8-K/AFinancial Events

FLEX LTD. 8-K/A Report, Exit or Disposal Costs (May 20, 2009)

Filed May 20, 2009For Securities:FLEX

Summary

This Form 8-K/A filing from Flextronics International Ltd. (FLEX) provides an amendment and additional details regarding a previously announced restructuring program. The company has recognized significant restructuring charges of $150.6 million for its fiscal fourth quarter ended March 31, 2009, primarily driven by employee termination costs and asset write-downs. This amendment clarifies the timing and estimated amounts of these charges, including cash and non-cash components. Investors should note that the company anticipates further restructuring charges between $70.0 million and $100.0 million in fiscal year 2010, with a majority expected in the first quarter. This includes both cash expenditures for severance and contractual obligations, and non-cash charges for asset impairments. The filing indicates that the overall restructuring plan is not expected to change significantly, but ongoing execution and macroeconomic conditions remain key risks.

Key Highlights

  • 1Flextronics incurred $150.6 million in restructuring charges during the fiscal fourth quarter ended March 31, 2009.
  • 2The charges include $80.6 million for employee termination costs, $53.1 million for property and equipment write-downs, and $16.8 million for contractual obligations.
  • 3Of the total charges, $95.2 million were cash charges, with $25.5 million paid by March 31, 2009, and $69.7 million accrued.
  • 4An additional $64.9 million of accrued cash charges are expected to be paid in fiscal year 2010.
  • 5The company estimates further restructuring charges of $70.0 million to $100.0 million in fiscal year 2010.
  • 6The majority of the fiscal year 2010 charges are expected in the first quarter of FY2010.
  • 7The restructuring aims to rationalize global manufacturing capacity and infrastructure due to macroeconomic conditions.

Frequently Asked Questions

This filing amends a prior 8-K report to provide updated and more specific financial details regarding Flextronics' restructuring program, including actual costs incurred in the fiscal fourth quarter of 2009 and estimates for fiscal year 2010.

In the fiscal fourth quarter ended March 31, 2009, Flextronics recognized $150.6 million in restructuring charges, with $128.8 million categorized as cost of sales and $21.8 million as selling, general, and administrative expenses.

Flextronics anticipates incurring an additional $70.0 million to $100.0 million in restructuring charges during fiscal year 2010, with the majority expected in the first quarter of FY2010. This includes both cash and non-cash components.

Yes, the company notes that forward-looking statements are subject to risks and uncertainties, including uncertain global and economic market conditions, the ability to implement the plan, employee retention, and changes in business requirements. These factors could cause actual results to differ materially from projections.