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MFLEX Reports Fiscal 2012 Fourth Quarter And Full-Year Financial Results

IRVINE, Calif., Nov. 8, 2012 /PRNewswire/ -- 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 its fiscal fourth quarter and full-year ended September 30, 2012.  Net sales in the fourth quarter of fiscal 2012 were $201.6 million, up 5 percent from net sales of $191.5 million in the same quarter last year.  This increase was primarily due to higher sales to a key customer.

Gross margin during the fourth quarter of fiscal 2012 was 5.8 percent, compared to 10.0 percent for the same period in the prior year. The year-over-year decline was primarily attributable to lower yields due to the complexity of one new program and higher labor costs in China as the Company continued to expand headcount to support anticipated future production levels.

Net income for the fourth quarter of fiscal 2012 was breakeven, compared to net income of $2.4 million, or $0.10 per diluted share, for the same period in the prior year.  Fiscal 2011 fourth quarter results were impacted by after-tax impairment and restructuring costs of $2.0 million, or $0.08 per diluted share.  

Net cash used in operating activities for the fourth quarter of fiscal 2012 was $14.2 million.  At September 30, 2012, the Company had cash and cash equivalents of $82.3 million, or $3.42 per diluted share, and remained debt free.

Fiscal Year 2012 Financial Highlights
For the fiscal year ended September 30, 2012, net sales were $818.9 million, compared to $831.6 million in fiscal 2011, primarily due to a decline in sales to one key customer.  Fiscal 2012 net income totaled $29.5 million, or $1.22 per diluted share.  Fiscal 2012 results benefitted from after-tax restructuring asset recoveries totaling approximately $1.5 million, or $0.06 per diluted share.  This compares to fiscal 2011 net income of $37.9 million, or $1.56 per diluted share. Fiscal 2011 results were impacted by after-tax impairment and restructuring costs totaling approximately $2.6 million, or $0.10 per diluted share.

Non-GAAP Results
A reconciliation of GAAP net income and earnings per share to non-GAAP net income and earnings per share is provided in the table at the end of this press release.  

Outlook
For the first quarter of fiscal 2013, the Company expects net sales to be between $260 and $280 million and gross margin to range between 10.0 to 12.0 percent based on the projected sales volume and anticipated product mix.

Commenting on the Company's business outlook, Reza Meshgin, Chief Executive Officer of MFLEX, noted, "As we reported in our pre-announcement last month, we are expecting record revenues and a significant rebound in gross margin in the first quarter of fiscal 2013. We anticipate an increase in sales to both existing and newer smartphone and tablet customers during the first quarter and throughout the balance of the fiscal year."   

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 fiscal 2012 fourth quarter and full-year financial results.  The dial-in number for the call in North America is 1-888-549-7750 and 1-480-629-9723 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 8:30 p.m. Eastern time (5:30 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 4571201.

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 smartphones, tablets, computer/data storage, portable bar code scanners and other 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; profitability; revenue growth; gross margins; the timing and ramping of new programs; labor costs; new customer opportunities; customer and product mix; demand for the Company's products; capacity, utilization and capacity expansion; yields; and labor efficiency.  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 "forecast," "guidance," "preliminary," "scheduled," "assume," "can," "will," "plan," "should," "expect," "estimate," "aim," "intend," "look," "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 on the demand for electronic devices; the Company's success with new and current customers, those customers' success in the marketplace and usage of flex in their products; product mix; the Company's ability to develop and deliver new technologies; the Company's ability to diversify and expand its customer base and markets; the Company's effectiveness in managing manufacturing processes, costs, yields and the ramping of new programs; currency fluctuations; pricing pressure; the Company's ability to manage quality assurance and workforce issues; the degree to which the Company is able to utilize available manufacturing capacity, enter into new markets and execute its strategic plans; electricity, material and component shortages; the impact of natural disasters, competition and technological advances; the outcome of tax audits; labor issues in the jurisdictions in which the Company operates; 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 June 30, 2012 and its annual Report on Form 10-K to be filed for the year ending September 30, 2012.  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.  

(SUMMARY FINANCIAL INFORMATION FOLLOWS)

Multi-Fineline Electronix, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

(unaudited)










Three Months Ended


Twelve Months Ended




September 30,


September 30,


2012


2011


2012


2011

Net sales

$     201,587


$     191,499


$     818,932


$     831,561

Cost of sales

189,797


172,330


736,241


726,850

   Gross profit

11,790


19,169


82,691


104,711

Operating expenses:








   Research and development

1,405


2,525


7,615


10,485

   Sales and marketing

5,841


5,930


24,457


25,189

   General and administrative

4,503


5,320


19,839


18,788

   Impairment and restructuring

-


3,187


(2,468)


4,186

      Total operating expenses

11,749


16,962


49,443


58,648

Operating income

41


2,207


33,248


46,063

Other income (expense), net:








   Interest income

288


224


1,352


875

   Interest expense

(114)


(124)


(555)


(472)

   Other income (expense), net

(206)


222


1,656


564

      Income before income taxes

9


2,529


35,701


47,030

Benefit from (provision for) income taxes

2


(152)


(6,216)


(9,157)

      Net income

$             11


$         2,377


$       29,485


$       37,873









Net income per share:








   Basic

$           0.00


$           0.10


$           1.24


$           1.58

   Diluted

$           0.00


$           0.10


$           1.22


$           1.56

Shares used in computing net income per share:








   Basic

23,760


24,096


23,783


24,027

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