Flextronics Reports First Quarter Results

July 21, 2011

- Net Sales Increased 15% Year-Over-Year
- Adjusted EPS Increased 11% to $0.21
- GAAP EPS Increased 21% to $0.17

 

SINGAPORE, July 21, 2011 /PRNewswire via COMTEX/ --

Flextronics (NASDAQ: FLEX) today announced results for its first quarter ended July 1, 2011 as follows:

 

(US$ in millions, except EPS)





Three Month Periods Ended





July 1,


July 2,


Y/Y



2011


2010


Growth


Net sales

$ 7,548


$ 6,566


15%


Adjusted operating income (1)

$ 197


$ 190


4%


GAAP operating income

$ 184


$ 175


5%


Adjusted net income (1)

$ 157


$ 154


2%


GAAP net income

$ 132


$ 118


12%


Adjusted EPS (1)

$ 0.21


$ 0.19


11%


GAAP EPS

$ 0.17


$ 0.14


21%









(1) An explanation and reconciliation of non-GAAP financial measures to GAAP financial measures


is presented in Schedule II attached to this press release.




First Quarter Results

Net sales for the first quarter ended July 1, 2011 increased $982 million or 15% to $7.5 billion compared to net sales for the quarter ended July 2, 2010 of $6.6 billion. Adjusted operating income and GAAP operating income were both up 4% and 5% respectively year over year. GAAP net income for the first quarter ended July 1, 2011 increased $14 million or approximately 12% to $132 million, compared to $118 million for the quarter ended July 2, 2010. Adjusted EPS and GAAP EPS increased 11% and 21% respectively from the prior year quarter.

"Every one of our four core business groups grew double digits year-over-year and our revenue marked the second highest June quarter in our history. We expect our revenue growth to continue next quarter," said Mike McNamara, CEO of Flextronics. "This performance exemplifies Flextronics' diversified business model and our broad based success across all the markets we participate in."

Authorization for New Share Repurchase

During the June quarter the company completed its third $200 million dollar share buyback program.

Flextronics also announced that its Board of Directors has authorized the repurchase of up to $200 million of the Company's outstanding ordinary shares. This authorization is subject to shareholder approval which is expected tomorrow at the Annual and Extraordinary General Meetings and this will provide authorization for the repurchase of up to 10% of outstanding ordinary shares.

Guidance

For the second quarter ending September 30, 2011, revenue is expected to be in the range of $7.6 billion to $8.0 billion and adjusted EPS is expected to be in the range of $0.21 to $0.23 per share.

GAAP earnings per share are expected to be lower than the guidance provided herein by approximately $0.04 per diluted share for quarterly intangible amortization and stock-based compensation expense.

Conference Calls and Web Casts

A conference call hosted by Flextronics's management will be held today at 2:00 PM (PT) / 5:00 PM (ET) to discuss the Company's financial results for the first quarter ended July 1, 2011.

The conference call will be broadcast via the Internet and may be accessed by logging on to the Company's website at www.flextronics.com. Additional information in the form of a slide presentation may also be found on the Company's site. A replay of the broadcast will remain available on the Company's website afterwards.

Minimum requirements to listen to the broadcast are Microsoft Windows Media Player software (free download at http://www.microsoft.com/windows/windowsmedia/download/default.asp) and at least a 28.8 Kbps bandwidth connection to the Internet.

About Flextronics

Headquartered in Singapore (Singapore Reg. No. 199002645H), Flextronics is a leading Electronics Manufacturing Services (EMS) provider focused on delivering complete design, engineering and manufacturing services to automotive, computing, consumer, industrial, infrastructure, medical and mobile OEMs. Flextronics helps customers design, build, ship, and service electronics products through a network of facilities in 30 countries on four continents. This global presence provides design and engineering solutions that are combined with core electronics manufacturing and logistics services, and vertically integrated with components technologies, to optimize customer operations by lowering costs and reducing time to market. For more information, please visit www.flextronics.com.

This press release contains forward-looking statements within the meaning of U.S. securities laws, including statements related to future expected revenues and earnings per share. These forward-looking statements involve risks and uncertainties that could cause the actual results to differ materially from those anticipated by these forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements. These risks include: that future revenues and earnings may not be achieved as expected; our dependence on industries that continually produce technologically advanced products with short life cycles; our ability to respond to changes in economic trends, to fluctuations in demand for customers' products and to the short-term nature of customers' commitments; competition in our industry, particularly from ODM suppliers in Asia; our dependence on a small number of customers for the majority of our sales and our reliance on strategic relationships with major customers; the challenges of effectively managing our operations, including our ability to manage manufacturing processes, utilize available manufacturing capacity, control costs and manage changes in our operations; production difficulties, especially with new products; the risk of future restructuring charges that could be material to our financial condition and results of operations; our ability to design and quickly introduce world-class components products that offer significant price and/or performance advantages over competitive products, at commercially viable production yields and quantities; the impact on our margins and profitability resulting from our increased components offerings which have required substantial investments, and start-up and integration costs in our components and design businesses; supply shortages of required electronic components; compliance with legal and regulatory requirements, including regulatory quality standards applicable to medical devices; the challenges of international operations, including fluctuations in exchange rates beyond hedge boundaries leading to unexpected charges; changes in government regulations and tax laws, including any effects related to the expiration of tax holidays; our exposure to potential litigation relating to intellectual property rights, product warranty and product liability; our dependence on our key personnel; our ability to comply with environmental laws; the challenges of integrating acquired companies and assets; the effects that the current macroeconomic environment could have on our business and demand for our products as well as on our liquidity and our ability to access credit markets; and the effects that current credit and market conditions could have on the liquidity and financial condition of customers or suppliers, including any impact on their ability to meet contractual obligations to us on terms and conditions previously negotiated. Additional information concerning these and other risks is described under "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our reports on Form 10-K and 10-Q that we file with the U.S. Securities and Exchange Commission. The forward-looking statements in this press release are based on current expectations and Flextronics assumes no obligation to update these forward-looking statements.

Kevin Kessel Vice President, Investor Relations +1.408.576.7985 kevin.kessel@flextronics.com

Renee Brotherton Vice President, Corporate Communications +1.408.576.7189 renee.brotherton@flextronics.com

















SCHEDULE I














FLEXTRONICS INTERNATIONAL LTD. AND SUBSIDIARIES



UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS



(In thousands, except per share amounts)

















Three Month Periods Ended








July 1,
2011


July 2,
2010




GAAP:










Net sales



$ 7,547,751


$ 6,565,880





Cost of sales



7,147,529


6,195,062















Gross profit



400,222


370,818















Selling, general and administrative expenses



215,915


195,718















Operating income



184,307


175,100















Intangible amortization



13,302


17,990





Interest and other expense, net



22,176


27,529















Income before income taxes



148,829


129,581















Provision for income taxes



16,854


11,403





Net income



$ 131,975


$ 118,178














EPS:











GAAP



$ 0.17


$ 0.14





Non-GAAP



$ 0.21


$ 0.19















Diluted Shares used in computing per share amounts



759,823


824,017


































See Schedule II for the reconciliation of GAAP to non-GAAP financial measures. See the accompanying notes on Schedule IV attached to this press release.












SCHEDULE II







FLEXTRONICS INTERNATIONAL LTD. AND SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (1)

(In thousands, except per share amounts)

(unaudited)









Three Month Periods Ended





July 1,
2011

July 2,
2010









GAAP gross profit


$ 400,222

$ 370,818



Stock-based compensation expense


2,014

2,783



Non-GAAP gross profit


$ 402,236

$ 373,601









GAAP SG&A Expenses


$ 215,915

$ 195,718



Stock-based compen

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