01—Abstract
Summary
Summary of the 10-K filed May 23, 2008. Cited figures are marked; the original filing is the authoritative source.
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.
02—Key points
Key Highlights
- Revenue increased by 46% to $27.6 billion in FY2008, largely due to the acquisition of Solectron.
- The company incurred significant restructuring charges of $447.7 million in FY2008, primarily related to the Solectron integration.
- A substantial non-cash tax expense of $661.3 million was recorded in FY2008 due to the re-evaluation of deferred tax assets.
- Net sales were concentrated, with the top ten customers accounting for 55% of net sales in FY2008 (down from 64% in FY2007).
- The company maintained a broad global manufacturing presence, with operations across 25 countries and 56% of sales from Asia.
- Flextronics offers a vertically integrated suite of services, from design and engineering to manufacturing, logistics, and after-sales support.
- The 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.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2008filed May 23, 2008Financial Statements
| 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 |
05—Questions
Frequently Asked Questions
What was the primary driver of revenue growth in fiscal year 2008?
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.
What led to the net loss reported for fiscal year 2008?
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.
How diversified is Flextronics' customer base?
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.
What is Flextronics' core business strategy?
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.
06—Continue