10-KPeriod: FY2012

FLEX LTD. Annual Report, Year Ended Mar 31, 2012

Filed May 29, 2012For Securities:FLEX

Summary

Flextronics International Ltd. (Flextronics) reported strong revenue growth of 3.2% to $29.4 billion 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.

Financial Highlights

54 data points
Beta

Revenue

$29.34B

5.2% Gross Margin

Net Income

$488.76M

1.7% Net Margin

EPS (Diluted)

$0.67

Total Assets

$11.03B

Cash & Equivalents

$1.52B

Free Cash Flow

$367.08M

Financial Statements
Beta
Revenue$29.34B
Cost of Revenue$27.83B
Gross Profit$1.52B
R&D Expenses$78.90M
SG&A Expenses$877.56M
Operating Income$520.77M
Interest Expense$67.80M
Net Income$488.76M
EPS (Basic)$0.68
EPS (Diluted)$0.67
Shares Outstanding (Basic)716.25M
Shares Outstanding (Diluted)727.81M

Key Highlights

  • 1Achieved 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.
  • 2Actively rebalancing its business portfolio, aiming for a 70/30 revenue split between non-HVS and HVS businesses to improve margins and profitability.
  • 3Exited the ODM personal computing business, which negatively impacted gross profit due to low margins and operating losses.
  • 4Announced an agreement to sell certain assets of its camera module business (Vista Point Technologies) as part of its ongoing portfolio review.
  • 5Secured new credit facilities totaling $2.0 billion, demonstrating continued access to capital markets and a commitment to managing its debt.
  • 6Managed a significant portion of its cash flow from operations, demonstrating operational efficiency despite portfolio adjustments.
  • 7The company maintained a strong focus on its core vertically-integrated manufacturing services, design, and after-market services.

Frequently Asked Questions

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.

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.

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).

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.