Flextronics Announces Filing Of Its 10-K And Subsequent Event

May 29, 2012

SINGAPORE, May 29, 2012 /PRNewswire/ -- Flextronics (NASDAQ: FLEX) today reported it has filed its 2012 financial statements on Form 10-K with the Securities and Exchange Commission.

As a result of recent events impacting the finances and liquidity of one of the Company's customers in the concentrated solar photovoltaic market, the Company has recognized a $32.0 million charge for the write-down of inventory and provisions for doubtful accounts. Company management has been in good faith negotiations with this customer regarding various out-of-court restructuring alternatives, but concluded on May 25, 2012 that all inventory and accounts receivable related to this customer were unrecoverable. 

Because this updated information relates to an uncertainty that existed as of March 31, 2012 and because the Company had not yet filed its 2012 financial statements on Form 10-K, the charge is considered a subsequent event under generally accepted accounting principles that must be recorded in the Company's 2012 financial statements. The Company announced its 2012 fourth quarter and full year financial results on May 1, 2012 and is now adjusting those results to reflect the impact of the event.

"This subsequent event has no effect on our ongoing operations, did not result in a material change to the Company's balance sheet, and had no effect on cash flows from operations or free cash flows for fiscal year 2012," said Paul Read, CFO of Flextronics. "In addition, our estimates for the fiscal quarter ended June 2012 are unchanged from the estimates we provided in our May 1, 2012 earnings release."

The effect of this subsequent event on the Company's fourth quarter and fiscal year ended March 31, 2012 adjusted and GAAP financial results are reflected in Schedules I – III of this press release.

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 aerospace and defense, automotive, computing, consumer, industrial, infrastructure, medical, clean tech 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 are 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; 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 impact on our margins and profitability resulting from our increased components offerings; supply shortages of required electronic components; compliance with legal and regulatory requirements; the challenges of international operations, including fluctuations in exchange rates beyond hedge boundaries leading to unexpected charges; changes in government regulations and tax laws; and the effects that the current macroeconomic environment could have on our business and demand for our products as well as the effects that current credit and market conditions could have on the liquidity and financial condition of our customers and suppliers, including any impact on their ability to meet their contractual obligations. 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.

                   
               

SCHEDULE I

 
                   

FLEXTRONICS INTERNATIONAL LTD. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

                   
       

Three Month Periods Ended

 
       

As Reported

 

Adjustments (2)

 

Adjusted

 
       

March 31,

2012

     

March 31,

2012

 

GAAP:

               
 

Net sales

   

$               6,382,412

 

$                           -

 

$               6,382,412

 
 

Cost of sales

   

6,019,605

 

4,000

 

6,023,605

 
                   
 

      Gross profit 

   

362,807

 

(4,000)

 

358,807

 
                   
 

Selling, general and administrative expenses

   

183,189

 

28,000

 

211,189

 
                   
 

      Operating income 

   

179,618

 

(32,000)

 

147,618

 
                   
 

Intangible amortization

   

14,122

 

-

 

14,122

 
 

Interest and other expense, net

   

(15,331)

 

-

 

(15,331)

 
                   
 

      Income before income taxes

   

180,827

 

(32,000)

 

148,827

 
                   
 

Provision for  income taxes

   

7,405

 

-

 

7,405

 
 

     Net income from continuing operations

   

$                  173,422

 

$                  (32,000)

 

$                  141,422

 
                   
 

     Loss from discontinued operations, net of tax

   

$         &n

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