Flextronics Announces Fourth Quarter and Fiscal Year End Earnings
Fiscal Year Revenues Up Record 74% and Cash Net Income Up 97% Over The Prior Year
SINGAPORE, April 24 /PRNewswire Interactive News Release/ -- Flextronics (Nasdaq: FLEX), a world-class electronics manufacturing services provider focused on delivering end to end solutions to original equipment manufacturers, today announced results for its fourth quarter and fiscal year ended March 31, 2001, as follows:
($ in millions, Fourth Quarter Fiscal Year Ended March 31
except EPS Ended March 31 Ended March 31
data) (A)
2001 2000 Growth 2001 2000 Growth
Net sales $3,114.4 $2,228.7 40% $12,109.7 $6,959.1 74%
Cash operating
income $136.9 $95.7 43% $551.7 $303.9 82%
Cash net income $108.9 $72.6 50% $415.9 $210.9 97%
Diluted cash EPS $0.22 $0.17 29% $0.87 $0.55 58%
Note A The above earnings data is presented before amortization and
one-time charges.
Net sales for the fourth quarter ended March 31, 2001, reached $3.1 billion, up 40% from $2.2 billion the same quarter a year ago. Before amortization and one-time charges, cash operating income for the quarter was $137 million, a 43% increase; cash net income was $109 million, an increase of 50%; and diluted cash EPS was $0.22, up 29% from a year ago. For fiscal year 2001, net sales were a record $12.1 billion, up 74% from the previous year. Cash net income before amortization and one-time charges for the year increased 97% to $416 million, and diluted cash EPS improved by 58%.
In order to restructure operations primarily located in high cost regions, the Company took a one-time, after-tax charge in the fourth quarter of fiscal year 2001 of $276 million, of which less than $40 million were cash charges. The plan permanently reduces overall capacity by approximately 15%, and reduces headcount by approximately 10%. These reductions took place primarily in North America. A small charge in the range of $10 - $20 million will finalize the plans in the first quarter of fiscal year 2002. "We are taking the steps that we believe strong companies take, and that is to rapidly bring capacity in line with revenue expectations in order to maintain profitability," said Michael E. Marks, Chairman and Chief Executive Officer of Flextronics.
Mr. Marks provided his outlook for Flextronics: "Because of our diverse customer base, global presence, strength in low cost regions, diverse service offering and pipeline of new opportunities, we believe our revenue over the next couple quarters will be in line with that of the immediately preceding quarters. Thus, our outlook is much stronger than that of many of our competitors. This strength is a validation of the business model that we have been expounding since Flextronics became publicly traded. Looking forward, there continues to be consolidation of business to the top tier companies in the electronic manufacturing services industry, which includes Flextronics. This is driven by OEMs' desire to outsource, which is now accelerating because of the market downturn. With the resulting number of outsourcing programs under review, we continue to believe that calendar 2002 will be robust for our industry."
A conference call hosted by Flextronics' management will be held today at 2:15 p.m. PDT to further discuss the financial results of the Company and its future outlook. This call will be broadcast via the Internet and may be accessed by logging on to the Company's Web site at www.flextronics.com. Additional information in the form of a slide presentation and Chairman's Letter that summarizes and discusses the quarterly results may also be found on the site.
This news release, the Chairman's Letter to the Shareholders and the earnings slide presentation contain forward-looking statements within the meaning of federal securities laws and is subject to the safe harbor under those laws. These forward-looking statements include statements related to expected future revenue and profitability, Ericsson mobile phone business, new program wins, outlook and profitability of various business services, consolidation of business to top tier companies, accelerating outsourcing by OEMs, and company growth and momentum. These forward-looking statements involve risks and uncertainties that could cause the actual results to differ materially from those anticipated by these forward-looking statements. These risks include the challenges of integrating acquired companies, economic trends and fluctuations in demand for customer's products and changes in customers' product sources, competition in our industry, the difficulties of managing during uncertain economic conditions, including the challenges of implementing the restructuring plan, and the other risks described under "Management Discussion and Analysis of Financial Conditions and Results of Operations - Certain Factors Affecting Future Operating Results" in the most recent Annual Report on Form 10-K and quarterly report on Form 10-Q, filed with the SEC. The forward-looking statements in this news release and Chairman's Letter to the Shareholders are based on current expectations, and Flextronics assumes no obligation to update these forward-looking statements.
Schedule 1
FLEXTRONICS INTERNATIONAL LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH INCOME
BEFORE AMORTIZATION AND ONE-TIME CHARGES
(In thousands, except per share amounts)
(Unaudited)
Three months Fiscal year
ended March 31, ended March 31,
2001 2000 2001 2000
Net sales $3,114,434 $2,228,696 $12,109,699 $6,959,122
Cost of sales 2,864,048 2,041,323 11,127,896 6,335,242
Gross profit
before one-time
charges 250,386 187,373 981,803 623,880
Selling, general
and administrative
expenses 113,524 91,689 430,109 319,952
Cash operating income
before amortization
and one-time
charges 136,862 95,684 551,694 303,928
Interest expense and
other, net 26,863 12,889 89,546 69,912
Cash income before
income taxes,
amortization and
one-time charges 109,999 82,795 462,148 234,016
Provision for income
taxes 1,073 10,199 46,215 23,080
Cash net income
before amortization
and one-time
charges $108,926 $72,596 $415,933 $210,936
Diluted cash earnings
per share $0.22 $0.17 $0.87 $0.55
Weighted average
ordinary shares
and equivalents 502,811 427,521 479,859 383,119
Schedule 1a
FLEXTRONICS INTERNATIONAL LTD. AND SUBSIDIARIES
SUPPLEMENTAL DATA
(In thousands)
(Unaudited)
Three months Fiscal year
ended March 31 ended March 31
2001 2000 2001 2000
Cash net income before
amortization and
one-time charges $108,926 $72,596 $415,933 $210,936
Goodwill and
intangibles
amortization, net
of tax 26,525 12,050 63,541 41,326
Merger related costs
and other one-time
charges, net of
tax (A) 275,567 7,519 798,411 11,042
Net income (loss)
after amortization
and one-time
charges $(193,166) $53,027 $(446,019) $158,568
(A)The Company recorded one-time after-tax charges of $798.4 million
during the fiscal year ended March 31, 2001.Of this amount,
$440.7 million was recorded in the first quarter and comprised (i)
$286.5 million related to the issuance of an equity instrument to
Motorola and (ii) $176.6 million related to the Dii Group and Palo Alto
Products International mergers which were completed in April 2000,
offset by (iii) a gain of $22.4 million on the sale of marketable
equity securities. One-time after-tax charges of $42.4 million were
recorded in the second quarter for the Chatham Technologies and
Lightning Metal Specialties mergers that were completed in August 2000.
One-time after-tax charges of $39.8 million were recorded in the
third quarter primarily for the JIT Holdings Ltd merger completed in
November 2000.One-time after tax charges of $275.6 million were
recorded in the fourth quarter for facility closures and integration
costs of several of the Company's facilities around the world.
Approximately 10% of the Company's headcount and 15% of its square
footage was eliminated by these fourth quarter actions.
The Company also recorded one-time charges of $11.0 million in the
fiscal year ended March 31, 2000. Of this amount, $3.5 million related
to the second quarter merger with Kyrel and $7.5 million related to
facility closures and integration costs in the fourth quarter of an
acquired company prior to its merger with Flextronics.
Schedule 2
FLEXTRONICS INTERNATIONAL LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
March 31, March 31,
2001 2000
ASSETS
Current assets
Cash and cash equivalents $631,588 $747,049
Accounts receivable, net 1,651,252 1,057,949
Inventories 1,787,055 1,142,594
Other current assets 398,063 275,152
Total current assets 4,467,958 3,222,744
Property and equipment, net 1,828,441 1,323,732
Other non-current assets 1,285,267 588,467
TOTAL ASSETS $7,581,666 $5,134,943
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Bank borrowings & current portion
of long-term debt $298,052 $487,773
Current portion of capital lease obligations 27,602 24,037
Accounts payable 1,480,468 1,227,142
Other accrued expenses 735,184 322,257
Total current liabilities 2,541,306 2,061,209
Long-term debt and capital leases,
net of current portion 917,313 645,267
Other long-term liabilities 92,686 58,133
Shareholders' equity 4,030,361 2,370,334
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $7,581,666 $5,134,943
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SOURCE Flextronics |
