Business Segment, Geographic and Customer Information

12 Months Ended

Oct. 01, 2022

Business Segment, Geographic and Customer Information

Business Segment, Geographic and Customer Information

Note 16. 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, high-level assembly and test and direct order fulfillment.

2) Components, Products and Services (CPS). Components include printed circuit boards, backplanes and backplane assemblies, cable assemblies fabricated metal parts, precision machined parts, and plastic injected molded parts. Products include memory solutions from our Viking Technology division; high-performance storage platforms for hyperscale and enterprise solutions from our Viking Enterprise Solutions (VES) division; optical, radio frequency (RF) and microelectronics (microE) design and manufacturing services from Advanced Microsystems Technologies; defense and aerospace products from SCI Technology; and cloud-based manufacturing execution software from the Company’s 42Q division. Services include design, engineering and logistics and repair.

The Company determined that it has only one reportable segment - IMS, which generated approximately 80% of the Company’s total revenue in 2022. CPS consists of multiple operating segments which do not meet the quantitative threshold for being presented individually as reportable segments. Therefore, financial information for these operating segments is combined and 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 who allocates resources and assesses 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, 2022		October 2, 2021		October 3, 2020
	(In thousands)
Gross sales (As restated):
IMS	$	6,413,606	$	5,485,612	$	5,719,180
CPS		1,655,183		1,379,455		1,369,550
Intersegment revenue		(149,167)		(126,711)		(138,522)
Net Sales	$	7,919,622	$	6,738,356	$	6,950,208
Gross Profit (As restated):
IMS	$	462,606	$	391,339	$	381,638
CPS		175,509		151,884		148,301
Total		638,115		543,223		529,939
Unallocated items (1)		(15,909)		(16,782)		(12,775)
Total	$	622,206	$	526,441	$	517,164
Depreciation and amortization:
IMS	$	73,914	$	77,076	$	81,169
CPS		30,061		27,770		26,718
Total		103,975		104,846		107,887
Unallocated corporate items (2)		4,808		4,810		6,331
Total	$	108,783	$	109,656	$	114,218
Capital expenditures (receipt basis):
IMS	$	94,636	$	44,672	$	23,933
CPS		55,993		33,839		23,915
Total		150,629		78,511		47,848
Unallocated corporate items (2)		5,650		3,343		3,227
Total	$	156,279	$	81,854	$	51,075

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

(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.

Net sales by geographic segment, determined based on the country in which a product is manufactured were as follows:

	Year Ended
	October 1,		October 2,		October 3,
	2022		2021		2020
	(Restated)
	(In thousands)
Net sales:
Americas (1)	$	3,748,643	$	3,164,562	$	3,440,365
APAC		3,007,904		2,517,963		2,514,005
EMEA		1,163,075		1,055,831		995,838
Total	$	7,919,622	$	6,738,356	$	6,950,208

(1) Mexico represents approximately 60% of the Americas revenue and the U.S. represents approximately 35%.

Percentage of net sales represented by ten largest customers	48.7	%	52.7	%	55.5	%
Number of customers representing 10% or more of net sales	2		1		1

	As of
	October 1,		October 2,
	2022		2021
	(In thousands)
Property, plant and equipment, net:
Americas	$	367,172	$	322,545
APAC		151,254		143,111
EMEA		56,744		67,329
Total	$	575,170	$	532,985