SINGAPORE, Flextronics today announced results for its second quarter ended September 28, 2007 as follows:
(US$ in millions, except EPS)
Three Month Periods EndedSix Month Periods Ended
SeptemberSeptember SeptemberSeptember
28, 200729, 200628, 200729, 2006
Net sales$5,557$4,702$10,714 $8,761
GAAP operating
income$161$29$295$146
Adjusted operating
income (1)$172$144$325$267
GAAP net income$121$185$228$269
Adjusted net
income (1)$146$117$280$220
Diluted GAAP EPS$0.20$0.31$0.37$0.46
Adjusted EPS (1)$0.24$0.20$0.46$0.38
(1) A reconciliation of non-GAAP financial measures to GAAP financial
measures is presented in Schedule II attached
to this press release.
Record Second Quarter Results
Net sales increased from the year ago quarter by $855 million, or 18%, to $5.6 billion in the second quarter ended September 28, 2007, which is at the high end of the Company's previously provided revenue guidance of $5.3-$5.6 billion. For the second quarter ended September 28, 2007, adjusted net income increased 25% over the year ago quarter to $146 million, or $0.24 per diluted share, compared to $117 million, or $0.20 per diluted share, in the year ago quarter. The Company's adjusted earnings per diluted share of $0.24 in the second quarter ended September 28, 2007 is at the high end of the Company's previously provided guidance of $0.22-$0.24.
Adjusted operating profit increased 20% from the year ago quarter to a record $172 million in the second quarter ended September 28, 2007 while adjusted operating margin increased sequentially 10 basis points to 3.1% from 3.0%. Operating cash flow was $371 million in the second quarter ended September 28, 2007 and $516 million in the six-month period ended September 28, 2007. Free cash flow (net cash flow from operating activities less net purchases of property, plant and equipment) amounted to $297 million in the second quarter ended September 28, 2007 and $370 million in the six-month period ended September 28, 2007.
Mike McNamara, chief executive officer of Flextronics, stated, "We continue to maintain a strong financial position with over $1 billion in cash, no short term debt maturities, and a record low debt to capital leverage ratio of 19%. Inventory turns improved to 8.0x while cash conversion cycle improved by two days sequentially to an industry leading 11 days. We remain intensely focused on generating a higher return on capital while growing our business, as evidenced by our return on invested capital of 11.2%, which increased 80 basis points from the previous quarter." McNamara concluded by stating, "I am very proud of the dedication and hard work of our employees and management across the globe in making this a very successful quarter for Flextronics. We believe we are executing very well on the controllable aspects of the business, which should provide an excellent foundation to add the capabilities of Solectron into the Flextronics framework."
Conference Calls and Web Casts
A conference call hosted by Flextronics's management will be held today at 1:30 p.m. PDT to discuss the Company's financial results for the second quarter ended September 28, 2007. Additionally, Flextronics will host its annual analyst and investor meeting on Tuesday, November 6, 2007 in New York City to present the Company's strategy and vision as well as the Company's revised financial guidance for the remainder of fiscal 2008 to reflect the previously announced Solectron acquisition, which was completed on October 1, 2007.
Both events will be broadcast via the Internet and may be accessed by logging on to the Company's website at :www.flextronics.com. Additional information in the form of slide presentations may also be found on the Company's site. Replays of the broadcasts will remain available on the Company's website afterwards.
Minimum requirements to listen to the broadcast are Microsoft Windows Media Player software (free download at www.microsoft.com/windows/windowsmedia/download/default.asp) and at least a 28.8 Kbps bandwidth connection to the Internet.
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