants or something like that? Is that close? And if so are these just delayed a couple quarters, or are we looking at a new expense rate that is (41:21) Thank you.

Yeah. So, couple questions in there. First of all, from a professional services standpoint, it's outside service provider, so it's not internal resources. We use external folks to help us in a number of areas, so it's probably going to recover back to that range of $65 million to $67 million this quarter that we set for operating expense. And I would see their professional – outside professional services being at kind of a consistent level with what we've typically seen before. It was more of a one-time event.

Okay. Thank you for the details. Much appreciated.

Sure.

Thanks, Jim. And operator, we have time for one more question, if anybody wants to ask?

Okay. Ladies and gentlemen, first of all, we want to again thank you for your time you spent with us. Hopefully, we answered most of your questions. I think it was a good quarter, most importantly it's what we do next quarter and we are excited what's in front of us. So please stay in touch and looking forward to talking to you 90 days from now.

Yeah. Thanks, everyone. Have a good evening.

Bye-bye.

This concludes today's conference call. You may now disconnect.