Flextronics Posts Profit, Gets a Tan

SINGAPORE -- Flextronics (Nasdaq: FLEX), a global provider of operational services focused on delivering design, engineering, manufacturing and logistic solutions to technology companies, today announced results for the quarter and year ended March 31, 2003. Net sales totaled $3.1 billion and $13.4 billion for the quarter and fiscal year ended March 31, 2003, respectively. This represents a 2% increase in sales for fiscal 2003. For the quarter ended March 31, 2003, diluted earnings per share on a GAAP basis increased to 4 cents from 1 cent in the quarter ended March 31, 2002. For the fiscal year ended March 31, 2003, the Company's GAAP net loss was reduced to 16 cents per diluted share from 31 cents per diluted share in the fiscal year ended March 31, 2002. During the fiscal year, the Company generated $608 million of cash flow from operations and ended the quarter with an industry leading cash conversion cycle of 26 days. At the end of the quarter, the Company had $424 million in cash. Total debt was reduced by $6 million during the quarter, leverage remained at 20% and liquidity increased to more than $1.3 billion at quarter end. During the quarter, the Company renewed and increased its revolving line-of-credit from $800 million to $880 million. "The March quarter operating results were in line with our expectations and reflected general end-market demand slow down, coupled with the seasonality of consumer related demand," said Michael E. Marks, Chief Executive Officer of Flextronics. "I continue to believe that our business is pretty stable as we continue to win new customers and new programs offsetting demand weaknesses. We remain profitable on a proforma operating basis and are generating cash, while making excellent progress on several initiatives, including our ODM (Original Design Manufacturing) strategy and expanding our non-consumer related client base. These two initiatives should contribute to stronger and more seasonally stable operating results going forward." Mr. Marks added, "I believe that Flextronics is well positioned to serve its customers with world class capabilities in manufacturing, combined with an expansive global footprint, and a broad service offering which includes design services, manufacturing, and logistics management." In terms of earnings guidance, the Company indicated that sales in the June 2003 quarter should be in the range of $3.0 to $3.3 billion and proforma diluted earnings per share should be in the range of 5 to 8 cents (which excludes amortization of intangibles of approximately one cent). For the full fiscal year ending March 2004, the Company is targeting earnings per share growth in the range of 20% on a revenue base of approximately $14 billion. Finally, the Company announced today the appointment of Lip-Bu Tan to the Board of Directors, effective April 3rd, replacing departing director, Tommie Goh, who had joined the board as part of the Company's acquisition of JIT Holdings. Lip-Bu Tan is the Founder and Chairman of Walden International, which manages over $1.8 billion in venture capital funds. Mr. Tan has been active in the venture capital industry for the past two decades, and has been a lead investor and/or board member in more than 50 companies. He has pioneered the U.S. venture capital concept in Asia, and promotes early-stage technology investing in the Asia-Pacific region. The Company believes that Mr. Tan will add significantly to the strength of its board. Flextronics Corp.