Note 13 Business Segment, Geographic and Customer Information

12 Months Ended

Oct. 01, 2016

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

Business Segment, Geographic and Customer Information

ASC Topic 280, Segment Reporting, establishes standards for reporting information about operating segments, products and services, geographic areas of operations and major customers. Operating segments are defined as components of an enterprise for which separate financial information is available and evaluated regularly by the chief operating decision maker or decision making group in deciding how to allocate resources and in assessing performance.

The Company's operations are managed as two businesses:

1) Integrated Manufacturing Solutions (IMS). IMS is a reportable segment consisting of printed circuit board assembly and test, final system assembly and test, and direct order fulfillment.

2) Components, Products and Services (CPS). Components include interconnect systems (printed circuit board fabrication, backplane and cable assemblies) and mechanical systems (enclosures, precision machining and plastic injection molding). Products include memory, optical, RF and microelectronics solutions from the Company's Viking Technology division, defense and aerospace products from SCI Technology, storage solutions from the Company's Newisys division and cloud-based manufacturing execution system from the Company's newly-formed division, 42Q. Services include design, engineering, logistics and repair services.

The Company evaluated its operating segments to determine whether they can be aggregated into reportable segments. Factors considered in this evaluation were similarity of economic characteristics, products, production processes, type or classes of customers, distribution methods and regulatory environments. The Company determined that it has only one reportable segment - IMS, which generated 80% of the Company's total revenue in 2016. The Company's CPS business consists of multiple operating segments which, based on this evaluation, do not meet the quantitative threshold for being presented as reportable segments. Therefore, financial information for these operating segments is presented in a single category entitled “Components, Products and Services”.

The accounting policies for each segment are the same as those disclosed by the Company for its consolidated financial statements. Intersegment sales consist primarily of sales of components from CPS to IMS.

The Company's chief operating decision making group is the Chief Executive Officer and Chief Financial Officer and they allocate resources and assess performance of operating segments based on a measure of revenue and gross profit that excludes items not directly related to the Company's ongoing business operations. These items are typically either non-recurring or non-cash in nature.

Segment information is as follows:

	Year Ended
	October 1, 2016			October 3, 2015			September 27, 2014
	(In thousands)
Gross sales:
IMS	$	5,297,740		$	5,157,427		$	4,933,714
CPS	1,372,412			1,414,797			1,514,340
Intersegment revenue	(188,971		)	(197,683		)	(231,092		)
Unallocated items (1)	—			—			(1,856		)
Net Sales	$	6,481,181		$	6,374,541		$	6,215,106
Gross Profit:
IMS	$	397,309		$	366,436		$	339,909
CPS	121,696			135,064			155,974
Total	519,005			501,500			495,883
Unallocated items (1)	(4,723		)	(17,644		)	(7,600		)
Total	$	514,282		$	483,856		$	488,283
Depreciation and amortization:
IMS	$	66,036		$	56,428		$	50,933
CPS	33,062			35,526			38,420
Total	99,098			91,954			89,353
Unallocated corporate items (2)	12,812			8,613			8,324
Total	$	111,910		$	100,567		$	97,677
Capital expenditures (receipt basis):
IMS	$	83,084		$	105,755		$	47,103
CPS	21,852			17,290			27,724
Total	104,936			123,045			74,827
Unallocated corporate items (2)	5,624			3,436			4,635
Total	$	110,560		$	126,481		$	79,462

(1) For purposes of evaluating segment performance, management excludes certain items from its measures of revenue and gross profit. These items consist of stock-based compensation expense, amortization of intangible assets, charges or credits resulting from distressed customers and acquisition-related items.

(2) Primarily related to selling, general and administration functions.

Segment assets, consisting of accounts receivable, inventories and fixed assets, are substantially proportional to segment sales.

Information by geographic segment, determined based on the country in which a product is manufactured or a service is provided, was as follows:

	Year Ended
	October 1, 2016		October 3, 2015		September 27, 2014
	(In thousands)
Net sales:
United States	$	1,045,998	$	1,029,897	$	1,041,892
Mexico	1,869,651		1,979,085		1,693,564
China	1,421,693		1,510,208		1,564,389
Other international	2,143,839		1,855,351		1,915,261
Total	$	6,481,181	$	6,374,541	$	6,215,106

Percentage of net sales represented by ten largest customers	52.0	%	48.3	%	50.3	%
Number of customers representing 10% or more of net sales	1		—		—

	As of
	October 1, 2016		October 3, 2015
	(In thousands)
Property Plant and Equipment, net:
United States	$	164,481	$	149,340
Mexico	145,916		159,907
China	80,894		84,426
Other international	226,233		197,171
Total	$	617,524	$	590,844