01—Abstract
Summary
Summary of the 10-K filed May 29, 2012. Cited figures are marked; the original filing is the authoritative source.
Flextronics International Ltd. (Flextronics) reported strong revenue growth of 3.2% to $29.4 billiona for the fiscal year ended March 31, 2012, driven by increases across most of its market segments, with the exception of High Velocity Solutions (HVS).
This growth reflects an improving macroeconomic environment and successful new program wins. However, the company's gross profit experienced a slight decrease due to a higher mix of low-margin products from its exited ODM personal computing business and other exit-related costs.
Flextronics is actively rebalancing its portfolio, aiming to reduce reliance on lower-margin HVS businesses and increase revenue from higher-margin, more complex non-HVS segments, which is expected to improve profitability in the long term despite potential short-term revenue impacts. The company continues to manage its debt effectively and maintain a strong liquidity position.
02—Key points
Key Highlights
- Achieved a 3.2% increase in net sales, reaching $29.4 billion for the fiscal year ended March 31, 2012, indicating revenue growth across key markets.
- Actively rebalancing its business portfolio, aiming for a 70/30 revenue split between non-HVS and HVS businesses to improve margins and profitability.
- Exited the ODM personal computing business, which negatively impacted gross profit due to low margins and operating losses.
- Announced an agreement to sell certain assets of its camera module business (Vista Point Technologies) as part of its ongoing portfolio review.
- Secured new credit facilities totaling $2.0 billion, demonstrating continued access to capital markets and a commitment to managing its debt.
- Managed a significant portion of its cash flow from operations, demonstrating operational efficiency despite portfolio adjustments.
- The company maintained a strong focus on its core vertically-integrated manufacturing services, design, and after-market services.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2012, Flex Ltd. kept $0.02.
- Revenue$29.34B100.0%
- Cost of revenue−$27.83B94.8%
- Gross profit$1.52B5.2%
- Operating costs−$997.2M3.4%
- Operating income$520.8M1.8%
- Interest, other & tax−$32.0M0.1%
- Net income$488.8M1.7%
Where FY2012 revenue went
$29.34B- Cost of revenue: $27.83B, 95% of revenue
- Net income: $488.8M, 1.7% of revenue
- R&D: $78.9M, 0.3% of revenue
- SG&A: $877.6M, 3.0% of revenue
Kept 1.7% as net incomeNet income $488.8M · 1.7%R&D $78.9M · 0.3%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2012filed May 29, 2012Financial Statements
FY2012 against FY2011
| Line item | FY2012FY2011 | Change |
|---|---|---|
| Revenue | $29.34B$28.44B | +3.2% |
| Cost of Revenue | $27.83B$26.86B | +3.6% |
| Gross Profit | $1.52B$1.58B | −4.1% |
| R&D Expenses | $78.90M$46.50M | +69.7% |
| SG&A Expenses | $877.56M$801.77M | +9.5% |
| Operating Income | $520.77M$612.26M | −14.9% |
| Interest Expense | $67.80M$88.70M | −23.6% |
| Net Income | $488.76M$596.22M | −18.0% |
| EPS (Basic) | $0.68$0.77 | −11.7% |
| EPS (Diluted) | $0.67$0.75 | −10.7% |
| Shares Outstanding (Basic) | 716.25M777.32M | −7.9% |
| Shares Outstanding (Diluted) | 727.81M790.19M | −7.9% |
05—Questions
Frequently Asked Questions
What was Flextronics' overall financial performance in the fiscal year ended March 31, 2012?
Flextronics reported a 3.2% increase in net sales to $29.4 billion, driven by growth in most market segments. However, gross profit saw a slight decrease due to a higher mix of low-margin products from exited businesses and restructuring charges. Income from continuing operations was $510.6 million.
What is Flextronics' strategy regarding its business portfolio?
Flextronics is strategically rebalancing its business portfolio to focus on higher-margin, more complex non-HVS businesses, aiming for a 70% revenue contribution from these segments. This involves reducing exposure to lower-margin HVS businesses, which is expected to improve overall profitability.
What significant divestitures or exits did Flextronics undertake during this period?
Flextronics completed its exit from the ODM personal computing business and entered into an agreement to sell certain assets of its camera module business (Vista Point Technologies).
How is Flextronics managing its debt and liquidity?
The company has access to a $2.0 billion credit facility secured in October 2011 and maintains a strong liquidity position with $1.5 billion in cash and cash equivalents as of March 31, 2012. They also actively manage their debt through repayments and refinancing.
06—Continue