Note 14 Business Segment, Geographic and Customer Information

12 Months Ended

Oct. 03, 2015

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 Non-Volatile DIMMs, solid state drives and DRAM solutions from the Company's Viking Technology division, defense and aerospace products from SCI Technology, storage products from the Company's Newisys division and optical and Radio Frequency (RF) modules. 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 regarding economic characteristics, products, production processes, type or classes of customers, distribution methods and regulatory environments. Based on this evaluation, the Company determined that it has only one reportable segment - IMS, which generated 80% of the Company's total revenue in 2015. The Company's CPS business consists of multiple operating segments which 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 non-GAAP 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 3, 2015			September 27, 2014			September 28, 2013
	(In thousands)
Gross sales:
IMS	$	5,157,427		$	4,933,714		$	4,766,670
CPS	1,414,797			1,514,340			1,335,510
Intersegment revenue	(197,683		)	(231,092		)	(185,056		)
Unallocated items (1)	—			(1,856		)	—
Net Sales	$	6,374,541		$	6,215,106		$	5,917,124
Gross Profit:
IMS	$	366,436		$	339,909		$	291,664
CPS	135,064			155,974			144,725
Total	501,500			495,883			436,389
Unallocated items (1)	(17,644		)	(7,600		)	(9,572		)
Total	$	483,856		$	488,283		$	426,817
Depreciation and amortization:
IMS	$	56,428		$	50,933		$	54,531
CPS	35,526			38,420			32,802
Total	91,954			89,353			87,333
Unallocated corporate items (2)	8,613			8,324			8,688
Total	$	100,567		$	97,677		$	96,021
Capital expenditures (receipt basis):
IMS	$	105,755		$	47,103		$	44,080
CPS	17,290			27,724			25,542
Total	123,045			74,827			69,622
Unallocated corporate items (2)	3,436			4,635			3,447
Total	$	126,481		$	79,462		$	73,069

(1) For purposes of evaluating segment performance, management excludes certain items from its measures of revenue and gross profit. These items include stock-based compensation expense, amortization of intangible assets, charges or credits resulting from distressed customers and similar items that either occur infrequently or are of a non-operational nature.

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

	As of
	October 3, 2015		September 27, 2014
	(In thousands)
Long-lived assets (including assets held for sale):
IMS	$	351,490	$	309,922
CPS	208,807		213,266
Total	560,297		523,188
Unallocated corporate items (1)	30,547		51,466
Total	$	590,844	$	574,654

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

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 3, 2015		September 27, 2014		September 28, 2013
	(In thousands)
Net sales:
Domestic	$	1,029,897	$	1,041,892	$	1,074,529
Mexico	1,979,085		1,693,564		1,433,799
China	1,510,208		1,564,389		1,501,632
Other international	1,855,351		1,915,261		1,907,164
Total	$	6,374,541	$	6,215,106	$	5,917,124

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

	As of
	October 3, 2015		September 27, 2014
	(In thousands)
Long-lived assets (including assets held for sale):
Domestic	$	149,340	$	147,298
Mexico	159,907		168,712
China	84,426		89,380
Other international	197,171		169,264
Total	$	590,844	$	574,654