COMPANY PRESS RELEASE: Flextronics a global provider of operational services focused on delivering design, engineering, manufacturing and logistic solutions to branded technology companies,has announced results for its third quarter ended December 31, 2001.
Net sales in the quarter ended December 31, 2001, were an all-time record $3.45 billion, up 6.6% from a year ago, and up 6.4% sequentially. Before amortization and one-time charges, cash operating profit was $117 million, a 14% sequential increase, cash net income was $85 million, an increase of 17% sequentially and diluted cash earnings per share was $0.17, a 13% increase sequentially. Diluted cash EPS in the prior year period was $0.26.
Flextronics continued to strengthen its balance sheet in the December quarter. Cash at the end of the quarter was $449 million, up from $400 million a quarter ago. Inventory dropped slightly, to $1.40 billion, as inventory turns improved to an industry leading 9.2 times and days sales outstanding improved to an industry leading 47 days. Finally, subsequent to the December quarter close, Flextronics raised approximately $505 million in additional cash through the issuance of 20 million ordinary shares in an overnight equity offering completed in January 2002.
With the December quarter results, Flextronics is now the leader of the EMS industry in terms of revenue, profitability, working capital management, return on invested capital and market capitalization. We are absolutely thrilled to have arrived at the top of the heap in our industry after eight years as a publicly traded company. We take great pride in the accomplishment, stated Michael E. Marks, Chairman and Chief Executive Officer of Flextronics
Mr. Marks further added: We still have much work to do. As strong as our performance was relative to our competition, we must remember that none of these metrics meet our long-term goals. To begin with, we do not plan to focus on revenues. In our business, it is still relatively easier to grow revenues rather than profits, but we will continue to be selective and only accept business that can provide a good return to our shareholders. So our focus will remain on earnings growth and improving our returns on tangible invested capital. In addition, we do expect to continue our leadership in driving costs out of the business by expanding our industrial parks, by relentlessly improving working capital metrics and by closely monitoring all S,G&A expenditures. At the same time, we are working extremely hard to expand the service offerings we provide customers, which allows us to create more value for the customer and thereby earn a higher level of return than can be achieved solely by competing on price. While this strategy is in place, there clearly is much yet to be accomplished.