– Adjusted operating margin continues to expand at 3.1%, increasing 30 basis points year-over-year
– Adjusted EPS at $0.27, GAAP EPS at $0.22
– Strong free cash flow generation of $143 million
– Maintains commitment to return value to shareholders
San Jose, Calif. — Flex (NASDAQ: FLEX), a leading sketch-to-scale™ solutions company that designs and builds intelligent products for a connected world, today announced results for its second quarter ended September 25, 2015:
|(US$ in millions, except EPS)||Three Month Periods Ended|
|September 25||June 26||September 26|
|Adjusted operating income||$||196||$||159||$||183|
|GAAP operating income||$||180||$||143||$||172|
|Adjusted net income||$||153||$||134||$||157|
|GAAP net income||$||123||$||111||$||139|
An explanation and reconciliation of non-GAAP financial measures to GAAP financial measures is presented in Schedule II attached to this press release.
Second Quarter Fiscal 2016 Results of Operations
Flex’s net sales for the second quarter ended September 25, 2015 were just over $6.3 billion, above the mid-point of its previously provided revenue guidance of $5.9 billion to $6.5 billion. The Company’s adjusted earnings per diluted share of $0.27 was towards the high-end of the Company’s previously provided guidance of $0.22 to $0.28.
Second quarter adjusted operating income increased 7% year-over-year to $196 million and was above the midpoint of the guidance range of $165 to $205 million. Adjusted operating margin expanded 30 basis points year-over-year to 3.1%.
“Our strong performance this quarter was reflected in our quarterly revenue growth, improved operating margins and our continued ability to operate with discipline,” said Mike McNamara, chief executive officer at Flex. “We remain committed to our strategy of expanding our sketch-to-scale offering to include exciting new partnerships such as NIKE and others that clearly demonstrate Flex’s ability to provide innovative solutions for many product categories that go beyond electronics.”
“We generated $300 million in cash flow from operations and $143 million in free cash flow during the quarter,” said Chris Collier, chief financial officer at Flex. “Our consistent free cash flow generation reflects our strong discipline and execution and enables our shareholder return commitment. During the quarter we invested $142 million to repurchase almost 13 million shares, or over 2% of our ordinary shares.”
For the third quarter ending December 31, 2015, revenue is expected to be in the range of $6.2 to $6.8 billion and adjusted EPS is expected to be in the range of $0.28 to $0.34 per diluted share.
GAAP earnings per share is expected to be lower than the adjusted EPS guidance provided herein by approximately $0.06 per diluted share for estimated intangible amortization and stock-based compensation expense.
Conference Calls and Web Casts
A conference call hosted by Flex’s management team will be held today at 2:00 PM (PT) / 5:00 PM (ET) to discuss the Company’s financial results for the second quarter ended September 25, 2015. The conference call 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 a slide presentation may also be found on the Company’s site. A replay of the broadcast will remain available on the Company’s website afterwards.
Flextronics International Ltd. (“Flex” or the “Company”), Reg. No. 199002645H, is a leading sketch-to-scale™ solutions company that designs and builds intelligent products for a connected world. With approximately 200,000 professionals across 30 countries and a promise to help the world Live smarter™, the company provides innovative design, engineering, manufacturing, real-time supply chain insight and logistics services to companies of all sizes in various industries and end-markets. For more information, visit www.flextronics.com or follow us on Twitter @Flextronics.
This press release contains forward-looking statements within the meaning of U.S. securities law including statements related to the future expected revenues and earnings per share. 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. Readers are cautioned not to place undue reliance on these forward-looking statements. These risks include: that future revenues and earnings may not be achieved as expected; the challenges of effectively managing our operations, including our ability to control costs and manage changes in our operations; compliance with legal and regulatory requirements; that the expected revenue and margins from recently launched programs may not be realized; that recently proposed changes in tax laws in certain jurisdictions where we operate may materially impact our tax expense, and the effects that the current macroeconomic environment could have on our business and demand for our products as well as the effects that current credit and market conditions could have on the liquidity and financial condition of our customers and suppliers, including any impact on their ability to meet their contractual obligations. Additional information concerning these and other risks is described under “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our reports on Forms 10-K and 10-Q that we file with the U.S. Securities and Exchange Commission. The forward-looking statements in this press release are based on current expectations and Flex assumes no obligation to update these forward-looking statements. Our share repurchase program does not obligate the Company to repurchase a specific number of shares and may be suspended or terminated at any time without prior notice.
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