Flextronics today announced results for its first fiscal quarter ended 30 June 2005. Net sales were $3.9 billion, which represents an increase of $17 million over the June 2004 quarter.
Excluding intangibles amortisation, restructuring and other charges, net income for the first quarter increased 27% to $99.6 million, or $0.17 per diluted share, compared with $78.3 million, or $0.14 per diluted share in the year ago quarter.
After-tax amortisation, restructuring and other charges amounted to $41 million in the current quarter compared to $4 million in the year ago quarter. As a result, GAAP net income for the first quarter decreased by $15.6 million to $58.7 million or $0.10 per diluted share, as compared to $74.3 million, or $0.13 per diluted share in the year ago quarter.
Return on invested tangible capital (ROITC) increased to 25% in the June 2005 quarter from 18% in the prior year comparable quarter while return on invested capital (ROIC) increased to 9% in the June 2005 quarter from 8% in the prior year comparable quarter. The company`s cash conversion cycle was 20 days in the quarter. Excluding restructuring charges, operating margin increased year-over-year for the seventh consecutive quarter to 3.4%.
The company ended the quarter with $380 million in cash, an increase of $165 million from 30 June 2004 while total debt has decreased by $217 million over the same period. This represents a net debt reduction of $382 million during the last 12 months.
With regard to the June quarter operating results, Michael E Marks, Chief Executive of Flextronics, stated: "We remain focused on achieving our goal of return of invested capital of 15% through improving profitability, asset utilisation and cash flow.
"To this end, we are pleased that we were able to increase operating margins for the seventh consecutive quarter on a year-over-year basis. This improvement reflects the results of our vertically integrated EMS offering as well as our relentless effort to contain costs in the business. Our world-class working capital management combined with declining capital expenditures should also continue to drive cash flow improvements."
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