10-KPeriod: FY2008

FLEX LTD. Annual Report, Year Ended Mar 31, 2008

Filed May 23, 2008For Securities:FLEX

Summary

Flextronics International Ltd. reported significant revenue growth in fiscal year 2008, primarily driven by its acquisition of Solectron Corporation. This strategic move substantially expanded the company's scale, service offerings, and market diversification, particularly in infrastructure, computing, and communications. Despite the revenue increase, the company experienced a net loss for the year, largely attributed to substantial restructuring charges related to the Solectron integration and a significant non-cash tax expense due to the re-evaluation of deferred tax assets. Investors should note the company's continued reliance on its top ten customers, although this concentration slightly decreased year-over-year. The company's financial health is supported by a strong global manufacturing footprint and a commitment to vertically integrated services.

Financial Highlights

27 data points
Beta

Revenue

$27.56B

4.3% Gross Margin

Net Income

-$681.38M

-2.5% Net Margin

EPS (Diluted)

$-0.95

Cash & Equivalents

$1.72B

Free Cash Flow

$1.04B

Financial Statements
Beta
Revenue$27.56B
Cost of Revenue$25.97B
Gross Profit$1.18B
SG&A Expenses$807.03M
Net Income-$681.38M
EPS (Basic)$-0.95
EPS (Diluted)$-0.95
Shares Outstanding (Basic)720.52M
Shares Outstanding (Diluted)720.52M

Key Highlights

  • 1Revenue increased by 46% to $27.6 billion in FY2008, largely due to the acquisition of Solectron.
  • 2The company incurred significant restructuring charges of $447.7 million in FY2008, primarily related to the Solectron integration.
  • 3A substantial non-cash tax expense of $661.3 million was recorded in FY2008 due to the re-evaluation of deferred tax assets.
  • 4Net sales were concentrated, with the top ten customers accounting for 55% of net sales in FY2008 (down from 64% in FY2007).
  • 5The company maintained a broad global manufacturing presence, with operations across 25 countries and 56% of sales from Asia.
  • 6Flextronics offers a vertically integrated suite of services, from design and engineering to manufacturing, logistics, and after-sales support.
  • 7The company's stock price performance over the five years prior to March 31, 2008, lagged behind the S&P 500 Index and its peer group.

Frequently Asked Questions

The primary driver of revenue growth in fiscal year 2008 was the acquisition of Solectron Corporation on October 1, 2007, which significantly expanded the company's scale, service offerings, and market reach.

The net loss in fiscal year 2008 was significantly impacted by substantial restructuring charges of $447.7 million related to the integration of Solectron and a non-cash tax expense of $661.3 million resulting from the re-evaluation of deferred tax assets in the United States.

While Flextronics serves a wide range of industries and customers, its top ten customers accounted for 55% of net sales in fiscal year 2008. Sony-Ericsson was the largest customer, representing over 10% of net sales. This indicates a degree of customer concentration, although it slightly decreased from the previous fiscal year.

Flextronics' core strategy is to provide vertically integrated, end-to-end global supply chain services to original equipment manufacturers (OEMs). This includes design and engineering, manufacturing, logistics, and after-sales services, with a focus on market-specific expertise and global economies of scale.