Summary
Flextronics International Ltd. (FLEX) reported significant revenue growth in the second quarter and first half of fiscal year 2009, largely driven by the acquisition of Solectron Corporation. Total net sales for the three months ended September 26, 2008, reached $8.9 billion, a 59% increase year-over-year. For the six-month period, net sales were $17.2 billion, up 61% from the prior year. Despite revenue expansion, profitability was impacted by substantial charges. Gross profit decreased as a percentage of net sales due to a $96.7 million write-down of inventory and related contractual obligations for financially distressed customers. Additionally, the company incurred $29.2 million in restructuring charges primarily related to the Solectron integration, impacting cost of sales. Selling, general, and administrative expenses also rose due to acquisition-related costs and provisions for doubtful accounts. The company ended the period with $1.7 billion in cash and cash equivalents and $3.4 billion in borrowings. While liquidity appears sufficient for the next twelve months, investors should monitor the company's significant goodwill balance, exposure to troubled customers, and the broader macroeconomic environment's impact on demand and supply chains.
Financial Highlights
22 data points| Revenue | $8.86B |
| Cost of Revenue | $8.45B |
| Gross Profit | $417.46M |
| SG&A Expenses | $258.69M |
| Net Income | $27.07M |
| EPS (Basic) | $0.03 |
| EPS (Diluted) | $0.03 |
| Shares Outstanding (Basic) | 828.18M |
| Shares Outstanding (Diluted) | 830.03M |
Key Highlights
- 1Net sales for the second quarter of fiscal year 2009 increased 59% year-over-year to $8.9 billion, driven by the Solectron acquisition and new program wins.
- 2The company recorded a $96.7 million charge for inventory write-downs and contractual obligations related to financially distressed customers, negatively impacting gross profit margin.
- 3Restructuring charges of $29.2 million were recognized, primarily related to the integration of Solectron, affecting cost of sales.
- 4Selling, general, and administrative expenses increased due to acquisition costs, increased stock-based compensation, and provisions for doubtful accounts.
- 5Goodwill on the balance sheet remains substantial, and the company is monitoring for potential impairment due to market volatility.
- 6Cash and cash equivalents stood at $1.7 billion, while total debt was $3.4 billion.
- 7The company continues to utilize securitization programs to manage its accounts receivable and generate liquidity.