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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



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FORM 10-K



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(Mark One)

|x | Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|- | ------------------------------------------------------------------------------------



For the fiscal year ended March 31, 2004



OR



| ̈ | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|- | ----------------------------------------------------------------------------------------



For the transition period from  to
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Commission File No. 000-31223



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Pemstar Inc.

(Exact name of registrant as specified in its charter)



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|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Minnesota                                                      |  | 41-1771227                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)
|                                                               | 
|3535 Technology Drive N.W. Rochester, Minnesota                |  | 55901                               
|(Address of principal executive offices)                       |  | (Zip Code)                          



Registrants
telephone number, including area code: (507) 288-6720



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Securities registered pursuant to Section 12(b) of the Act: None



Securities registered pursuant to Section 12(g) of the Act: Common Stock,
$.01 par value



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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    x  Yes ̈No



Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrants knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form
10-K.    x



Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).     x  Yes ̈No



The aggregate market value of voting stock held by non-affiliates of the registrant, as of September 30, 2003, was approximately $158,976,660 (based on the last sale price of such stock as reported by the Nasdaq Stock
Market National Market).



The number of shares outstanding of
the registrants common stock, $.01 par value, as of June 7, 2004, was 45,146,253.



DOCUMENTS INCORPORATED BY REFERENCE



Portions of the registrants 2004 Annual Report to Shareholders for the fiscal year ended March 31, 2004 are incorporated by reference into Part II. Portions of the registrants Proxy Statement for the 2004
Annual Meeting of Shareholders to be held on July 29, 2004 are incorporated by reference into Part III.



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PART I.



Forward Looking Statements



This Annual Report on Form 10-K (the Report) contains forward-looking statements within the meaning of Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All forward-looking statements are inherently uncertain as they are based on current expectations and assumptions concerning future events or Pemstars future
performance. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. Forward-looking statements are not descriptions of historical facts. The words or
phrases will likely result, look for, may result, will continue, is anticipated, expect, project or similar expressions are intended to identify forward-looking
statements, and are subject to numerous known and unknown risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors, including those identified under the caption Cautionary
Statements in Exhibit 13.1 to this Form 10-K. Pemstar undertakes no obligation to update or publicly announce revisions to any forward-looking statements to reflect future events or developments.



PEMSTAR® is a registered trademark of Pemstar Inc. Other trademarks and
trade names appearing in this Annual Report on Form 10-K are the property of their respective holders.



ITEM 1. BUSINESS



Overview



Pemstar Inc., incorporated in Minnesota in 1994,
provides a comprehensive range of global engineering, product design, automation and test, manufacturing and fulfillment services and solutions to our customers in the communications, computing and data storage, industrial equipment and medical
industries. We provide these services and solutions on a global basis through sixteen strategic locations in the Americas, Asia, and Europe. These customer solutions offerings support our customers products from initial product development and
design through manufacturing to worldwide distribution and aftermarket support.



Services Solutions



We offer a comprehensive
range of engineering, automation, test, manufacturing and fulfillment solutions that support our customers products from initial design through prototyping, design validation, testing, ramp to volume production, worldwide distribution and
aftermarket support. We support all of our service offerings with a comprehensive supply chain management system, superior quality program management and sophisticated information technology systems. Our comprehensive service offerings enable us to
provide a complete solution for our customers outsourcing requirements.



Engineering Solutions



New Product Design, Engineering, Prototype & Test. We offer a full spectrum of new product design, prototype, test and related engineering solutions that shorten product development cycles, resulting in
faster time to market and reduced costs for our customers. Our multi-disciplined engineering teams provide expertise in a number of core competencies critical to serving original equipment manufacturers in our target markets, including industrial
design, mechanical and electrical hardware, firmware, software and systems integration and support. We create specifications, designs and prototypes, and validate and ramp our customers products into high volume manufacturing. Our technical
expertise includes electronic circuit design for analog, digital, radio frequency, microwave and mixed signal technology, Microsoft and Intel design capabilities. We have global engineering facilities in Almelo, the Netherlands; San Jose,
California; Rochester, Minnesota; and Singapore.



Custom
Test and Automation Equipment Design & Build Solutions. We provide our customers with a comprehensive range of custom functional test equipment, process automation and replication solutions. We have substantial expertise in tooling, testers,
equipment control, systems planning, automation, floor control, systems integration, replication and programming. Our custom functional test equipment, process automation and



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replication solutions are available to original equipment manufacturers as part of our full service product design and
manufacturing solutions package or on a stand-alone basis for products designed and manufactured elsewhere. We are also a merchant provider of customer test equipment and automation systems to original equipment manufacturers. Our ability to provide
these solutions allows us to capitalize on original equipment manufacturers increasing needs for custom manufacturing solutions and provide an additional opportunity to introduce customers to our comprehensive engineering and manufacturing
services.



Revenues from our engineering services, including
process test and automation equipment and prototype development, were 11.8%, 12.0% and 12.5% of our total net sales in fiscal 2004, 2003 and 2002, respectively.



Manufacturing Solutions



Printed Circuit Board Assembly & Test. We offer a wide range of printed circuit board assembly and test solutions, including printed circuit
board assembly, assembly of subsystems, circuitry and functionality testing of printed assemblies, environmental and stress testing and component reliability testing.



Flex Circuit Assembly & Test. We provide original equipment manufacturers with a wide range of flexible circuit
assembly and test solutions. We utilize specialized tooling strategies and advanced automation procedures to minimize circuit handling and ensure that consistent processing parameters are maintained throughout the assembly process. All of our
manufacturing activities are monitored to comply with strict environmental controls and to maintain our product quality standards.



Systems Assembly & Test. We offer a wide range of systems assembly and test solutions that enhance product quality and optimize the supply
chain. Our manufacturing capabilities include the design, development and building of test strategies and equipment for our customers products which utilize manual, mechanized or fully automated production lines to improve product quality,
reduce costs and improve delivery time to customers. We also have expertise in advanced precision and electromechanical technologies and optical manufacturing services. In order to meet our customers demand for systems assembly and test
solutions, we offer subassembly build, final assembly, functionality testing, configuration and software installation and final packaging services.



Precision Electromechanical Assembly & Test. We offer a full spectrum of precision electromechanical assembly, coating and test solutions that
can be utilized in a variety of advanced applications in computer, communications, industrial and medical industry segments. We design, develop and build product specific manufacturing processes utilizing manual, mechanized or fully automated lines
to meet our customers product volume and quality requirements. All of our assembly and test processes are developed according to customer specifications and replicated within our facilities.



Revenues from manufacturing services, including process test and automation
equipment and prototype production, were 88.2%, 88.0% and 87.5% of our total net sales in fiscal 2004, 2003 and 2002, respectively.



Fulfillment Services



Product Configuration and Distribution. We provide our customers with product configuration and global distribution services that complement our
engineering and manufacturing solutions and enable our customers to be responsive to changing market demands and reduce time to market. We have developed a Web-based collaboration interface that enables real-time communication with our customers. We
utilize sophisticated software that allows us to customize product runs to configure the products made to the specifications in our customers orders. Our global distribution capabilities allow us to distribute products to customers,
distributors and end-users around the world. We provide inventory programs that allow our customers to manage the shipment and delivery of products. As part of these inventory programs, a customer may request that its inventory be stored at a site
closer to the customer prior to distribution, which streamlines the distribution process and decreases delivery times.



Aftermarket Services. All of our products carry warranties subject to contractual agreements with our customers. In addition, we provide our
customers with a range of aftermarket services, including repair, replacement, refurbishment, remanufacturing, exchange, systems upgrade and spare part manufacturing throughout a products life cycle. These services are tracked and supported by
specific information technology systems that can be tailored to meet our customers individual requirements.



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Value-Added Support Systems



We support our engineering, manufacturing, distribution and aftermarket support services with an efficient supply chain
management system and a superior quality management program. All of our value-added support services are implemented and managed through web-based information technology systems, which enable us to collaborate with our customers throughout all
stages of the engineering, manufacturing and order fulfillment processes.



Supply Chain Management



Our supply chain management system reduces our customers total costs by assisting them in the selection of components during the product design stage to enhance advantageous sourcing and pricing from preferred
suppliers and distributors. We employ a supplier certification process to ensure that suppliers of key components have predictable and stable manufacturing processes capable of supplying components that meet or exceed our quality requirements. We
have strong relationships with a broad range of materials and component suppliers and distributors based on our commitment to use them on a preferred basis. In addition, our product design and volume procurement capabilities enhance our ability to
secure supplies of materials and components at advantageous pricing.



We utilize a full complement of electronic data interchange transactions, or EDI, with our suppliers to coordinate forecasts, orders, reschedules, inventory and component lead times. Our enterprise resource planning systems, or ERP systems,
provide product and production information to our supply chain management, engineering change management and floor control systems. These ERP systems also provide us with real-time financial and materials management data. Our information systems
also control serialization, production and quality data for all of our facilities around the world utilizing state-of-the-art statistical process control techniques for continuous process improvements. We also have developed a Web-based
collaboration interface that utilizes products from AGILE Software Corporation and i2 Technologies to collaborate with our supply chain partners in real-time on product content and engineering change management. We are in the process of sequentially
implementing our Web-based interfaces and real-time supply chain management software products across all of our facilities to enhance our ability to rapidly scale operations to meet customer needs, shift capacity in response to product demand
fluctuations, reduce materials costs and effectively distribute products to our customers or their end-customers.



Quality Management



We believe that the application of quality management and continuous quality improvement activities are key success factors to providing high quality
products and services to our customers. Our base quality system is ISO 9000:2000, and we comply with 21 CFR Part 820/ISO 13485 in our medical device manufacturing locations as well. In facilities where applicable, we have also installed quality
management systems supporting QS 9000, AS9100, and TL9000 for those customers who require such. All our factories have on-line, Web-enabled process control manufacturing execution systems utilizing DATASWEEP software for work in progress and
production line quality control. At pre-determined points of time, currently on an hourly basis, production line performance can be monitored from any site in the world, to headquarters. Customers can also view their own product performance as it is
manufactured.



Manufacturing Technologies



We offer original equipment manufacturers expertise in a wide variety of
traditional and advanced manufacturing technologies. Our technical expertise supports standard printed circuit board assembly as well as increasingly complex products that require advanced engineering skills and equipment. We intend to continue to
maintain our technical expertise in traditional methods and processes and to continue developing and maintaining our expertise in advanced and emerging technologies and processes.



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We provide original equipment manufacturers with expertise in manufacturing technologies used in the
production of optical and wireless components and systems, including:



| |  | Adhesives. This technology involves the precision application of bonding agents to components.
| | - | ----------------------------------------------------------------------------------------------



| |  | Conformal Coating. This technology involves applying a film coating to printed circuit board assemblies and other assemblies to protect them from environmental damage. In
addition, Pemstar can also coat medical devices with biocompatible materials such as parylene, which can also serve as a foundation for subsequent coating layers that include pharmaceuticals or other compounds such as heparin.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Laser Welding. Utilizing lasers, we can conduct high-precision welding of materials.
| | - | ------------------------------------------------------------------------------------



| |  | Hybrid Optical/Electrical Printed Circuit Board Assembly and Test. We have technology that enables us to assemble circuit board assemblies containing both light or laser
components and electrical components.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Sub-micron Alignment of Optical Sub-Assemblies. We have technology that enables us to align components within increments of less than one millionth of a meter.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------



Our manufacturing technology expertise also
includes the following areas applicable to both printed circuit board assembly and application specific flexible circuits:



| |  | Surface Mount Technology. Utilizing this technology, component leads are attached to a circuit board by soldering to a circuit board without any holes or leads protruding
through the board. This technology is used for higher density products because both sides of the board can be used and can be automated for high volume production.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Fine Pitch. Fine pitch technology also involves the attachment of component leads onto a circuit board by soldering. Pitch refers to the spacing of component leads and
patterns. With fine pitch and ultra fine pitch technology, the distance between the individual component leads is much smaller, making this technology useful for products requiring smaller packaging and higher board densities.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Ball Grid Array. A ball grid array is a method of mounting an integrated circuit or other component onto a printed circuit board. Rather than using traditional leads, the
component is attached directly to the bottom of the package with small balls of solder. When assembled onto a circuit board, these solder balls form an inter-connect with conducive pads on the surface of the board. This method allows for greater
component density and is used in printed circuit boards with higher layer counts.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Flip Chip. A flip chip is a structure that houses circuits, which are interconnected without leads. This technology involves mounting an electronic device face down directly
to a circuit board utilizing solder balls attached to the device. The electrical interconnections are then surrounded with an adhesive-type underfill for protection. Flip chips are utilized to minimize printed circuit board surface area when compact
packaging and higher product performance is required.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Chip On Board/Wirebonding. This technology involves the attachment of an electronic device face-up directly to a circuit board and then making individual electronic
connections by bonding conducive wires to the board and the device. The completed assembly is then encapsulated in a polymer. This technology eliminates the need for packaging the circuit, and allows for additional miniaturization of products.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  | In-Circuit Test. This technology involves the verification of specific portions of a circuit board for basic electronic properties associated with manufacturing defects.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Board Level Functional Test. This technology simulates the ultimate end- use functionality of a completed circuit board assembly.
| | - | ---------------------------------------------------------------------------------------------------------------------------------



| |  | Stress Testing. This technology verifies the functionality of a completed printed circuit board assembly while intentionally introducing adverse environmental conditions such
as temperature extremes, humidity and vibration to screen out potential problems or failures otherwise not detectable until the product is in use.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Customers



Our customers include industry leading original equipment manufacturers such as Fluke Corporation, Honeywell, IBM, Medtronic, Hitachi Global Storage,
Motorola and Seagate. We also have many relationships with new and existing customers across the four key industries we serve including Ciena, Given Imaging, MTS Systems, Proxim, Qlogic, and U.S. Army/General Dynamics. The following table shows the
percentage of our net sales in each of the markets we serve for the fiscal years ended March 31, 2004, 2003 and 2002.



|                           |  |                             |   |  |      |   |  |      |  
|-------------------------- |  | --------------------------- | - |  | ---- | - |  | ---- | -
|                           |  | Fiscal Year Ended March 31, |  
|Markets                    |  | 2004                        |   |  | 2003 |   |  | 2002 |  
|Communications             |  | 27                          | % |  | 37   | % |  | 45   | %
|Computing and Data Storage |  | 36                          |   |  | 34   |   |  | 33   |  
|Industrial Equipment       |  | 32                          |   |  | 23   |   |  | 19   |  
|Medical                    |  | 5                           |   |  | 6    |   |  | 3    |  
|                           |  |                             |   |  |      |   |  |      |  
|Total                      |  | 100                         | % |  | 100  | % |  | 100  | %
|                           |  |                             |   |  |      |   |  |      |  



The following table
indicates, for fiscal 2004, certain large customers in terms of net sales, in alphabetical order, and the primary products for which we provided our services.



|                       |  |                                         
|---------------------- |  | ----------------------------------------
|Customers              |  | End Products                            
|Ciena                  |  | Communications equipment                
|Fluke Corporation      |  | Industrial instrumentation              
|Hitachi Global Storage |  | Industrial and storage electronics      
|Honeywell              |  | Industrial electronics                  
|IBM                    |  | Computing, network and storage equipment
|Motorola               |  | Wireless communications devices         
|QLogic                 |  | Communications and switching equipment  
|Seagate                |  | Storage equipment                       



IBM represents the
Companys only customer whose sales exceeded 10% in fiscal 2004.



Sales
and Marketing



We market our engineering, product
development, automation and test, manufacturing and fulfillment services solutions through a sales force of sixteen full-time senior sales professionals located in the Americas, Europe and Asia. Our North American sales force is assisted by a
network of manufacturers representatives. Sales in each world-wide region are managed by an experienced sales team with the assistance of technical support members who assist in coordinating the engineering interface across the regions. Our
direct sales personnel have knowledge of local and international markets, which we believe is critical to identifying new customers and developing new business opportunities. Our executive operations team is integral to our sales efforts, with each
member being assigned to an Americas, European or Asian region in which the executive interfaces with customers to ensure customer satisfaction and generate additional business opportunities.



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Our sales and marketing professionals target original equipment manufacturers that require a
comprehensive outsourcing solution in the communications, computing and data storage, industrial and medical industries and whose outsourcing requirements will utilize our global facilities and capabilities. Our marketing strategy focuses on
developing close working relationships with our customers. To facilitate these relationships, a customer support team is designated in order to service all of the customers needs throughout the life cycle of a product. Each team consists of a
dedicated program manager, project buyer, production control planner, manufacturing engineer and quality engineer. The program manager serves as the customers point of contact for all of the customers tactical requirements on a worldwide
basis and, with the support of the other team members, has responsibility for managing all aspects of the customers project.



Intellectual Property



We have developed proprietary processes and program management methodologies that enable us to shorten time to market and to deliver high quality products
in a cost-effective manner. Our intellectual property portfolio of patents, patent applications, trade secrets, know-how, and other proprietary information, enables us to develop products and manufacture custom automation and test equipment
solutions for our customers. We currently have eleven U.S. patents, two Singapore patents, and eleven patents pending for technology and methodologies relating to product development, process automation, product quality and reliability,
manufacturing processes, failure analysis, process control techniques and test equipment. These inventions are used as building blocks that can be applied in a variety of applications.



Our multi-disciplined engineering teams continually seek to develop new testing and manufacturing equipment and processes to
meet our customers changing needs and provide custom product development solutions at an affordable cost. Our engineers often incorporate custom built equipment into our own proprietary manufacturing systems to maximize the equipments
functionality and optimize manufacturability. Because these systems are based on our proprietary technology, they can be quickly replicated in our facilities and provided to our customers in a cost-efficient manner.



To protect our proprietary rights, we rely largely upon a combination of
patents, trade secret laws, non-disclosure agreements with our customers and our internal confidentiality procedures and employee confidentiality agreements. Although we take steps to protect our proprietary information and trade secrets,
misappropriation may still occur. We believe that our proprietary design and manufacturing processes do not infringe on the proprietary rights of others.



We license some technology from third parties that we use in providing engineering and manufacturing services to our customers. We believe that these
licenses are generally available on commercial terms from a number of licensors. Generally, the agreements governing this technology grant us non-exclusive, worldwide licenses with respect to the subject technology and could terminate upon a
material breach by us.



Research and Development



The market for our services is characterized by rapidly changing
technology and continuing process development. Original equipment manufacturers are demanding smaller, faster and higher performance products. These demands require increasingly complex engineering and manufacturing capabilities. We are committed to
developing new design and manufacturing technologies and enhancing our existing technologies. Since our formation in 1994, we have made investments in technology and equipment to meet our customers needs and maintain our competitive advantage.
Our expenditures for research and development in fiscal 2004, 2003 and 2002 were $0.5 million, $1.0 million, and $1.0 million, respectively.



Our close relationships with customers in the early stages of product design allows us to develop new products that utilize innovative technology in a
variety of engineering disciplines. These close relationships assist us in identifying emerging products and related technologies in target markets, which allows us to develop and expand our existing technology, or to develop or obtain new
technology that will enable us to remain competitive in the electronics manufacturing services industry. As a result of our commitment to maintaining advanced technological capabilities, we have developed expertise in communications, particularly in
the areas of optical and wireless technologies, which we believe gives us a competitive advantage over many other electronics manufacturing services providers.



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Employees



As of March 31, 2004, we had 3,678 full-time employees. In addition to our full-time employees, we regularly hire part-time and temporary (contract)
employees. Given the variable nature of our project flow and the quick response time required by our customers, it is critical that we be able to quickly adjust our production capacities to maximize efficiency and manage costs. To achieve this, our
strategy has been to employ a skilled temporary labor force, as required. Except for our 218 employees located in Almelo, the Netherlands, none of our employees are unionized. We believe our employee relations are good, and we have not experienced
any work stoppages at any of our facilities.



Worldwide Operations



A key element in our business strategy is to construct
our global presence to provide engineering, manufacturing and fulfillment services and solutions in locations that meet our customers regional requirements. Consistent with this strategy, we have established three geographical operation
regions: the Americas, Europe and Asia. Each region has design and manufacturing facilities. Our facilities offer a full range of services, where suitable to the regional market, or a more limited range, when that is appropriate.
Facilities service offerings can be scaled up or down as customers needs change. We will continue to explore strategic opportunities throughout the world, especially in low-cost regions, that strengthen our competitive position and
enhance shareholder value.



In the Americas region, our
facility in Rochester, Minnesota provides a full range of services and solutions, including engineering design capabilities, a new product introduction specialty center, volume production capacity and fulfillment and aftermarket services. We
maintain a similar operation in San Jose, California, providing easy access to communications and optical market participants in that area. Our Pemstar Pacific Consultants group continues to add significantly to our engineering and design
capabilities in our San Jose location and represent a strong presence for us in the governmental market. Our Austin, Texas expansion in fiscal 2004 greatly enhanced our capabilities in capital equipment manufacturing and expanded our presence in the
industrial segment. Turtle Mountain Corporation operations run jointly from Chaska, Minnesota and Dunseith, North Dakota provide new product introduction and volume production capacity often delivered through our strategic relationship with a Native
American owned distribution business. Facilities in Taunton, Massachusetts provide a new production introduction center, but can also provide volume production. Our Mexico facility, located in Guadalajara, enables us to provide low-cost
manufacturing and order fulfillment services for our customers on a global basis. Our Hortolandia, Brazil, facility represents our market entrance, offering low volume manufacturing and aftermarket support capabilities.



In the Europe region, our Almelo, the Netherlands, facility serves as a full
range capability site and additionally provides the capability to rapidly distribute products for our European and North American customers. Our facility in Ireland also supports European customers with an additional emphasis on medical device
manufacturing. We also support medical device manufacturing in our operation located at Yoqneam, Israel. During fiscal 2005, the Company has started an expansion joint venture in Brasov, Romania that will offer customers a low cost production
solution.



In the Asia region, our facility in China is the
largest Pemstar site with the completion of the expansion to 250,000 square feet in February 2004. The China operation enables us to reduce our customers manufacturing costs while giving us access to new customers in the communications,
computing and data storage industries. Our Bangkok, Thailand operation is located outside of Bangkok in a tax-free industrial zone to expand our manufacturing capabilities and provide cost effective solutions for our customers. Our Thailand
operations are strategically situated in the rapidly expanding Asian communications, computing and data storage markets, giving us access to new customers in those industries. Our facility in Singapore has enhanced our service capabilities in the
data storage industry by adding specialized disk drive design and industrial equipment assembly capabilities. This facility also provides critical sales support for customers in the United States, Southeast Asia, the Philippines, Japan and Korea.
Our Yokohama, Japan, facility supports the engineering and design services needs of our customers and also supports the outsourcing of capital equipment from our Singapore facilities.



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For disclosures regarding the financial information about various geographies, see Note 12 to the
consolidated financial statements included herewith.



Competition



The electronics manufacturing services industry is highly
competitive, and we compete against numerous domestic and foreign engineering and manufacturing service companies. We believe that the principal competitive factors in our industry are:



| |  | Service and solutions offerings;
| | - | --------------------------------



| |  | Technological capabilities;
| | - | ---------------------------



| |  | Scale of operations and financial strength;
| | - | -------------------------------------------



| |  | Geographic location and coverage;
| | - | ---------------------------------



| |  | Pricing;
| | - | --------



| |  | Product quality;
| | - | ----------------



| |  | Meeting product delivery schedules; and
| | - | ---------------------------------------



| |  | Flexible and timely response to design and schedule changes.
| | - | ------------------------------------------------------------



We believe that large, publicly-traded original equipment manufacturers prefer to enter into outsourcing relationships with other public electronics
manufacturing services providers that present them with the opportunity to build a long-term relationship because of their greater access to capital and resulting financial stability. Many of our competitors are substantially larger and have greater
financial, operating, manufacturing and marketing resources than we do. Some of our competitors have broader geographic breadth and range of services than we do. In addition, some of our competitors may have stronger relationships with our existing
customers than we do. We believe that we are well positioned to compete against these larger competitors due to our worldwide engineering, product quality, flexibility and timeliness in responding to design and schedule changes, reliability in
meeting product delivery schedules, pricing, the provision of value-added services and geographic location.



We also face competition, with decreasing frequency, from the manufacturing operations of our current and potential customers, who continually evaluate
the relative benefits of internal manufacturing compared to outsourcing. As more original equipment manufacturers dispose of their manufacturing assets and increase their use of outsourcing, we face increasing competitive pressure to grow our
business in order to maintain our competitive position.



Governmental
Regulation



Our operations are subject to federal, state
and local regulatory requirements on environmental, waste management and health and safety measures relating to the use, release, storage, treatment, transportation, discharge, disposal and clean-up of hazardous substances and wastes, as well as
practices and procedures applicable to the construction and operation of our plants. In addition, we are required to register with the United States Food and Drug Administration as a medical device manufacturer. The FDA and various state agencies
inspect our facilities from time to time to determine whether we are in compliance with the FDAs Quality Systems Regulation relating to medical device manufacturing companies, including regulations concerning manufacturing, testing, quality
control and product labeling practices. The current costs of compliance are not material to us, and we are not presently aware of any facts or circumstances that would cause us to incur significant costs or liabilities in the future related to
environmental, health and safety law compliance.



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Available Information



Pemstars Internet website is http://www.pemstar.com. Pemstar makes available free of charge, on or through its website, its annual, quarterly and
current reports, and any amendments to those reports, as soon as reasonably practicable after electronically filing such reports with, or furnishing such reports to, the Securities and Exchange Commission. Information contained on Pemstars
website is not part of this report.



ITEM 2. PROPERTIES



Our executive offices are located in Rochester, Minnesota, where we also
have engineering and manufacturing facilities. Information about our other facilities is set forth below:



|                                         |  |                         |  |                      |  |                                            
|---------------------------------------- |  | ----------------------- |  | -------------------- |  | -------------------------------------------
|Location                                 |  | Approximate Square Feet |  | Owned/Leased         |  | Principal Services                         
|Rochester, Minnesota (3 facilities)      |  | 257,00060,0009,000      |  | Leased Leased Leased |  | Headquarters, engineering and manufacturing
|                                         |  |                         | 
|San Jose, California                     |  | 141,000                 |  | Leased               |  | Engineering and Manufacturing              
|                                         |  |                         | 
|Taunton, Massachusetts                   |  | 85,000                  |  | Leased               |  | Engineering and Manufacturing              
|                                         |  |                         | 
|Dunseith, North Dakota                   |  | 47,00053,000            |  | Owned(1) Leased      |  | Manufacturing                              
|                                         |  |                         | 
|Austin, Texas                            |  | 62,000                  |  | Leased               |  | Manufacturing                              
|                                         |  |                         | 
|Chaska, Minnesota                        |  | 58,000                  |  | Leased               |  | Manufacturing                              
|                                         |  |                         | 
|Guadalajara, Mexico                      |  | 119,000                 |  | Leased               |  | Manufacturing                              
|                                         |  |                         | 
|Hortolandia, Brazil                      |  | 3,000                   |  | Leased               |  | Manufacturing                              
|                                         |  |                         | 
|Tianjin, China                           |  | 250,000                 |  | Owned                |  | Manufacturing                              
|                                         |  |                         | 
|Bangkok, Thailand                        |  | 180,000                 |  | Owned(1)             |  | Manufacturing                              
|                                         |  |                         | 
|Singapore                                |  | 60,000                  |  | Leased               |  | Engineering and manufacturing              
|                                         |  |                         | 
|Yokahama, Japan                          |  | 1,000                   |  | Leased               |  | Sales and technical support                
|                                         |  |                         | 
|Almelo, the Netherlands                  |  | 130,000                 |  | Leased               |  | Engineering and manufacturing              
|                                         |  |                         | 
|Navan, Ireland                           |  | 26,000                  |  | Leased               |  | Manufacturing                              
|                                         |  |                         | 
|Yoqneam, Israel                          |  | 5,000                   |  | Leased               |  | Manufacturing and technical support        
|                                         |  |                         | 
|Brasov, Romania                          |  | 30,000                  |  | Leased               |  | Manufacturing                              
|                                         |  |                         | 
|Inactive                                 |  |                         |  |                      |  |                                            
|                                         |  |                         | 
|Mountain View, California (2 facilities) |  | 38,0007,000             |  | Leased Leased        |  | Vacated in fiscal 2004                     

---

|(1) | Property is pledged under a mortgage.
|--- | -------------------------------------



10



---

We believe our facilities are well maintained and suitable for their respective operations. We anticipate that as our
business grows, we will need to acquire, lease or build additional facilities. We may encounter unforeseen difficulties, costs or delays in expanding our facilities.



ITEM 3. LEGAL PROCEEDINGS



We are currently a defendant, along with several current and former officers and directors, in a consolidated putative class action captioned in re
PEMSTAR Securities Litigation, alleging violations of Section 10(b) and Section 20(a) of the Securities Exchange Act of 1934 and Sections 11 and 12 of the Securities Act of 1933. The lawsuit is a consolidation of several lawsuits, the first of
which was commenced in United States District Court for the District of Minnesota on July 24, 2002. The plaintiffs, several individual shareholders, allege, in essence, that the defendants defrauded our shareholders by making optimistic statements
during a time when they should have known that business prospects were less promising and allege that the registration statement filed by us in connection with a secondary offering contained false, material misrepresentations. An Amended
Consolidated Complaint was filed January 9, 2003. The securities class action is pending and discovery is ongoing.



On August 23, 2002 and October 2, 2002 two different individual shareholders also commenced virtually identical shareholder derivative actions against us
as nominal defendant and our Board. Those actions have been consolidated and are currently pending in United States District Court for the District of Minnesota, Third Judicial District, County of Olmsted. The allegations in the consolidated
derivative action are based on many of the same facts that gave rise to the securities action. The derivative action alleges that our Board breached its fiduciary duties by allegedly allowing the violations of the securities to occur.



It is too early to predict the likelihood of prevailing on the various
lawsuits described above. We believe the securities action is wholly without merit and we have moved to dismiss the derivative action based on the plaintiffs failure to make a demand that the Board consider the merits of the claims in that
action. We are vigorously defending against both of these claims.



ITEM 4.
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS



None.



EXECUTIVE OFFICERS OF THE REGISTRANT



Robert D. Ahmann, 48, is Executive Vice PresidentIndustrial. He served
as a director from August 1999 to May 2003. Mr. Ahmann has worked for us in various capacities since 1994. From 1977 to 1994 Mr. Ahmann was employed by IBM, where he held several engineering and management positions, including most recently as
manager of test and process engineering for storage products. Mr. Ahmann holds a B.S.E.E. from North Dakota State University and a M.S.E.E. from the University of Minnesota.



Roy A. Bauer, 58, is Executive Vice President and our Chief Operating Officer. He has held a number of positions since
joining Pemstar in 2001, and is current head of World Wide Manufacturing and Product Development Operations. Prior to joining PEMSTAR, Mr. Bauer was employed by IBM for twenty-four years in various positions in manufacturing engineering, operations
management, and quality management, most recently as Director of WW AS/400 System Quality and Customer Satisfaction. He led the IBM Rochester site effort in winning the Malcolm Baldrige National Quality Award in 1990. Mr. Bauer is currently serving
on the Board of Directors of the University of Wisconsin Stout Foundation and in May of 2003 was named to the Panel of Judges of the Malcolm Baldrige National Quality Award Program. Mr. Bauer holds a B. S. in Industrial Technology and a Doctorate of
Science from the University of Wisconsin  Stout.



11



---

Allen J. Berning, 49, has served as our Chief Executive Officer, director and Chairman of our Board since
the founding of Pemstar in 1994. Prior to founding Pemstar, Mr. Berning was employed by IBM for fifteen years, where he held several engineering and management positions in process engineering, manufacturing, cost engineering and resource planning,
including most recently as Operations Manager for IBMs Rochester Storage Systems facility. Mr. Berning received a B.S.I.E. and an M.B.A. from St. Cloud State University. He served as board member and past chair of the Greater Rochester Area
University Center. He is currently serving on the 2004 Olmsted County United Way Campaign Cabinet. In 1999, Mr. Berning received the national Ernst & Young Entrepreneur of the Year Award.



Larry R. Degen, 49, is a Vice President and has served as our Principal
Accounting Officer since 2002. Prior to that, he served Pemstar as Corporate Controller since 1999. Mr. Degen was employed as Finance Director, North America by Capital Safety Company Ltd (formerly a division of BTP plc), a safety products
manufacturer, from 1994 to 1999. Previously, he held various auditing services positions over 15 years with Ernst & Young. He holds a B.A. from St. Johns University.



Gregory S. Lea, 51, is an Executive Vice President and our Chief Financial Officer and has been a director of Pemstar since
April 2001. From 1993 to April 2002, Mr. Lea served as a corporate Vice President for Jostens Corporation, a commemorative and affiliation products manufacturer, serving most recently as corporate Vice PresidentBusiness Ventures. From 1993 to
1999, Mr. Lea held two other corporate vice presidency positions at Jostens Corporation. From 1974 to 1993, Mr. Lea was employed by IBM Corporation, where he held several financial management and administrative positions. From 1981 to 1993, Mr. Lea
was President and a member of the Board of Directors of the Ability Building Center, Inc. Mr. Lea holds a B.S. in Accounting/Business Management from Minnesota State University, Mankato.



William H. Rice, 38, is Vice President, General Counsel and Corporate Secretary and had served as Senior Counsel and
Assistant Corporate Secretary since joining PEMSTAR in 2002. Prior to joining PEMSTAR, Mr. Rice was with NRG Energy, Inc., where he served as Senior Counsel for North American mergers, acquisitions and project finance, and Corporate Secretary for a
number of NRGs subsidiaries. From 1991 to 2000, Mr. Rice served as Senior Counsel with The Pillsbury Company, managed the legal department of Rollerblade, Inc., and spent several years in a private law firm. Mr. Rice holds a J.D. from the
University of Minnesota Law School and a B.A. from the University of St. Thomas.



12



---

PART II.



ITEM 5. MARKET FOR PEMSTARS COMMON STOCK AND RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES



The information required by this item regarding the market for
Pemstars Common Stock is incorporated by reference from the information under the caption Market Information, Holders and Dividends contained on page 45 of our 2004 Annual Report to Shareholders delivered to
our shareholders on or about June 30, 2004, (the 2004 Annual Report), which is filed herewith as Exhibit 13.1.



As of June 7, 2004, our common stock was held by approximately 1,335 shareholders of record and was selling at $2.48 per share.



ITEM 6. SELECTED FINANCIAL DATA



The information required by this item is incorporated by reference from the
information under the caption Selected Financial Data on pages 10 through 11 of our 2004 Annual Report, which is filed herewith as Exhibit 13.1.



ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS



The information required by this item is incorporated by reference from the information under the caption
Managements Discussion and Analysis of Financial Condition and Results of Operations on pages 12 through 25 of our 2004 Annual Report, which is filed herewith as Exhibit 13.1.



ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK



The information required by this item is incorporated by reference from the
information under the sub-heading Quantitative and Qualitative Disclosures About Market Risk under the caption Managements Discussion and Analysis of Financial Condition and Results of Operations on pages 17 through 25
of our 2004 Annual Report, which is filed herewith as Exhibit 13.1.



ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA



The
information required by this item concerning financial statements is incorporated by reference from the information contained on pages 26 through 43 of our 2004 Annual Report, which is filed herewith as Exhibit 13.1. The information required by this
item concerning supplementary financial information is incorporated by reference from the information on page 44 of our 2004 Annual Report under the caption Quarterly Results of Operations (Unaudited), which is filed herewith as Exhibit
13.1.



ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE



None.



ITEM 9A. CONTROLS AND PROCEDURES



The Company carried out an evaluation, under the supervision and with the
participation of the Companys management, including the Companys Chief Executive Officer and its Executive Vice President and Chief Financial Officer, of the effectiveness of the design and operation of the Companys disclosure
controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended). Based upon that evaluation, the Companys Chief Executive Officer along with the Companys Executive Vice President and Chief
Financial Officer concluded that as of the end of the period covered by this report the Companys disclosure controls and procedures were effective in timely alerting them to material information relating to the Company



13



---

(including its consolidated subsidiaries) required to be included in the Companys periodic SEC filings. During the
fiscal quarter ended March 31, 2004, there has been no change in our internal control over financial reporting (as defined in Rule 13a  15(f) under the Securities and Exchange Act of 1934, as amended) that has materially affected, or is
reasonably likely to materially affect, our internal control over financial reporting.



14



---

PART III.



ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT



The information required by this item regarding directors and Section 16(a) compliance is incorporated by reference from the information under the caption
Election of Directors contained on pages 4 through 6 of the Proxy Statement and the information under the caption Section 16(a) Beneficial Ownership Reporting Compliance on page 14 of the Proxy Statement, respectively. The
information required by this item regarding the Companys code of ethics is incorporated by reference from the information under the caption Code of Ethics contained on pages 16 of the Proxy Statement.



ITEM 11. EXECUTIVE COMPENSATION



The information required by this item regarding executive officers
compensation is incorporated by reference from the information under the caption Executive Compensation on pages 7 through 12 of the Proxy Statement. The information required by the item regarding director compensation is incorporated by
reference from the information under the caption Compensation of Directors on page 6 of the Proxy Statement.



ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS



The information required by this item regarding security ownership of
certain beneficial owners and management is incorporated by reference from the information under the caption Security Ownership of Certain Beneficial Owners and Management on pages 2 through 3 of the Proxy Statement. The information
required by this item regarding securities authorized for issuance under equity compensation plans is incorporated by reference from the information under the caption Equity Compensation Plan Information contained on pages 11 through 12
of the Proxy Statement.



ITEM 13. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS



None.



ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES



The information required by this item regarding accounting fees and services
is incorporated by reference from the information under the caption Independent Auditors Fees on page 16 of the Proxy Statement.



15



---

PART IV.



ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K



|(a)(1) | Financial Statements
|------ | --------------------



The following consolidated financial statements of Pemstar Inc. and subsidiaries and the Independent Auditors Report thereon, are
included in Part II, Item 8, hereof:



Report
of Independent Registered Public Accounting Firm



Consolidated Balance Sheets  March 31, 2004 and March 31, 2003



Consolidated Statements of Operations  Years ended March 31, 2004, March 31, 2003 and March 31, 2002



Consolidated Statement of Shareholders Equity 
Years ended March 31, 2004, March 31, 2003 and March 31, 2002



Consolidated Statements of Cash Flows  Years ended March 31, 2004, March 31, 2003 and March 31, 2002



Notes to Consolidated Financial Statements



|(a)(2) | Financial Statement Schedules
|------ | -----------------------------



The consolidated financial statement schedule of Pemstar Inc. and subsidiaries, required to be filed as part of this Form 10-K is listed
below and is included at the end of this Report.



Schedule II  Valuation and Qualifying Accounts  Years ended March 31, 2004, March 31, 2003 and March 31, 2002



All other schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under
the related instructions or are inapplicable and, therefore, have been omitted.



|(a)(3) | Exhibits
|------ | --------



|    |  |                                                                                                                                                                                                                                                           
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1 |  | Articles of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Companys Registration Statement on Form S-3 (File No. 333-75284)).                                                                                             
|    | 
|3.2 |  | Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.2 to the Companys Registration Statement on Form S-1 (File No. 333-37162)).                                                                                           
|    | 
|4.1 |  | Form of Promissory Note (incorporated by reference to Exhibit 10.6 to the Companys Registration Statement on Form S-1 (File No. 333-37162)).                                                                                                             
|    | 
|4.2 |  | Form of Certificate of Common Stock of the Company (incorporated by reference to Exhibit 4.1 to the Companys Registration Statement on Form S-1 (File No. 333-37162)).                                                                                   
|    | 
|4.3 |  | Rights Agreement, dated as of August 11, 2000, between the Company and Wells Fargo Bank, N.A., as Rights Agent (incorporated by reference to Exhibit 4.2 to the Companys Registration
Statement on Form S-3 (File No. 333-75284)).                       
|    | 
|4.4 |  | Amended and Restated Rights Agreement Amendment by and between the Company and Wells Fargo Bank Minnesota, N.A. dated May 8, 2002 (incorporated by reference to Exhibit 4.3 to the
Companys Registration Statement on Form 8-A/A filed on July 29, 2002).
|    | 
|4.5 |  | Form of Indenture relating to Senior Debt Securities (incorporated by reference to Exhibit 4.7 to the Companys Registration Statement on Form S-3 (File No. 333-75284)).                                                                                 



16



---

|      |  |                                                                                                                                                                                                                                                                                                                                                         
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      | 
|4.6   |  | Form of Indenture relating to Subordinated Debt Securities (incorporated by reference to Exhibit 4.8 to the Companys Registration Statement on Form S-3 (File No.
333-75284)).                                                                                                                                                                         
|      | 
|4.7   |  | Form of Initial Notes (incorporated by reference to Exhibit 4.1 to the Companys Current Report on Form 8-K filed on May 6, 2002).                                                                                                                                                                                                                      
|      | 
|4.8   |  | Form of Warrants (incorporated by reference to Exhibit 4.4 to the Companys Current Report on Form 8-K filed on May 6, 2002).                                                                                                                                                                                                                           
|      | 
|4.9   |  | Warrant dated May 10, 2002 to Smithfield Fiduciary LLC (incorporated by reference to Exhibit 10.3 to the Companys Current Report on Form 8-K filed on May 13, 2002).                                                                                                                                                                                   
|      | 
|4.10  |  | Warrant dated May 10, 2002 to Citadel Equity Fund Ltd. (incorporated by reference to Exhibit 10.4 to the Companys Current Report on Form 8-K filed on May 13, 2002).                                                                                                                                                                                   
|      | 
|10.1  |  | Loan Agreement, dated June 27, 2002, by and between the Pemstar (Thailand) Limited and Thai Farmers Bank Public Company Limited and related Guarantee Agreement by Pemstar Inc., dated June 25,
2002 (incorporated by reference to Exhibit 10.4 in the Companys Quarterly Report on Form 10-Q for the period ending June 30, 2002 (File No. 000-31223).
|      | 
|10.2  |  | Purchase Agreement by and among the Company, Smithfield Fiduciary LLC and Citadel Equity Fund Ltd. dated May 3, 2002 (incorporated by reference to Exhibit 10.1 to the Companys Current
Report on Form 8-K filed on May 6, 2002).                                                                                                                      
|      | 
|10.3  |  | Registration Rights Agreement by and among the Company, Smithfield Fiduciary LLC and Citadel Equity Fund Ltd. dated May 3, 2002 (incorporated by reference to Exhibit 10.3 to the
Companys Current Report on Form 8-K filed on May 6, 2002).                                                                                                           
|      | 
|10.4  |  | Registration Rights Agreement by and among the Company, Smithfield Fiduciary LLC and Citadel Equity Fund Ltd. dated May 10, 2002 (incorporated by reference to Exhibit 10.2 to the
Companys Current Report on Form 8-K filed on May 13, 2002).                                                                                                         
|      | 
|10.5  |  | Letter Agreement by and among the Company, Smithfield Fiduciary LLC and Citadel Equity Fund Ltd. dated May 8, 2002 (incorporated by reference to Exhibit 10.1 to the Companys Current
Report on Form 8-K filed on May 13, 2002).                                                                                                                       
|      | 
|10.6  |  | Letter Agreement by and among the Company, Smithfield Fiduciary LLC and Citadel Equity Fund Ltd. dated May 10, 2002 (incorporated by reference to Exhibit 10.5 to the Companys Current
Report on Form 8-K filed on May 13, 2002).                                                                                                                      
|      | 
|10.7  |  | Amendment and Termination Agreement by and among the Company, Smithfield Fiduciary LLC and Citadel Equity Fund Ltd. (incorporated by reference to Exhibit 10.1 to the Companys Current
Report on Form 8-K filed on July 19, 2002).                                                                                                                     
|      | 
|10.8  |  | Form of Change in Control Agreement (incorporated by reference to Exhibit 10.4 to the Companys Registration Statement on Form S-1 (File No. 333-37162)).*                                                                                                                                                                                              
|      | 
|10.9  |  | First Amended and Restated Investor Rights Agreement, dated as of June 7, 1999 between the Company and certain shareholders (incorporated by reference to Exhibit 10.10 to the Companys
Registration Statement on Form S-1 (File No. 333-37162)).                                                                                                      
|      | 
|10.10 |  | Pemstar Inc. 1994 Stock Option Plan (incorporated by reference to Exhibit 10.12 to the Companys Registration Statement on Form S-1 (File No. 333-37162)).*                                                                                                                                                                                             
|      | 
|10.11 |  | Pemstar Inc. 1995 Stock Option Plan (incorporated by reference to Exhibit 10.13 to the Companys Registration Statement on Form S-1 (File No. 333-37162)).*                                                                                                                                                                                             
|      | 
|10.12 |  | Pemstar Inc. 1997 Stock Option Plan (incorporated by reference to Exhibit 10.14 to the Companys Registration Statement on Form S-1 (File No. 333-37162)).*                                                                                                                                                                                             
|      | 
|10.13 |  | Pemstar Inc. Amended and Restated 1999 Stock Option Plan (incorporated by reference to Exhibit 10.15 to the Companys Registration Statement on Form S-1 (File No.
333-37162)).*                                                                                                                                                                        
|      | 
|10.14 |  | Pemstar Inc. 2000 Stock Option Plan (incorporated by reference to Exhibit 10.16 to the Companys Registration Statement on Form S-1 (File No. 333-37162)).*                                                                                                                                                                                             
|      | 
|10.15 |  | Pemstar, Inc. 2000 Employee Stock Purchase Plan, as amended (incorporated by reference to Exhibit 10.6 in the Companys Quarterly Report on Form 10-Q for the period ended June 30,
2002).                                                                                                                                                              



17



---

|      |  |                                                                                                                                                                                                                                                                                                                                                                       
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      | 
|10.16 |  | Pemstar, Inc. 2002 Stock Option Plan (incorporated by reference to Exhibit 10.7 in the Companys Quarterly Report on Form 10-Q for the period ended June 30, 2002).                                                                                                                                                                                                   
|      | 
|10.17 |  | Lease, dated June 29, 1998, between the Company and Leslie E. Nelson as Trustee of the Leslie E. Nelson Revocable Trust dated December 20, 1994, as amended (incorporated by reference to
Exhibit 10.19 to the Companys Registration Statement on Form S-1 (File No. 333-37162)).                                                                                    
|      | 
|10.18 |  | Sub-Lease Agreement, dated February 3, 1999, between Hongguan Technologies (S) Pte. Ltd. and Pemstar-Hongguan Pte. Ltd. (incorporated by reference to Exhibit 10.20 to the Companys
Registration Statement on Form S-1 (File No. 333-37162)).                                                                                                                        
|      | 
|10.19 |  | Lease Agreement dated September 30, 1998, between Guadalajara Industrial Technologico, S.A. de C.V. and Pemstar de Mexico S.A. de C.V. (incorporated by reference to Exhibit 10.21 to the
Companys Registration Statement on Form S-1 (File No. 333-37162)).                                                                                                         
|      | 
|10.20 |  | Sublease for Office Premises, dated May 1, 1999, between Pemstar B.V. and Fluke Industrial B.V. and Lease Agreement for Office Premises dated July 11, 1997 between Fortress Beheer I B.V.
& Garden End Building B.V. and Fluke Industrial B.V. (incorporated by reference to Exhibit 10.22 to the Companys Registration Statement on Form S-1 (File No. 333-37162)).
|      | 
|10.21 |  | Sublease Assignment Agreement dated June 8, 1999 between the Company and Bell Microproducts, Inc. (incorporated by reference to Exhibit 10.23 to the Companys Registration Statement on
Form S-1 (File No. 333-37162)).                                                                                                                                              
|      | 
|10.22 |  | Land and Factory Lease Agreement dated April 27, 2000 between the Company and Thai Factory Development Public Company Limited (incorporated by reference to Exhibit 10(ii) to the
Companys Quarterly Report on Form 10-Q for the period ending September 30, 2000 (File No. 000-31223)).                                                                             
|      | 
|10.23 |  | Lease Agreement dated August, 2000 between Pemstar De Mexico, S.A. de C.V. and Guadalajara Industrial Tecnologico, S.A. de C.V. (incorporated by reference to Exhibit 10(iv) to the
Companys Quarterly Report on Form 10-Q for the period ending September 30, 2000 (File No. 000-31223)).                                                                           
|      | 
|10.24 |  | Rental Agreement dated September 28, 2000 between Pemstar B.V. and GE Capital B.V. (incorporated by reference to Exhibit 10(v) to the Companys Quarterly Report on Form 10-Q for the
period ending September 30, 2000 (File No. 000-31223)).                                                                                                                         
|      | 
|10.25 |  | Multi-Tenant Industrial Triple Net Lease dated March 12, 2000 between the Company and Senter Road, LLC (incorporated by reference to Exhibit 10(vi) to the Companys Quarterly Report on
Form 10-Q for the period ending September 30, 2000 (File No. 000-31223)).                                                                                                    
|      | 
|10.26 |  | Lease Agreement, dated April 22, 1981, between the City of Dunseith, North Dakota and Turtle Mountain Corporation (incorporated by reference to Exhibit 10.37 to the Companys
Registration Statement on Form S-1 (File No. 333-60832)).                                                                                                                              
|      | 
|10.27 |  | Lease Agreement dated April 30, 2001, between the Company and James F. Matthews and Judith Matthews (incorporated by reference to Exhibit 10.33 to the Companys Registration Statement on
Form S-1 (File No. 333-60832)).                                                                                                                                            
|      | 
|10.28 |  | Lease Agreement, dated 5 April 2001, between Derraglen Trading Limited, Pemstar Ireland Limited and the Company (incorporated by reference to Exhibit 10(iii) to the Companys Quarterly
Report on Form 10-Q for the period ending June 30, 2001 (File No. 000-31223)).                                                                                               
|      | 
|10.29 |  | Asset Purchase Agreement dated as of May 7, 2001, between the Company, U.S. Assemblies New England, Inc., MATCO Electronics Group, Inc. and James F. Matthews (incorporated by reference to
Exhibit 10.34 to the Companys Registration Statement on Form S-1 (File No. 333-60832)).                                                                                  
|      | 
|10.30 |  | Asset Purchase Agreement dated as of April 30, 1999, by and between the Company and Bell Microproducts, Inc. (incorporated by reference to Exhibit 10.2 to the Companys Registration
Statement on Form S-1 (File No. 333-37162)).                                                                                                                                    
|      | 
|10.31 |  | Loan and Security Agreement between the Company, Turtle Mountain Corporation, Pemstar Pacific Consultants Inc. and Gentlelife, Inc., Congress Financial Corporation and Fleet Capital
Corporation dated April 25, 2003 (incorporate by reference to Exhibit 4.1 to the Companys Report on Form 8-K dated April 28, 2003 (File No. 000-31223))                        



18



---

|      |  |                                                                                                                                                                                                                                                                                                                                                                                                       
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      | 
|10.32 |  | Amendment No. 1 to Loan and Security Agreement, dated as of April 25, 2003, between the Company, Turtle Mountain Corporation, Pemstar Pacific Consultants Inc. and Gentlelife, Inc., Congress
Financial Corporation and Fleet Capital Corporation dated April 25, 2003 (incorporated by reference to Exhibit 4.2 to the Companys Report on Form 8-K dated April 28, 2003 (File No. 000-31223)).      
|      | 
|10.33 |  | Amendment No. 2 to Loan and Security Agreement, dated as of June 30, 2003, between the Company, Turtle Mountain Corporation, Pemstar Pacific Consultants Inc. and Gentlelife, Inc., Congress
Financial Corporation and Fleet Capital Corporation dated April 25, 2003 (incorporated by reference to Exhibit 10.1 to the Companys Report on Form 10-Q dated August 7, 2003 (File No. 000-31223)).     
|      | 
|10.34 |  | Amendment No. 3 to Loan and Security Agreement, dated as of July 10, 2003, between the Company, Turtle Mountain Corporation, Pemstar Pacific Consultants Inc. and Gentlelife, Inc., Congress
Financial Corporation and Fleet Capital Corporation dated April 25, 2003 (incorporated by reference to Exhibit 4.2 to the Companys Report on Form 10-Q dated August 7, 2003 (File No. 000-31223)).      
|      | 
|10.35 |  | Amendment No. 4 to Loan and Security Agreement, dated as of January 5, 2004, between the Company, Turtle Mountain Corporation, Pemstar Pacific Consultants Inc. and Gentlelife, Inc., Congress
Financial Corporation and Fleet Capital Corporation dated April 25, 2003 (incorporated by reference to Exhibit 10.1 to the Companys Report on Form 10-Q dated January 9, 2004 (File No. 000-31223)).  
|      | 
|10.36 |  | Amendment No. 5 to Loan and Security Agreement, dated as of January 6, 2004, between the Company, Turtle Mountain Corporation, Pemstar Pacific Consultants Inc. and Gentlelife, Inc., Congress
Financial Corporation and Fleet Capital Corporation dated April 25, 2003 (incorporated by reference to Exhibit 10.2 to the Companys Report on Form 8-K dated January 9, 2004 (File No. 000-31223)).   
|      | 
|10.37 |  | Amendment No. 6 to Loan and Security Agreement, dated as of January 6, 2004, between the Company, Turtle Mountain Corporation, Pemstar Pacific Consultants Inc. and Gentlelife, Inc., Congress
Financial Corporation and Fleet Capital Corporation dated April 25, 2003 (incorporated by reference to Exhibit 10.1 to the Companys Report on Form 10-Q dated February 17, 2004 (File No. 000-31223)).
|      | 
|10.38 |  | Amendment No. 7 to Loan and Security Agreement, dated as of April 12, 2004, between the Company, Turtle Mountain Corporation, Pemstar Pacific Consultants Inc. and Gentlelife, Inc., Congress
Financial Corporation and Fleet Capital Corporation dated April 25, 2003                                                                                                                                
|      | 
|10.39 |  | Lease agreement between Company and PEM (MN) QRS 15-39, INC., a Delaware corporation, dated March 28, 2003 (incorporated by reference to Exhibit 4.3 to the Companys Report on Form 8-K
dated April 28, 2003 (File No. 000-31223))                                                                                                                                                                   
|      | 
|12.1  |  | Computation of Ratio of Earnings to Fixed Charges.                                                                                                                                                                                                                                                                                                                                                    
|      | 
|13.1  |  | Portions of the 2004 Annual Report to Shareholders incorporated by reference herein.                                                                                                                                                                                                                                                                                                                  
|      | 
|21.1  |  | Subsidiaries of the Company.                                                                                                                                                                                                                                                                                                                                                                          
|      | 
|23.1  |  | Consent of Ernst & Young LLP.                                                                                                                                                                                                                                                                                                                                                                         
|      | 
|24.1  |  | Power of Attorney (included with signatures on page 21 herein).                                                                                                                                                                                                                                                                                                                                       
|      | 
|31.1  |  | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                    
|      | 
|31.2  |  | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                    
|      | 
|32.1  |  | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                    
|      | 
|32.2  |  | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                    

---

|* | Management contract or compensatory plan or arrangement required to be filed as an exhibit to Form 10-K pursuant to Item 15(c) of this Report.
|- | ----------------------------------------------------------------------------------------------------------------------------------------------



The Company agrees to furnish supplementally to the Securities and Exchange Commission upon
request a copy of any instrument defining the rights of holders of long-term debt not being filed as an exhibit in reliance on Item 601(b)(4)(iii)(A) of Regulation S-K.



19



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|(b) | Reports on Form 8-K
|--- | -------------------



On January 9, 2004, we filed a Current Report on Form 8-K reporting under Items 5 and 7 the execution and filing of Amendment Numbers 4 and 5 to Loan and
Security Agreement between the Company, Turtle Mountain Corporation, Pemstar Pacific Consultants Inc. and Gentlelife, Inc., Congress Financial Corporation and Fleet Capital Corporation dated April 25, 2003. We filed a second Current Report on Form
8-K on January 28, 2004, furnishing under Items 12 and 7 the earnings release and unaudited condensed financial statements for the quarter ended December 31, 2003. We filed a third Current Report on Form 8-K on May 18, 2004 furnishing under Items 12
and 7 the earnings release and unaudited condensed financial statements for the quarter and year ended March 31, 2004.



|(c) | Exhibits
|--- | --------



See Exhibit Index and Exhibits attached to this Report.



|(d) | Financial Statement Schedules
|--- | -----------------------------



See Financial Statement Schedule included at the end of this Report.



20



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Signatures



Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Rochester, State of Minnesota.



|                    |  |              |  |                                     
|------------------- |  | ------------ |  | ------------------------------------
|                    |  | PEMSTAR INC.
|                    |  |             
|Date: June 11, 2004 |  | By:          |  | /s/ Allen J. Berning                
|                    |  |              |  | Allen J. Berning                    
|                    |  |              |  | Chairman and Chief Executive Officer



Pursuant to the
requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons in the capacities and on the dates indicated. KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby
constitutes and appoints Greg S. Lea, as their true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities to sign the Annual Report on Form 10-K
of Pemstar Inc. for the 12 months ended March 31, 2004, and any and all amendments to such Annual report on Form 10-K and to file same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange,
granting unto said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent, or the substitutes for such attorney-in-fact and agent, may lawfully do or cause to be done by virtue hereof.



|                                                 |  |                                                                              |  |              
|------------------------------------------------ |  | ---------------------------------------------------------------------------- |  | -------------
|Signature                                        |  | Title                                                                        |  | Date         
|                                                 |  |                                                                             
|/s/ Allen J. BerningAllen J. Berning             |  | Chairman, Chief Executive Officer and Director (principal executive officer) |  | June 11, 2004
|                                                 |  |                                                                             
|/s/ Greg S. LeaGreg S. Lea                       |  | Chief Financial Officer and Director (principal
financial officer)           |  | June 11, 2004
|                                                 |  |                                                                             
|/s/ Thomas A. BurtonThomas A. Burton             |  | Director                                                                     |  | June 11, 2004
|                                                 |  |                                                                             
|/s/ Kenneth E. HendricksonKenneth E. Hendrickson |  | Director                                                                     |  | June 11, 2004
|                                                 |  |                                                                             
|/s/ Bruce M. JaffeBruce M. Jaffe                 |  | Director                                                                     |  | June 11, 2004
|                                                 |  |                                                                             
|Wolf Michel                                      |  | Director                                                                     |  | __________   
|                                                 |  |                                                                             
|/s/ Michael OdrichMichael Odrich                 |  | Director                                                                     |  | June 11, 2004
|                                                 |  |                                                                             
|/s/ Steven E. SnyderSteven E. Snyder             |  | Director                                                                     |  | June 11, 2004
|                                                 |  |                                                                             
|/s/ Larry R. DegenLarry R. Degen                 |  | Vice President, Principal Accounting Officer
(principal accounting officer)  |  | June 11, 2004



21



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Schedule IIValuation and Qualifying Accounts



Pemstar Inc.



|                                               |  |                              |        |                             |   |                                      |  |                     |        |  |                        |       |     |  |   |       
|---------------------------------------------- |  | ---------------------------- | ------ | --------------------------- | - | ------------------------------------ |  | ------------------- | ------ |  | ---------------------- | ----- | --- |  | - | ------
|Col. A.                                        |  | Col. B                       |        | Col. C                      |   | Col. D                               |  |                     | Col. E
|(Amounts in thousands)                         |  |                              |        | Additions                   |   |                                      |  |                     |       
|Description                                    |  | Balance atBeginningof Period |        | Charged toCosts andExpenses |   | Charged to Other Accounts Described |  | DeductionsDescribed |        |  | Balance atEnd ofPeriod
|                                               |  |                              |        |                             |  
|YEAR ENDED MARCH 31, 2004                      |  |                              |        |                             |   |                                      |  |                     |        |  |                        |       |     |  |   |       
|Reserve and allowances deducted from accounts: |  |                              |        |                             |   |                                      |  |                     |        |  |                        |       |     |  |   |       
|Allowance for uncollectible accounts           |  | $                            | 3,483  |                             | $ | 771                                  |  | $                   |        |  | $                      | 1,076 | (1) |  | $ | 3,178 
|Allowance for inventory obsolescence           |  |                              | 5,381  |                             |   | 768                                  |  |                     |       |  |                        | 2,743 | (2) |  |   | 3,406 
|Allowance for deferred tax assets              |  |                              | 35,516 |                             |   | 10,228                               |  |                     |       |  |                        |      |     |  |   | 45,744
|                                               |  |                              |        |                             |  
|YEAR ENDED MARCH 31, 2003                      |  |                              |        |                             |   |                                      |  |                     |        |  |                        |       |     |  |   |       
|Reserve and allowances deducted from accounts: |  |                              |        |                             |   |                                      |  |                     |        |  |                        |       |     |  |   |       
|Allowance for uncollectible accounts           |  |                              | 8,724  |                             |   | 2,214                                |  |                     |       |  |                        | 7,455 | (1) |  |   | 3,483 
|Allowance for inventory obsolescence           |  |                              | 6,676  |                             |   | 8,055                                |  |                     |       |  |                        | 9,350 | (2) |  |   | 5,381 
|Allowance for deferred tax assets              |  |                              | 26,962 |                             |   | 8,554                                |  |                     |       |  |                        |      |     |  |   | 35,516
|                                               |  |                              |        |                             |  
|YEAR ENDED MARCH 31, 2002                      |  |                              |        |                             |   |                                      |  |                     |        |  |                        |       |     |  |   |       
|Reserve and allowances deducted from accounts: |  |                              |        |                             |   |                                      |  |                     |        |  |                        |       |     |  |   |       
|Allowance for uncollectible accounts           |  |                              | 1,234  |                             |   | 8,228                                |  |                     |       |  |                        | 738   | (1) |  |   | 8,724 
|Allowance for inventory obsolescence           |  |                              | 2,154  |                             |   | 5,440                                |  |                     |       |  |                        | 918   | (2) |  |   | 6,676 
|Allowance for deferred tax assets              |  |                              |       |                             |   | 26,962                               |  |                     |       |  |                        |      |     |  |   | 26,962

---

|(1) | Write-off of accounts receivable determined to be uncollectible.
|--- | ----------------------------------------------------------------

|(2) | Disposal of obsolete inventories.
|--- | ---------------------------------



22



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EXHIBIT INDEX



|            |  |                                                                                                                                                                                                                                                                                                                                                         
|----------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  |                                                                                                                                                                                                                                                                                                                                                         
|3.1         |  | Articles of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Companys Registration Statement on Form S-3 (File No. 333-75284)).                                                                                                                                                                                           
|            | 
|3.2         |  | Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.2 to the Companys Registration Statement on Form S-1 (File No. 333-37162)).                                                                                                                                                                                         
|            | 
|4.1         |  | Form of Promissory Note (incorporated by reference to Exhibit 10.6 to the Companys Registration Statement on Form S-1 (File No. 333-37162)).                                                                                                                                                                                                           
|            | 
|4.2         |  | Form of Certificate of Common Stock of the Company (incorporated by reference to Exhibit 4.1 to the Companys Registration Statement on Form S-1 (File No. 333-37162)).                                                                                                                                                                                 
|            | 
|4.3         |  | Rights Agreement, dated as of August 11, 2000, between the Company and Wells Fargo Bank, N.A., as Rights Agent (incorporated by reference to Exhibit 4.2 to the Companys Registration
Statement on Form S-3 (File No. 333- 75284)).                                                                                                                    
|            | 
|4.4         |  | Amended and Restated Rights Agreement Amendment by and between the Company and Wells Fargo Bank Minnesota, N.A. dated May 8, 2002 (incorporated by reference to Exhibit 4.3 to the
Companys Registration Statement on Form 8-A/A filed on July 29, 2002).                                                                                              
|            | 
|4.5         |  | Form of Indenture relating to Senior Debt Securities (incorporated by reference to Exhibit 4.7 to the Companys Registration Statement on Form S-3 (File No. 333-75284)).                                                                                                                                                                               
|            | 
|4.6         |  | Form of Indenture relating to Subordinated Debt Securities (incorporated by reference to Exhibit 4.8 to the Companys Registration Statement on Form S-3 (File No.
333-75284)).                                                                                                                                                                         
|            | 
|4.7         |  | Form of Initial Notes (incorporated by reference to Exhibit 4.1 to the Companys Current Report on Form 8-K filed on May 6, 2002).                                                                                                                                                                                                                      
|            | 
|4.8         |  | Form of Warrants (incorporated by reference to Exhibit 4.4 to the Companys Current Report on Form 8-K filed on May 6, 2002).                                                                                                                                                                                                                           
|            | 
|4.9         |  | Warrant dated May 10, 2002 to Smithfield Fiduciary LLC (incorporated by reference to Exhibit 10.3 to the Companys Current Report on Form 8-K filed on May 13, 2002).                                                                                                                                                                                   
|            | 
|4.10        |  | Warrant dated May 10, 2002 to Citadel Equity Fund Ltd. (incorporated by reference to Exhibit 10.4 to the Companys Current Report on Form 8-K filed on May 13, 2002).                                                                                                                                                                                   
|            | 
|10.1        |  | Loan Agreement, dated June 27, 2002, by and between the Pemstar (Thailand) Limited and Thai Farmers Bank Public Company Limited and related Guarantee Agreement by Pemstar Inc., dated June 25,
2002 (incorporated by reference to Exhibit 10.4 in the Companys Quarterly Report on Form 10-Q for the period ending June 30, 2002 (File No. 000-31223).
|            | 
|10.2        |  | Purchase Agreement by and among the Company, Smithfield Fiduciary LLC and Citadel Equity Fund Ltd. dated May 3, 2002 (incorporated by reference to Exhibit 10.1 to the Companys Current
Report on Form 8-K filed on May 6, 2002).                                                                                                                      
|            | 
|10.3        |  | Registration Rights Agreement by and among the Company, Smithfield Fiduciary LLC and Citadel Equity Fund Ltd. dated May 3, 2002 (incorporated by reference to Exhibit 10.3 to the
Companys Current Report on Form 8-K filed on May 6, 2002).                                                                                                           
|            | 
|10.4        |  | Registration Rights Agreement by and among the Company, Smithfield Fiduciary LLC and Citadel Equity Fund Ltd. dated May 10, 2002 (incorporated by reference to Exhibit 10.2 to the
Companys Current Report on Form 8-K filed on May 13, 2002).                                                                                                         
|            | 
|10.5        |  | Letter Agreement by and among the Company, Smithfield Fiduciary LLC and Citadel Equity Fund Ltd. dated May 8, 2002 (incorporated by reference to Exhibit 10.1 to the Companys Current
Report on Form 8-K filed on May 13, 2002).                                                                                                                       
|            | 
|10.6        |  | Letter Agreement by and among the Company, Smithfield Fiduciary LLC and Citadel Equity Fund Ltd. dated May 10, 2002 (incorporated by reference to Exhibit 10.5 to the Companys Current
Report on Form 8-K filed on May 13, 2002).                                                                                                                      
|            | 
|10.7        |  | Amendment and Termination Agreement by and among the Company, Smithfield Fiduciary LLC and Citadel Equity Fund Ltd. (incorporated by reference to Exhibit 10.1 to the Companys Current
Report on Form 8-K filed on July 19, 2002).                                                                                                                     



23



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|      |  |                                                                                                                                                                                                                                                                                                                                                                       
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.8  |  | Form of Change in Control Agreement (incorporated by reference to Exhibit 10.4 to the Companys Registration Statement on Form S-1 (File No. 333-37162)).                                                                                                                                                                                                             
|      | 
|10.9  |  | First Amended and Restated Investor Rights Agreement, dated as of June 7, 1999 between the Company and certain shareholders (incorporated by reference to Exhibit 10.10 to the Companys
Registration Statement on Form S-1 (File No. 333-37162)).                                                                                                                    
|      | 
|10.10 |  | Pemstar Inc. 1994 Stock Option Plan (incorporated by reference to Exhibit 10.12 to the Companys Registration Statement on Form S-1 (File No. 333-37162)).                                                                                                                                                                                                            
|      | 
|10.11 |  | Pemstar Inc. 1995 Stock Option Plan (incorporated by reference to Exhibit 10.13 to the Companys Registration Statement on Form S-1 (File No. 333-37162)).                                                                                                                                                                                                            
|      | 
|10.12 |  | Pemstar Inc. 1997 Stock Option Plan (incorporated by reference to Exhibit 10.14 to the Companys Registration Statement on Form S-1 (File No. 333-37162)).                                                                                                                                                                                                            
|      | 
|10.13 |  | Pemstar Inc. Amended and Restated 1999 Stock Option Plan (incorporated by reference to Exhibit 10.15 to the Companys Registration Statement on Form S-1 (File No.
333-37162)).                                                                                                                                                                                       
|      | 
|10.14 |  | Pemstar Inc. 2000 Stock Option Plan (incorporated by reference to Exhibit 10.16 to the Companys Registration Statement on Form S-1 (File No. 333-37162)).                                                                                                                                                                                                            
|      | 
|10.15 |  | Pemstar, Inc. 2000 Employee Stock Purchase Plan, as amended (incorporated by reference to Exhibit 10.6 in the Companys Quarterly Report on Form 10-Q for the period ended June 30,
2002).                                                                                                                                                                            
|      | 
|10.16 |  | Pemstar, Inc. 2002 Stock Option Plan (incorporated by reference to Exhibit 10.7 in the Companys Quarterly Report on Form 10-Q for the period ended June 30, 2002).                                                                                                                                                                                                   
|      | 
|10.17 |  | Lease, dated June 29, 1998, between the Company and Leslie E. Nelson as Trustee of the Leslie E. Nelson Revocable Trust dated December 20, 1994, as amended (incorporated by reference to
Exhibit 10.19 to the Companys Registration Statement on Form S-1 (File No. 333-37162)).                                                                                    
|      | 
|10.18 |  | Sub-Lease Agreement, dated February 3, 1999, between Hongguan Technologies (S) Pte. Ltd. and Pemstar-Hongguan Pte. Ltd. (incorporated by reference to Exhibit 10.20 to the Companys
Registration Statement on Form S-1 (File No. 333-37162)).                                                                                                                        
|      | 
|10.19 |  | Lease Agreement dated September 30, 1998, between Guadalajara Industrial Technologico, S.A. de C.V. and Pemstar de Mexico S.A. de C.V. (incorporated by reference to Exhibit 10.21 to the
Companys Registration Statement on Form S-1 (File No. 333-37162)).                                                                                                         
|      | 
|10.20 |  | Sublease for Office Premises, dated May 1, 1999, between Pemstar B.V. and Fluke Industrial B.V. and Lease Agreement for Office Premises dated July 11, 1997 between Fortress Beheer I B.V.
& Garden End Building B.V. and Fluke Industrial B.V. (incorporated by reference to Exhibit 10.22 to the Companys Registration Statement on Form S-1 (File No. 333-37162)).
|      | 
|10.21 |  | Sublease Assignment Agreement dated June 8, 1999 between the Company and Bell Microproducts, Inc. (incorporated by reference to Exhibit 10.23 to the Companys Registration Statement on
Form S-1 (File No. 333-37162)).                                                                                                                                              
|      | 
|10.22 |  | Land and Factory Lease Agreement dated April 27, 2000 between the Company and Thai Factory Development Public Company Limited (incorporated by reference to Exhibit 10(ii) to the
Companys Quarterly Report on Form 10-Q for the period ending September 30, 2000 (File No. 000-31223)).                                                                             
|      | 
|10.23 |  | Lease Agreement dated August, 2000 between Pemstar De Mexico, S.A. de C.V. and Guadalajara Industrial Tecnologico, S.A. de C.V. (incorporated by reference to Exhibit 10(iv) to the
Companys Quarterly Report on Form 10-Q for the period ending September 30, 2000 (File No. 000-31223)).                                                                           
|      | 
|10.24 |  | Rental Agreement dated September 28, 2000 between Pemstar B.V. and GE Capital B.V. (incorporated by reference to Exhibit 10(v) to the Companys Quarterly Report on Form 10-Q for the
period ending September 30, 2000 (File No. 000-31223)).                                                                                                                         
|      | 
|10.25 |  | Multi-Tenant Industrial Triple Net Lease dated March 12, 2000 between the Company and Senter Road, LLC (incorporated by reference to Exhibit 10(vi) to the Companys Quarterly Report on
Form 10-Q for the period ending September 30, 2000 (File No. 000-31223)).                                                                                                    



24



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|      |  |                                                                                                                                                                                                                                                                                                                                                                                                       
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.26 |  | Lease Agreement, dated April 22, 1981, between the City of Dunseith, North Dakota and Turtle Mountain Corporation (incorporated by reference to Exhibit 10.37 to the Companys
Registration Statement on Form S-1 (File No. 333-60832)).                                                                                                                                                              
|      | 
|10.27 |  | Lease Agreement dated April 30, 2001, between the Company and James F. Matthews and Judith Matthews (incorporated by reference to Exhibit 10.33 to the Companys Registration Statement on
Form S-1 (File No. 333-60832)).                                                                                                                                                                            
|      | 
|10.28 |  | Lease Agreement, dated 5 April 2001, between Derraglen Trading Limited, Pemstar Ireland Limited and the Company (incorporated by reference to Exhibit 10(iii) to the Companys Quarterly
Report on Form 10-Q for the period ending June 30, 2001 (File No. 000-31223)).                                                                                                                               
|      | 
|10.29 |  | Asset Purchase Agreement dated as of May 7, 2001, between the Company, U.S. Assemblies New England, Inc., MATCO Electronics Group, Inc. and James F. Matthews (incorporated by reference to
Exhibit 10.34 to the Companys Registration Statement on Form S-1 (File No. 333-60832)).                                                                                                                  
|      | 
|10.30 |  | Asset Purchase Agreement dated as of April 30, 1999, by and between the Company and Bell Microproducts, Inc. (incorporated by reference to Exhibit 10.2 to the Companys Registration
Statement on Form S-1 (File No. 333-37162)).                                                                                                                                                                    
|      | 
|10.31 |  | Loan and Security Agreement between the Company, Turtle Mountain Corporation, Pemstar Pacific Consultants Inc. and Gentlelife, Inc., Congress Financial Corporation and Fleet Capital
Corporation dated April 25, 2003 (incorporate by reference to Exhibit 4.1 to the Companys Report on Form 8-K dated April 28, 2003 (File No. 000-31223))                                                        
|      | 
|10.32 |  | Amendment No. 1 to Loan and Security Agreement, dated as of April 25, 2003, between the Company, Turtle Mountain Corporation, Pemstar Pacific Consultants Inc. and Gentlelife, Inc., Congress
Financial Corporation and Fleet Capital Corporation dated April 25, 2003 (incorporated by reference to Exhibit 4.2 to the Companys Report on Form 8-K dated April 28, 2003 (File No. 000-31223)).      
|      | 
|10.33 |  | Amendment No. 2 to Loan and Security Agreement, dated as of June 30, 2003, between the Company, Turtle Mountain Corporation, Pemstar Pacific Consultants Inc. and Gentlelife, Inc., Congress
Financial Corporation and Fleet Capital Corporation dated April 25, 2003 (incorporated by reference to Exhibit 10.1 to the Companys Report on Form 10-Q dated August 7, 2003 (File No. 000-31223)).     
|      | 
|10.34 |  | Amendment No. 3 to Loan and Security Agreement, dated as of July 10, 2003, between the Company, Turtle Mountain Corporation, Pemstar Pacific Consultants Inc. and Gentlelife, Inc., Congress
Financial Corporation and Fleet Capital Corporation dated April 25, 2003 (incorporated by reference to Exhibit 4.2 to the Companys Report on Form 10-Q dated August 7, 2003 (File No. 000-31223)).      
|      | 
|10.35 |  | Amendment No. 4 to Loan and Security Agreement, dated as of January 5, 2004, between the Company, Turtle Mountain Corporation, Pemstar Pacific Consultants Inc. and Gentlelife, Inc., Congress
Financial Corporation and Fleet Capital Corporation dated April 25, 2003 (incorporated by reference to Exhibit 10.1 to the Companys Report on Form 10-Q dated January 9, 2004 (File No. 000-31223)).  
|      | 
|10.36 |  | Amendment No. 5 to Loan and Security Agreement, dated as of January 6, 2004, between the Company, Turtle Mountain Corporation, Pemstar Pacific Consultants Inc. and Gentlelife, Inc., Congress
Financial Corporation and Fleet Capital Corporation dated April 25, 2003 (incorporated by reference to Exhibit 10.2 to the Companys Report on Form 8-K dated January 9, 2004 (File No. 000-31223)).   
|      | 
|10.37 |  | Amendment No. 6 to Loan and Security Agreement, dated as of January 6, 2004, between the Company, Turtle Mountain Corporation, Pemstar Pacific Consultants Inc. and Gentlelife, Inc., Congress
Financial Corporation and Fleet Capital Corporation dated April 25, 2003 (incorporated by reference to Exhibit 10.1 to the Companys Report on Form 10-Q dated February 17, 2004 (File No. 000-31223)).
|      | 
|10.38 |  | Amendment No. 7 to Loan and Security Agreement, dated as of April 12, 2004, between the Company, Turtle Mountain Corporation, Pemstar Pacific Consultants Inc. and Gentlelife, Inc., Congress
Financial Corporation and Fleet Capital Corporation dated April 25, 2003                                                                                                                                
|      | 
|10.39 |  | Lease agreement between Company and PEM (MN) QRS 15-39, INC., a Delaware corporation, dated March 28, 2003 (incorporated by reference to Exhibit 4.3 to the Companys Report on Form 8-K
dated April 28, 2003 (File No. 000-31223))                                                                                                                                                                   
|      | 
|12.1  |  | Computation of Ratio of Earnings to Fixed Charges.                                                                                                                                                                                                                                                                                                                                                    



25



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|     |  |                                                                                                                                                   
|---- |  | --------------------------------------------------------------------------------------------------------------------------------------------------
|13.1 |  | Portions of the 2004 Annual Report to Shareholders incorporated by reference herein.                                                              
|     | 
|21.1 |  | Subsidiaries of the Company.                                                                                                                      
|     | 
|23.1 |  | Consent of Ernst & Young LLP.                                                                                                                     
|     | 
|24.1 |  | Power of Attorney (included with signatures on page 21 herein).                                                                                   
|     | 
|31.1 |  | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                
|     | 
|31.2 |  | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                
|     | 
|32.1 |  | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|     | 
|32.2 |  | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.



26