Summary
Flex Ltd. reported net sales of $7.5 billion for the three-month period ended December 31, 2011, a decrease of 3.8% compared to the prior year, primarily driven by a $430.6 million decline in the High Velocity Solutions (HVS) market. This decline was largely attributed to the company's exit from its ODM personal computing business, which incurred operating losses of $70 million in the quarter. Despite the quarterly dip, nine-month net sales increased by 6.0% to $23.1 billion, with growth across all segments, particularly in Integrated Network Solutions and High Reliability Solutions. The company continues to manage its business portfolio by divesting underperforming segments, evidenced by the completed exit of the ODM PC business, which is expected to improve future operating results. While gross profit margin saw a slight decrease to 5.1% for the quarter due to unfavorable manufacturing costs related to the exit and right-sizing activities, the company's strategic repositioning aims to redeploy assets and optimize operations. Flex Ltd. also returned capital to shareholders, repurchasing approximately $395.6 million of ordinary shares during the nine-month period.
Financial Highlights
51 data points| Revenue | $7.47B |
| Cost of Revenue | $7.08B |
| Gross Profit | $385.75M |
| SG&A Expenses | $244.83M |
| Operating Income | $106.21M |
| Interest Expense | $18.30M |
| Net Income | $102.18M |
| EPS (Basic) | $0.14 |
| EPS (Diluted) | $0.14 |
| Shares Outstanding (Basic) | 710.32M |
| Shares Outstanding (Diluted) | 720.89M |
Key Highlights
- 1Net sales for the quarter decreased by 3.8% to $7.5 billion, primarily due to the exit from the ODM personal computing business and a decline in High Velocity Solutions.
- 2Nine-month net sales increased by 6.0% to $23.1 billion, showing growth across all market segments.
- 3The company is actively exiting its ODM personal computing business, which incurred significant operating losses, with completion expected in Q3 fiscal 2012.
- 4Gross profit margin declined to 5.1% in the quarter, impacted by costs associated with exiting businesses and right-sizing activities.
- 5Flex Ltd. repurchased approximately $395.6 million of its ordinary shares during the nine-month period, indicating a focus on shareholder returns.
- 6The company's top ten customers accounted for approximately 56% of net sales in the nine-month period, highlighting customer concentration with Research In Motion and Hewlett-Packard being key accounts.