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