Summary
Flex Ltd. reported a modest increase in net income to $227 million for the third quarter ended December 31, 2021, a rise from $208 million in the prior year period. This was achieved despite a slight decrease in net sales, which fell to $6.6 billion from $6.7 billion year-over-year. The nine-month period showed stronger growth, with net sales increasing by 7% to $19.2 billion and net income more than doubling to $769 million from $373 million in the comparable period of 2020. The company's acquisition of Anord Mardix in December 2021 added $271.3 million in goodwill, expanding its industrial segment capabilities. Management highlighted ongoing supply chain disruptions, particularly component shortages and increased logistics costs, as persistent headwinds impacting operations. Despite these challenges, the company ended the period with a healthy cash and cash equivalents balance of $2.6 billion and is actively managing its working capital, which saw an increase in inventories due to supply chain pressures.
Key Highlights
- 1Net income for the third quarter increased by 9% to $227 million, while diluted EPS grew to $0.48.
- 2For the nine months ended December 31, 2021, net sales increased 7% to $19.2 billion, and net income more than doubled to $769 million.
- 3The company completed the acquisition of Anord Mardix in December 2021, adding $271.3 million in goodwill and enhancing its Industrial segment.
- 4Inventories increased significantly to $5.96 billion from $3.90 billion, driven by efforts to mitigate supply chain disruptions and component shortages.
- 5The company maintained a strong liquidity position with $2.57 billion in cash and cash equivalents as of December 31, 2021.
- 6Despite a slight overall decrease in Q3 net sales ($6.62B vs $6.72B), the Flex Reliability Solutions (FRS) segment saw a 5% increase driven by its Industrial business.
- 7The company reported ongoing challenges related to supply chain disruptions, component shortages, and elevated logistics costs, which are expected to persist.