SAN JOSE, Calif.–Flex (NASDAQ: FLEX) announced results for its third quarter ended December 31, 2018.
“During the quarter, we grew revenues, improved the quality of our sales mix, expanded margins, returned to free cash flow generation, and streamlined our investment portfolio,” said Michael Capellas, Chairman of Flex. “These results reflect our intense focus on execution in our core businesses.”
Third Quarter Fiscal 2019 Highlights:
- Net Sales: $6.9 billion, year over year growth of 3 percent
- Communications and Enterprise Compute: year over year revenue growth of 14 percent
- Industrial and Emerging Industries: year over year revenue growth of 11 percent
- High Reliability Solutions: year over year revenue down 1 percent with strong growth in Health Solutions offset by weakness in Automotive
- Consumer Technologies Group: year over year revenue down 12 percent
- GAAP Loss Before Income Taxes: $32 million
- Adjusted Operating Income: $256 million, year over year growth of 17 percent
- GAAP Net Loss: $45 million
- Adjusted Net Income: $181 million, year over year growth of 10 percent
- GAAP Net Loss Per Share: $0.09
- Adjusted EPS: $0.34
An explanation and reconciliation of non-GAAP financial measures to GAAP financial measures is presented in Schedules II and V attached to this press release.
Balance Sheet and Other Financial Highlights
Flex ended the quarter with approximately $1.5 billion of cash on hand and total debt of approximately $2.9 billion.
Adjusted cash flow from operations and free cash flow was $274 million and $119 million, respectively, for the three-month period ended December 31, 2018, and $379 million and negative $126 million, respectively, for the nine-month period ended December 31, 2018. Cash flow from operations was negative $621 million and negative $2.3 billion for the three-month and nine-month periods ended December 31, 2018, respectively, as cash collections for certain receivables sold under our ABS programs are reported as investing activities.
The Company remains committed to return over 50% of annual free cash flow to its shareholders as it repurchased ordinary shares for approximately $64 million and $124 million during the three-month and nine-month periods ended December 31, 2018.
“We are pleased with the results of our third quarter, which exceeded expectations on multiple levels. Our core business remains sound and is performing very well, and our balance sheet is positioned to support the business over the long term,” said Chris Collier, Chief Financial Officer.
Fourth Quarter Fiscal 2019 Guidance
- Revenue $6.2 billion to $6.6 billion
- GAAP Income Before Income Taxes $110 million to $140 million
- Adjusted Operating Income $195 million to $225 million
- GAAP EPS $0.18 to $0.21 which includes stock-based compensation expense and intangible amortization
- Adjusted EPS $0.25 to $0.28