Summary
Flextronics International Ltd. reported its third fiscal quarter and six-month results for the period ended October 2, 2009. The company experienced a significant year-over-year decline in net sales, with a 35% drop for the quarter and 33% for the six-month period, largely attributed to the weakened macroeconomic environment and reduced customer demand across all markets and geographies. Despite the revenue decline, the company has been actively managing its costs and restructuring operations, incurring charges related to rationalizing its global manufacturing capacity. While the company reported a net loss of $134.4 million for the six-month period, it maintained a healthy cash position with $2.0 billion in cash and cash equivalents. The company also made progress in deleveraging, repurchasing debt and redeeming notes, demonstrating a focus on financial flexibility amidst challenging economic conditions.
Financial Highlights
45 data points| Revenue | $5.83B |
| Cost of Revenue | $6.17B |
| Gross Profit | $299.58M |
| SG&A Expenses | $205.61M |
| Interest Expense | $36.70M |
| Net Income | $19.66M |
| EPS (Basic) | $0.02 |
| EPS (Diluted) | $0.02 |
| Shares Outstanding (Basic) | 812.37M |
| Shares Outstanding (Diluted) | 825.54M |
Key Highlights
- 1Net sales declined significantly by 35% for the quarter and 33% for the six-month period ended October 2, 2009, compared to the prior year, driven by a weakened macroeconomic environment impacting customer demand.
- 2The company incurred restructuring charges of approximately $12.6 million and $77.4 million for the three-month and six-month periods, respectively, to rationalize global manufacturing capacity.
- 3A net loss of $134.4 million was recorded for the six-month period, a reversal from a net income of $146.3 million in the prior year, impacted by revenue declines and restructuring costs.
- 4Despite the net loss, Flextronics maintained a strong liquidity position with $2.0 billion in cash and cash equivalents as of October 2, 2009.
- 5The company actively managed its debt, repurchasing approximately $200 million of senior subordinated notes and redeeming $195 million of convertible junior subordinated notes during the period.
- 6Gross profit margin for the quarter improved slightly to 5.1% from 4.7% year-over-year, despite lower sales, due to the absence of significant inventory write-downs seen in the prior year.
- 7Selling, general, and administrative expenses decreased in absolute terms but increased as a percentage of net sales due to the sharp revenue decline.