Multi-Fineline Electronix, Inc. News
MFLEX Reports Strong Results for Second Quarter Fiscal 2008
Sequentially, from the first quarter to the second quarter of fiscal 2008, net sales decreased approximately 11 percent, which was somewhat less than expected by the company. This sequential decline resulted primarily from a decrease in sales to a long-standing key customer of the company as market dynamics shifted. In addition, a transition in products supplied to another more recent key customer also occurred between the first and second quarters of fiscal 2008.
Net income for the second quarter of fiscal 2008 increased 240 percent from the comparable period in 2007 to
Gross margin during the second quarter of fiscal 2008 increased to approximately 18 percent, as compared to approximately 11 percent for the same period in the prior year. While gross margins in the first and second quarters of fiscal 2008 have been above the company's targeted sustainable gross margin range of between 10 to 15 percent, MFLEX believes this 10 to 15 percent range remains realistic. Nevertheless, the company expects that its gross margin may continue to be outside this range from time to time — either above or below — for a variety of reasons, including product mix and learning curves associated with new programs.
For the first six months of fiscal 2008, net sales increased approximately 47 percent to
According to
"We are pleased with the company's strong performance during the second quarter as we continue to benefit from a broader base of customers as well as significantly increased sales year-over-year to three of our four key customers. We believe that we are successfully differentiating ourselves in the market by continuing to address evolving opportunities. We expect our current key customers to continue to represent meaningful opportunities for us in the future. We also will continue to focus on the goal of expanding our customer base to include, overall, a handful of the world's most well-regarded, high-volume manufacturers of portable electronic devices," Meshgin said.
Also, the company's capacity expansion plan announced in
"We will continuously evaluate our manufacturing requirements in the months ahead, based on customer demand, and make any adjustments necessary so that our new capacity becomes available just-in-time, which is consistent with the company's previous expansion efforts," Meshgin said.
While customer demands are changing, MFLEX said it expects net sales in the third quarter of fiscal 2008 to be similar to those in the second quarter of fiscal 2008. In addition, the company believes its customer mix and new program outlook are very promising for the latter part of the fiscal year, as numerous new programs ramp. Gross margin during the quarter is expected to be at or slightly above the high end of the company's targeted sustainable range of 10 to 15 percent.
Meshgin, who served previously as MFLEX's president and chief operating officer and has had a 20-year career with the company, was named chief executive officer in
Conference Call
MFLEX will host a conference call at
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
About MFLEX
MFLEX (http://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, personal digital assistants, mobile power adapters, medical devices, computer/data storage and portable bar code scanners. 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, earnings, operating expenses, capital expenditures, profitability, gross margins, including without limitation, the company's targeted range of gross margins, achievement of margins within or outside of such range and factors that could affect gross margins, yields, the company's diversification efforts, the company's relationship and opportunities with, and expected sales to and demand from, its customers, the relative size of each customer to the company, market opportunities and the utilization of flex and flex assemblies, current and upcoming programs and product mix and the learning curves associated with the company's programs, the company's manufacturing capabilities, capacity, growth and expansion of the company's facilities/capacity and equipment installation, and the costs associated therewith. 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 impact of changes in demand for the company's products and the company's success with new and current customers, the company's ability to develop and deliver new technologies, the company's ability to diversify its customer base, 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
(SUMMARY FINANCIAL INFORMATION FOLLOWS) Multi-Fineline Electronix, Inc. Condensed Consolidated Statements of Income (In thousands, except per share and share data) (unaudited) Three Months Ended Six Months Ended March 31, March 31, 2008 2007 2008 2007 Net sales $163,936 $113,406 $348,088 $237,293 Cost of sales 135,009 100,553 288,375 209,433 Gross profit 28,927 12,853 59,713 27,860 Operating expenses Research and development 588 639 1,081 1,228 Sales and marketing 4,528 2,489 9,145 5,047 General and administrative 7,753 5,462 14,530 12,428 Total operating expenses 12,869 8,590 24,756 18,703 Operating income 16,058 4,263 34,957 9,157 Interest income, net 476 237 776 470 Other income (expense), net (2,129) 54 (1,780) 178 Income before provision for income taxes 14,405 4,554 33,953 9,805 Provision for income taxes (3,981) (1,488) (9,943) (3,086) Net income $10,424 $3,066 $24,010 $6,719 Net income per share: Basic $0.42 $0.13 $0.97 $0.27 Diluted $0.41 $0.12 $0.95 $0.27 Shares used in computing net income per share: Basic 24,760,848 24,502,871 24,706,958 24,477,412 Diluted 25,390,410 25,146,270 25,282,228 25,160,254 Multi-Fineline Electronix, Inc. Condensed Consolidated Balance Sheets (In thousands) (unaudited) March 31, 2008 September 30, 2007 Cash, cash equivalents and short term investments $58,508 $37,298 Accounts receivable, net 119,613 124,313 Inventories 50,361 63,424 Other current assets 9,963 9,523 Total current assets 238,445 234,558 Property, plant and equipment 139,391 133,846 Other assets and long term investments 21,976 8,883 Total assets $399,812 $377,287 Accounts payable $88,927 $111,934 Other current liabilities 20,550 15,143 Other long-term liabilities 5,873 204 Stockholders' equity 284,462 250,006 Total liabilities and stockholders' equity $399,812 $377,287
SOURCE Multi-Fineline Electronix, Inc.; MFLEX
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