01—Abstract
Summary
Summary of the 10-K filed May 28, 2013. Cited figures are marked; the original filing is the authoritative source.
Flextronics International Ltd. (FLEX) reported total revenues of $23.6 billiona for the fiscal year ended March 31, 2013.
The company experienced a significant revenue decline of 19.7% compared to the prior year, primarily due to exiting the high-volume, low-margin Original Design and Manufacturing (ODM) PC business and a reduction in services provided to a major smartphone OEM. Despite this revenue decrease, the company generated $1.1 billionb in cash from operations and $680.1 million in free cash flow, demonstrating strong operational cash generation.
Flex responded to challenging macroeconomic conditions with restructuring activities, including workforce reductions and facility consolidations, which resulted in $227.4 millionc in pre-tax restructuring charges. The company's strategic focus remains on providing end-to-end global supply chain solutions, with continued investments in design and engineering capabilities, aiming to leverage its scale and global presence to serve leading OEMs across diverse markets such as High Reliability Solutions (medical, automotive, defense), High Velocity Solutions (mobile, consumer electronics), Industrial and Emerging Industries, and Integrated Network Solutions (telecom, data networking).
02—Key points
Key Highlights
- Revenue declined by 19.7% to $23.6 billion in FY2013, largely attributed to exiting the ODM PC business and reducing services for a key smartphone client.
- Generated strong operating cash flow of $1.1 billion and free cash flow of $680.1 million in FY2013.
- Incurred significant restructuring charges totaling $227.4 million in FY2013 to improve operational efficiency and rationalize global capacity.
- The company's largest customers accounted for 47% of net sales in FY2013, with no single customer exceeding 10% of net sales.
- Flex has an extensive global operational footprint with manufacturing facilities in over 30 countries across four continents.
- The company is strategically focused on higher-margin business groups such as High Reliability Solutions (HRS), Industrial and Emerging Industries (IEI), and Integrated Network Solutions (INS).
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2013, Flex Ltd. kept $0.01.
- Revenue$23.57B100.0%
- Cost of revenue−$22.40B95.1%
- Gross profit$1.17B4.9%
- Operating costs−$863.7M3.7%
- Operating income$302.5M1.3%
- Interest, other & tax−$25.5M0.1%
- Net income$277.1M1.2%
Where FY2013 revenue went
$23.57B- Cost of revenue: $22.19B, 94% of revenue
- Net income: $277.1M, 1.2% of revenue
- SG&A: $805.2M, 3.4% of revenue
- Other operating costs: $274.3M, 1.2% of revenue
Kept 1.2% as net incomeNet income $277.1M · 1.2%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2013filed May 28, 2013Financial Statements
FY2013 against FY2012
| Line item | FY2013FY2012 | Change |
|---|---|---|
| Revenue | $23.57B$29.34B | −19.7% |
| Cost of Revenue | $22.19B$27.83B | −20.3% |
| Gross Profit | $1.17B$1.52B | −23.2% |
| SG&A Expenses | $805.24M$877.56M | −8.2% |
| Operating Income | $302.50M$520.77M | −41.9% |
| Interest Expense | $68.90M$67.80M | +1.6% |
| Net Income | $277.05M$488.76M | −43.3% |
| EPS (Basic) | $0.42$0.68 | −38.2% |
| EPS (Diluted) | $0.41$0.67 | −38.8% |
| Shares Outstanding (Basic) | 662.87M716.25M | −7.5% |
| Shares Outstanding (Diluted) | 675.03M727.81M | −7.3% |
05—Questions
Frequently Asked Questions
What were the primary drivers for Flex's revenue decline in fiscal year 2013?
Flex's revenue decreased by 19.7% in fiscal year 2013, primarily due to the company's exit from the high-volume, low-margin Original Design and Manufacturing (ODM) PC business and a reduction in assembly activities with a major smartphone OEM. These factors led to a combined revenue decrease of approximately $3.8 billion.
How did Flex manage its operational efficiency and costs in response to the challenging market conditions?
In response to a challenging macroeconomic environment, Flex initiated restructuring activities during fiscal year 2013. These activities included reducing workforce and capacity and rationalizing its global manufacturing infrastructure, which resulted in $227.4 million in pre-tax restructuring charges.
What is Flex's financial health and liquidity position as of March 31, 2013?
As of March 31, 2013, Flex reported cash and cash equivalents of $1.6 billion and total debt of approximately $2.1 billion. The company generated strong cash flow from operations ($1.1 billion) and free cash flow ($680.1 million), indicating a solid liquidity position to fund operations and strategic initiatives.
06—Continue