Flextronics International Announces
Increased Fourth Quarter Revenues and
Record Financial Results for FY1999
Net Profit For Year Grows 68%, Earnings Per Share Up 40%
SAN JOSE, Calif., April 22 /PRNewswire/ -- Flextronics International Ltd. (Nasdaq: FLEX - news), a world-class
electronics manufacturing services (EMS) provider offering global multinational companies complex manufacturing
services throughout the world, today announced its results for both its fourth fiscal quarter and for the fiscal year
ended March 31, 1999, as follows:
Mar '99 Mar '98 Growth FYE99 FYE98 Growth
Qtr Qtr
Revenue (mils) $508.7 $331.1 54% $1,808 $1,113 62%
Operating Profit 21.1 15.9 33% 83.0 51.5 61%
Net Income(a) 16.9 10.9 54% 56.9 33.8 68%
Free Cash Flow(b) 30.7 19.9 54% 107.4 64.7 66%
Diluted E.P.S.(a) 0.33 0.26 27% 1.23 0.88 40%
Adjusted EPS(c) 0.35 0.29 21% 1.31 0.98 34%
EPS. Incl OTC(d) 0.22 0.02 1000% 1.12 0.52 115%
(In millions except per share amounts)
a Before One Time Charges.
b Net Income before One Time Charges Plus Amortization and Depreciation
c Adjusted Diluted E.P.S. excludes tax-effected Goodwill and Intangible
Amortization and One Time Charges
d Diluted EPS includes One Time Charges of $5.4M in the fiscal 1999 and
$13.9M in fiscal 1998
For fiscal year 1999, Flextronics had an increase in revenue of 62%, net income increased 68% to $56.9 million, and
EPS increased to $1.23, up from $0.88 last year.
''We are extremely pleased with the most recent quarter,'' said Michael Marks, Chairman and CEO of Flextronics.
''Revenue grew faster than we anticipated coming into the quarter, and customer wins continued unabated.'' Mr.
Marks continued, ''This positions us well for the future as the world's largest electronics companies, particularly those
in the telecom segment, increase their outsourcing activities.''
Gross margin in the quarter was 8.2% of sales and S,G,&A increased to 3.9% as a result of the significant number of
startup programs. These new programs offset seasonal weakness in the consumer product segment of the business,
but do not contribute to profits in their early stages. However, these new programs will help fuel revenue and profit
growth in coming quarters.
Substantial growth is also expected to come from increasing penetration into the customer base established in the past
few years. Flextronics expects to continue to expand with new startups, and new relationships will continually be
developed. Large new orders are expected to also come from current customers, like the two announcements made
this week, regarding the Palm connected organizers and Ericsson GSM base stations. As a result of the recent
Ericsson Visby acquisition, Flextronics will now produce a full line of cellular infrastructure products, along with
PBX's and DECT phones in the Karlskrona operation.
Flextronics continues to see substantial growth in Mexico and Central Europe. Customers see these locations as the
best compromise between low cost and proximity to end-markets. As a consequence, the Company has substantial
expansions underway in the Industrial Parks in Guadalajara, Mexico and Zalaegerzeg, Hungary.
Brazil, which has suffered setbacks in consumer spending, has been particularly strong for Flextronics. The major
source of revenue is from the build out of telecommunication infrastructure, which is somewhat independent of the
short term economic performance of the country.
Networking business in the quarter grew from 19% in the December quarter to 26% in the most recent quarter.
Production in the Americas grew to 39% of production in the March quarter.
Further discussion of the Company's results can be obtained from the Company Web site,
flextronics.com. This includes the Chairman's letter to shareholders for the March quarter and for the
1999 fiscal year.
This news release contains forward-looking information within the meaning of Section27A of the Securities Act of
1933 and Section21E of the Securities Exchange Act of 1934, and is subject to the safe harbor created by those
sections. These forward-looking statements include statements related to expected new orders and relationships, future
sales and operating results, and company and industry growth. These forward-looking statements involve risks and
uncertainties, including those described from time to time in Flextronics' filings with the Securities and Exchange
Commission (SEC) that could cause the actual results to differ materially from those anticipated by these forward-
looking statements. In particular, see ''Management Discussion and Analysis of Financial Conditions and Research
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. Flextronics assumes no obligation to update the information
contained in these documents.
FLEXTRONICS INTERNATIONAL LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
March 31, March 31,
1999 1998
ASSETS
Current assets
Cash and cash equivalent $172,984 $89,390
Accounts receivable, net 225,790 155,126
Inventories 192,766 157,077
Other current assets 62,492 37,941
Total current assets 654,032 439,534
Property and equipment, net 367,507 255,573
Other non-current assets 72,840 49,016
Total non-current assets 440,347 304,589
TOTAL ASSETS $1,094,379 $744,123
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Bank borrowings $49,383 $29,211
Current portion of capital
lease and long-term debt 14,511 23,585
Accounts payable 251,795 177,084
Other accrued expenses 97,198 85,118
Total current liabilities 412,887 314,998
Long term debt and capital
leases, less current portion 197,179 189,678
Other long term liabilities 18,062 24,638
Shareholders' equity 466,251 214,809
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $1,094,379 $744,123
FLEXTRONICS INTERNATIONAL LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
Three months ended Twelve months ended
March 31, March 31, March 31, March 31,
1999 1998 1999 1998
Net sales $508,700 $331,058 $1,807,628 $1,113,071
Cost of sales 466,758 298,675 1,652,891 1,004,170
Gross Margin 41,942 32,383 154,737 108,901
Operating Expenses:
Selling, general and
administrative
expenses 19,814 15,552 68,121 53,695
Goodwill & intangibles
amortization 982 955 3,622 3,659
Total Operating
Expenses 20,796 16,507 71,743 57,354
Operating income 21,146 15,876 82,994 51,547
Interest expense and
other, net 1,966 3,385 18,333 13,335
Income before income
taxes 19,180 12,491 64,661 38,212
Provision for income
taxes 2,302 1,555 7,770 4,411
Net income before one
time charges $16,878 $10,936 $56,891 $33,801
Diluted EPS before
one time charges $0.33 $0.26 $1.23 $0.88
Basic EPS before
one time charges $0.35 $0.28 $1.31 $0.93
Memo : Diluted Adjusted
E.P.S. (net income per
share before one time
charges and tax-effected
goodwill and intangible
amortization) $0.35 $0.29 $1.31 $0.98
Merger related expenses -- 3,416 -- 7,172
In-Process R&D 2,000 -- 2,000 --
Provision for excess
facilities 3,361 8,869 3,361 8,869
Tax effect on one time
charge -- (2,153) -- (2,153)
Net income after income
taxes $11,517 $804 $51,530 $19,913
Diluted EPS $0.22 $0.02 $1.12 $0.52
Weighted average
ordinary Shares
and equivalents
- Diluted 51,680 41,598 46,163 38,194
Weighted average
ordinary Shares
and equivalents
- Basic 47,916 39,588 43,569 36,526
SOURCE: Flextronics International Ltd.
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