Flextronics Announces First Quarter Results

About Flextronics

Headquartered in Singapore (Singapore Reg. No. 199002645H), Flextronics is a leading Electronics Manufacturing Services (EMS) provider focused on delivering innovative design and manufacturing services to automotive, industrial, medical, and technology companies. With fiscal year 2005 revenues of USD$15.9 billion, Flextronics helps customers design, build, ship, and service electronics products through a network of facilities in over 30 countries on five continents. This global presence provides customers with complete design, engineering, and manufacturing resources that are vertically integrated with components to optimize their operations by lowering their costs and reducing their time to market. For more information, please visit www.flextronics.com.

This press release contains forward-looking statements within the meaning of federal securities laws. These forward-looking statements include statements related to anticipated increases in revenues and earnings, anticipated uses of available cash, expected reductions in capital expenditures, anticipated increases in cash flow and return on capital, new business opportunities and the expected impact of our pending divestitures of our Network Services and semiconductor divisions. 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; the risk that we may not obtain anticipated new customer programs, or that if we do, they may be delayed, and may not contribute to our revenue or profitability as expected, or at all; the possible need for future restructurings and impairments of assets; the risks that we may not obtain the benefits anticipated from acquisitions or succeed in integrating acquired companies, including integrations necessary pursuant to the Nortel transaction; our ability to respond to changes in economic trends and to fluctuations in demand for customers' products and changes in customers' orders; the risks that we may be unable to generate or support increased ODM and design activity; our dependence on a small number of large customers; our dependence on industries affected by rapid technological change; competition in our industry; risks of shortages of key components; and the other risks described under "Business - Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our most recent Annual Report on Form 10-K and in our quarterly reports on Form 10-Q and current reports on Form 8-K, filed with the SEC. The forward-looking statements in this press release are based on current expectations and Flextronics assumes no obligation to update these forward-looking statements.

                                                              SCHEDULE I

               FLEXTRONICS INTERNATIONAL LTD. AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF OPERATIONS
                   (In thousands, except per share amounts)
                                 (Unaudited)

                                     Three Months Ended June 30, 2005
                                                  Required
                                Non-GAAP (1)    Adjustments        GAAP

    Net sales                    $3,897,531                    $3,897,531

    Cost of sales                 3,618,317                     3,618,317

    Restructuring charges                --          27,572        27,572

      Gross profit                  279,214        (27,572)       251,642

    Selling, general and
     administrative expenses        147,791                       147,791

    Restructuring charges                --           5,117         5,117

      Operating income              131,423        (32,689)        98,734

    Intangibles amortization             --          14,621        14,621

    Interest and other expense,
     net                             26,017              --        26,017

      Income before income taxes    105,406        (47,310)        58,096

    Provision for (benefit from)
     income taxes                     5,759         (6,370)         (611)

      Net income                    $99,647       $(40,940)       $58,707

    Earnings per share:
      Basic                           $0.18                         $0.10

      Diluted                         $0.17                         $0.10

    Shares used in computing per
     share amounts:
      Basic                         569,325                       569,325

      Diluted                       598,298                       598,298

                                                            Three  Months  Ended  June  30,  2004
                                                                                                    Required
                                                                Non-GAAP  (1)        Adjustments                GAAP

        Net  sales                                        $3,880,448                                        $3,880,448

        Cost  of  sales                                  3,633,516                                          3,633,516

        Restructuring  charges                                --                    20,991                20,991

            Gross  profit                                    246,932                (20,991)              225,941

        Selling,  general  and
          administrative  expenses                141,596                                              141,596

        Restructuring  charges                                --                      2,597                  2,597

            Operating  income                            105,336                (23,588)                81,748

        Intangibles  amortization                          --                      8,661                  8,661

        Interest  and  other  expense,
          net                                                          18,286                                                18,286

            Income  before  income  taxes          87,050                (32,249)                54,801

        Provision  for  (benefit  from)
          income  taxes                                          8,705                (28,226)            (19,521)

            Net  income                                        $78,345                $(4,023)              $74,322

        Earnings  per  share:
            Basic                                                      $0.15                                                  $0.14

            Diluted                                                  $0.14                                                  $0.13

        Shares  used  in  computing
          per  share  amounts:
            Basic                                                  530,626                                              530,626

            Diluted                                              568,013                                              568,013

                (1)  The  non-GAAP  financial  measures  disclosed  in  this  release  exclude
        certain  amounts  that  are  included  in  the  most  directly  comparable  GAAP
        measures.  Non-GAAP  results  exclude  after-tax  intangibles  amortization,
        restructuring  and  other  charges,  as  applicable.    The  Company  recorded
        intangible  amortization  expense  of  $14.6  million  and  $8.7  million  during
        the  quarters  ended  June  30,  2005  and  2004,  respectively.    The  Company  also
        recorded  restructuring  charges  of  $32.7  million  and  $23.6  million  during
        the  quarters  ended  June  30,  2005  and  2004,  respectively,  which  were
        primarily  related  to  the  closures  and  consolidations  of  various
        manufacturing  facilities.  The  tax  benefit  related  to  all  of  these  items
        and  other  non-operational  tax  adjustments  amounted  to  $6.4  million  and
        $28.2  million  during  the  quarters  ended  June  30,  2005  and  2004,
        respectively.


                                                                                                                            SCHEDULE  II

                              FLEXTRONICS  INTERNATIONAL  LTD.  AND  SUBSIDIARIES
                                        CONDENSED  CONSOLIDATED  BALANCE  SHEETS
                                                                (In  thousands)
                                                                  (Unaudited)

                                                                                                        June  30,            March  31,
                                                                                                            2005                      2005
        ASSETS

        Current  Assets:
                Cash  and  cash  equivalents                                      $830,207            $  869,258
                Accounts  receivable,  net                                      2,057,050            1,842,010
                Inventories                                                                1,511,004            1,518,866
                Deferred  income  taxes                                                  12,562                  12,117
                Other  current  assets                                                  543,863                544,914
                        Total  current  assets                                      4,954,686            4,787,165

        Property,  plant  and  equipment,  net                          1,669,137            1,704,516
        Deferred  income  taxes                                                        690,950                684,952
        Goodwill  and  other  intangibles,  net                        3,461,484            3,502,189
        Other  assets                                                                          321,198                328,750
                        Total  assets                                                  $11,097,455        $11,007,572


        LIABILITIES  AND  SHAREHOLDERS'  EQUITY

        Current  Liabilities:
                Bank  borrowings  and  current  portion
                  of  long-term  debt                                                      $55,627                $17,448
                Current  portion  of  capital  lease
                  obligations                                                                      8,332                    8,718
                Accounts  payable                                                      2,571,883            2,523,269
                Other  current  liabilities                                    1,318,888            1,330,759
                                                                                                      3,954,730            3,880,194

        Long-term  debt,  net  of  current  portion:
                Capital  lease  obligations                                            7,156                    9,141
                Zero  Coupon  Convertible  Junior
                  Subordinated  Notes  due  2008                                  200,000                200,000
                1  %  Convertible  Subordinated  Notes
                  due  2010                                                                        500,000                500,000
                6  1/2  %  Senior  Subordinated  Notes
                  due  2013                                                                        399,650                399,650
                6  1/4  %  Senior  Subordinate  Notes
                  due  2014                                                                        507,487                490,270
                Other                                                                                108,308                110,509
        Other  liabilities                                                                179,080                193,760

        Total  shareholders'  equity                                          5,241,044            5,224,048
                        Total  liabilities  and
                          shareholders'  equity                                $11,097,455        $11,007,572
 





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