MFLEX Reports Record Net Sales for Fiscal 2010 First Quarter
First quarter net sales of $229.5 million, highest in Company history; Strong earnings per share of $0.63
ANAHEIM, Calif., Feb. 4 /PRNewswire-FirstCall/ -- Multi-Fineline Electronix, Inc. (Nasdaq: MFLX), a leading global provider of high-quality, technologically advanced flexible printed circuit and value-added component assembly solutions to the electronics industry, today reported financial results for the fiscal 2010 first quarter ended December 31, 2009. Net sales in the first quarter of fiscal 2010 were $229.5 million, a record quarterly amount for the Company and a 6.0 percent increase from net sales of $216.6 million in the same period of the prior year. The increase in net sales was primarily due to significantly higher sales to two major customers (consistent with recent trends) partially offset by substantially lower sales to one customer. Net sales in the first quarter of fiscal 2010 grew approximately 15 percent sequentially from $199.2 million in the fourth quarter of fiscal 2009 due primarily to higher sales of flex assemblies for smartphones and other consumer electronic devices that are experiencing strong marketplace demand.
Net income for the first quarter of fiscal 2010 was $16.3 million, or $0.63 per diluted share, compared to net income of $14.1 million, or $0.56 per diluted share, for the same period in fiscal 2009.
"In what is historically our strongest quarter of the year, we executed very well and delivered on record demand during the December quarter for our flex assemblies for smartphones and other consumer electronic devices, driving net sales to the highest quarterly level in the history of the Company," said Reza Meshgin, Chief Executive Officer of MFLEX. "Our success in the first quarter was due in part to our ability to efficiently meet our OEM customers' high-volume production requirements for complex flex assemblies, which we believe helps give us a competitive advantage and expand our business. Gross margin of 15.9 percent was at the high end of our expected range and our ongoing focus on improving yields and labor productivity continued to mitigate the pressure on our gross margin from a higher material content in the product mix during the quarter. This operational excellence coupled with effective cost management helped generate net income of $16.3 million, or $0.63 per diluted share."
Financial Highlights
Gross margin during the first quarter of fiscal 2010 was 15.9 percent, compared to 15.3 percent for the same period in the prior year. The year-over-year increase in gross margin is primarily due to improved yields and labor productivity partially offset by the higher material content of programs during the quarter. Sequentially, gross margin increased from 14.1 percent in the fourth quarter of fiscal 2009 due primarily to the leveraging of manufacturing costs over higher sales volumes and a favorable product mix.
The Company remains committed to maintaining a strong balance sheet and liquidity position. At December 31, 2009, cash and cash equivalents grew to $141.0 million, or $5.47 per diluted share.
Outlook
The Company has fine-tuned its outlook for the second quarter of fiscal 2010. Based on its most recent forecast, the Company now expects net sales to be closer to the bottom of the $160 to $180 million range provided last month. In addition, based on this expected sales volume and product mix, second quarter gross margin is projected to be approximately 13 percent.
Commenting on the Company's business outlook, Mr. Meshgin noted, "With the benefit of an additional four weeks since providing guidance in early January, we now have greater visibility on our second quarter outlook and we have fine-tuned our projections for net sales and gross margin. Our second quarter guidance reflects the normal seasonality after the holidays, the Chinese New Year in February, as well as some programs approaching the end of their life cycle. However, we believe our market share is unchanged with our major customers and fully expect to participate on follow-on programs that are projected to be launched during 2010.
"We continue to expect year-over-year net sales growth in the second half of fiscal 2010 and we are very optimistic about our longer-term opportunities to profitably grow our business. We are continuing to work aggressively to demonstrate the broad applications for our products and services. Given our positive outlook for growth, construction of our new state-of-the art manufacturing facility, MFC3, is progressing on schedule. In addition to expanded manufacturing capacity, we believe MFC3 will provide the advanced technological capabilities necessary to accommodate a larger customer base in the future," said Mr. Meshgin.
Conference Call
MFLEX will host a conference call at 5:30 p.m. Eastern time (2:30 p.m. Pacific time) today to review its financial results for the first quarter of fiscal 2010. The dial-in number for the call in North America is 1-877-941-8632 and 1-480-629-9821 for international callers. The call also will be webcast live on the Internet and can be accessed by logging onto www.mflex.com.
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 7:30 p.m. Eastern time (4:30 p.m. Pacific time) today. The audio replay dial-in number for North America is 1-800-406-7325 and 1-303-590-3030 for international callers. The replay passcode is 4204780.
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; cash balances, cash flow and uses of cash; tax rates; operating expenses; capital expenditures; inventory levels; profitability; gross margins, including factors that could affect gross margins; yields; labor productivity and operating efficiencies; growth and diversification of the Company's customer base; the Company's relationship and opportunities with, and expected demand, orders from and trends with, its customers (including the effect of seasonality and product life cycles on demand); demand for smartphones and other consumer electronic devices; the Company's competitive advantages and market opportunities; expected benefits from the acquisition of Pelikon and the MorphPad™ display; the utilization of flex and flex assemblies; current and upcoming programs, product mix and the material content and ramping thereof; the Company's manufacturing capabilities, capacity and ability to ramp/expand production of flex and flex assemblies and capacity; and plans regarding expansion of the Company's manufacturing facilities. 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 or seasonality on the demand for electronic devices, the Company's success with new and current customers and those customers' success in the marketplace, the Company's ability to develop and deliver new technologies, the Company's ability to diversify its customer base and markets, 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 December 31, 2009. These forward-looking statements represent management's judgment as of the date of this news release. The Company disclaims any intent or obligation to update these forward-looking statements.
Contact: |
Lasse Glassen |
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Investor Relations |
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Tel: 213-486-6546 |
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Email: [email protected] |
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(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
December 31,
2009 2008
---- ----
Net sales $229,498 $216,630
Cost of sales 193,025 183,557
------- -------
Gross profit 36,473 33,073
Operating expenses
Research and development 2,835 1,171
Sales and marketing 6,685 5,335
General and administrative 5,883 7,019
Impairment and restructuring costs - 311
--- ---
Total operating expenses 15,403 13,836
------ ------
Operating income 21,070 19,237
Other income (expense), net
Interest expense (277) (18)
Interest income 86 386
Other income (expense), net 190 (1,482)
--- ------
Income before income taxes 21,069 18,123
Provision for income taxes (4,756) (4,032)
------ ------
Net income $16,313 $14,091
======= =======
Net income per share:
Basic $0.65 $0.56
Diluted $0.63 $0.56
Shares used in computing net income
per share:
Basic 25,269,783 25,066,968
Diluted 25,755,033 25,290,875
Multi-Fineline Electronix, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
(unaudited)
December 31, September 30,
2009 2009
---- ----
Cash and cash equivalents $140,975 $139,721
Short-term investments 11,689 11,812
Accounts receivable, net 132,413 129,270
Inventories 36,070 50,285
Other current assets 18,780 17,475
------ ------
Total current assets 339,927 348,563
Property, plant and equipment 161,359 150,099
Other assets 26,611 27,268
------ ------
Total assets $527,897 $525,930
======== ========
Accounts payable $105,485 $122,524
Other current liabilities 34,960 24,003
------ ------
Total current liabilities 140,445 146,527
Notes payable - 10,852
Other long-term liabilities 10,711 9,563
Stockholders' equity 376,741 358,988
------- -------
Total liabilities and stockholders'
equity $527,897 $525,930
======== ========
Multi-Fineline Electronix, Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(unaudited)
Three Months Ended
December 31,
------------
2009 2008
---- ----
Cash flows from operating activities
Net Income $16,313 $14,091
Adjustments to reconcile net income
to net cash provided by operating activities
Depreciation and amortization 12,043 9,732
Provision for doubtful accounts 2,079 (233)
Deferred taxes (88) (124)
Stock-based compensation expense 1,376 710
Impairment and restructuring costs - 1,365
(Gain) loss on disposal of equipment (145) 72
Changes in operating assets and liabilities (19,122) (5,383)
------- ------
Net cash provided by operating activities 12,456 20,230
Cash flows from investing activities
Sale of short-term investments 150 -
Purchases of property and equipment (1) (11,709) (10,041)
Proceeds from sale of equipment 234 15
Change in restricted cash, net - (59)
Acquisition of business, net of cash acquired - (872)
--- ----
Net cash used in investing activities (11,325) (10,957)
Cash flows from financing activities
Proceeds from exercise of stock options 945 164
Tax withholdings for net share settlements of
equity awards (905) -
---- ---
Net cash provided by financing activities 40 164
Effect of exchange rate changes on cash 83 (29)
--- ---
Net increase in cash 1,254 9,408
Cash and cash equivalents at beginning of
period 139,721 62,090
------- ------
Cash and cash equivalents at end of
period $140,975 $71,498
======== =======
(1) Excludes $11,015 of capital expenditures accrued but not paid as of
December 31, 2009.
SOURCE Multi-Fineline Electronix, Inc.
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