Summary
Flex Ltd. reported net sales of $25.4 billion and net income of $429 million for the fiscal year ended March 31, 2018. The company experienced a 7% increase in net sales compared to the previous year, driven primarily by growth in its Industrial and Emerging Industries (IEI) and High Reliability Solutions (HRS) segments. Management highlighted strategic investments in innovation and design services, alongside its core manufacturing and supply chain capabilities, as key differentiators. However, investors should note the disclosure of material weaknesses in internal control over financial reporting, specifically concerning the accounting for accrued customer obligations and aspects of the control environment. While remediation efforts are underway, this indicates potential areas for enhanced oversight and process improvement. The company also reported increased selling, general, and administrative expenses, partly due to investments in design and engineering resources and legal matters.
Financial Highlights
54 data points| Revenue | $25.44B |
| Cost of Revenue | $23.78B |
| Gross Profit | $1.60B |
| R&D Expenses | $78.20M |
| SG&A Expenses | $1.02B |
| Interest Expense | $123.10M |
| Net Income | $428.53M |
| EPS (Basic) | $0.81 |
| EPS (Diluted) | $0.80 |
| Shares Outstanding (Basic) | 529.78M |
| Shares Outstanding (Diluted) | 536.60M |
Key Highlights
- 1Net sales increased by 7% to $25.4 billion for fiscal year 2018, driven by growth in IEI and HRS segments.
- 2Net income increased by 34% to $429 million, supported by revenue growth and gains from the deconsolidation of a subsidiary and the sale of Wink.
- 3The company reported material weaknesses in internal control over financial reporting related to accounting for customer obligations and control environment.
- 4Selling, general, and administrative expenses increased by 9% due to investments in design and engineering and legal matters.
- 5The company maintained a diversified customer base, with its top ten customers accounting for 41% of net sales and no single customer exceeding 10% of net sales in fiscal year 2018.
- 6Free cash flow decreased to $236 million from $660 million in the prior year, primarily due to lower cash flows from operations and higher capital expenditures.