Summary
Flex Ltd. reported solid revenue growth for the nine-month period ended December 31, 2017, with net sales increasing by 6% to $19.0 billion. This growth was primarily driven by strong performance in the Industrial and Emerging Industries (IEI), Consumer Technologies Group (CTG), and High Reliability Solutions (HRS) segments, offsetting a decline in the Communications & Enterprise Compute (CEC) segment. The company's net income for the nine-month period was $448.1 million, a significant increase from $232.7 million in the prior year, largely influenced by a substantial gain from the deconsolidation of an investment in Elementum and a gain from the sale of Wink. Financially, Flex Ltd. maintained a healthy liquidity position with $1.3 billion in cash and cash equivalents as of December 31, 2017. While free cash flow saw a decrease year-over-year due to higher capital expenditures and increased working capital, the company remains confident in its ability to fund operations and future growth through existing cash, operational cash flows, and available credit facilities. The company also announced a restructuring plan to optimize its cost base in lower-growth areas and streamline functions, expecting to incur charges of at least $50 million in the fourth quarter of fiscal year 2018.
Financial Highlights
49 data points| Revenue | $6.75B |
| Cost of Revenue | $6.31B |
| Gross Profit | $446.33M |
| SG&A Expenses | $247.37M |
| Interest Expense | $32.10M |
| Net Income | $118.33M |
| EPS (Basic) | $0.22 |
| EPS (Diluted) | $0.22 |
| Shares Outstanding (Basic) | 528.40M |
| Shares Outstanding (Diluted) | 534.35M |
Key Highlights
- 1Net sales increased by 6% to $19.0 billion for the nine-month period ended December 31, 2017, driven by growth across multiple segments.
- 2Net income more than doubled to $448.1 million for the nine-month period ended December 31, 2017, significantly boosted by a $151.6 million gain from the deconsolidation of Elementum.
- 3The company reported $1.3 billion in cash and cash equivalents as of December 31, 2017, indicating a solid liquidity position.
- 4Free cash flow for the nine-month period decreased to $42 million from $628 million in the prior year, primarily due to increased capital expenditures and working capital needs.
- 5Flex Ltd. announced a restructuring plan expected to incur at least $50 million in charges in Q4 FY18 to streamline operations and reduce costs.
- 6Goodwill increased to $1.1 billion as of December 31, 2017, reflecting acquisitions, notably AGM Automotive and a Power Modules business.
- 7Diluted earnings per share for the nine-month period were $0.84, up from $0.42 in the prior year.