EXHIBIT 99.01
PRESS RELEASE
[FLEXTRONICS LETTERHEAD]
FLEXTRONICS CONTACTS:
Thomas J. Smach
Senior Vice President of Finance
+1.408.576.7722
investor_relations@flextronics.com
Renee Brotherton
Senior Director of Corporate Marketing
+1.408.576.7189
renee.brotherton@flextronics.com
- --------------------------------------------------------------------------------
FLEXTRONICS ANNOUNCES FOURTH QUARTER RESULTS
- REVENUES GROW 23%; PROFORMA PROFITS GROW 187%
-EXCEEDS HIGH-END OF EXPECTATIONS
-FISCAL 2005 GUIDANCE INCREASED
SINGAPORE, APRIL 27, 2004 - Flextronics (NASDAQ: FLEX) today announced results
for its fourth quarter and fiscal year ended March 31, 2004, as follows:
<Table>
<Caption>
(In millions, except EPS) THREE MONTHS ENDED TWELVE MONTHS ENDED
--------------------------------------------------------------------------
MARCH 31, MARCH 31, MARCH 31, MARCH 31,
2004 2003 2004 2003
--------------------------------------------------------------------------
Net sales $3,768.2 $3,059.6 $14,530.4 $13,378.7
Proforma operating income (1) $ 98.6 $ 50.0 $ 338.6 $ 272.1
GAAP operating income (loss) $ 16.6 $ 50.0 $ (201.8) $ (32.3)
Proforma net income (1) $ 72.8 $ 25.4 $ 234.8 $ 161.6
GAAP net income (loss) $ 16.0 $ 19.5 $ (352.4) $ (83.5)
Diluted proforma EPS (1) $ 0.13 $ 0.05 $ 0.42 $ 0.31
Diluted GAAP EPS $ 0.03 $ 0.04 $ (0.67) $ (0.16)
</Table>
(1) Proforma results exclude after-tax intangibles amortization and
restructuring and other charges, as applicable. See Schedules 1 and 2
attached to this press release for a reconciliation of proforma
results to Generally Accepted Accounting Principles ("GAAP") results.
FOURTH QUARTER AND FISCAL 2004 RESULTS
Net sales for the fourth quarter were a record $3.8 billion, which represents an
increase of $708.6 million, or 23% over the March 2003 quarter. Net sales for
the fiscal year reached a record $14.5 billion, which represents an increase of
$1.2 billion, or 9% over fiscal 2003.
Proforma net income was $72.8 million, or $0.13 per diluted share for the fourth
quarter, which represents an increase of $47.4 million, or 187% over the March
2003 quarter. Including after-tax amortization expense of $8.8 million and
previously announced restructuring costs of $48.0 million, GAAP net income in
the fourth quarter was $16.0 million, or $0.03 per diluted share, as compared to
GAAP net income of $19.5 million, or $0.04 per diluted share in the March 2003
quarter.
PRESS RELEASE
[FLEXTRONICS LETTERHEAD]
The quarterly results reflect continued industry-leading working capital
management, with a cash conversion cycle of 16 days and inventory turns of 12
times.
"Our financial results continue to improve as we realize the earnings leverage
embedded in our business. Quarterly revenues grew 23% on a year-over-year basis,
while proforma profits nearly tripled. Both operating margin and revenues were
stronger than expected, as the quarter ended less seasonal than expected for
handsets and other consumer related products. While we executed well in the
quarter, delivering improved operating performance and maintaining
industry-leading working capital management, we remain focused on continually
improving operating results going forward. Our pipeline is solid and we are
winning business from new and existing customers across many end markets. The
combination of improving demand, better pricing trends, and strength in our
higher value-add supply chain services, including our ODM business, should
continue to drive momentum in our operating leverage, leading to increased
margins and profits," said Michael E. Marks, Chief Executive Officer of
Flextronics.
INCREASING OUTLOOK
The Company has increased its sales expectations for the June 2004 quarter by
approximately $150 million and increased it proforma EPS expectations by $0.02.
In addition, the Company indicated that each of the other three remaining
quarters in fiscal 2005 are also expected to exceed the existing First Call
consensus by approximately $100 million in sales per quarter and $0.01 in
proforma EPS per quarter. This represents an annual increase in expectations of
$450 million in sales and $0.05 in proforma EPS for the Company's fiscal year
ending on March 31, 2005.
Quarterly GAAP earnings are expected to be lower than proforma earnings by
approximately $0.02 per diluted share reflecting amortization expense.
CONVERSION OF NOTES
Flextronics also announced today that it intends to convert all of the
outstanding 0% Convertible Junior Subordinated Notes issued in March 2003 into
approximately 19 million shares of common stock. The Company plans to file a
Registration Statement on Form S-3 tomorrow to register the shares, and the
conversion will be completed after the Securities and Exchange Commission
declares the Form S-3 effective. The conversion will not impact Flextronics'
diluted EPS, as the stock equivalents have always been included in the diluted
EPS calculation.
"We have been working with the Company for the last 18 months and believe that
there are numerous ways that we can continue to help the Company realize its
growth and profit potential. Flextronics has performed exceptionally well since
early 2003, and we fully expect that the Company will build on its
industry-leading position both in the near-term and the longer-term. Although
the forced conversion of our investment provides us liquid common stock, we have
no current intention to sell or distribute our position at this time," said Jim
Davidson, Managing Director, Silver Lake Partners.
CONFERENCE CALL AND WEB CAST
A conference call hosted by Flextronics' management will be held today at 1:30
p.m. PDT to discuss the Company's financial results and its outlook. This 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 and CEO's Letter to Shareholders that summarizes and
discusses the quarterly results may also be found on the site. A replay of the
broadcast will remain available on the Company's website after the call.
Minimum requirements to listen to the broadcast are Microsoft Windows Media
Player software (free download at
http://www.microsoft.com/windows/windowsmedia/download/default.asp) and at least
a 28.8 Kbps bandwidth connection to the Internet.
ABOUT FLEXTRONICS
Headquartered in Singapore, Flextronics is the leading Electronics Manufacturing
Services (EMS) provider focused on delivering operational services to technology
companies. With fiscal year 2004 revenues of $14.5 billion, Flextronics is a
major global operating company with design, engineering, manufacturing and
logistics operations in 29 countries and five continents. This global presence
allows for manufacturing excellence through a network of facilities situated in
key markets and geographies that provide its customers with the resources,
technology and capacity to optimize their operations. Flextronics' ability to
provide end-to-end operational services that include innovative product design,
test solutions, manufacturing, IT expertise, network services, and logistics has
established the Company as the leading EMS provider. For more information,
please visit www.flextronics.com.
# # #
This news release, the CEO's Letter to the Shareholders and the earnings slide
presentation contain forward-looking statements within the meaning of federal
securities laws and are subject to the safe harbor under those laws. These
forward-looking statements include statements related to trends in our industry
and end markets, changes in customer demand, future growth, increased
utilization rates, improved pricing, existing and new customer activities, the
effect of our conversion of our 0% Convertible Junior Subordinated Notes,
improved general economic conditions, seasonality, ODM activity, industry
capacity, anticipated revenues, earnings leverage, operating margins and
results, cash flow, profitability, level of future restructuring activities and
charges, and the expected impact of potential new programs on our anticipated
revenues and earnings. 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. These risks include the
challenges of effectively managing our operations, particularly during uncertain
economic conditions, the risk that we may not obtain anticipated new customer
programs, including the program under discussion with Nortel, or that if we do,
they may be delayed, and may not contribute to our revenue or profitability as
expected, or at all, the need for future restructurings, integrating acquired
companies, responding to changes in economic trends and to fluctuations in
demand for customers' products and changes in customers' orders, our dependence
on a small number of large customers, our dependence on industries affected by
rapid technological change, competition in our industry and the other risks
described under "Management's Discussion and Analysis of Financial Condition and
Results of Operations - Risk Factors" in our most recent Annual Report on Form
10-K and quarterly reports on Form 10-Q and current reports on Form 8-K, filed
with the SEC. The forward-looking statements in this news release, the CEO's
Letter to the Shareholders and the earnings slide presentation, are based on
current expectations, and Flextronics assumes no obligation to update these
forward-looking statements.
PRESS RELEASE
[FLEXTRONICS LETTERHEAD]
SCHEDULE 1
FLEXTRONICS INTERNATIONAL LTD. AND SUBSIDIAIRES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<Table>
<Caption>
FOURTH QUARTER ENDED MARCH 31, 2004 FOURTH QUARTER ENDED MARCH 31, 2003
-------------------------------------------- ----------------------------------------
PROFORMA PROFORMA
PROFORMA(1) ADJUSTMENTS GAAP PROFORMA(1) ADJUSTMENTS GAAP
-------------- -------------- -------------- ------------- -------------- -----------
Net sales $ 3,768,153 $ 3,768,153 $ 3,059,565 $3,059,565
Cost of sales 3,529,256 3,529,256 2,893,527 2,893,527
Restructuring and other charges --- 75,555 75,555 --- --- ---
----------- ----------- ----------- ----------- ----------- ----------
Gross profit 238,897 (75,555) 163,342 166,038 --- 166,038
Selling, general and administrative
expenses 140,335 140,335 116,087 116,087
Restructuring and other charges --- 6,414 6,414 --- --- ---
----------- ----------- ----------- ----------- ----------- ----------
Operating income 98,562 (81,969) 16,593 49,951 --- 49,951
Intangibles amortization --- 9,772 9,772 --- 6,832 6,832
Interest and other expense, net 17,633 17,633 22,024 22,024
----------- ----------- ----------- ----------- ----------- ----------
Income (loss) before income taxes 80,929 (91,741) (10,812) 27,927 (6,832) 21,095
Provision for (benefit from)
income taxes 8,093 (34,903) (26,810) 2,576 (1,007) 1,569
----------- ----------- ----------- ----------- ----------- ----------
Net income (loss) $ 72,836 $ (56,838) $ 15,998 $ 25,351 $ (5,825) $ 19,526
=========== =========== =========== =========== =========== ==========
Earnings per share:
Basic $ 0.14 $ 0.03 $ 0.05 $ 0.04
=========== =========== =========== ==========
Diluted $ 0.13 $ 0.03 $ 0.05 $ 0.04
=========== =========== =========== ==========
Shares used in computing per share amounts:
Basic
529,323 529,323 519,266 519,266
=========== =========== =========== ==========
Diluted 569,572 569,572 531,118 531,118
=========== =========== =========== ==========
</Table>
(1) Proforma results exclude after-tax intangibles amortization and
restructuring charges, as applicable.
PRESS RELEASE
[FLEXTRONICS LETTERHEAD]
SCHEDULE 2
FLEXTRONICS INTERNATIONAL LTD. AND SUBSIDIAIRES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<Table>
<Caption>
FOURTH QUARTER ENDED MARCH 31, 2004 FOURTH QUARTER ENDED MARCH 31, 2003
-------------------------------------------- ----------------------------------------
PROFORMA PROFORMA
PROFORMA(1) ADJUSTMENTS GAAP PROFORMA(1) ADJUSTMENTS GAAP
-------------- -------------- -------------- ------------- -------------- -----------
Net sales $14,530,416 $14,530,416 $13,378,699 $13,378,699
Cost of sales 13,704,576 13,704,576 12,650,402 12,650,402
Restructuring and other charges --- 477,305 477,305 --- 266,244 266,244
----------- ----------- ----------- ----------- ----------- ----------
Gross profit 825,840 (477,305) 348,535 728,297 (266,244) 462,053
Selling, general and administrative
expenses 487,287 487,287 456,199 456,199
Restructuring and other charges --- 63,043 63,043 --- 38,167 38,167
----------- ----------- ----------- ----------- ----------- ----------
Operating income (loss) 338,553 (540,348) (201,795) 272,098 (304,411) (32,313)
Intangibles amortization --- 36,715 36,715 --- 22,146 22,146
Interest and other expense, net 77,700 77,700 92,780 92,780
Loss on early extinguishment of debt --- 103,909 103,909 --- ---
----------- ----------- ----------- ----------- ----------- ----------
Income (loss) before income taxes 260,853 (680,972) (420,119) 179,318 (326,557) (147,239)
Provision for (benefit from) income taxes 26,085 (93,826) (67,741) 17,715 (81,501) (63,786)
----------- ----------- ----------- ----------- ----------- ----------
Net income (loss) $ 234,768 $ (587,146) $ (352,378) $ 161,603 $ (245,056) $ (83,453)
=========== =========== ========== ========== =========== ==========
Earnings (loss) per share:
Basic $ 0.45 $ (0.67) $ 0.31 $ (0.16)
========== ========== ========== ==========
Diluted $ 0.42 $ (0.67) $ 0.31 $ (0.16)
========== ========== ========== ==========
Shares used in computing per share amounts:
Basic 525,318 525,318 517,198 517,198
========== ========== ========== ==========
Diluted 559,433 525,318 526,738 517,198
========== ========== ========== ==========
</Table>
(1) Proforma results exclude after-tax intangibles amortization, costs
associated with the early extinguishment of debt, restructuring charges and
the Beckman Coulter legal settlement, as applicable.
PRESS RELEASE
[FLEXTRONICS LETTERHEAD]
SCHEDULE 3
FLEXTRONICS INTERNATIONAL LTD. AND SUBSIDIAIRES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
(UNAUDITED)
<Table>
<Caption>
AS OF AS OF
MARCH 31, 2004 MARCH 31, 2003
-------------- --------------
ASSETS
Current Assets:
Cash and cash equivalents $ 615,276 424,020
Accounts receivable, net 1,871,637 1,417,086
Inventories 1,179,513 1,141,559
Deferred income taxes 33,802 29,153
Other current assets 581,063 466,942
---------- ---------
Total current assets $4,281,291 3,478,760
Property, plant and equipment, net 1,625,000 1,965,729
Deferred income taxes 588,984 415,041
Goodwill and other intangibles, net 2,721,432 2,192,910
Other assets 370,987 341,664
---------- ---------
Total assets $9,587,694 8,394,104
========== =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Bank borrowings and current portion of long-term debt $ 96,287 $ 52,484
Current portion of capital lease obligations 8,203 7,622
Accounts payable 2,145,174 1,601,923
Other current liabilities 1,131,010 918,990
---------- ----------
Total current liabilities 3,380,674 2,581,019
Long-term debt, net of current portion:
Capital lease obligations 15,084 7,909
8 3/4 % Senior Subordinated Notes due 2007 --- 150,000
Zero Coupon Convertible Junior Subordinated Notes due 2008 200,000 200,000
9 7/8 % Senior Subordinated Notes due 2010, net of discount 7,659 497,172
9 3/4 % Euro Senior Subordinated Notes due 2010 181,422 160,192
1% Convertible Subordinated Notes due 2010 500,000 ---
6 1/2 % Senior Subordinated Notes due 2013 399,650 ---
Other 320,446 34,580
Other liabilities 215,546 221,212
Total shareholders' equity 4,367,213 4,542,020
---------- ----------
Total liabilities and shareholders' equity $9,587,694 $8,394,104
========== ==========
</Table>