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Flextronics International Ltd. (FLEX) filed Quarterly Report for the period ended 2011-09-30.
Flextronics International Ltd. has a market cap of $4.89 billion; its shares were traded at around $6.68 with a P/E ratio of 8.4 and P/S ratio of 0.2.
This is the annual revenues and earnings per share of FLEX over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of FLEX.
Highlight of Business Operations:
We use a portfolio management approach to manage our extensive service offering. As our OEM customers change in the way they go to market, we reorganize and rebalance our business portfolio in order to optimize our operating results. The objective of our operating model is to allow us to redeploy and reposition our assets and resources across all the markets we serve. In May 2011, due to negative operating margins and performance metrics we announced that we will be phasing out of our ODM personal computing business. During the three-month and six-month periods ended September 30, 2011, the business generated $743 million and $1.4 billion in sales, respectively and sustained operating losses which approximated $20.0 million and $39.0 million, respectively. We have accelerated our exit activities and expect to have completed our exit of this business by the end of the third quarter of fiscal 2012. We expect a sequential reduction of approximately $550 million of quarterly ODM personal computing revenues in our December quarter associated with the accelerated exit of this business. Losses in the third quarter of fiscal 2012 associated with the ODM personal computing business are expected to range from $30.0 to $50.0 million, depending on our ability to redeploy certain design resources, the timing of our ceasing production of products and negotiated recoveries. No material revenue or significant losses associated with the ODM personal computing business are expected after the third quarter of fiscal 2012. Accordingly, upon the completion of the phase-out in the December quarter we expect to realize improved operating results. We also expect to be able to redeploy the associated manufacturing and design assets into other parts of our business, which would benefit our cash flows through reduced capital expenditure requirements.Net sales during the six-month period ended September 30, 2011 totaled $15.6 billion, representing an increase of approximately $1.6 billion, or 11%, from $14.0 billion during the six-month period ended October 1, 2010. Sales increased across all of the markets we serve, consisting of increases of: (i) $699.1 million in the High Velocity market, (ii) $534.3 million in the Integrated Network Solutions market, (iii) $286.3 million in the High Reliability Solutions market, and (iv) $84.2 million in the Industrial and Emerging Industries market. The increased sales in our High Velocity market were driven primarily from an increase in sales to one of our significant customers in the ODM personal computing business which we are exiting in the third fiscal quarter. Increased sales in our Integrated Network Solutions market were driven by new program wins with existing customers with products in data networking and telecommunications infrastructure markets, offset by declining demand from certain customer programs in the server market that were reducing due to the end of the product life cycles or which transitioned to another supplier. Increased sales in our High Reliability Solutions market were driven primarily from new wins and programs with our larger customers in the automotive, medical equipment and drug delivery markets as demand increased for their end products. Net sales increased in our Industrial and Emerging Industries market due to new wins and programs with customers serving the clean tech markets, offset by reduced demand from our customers serving the capital equipment markets. Net sales increased by $1.4 billion in Asia and $258.4 million in Europe, and decreased $63.7 million in the Americas.
Our ten largest customers during the three-month and six-month periods ended September 30, 2011 accounted for approximately 59% and 57% of net sales, respectively, with Research In Motion accounting for greater than 10% of our net sales for the three-month period and Hewlett-Packard accounting for greater than 10% of our net sales in both periods. Our ten largest customers during the three-month and six-month periods ended October 1, 2010 accounted for approximately 53% and 51% of net sales, respectively, with Research In Motion and Hewlett-Packard each accounting for greater than 10% of our net sales in both periods.
Selling, general and administrative expenses, or SG&A, amounted to $214.1 million, or 2.7% of net sales, during the three-month period ended September 30, 2011, increasing $15.1 million from $199.0 million, or 2.7% of net sales, during the three-month period ended October 1, 2010. SG&A amounted to $430.0 million, or 2.8% of net sales, during the six-month period ended September 30, 2011, increasing $35.3 million from $394.7 million, or 2.8% of net sales, during the six-month period ended October 1, 2010. The increase in absolute dollars for both the three-month and six-month periods was primarily due to an increase in headcount for various corporate support activities as well as other general infrastructure costs supporting the growth of our operations. Although net sales increased, SG&A as a percentage of sales did not change significantly due to proportionate increases in SG&A expenses.
Cash provided by operating activities was $436.9 million during the six-month period ended September 30, 2011. This resulted primarily from $261.8 million of net income for the period as adjusted to exclude approximately $235.6 million of non-cash expenses for depreciation and amortization. Due to higher sales and anticipated growth, our operating assets and liabilities increased $60.6 million on a net basis primarily from increases in accounts receivable of $741.1 million and inventory of $313.1 million, partially offset by increases in accounts payable of $721.4 million and other current liabilities of $273.6 million.
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