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From the Wires
MFLEX Reports 28 Percent Year-Over-Year Increase in Net Sales for Fourth Quarter Fiscal 2008
Company Exceeds its Expectations with Highest Quarterly Net Sales and Full Year Net Income in its History
By: PR Newswire
Nov. 3, 2008 07:00 AM
Sequentially, from the third quarter to the fourth quarter of fiscal 2008, net sales increased 27.1 percent, which exceeded the Company's expectations. Net sales in the fourth quarter of fiscal 2008 were positively impacted by greater than expected volumes associated with a key customer's launch of a new smartphone and another consumer electronic device. During the fourth quarter of fiscal 2008, the Company's four largest customers each accounted for approximately 10 percent or more of net sales, with two of such customers each accounting for 25 percent or more of net sales. Net income for the fourth quarter of fiscal 2008 was Net income of -- -- -- "We are very pleased with our performance and execution this quarter,
which helped us to generate the highest level of quarterly net sales in our
history while maintaining strong gross margins," said Financial Highlights Gross margin during the fourth quarter of fiscal 2008 increased to 16.1 percent, from 8.5 percent for the same period in the prior year. The increase in gross margin is primarily attributable to a favorable product mix and improved yields. Sequentially, gross margin increased from 13.8 percent in the third quarter of fiscal 2008. The better than expected sequential quarter increase was primarily due to the higher sales volume favorably leveraging fixed overhead along with higher than expected yields on programs that began ramping in volume during the fourth quarter. MFLEX continues to believe that its sustainable gross margin range is 10 to 15 percent. Nevertheless, the Company expects that its gross margin may be outside this range from time to time -- either above or below-for a variety of reasons, including changes in its product mix and learning curves associated with new programs. Cash flow from operating activities for the fourth quarter of fiscal 2008
was For the fiscal year ended Outlook Commenting on the Company's business outlook, Mr. Meshgin said, "While I am happy with our recent progress, our business outlook is cautious due to ongoing uncertainty surrounding the global economy. Based on our current estimates, we expect fiscal 2009 first quarter net sales to be at least as high as the net sales level we achieved in the first quarter of fiscal 2008, yet decline on a sequential quarter basis. We also currently expect that first quarter gross margin percentage will fall within our targeted 10 to 15 percent range, based on our projected product mix and leveraging of manufacturing costs. "We are also mindful of the potential impact that a prolonged economic slowdown could have on consumer demand for mobile electronic devices and the resulting effect on our net sales. Accordingly, we are taking a more conservative approach to our near-term capacity expansion plans. We have made the decision to extend the completion date of our new MFC3 manufacturing facility, and manage development activities and requisite capital expenditures in discrete phases. We believe this approach enhances our flexibility until we have a higher level of confidence regarding future increases in demand from our existing customers or until meaningful relationships with new OEMs are established." Conference Call MFLEX will host a conference call at The webcast will be archived on the Company's website for at least 60 days
following the call. An audio replay of the conference call will be available
for seven days beginning at About MFLEX MFLEX (www.mflex.com) is a global provider of high-quality, technologically advanced flexible printed circuit and value-added component assembly solutions to the electronics industry. The Company is one of a limited number of manufacturers that provides a seamless, integrated end-to- end flexible printed circuit solution for customers, ranging from design and application engineering, prototyping and high-volume manufacturing to turnkey component assembly and testing. The Company targets its solutions within the electronics market and, in particular, focuses on applications where flexible printed circuits are the enabling technology in achieving a desired size, shape, weight or functionality of an electronic device. Current applications for the Company's products include mobile phones and smart mobile devices, medical devices, computer/data storage, portable bar code scanners and other handheld consumer electronic devices. MFLEX's common stock is quoted on the Nasdaq Global Select Market under the symbol MFLX. Certain statements in this news release are forward-looking statements
that involve a number of risks and uncertainties. These forward-looking
statements include, but are not limited to, statements and predictions
regarding revenues, net sales, sales, net income, earnings, gross profit, tax
rates and the benefits expected from the Company's reorganization,
restructuring and cost reduction efforts, the value of the Company's auction
rate securities, operating expenses, capital expenditures, profitability,
gross margins, including without limitation, the Company's targeted range of
gross margins, achievement of margins within or outside of such range and
factors that could affect gross margins, yields, the Company's diversification
efforts, the effect of the economy on demand for consumer products, the
Company's relationship and opportunities with, and expected sales to and
demand from, its customers, the relative size of each customer to the Company,
the Company's competitive advantages and market opportunities, the utilization
of flex and flex assemblies, current and upcoming programs and product mix,
the lifecycle of the Company's customers' products, the costs and benefits
associated with new programs, the Company's manufacturing capabilities,
capacity, costs and its ability to ramp production of flex and flex
assemblies, expansion of the Company's facilities/capacity and equipment
installation, and the costs associated therewith. Additional forward-looking
statements include, but are not limited to, statements pertaining to other
financial items, plans, strategies or objectives of management for future
operations, the Company's future operations and financial condition or
prospects, and any other statement that is not historical fact, including any
statement which is preceded by the words "assume," "can," "will," "plan,"
"expect," "estimate," "aim," "intend," "project," "foresee," "target,"
"anticipate," "may," "believe," or similar words. Actual events or results may
differ materially from those stated or implied by the Company's forward-
looking statements as a result of a variety of factors including the effect of
the economy on the demand for mobile electronic devices, the impact of changes
in demand for the Company's products and the Company's success with new and
current customers, the Company's ability to develop and deliver new
technologies, the Company's ability to diversify its customer base, the
Company's effectiveness in managing manufacturing processes and costs and
expansion of its operations, the Company's ability to manage quality assurance
issues, the degree to which the Company is able to utilize available
manufacturing capacity, enter into new markets and execute its strategic
plans, the impact of competition, pricing pressures and technological
advances, and other risks detailed from time to time in the Company's SEC
reports, including its Quarterly Report on Form 10-Q for the quarter ended
(SUMMARY FINANCIAL INFORMATION FOLLOWS)
Multi-Fineline Electronix, Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share and share data)
(unaudited)
Three Months Ended Year Ended
September 30, September 30,
2008 2007 2008 2007
Net sales $213,095 $166,716 $728,805 $508,147
Cost of sales 178,693 152,588 611,517 461,376
Gross profit 34,402 14,128 117,288 46,771
Operating expenses:
Research and development 752 701 2,470 2,499
Sales and marketing 3,756 4,234 17,957 12,544
General and administrative 8,366 6,182 30,518 24,216
Asset impairment and
restructure costs 2,180 - 2,180 -
Terminated acquisition
expenses - - - 7,821
Total operating
expenses 15,054 11,117 53,125 47,080
Operating income 19,348 3,011 64,163 (309)
Other income, net
Interest income, net 402 345 1,581 1,229
Other income (loss),
net (1,010) (435) (2,742) 200
Income before income
taxes 18,740 2,921 63,002 1,120
(Provision for)/benefit from
income taxes (11,100) 110 (22,523) 1,918
Net income $7,640 $ 3,031 $40,479 $3,038
Net income per share:
Basic $0.31 $0.12 $1.63 $0.12
Diluted $0.30 $0.12 $1.59 $0.12
Shares used in computing net
income per share:
Basic 24,993,420 24,572,747 24,828,732 24,520,040
Diluted 25,711,676 25,146,347 25,433,676 25,164,401
Multi-Fineline Electronix, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
(unaudited)
September 30, 2008 September 30, 2007
Cash, cash equivalents and short
term investments $62,090 $37,298
Accounts receivable, net 162,419 124,313
Inventories 59,774 63,424
Other current assets 13,000 9,523
Total current assets 297,283 234,558
Property, plant and equipment 160,217 133,633
Other assets and long-term investments 30,110 9,096
Total assets $487,610 $377,287
Accounts payable $128,642 $111,934
Other current liabilities 34,741 15,143
Other liabilities 13,909 204
Stockholders' equity 310,318 250,006
Total liabilities and
stockholders' equity $487,610 $377,287
Multi-Fineline Electronix, Inc.
Statement of Cash Flows
(in thousands, except per share and share data)
(unaudited)
Three months ended Twelve months ended
September 30, September 30,
2008 2007 2008 2007
Cash flows from operating
activities
Net Income $7,640 $3,031 $40,479 $3,038
Adjustments to reconcile
net income (loss) to net
cash provided by
operating activities
Depreciation and
amortization 9,902 6,052 31,150 20,447
Provision for doubtful
accounts (343) 618 216 696
Deferred taxes (4,778) (741) (4,810) (725)
Stock based compensation
expense 908 430 3,423 2,715
Impairment of long-term
investments 1,162 -- 1,162 --
Asset impairment and
restructuring costs 2,180 -- 2,180 --
Impairment of cost
investment -- -- 450 --
(Gain)/loss on disposal
of equipment 267 140 718 190
Changes in operating assets
and liabilities 3,252 2,333 7,421 20,329
Net cash provided by
operating
activities 20,190 11,863 82,389 46,690
Cash flows from investing
activities
Sale (purchase) of long-term
investments (821) (6,000) (6,300) 12,355
Cash paid for property, plant
and equipment (18,484) (19,614) (45,864) (55,711)
Purchases of software and
capitalized internal-use
software (817) (42) (1,183) (195)
Deposits on property, plant and
equipment 506 2,454 (2,086) (1,713)
Proceeds from sale of
equipment 102 52 300 369
Decrease (increase) in
restricted cash, net 2,342 75 2,355 (188)
Net cash used in
investing
activities (17,172) (23,075) (52,778) (45,083)
Cash flows from financing
activities
Income tax benefit related
to stock option exercise 1,559 95 1,623 53
Payments on lines of credit -- -- -- (4,000)
Proceeds from exercise of
stock options 180 163 2,182 638
Net cash provided by
(used in)
financing activities 1,739 258 3,805 (3,309)
Effect of exchange rate
on cash 745 1,448 719 5,197
Net change in cash 5,502 (9,506) 34,135 3,495
Cash and cash equivalents at
beginning of period 56,588 37,461 27,955 24,460
Cash and cash equivalents
at end of period $62,090 $27,955 $62,090 $27,955
SOURCE Multi-Fineline Electronix, Inc.
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