Summary
Flex Ltd. reported fiscal year 2019 net sales of $26.2 billion, a 3% increase from the prior year, driven primarily by growth in its Communications & Enterprise Compute (CEC) and Industrial and Emerging Industries (IEI) segments. However, net income saw a significant decrease of 78% to $93 million, largely due to increased restructuring charges, charges related to distressed customers, and investment impairments. The company continues to navigate a complex operating environment, marked by evolving technology trends and a diverse customer base across its four segments: High Reliability Solutions (HRS), Industrial and Emerging Industries (IEI), Communications & Enterprise Compute (CEC), and Consumer Technologies Group (CTG). Despite the dip in profitability, Flex remains a global leader in its Sketch-to-Scale® services, offering design, engineering, manufacturing, and supply chain solutions. The company emphasizes its global scale, extensive design capabilities, and focus on high-growth industries like healthcare and automotive as key competitive strengths. Management is actively managing its portfolio, including optimizing underperforming accounts and investing in areas with longer product life cycles and higher margins.
Financial Highlights
52 data points| Revenue | $26.21B |
| Cost of Revenue | $24.59B |
| Gross Profit | $1.52B |
| SG&A Expenses | $953.00M |
| Interest Expense | $146.00M |
| Net Income | $93.00M |
| EPS (Basic) | $0.18 |
| EPS (Diluted) | $0.18 |
| Shares Outstanding (Basic) | 527.00M |
| Shares Outstanding (Diluted) | 530.00M |
Key Highlights
- 1Net sales reached $26.2 billion in fiscal year 2019, a 3% increase year-over-year, reflecting growth in the CEC and IEI segments.
- 2Net income declined significantly by 78% to $93 million, impacted by $113 million in restructuring charges and nearly $200 million in investment impairments.
- 3Gross profit decreased by 5% to $1.5 billion, with gross margin narrowing to 5.8% due to higher charges and unfavorable revenue mix, particularly a decline in higher-margin automotive products.
- 4The company is strategically shifting its portfolio towards higher-margin businesses like HRS and IEI, while actively managing underperforming accounts within the CTG segment.
- 5Flex maintains a strong global operational footprint with over 100 facilities across approximately 35 countries, supported by a workforce of around 200,000 employees.
- 6The company repurchased approximately $189 million of its ordinary shares during fiscal year 2019 under its share repurchase program.
- 7Despite a challenging year for profitability, Flex continues to invest in design and engineering capabilities and expand capacity in key growth areas.